Good day, and welcome to Beyond Meat Incorporated 2023 third quarter conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After the presentation, there'll be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star, then two. Please note that this event is being recorded. I'd like to turn the conference over to Paul Sheppard, Vice President, FP&A, and Investor Relations. Please go ahead. Thank you. Good afternoon, and welcome. Joining me on today's call are Ethan Brown, Founder, President, and Chief Executive Officer, and Lubi Kutua, Chief Financial Officer and Treasurer. By now, everyone should have access to the company's third quarter 2023 earnings press release, filed today after market close. This document is available in the Investor Relations section of Beyond Meat's website at www.beyondmeat.com. Before we begin, please note that all the information presented on today's call is unaudited, and that during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Forward-looking statements in today's earnings release, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. We refer you to today's press release, the company's annual report on Form 10-K for the fiscal year ended December 31st, 2022, the company's quarterly report on Form 10-Q for the quarter ended September 30th, 2023, to be filed with the SEC and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please also note that on today's call, management may reference Adjusted EBITDA, which is a non-GAAP financial measure. While we believe this non-GAAP financial measure provides useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of Adjusted EBITDA to its most comparable GAAP measure. With that, I would now like to turn the call over to Ethan Brown. Thank you, Paul, and good afternoon, everyone. Having pre-announced select financial results for the third quarter last week, I will briefly review these metrics, provide more color on our performance, and then turn attention to what we are doing to adjust our global operations to fit the current macroeconomic reality and business environment. We expected a modest return to growth in the third quarter of 2023, which did not materialize as category-specific and broader consumer headwinds continued and drove weaker than expected sales volumes, reduced promotional effectiveness, and adverse changes in our product sales mix. Net revenues for the third quarter were $75.3 million, down approximately 9% year-over-year. In turn, lower volumes, coupled with higher levels of discounting and other factors, exerted significant downward pressure on our gross margin relative to our previous expectations, with gross profits swinging to a loss of approximately $7 million. This result obscured continuing progress we're making on COGS reductions, where year-over-year, we reduced cost of goods sold by 18%. Despite these challenging circumstances, we were able to achieve free cash flow positive operations for the quarter. As we indicated when setting this goal one year ago, this outcome reflects a meaningful benefit from working capital as a source of cash, and while encouraging, should not be interpreted to mean that we've turned the corner to sustained free cash flow positive operations. We do, however, believe that is indicative of the early progress we are making in our objective to reduce cash consumption, even as the company takes additional measures to substantially reduce OpEx, make changes to pricing architecture, and further prioritize current growth opportunities. I will now dive into our strategy and plan to accelerate our transition to sustainable and ultimately profitable operations. We are pursuing five main actions to improve our cost structure and overall operating performance. One, as previously announced, we are executing a 19% reduction in our global non-production employee base, immediate step in a broader program to improve our cost structure. Two, we are reviewing our pricing strategy with certain channels to support margin expansion. Three, we are continuing to utilize inventory management to reduce working capital. Four, we are intensifying our focus on channels and geographies that are exhibiting revenue growth. Five, in U.S. retail, we are using our portfolio and marketing to directly counter misinformation about our products and category. I will now provide further commentary in each of these five areas. Operating expense reduction. A reduction in force, combined with the elimination of certain open positions, is expected to result in approximately $10.5 million-$12.5 million in operating expense savings in 2024 and is an immediate step in a broader cost-cutting initiative to better align our operating expenses with current revenue. While necessary, this is a difficult decision for the business given the tremendous talent, expertise, and passion of our workforce.... Our people are what make us special, and letting these team members go is done with a very heavy heart. Though we reduced year-to-date operating expenses by 29% or $73.9 million year-over-year, to further cut costs as we look to establish our operating expense base for 2024 at a level that better reflects current revenues, we are initiating a review of our global operations focused on narrowing our commercial focus to certain growth opportunities and accelerating activities that prioritize gross margin expansion, and cash generation. As part of these efforts, we are evaluating and tend to reduce activities related to certain underperforming geographies, markets, and channels, including a review and potential restructuring of our operations in China. We are further focusing our research and development to near-term product renovations and innovations in a more limited set of breakthrough projects and programs. As I will elaborate on momentarily, we are more narrowly deploying our marketing spend in the U.S. around a primary message of taste and health. More generally, we continue to invest focus and resources around lean management in support of overall expense reduction and margin expansion, including the potential exit of certain product lines and further optimization of our manufacturing capacity and real estate footprint to reduce overall complexity and drive additional cost savings relating to logistics, overhead, tolling, and general production. Pricing