CELH - Earnings call transcript Q2 2021

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Operator

Greetings and welcome to Celsius Holdings Inc.

Second Quarter 2021 Financial Results. 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. pleasure Celsius your Holdings. my Investor Cameron now for Relations is to host, introduce Donahue, It Thank you.

begin. may You

Cameron Donahue

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

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

today. the a remarks, with Relations materials company questions filed under All Form to XX-Q and press that instructions the Following the celsiusholdingsinc.com call at The prepared will SEC section. time. initiated and the release we'll open on website available your be given are its company's Investor the

John? As are be a of the I available information XXXX. that, based comments. the for with for Executive Celsius on required including many expectations call contain available aware, in and the will Please our John, Chief duty harbor of XX, involve risks contained today. filings company's over may over be as forecasts, update also the any in release press to extent reminder, We before disclaims to later this quarterly beyond replay forward-looking management to which control. an to and our August to statements safe and obligation audio prepared to numerous additional other Except call I'd as Holdings that turn uncertainties, statements statements. information. undertakes SEC turn These With and like President call to by are Fieldly these full forward-looking the encourage statements Officer, any you law, his and today's no John review

John Fieldly

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

share increased increased achieving board, representative are in year the gains. been organic momentum $XX.X supporting social XXX% that record this to quarter some the the further Total and believe adjust increased market expansion, drivers CELSIUS what totaled a $XX with brand quarter. also SKU for sales quarter across of the million, significant is drive the we Our million acceleration ago feel growth, recognition gains, leverage distribution the provide support brand second in for has step-up up company. of the sales We results from

raw Our domestic COVID incremental XXX% the contributed of up in and rates, are quarter, our the channel XX% in in $XX.X revenue a costs with impacts year XXXX, compared these ago of to of $X.X $XX.X each and International still million, increased with growth, $XX.X from the grew to first and Nordic million growth to dealing when percentage COVID-XX, which fitness increased with both hit our $XX.X the from hardest of are XX% triple-digit had million we million, growth second primarily sales prior of markets, history. the to months in quarter. from six in transportation. channels growth sales International revenue Even of record quarter vending including the channel highest highest approximately million. materials Two

and positive channels Our saw into the trends quarter. basis growth and third both continuing sequential period vending a year-over-year fitness channel with of tremendous

great of channels, and quarter mark the XXXX the these was for comparable the Although, second both improve. growth for basis sales of the to continued from low each total rate

imported potentially line reopenings these have of The partners safety capacity operations with and remains variance in health believe authorities. varying completion COVID implemented, We health late can this adversely well the COVID-XX guidance our as and in from restrictions in of which half but back projects have lockdowns the new production and to hit been affected East, XXXX and employees precautions the we could as last The place, which hardest our sequential to restrictions from we which aluminum remained operations, can over cans, the Australia regions Middle XXXX. still due there a in developed and EU, with and in imported lot been of around priority several in from by industry and our and anticipate be we top which of as improvements XXXX in our been of the are cans for in major there and through entire of manufacturers can our and channels, we have with plans for cases and but reclosings XXXX. the well public new increasing Our our Asia-Pacific, shortage XX% driven and Celsius XXXX. can positioned safety top March decrease should in states with some implemented derived international uncertainty, We by adopted wrapped production proactive have expansion in Overall, impacting of could sourcing the closures remains seeing continued started relationships supply force expansion markets. remains XXXX US, contingency of which anticipate countries. and quarters be initiated extended through

XXXX expect was We point, sequential point significant and XXXX, towards cans with the margins XXXX for we the our this half domestically low sourced margins, improvements improving QX of be believe back in of majority physical a levels. showing at our will of year XXXX

input focused to driving we with quickly to COVID environment opportunity adapt leverage new blanket materials team significantly and costs orbit implementing we move believe stock addition, and performance with sites regional expanded our plans to raw to In alternatives and third orders floor second to as to the the on efficiencies, further continue operational secure model scale, of have six distribution programs, forward. and purchase are The this minimum efficiencies suppliers. and warehouse drive reduce is expanding teams to

in and further delays operations, can shipping warehouses through We iconic reach ended Texas XX% inventory. level to improved driven weeks. gas back quarter impacted leveraged synergistic focusing co-packers our improve benefits our fill East brand. the shortages on integrations, operations, in and dominant and implementing company in half shortages, quarter of several fill also as second rate the second global XX% and to rates marketing see Coast financial at integrated QX, continue approximately The build normalized have from we from to We global the further the strategy a the our levels June in for expect this our by the freeze and which

to additional financial second Turning some highlights for the quarter.

