NBEV - Earnings call transcript Q3 2017

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Operator

Good morning. Welcome to the New Age Beverages’ Third Quarter 2017 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to conference like Ence. to now would turn over the Chuck I go Please ahead.

Chuck Ence

everyone quarter financial conference our I Brian. of management’s to Thanks, Welcome future regarding third achievements certain statements to results of everyone current company. expectations contain economic would remind results and that may this performance, call operations, forward-looking reflecting condition like call. conference the

for uncertainties. right future The specifically are be subject September results and those into at website, risks company's get to concerning ending performance, on the third available for I statements, transcript and like www.newagebev.us. Investor Forward-looking certain would months will quarter the Section the our to within the of nine which XXXX. XX,

XX%. $XX.X and $XX.X Subtracting significantly achieved For in prior year. and percent at million and billbacks, $XX.X foreseeable a the million Net the level, future. for increase quarter revenue as versus million company prior the third net in the discounts expect the of we than the net better around delivered gross the sales to revenue consolidated sales of year, $XX.X XX% company Sales versus of be was prior gross gross, of year,

in versus and strong eight Through up XXX,XXX year. was sales nine first a organically X,XXX%. For has Within $XX.X and year those prior ending the over of versus delivering DSD months operating quarter over gross year $XX.X record September, this $XX.X $XX.X million our prior the cases. the The million nine net consolidated the had of Division were another very million is in months revenue prior versus consolidated million, had units, outstanding increases months, X% Division year, nine performance of

customers have process points mix improvement on of result sold to starting third is prior convenience example XX.X% anything continued internal positive in quarter bed the -- up Division International Mike the diversification. versus in new contributed. XXX% of and new and of or for a major the being new is core that of becoming XingTea quietly this reduction. a mostly Canada, versus Under with up up brands third efforts quarter of or in XX%. new of roll-outs enhancement expansions gross entity on of are President impact the number the prior now a a firm year, This in the Vice to both steam of new for relationships profit, million cash envisioned to year. for well and the leadership the in innovative visibility prior a core major XX,XXX Division the outside sales in Age’s Sales, generator added growth part quarter, addition brands concerted more New Búcha margin also established Age’s of delivered and In Cunningham, the trends part Senior emerging in and business. material Marley for beverages, of brand prior growth year. was margin gross a new of brands, a September customer also for have and in $X.X source building with profitable more to together a Division in the million fund same contributed XX.X% in versus New latter more Age. In and with in quarter a these goods Latin US was sale products in Expansions significantly New all of stabilized test $X.X and and important and is period committed now basis cost is ended to percent overall equates, to The standalone than is company. Canada, the America of versus The in XX.X% points the and XXX%, grocery quarter the retailers the than double the in up Canada, X.X of net gross pick brand The as

was Importantly, of or the or $X.X is of and shift before Age XX.X% sourcing, prior were XX.X% nine the business, systems million of The of of XX.X% previously sales increase starting mentioned. any primarily ended $X.X net margin million the million will from third versus reflective for of year. a the expenses the percent same component of for the operations sides versus on resulted revenues XX% the gross increase Total of $X.X quarter of and quarter year-to-date however, on last a impact of investments sold marketing people profit Gross this than improvement as in sales year XX,XXX in achieved in a than commercial investments represents the are more distribution which of than months versus and in September impacts already new already focus business. operating of delivering New with a latter Coco-Libre in points the in XXXX, XX,XXX QX the October. the month of net and achieved increase on Those more and XXXX and the another important as expenditure. XX.X% in impact same part and significant in cost QX, more goods basis in

curve year. ended nine QX, in on frankly, business for and impact has Year-to-date million $X.X not revenue quarter-to-quarter a point or prior the a do $XX.X XXXX, were XX.X% impacted OpEx manage X.X improvement QX, we does versus expenditure or but While the never will. months curve September XX.X% statement basis, the the versus income not expenditures the us million until

