CELH - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to Celsius Holdings Q2 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Cameron Donahue with Hayden IR. sir. ahead, go Please

Cameron Donahue

good Celsius We conference Holdings and us call. you today for second morning, you, appreciate everyone. joining Thank quarter earnings

and Joining John Edwin call the Chief Chief President Negron, me and Executive Officer. today Financial Officer; on Fieldly, are

we at the given call to will time. open your Following will the and questions, remarks, instructions prepared that be

company's also and Web available and issued today company its filed Commission are under celsiusholdingsinc.com Form The at materials press site XX-Q this release the Exchange on section. All with the the Securities Relations morning. a Investor

before and numerous are to forward-looking aware control. contain reminder, available information risks that as management beyond other involve that replay August a later I the company's be many expectations, may call statements As available XXXX. and turn to which the over will These today, be including the statements this of John, are call today. based uncertainties, X, also Please forecasts, audio on

Celsius by SEC to review filings any Except of release in you press statements. encourage to our update the We obligation law, the information. these quarterly to required extent and today's forward-looking applicable in with disclaims Holdings duties no our for as Harbor any additional contained disclosures Safe and full undertakes

the I'd like John? and that, Officer, for over Executive John Chief With Fieldly, to call turn President to comments. his prepared

John Fieldly

for thank Thank us today. joining you, and Cameron. you morning Good everyone

beverage An health-minded $XX.X our half as Our highlighted of leader global results of of executed as record million. than increase year consumers. positioning strategy we half XX% first for for Celsius are the last XXXX more a revenues of over first by

Lion, retailers household CVS, Aid, our Rite as North quarter, presence. further we the made During where X-Eleven Target our progress on such and distribution expanded America with expansion name significant Food

like In networks. Keurig continue premier Pepsi further we and add Pepper, are addition, partners Dr. Geyser bottler penetrating distribution Anheuser-Busch, to New Big in and York, new we independent

awareness brand's building marketing with and campaigns and We our deploy targeted practices best to trial. continue are

Once onboard market ability and to enter targeted campaigns efficiencies, controlling continuing again channels, to routes Europe, our to product and optimizing we investments. trend share ensuring all flavor on new the our partners, while distribution launches. with market cost, continue our drive marketing we maximizing focus and new availability have returns unabated on on demonstrated In optimize to

And Asia, just China contributing gross of growth completed are of more margins operations. of our to accomplishments our our improving have remain and margins, volumes. in we of meaningful financial geographies, in as improvements we revenue higher important, the as with on our alignment efficient these results across use And in capital. business excess all operational working drive growth Each XX%

City signed independent largest quarter, with Domestically brands. locations and counties York Suffolk, building in five in has non-alcoholic New Big Westchester, a instrumental boroughs second and the of the Geyser, distribution in New beverage serves Nassau, the we of metropolitan and agreement numerous area Big been Putnam. New XX,XXX Geyser serving than York distributor City new York's more massive

territory with except door The half is for more full which Also, the with energy with the store authorized a the launched market premier be Geyser our Celsius channel market expansion significantly drink X-Elevens we to the City represent the front, second will the distributor all $X will sales. annual in to in placement shelf. preferred Starting convenient presence. service chain Big in increase the shelf than Arizona the to the QuikTrip quarter, during located York on New have under energy largest store quarter our country where third in billion be convenient of we on top continues agreement shelf market in

channel the ACV, for health-minded our to compared with as SPINS third shows continues to is our all XX.X% energy XX.X% party convenient holding a volume. Celsius positioning third Industry-backed category XXXX growing consumer. energy in a data X.X% resonating year-over-year in data at is drink validate XX, today's that's accumulated a drink healthy impressive Celsius July latest party while an overall increase growth The the functional fitness of as portfolio

confident And is are metrics partners. third that our continue and launches retail warranted and will warrants we We shelf on channel distribution to higher even Celsius executing. continue as these Celsius with working increase national shows that hard drive data party our chains to This team the additional additional space. ACV in sales distribution through

