Greetings, welcome to the Celsius Holdings fourth quarter fiscal year 2022 earnings call. At this time, all participants are on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cameron Donahue, Investor Relations for Celsius Holdings. Thank you. You may begin. Thank you and good afternoon, everyone. We appreciate you joining us today for Celsius Holdings fourth quarter 2022 earnings conference call. Joining me on the call today are John Fieldly, President and Chief Executive Officer, and Jarrod Langhans, Chief Financial Officer. Following the prepared remarks, we'll open the call to your questions and instructions will be given at that time. The company released their earnings press release early this evening, and all materials will be available on the company's website, the celsiusholdingsinc.com. As a reminder, before I turn the call to John, an audio replay will be available later today and can be accessed with the same live webcast link in our conference call announcement press release. Please also be aware that this call may contain forward-looking statements which are based on forecasts, expectations and other information available to management as of March 1st, 2023. These statements involve numerous risks and uncertainties, including many that are beyond the company's control. Except to the extent as required by law, Celsius undertakes no obligations and disclaims any duty to update any of these forward-looking statements. We encourage you to review in full our safe harbor statements contained in today's press release and our filings with the SEC for additional information. With that, I turn the call over to President and Chief Executive Officer, John Fieldly for his prepared remarks. John. Thank you, Cameron. Good afternoon, everyone, thank you for joining us today. We achieved record sales for the fourth quarter of $178 million, an increase of 71% from last year's fourth quarter of $104 million. This revenue growth was driven despite the approximately $15 million-$20 million we discussed in the third quarter that was driven by the inventory pipe bill by the Pepsi system in the preparation for distribution transition that began October 1st, 2022. We believe the distributor inventory levels are now back to normalized levels as we began the first quarter of this year. For the full year, sales totaled $654 million, up 108% or $340 million growth compared to $314 million in 2021. According to the January 1st, 2023, 52-week IRI energy category SPINS MULO+C data, representing the calendar year for 2022, Celsius is the number one brand driver of growth in the energy category in all of 2022, responsible for 22% of the category dollar growth, driving $474 million approximately in incremental retail sales for the category. We continue to see growth across all channels, including those non-tracked, with the club channel sales totaling over $138 million for the year ending December 31st, 2022, which were up 247% compared to $40 million in the last year. We also hit record sales through Amazon in 2022, with full year sales of approximately $58 million versus full year sales in 2021 of $32 million, up 83% approximately. According to trailing 12 weeks IRI MULO+C total energy as of January 1st, 2023, representing the majority of the fourth quarter, Celsius is now the number three energy drink brand in the category, with dollar sales growing approximately 128% versus the same period in the prior year. Our fourth quarter represented our first quarter since the commencement and distribution partnership with PepsiCo. During the fourth quarter, we had an additional $38 million in expense of sales and marketing related to termination, associated expenses from prior distributors, which was recognized. Most of these distributors were transitioned by November 1st, 2022, in conjunction with approximately $156 million of similar book charges that were recorded in the third quarter. For the full year, transition costs totaled $194 million, mainly associated with distributor termination costs. This completes our distributor transition to the PepsiCo network, and we do not anticipate any further material changes going forward. We have been extremely happy with the transition, both from our PepsiCo partner as well as with our Celsius team. I'd like to thank all of our previous distributors for their amazing work that they did, helping us build the Celsius brand, especially through these challenging macroeconomic times over the last few years. As highlighted in our earnings supplement for the four weeks period according to SPINS and IRI total energy as of January 1st, 2023 in the MULO+C, Celsius is the number three energy drink with a $6.4 share in the energy category versus 3.4% share in the year ago period, with an ACV now reaching approximately 89.7% versus 59.6% in the year ago period. In addition, in the convenience channel, Celsius has seen approximately a 96% increase in ACV growing to 89% compared to 45.3% in the year ago period. We see substantial growth opportunities and convenience on a go forward basis. In addition, in the food service channel, we have now expanded to over 1,600 colleges and universities and over 1,600 healthcare locations in the United States. We also continue to drive authorizations with key PepsiCo customers such as the Marriott and Hilton, as well as travel and airport segment and casinos, which are all incremental to the brand. International sales did see a 38% growth in the fourth quarter, totaling $11.5 million compared to $8.3 million in the fourth quarter of 2021. We believe there is significant opportunities for international growth going forward with PepsiCo. While we just began our distribution partnership with PepsiCo and the initial focus has been on the U.S. distribution transition to their network, we have begun initial discussions, and we see significant opportunities to capitalize on a global scale in the future, reflecting the changes in consumer preferences for better for you offerings. While the U.S. transition has taken the majority of our focus to date, we do expect to announce additional international expansion initiatives in additional countries in the future. Turning to our gross profit. Gross profit for the quarter increased approximately 90% in the fourth quarter to a record for the quarter of $79 million, up $42 million in the year ago quarter. Our gross margins for the quarter totaled 44.4%, an increase of approximately 445 basis points from the prior year. As discussed on our last earnings call, we reiterate our expectations for continued sequential margin percentage improvements as we further gain efficiencies through our supply chain. As stated on our last call, our goal was to achieve a mid-forty gross profit margin upon our exit of 2022, which we have achieved. The improvement was made despite the significant growth we saw on the club channel as this channel has historically had lower margins due to secondary repacking facilities, which is required for the pack size. We continue to initiate production efficiencies to improve margins in this