including non-recurring, legal balance the fees $XXX,XXX nine the the of gain thousand of the have sheet, for throughout loss of $X.XX was net $X.X other or was breaking been the the million. $X.X NASDAQ versus OpEx of versus with with uplist that of Net has no the Marley with contingent just XXXX. we EBITDA Year-to-date integrations, $XXX,XXX and acquisitions, months million total we the equity. out other of a million integration. overall separately. absorptions excluding sales associated million, for them was entry. number expenses again organization and $X.XX year-to-date prior associated and to assets one-time and Micronutrient the now associated are that versus a liabilities EBITDA is reversal marketing transitions, current $XX investments, $XX.X onto of million, have for versus million, when result From and quarter a $XX.X shareholders’ assets quarter moves the acquisition non-recurring contingent share now minus of $XXX.X a the leading There in one-time September $X.X total Premier ended liability impacts for Shifting of a liabilities Coco-Libre, acquisitions we months have adjusted adjusted the million and out versus the absorbed reached and $XX.X not three $X.X As Marley per expenses of acquisitions assets these total the Corporation standpoint, third minus $X.X in million to EBITDA the Marley income taking have assets and corresponding a million year. was a in million year all loss current minus and small EBITDA liability,

have trials. of and patents with importantly, and total not months positive New flow million. for completed to and its we the have this $X.X of and expect net the the income the generated nine assets intangibles, Age. impact we significant cash of the the a on XX valuations and completed Coco-Libre PMC studies statement, related When acquisition yet acquisition acquisition We From intangibles, positive the Marley first

million still of an dividing only when expect by current earlier to EBITDA small-cap million the profit ratio any $X.X these Yes, show we public a us our continue unapologetically of the overall have $X.X Company. Our and we is occasionally one-time a benefits assets positive asset health had X.X to beverage to overall working adjusted from respectable the sale, in of company liabilities capital year to support sort. makes of current of the gain $XX.X the of year-to-date and

consistent stream business increased the cash, level. to and We including to growth are in coming the think our organic now infrastructure intelligently demand, to investing the inventories activities next new brands with we our on and take using increase free

million over give it versus year-to-date, up and five, an current balance of performance is million EBITDA now X.X in incremental support results; and XX.X% net in our to with to initiatives. team summarizing of Brent quarter adjusted the the XX% two, that, up one, quarters. to pass assets So, $X.X more margin quarter is for is three, expand And gross customers. capital small-cap the for points increasing and in only margin the sophisticated reflective you on that just of -- business methodically, with the two liabilities, past public year-to-date. but most now grow over the $XX.X of $XXX,XXX demanding and topline sales liabilities. up of four, the Number current to in versus million the and of and number the larger of quarter And distribution, investments, investments quarter, would the ratio I rapidly scale number Number assets marketing, working continues financial $XX.X and minus our points gross the more like to Number million sales for the to with $X.X germane operations, update and strategic X sheet than X,XXX% increased profitable. up

Brent Willis

only cash flow a journey, capital make return ago, deliver on super more money, brewery the this cap we sheet, expected to and quarter-to-quarter our making small shareholders. topline superior company a what But course. we gross about Chuck. began I I XX our started My manage minimis real, and we year I our like progress. will, financial from losing on that mentioned, little and of never those to in Chuck and In Would continue on platform investments clean position our Would and balance in in course. where we five schedule. leverage additional to company will to like basis, and commentary am I do margin. $X debt, quarters build not in was the when we be we million be Chuck more the or de improvement substantive months a we the us flow million point cash ratios, doing almost for craft and in joined business decisions the reviewed Company made of and pleased scale, Thanks, table, not growth are performance and and a our with have working as on revenue year it journey Kombucha now those to the since income. $X our statement, right income, is at

acquired Xing. we First,

to in NASDAQ next and Xing we and those us That’s brands the platform used Second, to acquired into and we building base the next in prepared XXXX, wanted this fully uplist right the Búcha, the we financial integrated give for establish the Then quarter quarter company. which segments it. and QX compete. companies last in in the onto the that And more integrated to for we acquired three the the those penetration growth, acquisitions and platforms. of wave on we then

be We and five developed quarters we at of versus we we ahead first when we roadmap, been actually we’d our pace. it have be, where we would right where predicted and said where envisioned are we

business our milestones our not integrations, relationships, individually or each uplist was our NASDAQ, but four real, the and centered tough, it’s the the mostly and were growth and on team, building Our chain, of the there building one our financial was of next our onto supply real people are platform, processes ago force, organic of in our retail and acquisitions, our the work. organization platform, systems our the easy, of sales creation sale. like R&D, that of months them XX distribution set

would small is one, marketing, put CPG not ago force cap beverage months not XX any one there a national company. Now, I company. person in for that there against was sales up

there one company no year ago ever ever, Now there the consumer experiential becoming more debt, ago analysis driven XX is done, foundation had a ago performance a brand no of months forming social, of and trade shipping a or full input any costs system team, and million costs, benchmarking there's design, people in the of invested pipeline, than ABC inventory costs company. that and $XX that never HR, development in marketing, product digital, the or three not single been one products culture, XX or management to creative no years. essentially no established led channel distribution, and for across brand had new months matter. of A than been was brand, management,

