Perfect. Okay, everybody. Thanks for hanging in there on day three. We're excited to welcome back Freshpet with us today. Again, with us are CEO Billy Cyr and Chief Financial Officer Todd Cunfer. Thanks so much for joining. Glad to be here. Maybe we start off with, as we've heard over the past couple of days, right? If there's been maybe one constant this year, it's been the constant of change. In that context, I think maybe it'd be good to open it up by just letting you share sort of what's changed for Freshpet since our fireside chat here, basically this time a year ago. Right. First, thank you very much for hosting us. We really appreciate it. We think this is a great event. Let me start with talking about what hasn't changed because there's been a lot that's changed, but it helps to anchor yourself on the things that have not changed. First, our belief in, and I think frankly, broadly the industry, retailers, and whatnot, belief in the long-term potential of fresh pet food has never been stronger. Everything in the data that we've seen, everything we've seen from competitors, from retailers, and whatnot would suggest that the category that we pioneered 20 years ago, we kind of accelerated growth 10 years ago, is still looking like it's going to be a very large part of the pet food market. Today we're a billion-dollar company. We think there's about $3 billion in retail sales that are accounted for by this sort of higher quality fresh and frozen product, mostly us and The Farmer's Dog. General Mills put out a number. They said it could be a $10 billion market in a decade. We wouldn't dispute that number. We think that's certainly in the ballpark of possibilities. That hasn't changed. The market, the potential here is enormous. The second thing that hasn't changed is that we as a company have been very, very successful at building out what I would consider a very strong business and competitive moat. Think of that as we've been investing for a long period of time in building out manufacturing capability, fridge availability at retail, building brand equity, doing product innovation, adding households, and that hasn't changed. That continues to go incredibly well. What has changed, what's happened in the near term is, frankly, the consumer sentiment that we all have seen and we've talked about over the last couple of days, the consumer sentiment has had what I would describe as a temporary impact on the growth rate for both us and for the category of dog food. We think it's a temporary effect, but it's there. It's very real. Consumer sentiment is measured by the University of Michigan. In the second quarter, it was the worst consumer sentiment on record. It had an impact in people's willingness to adopt a dog, or in our case, trade up their dog food. We look at that and say it's not a surprise that we saw that, the growth slowed down. It was a surprise to us that sentiment got as bad as it was. We were badly off in our projections for where the year was going to go. Sentiment decelerated rather quickly. With the weak consumer sentiment, it's not a surprise that we have the situation we do. The good news is that this is a very sticky category. In other words, our existing user base remains very, very strong. We're not losing users. We're just not adding new users at the rate that we would use, that we'd be expecting to. The last thing that I would highlight is that what's missed a lot in the story, because the story is a lot about the growth of the company and the growth of our industry, and the transformation. The operational improvements that we've made over the last year or two years are pretty stunning. We've now gotten from a 3% EBITDA margin three years ago to, you know, we're projected about an 18% EBITDA margin this year. Our gross margins are running in the range of 48%, which is where we're projecting we'll be. That performance has been pretty remarkable, testament to some really hard work that our team has done. I look at it and I say a lot has changed, many things for the good, but there is one big, you know, overarching issue, which is the growth. We think it's a short-term phenomenon. We think we'll get out of this at some point. Overall, we feel very good about the long-term potential of this business. It's great context. Thank you for that. A good way to kick it off. The dog food category has evolved quite a bit over the years and continues to do so even as we sit here today. I guess what are your expectations for what the dog food category is looking ahead? Have you seen periods similar to this sort of current period before? Yeah, it's a really good question. The dog food category, if you take a long view, people are replacing kids with dogs. It's been going on that way for a very long time, and we don't. I should be so lucky. Yeah. My kids are very jealous because our dog is, they think it's not just, you know, another member of the family, but it is our favorite child. Dogs are replacing kids. We don't see that trend slowing down anytime soon at all. There are periods, if you look over a long period of time, where there's been accelerations in people getting dogs and the way they treat their dogs. There have been periods where it's decelerated largely because of macroeconomic factors. The Great Recession in 2007 