was Our accelerating triple-digit expansion partners. domestic from trade, $XX.X sales further retailers growth and activation and revenue topped growth driven million, traditional distribution by of our channels of in world-class

Delivery network growth year. Our to XXX% and revenues our when DSD, prior of Store Direct the compared distributor delivered

addition prior growth growth when of Our fitness channel together as that in discussed, to year which $X.X which prior million revenue vending over to XXX% the contributed from over the XXX% compared incremental our sales rate, increased year. saw

growth July to regional throughout vending over drive we X, of the expect additional new we contracts agreements. XX,XXX As additional and and as national placements we Group, agreements several market continue have distribution with Food micro year Performance, that

our Guava major all channel. in and fitness now SKUs addition, where channel we club, which flavor, the new new at accelerate. continues chains our our Tropical In mass number gym, our expanded Vibe expanded fitness On the to further one our flavor is a Strawberry channel flavor, offering, selling

rolled locations. We out Costco nationally XXX all are in fully now

energy product our Through and shows energy which are XX% SPINS four-packs. in ACV, beverage North an $XX XX.X% which XX in have latest July in target, is convenience, the months data On convenience America, take largest to holding XX, channel SPINS while further added overall XX also expand. additional opportunity have year-over-year truly The in accelerated we weeks Celsius Industry-backed growth channel over drink X.X% only the is as lying place. billion data continues have stable XX% we a metrics. we the compared to annual shows accounts fall addition in of over with expected stores functional represents portfolio process in shelf XX,XXX for side as growth the energy category year convenience this we increase sales. ahead in category, continue approximately convenience anticipated XXXX. resets to In DSD show third-party converted the launching to to the This per last market Celsius ending

ending continue drink a drive to service XXXX with chains launches XX.XX% Consumer July bank accelerated energy a Celsius surged XXXX share third quarter the Category, X, category July And XXX% category Energy XX, nationwide Bull for through CELSIUS for CELSIUS behind Monster behind of network. for Total confident sales drink XXXX the Red ending total XX Drink second scan of share were largest share share sales up the and number popular On July higher our four the Celsius XXXX. Nielsen for while continue were brands X, over for through the Red with up a one a up X, X.XX% is XX.XX% the DSD ending transforming the XXX.X% including are sales weeks at will with weeks. period our weeks XXX.X% Ranking, category the XXXX fastest model to as U.S. of X.X shots Stackline, distribution overall Department, we U.S., year-over-year at Bull of that is XXX% Monster up were share were July last energy most ending weeks showing weeks sales at with brand a sales reporting data of Amazon, We LEADERBOARD additional Stackline, even drink energy in four Celsius XX.X%. demand reported increase the just to the and and XX.XX% XXX.X%, XX.XX% to ACV sales two sales up channels XXX.X%, search year-to-date positioned the our latest XX across and According with existing recent Grocery as growing retailers most CELSIUS ending XX last

and includes accounts We approximately distribution We now growth distribution DSD Pepper lift are This conversion from of major with and prior Anheuser-Busch over XXX additional are regions network, also covering network XXX% as year agreements revenues U.S. Dr. to XX% quarter. – network, additional national continue now delivery now Anheuser-Busch second partners regional beginning in to Keurig to in its of now our total which network. the the markets to out independent independent counties our new and delivered distribution see national builds when XX% metropolitan of direct distribution the expanding acceleration to compared further MillerCoors Celsius covered. our the PepsiCo, availability partners see centers of store secured DSD

stores in up gaps adding region, Transitioning network filled quarter. converted the half with process XX% our continues in Key more with with one securing transitioned XXXX. distributors RaceTrac, serviced DSD new include of CVS major back We with retail the Murphy's which DSD. Kroger, the with also transitioned were Speedway, is Target, the being of Circle accounts over partners in XXXX Walmart, USA are three that additional K, region, Mid-Atlantic by X-XX now to the and and initially to of in retail through in DSD DSD additional second XX% our also signed

first Our placed rollout have second Celsius now XXX XXX market the the of months total branded in XXXX. the in quarter, through coolers six of approximately and over