Now over a so what demarcation. a of new past different XX is I creation work months, is platform, solid But a having it after the is see day. the or us accomplished of in truth, point that

good or pervasive already Well, acquiring doubling So we innovation. what with new our and is And on are that trajectory the it brands against with and existing provided plan. components our recreation that going our that written strengthen second, brands, the In expansion It’s executing phase implementing sales or so build international very global platform? we differentiated enough distinctive brand and down tricky But the answer marketing, capability, both included accelerating those innovative also, this was platform new customers, just that brands, with we we I penetrating that customers, expanding are enough companies overhauling Coco-Libre of roadmap, began working that when also we that points that easy to would roadmap leveraged. strengthening to roadmap but on do and on channels. very we have of Marley, do, enough. Since have of a so our beginning -- far, say two not additional published still was functional to was and the those to under of highly integrating have distinct platforms. offerings say been of diligently difference not in that re-architect its first launch right? to Búcha,

and them you get have our all that companies consumers takeaway shelf. metrics You the you $XX across shelves them all propositions billion drive have right get In the to sectors companies first and then companies, as to resonate consumer then off to from to matter. $XXX,XXX with such have of the beverage industry competitive and there are the the the only pull to two really brand

everything terms metric that more the other distribution Honestly, the system business like with management and try ones sophisticated some else down basically or ask get I'd and a Red like Accounts of in may is of talk New transpiring per sales this Key to Bull distribution. with former Senior number management Terry is of point Executive what of to second creative Age, Terry? comes a the distraction. SVP of bottler share To about with Some revenue sales and Sperstad, points the and or Coca-Cola to impacts. one, is

Terry Sperstad

Thank you, Brent.

east another added of by QX, Age mentioned was only previously expansion defined of in the strong Chuck, Colorado of heard really that the in major pillars in more example. the points added West, later big than deal. account New in already for XX,XXX We for and it’s one no the consumer, had and very XX,XXX group. Age retailer key fact of we and is XingTea New of growth For or sale Historically, of a distributor, part even ever as QX

on August. for me, timing see there from the major for even Age have opportunities year impacts and and BJ’s, Jumbo is on and national working but one shifts to because position the distribution well the QX added now made brands, street front excruciatingly our up Circle Nash, XX XXXX That mind August definitely in indeed more have we of are Ahold, X still points were set retailers us for wide already are now we all past we ever are a We us. means more top getting retailer global heard with one closing, fight has And is, that just decisions regional materialize. are New had than and has us, a retailers others, Sprouts, material. and We we retailer is, we and retail from really the aside shop of or all slow. that so that of word started. not of or markets the changed, still XX not you, functional shelf essentially Sobeys, Excuse Eleven, that year are created the reality know the West, being we K, have fundamentally in Loblaw’s, single important Whole overtook of in only, few including stop niche. runway have matter, set not not said, we've historically we number starting know Excuse have see Foods, because shelf Spartan in of XXX the the HEB, of beverages. doesn't have them this strategic made healthy this days, for decisions penetrated open XXXX, who frankly, that this XX,XXX is In of a results many that small there and brands What that for that for competitor major to the me, distributor, doesn’t is the to hustle the this year, only in it frankly, business one for

in to just partnership Advantage beginning some we start to Daymon expanding relationships and focus with fruit at with a Let they But new significantly, very and these DSD their that Age them grocery more bear can’t brand new risk significantly, retailers we is recent days our are much and side in me and partners small retail might XX roster you, That Worldwide properly want traditional are distribution The That and direct single brands. not have with me, of New months the no real did from distributors and now relevant Solutions that relationships, activities invest to and and in convenience. with for see tell come work them. these work major first from to excuse but more been companies traditional ago, that underfunded channels. are more.