and 2009, you saw the dog population basically go flat for a period of time. By 2011, 2012, the population was above the trend line. We'd expect this from a category perspective that it does have fits and starts, but the tailwinds are there for the long haul. When you look at our business in particular, we're not that old that we had much of a history back in 2007, 2008. I think a lot of people will forget, you know, in the summer of 2022, when we had $5 gas and 9.1% inflation in June of 2022, consumer sentiment was pretty bad. It was actually at that point the lowest consumer sentiment on record, only to be beaten by the sentiment we had this year in the second quarter. We saw our household penetration growth rates and our volume growth rates drop to about where they are today. We've seen this. Five quarters later, we had come up and out of that, and our household penetration gains were back in the high teens, and our volume growth was back in the mid-20s. We've been there, we've seen it, we know that it can be corrected over time, and it does take time. The thing, the really specific behavior that we're seeing that I think it's really important to understand is people who are coming into the category for the first time are selecting Freshpet disproportionate to what our share is. We are attracting more new users than, you know, our share would justify, which is a really good sign of long-term health. The thing that's not happening is the people who are already in the category are not trading up at the rate that they have historically. The dog food category has historically had three to five points of growth every year that came from premiumization, people moving from lower-cost products to higher-cost products. We were probably a disproportionate share of those three to five points. It had an outsized impact on our volume when consumers stopped doing that trade-up in this environment. Eventually, that will return. When you're treating your dog as if it's your child, you will eventually choose the very best option. That's what we're expecting. Demographics work in your favor on this option. Without a doubt. It's time. Yes. You recently reiterated your long-term margin targets of 48% gross margin, 22% adjusted EBITDA margin in 2027, despite having removed your 2027 net sales target. What gives you confidence in your ability to hit your long-term margin targets and be free cash flow positive? Sure. As Billy mentioned, we've made significant progress over the last couple of years. We're approaching 47% adjusted gross margin this year. We feel great about 48% by the end of 2027. In fact, there's probably a little bit of upside to that number. The 22% EBITDA margin, again, we've forecasted about 18% this year. We do need some fairly steady sales growth around 15% over the next couple of years to have enough G&A leverage to get to that 22%. That's what I've been communicating to investors: if we can grow in that range, I feel great about the 22%. If we're below that, we'll still get to 2021. We're probably not getting all the way to 22%. The one regarding free cash flow, the one side benefit from our business slowing down is it's going to make us free cash flow positive sooner and bigger. We've been able to push out a significant amount of CapEx this year and next year. If the business doesn't come back into the strong double digits the next few quarters, we will continue to push out more CapEx. We have $1.5 billion of installed capacity today. It's not fully staffed, but we have installed capacity of $1.5 billion. We've got it to about $1.1 billion or so this year. We have plenty of capacity. We will actually be pretty close to being free cash flow positive this year. Certainly next year, we will. Great. Thank you. Closer in, can you talk about your expectations for top line growth this year, and what key drivers of that expected growth are? Yeah. What we've been talking about is that we as a company take a lot of pride in being nimble. There are some things we can control and some things we can't control, the macro environment we can't control, but the things that we can control, and we combine that with our ability to be fairly nimble, is we need to adapt to this environment. One of the first things that we need to do is get our message right for the consumers who are interested in possibly making a trade-up and also focusing the message on the attributes that are most important to them to understand value. We've had phenomenal success with our advertising over the last several years, but the message was very much about you and your relationship with your dog. You might remember we had Meghan Trainor talking about being a dog mom. We then had a piece of advertising recently, which had a Sopranos feel to it, which said basically, if my dog isn't as important to you as it is to me, you're going to end up in my trunk. That message was really helpful and important. In the environment we're in today, we've needed to get a message out there that talks a little bit more about the virtues and values of fresh food. Because you're trying to get somebody to trade up from a kibble or can, they need to understand that they're getting something more for that. We need to target that advertising against the consumer who is in the market, or at