channel, including working with our co-packers to transition to inline packing so the product doesn't have to be moved to a secondary location and facility. In addition, we are working to increase our pack size from a 15-pack to an 18-pack size through this transition, which started in the fourth quarter. We did launch a second SKU, a Vibe multi-pack, in the fourth quarter at Costco, and will continue through the first quarter of 2023. We launched a second SKU also at a club pack at Sam's Club. In the first quarter of 2023, we are fully rolling out through BJ's nationally. The company does see opportunities to drive incremental efficiencies in 2023 and beyond from both the expected improvements in the club channel, in addition to with our transitions from a significant number of independent distributors to PepsiCo's distribution. This will allow our team to consolidate sales, marketing, and distribution efforts, which will have associated cost benefits, which we expect to recognize and leverage in the future. International third-party back data continues to show accelerated growth metrics. We are confident that Celsius will continue to drive sales even higher as we increase our ACV across channels through additional launches with new national retailers and independent chains, and further leveraging our new partnership with PepsiCo. Consumer demand for Celsius on a dollar basis re-accelerated through the fourth quarter of 2022 and into the first quarter of 2023 from the initial distribution shift which started October 1st, 2022. The most recent period, Nielsen scan data and energy reported as of January 28, 2023, so Celsius sales were up, as of the four weeks, 136% year-over-year, 129.8% for the 12 weeks ending, 127.5% for the fourth quarter. This compares to the energy category, which grew approximately 17.1% for the four-week period ending, 18.8% for the 12-week period ending, and 10.8% for the fourth quarter over the same period. On Amazon, Celsius is the second-largest energy drink brand with a 16.94% share in the category, ahead of Red Bull, which is at 11.71% share, and just behind Monster, which is at a 26.38% share, year-over-year periods as of February 11, 2023, per Stackline total energy total U.S. Amazon full year 2022 sales hit a record for us at $58 million versus the prior year, which totaled $32 million, which as we stated earlier, was up 83%. We see great opportunities as we continue to leverage consumers in the omni-channel world. The company has plans to place an additional 15,000 dedicated branded Celsius coolers in 2023, which will bring our total dedicated Celsius coolers in the U.S. to over 20,000 by the end of this year of 2023. This will be the incremental to the additional cold placements we expect to gain, as we discussed before, in the PepsiCo Energy dedicated coolers, which provides an additional incremental up to 50,000 additional placement opportunities. Our U.S. store count now exceeds over 210,000 locations nationally, growing approximately 20% from the third quarter, with additional expansions planned through 2023, accelerated by the PepsiCo distribution agreement. Before I turn the call over to Jarrod, I want to outline some key pillars the company is focusing on to drive further shareholder value. The first pillar is top-line growth, which includes increasing the number of stores and channels that carry Celsius. New retailers, national expansions within existing channels, such as our recent national expansion, as mentioned earlier, with BJ's, and also a national rollout which starts this quarter the first quarter of 2023 with Aldi. In addition, leveraging and expanding new channels such as food service and college universities. Also increasing the number of items carried per location. Focusing on key drivers to drive velocity rates and the opportunities to leverage and with international growth. Our second pillar is the operational excellence. These drivers include a focus on gross margin. Our focus on gross margin will be driving efficiencies and leverage as we scale. Leveraging our Orbit model, our distribution Orbit model, to drive more efficiencies. As an example, shipping from co-packers straight to distributor, optimizing freight warehousing costs, vertically integrating and improving our scrap and waste efficiencies. Focusing on sales and marketing initiatives to gain further leverage, optimizing our PepsiCo partnership. In the G&A, optimizing our revenue per employee, leveraging software optimizations, and focusing on building our internal and expertise internally to drive scale. The driver of the final pillar is cash generation and EBITDA leverage. Goal of driving increased EBITDA as we scale. To close my prepared remarks, with the PepsiCo transition now complete, Celsius is positioned for the next phase of growth, with further opportunities as we begin to expand international markets to further capitalize on our future and optimize our leverage, driving further value for our shareholders. Celsius is now established as a leader in the energy category in the United States, driving growth for the entire category in all of 2022, with incremental opportunities to further drive growth to 2023 and beyond. I will now turn the call over to Jarrod Langhans, our Chief Financial Officer, for his prepared remarks. Jarrod? Thank you, John. Before jumping into the financial results for the year and the quarter, I'll cover a few administrative items. It was another very exciting and busy quarter. For the quarter, we successfully integrated into the Pepsi distribution system, going from an ACV in the mid-60s to the high 80s very quickly. In addition to moving to the Pepsi system, we processed a majority of our prior distributors terminations, including final payments, inventory returns, et cetera. As John mentioned, the transition continues to go very well, and we are excited to see the results of this long-term partnership. Let's walk through some accounting updates. Let's start with transition-related expenses. Included within our annual results, we recorded approximately $194 million of termination expenses associated with termination notices issued in 2022, primarily related to the transfer of distribution to Pepsi. As of the first quarter of 2023, we have effectively transferred all activities that we had set out to transfer to Pepsi, plus a few additional areas. During the fourth quarter, we saw some increases in inventory reserves and other related costs as we transitioned from our prior distribution network and into the Pepsi system. As a part of our contract with the prior distributors, we accepted return product and had to make decisions on the product in terms of taking the product back or disposing of the product. In a number of instances, we chose to donate or dispose of the product. In addition, in the fourth quarter, we made a decision to over-invest as a part of the integration into the Pepsi system in order to support the significant expansion. More on that later. Now let's talk taxes. As a reminder from our Q3 call, our effective tax rate for the