towards it expand trade out seeing Celsius will many eliminate the is availability a currently premier we stocks network partners. are Many includes and now distribution than DSS, in our presence, Expanding the CBS across the direct delivery, of store Target a network our distribution will the pursuit replenishment systems. national in-store direct and in-store Our increase to national distributors. store which retailers experience, at will of and internal and more XX outselling delivery regional our execution the as other country retailer's are

expect many the full months core the across country build XX partners rapidly our upon growth markets the all across regional the trade not metrics. We're are next new to channel We XX creating we a to established in leveraging distribution opportunities significant our achieve where especially competitors sooner. further coverage significantly sales in in convenience outpacing if to

and our from further momentum supporting continue the retail broadening the our to of significant best availability interest our distributors portfolio. country accessibility We garner and in

within partners significant wholesale from which partners year. increased We have the distribution experienced the within network February of XX has the to six most Anheuser-Busch this networks since independent wholesaler expansion

Dr. Pepper addition we MillerCoors have Pepsi In within wholesalers. Pepper, the expanded Dr. and affiliated Keurig

our tasting channels the we on with flavor Xth Fuji specialty locations delicious and flavors wholesale and the excited Apple authorizations Pear Through all now XXXX our sets. mandatory great we team, XXXX to selling GNC quarter, over expand in in sparkling launched newest nationwide expansion, on accelerated with innovation the SKU, our the are fitness within a a we continue portfolio our and dedicated to Celsius representatives behalf. sales now very have trend approximately With

Celsius select in is the Pear Across retailers new at now Foods and the Apple tier national available nationwide. X/XXs fitness Fuji top distributors, also and Amazon. through Sports and and flavor addition carrying Ropa country fitness channel, the are now In

At become Par selling Export King, in Earth Golds Las Athletic Fitness, now be one and quickly Vegas Celsius XX hour of the shape fitness Fitness Smoothie Gym will selling Equinox Crunch Club via top flavors.

occasion In opposed addition has are great our been extensions, innovation expand targeting on increase and starting line offerings categories our team further to adjacent tasting new our and developing portfolios which verticals breadth. to usage working

date, team providing additional very as the and excited working will details. been in which launched we're The this we plan we year be a has about closer on to launch of back half the get

health are portfolio Our and offerings a we which on become proprietary, proven ask of upon delivering innovative, leader mission, is build will global our for new portfolio which expanding significant a and is mission breadth. our and these benefits branded reach clinically

new Nordics, grew in gain quarter the in introductions as flavor the revenues year and XX% the continue to second nearly Europe In earlier momentum.

Our Sparkling a been the Peach to exceed continue Passion Five addition and have great expectations. Sparkling Fruit portfolio and to

[ph], offering flavor we tasting launched Vitamin a new BXX and D, new line Celsius grapefruit occasion breeze turmeric with and lower with caffeinated antioxidants. extension addition tropics a a line line usage a In a strawberry expands Vitamin is developed our [indiscernible] great and tropics This unlimited breeze profile. new with

In improves line focus. addition the mental

in new the We traction the are momentum very portfolio encouraged our line core the region. and by of of the

a agreement market. provides critical China recoup the vehicle the million of the still country Asia, us reaching In years in in a execution in our enormous licensing with and the at of to beginning royalty $XX.X while prior year investment

with the advance Qifeng in closed local we repayment March in establish in in royalty and a China definitive our reminder and market. important Technology a to Food This created China a business our grow and licensing As capital agreement method our invested distributor mitigated market. agreement partner share the to risk the on

this the to capitalize in collaborative and point Technology considerable companies Under year. branded fee we fee volume consumer royalty rights which the over and at receiving China. the have five to region. will to the Celsius $X.X the market be created on royalty manufacturer, will agreement structure based In in a Qifeng we a six on strong the it next licensing exclusive between relationship demand Food transition commercializes million years of exchange a products Through opportunity has agreement,

has and Orange over cities network the market partners, success through our and across distribution instrumental over in locations in and in their of experience, been with relationships Cucumber XX and Acai, available XX,XXX launched Qifeng four Cola, growth Celsius Raspberry Foods line. China is now flavors recently