least potentially in the market to trade up their food. We've all talked about low and middle-income consumers are really constrained today. Higher-income consumers are a little bit more willing to make that trade-up. That's certainly part of the equation. Also, putting our products in the channels where they are accessible. We have broad distribution today, but there are still a couple of outliers. One of the outliers for us has been the club channel with Sam’s. We're now in 125 Sam’s, and that's gone well. We have expectations that'll go beyond that, but we'll wait and see how that unfolds. We have other new distribution coming largely in the form of second and third fridges that expand our presence, particularly in the channels that are winning channels today, places where people are shopping. The third part is we've just launched a product we called Complete Nutrition. It's an entry price point bag where basically it's designed to get somebody to enter into the category. We did a roll version of this two years ago, and it succeeded at bringing new consumers in. To your question about where we think the volume is going to come from, those are the drivers. We watch the Nielsen's every week like everybody else does, and we're watching to see where it goes. We're still comfortable with where we are at this point, but we're very much dependent upon consumer sentiment and the implementation of our new advertising message. I do have the ad queued up. I think it's a good place to show it, just to show you the difference in the message that we've got. This literally just broke this week. Let me hit this and see if you can see it. Do I have to hit it again? Maybe I do. I guess not. Go back. See here? How does Freshpet make healthy food for dogs? The same way you make healthy food for people. Start here. On farms like mine. Plant the seed, tender the soil, feed the animal. Harvest fresh. Ship it fresh. Craft it into recipes that are vet-developed and protein-packed. When people tell you, "We can't put dog food in our fridges," you build your own because your dog deserves fresh, healthy food just like you. Freshpet. Healthy food fresh from the fridge. Apparently, a lot of people saw that ad this week because it's on the U.S. Open. A lot of folks here are watching the U.S. Open. That's the message that we want to convey, which is there is a better way to feed your pet, and healthy, fresh food is the way to go. Thank you. You touched on this a little bit, but can you describe what's different this year about sort of your media spend versus in previous years? Are you learning a bit more this year than in the past on how you've refined your strategy around media and how it's played out so far? Yeah, quite a bit. The media landscape is ever-changing. We have historically spent the bulk of our media dollars in sort of the broadcast media because we're still a young brand that's trying to fill the funnel. We still believe that spending the bulk of our dollars trying to fill the funnel of potential new users is the right place for us to be. We also want to spend that money in a way that goes after the highest potential prospects, those people who are in the market or have the values and interest in food and pets the way that our existing consumers do. We call them MVPs. There's this broad funnel with the bulk of our media spending at the top. As you go down the funnel, there's more and more targeting that happens that's designed to bring these MVPs, people who spend about $500 a year with us, to move those people down the funnel and into the brand. We're increasingly targeting the messaging to that audience. We're also building a higher share of our media moving into digital and social channels from the broadcast just so that we can pull people down through that funnel. We're very data-driven on our advertising and media spend. We've just hired some new folks. We just hired somebody, a new head of our digital media advertising planning team. The guy came out of Estée Lauder. We were quite thrilled to get this guy. He's revisiting the entire plan to help us figure out where do you get the best efficiency, how do you reach your audience, the prime prospects best, how do you pull them down through the funnel. We're feeling like, you know, when we look at the metrics, the metrics need to turn. They need to move to a lower cost of acquisition of a customer. We feel like we're heading in the right direction, especially with the right message. Right. You know, over time, household penetration and growth have proven to be important indicators of brand health. Yeah. What are you seeing for household penetration and buy rate in terms of growth for buy rate growth for the Freshpet brand of late? Which of those metrics, I guess, are you most focused on? Yeah, I mean, household penetration is by far the most important metric. When you're a young brand, you want to continue to add household penetration. We are also very mindful that we want to bring in the consumers who are of the highest value, and that will show up in the buy rate. Household penetration is where our focus has been. We're particularly looking at that within that at the MVPs, the people that we bring in who are going to be the highest potential spenders. We're today still adding households. We're