year deferred from the statutory federal income tax rate of 21%, primarily due to the tax impact of the $282.5 million Series A preferred stock value adjustment, which is being expensed over 20 years for book purposes. As this expense is nondeductible for tax purposes, we recorded a deferred tax liability in the third quarter as a discrete item. The effective income tax rate for the year was also impacted by a disallowed stock-based compensation expense, state and local income taxes, and the release of certain state income tax reserves. Moving on to a few legal items. We have progressed on the settlement associated with our can label. As of the middle of February, the notification process was completed, and we would expect to close this out prior to the end of the second quarter. As many of you know, we received an unfavorable verdict in January of 2023 around litigation involving Flo Rida. We have incorporated a detailed discussion within our 10-K, as well as a range of potential outcomes. We are in the process of appealing and believe that we will ultimately prevail. In regards to the SEC review, we continue to cooperate with any inquiries or requests that are received, but don't really have any updates beyond that. Before moving to the results, I wanted to make a few comments on our internal control environment. We have significantly expanded our finance team, especially during the fourth quarter, and our control environment has seen great improvements across 2022. With that said, 2022 was a very busy year with our significant growth, Pepsi transition, and new team members. As a result, although we were able to make progress and saw many improvements, we were not able to get to a position where we could fully clear the material weaknesses from 2021. This is reflected in our 10-K. As we look out across 2023, the team is focused on working towards fully clearing these items, we will work diligently to get across the finish line. Turning to our fourth quarter financial results, revenue was approximately $178 million, an increase of 71% from $104 million driven by North America, where fourth quarter revenues were $160 million, an increase of 74% from the same period in 2021. The primary factors behind the increase in North American sales volume were related to our integration into the Pepsi distribution system, as well as continued strong growth in traditional distribution channels, combined with an increase in and optimization of our products presence across our footprint. As a reminder, we discussed on our third call that revenue in the third quarter was elevated as a result of building inventories at Pepsi warehouses and distribution centers. This was a one-time pipe fill of around $15 million-$20 million. Gross profit for the quarter increased 90% to $79 million, up from $42 million in the year ago quarter. Gross profit margin in the fourth quarter were 44% of revenues, compared to 40% for the prior year fourth quarter. The improvements in gross profit margins were due to lower average can prices, improvements in freight lanes from our Orbit model and transition into Pepsi, as well as pricing benefits. Sales and marketing expenses for the three months ended December 31st, 2022, were approximately $90 million, an increase of approximately 265%. This increase was primarily attributable to termination expenses of prior distributors in the amount of $38 million, as well as an intentional increase in marketing spend versus budget in the amount of $15 million, as we moved into the Pepsi distribution system. With the huge gains that were made in ACV, we felt that it was appropriate to overinvest in marketing in support of this expansion. As a% of sales and marketing would have been in line with historical rates had we not incurred the termination expenses and put forth the additional marketing investment. As we moved into Q1 2023, we expect our sales and marketing spend to be in line with historical rates as a% of sales. General and administrative expenses for the three months ended December 31st, 2022 were approximately $22 million, an increase of 54% relative to 2021. This increase was due to increased employee costs associated with building a back shop that can scale as we grow, as well as administrative fees such as legal, audit, and other consulting fees. G&A expense as a percentage of sales was 12% for the fourth quarter of 2022 versus 14% in the prior year, which was in line with our annual rate. We would expect to see this area leverage during 2023 once we have fully built out the team. Turning to our full year financial results, we had revenue of approximately $654 million, an increase of $340 million or 108% from $314 million in the prior year, driven by 126% revenue growth in North America. The primary factors behind the increase in North American sales volumes were related to continued strong growth in traditional distribution channels, combined with an increase in optimization of our products across North America, as well as our transition into the Pepsi system. Gross profit increased 111% to $271 million, up from $128 million in the prior year. Gross profit margins were also improved, up 66 basis points on a full year basis. We saw gradual improvement in our gross profit margins across the back half of 2022, as we saw improvements in our average can costs with less higher price international cans, more efficient freight lanes with our Orbit model and also some pricing benefits. Sales and marketing expense for the year ended December 31st, 2022 were $353 million, an increase of $278 million or 372% from $75 million in the prior year. The largest increase was from $194 million of termination expenses to our prior distribution network. We had increased incremental marketing investment activities of roughly $48 million, saw increased employee costs of $8 million, and had increases of $28 million across storage, distribution, broker costs, and trade spend. Sales and marketing costs as a percentage of sales were consistent year-over-year when excluding the $194 million in termination expenses and fourth quarter incremental marketing spend. General and administrative expenses were approximately $76 million, an increase of $18 million or 32% from $58 million. Employee costs for the year ended December 31st, 2022 reflected an increase of $5 million as investments in this area were required to properly support our higher business volume in commercial and operation areas of the business. Administrative costs drove an increase of $26 million, mainly related to increases in legal expenses, audit costs, insurance costs, and other consulting fees. Depreciation, amortization, and impairment had an increase of $3 million when compared to the prior year due to investments in operational equipment, mainly coolers and the impairment of the Func Food brand name. The increased expenses were offset by a lower stock option expense in 2022, which was $21 million, a decrease of $16 million from the prior year period. This change in stock option expense was mainly attributable to the revaluation of certain