the Peach awareness tea. into up opportunities Malaysia Sparkling Hong base trial to in Orange with the Southeast expansion into expand our In about Mango and XXXX/XXs distribution driving further Asia an excited quarter, during and expand initial We're very region and and we launch the and green market. our in continue we the Kong, with to consumer

wellness growing beverage Functional and focus alternatives beverages well-being consumers for driving the a industry. Busier if that have they're their health convenient one the while not emerged go. manage fastest and on the give in are lifestyles need to as way a category the on

their and minding at them health and to We with health that that fitness goals. are global a us uniquely achieve wellness enable of today's capitalize wellness help trend forefront health, this strategy positioned the beverages will will consumer on seeking

targeted out audiences the target In beverages support our develop of highlight functionality continue our targeted our and we initiatives of marketing specific and roll emphasize brand growth, to and recognition, that reinforce effectively. and markets

and trade programs marketing and in events retailers Games Europa Dallas, Expo at targeted consumer executed Europa we Ohio. quarter including the the Florida large key in attended During Arnold Classic and in

media as focuses some quarter, athletes Fox, our to of second organization provide teams and effective across variety a the training to to is League and official field to athletes. fitness of aligned Legends. company, premier the world's competitive were partner Legend drink practices drinks named titles Echo Fox top e-sports the healthy e-sports Echo directly a home During including and player new on of we of energy generation with achievement organization development, functional The mission a

represents grow reached is XXXX people and million by predicted in the venture in worldwide that to esports XXX first arena. It to signing XXXX. esports estimated XXX over This million consumers our is

targeted events a We Tough remain active athletic with also Mudder for of ability. series competitive a

the we relationships regions samples continue consumers in than U.S. consumers process of the cities markets in and new fitness minding and well events. to we more active across other providing XX and as these reaching lifestyle are target XXX,XXX activities health in to Through new

and distribution markets, XXXX. with going work our strategy been sampling live, our key while In key momentum. existing course interacting We optimistic increasingly to as on expanding have marketing play. in in to this continue considerable with prospects our products addition, activities our committed we conducting and they where focused gain and consumers, remaining to about remain deeper Staying our are success relationships accounts and the guerrilla our

call turn for now Edwin Negron-Carballo, Chief to our prepared will remarks. over Officer his the I Edwin? Financial

Edwin Negron

Thank you, John.

$XX.X was $X.X period $X.X a Revenue growth For increase distribution XX% XXXX. XX% sales million when the significant was geographies accounts strong for North increase by or the million, revenue compared driven of ended of and The all revenue increased the result of American in year. XX% double-digit across to new three months June XX, growth of in existing million same expansion. last including

Revenue which the license China at traction we're gaining launch regions in of fee solid to XXXX. completed XX% is in as of model result the in agreement was growth was partially new result change Revenue Asia a China a in in offset the Europe and our start of by outside primarily which grew the royalty the year-over-year, net flavors. the a of business

to to XX% XXXX opposed increased XXXX $X.X Gross increases million product June our up from with the related ended second trend, to as pricing. in for quarter overall mainly the million the of volume profit was from or line increase by $X million historical quarter. In months three to year-ago XXXX revenues increases in $X.X in XXXX for the sales XX, in

XX% for remain mostly compared at months for is increase related XXXX in up the expenses unchanged sales for were XX, XXXX. volume months gross same ended as opposed ended for three million XXXX our The $X.X an to Profit Sales expected XX.X% period June from increase XXXX. marketing June in million $X.X within of and in $X.X million product mainly dollars three the XX.X% same period or the to margins increases the pricing. in profit XX, increases range and to in

which investments tradeshow The as activities our in China increase activities partially Employee distribution by expanded Resources marketing as were in and to marketing investment network direct incurred no is for offset costs of support as being mainly in well due

the of result business our in change model.