adding them across all income groups, all age groups, all demographics. We're adding them at a higher rate than everybody else in the category. We're also bringing in new users at a higher rate than others in the category. It's just not at the levels we were a year ago. We're seeing household penetration gains in the, call it, high single digits overall and in the mid double digits on our MVPs. The buy rate gains continue to be in the 5% and 6% range overall, which, if you put all that together, gives you a relatively attractive picture compared to most CPG companies today. It's just not where we want it to be, but it's still a healthy overall picture. If we can manage the capacity, as Todd referred to, and the overhead structure, it's still in a very attractive place for us to be. I know at Cagney earlier this year, you spoke about shifting to focusing more on what you referred to as the MVPs, or most valuable pet parents. Can you talk a bit more about the strategic shift you've made there? What drove it and how you feel it's played out thus far? Yeah, the ultimate goal for us is we believe the best franchise for us to have is consumers who are feeding Freshpet as the main meal every day. That's what we want to get to, because if we have a franchise that is a bunch of people who are occasional users or might use us as a mixer or topper, they really haven't bought into the full Freshpet story. Our goal is to build the biggest franchise we can, but we want it to be an incredibly high-quality franchise. That's really what the MVPs are. These are people who have committed themselves to feeding their pet in a different way. They're spending $500 a year. In order to accomplish that, what we need to do is think about the message that we deliver. The advertising message needs to be really cued in on who they are and what their values are and their relationship with their pet. The media targeting needs to find those people because there are 32 million of those people out there today. There are 32 million households that are in our prime prospect group, but we need to find those people and deliver that. We need to make sure that the consumer experience, when they buy the product and they experience the product, they notice or see the benefits that they would expect to get from the product. That is a big, big focus for us. In the end, we will always have some number of occasional users. We'll always have some people who feed Freshpet for their dog's birthday or for Christmas or whatnot. The franchise we want to build is that loyal base of consumers who buy us every single day as a regimen purchase. As with any growing segment in our industry, we've seen competition in fresh dog food has recently been heating up. Obviously, later this year, there have been other announced launches into the fresh space as well. Maybe you could talk a bit more about how you think Freshpet compares in light of the increased competition coming to market. Are you losing any shelf space or new fridge placements? How do you foresee that dynamic playing out over the next couple of years? Yeah. You want to? Yeah. First of all, we've been preparing for this moment for the last 10 years. We had very lofty goals a long time ago that we would build a business that would ultimately be so attractive that people would no longer view us as this niche item. They'd view this as the future of pet food. When we got there, we'd want to know that we had built as many competitive advantages so that when the day came that people did enter, those advantages would be available to us. We didn't want to get to this day and then say, "Oh, what's the defense plan?" or "What do you do to respond to it?" We wanted to be ready. We feel like we've made a bunch of really good choices along the way. We've built what we think is the best retail availability and visibility. We have 38,000 fridges. We have a very broad array of products that meet a wide range of needs. We spent a very large amount of money building consumer brand equity. Perhaps the most important barrier that we built and the competitive advantage that we've built over time has been our manufacturing. Manufacturing fresh pet food is not easy, and certainly not to the quality that we get. It is very, very difficult to do that. We have spent a ton of time building our mastery, building scale against that mastery, and then developing new technologies that are designed to better insulate our business and deliver a better consumer experience at the end. As the new competitors arrive, there will be people who are going to buy fridges and put them in store or access fridges that people like Walmart own. Probably not to the extent that we have, you know, the 38,000 fridges. People will get some number of stores. They won't have as broad a lineup to reach as many consumers as we can reach with as many specific tailored products. At the end of the day, it's going to be tough for somebody to compete with the manufacturing expertise we have that delivers the best quality at the lowest possible cost. We'll see. We'll see what happens as the market unfolds and see how that all plays out. We do believe that the arrival of new competition is really good for the category. We've been saying for the last several years that the farmer's dog and