share-based payment awards that were modified during 2021. G&A expense as a percentage of sales was 12% versus 18% in the prior year. Excluding stock-based compensation, G&A expense as a percentage of sales was 8% versus 7% in the prior year. Focusing now on liquidity and capital resources. As of December 31st, 2022 and December 31st, 2021, we had cash of approximately $653 million and $16 million respectively, and working capital of approximately $757 million and $169 million respectively. Included within the 2022 cash balance was approximately $39 million of restricted cash that represents $35 million due back to Pepsi, representing excess funds provided by Pepsi for our distributor transition and $4 million of remaining accrued payments due to former distributors. Cash flows provided by operating activities totaled $108 million for 2022, which compares to $97 million in net cash used in operating activities in 2021. The approximately $205 million increase in cash generation was driven by continued growth in operations of the company, as well as working capital benefits, including the timing of transactional costs associated with the Pepsi distribution transition. Looking at inventory, total inventory ended at $173 million, down over $18 million versus the prior year. We'll continue to carry additional inventory in order to make sure that we are able to keep up with the significant growth we're experiencing. We would expect to continue to drive efficiencies in our DIO as we move through 2023. With the business generating cash as well as the injection of funds from our PepsiCo partnership, we have sufficient firepower to take our business to the next level across the U.S. and eventually internationally in the coming years. This concludes our prepared remarks. Operator, may now open the call for questions. Thank you. Thank you. Ladies and gentlemen, at this time, we'll be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Please remember to limit yourself to one question and one follow-up. Our first question comes from the line of Kevin Grundy with Jefferies. Please proceed with your question. Hey, good afternoon, guys. Thanks for taking the question. First for me, just in the interest of clarity, just trying to reconcile a bit the performance in North America on sales growth relative to what we saw on the scan channels. I know there's a handful of moving parts here and not the least of which would be, Jarrod, the pull forward, the $15 million-$20 million, which you quantified last call and mentioned again. Jarrod, you also mentioned some product returns, which would be a drag. I guess kind of going the other way, you know, you also had strong growth in club again, you had some distribution wins, which John talked about before. Maybe just comment a bit on the gap that we saw with North America up 74%, Nielsen channels up very strongly, up about 130%. Can you just kinda reconcile the two for us a bit? Kevin, good afternoon. If you looked at the pipe fill, that would have brought us up to, you know, in excess of 90% from a North American perspective. We are beholden a little bit to some of our bigger customers in terms of seasonality or in terms of timing. I suspect there was also a little bit of working capital management at the end of the year, which would have pulled inventories down a little bit. From that perspective, I think the scan data continues to be accurate. If you look at Q1 and how we've done thus far, we continue to accelerate our growth and do very well. I think there's a little bit of clunkiness around Q3 and Q4 with the onboarding and integration into the Pepsi system and the pipe fill, and also some kind of year-end working capital type activities associated with some of our customers. Yep. Yep. Definitely makes sense, Jarrod. Thanks. And then just the follow-up, just more broadly, the transition to the Pepsi system seems like it's gone really, really well. Maybe just some color on the spring shelf space resets, wins there, where you guys sort of expect to land. And then just further context for kind of where we are. We see the ACV ramp. You guys mentioned some of that. We can see it in the Nielsen data, but maybe just some context for where we are and ultimately where you think the company will land as we think about ACV, as we think about total distribution points, and even as we think about non-track channels, some of the wins you guys have on college campuses, healthcare, et cetera. Just give us a sense for where we are and ultimately when this starts to look, you know, something closer to where the ambition is from a fully distributed perspective. Thanks, guys. Yeah, Kevin, great question. Good afternoon. I think, you know, there's a lot of momentum, as Jarrod mentioned, especially in the first quarter of 2023. You know, our ACV, we finished the year right around 90%, you know, right around an average of 90% ACV, about 89% as we talked earlier. Great execution through the transition with the Pepsi system. Keep in mind, we still had some distributors that transferred over in the quarter, so they weren't, you know, purely 100% Pepsi system from that October 1st transition window. We do expect to pick up additional ACV points, especially with the spring resets that are coming ahead. You know, we also have been very aggressive in gaining additional Bang space that has been out there. You know, the teams, I just hats off to the teams working extremely hard on our key accounts team, gaining incremental distribution and also picking up new distribution as well. We're really excited about the next resets coming out. As I talked about earlier, we talked about BJs as well on the club channel non-tracked. I think there's opportunities there that's rolling out, also gaining incremental shelf space. In the alternative channels, food service has been a big opportunity for us. I just touched on the college and university, where we have about 1,600 currently, hospitals as well as around 1,600. We're really just getting started in the food service business. That could be a considerable amount of upside, especially when we're seeing the usage occasion with Celsius really expanding. We're really excited right now. We're not going to provide forward-looking ACV guidance, but, you know, where it stands right now, we're in really good shape and I know look forward to a great 2023. Our next question comes from the line of Mark Astrachan with Stifel. Please proceed with your question. Yeah, thanks. afternoon, everyone. Two questions from me, please. first is on just thinking about distribution, not ACV, but actual distribution points. Could you just talk about how you're thinking about where you're going in 2023? You know, we're close to spring resets at this point. What have you secured on a percentage basis? maybe more broadly, how do we think about where the product is going? Is it in existing energy coolers, or are you moving into more dedicated performance, functional, healthful coolers? That's the first question. Yeah. Thank you, Mark. I'll jump in. You know, in regards to distribution