architecture. As you know, over the last year, we've used pricing in an effort to bring new consumers into the category and to support our inventory reduction and cash generation objectives. While these pricing programs were effective in generating cash from inventory, they did not help us move from early adopters to mainstream consumers. We believe there are likely several reasons for this outcome, among them, increased consumer confusion over our value proposition and the remaining price delta between Beyond Meat products and their animal protein equivalent. As we look to 2024, we expect to implement a more nuanced pricing strategy, keeping certain programs and pricing in place while adjusting others in support of gross margin expansion. Inventory management. We intend to continue to manage inventory levels down to generate cash. We've made some progress in this, in this regard, as inventory levels have fallen by 21% year-over-year, yet we have many miles left to travel as we seek to bring inventory in line with lean management principles. Commercial focus on current growth markets and channels. We are encouraged by and are investing in markets and partnerships that are currently exhibiting growth. This includes select markets in Europe, and in particular, certain strategic partners, where we are experiencing year-over-year double-digit growth. Fighting back in U.S. retail. We are pursuing a portfolio and marketing approach intended to restore growth in U.S. retail. We are contending with two main headwinds. First, there are broader challenges facing the U.S. consumer, namely higher prices and reduced buying power. We believe that the corresponding consumer action of trading down among proteins, that is forgoing the more expensive cuts of animal meat for cheaper cuts of meat, is similarly impacting our category and brand. We are, despite aforementioned pricing programs of certain exceptions, a higher-priced protein relative to animal protein. Second, as I previously mentioned, we continue to face a serious category perception challenge. As I've long maintained as a brand and category, we will cross the chasm to mainstream on the strength of progress across taste, health, and price, and to a lesser extent here in the U.S., awareness of the planetary benefits of our products. We continue to make organoleptic progress across our portfolio, which the team is racking up recognition and awards as we close the sensory gap between our products and their animal protein equivalent. Yet it is, in our view, the health perception of the category that is the most immediate and important variable to address in order to restore growth. We must squarely and forcefully counter the broad misinformation that swirls around our category before we can more effectively use pricing as a tool to bring new users and the mainstream consumer into our category. There is a loud and steady drumbeat of advertisements, op-eds, and social media posts and activities that seek to negatively influence the consumer regarding our products and category. Generally, this always-on attack platform uses one or more of three main rhetorical anchors: fake meat, processed, and full of chemicals. The financial backers of the successful campaign appear to range from the more obvious, such as various members of the meat industry, to the less obvious, which may include members of the pharmaceutical industry, the latter seeking to preserve one of the largest global markets for antibiotics, livestock. As you may know, it's estimated that over 70% of medically important antibiotics are given not to humans, but to livestock. As I shared, this effort to sow doubt and confusion regarding our products has worked. While 50% of U.S. consumers believed that plant-based meats were healthy in 2020, by 2022, this number had declined to 38%, and my guess is that this percentage would be lower today. This well-orchestrated campaign borrows heavily from similar efforts to frustrate tobacco legislation and the tighter regulation of underage consumption of alcohol, and in fact, share some of the same players. We are confident that the strong health benefits available to consumers through the use of our products will ultimately overcome these tactics. This said, we are not passively waiting and instead are taking the following actions. First, we continue to support third-party research regarding the health outcomes available to consumers through our products. This research includes our ongoing work with Stanford University School of Medicine and a growing and formal consortium of universities, hospitals, and institutions... We derive significant value from this research in at least two ways. First, we achieve and can share a more precise understanding of the impact of our products on key human health indices, for example, cholesterol levels. Second, we are surrounded by leading medical and nutritional experts who are instrumental in our efforts to, over time, deliver even greater health benefits in future iterations of our products. Second, we are teaming up with leading associations to validate and help familiarize the consumer with the health benefits of our products. These partnerships and affiliations include, as we've highlighted, the American Heart Association, which has recently expanded the number of Beyond products, earning its rigorous certification as a heart-healthy food, as well as our multi-year program with the American Cancer Society to further research on plant-based meat and cancer prevention. In 2024, we expect to announce additional certifications and partnerships that we believe provide important third-party endorsements and or recognition of the health benefits of our products. Third, to make accessible and amplify the positive health outcomes associated with our products, we are teaming up with authentic voices, including ambassadors, medical professionals, and registered dieticians and nutritionists, to counter false narratives and educate the consumer on the ingredients and process we use for our plant-based meats. There will be more to come on this front in the coming quarters, and we look forward to updating you on our progress accordingly. In closing, we are disappointed by our third quarter 2023 results and are taking immediate action to pull significant costs out of our