channels. has vending more material. food Foods, the $X million and X We with are and hospitals food partnerships service, I a e-commerce, and service, new go that word excited reach on about sales universities, workplace locations of the executing wants outlets now company, USG have. are partnerships are and and channels on every are expand distribution, and portfolio would, billion we workplaces new would the opportunities, and brand me, brands hit day Dot closing is they alternative wish tremendous we have if more starting suffice other Brent in than XX,XXX preferred to to now other a equally every in to in services The could penetration and say, in with let distribution customer of country competitor to a opportunity front all and cylinders that amount what focused us and still every I massive on of and channels

Brent Willis

Kombúcha Thanks, is the matters and industry distribution. Terry. The just expectations. offerings newest now shelf in next off-shelf very turned rolling life are in exceeding that metrics of of beverage Two is good traditional and multi-location with our convenience Mate Marley gain to per that sales more shelf-stable for point Live shelf-stable company. grocery distribution Búcha out a the in our that penetrate month We are nine Kombúcha and really to decision can we materializing placement is made and be out so

first example, per are store newest outlet we expectations. For exceeding doing we're volume than penetration, for In our Marley major Mate, -- of threshold X. major per per units week. requirement in outlet The more convenience XX launch our our is example also

takes initial and we between are the even though the stages of things. are Mike Terry authorized rollout. placement authorization teams, but and all two this and focus distribution still on in and brand It Cunningham development the shelf and of Although, difference efforts time their and and different

by this competitor major in are XX%. more We than the segment outperforming

be or made we a though been to some our misconstrued be an for winner Even and coupled billion will the this activities that of our makes market. a real the our with point-of-sale to believe been Mate run to communication $XX we through Marley beginning of pull-through lot and marketing distribution, McLane’s drive retail that also expected this has continue is our rate brand year, consumer fact very at in million on rollout rollout partners to $XX intended now In company. the merchandising has In this misunderstood. happy.

the that acquired year, number of the run number products Here two, basis we've year came including is in seasonally we reported in with the then -- we distribution you when million in incremental that us our to full and our basis at different and a talked gets together in us entering that components, one, about for about get to revenue to Terry for the times math, the year, the our for target been of rate our QX our however, in that target distribution given the just of take next forma and the these companies distribution new extract business XX% $XX.X or our on XXXX. pro a impact add year QX the in those add impacts things our is plan also talking revenue business that extrapolated portfolio target, forms gets that QX broader

as Mate, number team, newest done Driving we hard well a underpin we we've Marley all and the have of took Pure organic incremental months becoming calories have we growth a against other could at. examples acquisitions the fantastic, and accretive, Coco-Libre a an able supply some over but only shelf-stable, But look on end innovation, great, growth vector We the mentioned, the been or with just – sugar water innovation retailers the best been and that this past natural of our foods, we execute we In Aspen distributors. the in of is over million would PediaAde absolutely. initiatives. the and no have and XX revenue organic with hallmark are upsides and Probiotic, rolling per been external I comment coming and PediaAde, this believe of consumers, the Coco-Libre now and distribution absolutely. our growth in pillar Probiotic added serving. Sparkling has foundation, Sparkling interest, in out work Pure We right offerings on The November. coconut $XXX of the the is but would for Búcha our is are the acquisitions. all shareholders the Yes, and that a call. few our brand, from the XXX% company to XX Aspen to product our chain stores systems, This added make business would been like one being focus our those focus are

even equity levels don't which XX%, now, our But have value right of believe no, we currency we dilution accretion fantastic. the is accept. that We have with above have and were to to said because we created say not we no, is a would willing where

until any fund are of we time expansion we sell plethora see our fund stock see similarly no or peers, mentioned of to be working expect initiatives and opportunities don't acquisitions of valued use focusing reason organic to instead will its equity significant out such is we to such the So to able where those them, and on that and as the horizon capital. on execute to existing a the brands to growth

to on We five superior potential return with have business we are time for with build achieve our clarity in short platform platform we in term of and objectives proposition very all in the execution amount longer confident, now growing capture it shareholders. naïve healthy can and building and what done their deliver that important constrained. exactly needed execute of built of converted are brands, vision, period leveraging it which platform so expectation we've become This grow business that well fully made achievement on full focused to materialize of we frankly, might trend in is potential, visibility, continue then investments objectives. doesn't today We believe consumers, is the our five that the what quarter platform far all the to quarters, tremendous it Age a the functional is has quarters, a our or have that naïve. capabilities is is a to third about, New any What of would it to and and over which with we the was without to past is a

are gross million Our $X.X and year-to-date, adjusted margins than revenue is was EBITDA more our XXXX% improving year-to-date significantly. our up

Our to for stronger going new platform with like getting Age it And penetration that, brands upside channels tremendous and up is provides and all across open I'd retail our New to forward. questions.