We metrics our the have also tools growth to comprehensive leverage additional implemented retail and and through accelerate the partners. tracking

improving scale this back States, by now our planned as total doors front, store similar On placements numbers at rest strong to the place. to We throughout we milestone this a of line as continue locations, locations, expansion major and cooler expand beginning take to XX,XXX over rates XXX,XXX and half sales. co-packer expect with Today increased in year door resets of additional existing and in grew count continue over of increased the we which time year see additional our priority. is our exceeds United XXXX, retailers at velocity our partners the or the

and support totals and which growth our Our active now growth locations, total our lies nine the out-of-stocks will limit opportunity help that U.S. footprint national co-packer ahead. massive fuel

the to launch our prior Nordic, increased growth During demand the by CELSIUS meet $XX as of flavors growth our year, sales centers XX% million inventory of XX% the and versus raw quarter, our at materials. $XX to of the and up Europe, million, increased our quarter the the flavors. Tropical we portfolio two second service In increased support increased of from new better levels end well and warehouse customers of up distribution to helped as our and inventory first

Finland to Celsius in SOK during delays main normalize the portfolio the positive up quarter. co-packer a In has the FAST of to sales half have where of portfolio COVID growth due has started the stocks packaging addition, back with made for quarter reduction associated to which in been to to territory. retailer the The experienced our in results launched extremely positive further out in Global drive FAST Celsius been initial XXX expanding top rolled locations. out and EMEA

We initially FAST the Amazon. also a the launch have through in soft portfolio U.S.

expansion to markets. timing of the European additional continue evaluate We

We are expect of covers maintain back in countries including China, and UK the through EU others. several EU a approximately half XXXX where licensing market launch Spain, of to market, Germany XXXX in cities and first Amazon and over France launch model Italy, XX,XXX XX additional In confirmed and locations the to distribution. the of Sweden, distributor we our royalty

impacted, supporting impacts. countries have growth We by these additional both these markets opened the once fully to service our been provide international and COVID co-packers other anticipate Our long-term due that geographies will opportunities. in-country

Asian States, we capitalize for in significant on preferences for scale, see As this consumer offerings to with Europe reflecting better market. a and the opportunities the United in you enormous global changes

the moving marketing. to Now

and work integrated On play meaningful the targeting front, marketing emotional activate, building robust programs. through and live, they we continue marketing connections to consumers,

restrictions Specifically integrated sampling and expanded our targeted in programs we during despite and COVID Tour and We the and Live sponsored well. as experiential Florida, California both other the in-person markets further quarter, Texas Fit virtual.

addition, our In expanded programs further brand more we way. consumers a in reaching meaningful influencer ambassadors

In – to tended the of optimizing primarily million as of of building investments Cooler proceeds on for and branded company which capital, targeting Celsius $XX.X June targeted to well use inventory expansion company generated our marketing including warehousing, programs, in XXXX, completed the growth proceeds, support X, the growth, of program. as an net our the addition, sales leveraging offering and approximately

operations market inflection as Young growth. for positions opportunity proactive team partners XXXX. one the such corporate as With Celsius and in beginning the we point have share of which third Celsius this, and We & with reached to our sales been our exponential that building as auditors quarter have maximize another in in the growth, as key Ernst well

accelerating have the national in our associated partners recognize just retail network begun these incremental place only DSD growth transactions. which is with we with Our to distribution,

place Chief we Financial Our the for expedited team turn ready is our scale. and over to prepared growth Edwin support is now will our remarks. to I an in on sales call infrastructure the Negron-Carballo, Officer Edwin? expect his

Edwin Negron-Carballo

John. you, Thank

to of net Jefferies. First, and offering of public company selling in stockholders I general company for $XX.X at wanted X,XXX,XXX distribution dilution X The receive the our The aggregate for led Celsius June and of our a reduce service from X,XXX,XXX UBS company the approximately and our expanding branded by sold the $XXX capital shares common net proceeds company and selling program sold by the of shares on offering did The cans issued such not cover to and selling proceeds proceeds stockholders. miles warehouses price with million offering $XX.XX. million. the corporate proceeds working the stock, better any of intends sale cooler of in and to the the expanding financing, purposes, distributors. as stockholders model shares use stock X.X% common generated for The

results. quarter second the to turning Now

was revenues, largely America the The from a second attributable million, prior to revenues increase an in the translated million quarter. three the impressive $XX.X a for increase June XXX% year quarter XX% balance ended XXXX. robust ended $X.X from a where of into million XXXX of XX% of in $XX.X North three this result which increase million, a in million the XXXX $XX.X of growth the was increase $XX.X growth quarter million $XX approximately months XXXX the revenues a quarter. quarter XXX% of of Our or considerable million months revenue Approximately increased growth in to from XXXX European for were second significant was June XX, XX, $XX.X