operating base as we enter 2024. Simultaneously, we are heightening and narrowing our focus around specific geographies and channels where we are experiencing growth, including in the EU, where we're seeing favorable near-term trends, such as certain segments of U.S. food service. As we head into 2024, we believe we have a solid portfolio and marketing strategy to address category and brand headwinds in U.S. retail, one built around the fundamental benefits available to the consumer through our carefully designed plant-based meats. Though we believe that our achievement of cash flow positive operations for the third quarter is an encouraging directional signal, we are committed to a far more comprehensive and aggressive rebalancing of operating expense to current revenues as we plan for the future. We understand that current results, category challenges, and the attendant media coverage can distract from what we believe is a far brighter future. We see this future in colleges and universities here in the U.S. and abroad, including those where youth-driven movements are calling for fully plant-based campuses to fight climate change, drawing analogies to university pledges to divest from fossil fuels. We see this future in countries where per capita animal meat consumption is the lowest ever in recorded history, such as in the U.K. and Germany, and the corresponding progress we are experiencing in the McDonald's plant platform in these and other E U economies. We see this future in cities such as Amsterdam, where officials are taking tangible steps to increase availability of plant-based meats and dairy in support of their target to have 50% of citizens consuming a plant-based diet by 2030. In South Korea, where the Minister of Agriculture, Food, and Rural Affairs recently announced a strategic plan to support the growth and consumption of plant-based meats and alternative proteins. We see this future in the youth-driven petition to have the upcoming U.N. Climate Summit, COP28, be majority plant-based, and in U.N.'s acknowledgment of the legitimacy and seeming acquiescence to this demand. Finally, we see this future when, together with the medical and nutrition community, we mobilize to push back against incumbent industry propaganda and put in place our strongest response yet to this troubling misinformation campaign. In summary, though we did not foresee the current trough in our journey of disruption, we are confident in our ability to successfully fight through it and fulfill our vision of being tomorrow's global protein company of size and significance, a company dedicated to empowering consumers through delicious and satiating products to take meaningful action to address the urgent human health, climate, natural resource, and animal welfare challenges facing our global society. With that, I'll turn it over to Lubi, our Chief Financial Officer and Treasurer, to walk us through our third quarter financial results in greater detail, as well as update our outlook for 2023. Thank you, Ethan, and good afternoon, everyone. As Ethan noted, this was a disappointing quarter for us. In light of continued weakness in the plant-based meat category in our largest channel, namely U.S. retail, we are doubling down on our gross margin expansion and cash generation efforts, hence our decisions to execute a further reduction in force and initiate our global operations review. As we shared in the press release, that review will consider the potential exit of select product lines, changes to our pricing architecture within certain channels, accelerated cash accretive inventory reduction initiatives, further optimization of our manufacturing capacity and real estate footprint, and a review and potential restructuring of our operations in China. As you might expect, this global operations review needs to take its course, and so we will reserve providing further, more detailed information for future periods as individual initiatives become more definitive. As such, my remarks today will primarily focus on our financial results for the third quarter of 2023, as well as our updated outlook for the full year. Net revenues for the quarter ended September 30th, 2023, were $75.3 million, a decrease of $7.2 million or 8.7% compared to the prior year period.... This was driven by an 11.6% decrease in net revenue per pound, partially offset by a 3.5% increase in volume of products sold. The decrease in net revenue per pound was primarily driven by increased trade discounts, especially in the U.S. retail channel, and changes in product sales mix, partially offset by favorable changes in foreign currency exchange rates. The increase in volumes of products sold was primarily driven by sales to international retail and food service channels, and was partially offset by decreased volume in the U.S. retail and food service channels due to weak category demand and the cycling of certain sales in the food service channel in the year ago period that did not repeat this year. Breaking down our net revenues by channel, net revenues from U.S. retail sales in the third quarter of 2023 were $30.5 million, a decrease of $15.7 million, or 33.9% compared to the prior year period, due to an 18.8% decrease in volume of products sold, primarily reflecting continued soft category demand, particularly among our core refrigerated products, and an 18.6% decrease in net revenue per pound, resulting from higher trade discounts and, to a lesser extent, changes in pricing and product sales mix. In U.S. food service, net revenues in the third quarter were $12.5 million, a decrease of $3.5 million, or 21.6% compared to the year ago period. This decline was driven by a 37.7% decrease in volume of products sold, primarily reflecting the cycling of sales to a large QSR customer for a limited time offering in the year ago period, which did not repeat in the current year, partially offset by a 26% increase in net revenue per pound, primarily driven by changes in product sales mix. Excluding the aforementioned sales to a large QSR customer for a limited time offering, U.S. food service channel net revenues would have increased by approximately 39% year-over-year. Net revenues from international retail sales in the third quarter of 2023 were $14.2 million, an increase of $4 million, or 38.8% compared to