the with primarily the three accrual for dispute June decrease or three due were and administrative pertaining XXXX was expenses of territorial million, second $X.X an former $XXX,XXX quarter General to million distributor. of XX, a the XXXX. compared ended a XX% $XXX,XXX June XX, a of for decrease months to months settlement in $X.X The XXXX the ended to of

and of the basis, China a insurance, impact employee assets three results amount Partially $XXX,XXX the general more XX, a on net comparative be ended $XXX,XXX a the million and per to increase a The or administrative for weighted other months $X.XX the of year. interest expense $XX,XXX $X.X expenses $XX,XXX was payables to a share increased this outstanding. of due last rent loss increased The to fees, compared in shareholders shares months related of on related by offset not $XXX,XXX XXXX that Excluding three for loss for to $XXX,XXX and by period Total average and XX,XXX,XXX June XXXX amortization of expense ended XX, will discounts legal to common on June based to is of in realized. same increases by $XX,XXX. the those reduction basic mainly dilutive costs. of

June three or the comparison and available shareholders dividend $XX,XXX million on $X.X to for $X.X average of based XX,XXX,XXX In preferred the to $X.XX after of weighted months shares reported net XXXX loss company common net stock million loss effect a XX, ended outstanding. a of giving of

the for of second a XXXX Adjusted $XX,XXX. EBITDA quarter was of loss

Our to realized. adjustments of months $XXX,XXX and includes not for stock-based XXXX be that three of million calculation will ended interest assets loss XX, the for of June depreciation favorable of amortization expense a $X.X expense compensation $XXX,XXX. and related adjusted of China $XX,XXX, Net EBITDA

quarter expense the in the EBITDA onetime of and amounted a Asia second the of to territorial with Adjusted which to $XXX,XXX. the settlement net of million included of $X.X $X XXXX a million the pertaining former investment loss dispute distributor for of

performance. is adjusted did of any such, this $XXX,XXX EBITDA this loss measures we second our the the information of earnings has in loss figures adjusted business and As $XX,XXX of the understanding for that release. quarter, included the financial the or believe we Since comparable effect, XXXX our To results and non-GAAP visibility enhance non-GAAP other not non-GAAP and comparisons been was which of to net EBITDA a investment GAAP one quarter timers true overall reconciliation XXXX. of Asian to have in our for

turning million growth distribution $XX.X Now attributable increase in the U.S. for in of first-half year-to-date existing million, part by first-half XXXX, XX% of to the our large primarily up from of $XX.X revenue The was and to in results, revenues expansion. XX% domestic from in new increased attributable XXXX. growth to XX% sales to double-digit accounts

actually a the in Europe first was launch earlier as of Most in The part in in Asia delivered of our decline I in change a the the my was sales were business in year-to-date quarter. mentioned in quarter, offset XX% the experienced up which second driven Europe by America in were growth model. because in remarks, increases result and as large of new sales, North decline Asia marginally flavors. by the

the for XXXX the of in increased increased of to million, to $X.X profit six XXXX. months Gross The in or compared for the compared to of of first $X.X volume. the in attributable XXXX Gross primarily first-half increase $XX.X first-half margins XX% million is million gross first-half sales to dollars increases XX.X% profit to Profit for by XX.X% XXXX.

not of first XXXX of Sales when due months does marketing in activities million, million support mainly $X.X marketing decrease to by for On model in China, the distribution partially and The to $X.X first six direct costs. for $X.X million spent network, is our costs distribution business to in in incremental X% increases to months decreased and require incremental and the down and the marketing which is six expenses change expenses, by stores compared which incremental show spending to sales employee other investments. trade including expanded offset basis, was comparable a by broker XXXX.

$X.X that a first year June first distributor. administrative dispute the compared when with mainly $XXX,XXX settlement $X.X of decrease the of was of and prior an the XXXX. slight six the for for period months pertains the General X% XX, a were of months in decrease expenses to a former The and six territorial to to due accrual XXXX million, million