points, we talked about currently we're at roughly around 210,000 as reported, but we are gaining considerable amounts of distribution incrementally in the non-reported, as just talked about earlier, the food service. As Pepsi calls it, the OTS segment, which is the independent market, which Pepsi is really strong. We talked about that in the third quarter, being involved in their metals program, which is really their independent loyalty program. That's gonna be a great opportunity for us. There's resets taking place for 2023 now. That could add considerable amounts, where there's over 150,000 in additional doors or locations that are out there. You know, we're watching that closely and there's a definitely considerable upside. When you look at, you know, the reported channel segment, I think there's additional opportunities there in regards to tier 3 and tier 4 accounts and on a regional basis as well as we gain further, you know, ACV gains in a variety of new markets and territories for us. In addition, where are the products being placed? We're going core energy. That's where we're mainly gaining our shelf space and doing extremely well. The team's doing a great job expanding that space, and we expect the next resets to be expanded with additional items per location. Also, I talked about the coolers that we're investing in. We anticipate by the end of the year to have over 20,000 dedicated Celsius coolers. You know, and so that's a really great opportunity, and we've never had that before. In addition to the PepsiCo energy coolers, which we're told are up to about 50,000 currently, that gives us opportunities. Definitely opportunities ahead in 2023 to expand the number of stores, locations, and cold availability. Got it. That's helpful. Maybe just a clarification on some previous points. I'm still trying to understand the puts and takes the pipeline fill. $15 million-$20 million of sales ahead of actual sales in the third quarter. Why wouldn't you add that to the fourth quarter? You know, it'd be coming out of fourth quarter. Fourth quarter is essentially just servicing what demand is, right? That run rate should then be higher, right? Because then you're servicing kind of what was there previously. I guess maybe put, you know, altogether, I'm surprised sales were as strong as they were, given that you had that headwind in the third quarter. Is the run rate, we should be thinking about the number in fourth quarter plus the $15 million, and then you made some comments about the inventory destocking as well in December. You know, kind of help put those pieces together, please. Yeah. You know, in regards to the comments that Jarrod and I made in the prepared remarks, when you look at the, you know, it's right around $15 million-$20 million, it was incremental in regards to a pipe fill. Adding that to Q4, I think gets you to a, you know, kind of a what we saw as a normalized run rate. You know, there is some year-end, you know, inventory. Felt there was inventory control metrics or potentially there could have been. You know, we're watching the inventory levels very closely. We don't have full transparency on the inventory levels, but we do think, you know, pulling forward that $20 million in Q3 $15 million-$20 million in Q3 kind of gets you to a normalized level for Q4. Keep in mind, there were several other distributors that were transitioning into quarter two, so you're not looking at a full 100%, you know, distributor partnership, with our, with our PepsiCo, leveraging the full power of the distribution of PepsiCo. There still was some large markets for Celsius that were transitioning during that time. I don't know if you have any other comments, Jarrod. Yeah, I think we need a little bit of history too, to understand some of the ebbs and flows in terms of the inventory management of our partners and, you know, in particular our biggest partner to see kind of is a pull down something that's gonna recur at the end of every quarter. Obviously after we get through a couple quarters, then we'll have a good kind of baseline, and it won't really be impactful because it'll be more kind of like that one time item that happens. At the moment we're seeing great scan data. You know, we're getting good pull through across the board with our customers and our primary distributor. We're seeing, you know, things are looking up. Q1 obviously is not as big as we'd expect when we get to Q2 and Q3. Q4 and Q1 are probably more consistent with each other from a seasonality perspective. Our next question comes from the line of Kaumil Gajrawala with Credit Suisse. Please proceed with your question. Hi. You alluded a little bit to some increased selling expenses related to some of these big distribution gains. Can you maybe just give us some context on how much was incremental? What's the right run rate in terms of how to think about, you know, selling expenses as a percentage of revenue during this phase of sort of this distribution boom? Then maybe more of a how we should look at it on a more of a run rate standpoint. Yeah. Kaumil, you know, great question. We did invest through the transition. We made a strategic decision. Jarrod kind of alluded to it in his prepared marks about how we went over budget by about $15 million in the quarter, really supporting the distribution gains and the ACV gains. You know, the company has seen a considerable amount of increase in ACV going from October first to where we ended the year. We made a strategic initiative to really continue to invest ahead of those ACV gains to make sure consumers know where we are, where they can purchase Celsius and continue to drive velocity. That was really key. I think it's very important we continue to invest with the expansion of the number of points of distribution and the ACV. I think when you look at historical rates, if you go back, we've been running around, you know, 23.5. If you back out, you know, in the fourth quarter, if you back out the $15 million that Jarrod just kind of was referencing, that was over, plus back out the transition fees of about $38 million, you kind of got it back to that same, at that same run rate around, you know, 20%-22% of revenue there. You know, we're now gonna continue to invest in the brand, continue to build the brand, especially as we continue to increase the distribution. We're really focused on driving velocity, especially heading into resets. Yeah. For Q1, you know, the idea would be back to more along that 22%. Okay. great. Then, you know, it seems very intentional the, some of the commentary about the international rollout. you know, you're doing very well in the United States, obviously, yeah, but your share is, you know, high compared to where you came from, but still a long way to go. Why is now the right time to start thinking about or talking about international? Yeah, we have opportunities internationally with Pepsi. We're, you know, we're mainly focused on the United States and the expansion opportunities we have here. We do see opportunities on a global basis. There's partners through