the year ago period, due to a 42.8% increase in volume of products sold, primarily reflecting strong sales from new product introductions and the lapping of a weak year ago comparison, partially offset by a 2.8% decrease in net revenue per pound. The decrease in net revenue per pound was primarily due to higher trade discounts and changes in product sales mix, partially offset by favorable changes in foreign currency exchange rates. Finally, in international food service, net revenues were $18.1 million in the third quarter of 2023, an increase of $8 million, or 78.7% compared to the year ago period. This increase was driven by a 90.9% increase in volume of products sold, primarily reflecting strong sales to a large QSR customer in the EU, partially offset by a 6.3% decrease in net revenue per pound. The decrease in net revenue per pound was primarily due to higher trade discounts, partially offset by favorable changes in foreign currency exchange rates. I'll now move to gross margin. Gross profit in the third quarter of 2023 was a loss of $7.3 million, or gross margin of -9.6%, compared to a loss of $14.8 million, or -18% in the year ago period. Although this represents over eight percentage points of margin improvement versus the year ago period, including the impact on depreciation expense from the change in our accounting estimates associated with the estimated useful lives of our large manufacturing equipment, it fell short of our previously stated expectation to drive sequential margin improvement throughout the year. Relative to our previous expectation, the variance in gross margin was primarily driven by lower net revenue per pound, reflecting higher than expected trade discounts and less favorable sales mix, and to a lesser extent, higher COGS per pound, mainly driven by warehousing costs and co-manufacturer underutilization fees. Compared to the year ago period, gross profit and gross margin in the third quarter of 2023 were positively impacted by lower manufacturing costs, excluding depreciation, lower materials costs, lower depreciation, and lower inventory reserves per pound, partially offset by lower net revenues per pound. In the third quarter of 2023, gross profit and gross margin benefited by $4.4 million, or 5.9 percentage points of gross margin, respectively, as a result of the change in the estimated useful lives of certain of our large manufacturing equipment as compared to those same measures calculated using our previous estimated useful lives. Moving down the P&L, operating expenses in the third quarter of 2023 were $62.4 million, a reduction of $12.5 million, or 16.7% compared to the prior year period. The primary drivers were lower legal and restructuring expenses, reduced non-production headcount expenses, lower product donation expenses and reduced scale-up expenses, partially offset by the write-off of an uncollectible note receivable in the amount of $3.8 million associated with a certain co-manufacturer, as well as higher consulting expense accruals. Loss from operations was therefore $69.6 million in the third quarter of 2023, compared to $89.7 million in the prior year period. Total other expense net of $0.7 million in the third quarter of 2023 consisted primarily of $2.5 million in realized and unrealized foreign currency transaction losses, and $1 million in interest expense from the amortization of convertible debt issuance costs, offset by $2.8 million in interest income. Overall, net loss in the third quarter of 2023 was $70.5 million, compared to $101.7 million in the year ago period. Adjusted EBITDA was a loss of $57.5 million, or negative 76.3% of net revenues in the third quarter of 2023, compared to an Adjusted EBITDA loss of $73.8 million, or negative 89.5% of net revenues in the year ago period. Turning now to our balance sheet. Our cash and cash equivalents balance, including current and non-current restricted cash, was $232.8 million, and total debt outstanding was approximately $1.1 billion. Inventory fell to $194.6 million in the third quarter of 2023, representing a sequential quarterly reduction of $12.6 million, or 6.1%, and our 6th consecutive quarter of inventory reduction. Turning to cash flows, net cash provided by operating activities in the third quarter of 2023 was $9.1 million, an increase of $43.7 million compared to the year ago period, and capital expenditures totaled $1.4 million compared to $18 million in the year ago period. As a result, free cash flow, defined as cash flows from operating activities less capital expenditures, was an increase of $7.6 million in the third quarter of 2023, and total net change in cash, including the effect of foreign currency exchange rate changes on cash, was an increase of $6.9 million, compared to a decrease of $64.5 million in the prior year period. Taken together, these year-over-year improvements in COGS, operating expenses, inventory drawdown, and cash conservation demonstrate that we continue to make real strides in managing our business more efficiently. Finally, I will provide revised guidance for our full year 2023 outlook. We now expect net revenues to be in the range of $330 million-$340 million, representing a decrease of approximately 21%-19% compared to the full year 2022. Gross profit for the full year is now expected to be approximately break even, and we continue to expect operating expenses to be approximately $245 million or less before one-time separation costs and non-cash savings associated with our recent reduction in force. We estimate we will incur one-time cash charges of approximately $2 million-$2.5 million in connection with the reduction in force, primarily consisting of notice periods and severance payments, employee benefits, and related costs, and we expect the majority of these charges will be incurred in the fourth quarter of 2023, subject to local law and consultation requirements, which may extend the process beyond the end of 2023 in certain countries. In aggregate, the reduction in force, combined with the elimination of certain open positions, is expected to result in approximately $9.5 million-$10.5 million in cash operating expense savings in 2024, and an additional approximately $1 million-$2 million in non-cash savings related to previously granted unvested stock compensation, which would have