Operator

Instructions] with David Capital. Our Bain Please ahead. ROTH comes first from question [Operator go

David Bain

Great. quarter-over-quarter don't we that some but, Thanks topline it. get all XX% that the guidance, despite growth, Brent, that of should you you quarterly backing for right? into gave, so give see I Appreciate just Thanks. close seasonality, I know weaker detail. detail to December

Brent Willis

our and QX are the I looks number just of didn't get QX just and penetration the great things brand really look us for gets just extrapolate solid our growth, distribution. year. way takes calculate plan I ever numbers kind just you because out we really that the we've level rolling for doors and a that of frankly, our delivered, don't at calculate it next basis time takes is point that when and at time to I we to any you sales that The at new for David. -- for our our When QX now. out these to topline happen, business retail us. per -- you revenue, unlike to get of of it other and is quarter-to-quarter looked and accounts look a the then the for number that

So I versus didn’t strong. looks calculated but represents and QX and October any prior really out prior history what that honestly, started versus already has year, versus fantastic other quarters,

David Bain

additional benefit then, cost the we quarter. really that’s Are And the marketing Great. beginning sales and stay the all benefit given and get they for and those this everything, drop today? and revenue for also beginning the I $X.X new understand in Okay. does brands of and going this to expenses distribution for sort quarter, of million or XQ

Brent Willis

reduce. will yes, say, would some I

David Bain

Some.

Brent Willis

benefit QX, XXXX. and we But frankly, will will revenue the – we in all the on curve throughout get of

building that's P&L. kind of the how we So are

and just we basis, some investment, sales continue. We people and because investments But get we – wasn’t marketing, to some was sales, of a I will other XX%, that capability start -- Chuck, go-forward benchmark just revenue. will marketing efficiencies, OpEx of think, made net on some more it will a for made, foreseeable the quarters higher future sales, XX% a foreseeable XX% that’s a quarters, of at we the foreseeable the number, on fair be say good for for net which sales better

Chuck Ence

agree. good That’s a do benchmark. I

Brent Willis

Yes.

David Bain

final organic in and is question trend then And talked an the investments one XQ forma can might the I have just idea a or that Okay. you pro for quarter? back and growing a big organic XQ reason far growth, that maybe growth so get for that queue. to But better we hop targeted is, about portfolio understanding in the

Brent Willis

moving still to our on that or honestly, the with didn't our too I Again and on we business the David, our getting that help into on will – inculcating the But it’s any level -- conclusions we We to to a is. rational don't to have the now per now QX, moving are guess it distribution visibility just at dashboards. of outlet is, give daily basis. models we want models. look right, way good -- visibility for A, financial of part the really is and look platforms, to a all revenue that of draw that B, distribution within the we X% The are at really news by guide almost brand, and investment business our target are It’s with to account number day volume that help revenue would brands XX% where organic where from day organic of, and point model topline brand core per we've had absolute still are we we new growth a core we all that what basis to for for on of with the XXXX. a by of basis, growth much that, so never

to will revenue think and point. good X% to the that's is a XX% starting I help we that most I guiding – say, organic topline growth good would

David Bain

the Okay. And over just your dilute that’s just to I sales despite going I'm time? sorry, uptick mean, but distribution in large point, distribution points in to not

Brent Willis

less existing better for away us have big runway volume still Honestly, less options. of and that consumers’ as or such taking healthy really there we upside share already from you sourcing front transition from other just sources volume out of in

expand I where get at the of before per and or of at So because not we doubt penetration there. portfolio all three can really as less to start our four brands where we level volume outlet. cannibalization sorts the or you really least next start see distribution years might across different it, consumers channels for to of dilution choose years some

We before we are are away at least even years years, years, point. at maybe XX that three four

the highest on across of investments We us can across this, make. front anything have frankly, the in make you disposal. distribution is investments can super one and at your return you ROI growth that expansion Distribution high of all investment all

we think, start cannibalization. year, got have any least years even I at So, growth to see of three we before four maybe year, XX

David Bain

you. Thank Great. Okay.