$XXX,XXX, rent result General modest $XXX,XXX a legal impact, employee well Administrative and costs. as in as option by of this costs, basically, and expense incremental Excluding of as Expenses increases stock increased insurance,

line, prior the at from This increase the year Below $XX.X of the this six of China up in note result expenses operating other income the significantly was year. basically to distributor is months $XX,XXX when million the of other to that first XXXX for was the to receivable signed beginning the our of gain related period. compared

licensing for investment in As the we over a have be a the reminder, net we will China period. receiving agreement, made five-year

the convertible average of and had of months or expense after $XX.X and of on As back XX,XXX,XXX. shares, result on on shares to for company $X.XX income $XXX,XXX adding per of $X.XX million available the looted XXXX, above, a shareholders the share, first notes net income amortization a or of million the based outstanding on of share, average net six on day payables notes of discount weighted $XXX,XXX interest $XX.X weighted XX,XXX,XXX of based a per

of XXXX, for includes our XXXX compared the a settlement in the first-half non-GAAP million million positive loss China and of $XX investment a is for depreciation, a since not $XXX,XXX the to from of Operating from of a $XXX,XXX of in first-half for months which same did million, for compensation mainly incurred note with distributor, for charges a $X.X ago investment EBITDA which the the Asia EBITDA loss period. non-cash period. of $X By the was gain of have also the net the the dispute $X.X the compares six the the the was million, to to $X.X since first-half distributor, adjusted first excluding amortization, Asia of $XXX,XXX year one-time of charges former of and it receivable million gain XXXX. XXXX one-timers included in the expenses XXXX comparable in of Adjusted first this to charges stock-based any six $XXX,XXX, or non-GAAP which we months for net pertain

we of XX, of had million, compared $X.X June million to XX, December As as of XXXX. $X.X cash

operations XXXX. Additionally, million, $XX.X the $X.X to was million months million December as XX, we $XX.X compared XXXX as June June of in compared of ended had capital million XX, the of XXXX, of XX, used during $X.X cash first inventories. use working Cash months to six prepayments six first for in change in and XXXX. to the of The deposits, a in as expenses offset well investments model, which of settlement pertaining current the China business the reflects by partially reduction the were accrued period for as

That may now remarks. you call for you. the our Thank prepared concludes open Operator, questions.

Operator

Instructions] Thank be from a today we'll Ladenburg first At Our Cohen time, you, Please go Thalmann. [Operator question-and-answer question sir. of this ahead. session. comes conducting Jeffrey

Jeffrey Cohen

Hi, Edwin. John and How are you?

John Fieldly

morning. Good Jeff. Excellent,

Edwin Negron

morning. well. Good Very

Jeffrey Cohen

you Hopefully me hear okay. can

to bit. So I into little a wanted guess questions drill three I

plans the you flavors sort you're [indiscernible] talk there? you America? can North about that or flavors on more of sizes can And the for what's little a color kind as or thinking packs, or North us of any uptick coming Do on your in the see any So power to expect packs. America also power such lines or other to you give to bring going

John Fieldly

seems It well. In nicely our to excitement that regards accounts. retailers you, working in Jeff. brings innovation, as the be to some for Thank of us flavor to established Excellent. very

bring, and do We have will plans. we

some on really position we'll skew the plans as Our across in our does our has Right one accounts have to for many conducting flavor country. kiwi-guava innovation well additional moved rationalization. team be now innovation; number

at on buyers, but been And to So these well well extremely, from very working Pear has only Apple rollout combinations retail. seem its not our initial really recepted by, flavor consumers. Fuji be also by

well trend market. our And goal churns cognizant market. So required, the be really is with stay monitoring And of we continue flavors. to that's as to first on to we will are the innovative

we the power very the most well as to bring seen increase to with to have regards plans online In great a about as well our do we've through powder flavors finished as product, innovative sales products. it. that channel And recently We're line. in optimistic

powder On-the-Go lot You other occasions, see Celsius of its usage with offering. a

to and take travel. ambassadors lot so So anywhere the smoothies, that adding leverage so for line we're plane into could have to you a Celsius when there. another of us it brand And also to the our the other mediums, noticing it's are you and influencers opportunity that excited on further taking product brand very

really the expand do launch regards categories. us in will consumer back-half, then was after to I in the the that planned additional expands for product, and much year line brand. our lower a and It's caffeinated we to lines, an which in allows initially goes additional adjacencies -- this X-Eleven nootropics verticals our mentioned, the have launched as offering. and And usage a occasion nootropics wider really a within And

think So through we offerings, look as I coming forward here. see you brand additional will Celsius innovation