the PepsiCo system as well as our existing partners, in looking at, you know, in the Nordics and also our Asia distribution, in the APAC markets where we've been really laying a foundation. The energy market continues to grow around the globe, and we see these health and wellness trends continuing to gain momentum, and we're getting more interest from Celsius. Our main priority is North America. Okay, great. Thank you. Thank you. Our next question comes from the line of Peter Grom with UBS. Please proceed with your question. Hey, good afternoon, everyone. Thanks for taking the question. I just wanted to ask a quick clarification in response to Kevin's question on the quarter to date acceleration. Is that just a broad-based comment, or are you actually seeing top-line growth quarter to date stronger than the 90%+ growth you saw in four Q after adjusting for the Pepsi transition? I think what Jarrod was alluding to is the Nielsen scan data and IRI and SPINS data that he's referencing, that we weren't providing any forward guidance on Q1. Okay. All right. That's helpful. I guess I just wanted to ask around, you know, gross margin. You've seen some nice sequential progression, you know, in three Q and four Q. How does the exit rate of 44%+ kind of inform your view on gross margin looking out to 2023? Just, you know, would you expect sequential improvement from here as we move through the year? Peter, this is Jarrod. I think from a gross margin perspective, the idea was to exit the quarter at kind of that mid-40s, which we have. Actually we kind of hit the mid-40s for the entire quarter. We did see the improvements that we expected come through. We're no longer beholden to the expensive cans that we had historically over the last kind of 18 months. We're seeing good opportunity within the freight lanes as we deliver product straight to distribution centers or mixing centers with Pepsi. We're also seeing some other areas from a COGS perspective or raw materials perspective where we're seeing some advantages or some benefits. We think kind of that mid-40s throughout 2023 is still valid. Is there opportunity as we work through the year to do better? Definitely. At the moment, we think kind of sticking with that is the way to go, you know, seeing that we don't really know how the rest of the year will go when it comes to commodities and things like that. At the moment we're confident in that mid-40s and we're probably more on the side of seeing opportunities than we are seeing, you know, other areas that would not allow us to hit those numbers. As a reminder, ladies and gentlemen, it is star one to ask your question. Our next question comes from the line of Gerald Pascarelli with Wedbush. Please proceed with your question. Hi. Thanks very much for taking the question. mine's actually on the Amazon channel, specifically. you know, obviously, when you look at track channels, trends have looked as good as they ever have. but you did see some decel in the Amazon channel. If you could talk about any drivers behind that, and then specifically, any color you could provide on how that channel specifically has trended, you know, over the first couple of months here, I think that'd be helpful. Thank you. No, great question in Amazon. You know, we still have a strength in our prepared remarks, have a really strong Amazon business. You know, the quarter is, you know, we're gonna watching that closely. That's why we wanted to, you know, share the information there. As we gain more ACV, we're gonna have to watch to see how that performs. It was great to see it up for the quarter and continuing to show good solid growth. You know, in the quarter we did have some, in regards to some warehouse movements, underlying around Amazon, which potentially caused some delays as they were moving product in different locations. I believe they were closing some locations and opening additional locations. There was definitely some inventory movement that was taking place, especially around the holiday season. They were likely going through substantial volumes through their warehouses. There was some challenges in the quarter with inventory in regards to some of their warehouses. You know, I think, you know, as we, as we look forward, I think that's still gonna be a really strong business for us. We live in an omni-channel world. Consumers want it, how they want it, when they want it, and we embrace all platforms, including, you know, Instacart as well and, you know, driving to retail and home delivery, which we see great results as well. Got it. Thanks a lot, guys. I'll pass it on. Thanks, Gerald. Our next question comes from the line of Jonathan Keypour with Bank of America. Please proceed with your question. Hi, everybody. Thanks for the question. I'm just wondering in 4Q, where the ACV was filled geographically in the States, sort of what regions did you guys move into, and then in, you know, what is left to move into? I guess, as you guys spend to activate and kind of get consumers aware of the product, how should we think about maybe like a lag on entering, a new geography before you kind of operating at, like, optimal consumption or more optimal consumption? I guess what is sort of the flow through of the marketing into a consumer response? Yeah, Jonathan, great question. You know, it's. Historically, we've been, prior to PepsiCo, you know, mainly re-regionally focused with a higher ACD. You know, prior to PepsiCo, we were roughly around, I believe, like 65%-67% ACD at the time. You know, so, and very much, regionally to certain pockets of the country, the Northeast, Southeast, Texas markets and Southern California, we saw our big higher ACD markets. You know, with the transitions to Pepsi, we're seeing ACD gains really open up broadly in other markets. That's really goes back to that additional investment in marketing that we made in Q4 because of the ACD gains as we wanted to continue to drive velocity rates and educate consumers what Celsius is and where we're located. When you look at that area, you're looking at the center of the country, you're looking in, you know, the Pac Northwest, we gained a lot of distribution. Those areas, we saw some great gains, especially in regards to Mid-Atlantic areas as well. You know, we're at roughly around a 90%, 89% ACD right now nationwide. Great. Thank you. Just to follow up. In terms of, I guess I'm trying to think about how, you know, a store you're in, depending on whether or not you have a fridge, it's an own fridge or not. I guess I'm trying to get a sense of how productivity in each of those kinds of, you know, go-to-market scenarios, how those compare. Basically like, you know, is it like a 1.5 x better sales pull through when you guys have an own fridge in a location? Something like just trying to get a sense of that kind of relative effectiveness. Yeah, no. I mean, a great question. We haven't really discussed that, the exact number. What we have stated prior is historically, you know, we've gone back, like last year, we were talking about coolers and the payback period