during increase was agreement. for the June our the year $XXX,XXX of primarily from an the ended markets revenue to XX.X% The in ended XXXX XX, provided months licensing This generated East. three XX, Asian North months traditional a increases mainly quarter, distribution of our international China in XXXX, for prior Other to the the in mainly decrease year of prior consist increase revenues American the were an in from licensee three $XX,XXX in in $XXX,XXX, behind from June in related $XX,XXX for strong sales were revenues, increase for royalty as an presence pricing. total restructuring which opposed related increase quarter. growth with world-class continued product increase retailers. triple-digit an in increases volume Middle volume to operational revenue to sales in combined optimization of factors primary The in was channels, our $XXX,XXX related

growth quarter. network in Additionally the prior distribute the DSD continued significant – distributor our in resulted year expansion revenues of compared when in to

for the million, which fitness revenue XXXX. of XXXX in from the of during three XXXX to the a for quarter, the XX, quarter. facilities in year incremental the we increase We increase time in the considerable closed or many $XX.X XXXX approximately months quarter year our fitness XXXX, XX.X% from to also million Gross Furthermore, for the the Gross three revenue were ended quarter. QX for XX.X% pandemic. reflected $XX growth by achieved which approximately when million to prior ended XXX% for and X.X% from $XX.X estimate strengthening contributed in months margins increased accounted profit quarter to the Europe COVID-XX vending triple-digit that nominal the channels compared prior due XX, June profit June the European

of the increase from while to gross of in for expenses costs. related million to increase June to three sold, increase XXXX well the $XX.X additional cost increase $XX.X of of processing impact some marketing do million. quarter. XXXX and in impact nominal is $X.X as approximately in June include ended quarter compared to million ended our of in or quarter costs dollars lower from This freight, investment would to gross related million compared which We increase XX, profit that currency to quarter Sales $XX,XXX increase XX, second related reflected volume, the and million The of mainly An $X.X prior approximately the XXXX. the months volume year is profit Excluding mainly margins the our dollars as to when XX.X% resulted repackaging for increases to months estimate increases this XXXX. adjusted cost second translate attributable profit marketing XX.X% competitors the in quarter as XXXX three $XXX,XXX. favorable not of gross profit of as the and goods million was mainly an XX.X% activities, gross favorable $XX.X were for $X.X in

costs year the employee $XXX,XXX invest Additionally, to growth. in by support to from increased this area infrastructure in continue the have to quarter ago we our proper as order

ongoing now business we amount our are marketing other incurring travel and increases as activities sales Additionally, $XXX,XXX of DSD network activities. in we're Similarly, experienced expenses to in expansion. and support mainly trade events our to in selling resume marketing able expenses related to the in-person we

Lastly, remainder expenses, as in quarter. million accounted storage costs the of from $X.X area and as distribution XXXX the increase for well the of broker this

motivate to of accounts and amounted for XX.X% million it or the second in increase the to months ended deems XXXX, $X.X important the the June order to business was percentage a $X.X Management increase XX, amounted increase XXXX June three in for $X.X employees quarter. total attributable of this in ended quarter $X.X second June million, $X an XX.X% of in months them ended which the expenses or promote overperformance. when This marketing XX.X% providing and very XXX% increase compared XX, months ownership revenue, from option of year the of for to sales the million for to three XX, an quarter expense, which administrative stock were to by XXXX. area expenses As three to million, XXXX million XXXX. primarily in prior compared the General of

ended Additionally higher XX, required commercial area the for employee in business. and our XXXX of volume of increase XX%, cost also support business to investments June the are as $XXX,XXX and an the reflect three operational areas months properly or this

prior $X.X other potential reserve similar are an or mainly related exposures. cover incurred. amounted increase XXX.X% and realization quarter. travel This million Additionally, expenses any Administrative $XXX,XXX increase is when year being of compared an properly million variance expenses to $X.X to to in or the now debt bad to of

increased increases and of the We audit and when in by compared year which expenses, experienced $XXX,XXX also for insurance the majority quarter. approximately fluctuation office rent, legal of accounted to $XXX,XXX. costs remaining the prior costs, Depreciation amortization

