Celsius Holdings, Inc. (CELH) Earnings Call Transcript & Summary

I'm Sean King. I'm the U.S. Beverage Analyst at UBS. I have the pleasure of introducing John Fieldly, the CEO of Celsius Holdings. Celsius was founded in 2004. Celsius has grown to become a global competitor in the fast-growing healthy energy drink market. With that, I'll hand it over to John to tell us more about the Celsius growth story. First off, I'd like to throw a disclaimer out that UBS Research does not cover Celsius, so therefore, we do not take a view on the stock. So, John?

Thank you, Sean. Thank you, everyone. Thanks for joining us today. Before I begin, I'd like everyone to review our safe harbor disclosure, including our presentations today. At Celsius, our mission is to build a proprietary portfolio, which is innovative, clinically proven and offer significant health benefits. We operate in one of the fastest-growing categories in food and beverage, which is the beverage category, grown this year at over 2.8% dollar value growth, was about $2.2 billion growth in the global industry in the beverage category. Within the beverage category, we operate in the energy drink market, which is the fastest-growing category in the beverage category. Expected to grow to an 84.8%, $1 billion category by 2025. There's something happening right now taking place in the energy category. It's under transformation. There's an evolution taking place for better-for-you healthy, functional energy. And it's here now. The evolution is taking place. In addition to the rapidly growing revenues, we're also seeing new consumers enter the category for the first time. Millennials are over-indexing and the usage occasion for energy drinks. We're also seeing more females enter the category. And the category is driving, really aging up in age demographics as well. With our portfolio, some investment considerations, we have a proven proprietary disruptive functional beverage portfolio. We're capitalizing on today's health and wellness trends. We're growing strong momentum within our category. We're expanding our distribution through different trade channels, significantly building our brand awareness. And we just most completed -- recently completed an acquisition, which will fuel our growth throughout Europe. Looking at our financials, we'll get into some of the details a little later. We have a -- over the last 3 years, a 45% CAGR growth. We are reporting our Q4 and 2019 full report and financials next Thursday at 10 a.m., hopefully, all can join us. We also have strong gross profits. We'll get into more details on that. When you look in addition to our sales data that we're reporting externally, it's also important to look at our external reported numbers, what's happening in the channels, what's happening at the register? Most recently, Celsius was born in vitamin specialty, gyms and health clubs. And through these health and wellness trends and the evolution in the energy category, we're expanding to new categories. 70% of energy drink sales are derived from the convenience store channel. We're seeing -- we have about a 12% ACV in that channel currently. And we're seeing a 44.5% growth rate, according to SPINS data, that's as of December 29, 2019. The category overall is growing at 8.6%. It's a $9.6 billion category, and we're currently ranked 11th brand. So a strong runway of growth ahead and performing extremely well in existing accounts. Talked about our channels of trade. And when you look at portfolio, many companies performed well in a single channel of trade. What's unique about Celsius, it has broad appeal. When you look at it, we were born at Vitamin Shoppe, GNC, in the Fitness channels, at Gold's Gyms and 24-Hour. That's where the product was born years ago. We're slowly making this transition, as really retailers are seeing the opportunity and seeing the growth in the category. We've expanded in conventional grocery in 2018 and '19 through Kroger, Food Lion. We continue to expand in existing accounts. 7-Eleven was our first convenience store chain to really take us on over 3 years ago. And believed, it really was visionary seeing this healthy better-for-you functional energy take hold. As Rodney Sacks has talked about in many earnings calls, there's an evolution taking place and the performance energy category is here to stay. And as he quoted, he anticipates the category continue to grow, and in 2020, retailers will be updating their sets in 2020 for this new age energy, and Celsius would be a top choice. In the Natural channel, we're one of the top-selling natural energy drinks in that category, outside of Whole Foods. This week, we announced our launch into Walmart, 1,500 locations with 2 SKUs or 2 flavors. And we announced -- also announced expansion into Target with over 5 flavors now. We started with Target with 2 flavors and 500 store test in the fourth quarter of 2018, and continued to expand as the product continues to do well in existing accounts. The drug channel, doing extremely well there. We're expanding there. We're in CVS now nationwide as well as Rite Aid. I talked about Vitamin Shoppe, vitamin specialty and GNC. Military channel, we're doing well as well. And in Vending, there's a new opportunity where we started a dedicated focused team going after healthy energy at work, college campuses, hospitals and universities. And this channel has already overgrown -- already grown to over 10,000 healthy vending machines and 5,000 micro markets. And we just signed into many food service agreements as well. So more opportunity there. And of course, online is a big growth factor, as more consumers shop online. What's interesting and we're leveraging with Celsius coming out of vitamin specialty, many stores where we really are located in the vitamin specialty sports nutrition sets, but we also can leverage our energy functional portfolio in the energy category as well as cold availability. So we're able to leverage multiple points in any given outlet, maximizing the velocity. And like any CPG company, it's important really to focus on your channels of trade but also your routes to market, especially when you're shipping heavy liquids around the country. So really up until June of 2019, our main route to market was direct to retailers warehouses who delivered to their stores or through the national wholesaler network McLane, KeHE and UNFI. In June, we started to close some of the key premier national distributors in the country. We're up to over 100 premier distributors today, some of those represent Anheuser-Busch, MillerCoors. We also had Big Geyser, we closed in the back half of 2019, who was world-renowned. That's one of the top distributors in the nonalcoholic space in New York City. They service over 20,000 locations. We've already started to flip our key accounts over to some of these DSD partners. As an example, Big Geyser now services Target, CVS and Rite Aid within their market. And we will be flipping over other markets as we continue to build out the DMAs with these key distributors. And what that does is improves velocity in-store, better in-store execution. We're seeing over a 40% growth rate by -- in existing accounts. And we also pick up the small format stores in a given market, further increasing your overall ACV in that marketplace to drive better effective marketing ROI as well. Looking at our brand positioning, we have the products, we know our position. We're gaining placements and we're very targeted on our promotions. I do have a brief video, just you can see the brand tone, look and feel. I hope many of you tried the product today. If not, we have product available out there. I encourage everyone to grab a can. [Presentation]