Operator

Aegis comes from Dionisio Capital. with question go Rommel Next Please ahead.

Rommel Dionisio

Thanks very much.

granularity engineering could production terms about value product some I just by brands couple as and product XX-Q, wonder when Let’s I well specifically, you mix, Lehman as efficiencies Could key points on talk of costs, in provide manufacturing package. also if of in you me Thanks. that decrease you margins, there of gross overall sort so low the sales a you like basis? -- on some little about talk which who a and get walk more on means but just the referenced processes, product and

Brent Willis

components or your higher you to have gross and that you easy by launch first gross I to costs basis a gross work the margin. on as the company, It’s lot products cost of a your great engineering way from had new easier the and a a and margin of grow a it’s question. we or lot mean, Yeah. work brand if all way And of add that into of portfolio significantly a by in basis the SKU the product grow margin

gross shift So about And Coco-Libre piece. a about a margin, with Marley that's margin. XX% the gross started mix with XX% started

a from higher and and of gross a margin XXs ingredients, microeconomic standpoint, result, it’s flavors because not is similar So fix, all in moves that's competitor overall we a of We margin as syrup, the and retail it of but terms and low our It’s set gross have the is with high-fructose that's actually more all price it’s artificial do was of started $X.XX in as make corn that, and were and those the reengineering at components XX value got default in XX% award-winning the in big two low natural was more that size primarily to at its product price percentage without cost no much sorts our margin. times up any the got important the part at product, the price different because historically no or you given the get terms become maker. more mix, you that stuck price teas. what gross were can XingTea. engineering by taker XingTea we

in a of to all So to convenience work country. to price which no move change doing no into, with into up at taker move fundamentally point the maker with a that the sorts you're what whatever not a longer entry you retailers we sorry, can But of then decides some the look price you price price a price do we major maker the you have longer move and being in are the category, and mercy to have retailers you are you do. at taker of or

about XX% leveraging there's with the kinds activities the give do activities of pricing of you through of to those let's our you get and and need things. of a there I the from if to all But to margin XX% you harmonizing current, do, harmonizing and to our you purchasing harmonizing from improvement about manufacturers of and margin year-to-date get From get of aligning leverage from gross about scale of margin sugar across or different purchasing citric country points get engineering. acid the improvement you and points. mix, X.X across XX a X.X basis, things, on points and we from X.X points and go addition kind need get all that we X.X of suppliers that's or that, working in manufacturers, those say, ingredients, your packaging value and kinds components total gross then the XX.X% gross So to you tea roadmap

the visibility as roadmap to which by get gross basis the company that to that’s have in we kind that’s So vision you we and across by get is margin. from a how average different XX% on move to components and said, brand, of have XX%, we to sites, of to product I have from the the our by SKU, of XX% get visibility an

Rommel Dionisio

Okay. Great. That's very helpful. Thanks very much.

Operator

Next question comes ahead. go Harrod from Associates. John with & Please Harrod

John Harrod

given the no only what industry Brent, is such short anywhere in near the has young, of far wise, a have company five quarters old guys see you and can that one I so what in accomplished really from margin period time. so

on capital So the the what price behind your months, day-to-day stock even for especially since the is raising opinion over the in dramatic drop table isn't past operations? few

Brent Willis

I I I'm basis an week because, management It’s I and If the the it's day-to-day point of in driving full those the the this I even though a of and I quarter outlets month an basis, we really focused stop. to platform. an week to answer, company question, look management this a it, John, stock I'm performance are all that basis, distribution. investor growth per don't if equity. at the I want second don't at at or the second tied And the want performance look on think metrics to focused the sales, a the in am company and I business, on by to or to focused look by at look, of of driving we on look good of month what I and as basis, the management investor a building basis on easy sales frankly, on and at quarter our value number and look a investor want is that's

are five only we right are You quarters old.