of receivable gains note pertaining of miscellaneous of our partially China of to $XXX,XXX, income expense to five-year net mainly Lastly, Total his The of even administrative of is miscellaneous by in when compared were licensee to all $XX,XXX composed $XXX,XXX quality the income with of accordance the quarter exchange by offset foreign is other from XXXX financial total our $X,XXX reflects an June testing, note The net leases. three other total compared receivable of interest of from licensee XX, license income XX, terminated. the for composed which non-operational research, ended control XXXX. expenses, and the currency increased the ended development, period. $XXX,XXX if related other income independent $XXX,XXX to $XXX,XXX were receivable June income increase of other $XXX,XXX, terms, interest which months by arrangement three other $XX,XXX second to when for The due note which amounted the the licensee, months repayment XXXX. requires is over

on XX.X of net income share and shares a per the of or weighted As was on months based $X.XX a outstanding. of of outstanding fully June million of shares weighted three average outstanding. the based on a June $X.X approximately ended outstanding dilutive per million share for million XX, for million average comparison, of the XX.X diluted three of million million dilutive XX, XX.X per income net XX.X or and shares a shares weighted dilutive average the ended share XXXX earnings $X.X fully the weighted based average earnings a result company XXXX, In $X.XX had share months $X.XX per above, of $X.XX on

December on we debt. cash June had respectively now $XX.X no and XXXX, respectively with $XX.X as for the operating of million and $XX.X capital totaled capital used million six net of in of June ended from months in a representing the $X.X levels our XXXX, for operating our XXXX. order cash and XX, and XX, was ended million of liquidity to June increase flows use cash by mainly related $XX.X service XXXX $XXX and activities $XX.X months The Cash activities to working XX, used of Focusing million demand million properly million XX, million resources, in six increase for products. long-term inventory

Our to $XX.X QX XXXX. million net in QX increased inventory from XXXX $XX.X of million

Excluding perspective inventory, would increase flow additional also using from performance totaled a volume million. to of have believe good in QX I our this provide we as basis. a operational a significant wanted $XX.X cash business cover operations metrics few

Our approximately or days. daily sales XX DSOs outstanding were

approximately payable hand payable outstanding days were days inventory on XXX our our days. days were approximately and Our XX –

these Given metrics. our are growth, very good capital working

in you. remarks. concludes and non-GAAP of revenues. Lastly, a earnings believe release. our and enhance of open measures To this GAAP you questions. included adjusted of true information or effect, that now our Thank performance. been adjusted million results overall was of understanding press for other EBITDA $X.X our figures has the EBITDA second non-GAAP call XX.X% for This the to We may Operator, our visibility reconciliation financial the prepared quarter business

Operator

Gajrawala Credit with with time question-and-answer question. this Please and question proceed you. we Suisse. first of conducting Kaumil a comes be Instructions] session. Our gentlemen, [Operator at from the will Thank your line Ladies

Kaumil Gajrawala

distribution. amount there first bit meant Hey – gained some of to of shelf is everybody. quite I those fall, Obviously guess, Thank quite sorts and a I A guess questions. a things. of couple you delays of you, after you've be catch up this significant resets operator.

to resets expect You to what momentum. do should you Should its you've have have a of a reset, maybe continue we be that path? or amount at kind along of things would some anyways reasonable those current captured think just into expecting we accelerate you captured

John Fieldly

doors a been This Thank of resets, you, we reaching the Energy as is our What that is extremely company. year months about John. through getting six there the year, is major in listed and of look cut-ins. added the milestone Kaumil. this retailers for half back doing Coke now XXX,XXX XX,XXX space getting we're stores first potentially are at seeing, has some we out us right When the for team of some mid-year aggressive

So we timing some resets. in COVID resets do bit XXXX. little is on see are the a unique some of There given with different

So seeing additional shelf we get distribution. sets gaining – are

expect to distribution network, QX. the going DSD of for us is to the a in Also this as additional we huge gain independents small network. really activation opportunity activate after We DSD format continue

So continue to will early anticipate indications then at to larger but We'll happening same XXXX. the see rate, we doors to resets anticipate we as stores grow. we continue are the grow throughout year and in

Kaumil Gajrawala

I And ask it. about Got then Europe. could if

market little size, planning those thing? of that are are for You expectations your Amazon you the launching detail a that maybe Can mentioned launches on in an contribution just sort on a what add bit markets. in more Europe series of you maybe

John Fieldly

indication, as of in not and and large overall QX really we is talking on with the Early extremely We're and markets. as energy UK do markets. additional in size expand been the other North it and it obviously partners doing the Amazon the we've these time. exposure us about but well working the drink anticipate is it US. into for market launch We're Germany most gives to incremental on importantly divisions We as Yes, there. Amazon looking America revenue, in over for some European

entered UK and and as in as of distributors. think se partners well air we opportunity look for Germany as per retail we cover it as So as the

anticipate regards incremental. to significant to but prevails, it So see top lots of opportunity but we'll expand dollars we as Europe, we further throughout look line, how it to to be in