vested in 2024. Finally, we now expect capital expenditures to be in the range of $10 million-$15 million for the full year 2023. With that, I'll conclude my remarks and turn the call back over to the operator to open it up for your questions. Thank you. Thank you. I'll now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble the roster. First question comes from Alexia Howard of Bernstein. Please go ahead. Good evening, everyone. Hi, Alexia. Hey there. Hi there. How are you? Can we hone in on the U.S. sales generally, particularly the grocery channel? It looks as though the measured channel data was better than the numbers that you reported. So I'm wondering, first of all, what happened in non-measured channels? And then I have a follow-up. ... Yeah, sure, I can speak to that, Alexia. So, you know, as you know, there's typically a lag, right, between shipments and the consumption data. So sometimes, some of the trends that you see in the consumption data do not necessarily align. I wouldn't say that there was anything, you know, particularly unusual that happened in non-measured channels. So I think, you know, primarily, like, any differences that you're noting there are primarily driven by just sort of timing differences. Great. Thank you. And as a follow-up, can you talk about the differences between the dynamics in the international markets versus domestically? Obviously, things are still very challenged domestically with pricing down and so on, and yet you're actually seeing much better performance in the overseas market. So I'm wondering what the difference is in terms of consumer behaviors, competitive trends, et cetera, and I'll pass it on. Thank you. No, thank you for the question. That's exactly what's happening. I think the kind of main story that's afoot right now with our business from a growth perspective is if you look at the EU as an example, you know, retail and food service are both up substantially. You know, some of that's driven by timing of shipments, but the numbers are pretty significant, like 39% for retail and almost 80% for food service. But again, you have to factor in some timing issues with shipments. But overall, very directionally, you know, encouraging. And then you look at the strategics and what's happening, you know, with the plant platform, for example, in the EU. It continues to get good traction to the point where if you look at Austria, Germany, Ireland, you know, Netherlands, UK, Malta, Portugal, and Slovenia, and Switzerland, you know, all of those markets are operating and doing well for us. So the main difference, right, is in the EU, the consumer is driven not only, of course, by taste, you know, wanting to enjoy the delicious products, but also, climate plays a significant role in the consumer decision around the food system and food choices, as well as health, and health does not have the same kind of counterattack that's going on here in the US. Both on a climate and health perspective, the products are viewed correctly and given credit for their positive impact. So, continue to see very strong, you know, international growth, and if you start to look at the mix of our revenues, it's reflecting that, right? I think we're 42% now international versus 57% domestic. And then, in the US, if you look at US food service, we are lapping an LTO we did a year ago, this past quarter. And if you separate that out for a minute, US food service is also up pretty substantially. So it really gets down to US retail. That's the main issue. And so that's why we're spending so much time focusing on how do we write the narrative, how do we correct the narrative, rather, in U.S. retail, around our product to bring the consumer back into our value proposition. And, you know, as I noted, there's some confusion out there and some misinformation that we just need to do a better job of cleaning up. So very encouraged by the growth we're seeing internationally, encouraged by some of the segments in food service, continue to be concerned about retail, but have a strategy there to try to get that ship righted. Great. Thank you very much. I'll pass it on. Mm-hmm. Thank you. Next question will be from Daniel Gold, BofA. Please go ahead. Hi, this is Daniel Gold. Thanks for taking my question. Sure. In the pre-announcement, there was a comment about improving margins through pricing. How does that reconcile with targeting price parity with beef? Sure. So, you know, I think almost, let me see, 4.5 years ago, I set a target to, within five years, to be able to price at parity with at least one product in one category. We've actually achieved that with a particular product. We'll give more news on that as we come up on that five-year mark. Overall, when you take a step back, you know, the idea here, last year when we went into a focus on driving our pricing structure closer to animal protein, a couple of things were going on. One, animal protein was seeing increases in price. So we thought, you know, with that narrowing of the gap, we could, you know, accelerate and close the delta even further. But the idea was to get across the chasm from kind of the niche, early adopter consumer that we do so well with, to the mainstream consumer, and it didn't work. You know, we, we think that the headwinds that the category is facing, whether it's the, you know, misinformation or misunderstanding about the, the value proposition, or whether it's just the incredible pressure the, the retail consumer is under and, and the, the very established pattern of trading down among high-cost proteins. Because, again, even though we did pricing, you know, programs, we were still higher cost. So in that environment, whether it was the sector-specific headwinds of you know, ambiguity around the health benefits and things of that nature, or whether it was the broader consumer environment, and you know, reduced buying power and things of that nature, it just didn't have an impact. So, you know, we're gonna go back to pricing the products at a way that gives us a margin that can sustain our business. And, you know, that's not across the board, right? Some of the pricing programs will stay in place, and others will lift, and it'll be on a case-by-case basis. ... Interesting. That's, that's really helpful. Sure. Also, there were some Q3 softness that