the $200+ million a year they're spending in advertising has actually been very helpful to us. We think that it has raised people's visibility that kibble and can may not be the best way to feed your dog. There's something better out there. In 2017, when we launched our plan that we called Feed the Growth, we spent a grand total of $13 million in advertising. It was double the year before, and it was the sum total amount of money being spent to drive the fresh and frozen category. I believe, based on the data we've seen, in 2026, there will be somewhere between $350 million and $450 million spent in advertising to tell people that there's a better way to feed your pet than kibble and can. That can only be good for the segment that we are the market leader in and the segment that we expect to command a very large share of over a very long period of time. We welcome the competition. We take it seriously, but we're ready for it. Yeah, and as General Mills has, you know, Billy mentioned it earlier, they think the category is going to go from $3 billion- $10 billion. There's $7 billion, if you believe that number, which I think is a reasonable assumption, there's $7 billion of growth over the next decade. There's going to be a lot of competitors trying to get that $7 billion. We strongly feel we are best positioned to get the biggest chunk of that. Will we have the same market share we have today? Probably not. We have a lot of upside because this subcategory will continue to grow substantially. Thanks for that. You've been teasing some new technology that you've been testing over the last year or so. Maybe you can share a bit more about what sort of differentiates this technology, what consequences it could have on your product, and maybe when you'd be able to sort of know for sure that it truly sort of works. Yeah, so we're very excited about it. It's the seventh line in our Bethlehem facility. It's a new technology for the bags. As most of you who follow the story know, our bag margins are significantly less than our roll margins, kind of high single digits, lower than our roll margins. The goal is to get that closer to parity. This technology, if it works the way we think it's going to work, will bridge that gap significantly. I won't go into the details of the technology, but it's higher throughputs, it's higher yield, it's lower quality costs. Also, a nice added benefit is it gives us more flexibility on new products and to drive further innovation over the next several years. This line is being commissioned as we speak. We anticipate we'll start running real product off of it probably around November. I'm sure it'll take a little while for us to get comfortable with the product coming out of there. We're really excited about it. If it works, all future bag lines will be utilizing this technology. Subsequently, what I'm equally excited about is at the same time, we've come up with a, we call it the light version of this technology, which allows us to retrofit many of our existing bag lines with forms of this technology. It doesn't get you all the way there, but we get about two-thirds of the margin improvement by being able to retrofit to some extent our existing bag lines. We will test that live and probably go live with it about April or May of next year in one of our lines in Bethlehem as well. If it works the way we think it's going to work, we will build that out over the next couple of years. That is not in the 48% adjusted gross margin guidance we've given for 2027. That's why I do believe there is upside. We'll get some of that benefit if it works, you know, in 2027, but it's more of a 2028, 2029 benefit where we'll really see the upside in margin. I think it's also important to put in context that half of our business today is in bags, and it's the fastest growing segment of our business today. All the competitive entries that we've seen out there, nobody else has been able to do bags. We've seen competitors do rolls. We've seen competitors do stews. We've seen people do a lot of frozen stuff. To do a bag product, you know, a fresh bag product, it is the most difficult, most complicated product for us to make. By the time somebody probably figures out how to make what we're making, we'll be producing to this new standard, which has higher quality, lower cost, better opportunities for innovation. To the comment that I made earlier about being prepared for this moment, we started investing in this next-generation technology in late 2018 to figure out how you would do it. We wanted to be ready the day that the competitor showed up. We would be in a position where we could take the next leap forward in the manufacturing expertise and the quality of the product that we produce so that it would be hard for somebody to chase us and certainly hard for somebody to undercut us on the cost. We think we're going to accomplish that. That's really helpful. You significantly reduced CapEx this year, as you talked about. Now looking for CapEx of about $175 million versus your initial outlook for $250 million at the start of the year. Can you remind us the breakdown of maintenance versus fridges versus capacity expansion? Yeah. What are your expectations for next year, and is that level sustainable? Sure. We spend about $20 million on