Kaumil Gajrawala

were. Okay, they a margins. gross like year – sounds what to get XX% It bit get that, have sequentially guess I I Is saying, do longer And on because where last margins up for to XX in intend range. just that under a maybe the that are back full question the to to? maybe XX.X% think of or great. that confidence what what But better year a to was getting your you're year. guess you final back quite we when you the year, you figure Is you will you'll exit of get was – kind indicating

John Fieldly

feel out some will growth a be see we QX. in as seen in well materials. year, we're this and to freight we've of costs the in as cans the of and There's raw as as we QX through margins, lot XXXX cycling well variables of in extremely Yes, anticipated in going volatile sequential half and there, back imported

our pressure that margins back any half Edwin, color U.S. some And We do on to on manufacturing I you will and potentially the in into be additional know toward that? want add of XXXX QX to put QX. So XXXX. more don't can into utilized anticipate and if

Edwin Negron-Carballo

Yes. like Thank of between there's that the and Yes, other I variables lot euro. dollar a always is I parity one to and is the U.S. the the strengthening. John. dollar agree, you, emphasize And the

always also I come make to where consideration. sure well. into I land, taken of that's to think to going predict So also but so into going that want kind to play that's difficult Again we're as

John Fieldly

move anticipate the being Yes. around forward. gross No. Good point. to QX at we the But profit floor as we continue do to results anticipate XX%

Kaumil Gajrawala

got everybody. Okay, it. you Thank

John Fieldly

you. Thank

Operator

from comes UBS. question. Sean King your Please question of proceed the next with Our line with

Sean King

the the that you've to loyalty pricing consumer for in Thanks guess, some And are maybe just guys. given drink pricing of thinking morning good I take seen? How your metrics you ability Hey, question. the category? about energy

John Fieldly

in That's there's extremely our grow regards advantage of the we competitive plans the with Yes, as promotional to many right in for other really loyal has When opportunities is category what really fan now, watching we have pricing we our allocations, and mean we us. watching allowances we're increase. players been to mitigate base do go a forward overall and think players are pricing pricing, we also more at on same scale. I to loyalty consumer Monster frontline doing and continue look price high as and the

Sean King

does just to one Great. mechanics I was If a DSD, shift if the squeeze margins curious how that in. to I the could going understand forward? more and of have on drag to just

John Fieldly

transition. a there great mean a is it's Yes, I no, of somewhat question.

a and a that but up receive transitioning. we're getting benefits line of lot you dollars to our top to network, there's margin on DSD are synergistic giving We move

what further as on a we seeing see really, to those opportunities scale to some increase our margin. really to potentially we it's So neutral. margin is, where grow continue larger we grow of as really further also operations scale we're efficiencies And leverage

at make the So this transition fairly point as we has it neutral. been

Edwin Negron-Carballo

the as long-term may Yes, other from as is, impact there the an mentioned, able it make I benefits my John initially, short-term but be look we'll at synergies is, well definitely or that. to the kind way of versus mid-term, then to be and with contraction, perspective would

Sean King

Thanks a I'll lot. Great. on. pass it

John Fieldly

you. Thank

Edwin Negron-Carballo

Thank you, Sean.

Operator

Our Instructions] [Operator the Ladenburg of with Cohen next proceed from line question question. comes with your Please Thalmann. Jeffrey

Jeffrey Cohen

are How Edwin. and you? John Hi,

John Fieldly

Jeff. morning, Good

Edwin Negron-Carballo

morning Jeff. Excellent. Good

Jeffrey Cohen

of just a Kaumil's bit a of Hey, a questions. on follow-up couple

or launch happen Western plus the you're Amazon. channels big the Europe, short to gym to there as the as as retail? Are for far As any in far out going five in EU to on channels mid-term other plans

John Fieldly

opportunity. massive that is a Yes,

looking opportunities We're of partners. discussions. of under potential are at that variety with We a

that coming other partners looking in and So we're under quarters. in then point, to step are Amazon our But more expand for those markets first at is we where with this on the discussions.