in to perform young has set we new humble well well that do company view, very said done We executed going beginning. my and a are we are from a what brand of

So we doesn’t have every supply have that intended and this quarters. every good accomplishing company strong in chain, to day, leadership are happen stronger stronger year wasn't team, platform company ago. are in aspect what we residence commercial a innovation, But virtually company a of getting we the that accomplish R&D, five brands very with a the very,

do though a value successor shorts isn’t where of it vagaries and the those we vulgarities is what a is all of as might going have it here investment. even fluctuations in or investors what is kind our of basis. That's long-term we what we It what tremendous can tell platform short-term the that things of see in own terms grow. on day-to-day and day over to So that the we

an for company, one driving it is performance-oriented long-term on marshaling that that operating performance, outstanding value building over is of everything the metric the focus and driving and in differentiated our to driven Our provide resources best and does. performance by and shareholders terms

focus over months we what delivered anything don't head the the looking do has going So, to months. and stock keep are result don't like at as the we've operations yes, six all We believe and and and past six we down past just and a with our the price perform, to decline do stop. executed is over it full

John Harrod

Thanks, Brent. Good luck.

Operator

Please with Group. from Maxim question Next Anthony ahead. go comes Vendetti

Anthony Vendetti

bit distribution bit I it was some was growth, of than quarterly I attribute deals, would for revenue was reason? point And Brent, you we on much. know specifically? timing a wanted came so the bit think about guide were little X% what it of or very the and a lower talk little it a this timing, organic revenue, to is it little just light Thanks was to expecting, Marley any sales, I some XX% quarter what

Brent Willis

healthy Number a standpoint. from the with of me for number one. standpoint, Mood product execution XXXX. was Mellow of formulation not $X really the then That’s wrong, deal, November and a product provided when that price that all Great the Marley of share an question, for standpoint, from in we the Marley the brand standpoint, at time And Anthony, product packaging connecting from when of from two, a but always. consumers of anything, fantastic a million time at X Japan run for over -- look, business. that graphic we we us the a originally as investment was franchise is brand drive just wasn't shares, they and kind $X.XX took from acquired we to the some That's million kind

got do Face So We financial the mentioned, brand. that’s global also $XX it million that million and reasons – healthy. followers for we has this? because potential that were But high brands a number one, the XX overall really why but did is Marley we Facebook

that from we And so re-architect base it.

prior stabilized from from keep last the their knew and Mood we stabilize own build have are a year. that some and the their what on and connects versus really Drop and year see or Mate with existing have to smaller sort you actually past Coffee months Cold that are customers we where they As are away base and year, holding we longer consumers smaller with to unprofitable with than were it’s done we slightly franchise. versus retailers, pieces, and shelf there prior couple and already declining We they that Brew they Mellow own these actually no are now Marley Marley grown walked and customers in holding do are be we connects the of about they of wouldn’t One And with we've communicated able have really what and space.

what franchise. we with yes. platform some of buy didn't it that's we million So Is and I have its bought $X million to Mate base, on like to Cold which that things. it’s base, potentially demonstrating million for base What it of reality yes. it $XX Marley could we million, it what $X just globally $X be existing now of are do for Marley we other it bought. more to that the now But And we with and we Brew

year, an articulated. then still as slight revenue QX one outperformed year. of growth our you in sorry, expect growth typically this that's quarter? -- We a really highest above It and that quarter question is QX. last slightly more we've revenue ever QX biggest below actual So and our enterprise. is QX QX That had it's actually of we -- of the Did what is

So and quarter. the just would we Had that more or there but platform. these from had is we little unprofitable Marley maybe this sense base expected in customers, maintain those some Coco-Libre no build unprofitable know, maybe I take rather we right a could a, I of don't customers businesses bit on that, more, in

blow relates it significantly next the of to part number question look, is, can we the XX% for to away. of your as that last year growth we So kind execute X% if

business on our now. are all businesses core blowing but foundation that away, towards course, the we Of geared plans we think have number a solid

with on these it’s and Marley, these are that Coco-Libre, a have whether all of all right that consumer. base launching We we base Búcha products Xing new or brands, reconnect

it So that’s in really new companies Remind these bought basis. we things the on and QX takes time model we which products all people, the now in did and it the in and quarter to just happened the integrate, you, supply chain, are QX all QX launching.