on the cooler was roughly around five months. But what I will tell you know, when we have a cooler, the, you know, the sales increase exponentially when we have that cold placement. It's got to be 6 ft from the register and optimally placed to get the maximum benefit. That's really what the teams are focused on. The goal is to be upfront, and 6 ft rom the register. You know, that definitely coolers are great tools for us. The product, it's, they see it and our consumers are able to buy it, and you get a higher rotation. As we were saying many times before, if it's cold, it's sold. That's something we only say internally, but that's really all I can comment on that. Great. Thank you. Our next question comes from the line of Jeff Van Sinderen with B. Riley. Please proceed with your question. Hi, everyone. Just wanted to kind of circle back to the opportunity to increase SKU count this year. Maybe just give us a sense, if you could, by channel, where specifically do you expect those counts to grow most? Maybe if you think about it first half, second half, just any thoughts around that? Yeah, Jeff, great question. I think when you're looking at the current ACV MULO+C number, the average items carried per store has increased, you know, exponentially since the PepsiCo partnership. We're currently sitting at roughly, if it's 12.5, like 12.5 items per store. We do anticipate that to continue to increase with the next resets. You know, where that lands, I, you know, I think we not really comfortable on commenting on that. We have internal expectations, but I think we'll have a better understanding as we get through, you know, the resets that are taking place and we look maybe around, you know, April, start looking at the data in April. You should be able to get a better set on where we will be for the rest of the back half of the year. Okay, good. That's helpful. Just a couple of things around margins. Your latest thoughts on efficiency opportunities with Pepsi, overall Pepsi distribution and then maybe club distribution and the potential benefit to P&L metrics from that process. Also noticed you mentioned taking some price, I'm wondering if you're planning to take more price this year? Yeah, this is Jarrod. I'll start with some efficiencies. You know, with the club channel, John did mention that historically we've had to go to a secondary packing facility. We have found a number of co-packers that can pack that in-line for us. That is definitely an efficiency and will help drive margin as we look out over 2023. We did start doing that a little bit in Q4 and started expanding that to most of the club channel in Q1. We do have pricing that was kind of fully in play in Q4, but that will benefit us across 2023. We haven't announced anything for 2023 at the moment, so we'll sit tight on that and see where we land. Other opportunities, you know, are really it's the Orbit model we've created to continue to drive the freight lanes and continue to drive efficiencies there, and also taking advantage of our scale when it comes to raw material purchases, and benefiting from some of the changes we've seen across the raw materials categories in terms of pricing. Okay. Thanks for taking my questions and best of luck. Thank you, Jeff. Next question comes from the line of Sean McGowan with ROTH Capital Partners. Please proceed with your question. Thank you. Hi, guys. Following up, Jarrod, on the comments you made regarding efficiencies, can you give us some sense of what the kind of order of magnitude upside is on that margin improvement? I gotta think that taking the cans off the line, putting it in, you know, the Fort Knox box you used to have, cut into the margin. What is the upside? Are we talking about hundreds of basis points of improvement potential? Yeah, I mean, I guess mid-forties is a wide range. I think last couple- No, I meant specifically on the club. I meant specifically on those, you know, extra pack, the 18 packs in the clubs. Like, how much higher margin would that be if you know, got more cans in there and a more efficient process and a, you know, thinner cargo, cardboard? It's not cargo anymore. You know, how much higher margin is that item from what you had, you know, six months ago? I mean, you know, ultimately we have to get it all into the same copacker set in order to get that benefit. We haven't fully transitioned, but I think we'll have the opportunity to do that this year. You know, if you looked at the club margin, it's pretty good. It could be a couple percentage points, but you gotta remember that the club is only a small piece of our business from that perspective. There is some opportunity there on that piece of the business. I think there's also opportunity, like I said, with the freight lanes on improving that. If you look at our historical rates, over the course of the last two years, the freight lanes have gone down for us. You know, I think if you look over the last couple years, it's gone from roughly 6%- 4% on an annualized basis. We've seen some gains there across that. We'll see with the aluminum cans as well, where that was putting pressure on us. There's opportunity with other things like sucralose and caffeine as well. Okay. Following up on the earlier comments about, you know, potential placement, or resets and the, and the benefits that could come in April, would you also expect to get kind of better position within some of the back wall refrigerators? You know, I go to some stores and you're kind of down by the ankles. Would you expect to get some better placement, you know, higher up on a reset? Yeah. Yeah. Absolutely. We definitely don't wanna be by your ankles that you mentioned there. Our goal is to get out of the gutter and get out of the nosebleed and get in the bull's eye, as you say. That's what our key accounts team is focused on. If you look at a lot of the areas, we're getting very close, and, you know, targeting some of the Bang space that's out there. I expect us to be pretty prominent, you know, on the next resets, and hopefully you start seeing us in much better places as we go forward, especially have the distribution power of PepsiCo now. Great. Thanks a lot. Our next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question. Oh, hi, John and Jarrod. How are you? Excellent. Excellent. Thanks for taking our questions. Just a few from my end. I know I heard, impairment on the Func line. Can you talk a little bit about, what's going on there with Func and any of the FAST bars out of Finland? Maybe talk about what you can as far as, PepsiCo and some of their SKUs as far as, food and protein goes, and what discussions and opportunities may be going on there as far as, SKU expansion from your end. Yeah. Yeah. In regards to, you know, the Nordics, Celsius Europe has been mainly Sweden distribution in Finland. It's been going really well, and they had a great fourth quarter. Got some new innovation that came in, and, you know, they're doing a great job with the Celsius portfolio. With our FAST brand or snack portfolio, which is focused on Finland, there's