was attributed to lower than anticipated promotional effectiveness. What can you learn from that, and why was that the case? I think it's the same feature that I was just highlighting. You know, when there's so much noise both macroeconomic with the, again, the consumer pressure as well as, you know, questions about our value proposition, those type of programs are just less effective. And so, you know, in hindsight, right, we probably would have done less of it, given the just the overall conditions of the market and our particular category. In the long run, we think, you know, it's a good thing to do, but we first have to clean up this messaging issue and the perception issue before I think those type of programs can be effective. In some sense, you just train the consumer, if you're not, you know, increasing the population that's consuming your product, you're just training the existing ones to wait for those discounts. So, but we're gonna look heavily at how we do that and when we do that in the future. Got it. That makes sense. Thank you. Mm-hmm. Thank you. Next question will be Ben Theurer of Barclays. Please go ahead. Oh, yeah, good afternoon, and thanks for taking my question. So Ethan, Lubi, I wanted to dig a little bit into the potential of your gross margin and how we should think about this, because clearly, I know you weren't targeting to be somewhat positive this quarter. You're talking about break even for a year. This quarter still didn't turn out. But just help us understand what's been driving the cost up so much compared to three-four years ago, when you were able to achieve gross margins in the 30%+ range. And is that something you think is achievable, or is there something structural to the cost of your product that is impacting and impeding you of reaching those levels you had, just call it maybe pre-pandemic, right before the pandemic? That would be my first question. Yeah. No, that's a good question. So I think this is an area that, you know, kind of can frustrate our operations team. You know, we're about a year in now to implementing lean management. And, you know, it all takes five years to get an organization to be, you know, fully leaned out and operating according to those principles. But we're taking it very seriously, and they're doing great work at the plant level. You know, they're driving... I think we took, like, $1 or so out of COGS on a year-over-year basis. But two things are working here against us on that front. One is just pricing, right? Like, we've taken down pricing dramatically since the period you referenced. And second is mix has changed. You know, there's definitely a pretty significant impact from mix. So the gains that we're seeing on whether it's, you know, direct labor or direct material or reduced logistics or things of that nature, are kind of being swamped by the pricing measures we took, as well as some of the mix changes. And so, you know, that's why we're so focused right on pricing. We're obviously gonna continue to drive down cost and, you know, address the mix issue and things of that nature. But the primary tools that we're looking at from a change perspective is moderating our pricing programs. But Lubi, I don't know if you want to add to that. Yeah, Ben, the only thing I would add to that is, you know, from a COGS per pound perspective, if you look over the last couple of years, say the last 12- 24 months or so, you know, clearly there has been, you know, some softness in demand, and so there has been an impact from just volume deleveraging, and also the impact from underutilization fees, right? And so we've done a lot of work, in over the last 12 months or so to really try to consolidate the network. We think we're gonna start to see greater benefits from that, you know, in future periods. But, you know, so those are things that I wouldn't consider structural. I think clearly there's challenges that remain in the category today, and we got to, you know, figure out a way to stabilize the business in the U.S. and get that back to growth. But I wouldn't consider those as structural hurdles, right, in terms of the cost structure. So, you know, as Ethan said, I think, you know, a large part of this does come down to pricing, and then I think, if we're successful at, you know, restoring growth in the business, then some of the fixed cost absorption issues and things like underutilization, along with the work that we're doing from a network perspective, you know, should sort of resolve itself. Yeah, I think that's, that's exactly right. And, and we, you know, as, as we look at sort of what changed between August and now, certainly the lower volumes impacted our ability to call this one right, and then higher trade payment, right? So it, it, it's less on the COGS side, and more on, on, on those, on those factors for right now. Okay. And then just one for me to like, kind of try to get your thoughts on this idea of the concept of if you want to... You obviously said you're gonna spend a lot of time on telling consumers and convincing consumers of the health aspects and the just the benefits it has, not only to health, but also to the environment, et cetera. So ultimately, talking about this being a superior or premium product, and usually in consumer products, for healthier products, for superior products, you can charge premiums. You ultimately get a better pricing, making this a more exclusive product. So is that something that you would consider within your strategy, particularly in retail, creating brand value, creating something that just on purpose- ... is not striving for price parity, but actually for a significant premium because it is something better, and to make it profitable through that? Yeah, look, that's a great question, and you know, I don't wanna sort of show too much of our hand, so I can't give a particularly detailed answer. But I think the way to think about our pricing and our value proposition, it's gonna be varied. You know, in certain segments, it's gonna be very aggressive in terms of reaching price parity, and we're seeing some absolutely amazing things. Our team has done such good work in some of those channels. But in retail, particularly as we try to remove some of the targets, even though we think they're unfair, you know, we are gonna kinda get