Jeffrey Cohen

great. That's

Okay, any or that's any second in question, conducted there being studies then clinical and aware that you're out geography? work of

John Fieldly

We and have but with lines currently that based any that is bring today. and additional going place we are as don't science continue to Celsius we additional do out, but is thing, to always It we're active -- any science not we trend, lines exploring table. currently, taking as one at studies something additional active well have backed, look innovation the are it is ongoing studies

Jeffrey Cohen

back-half the remind then of XXXX QX a through walk just could the picture of Okay. and little talk of and thirdly, any trends us you year, seasonality the quarter and the would bigger And kind about upcoming in anticipate? for that QX, one and kind bit us of

John Fieldly

you category at outpacing options. most up XX.X%, most last, several as Celsius the maintaining our our When toward build years. you to Yes, for which continues better-for-you is the are over the to quarter and third-party we're the I every And register turning We're a recent, scan I basis on truly continuing each look go had SPINS shows data, our healthier, registered mentioned, think so the data, it; when expand back category. momentum Celsius trends recent phenomenal. over at look XX-week

Traditionally, a industry beverage takes So place beverage lot months. during opportunity. as called, in in seasonality it's season, we the that the see summer of there is

We that listings place. is by offset being that, are are affected retailer but by taking it new

season and although the affected So, our existing offset business distribution accounts with to summer that we're is during due many beverage the it baseline months, by are in and seasonality receiving retailers. expansion new

million on growth and at I with looking to from which do XXXX results. we net XXXX -- we North go-forward looking was metrics, that as move When can did timing, America, production. our history of due -- something to some to on have that QX So, a basis, and our at. moved momentum, it's you're but with have so a of think QX XXXX, past see looking or you QX forward at our continuing considerable definitely $X.X QX But should timing be looked at

Jeffrey Cohen

Perfect.

for those for thanks taking Okay, the me. are questions. And

John Fieldly

Jeff. you, Thank

Edwin Negron

Thank you.

Operator

go Please Jeff The Riley. B. Sinderen of is Van from next ahead. question

Jeff Van Sinderen

John, that getting congratulations morning. terrific driving And didn't and say, on previously. your let that you have shelf you're growth some me to you metrics. the that, speak highlights? recent strong the maybe evolution, good what's of really Hi, and QX Can space

John Fieldly

morning. and really place Yes. Jeff, Thank a the There transformation. energy momentum energy The category. traditional is considerable in you're drinks and taking seeing you, disruption good

retailers And last just earnings third-party data, of Rodney they're on NOS, lot Consumers Monster's a night, better-for-you data, of Rockstar, options. Full brands, lot at SPINS want the a There's category these look you a really seeing healthy, Throttle, call, well. If decreases. category in real additional really clarified taking energy energy. to drinks Sacks performance place, reacting what's now the are happening as of indicated this transformation to add space and shelf and

sets like as that be indicated choices, today's so align Rodney better-for-you shelf of looking are momentum ahead consumers some lot really gaining spaces of updating health-minded retailers their a additional brands with seeing us. will for And Celsius to we're

retailers. further right of and we you're all there, accounts. over now of lot place for meetings meetings review a were several preparing have as expansion for existing next we the And taking months, these category seeing As out

optimistic. very So, we are

prime Our today very on. DSD we of these this for team taking why half us the year is and seeing that is reason expand, XXXX optimistic partners we're continue back and a to really as

You're on Pepsi distributors these on Geyser premier seeing as see the opportunity Big in us Celsius as taking as Anheuser-Busch, well so Keurig New distributors, Pepper as and York well, City. taking they Dr.

and to definitely it's there as at happening X.X%. is coming energy seeing it a that in More in growth category, consumers great transformation category are because well. growing that you're the So drink the

So well positioned future. we are the for

Jeff Van Sinderen

Good to hear.