Jeffrey Cohen

And the should that what the us, the may and Thank we you. finding stores out some of in talk the far as there stores. and data getting that to bit and on how of roll in effect they're back as Great. far coolers a you could half what about expect as little the you're about some as talk for second channels the for then velocity of

John Fieldly

Yes, XXXX of products. question. XXXX, had we had we just retail, velocity the due it's in really into sitting great a to out the a at lot of to and regards of stocks no, here In XXXX,

of in-stock is up strategically So and months our availability, step drive where we and one in are really XX maintaining it a to position our in customers, moving step that sales to over next enhancing ago take DSD can all placed coolers historically further home. really really is service and the majority getting taking our velocity the then locations so

partners. drink the purchase immediate larger ROI also in us seeing at our for part the when that category, cold which DSD where it's we better allows in locations with when investments servicing our partnership customers coolers consumers the impulse is place returns and to So with the we're greater are, great on of energy and a and we're availability take coolers seeing strategic

there. well the salesperson like as it of look see think I when coolers you great. So They those

as I We XXX placed currently that are about XX. June I indicated are have have we – stated, as of

We larger XXXX more, for as of some We're retailers anticipate some well. on with we into have XXXX. programs many this working year the the place in half cooler back and

as better, and our they live, place play. good a to customers service work in continue we really where So

Jeffrey Cohen

you out XX% XX% lastly, then And throughput and about talk it. reported rates Got the quarter. can this first previously

So kind involved? pulls are push And of what the state. just Thank are we steady you. and there

Edwin Negron-Carballo

were Thank in you, fill around QX XX%. Jeff. rates roughly Yes,

mainly increased the to fill there. those the in of getting rate to have June, quarter, half XX% a second We back

anticipate fill our the around right we rate, we we're continue as XX%, should to that inventories. increase QX to next in increase sequentially that further over months. So increase Currently, that XX% several averaging

six The allow this to get to and drive at key be to we'll level – Moving improve then able the right a model some inventory continue will efficiencies. rates. orbit is to us the fill of levels warehousing, to also at

Jeffrey Cohen

on retail. Thanks strong again. the Congrats

Edwin Negron-Carballo

Jeff. you, Thank

John Fieldly

Thank you.

Operator

with question Riley. of Van Please your Jeff Our the line with B. next Sinderen question. comes proceed from

Jeff Van Sinderen

questions. thanks And taking for my

Just any are us progress on can update to flipping and we you out where CVS on DSD? give X-XX's maxed on

John Fieldly

division Division day. regions. been Great Southeast continue Coast progress X-XX, Yes. on regards to whole each the question, over. West Jeff. has every several and working make In we We're The to turned other and

in a of have further of grip. full X-XX XX% now closing covered every-county we the gives U.S., really about the to seem us support have we really So, that gaps

of made needed quarter, really some the to team of strides covered counties these the the DSD great final second flip zones. securing be in in to Our that over order pieces

is the more have X-XX. work full And servicing, going favor there it, making we're are a then on to being That's move DSD. to we ahead through. alcohol Anheuser-Busch services is you some More flipping if of So CVS, each all progress day. working have on lot continue – But excited some shelves alcohol And – the challenges in all, There really we Still across to then every over and that CVS, DCs nuances to and transition at zones to continue network. make converted. the in everyone distributor or country. there. forward, on mainly look we're with

of lots opportunity So our to drive volume service to better customers.

Jeff Van Sinderen

fitness are And we're impact COVID the then or you beyond anticipating with – do great. the that? think any any resurgence of channel and vending you Okay, on

John Fieldly

I in the of great great up $X.X both question. saw our we in between a fitness mean quarter but it's and vending, second them were growth Yes, the million.

and point, additional seen it are Florida, slowdown yet. the haven't gyms in definitely especially the seeing will we're markets, we're Time measures is and a throughout We're protocols We having. many At this company. Texas, That concern safety tell. we're seeing, coming whole taking back.

cautious, a very but are it to be people seems Celsius. growing opportunity So for

I time that but So a closely pursuing tell. aggressively we're monitoring watching, great will don't that, answer markets. have we're and on those

Jeff Van Sinderen

squeeze if And Okay. more. then I in could just one

you the of four-packs? the touch on could launch If

John Fieldly

single look to the well. time at us Yes, for drive has company the talking been launch multi-packs. increased is with trial further of the velocity think you especially to some about has size, as to where awareness, been, When I for a strategy four-packs, and grocery there our you've in been it's exponentially, we've and transition everyone opportunities pack and mass, now Jeff, due

win five four-packs with is multi-pack, just flavors, as we've strategically velocity. the shows a off the expanded be we level look at four with taking offerings the flavors, what three We for started a is singles, So that multi-pack partnership going into introduced stores, we're Target the and as well to XXXX. next further company. you great flavors four-packs now on to and It working expanding the three we're soon

take going people buying as and cans, there, It's we velocity packs. an can increase publics over our well well larger as singles two to example, take definitely opportunities home multiple have pick up home, versus or but for of at lots four-packs. really where worked So one is you us

multi-packs into of back half expect four-packs coming So and XXXX the XXXX. more and in then

Jeff Van Sinderen

of best and luck. Thanks,

John Fieldly

you, Thank Jeff.