opportunities there. You know, we're not, it's not. We haven't really had any discussions with PepsiCo now on potentially distributing that in the other areas. We've had somewhat challenges in Europe with supply chains as well, with some of the protein bar raw materials. You know, the business continues to maintain the business and, at the right time, there could be opportunities internationally, just not right now. Got it. Could you talk about SKU expansion or new flavors or old flavors and targeting ex-U.S. territories as far as Europe? Would they be kind of country specific on the SKUs and flavors? Yeah. Internationally, we have, you know, we're starting to leverage our, you know, the global supply chain as well, trying to gain more efficiencies. Really look internationally to leverage some of the innovation, you know, collaboratively. It's really when you look at the world today, especially with social media, the awareness and radiation, you know, goes cross Atlantic. You know, we're starting to get more aligned, more strategic in our flavor launches. As we go forward, we expect to have more consistency. Flavor innovation is extremely key. Has been driving the category and expect us to continue to lead in flavor innovation. Yep, I know. It took a couple weeks to get that Fantasy Vibe. Lastly, talk about ALDI a little bit, how many stores, geographical rollouts and, you know, what we may see during 2023. Yeah. Aldi, we're, we have a national rollout that's taking place. Expect to find us in an Aldi near you, in the near future. The number of stores, I believe there it's, roughly I think there was like 600 and growing, roughly, approximately. Got it. Super. Thanks for taking our questions. Absolutely. Thank you. Our next question comes from the line of Anthony Vendetti with Maxim Group. Please proceed with your question. Thanks. I just wanted to follow up on the coolers. Did you say, John, about 20,000 coolers you expect to be in terms of the brand Celsius coolers by the end of 2023? That's correct. We have placed in retail is our internal goal. We have about 15,000 on order currently. We're working on placing those strategically in a variety of our core markets and core retailers. How many were placed in this quarter for Q 22? We didn't disclose the number that was being, that we placed in the fourth quarter. We did place, a good number. You know, through the transition, we kind of pulled back a little bit, and we expect that to continue to increase, upon the new year. Yeah, they're a bit less. We're probably somewhere between 4,500 and 5,000 by the end of the year. Overall, you know, we held back on that as we were doing the transition. Also, we really ramped up our ordering in Q3 and Q4, so they do have a little bit of lead time. We're starting to see all those come ashore. Okay. Lastly, on the Pepsi Energy coolers, you mentioned there's 50,000 of those. How many are Celsius in right now? What's, what's the goal by the end of 2023 for those Pepsi coolers? Yeah, I don't have that current number, in regards to how many of the 50,000 we're in. We're working on getting those reset. I expect us to have a, you know, I would like to be in the majority of them by the end of the year. That's the goal. You know, we're part of the PepsiCo energy portfolio, and we expect to be in every single one by the end of the year, and we'll work towards that goal. Okay. The last question is on erythritol, the sugar substitute. How many of your products have that right now? Are you concerned about the recent news that it could cause an increase in stroke and heart attack? It's a very minor piece of the portfolio. There's, certain, store types that have wanted the stevia type branded product from us, so I'd be surprised if it was more, you know, more than 1% of our sales. Not really a big volume for us. It's something that we've provided, to a customer set that's wanted it, but not really a core to our portfolio. We're looking into it. Our next question is a follow-up from the line of Kaumil Gajrawala with Credit Suisse. Please proceed with your question. Your line is live. Go ahead, Kaumil. Sorry about that. Yep. Well, I wanted to bring it back to a little more high level on talking about distribution. You mentioned the Pepsi transition is complete, but the actual, you know, practical conversions, they're still sometimes similar to what we saw during the Anheuser-Busch transition. How much is left? You've given a lot of very detailed figures about kind of pieces it, but are you know, 100% available but only 60% converted? How much is kind of left on the PepsiCo actual availability side? Well, I just to clarify, when we say, when we stated in the prepared remarks that the transition is getting complete, when we talk about the distribution, that's our distribution partners. You know, we're about 90%, 95% being serviced now by PepsiCo in North America. We did keep on a few of our prior distributors and partners in certain markets. Other than that, we are pretty much 100% complete with the transition, you know, within the PepsiCo agreement that started October 1st, 2022. Now, when you look at the opportunity on store distribution and store expansion, we have reached that 89%, 9%, you know, 89% ACV number of reported stores. We do think there's additional upside from there, but we're not in a position right now to really comment on where that will arrive. I think we'll have a better indication at the April data to see where the company will really probably finish the year at. There is non-reported stores and locations that we're able to gain additional distribution and cold placements. That's really those OTS stores which are non-reported, which is through PepsiCo's Metals program. We're told there's about 150,000 of those, you know, independent locations. We're working through those and resets are taking place as well. Also in food service, there's a huge opportunity in food service and really just scratching the surface there. That's another big opportunity for us. Okay, great. Thank you. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you. On behalf of the company, we'd like to thank everyone for their continued interest and support. Our results demonstrates our products are gaining considerable momentum, and we're capitalizing on today's global health and wellness trends and the transformation taking place in today's energy drink category. Our active lifestyle position is a global position with mass appeal. We're building upon our core and leveraging opportunities and deploying best practices. We have a winning portfolio, strategy and team, and a large, rapid growing market. I'd like to thank all of our investors for their continued support and confidence in our team. The company will be attending several upcoming investor conferences the week of March 13th, including attending Bank of America, UBS and ROTH Conference investor conferences. We look forward to meeting many of you there. Thank you, everyone, for your interest in Celsius and Live Fit. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.