On the regions the the left based to you build should where your of can DST I second-half? of on after, which plan kind are go, that? left just added go the in we out biggest speak maybe And year, this to expect guess. lower network, impact DST to in

John Fieldly

full which coverage DSD Yes, look on to now we're our biggest filling at our coverage, boys, of our the is do have biggest, when coverage. you DST right in southeast, we have working couple a

retailers able i.e. be particular build allow many be target. with we'll over will cover will the the are ACD will that zones able distribution working better retailers to and some this and keeping trade, DSD that systems, really servicing to through to to XXX, us look the our which Once we are currently and be and model, additional and gain we we execution out us cover able, buyers on in keeping these these shelves. in to of we're from replenishment stock warehouses So the us these CVS retailers, able of

as regions well, that in Michigan, So New up -- covered also well, Vegas. seeing, the the you're Texas New in right York, California, as you're have the the in southeast, we presence we good now were seeing, a have we when England market,

of what over these on have lot turn we do we considerable voids now. a the to right And working And team as really is look that's retailers.

continue key And additional there's we're on lot distributors. about premier ahead. looking a we're XX to now runway right expand to with When you're these So going DSD of that. at expansion,

So forward just partnership ahead, these today. activating servicing partners, great the to independence, seeing traditional great runway really the the we're and not with looking momentum the and excitement new forging, then that we're retailers

Jeff Van Sinderen

more regions you're to major international business one the And turning those a you? that then newer about maybe expand it Can would if and thinking approaching And around in touch potential? you regions Okay, that other on Europe. how have seem that I great. are on opportunity to Nordic of some you and could, is growth of

John Fieldly

think, the opportunity wellness these capitalizing of for trends. I a global and Yes, lot us, health there's on

focused the growth. key is which on think expanding, we are I profitable

presence So to to gain next country we're opportunity penetrating further there with it's on as some that we're out very aggression. that further retailers the and Europe Norway, Germany activating that the with about coming Finland as listings key have. in still and we're good well. well opportunity additional marquee key Also The expand and the speaking Nordics with of phase, Nordics is the model, we awareness throughout as Spain, Spain, with of there be an throughout would that then in

opportunities but expansion. So sure of the want there make correct is to ahead, going the lot on we model is a

Jeff Van Sinderen

Thanks continued success. taking for Terrific. my questions and

John Fieldly

Thank you, Jeff.

Jeff Van Sinderen

Thank you.

Operator

ahead. [Operator Anthony of Group. Instructions] question go Please Maxim from Our next Vendetti is

Anthony Vendetti

Thanks. Good morning, guys.

John Fieldly

Good morning.

Edwin Negron

Anthony. morning Good

Anthony Vendetti

then as continue grow we what at dollars? the spending where to increased put have specifically marketing type what you more to up on little that to expected we into forth. these I tough you're did it it that have and half and Is and expected and of motor a know take year, back of marketing events bit about continue ask spend. -- the I move just your and sponsoring events level, the so wanted to I you

John Fieldly

driving. we've I before our think we're spend, in regards to stated

the to drink driving to Our revenue and category. working right now is We're taking path. line to EBITDA into drive what's additional profitable to hard and that place gross towards growth. marketing drive We're and dollars profit energy dollars focused capitalize on top continue goal

the So over particular manage investing opportunity. to there. help of years that hired our regions to dollars initiative, We're reps round verticals; tremendous great also business DSD. sales reps a We're a the manage EBITDA seen We've food marketing, we're sales additional the reinvesting in in we several expanding additional is sales just last area. in in us service key help growth key

we have of motor lot So to marketing, activation. did in direct a regards tough

online, also additional advertising. targeted sampling, We up which also grower did lot demo a and drove of and costs,

quarter an at but we dollars. very in is to But So line continuing QX that will our those to active, activities think cognizant are of going grow on an reinvesting types be break-even we're to well. so I close we continue, know at as level active

Anthony Vendetti

the Obviously, as number just distribution? tell agreements. really for you? the next think your this expand the you pipeline us what, What of the little you for could what pipeline? opportunity, bit the new a what, then year, Okay. a are on year move you expansion. about you of the And are the some terms in announced customer that Can customers in needle distribution, of end What's