maintenance capital every year. We spend $20 million- $25 million on fridges each year, and the rest of it is for capacity expansion. In a typical year, we're spending $200 million- $250 million of that, and 80% or so of that spend is going to capacity. Now, with the business slowing down a bit, we are able to push out to the right that capacity expansion. We're going to do it this year. We're certainly going to do it next year as well. Again, we're going to follow the tape. If we start to accelerate, then we will start to up the CapEx in the out years. If we're at a new normal slower pace, high single digits, low double digits, that amount of capital will be lower for an extended period of time. As I said earlier, we will be close to free cash flow positive this year. We certainly will be free cash flow positive in the subsequent years after that. Great. Maybe in our final moments, you've been meeting with investors the last day and a half or so, and obviously oftentimes before that. Over the last few days, what's the sort of the common theme that you've been hearing from investors or themes that are developing, the key questions that you're getting? Yeah. How have you responded to them? Yeah. Is there something or some area that you feel like folks are necessarily missing or maybe not putting the proper amount of focus on as you see it? Yeah. As we're thinking about this brand equity over time. Yeah, I would highlight two and Todd can add to these. The first one is I think that anybody who is confusing today's slowdown that we've seen this year with a diminishment of the long-term opportunity is missing the boat. The reality is this is a short-term temporary phenomenon. All the data that we have suggests that the long-term opportunity remains there. It's very clear that consumer sentiment that we've seen this year has had a negative impact on our growth rate. It doesn't change what the long-term opportunity is. Anybody who's looking at valuing us, I recognize that it's not an easy thing to do to say at what point will it grow faster and how do I project that. You shouldn't assume that the current rate of growth is the rate of growth that we're going to have in the years going forward because we are fully intending to realize that opportunity that's ahead of us. The second thing I would talk about is people have tried, they're trying to figure out with not just General Mills, but we have Mars with Royal Canin. We have The Farmer's Dog. We have a whole host of people who are trying to enter this space. It is going to be a very dynamic environment. It's going to be very interesting. As I said, we're well prepared for it. I think there's a very good corollary. There's probably a wide range of corollaries that people can think about. The way one of the things that I recall is, you know, we feel like we're doing to the pet food category what Chobani did to the yogurt category. Around 2005, they entered with Greek yogurt. Somebody who was outside the category, was an insurgent, came into the business and basically said, "I have a way to make a different and better product." There were some well-entrenched competitors then. There was Yoplait, there was Danone and whatnot. They paused. They waited a long time before they responded to it. By the time they responded to it, it was too late. Chobani had built an enormous brand franchise, a lot of manufacturing capability, a lot of manufacturing expertise. It became very difficult for the incumbents to keep up with them. We aspire to do that same thing to this category. We think we built the moat to do it. We think we built the expertise to do it. We think this is going to be a very durable long-term franchise in this space. The next year or two will be the test to see whether or not what we've done, we've made the right bets. We feel pretty good about the bets that we've made. Yeah, I would say the other thing that with the slowdown in the business, which has been so much of the focus, what's been lost is our plants are running exceptionally well. Yeah. Ennis, which was our lowest margin facility last year, this year is our highest margin facility. They've made tremendous strides in the last six to nine months. I get a lot of questions, a lot of concerns about, "Hey, if the business is only growing slightly, are your margins going to start to deteriorate?" No, they won't. If we're still growing, we can maintain the margin structure that we have. It'll make it a little bit more difficult to grow the margins to where we want to grow them, but as I said earlier, we're anticipating about 18% EBITDA margin. Even if our business would slow significantly, we can certainly maintain that margin structure. Obviously, our intention is to get above 20%. That's great. After a couple of days of hearing a lot of packaged food stories, it's fun. I always get to talk about one where there's clearly a pretty significant growth track ahead of you. It's never a linear straight line. Yeah. We appreciate you coming here and talking us through sort of the closer in aspects, and then, you know, making sure we understand the forest for the trees. Thank you both for being here. Thank you. We're going to cut it here and go over to the breakout. Please join me in thanking Billy and Todd for being here. Thank you, Andrew.