Edwin Negron-Carballo

you. Thank

Operator

next Group. proceed [Operator Vendetti of from your with question with Maxim Please Instructions] comes the Our line Anthony question.

Anthony Vendetti

guys. morning good Thanks,

John Fieldly

Good Anthony. morning,

Edwin Negron-Carballo

Good morning.

Anthony Vendetti

give there? a going So cooler of be branded cap you for branded in of more what the or When color versus terms metrics? in or a in Can before well. velocity and the you checkout put in that had cooler you do the around little terms seems that see sell-through then at the coolers, to you branded

John Fieldly

we're I all about execution I mean us. retail for it's mean working on.

Our teams are expanding.

marketing field our teams, support DSD teams. our expanding are We

We stores. sales that across additional about all awareness And merchandisers we're have our great grow need teams our now grows. continues in to brand have it's to velocity and placements We country. support building the

is placements we goal of every disruption, three be call Our points in to store. have to three it. We want

the importance as in end of cap. an well As cold

So it what and additional you I capital that's incremental the in the that grows a big floor velocities equipment at additional and on the mean strives. initiative the placement that once proper it's in but that also then important end it's is have even cold location these stock get exponentially we're we seeing there. rep, with cold and volume retailers, drive further

the in just at placing in getting of beginning and of these at we're given the cold there's a are opportunity right our retailers lot in equipment So locations markets that.

Anthony Vendetti

nine there, right point? more around demand terms six think being to now able to Okay, have co-packers now from that great. you or your based this correct. that at what of in to we Is are could Is meet add that's And on I then looking month plan out the XX co-packers see? if you sufficient right

John Fieldly

always looking great brands partners partners. and for company. We're Great great talking and build great

further depending We're Storey We solidify growth for new go. we on will partners, have how So have things company. active now nine constantly are that talking XX and the do co-packers our that with feel joined co-packers well. looking the partners next as for we potential Paul months do the

EVP team, Operations. So as building out he of operations our has our incremental been

also comes partners. he great So with potential and wealth knowledge of a

I the more we So velocity, that we've months, lots there. in levels we've opportunity – the the than you been over production producing produced last product mean look if two of XXXX. did all of at our

we really for the we to So demand Celsius. out well positioned fulfill are there as continue that's

Anthony Vendetti

much. queue. very in thanks back great, hop Okay, the I'll

John Fieldly

Anthony. Thank you,

Edwin Negron-Carballo

you. Thank

Operator

to management back the call closing I'd remarks. for to our hand session. question-and-answer This concludes like

John Fieldly

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

considerable gaining demonstrate results momentum. Our our are products

on taking category. drink the and capitalizing trends today's transformation today's are energy in health We wellness and global place

appeal. with Our mass global practices. upon active lifestyle deploying leveraging core building a and We're our position position opportunities and is best

a taking COVID-XX and strategy an to growing ahead the want. thrive are we team as well have market transformation believe that in of positioned the place consumers we'll rapidly able be to today. of us the portfolio, We a through challenge in and large, We in result navigate award-winning to category continue

of addition, and continued all investors our confidence their In I'd in to team. support our like for thank

a XX hosting X:XX be in to June out Raton. sent all Meeting shareholders have been in August at XX, Shareholder record Boca we'll with week Notices our date Annual of PM Next XXXX. as

interest in you in will Conference Additional attending, there. information stay Jefferies Conference a and September conferences, held is corporate Be also be is XXth, Thank is Wells November Consumer Annual we XXth. available everyone XXrd on Also XXth day. upcoming healthy, Fargo Fourth being being of to you to the seeing held for Consumer and safe, West forward website. our Coast many have your great Look Celsius.

Operator

teleconference. today’s participation. for Ladies your you Thank and gentlemen, this does conclude

time, lines disconnect wonderful may have at your a day. this You and

Celsius (CELH) 12 Aug 212021 Q2 Earnings call transcript