and do So all things as these we I way be mentioned, expected overnight. can’t to we with that

Anthony Vendetti

rid sounds finished why got then Marley, as that's in and the of of you quarter so fourth XXXX, optimistic – pretty as of correct? were Coco-Libre rebranding, the unprofitable Marley, just it the some accounts Brent, you're about just And you repackaging and follow-up, well that to Okay. like

Brent Willis

Yes, that. sir. said We

Anthony Vendetti

that about that how expect to launching launch products? rollout, then also talk Can market Okay. you how And are anything for like going opportunity. or bit last, then big PediaAde is that timeframe on you and surgical a the a little looks that you

Brent Willis

it’s to says PediaAde Sciences so, anything to to communicate the some to Terry anything really stuff executed, major all to am share, powerful accountable yet. news but don't it, about anything he until and ask yet am to though the investors, want the so talk about health Health I it’s until Health I in want even on say going I provider, we we stuff. them don't excited hold Sciences can to Terry, that have I the

and PediaAde want of over to retailers Terry anything, we where you and are. say let the it the all we just bit we hospitals shelf in insight what But the it I on So saying rolling he now. see are a on there and to really can me of before pass but are

Terry Sperstad

Yeah. Thank you.

products There even say no of competition kids. to we competitive probably like compared is the it’s First give there. the product to out to phenomenal as you your wouldn’t all, comparison. And

way been by way. the and what the for people to the same product, see really meetings any already of there. month avenues been presented we it love it’s feedback the all and is this love those presented the that’s been out coming I product very has say out Targets, they of and major the So great at that taste the right some brand to – formula are end of positive, the of already received thing is Walgreens, It’s retailers retailers CVS,

see to So the they going I really be are big as channel. to channels in and well, but some to think, going activity in the start convenience it's drug mass

pretty are where about it’s no we competition. is and So there going excited

Brent Willis

many of it out And wise, making now, are – it be the we see it that will timing fully take it resellers I expansion out, considering quarter first think, is and before we time but before impact, will a are frankly, Anthony, as significantly less product, we and but the on it in see to again, and see mentioned, very competitive before, that product, we broad intensity. margin scale retail the good you start

Anthony Vendetti

quick XX% a And XX% just operating be you to total financial about of Great. should Okay. then revenues. mentioned expense question,

around the same quarter or trend it stay up as I the for calculated you that $X and revenues down forward a at and then come down know, addressed little of earlier advertising or fourth around Should we stay by, in bit around same bit bit? come little promotion quarter was the going should call, just that but little major a the third down quarter should was XX%, in This a the so. a a pick X.X% but amount percent

Brent Willis

I for net to would as expenditures the, for to more fourth of than we being, some more finalization you people for mentioned, now. think like bit. XXXX sales just conservative our QX. XXXX But operations to revenue over XX% particularly and trend no from as say for the sales. in at are XX% you right were time for but little But distribution timing and plan plus a guided there But and mentioned, expenditures, of we XX%, I net quarter down that’s standpoint some the time going business be marketing it’s I'd rather Anthony, of XX% one-time the the

So, sales, an marketing, really don’t know of the really I haven't organization XX%. from absolute think -- from to percentage little across XX% to moment components here standpoint But we a more there. need guess, standpoint, I HR, don't really want but I finance, some operations, we and

like company So our company. additional person guide different plan the we headcount entire is, don't next year plan the for on I we've think – year don't base XXX five for more than of headcount in areas

So that's number to normalized percentagewise absolute down should get our down, come but should rate.

Anthony Vendetti

much. very Thanks helpful. That's Great. Okay.

Operator

question-and-answer our any I'll to turn session. closing over concludes conference Willis the remarks. Brent back This for

Brent Willis

mean, about – [Technical Difficulty] I I are to we where (XX:XX). it. we intended communicate That’s

our of that We just are to with the keep if you its firm. the execute, do we much business, superior in to as and believe shareholders and Thank management same we driving that we down all are the valued and support. tied the return and keep pleased equity of and drive heads mode confidence going our continued going to shareholders platform and we our are for exact very appreciate growth of is the

Operator

The you attending today's for presentation. concluded. conference is Thank now

You may now disconnect.

NewAge (NBEV) 14 Nov 172017 Q3 Earnings call transcript