into that area of maybe a more premium good. And that will, I think, drive, you know, a justification for pricing at a higher level as well. And it gets back to, you know, are we trying to, in retail right now, cross the chasm to the mainstream consumer? Are we kind of regrouping, getting our margins right, getting the product value proposition cleaned up and selling, you know, maybe a higher priced product to a group of early adopters and early mainstream? So I think that the direction of your question, I think, is spot on. Perfect. Ethan, thank you very much. Yep. Thank you. Next question will be from Adam Samuelson, Goldman Sachs. Please go ahead. Yes, thank you. Good evening, everyone. Hey there. Hi. So I guess continuing on the pricing and margin discussion, if I look at the business, the U.S. pricing per pound is $0.80 or so, $0.80, $0.90 higher than it is internationally, and it moves around quarter to quarter, a little bit, depending on promotions and mix and FX. How big of a difference would you frame the cost to serve that international business versus the domestic? So as part of the plan here, hey, we're seeing better consumption growth, we're seeing better demand, maybe there's less price elasticity if we can get our pricing points in Europe closer to where they are in the U.S. Or is the point that domestically in retail, we need the price... Kind of price cut, price cuts are not working, and so we can make it profitable to raise price, even if we have to sacrifice volume? I'm just trying to dimensionalize where along the continuum we are in terms of the plan of attack going forward. Yeah, so I think, you know, in Europe, we're probably less inclined to do any significant price increases in retail. And as well as in Europe, because of the heavier action among strategics there, the price point is lower in food service. In U.S. food service, actually, our pricing went up due to mix. But in retail, of course, it went down substantially. I think the average was $5.21-$4.24 price per pound basis, and that was driven largely by trade discounts and pricing and mix. But so I don't I think in the... we're primarily focused on the pricing question and any significant strategy change in the U.S. market versus in Europe. I don't know, Lubi, if you want to add to that. Yeah, Adam, what I would add to that is, if you recall, at the beginning of last year, I believe, in 2022, we did do a pretty broad-based pricing reduction in the EU to better align our pricing in the European retail landscape. Now, one of the things that's structurally different about Europe retail, if you will, relative to the U.S., is there is a much greater presence of private label over there. And so, you know, when you look at the competitive landscape in the EU, you have to, you know, the pricing structure is going to be different from the U.S. Now, we actually think that our pricing where it stands today in the EU, you know, feels like it is where it needs to be relative to the competitive set. I think there are opportunities for us to drive, you know, incremental efficiencies from a COGS perspective. But, you know, our margin profile in the EU business is actually, you know, pretty good. I think there's opportunities to make improvements there. But, you know, I think, you know, when we're thinking about pricing strategy in the EU, I wouldn't necessarily be thinking about price increases. You know, there's always going to be some variations from a promotional perspective and things that we do in that regard, but you know, we actually went through the exercise over a year ago, right, to make sure that our price points were in the right place in EU retail. I think you know the way to think about... So we're undergoing a substantial reduction in operating expense across the company, to better fit kind of the newer current conditions. But that in the EU, because of the success we're seeing on a relative basis, we're expanding our investment there, just because it's such a powerful growth engine for us at the moment. Okay. And if I could just ask a follow-up on cash flow. So there was positive cash from operations kinda in the quarter. It seems like a large part of that was your payables actually expanded, so that was a source of cash, which is not what we would expect to happen if you're also trying to reduce your purchases and slow down inventory and shrink inventory. So, is part of the point on the cash flow sustainability that payables kind of growth in the quarter, which just becomes a source of cash, is not repeatable, and that then becomes a headwind as you move 4Q and into next year? Yeah, I think that's right, Adam. So, you know, the working capital was a pretty significant benefit in the third quarter of this year. You know, typically, we do have a strong quarter from the perspective of accounts receivable in Q3, because that's, you know, following what is seasonally our strongest quarter in Q2, and so we collect. You know, I would say AP typically, that tends to move around. It tends to be sort of more just timing driven. But I think you're absolutely right. You know, in thinking about as we move forward sequentially, and, you know, we've said we don't expect to sustain the cash flow positive in the fourth quarter. One of the headwinds, if you will, in this quarter will be, we don't expect that type of a benefit from accounts payable. Okay. I appreciate it. I'll pass it on. Thanks. Thank you. Next question comes from Peter Galbo of BTIG. Please go ahead, sir. Great, thanks for taking the question. You guys mentioned, and I know it's early, the exit of select product lines and/or geographies, potentially restructuring China. I was hoping you'd give us a little bit more color on at least the early thinking there. Is this mostly related to, you know, U.S. retail product lines? And also maybe just a little bit of color on the performance of jerky. Is that on the, you know, in the consideration set? And then when you mention restructuring China, is this just a shrinking of the China market, or are you considering a full-on exit? Just any color around that would be helpful. Thank you. Sure. I mean, we can't give too much, right, for just don't wanna box ourselves in. But, you know, what's on the table, right, is, is there are product lines that are underperforming, you