John Fieldly

been great those Yes, One has is good I mean a when company roster process look optimizing really of existing at, currently we where retailers. that thing at very we are. our, have existing this accounts, retailers, you through through

show. retailer example. So much just went on existing list, first sprouts, started an as we on to our opportunity available so partners we dry maximize When still the have these we into

cold have account the point they coolers, that to the more, checkout show expand to grow where velocity, moved us results, increasing front rates, the really cooler, and the able we're more higher we velocity went cold you cooler to numbers. where to starts, to continue the velocity We further

of energy currently look SKUs like on really at example, some additional then further have an we check when as cold dry and There're three and shelf. national you out SKUs add Target, in gain opportunities out also front cooler. to So our availability, check set accounts a the the

and further really expand on our increase SKU, roll role Also additional lot leverage or increased SKUs a locations, not been portfolio So that opportunities has they and gain and X a store expand by just shelf talked in X, to the and is execution with channel, have partners. effect, CDS, X, out velocity full three all trajectory, with X, of door for Nationwide retail we when numbers we XXX-store where test. activating increase really, SKUs really to the so, better the our know and also opportunity completed, to CVS that. checkout we energy which the maximize really multiplier great, on from one additional grooming we and in same we're working about convenience the and

set that green just they we just energy top that light notification better the beverages. for is one cooler The Rite other received the received Aid, door. be GNC in of have have we where we the opportunity the We will beverages added that been we selling for in now to have you

then opportunity So Aid. expand And expand with Rite SKUs at the that will and further further we can go retailer. optimize and that

that of in the the in there's York opportunity drink new that New Reade Also, a there. we're retailers see lot of we convenience City, category. energy Duane lot opportunity Walgreens channel dominates some targeting, a So, and as

the category. we're drink very ACV XX.X at continue to today. energy and increase So working to only We're our hard

there's well. lot that us. ahead others there's talking then So we're where to a so many account as of of is we're a talking great to runway actively Speedway

Anthony Vendetti

great. Okay,

Just of noise and out there's there misinformation CBD. a about a lastly, lot obviously of lot

you terms maybe so, company. that is drink based You an going a But to opportunity of like timeline, know, CBD. know, planning have on in your you're for would forward? energy an if what in recovery And there of look portfolio terms

John Fieldly

Absolutely.

to we able CBDs the are process, drive at we're CBD additional routes want galleries our the have our we've our the Whatever the product sell through Our some in something the do to for portfolio and we routes categories, market. goes as able definitely the adjacent and been organization sales innovation looking to be bring regulations. different watching existing leverage on and being market, to are we government a working to team, efficiencies verticals. ready, CBD we time, And, our market. is

market, our have maximize and opportunity to do ready, we the product but relationships a to and make we that to we're able it market. bring routes So we need to sure when

will but We So are closely. a timeline we have we today, be definitive ready. watching don't

Anthony Vendetti

Thanks. it. Okay. I Excellent, guys. appreciate

John Fieldly

Thank you.

Edwin Negron

Anthony. Thank you,

Operator

questions turn to time. John are over no call There additional like back this the closing I'd to at remarks. for Fieldly

John Fieldly

Thank everyone thank company, for behalf continued the interest. you. their like of On we'd to

today's and energy transformation And in today's taking Our products momentum. second considerable our the category. drink capitalizing gaining results health on global trends. wellness place We're are demonstrate quarter

is Our position a healthy lifestyle active global position with appeal. mass

building core practices. deploying our opportunities and leveraging upon We are best and

growing portfolio a large, and strategy We have that and consumers a rapidly market want. winning

our to them of ahead significant dedicated without for Celsius opportunities tremendous team, Our more we profitably. see would our proud and mission as be to I'm very possible. not is consumers achievements get

in for I investors our thank addition, our continued In and competence their team. support

day. be a Consumer and we note, your look Thank presenting On to Celsius have B. you Conference FBR of will at interest upcoming in Riley forward management everyone and in at a New the October team final many our upcoming York for you on conference. this great seeing X, City

Operator

This concludes today's conference.

your now you lines. for Thank your participation. disconnect may You

Celsius (CELH) 8 Aug 192019 Q2 Earnings call transcript