know, in a, in a way that we think is perhaps structural on a margin perspective or, or, or just not, not exhibiting the growth we wanna see. So, you know, some of what you mentioned is probably falls into that pretty well. On, on China, you know, I think it, it's just taking a look at what is our strategy for the next two, three years there, and, how, how, how big, or small do we need to be? You know, it's interesting, that part of the world is starting to replicate a little bit of what you're seeing in Europe in a just an early, very nascent way. Like, if you look at Europe with all the government programs and incentives, or campaigns rather, probably is a better way to put it, to reduce animal protein consumption, as I mentioned in my prepared remarks, whether it's the UK, Germany, Netherlands, et cetera. South Korea, as I mentioned as well, just came out with something. You see some interesting activity occurring on a commercial side of things in Japan. So it's a little bit too early to give an answer to that, and we're just continuing to look at it. To drive down the type of cost reduction and the operating expense reduction that we're pursuing, kind of everything has to be on the table, and it is. Thank you very much. Yep. Thank you. Again, if you have a question, please press star then one. Next question comes from Michael Lavery, Piper Sandler. Please go ahead. Thank you. Good evening. Good evening, hey. Just would love to understand the table at towards the end of the text in the release better on the distribution points by channel. Obviously, you've done much better in international food service than in the U.S., but that shows a sharp decline in distribution points and a small uptick in the U.S. in food service. Can you just help explain what's going on with those numbers and how to reconcile that with what you've reported? Is there somebody that's just had a recent discontinuation or anything we should be sure to be aware of? Yeah. So in international food service, what that's reflective of is basically the discontinuation of distribution at a certain large, like, chain customer. And this is in, it's, it's in China. It's not a meaningful percentage of revenues, at all. And then, I think your, the, the second part of your question was related to U.S. food service. Those numbers, you know, tend to, you know, from quarter to quarter, have some fluctuations in them. So I don't think there was anything of note, to call out in that particular line item. Okay, that's helpful. And even a little bit of rounding, if you know, it's just not a huge move is what you're saying. Just following up on just some of the outlook on the restructuring or SKU rationalizations. I know you don't want to be too specific, but just in terms of how we're thinking about modeling 2024, which obviously, too, I know you're not guiding on yet. But anything just directionally to you know, more specific, I guess, in terms of where you know, there's watch outs in terms of you know, even if certain products haven't been pinpointed yet, you know, is it more China-focused and U.S. retail? It sounds like we have some of the breadcrumbs, but any more you can give there? ... Can't give a lot more additional color, but I think it's we're not doing anything that would, I think, surprise people. You know, if you look at kind of the performance of various product lines and, you know, where our emphasis is as a company, you know, obviously, we're very focused on beef and burger and sausage and our chicken lines and things of that nature, and, you know, really focused on the partnerships we have in Europe and some of the new retail items we've offered there. So it's some of the more underperforming SKUs that if you were to do a, you know, quick chart, you'd see, it's, that's the process we're going through. So I don't think it's anything that's gonna surprise people. Okay, thanks so much. Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Ethan Brown for closing remarks. No, that's it. You know, we are, yeah, I think taking a very hard look at where our operating expense is, given that the revenue is lower than we need it to be right now. So, you know, we're gonna be fitting the organizational size into more of the near term opportunity. We're extremely encouraged by the international growth that we're seeing and the way the world is moving in that direction. You know, the governments in Europe are taking this matter very seriously. They see you know, plant-based foods and a shift from an animal protein-based economy to one that is plant-based from a food system perspective as a very strong lever for climate. Just so that folks understand this, the reason it's so powerful, right, is that, you know, not all emissions are kind of, you know, equal, right? And methane is a very powerful greenhouse gas. It also moves through the atmosphere at a quicker rate. Its half-life is much lower, so you can take it out of the atmosphere much more quickly. And so in doing, you can dramatically slow within our lifetime and within the period that matters, you know, the rate of climate change. But more importantly, by utilizing the 30% of land that we have globally devoted to livestock for carbon sequestration, you can pretty much take a huge chunk out of the climate problem without any new technology development. So that's why this solution is so much more powerful than automotive or energy or the other areas that get so much attention. It's a near-term solution that requires very little additional technological development. The European governments see that, right? And you think—I think some of the Asian governments are starting to see it as well. The U.S. has been slow. It's dominated by you know, vested interests, and the government is very much you know, beholden to them. So this transition here is gonna be about businesses and the consumer making the change. I don't think we expect the government to step up, but we're doing that. I think that health is the main driver here, and I'm really quite optimistic about what we're gonna do next year to help write the narrative and get back on track with the U.S. consumer and retail. More to come, and we'll talk next time. Thanks. Thank you. This concludes the conference. Thank you for attending today's presentation. You may now disconnect.