As you can see it's Celsius. It's Celsius Live Fit. It's your ultimate fitness partner. No matter what you're doing, that extra set, that extra mile, we're getting ready for that next meeting. Celsius is here to help you through that, accomplish your goals. With our targeted marketing initiatives, it's all about creating real emotional and functional connections, not only online but offline. And everything we do revolves around a 360 approach. We leverage events, influencers, drive through digital activation, create retail experience through our targeted trade marketing initiatives. And everything revolves around that 360 approach, targeting consumers where they live, work and play. In addition to that marketing strategy, it also is aligned with our sales strategy. We have an innovative portfolio, as I said, capitalizing on today's health and wellness trends. Our core line is our Celsius portfolio, over 9 great innovative flavors. Just recently launched a Fuji Apple Pear that taste amazing and doing extremely well, Kiwi Guava. And we just launched what's a Grapefruit Melon Green Tea, which did gain national distribution at Target recently. We have on-the-go sticks and we have a Stevia Sweetened Line. I talked about the ACV data coming out of the convenience channel. Some other key data points as well as the MULO channel, when you're looking at that as of December 29, 2019, the growth out of that channel is over 111%. So really showing good, strong indicators, not only on our internal financials but external third-party reporting. So Celsius, what is it? It's a proven functional energy drink. It's proprietary. It's a thermogenic that burns calories and body fat. It's also backed by over 6 clinical studies published in peer-reviewed Sports Nutrition journals. The claims have been tested in the California court system. No sugar, no high-fructose corn syrup, no preservatives, no aspartame, and it's gluten free, non-GMO and vegan as well. So how does it work? It's a thermogenic. It's backed by our 7 essential vitamins. It's backed by green tea, with ECGC, guarana and ginger, which turns on thermogenesis in the body, which boosts one's metabolic rate. And it's clinically proven that drinking Celsius prior to a moderate fitness activity will accelerate your metabolism, burn fat and calories. So where does Celsius play within the energy category set? It's across between conventional energy, healthy, functional energy -- or healthy energy and functional energy. It's healthy functional energy. It's the Energy 2.0. It's capitalizing on the evolution and the energy category. We all know about the masses that left sugary sodas, and the explosive growth in sparkling waters, functional waters. The next category under disruption and it's under disruption right now, it's the energy category. That's the opportunity we have here at Celsius. In addition to our core line, we have a performance line, which is a CELSIUS HEAT, enhanced caffeine, 2,000 milligrams L-citrulline which is a vasodilator, truly to take you to peak performance. And in September 2019, we launched a recovery line, Celsius BCAA plus Energy. We've got fuels recovery with Tart Cherry, electrolytes and vitamin D3. We also have a FAST portfolio line, a protein snack portfolio. It is one of the top-selling brands in Finland. We do have presence not only in North America, we do have presence in Europe and Asia. I'll get into that a little bit later. Most recently completed an acquisition and through that acquisition of our Nordic partner, they had this FAST portfolio, which is very innovative. It has slowly been seeding in Sweden, Finland as well. And we're looking for opportunities in North America. It's high in protein, low in sugar, very dimensional bar that taste great. Talking about that global opportunity for Celsius. In the back half of 2019, we completed an acquisition with our Nordic distribution partner. We are one of the top-selling energy drinks -- -- functional energy drinks in Sweden. We sell 20 million cans to a population of 10 million people. Also, most recently launched into Finland and Norway and gaining additional distribution And through our network, of our key -- one of our key investors, Li Ka-shing, who owns Hutchison Whampoa and A.S. Watson, we're able to leverage his connections and network throughout Europe. Now we're very focused on profitable growth. We're very methodical on how we expand and our process on expanding, but these lead to future opportunities. We do have a presence in Asia. Any of you -- many of you track our financials. If you look at our 2017 and '18 financial results, we did invest over $12 million in the early incubation of Celsius in China. Excluding those investments, the company has been running at a cash flow-positive EBITDA over the last several years. In the back half of 2018 and really going into 2019, we restructured our agreement with our master distributor in China. And we moved to a licensing royalty model, where we're going to get guaranteed royalties over the next 5 years for $7 million. And that $12 million we invested in '17 and '18, we will get back over -- a receivable over the next 5 years. In addition to the opportunity in China, where we mitigated our risk and maximized our upside. We do have distribution in Hong Kong, where we have a team were distributed by A.S. Watson Water, we're also in 7-Eleven and Park and Shop. And then most recently, just launched in Malaysia, in the back half of 2019 and over 1,000 7-Elevens gyms and health clubs through a strategic distribution partner. Looking at our growth strategy. It's building upon our core portfolio with new flavor innovation, expanding into adjacent categories as we saw that Celsius BCA recovery line. And introducing disruptive -- really disrupting the market and introducing new products in the marketplace. We're a very focused, dedicated team. The company is run by CPAs. We're disciplined, we're results-orientated, we're building upon our brand equity, increasing our brand ACV and also increasing the breadth of our portfolio and extremely focused on transforming this organization for scale and improving our gross profit margins and very data analytics. Everything we do is revolved around increasing our shareholder value. It's building that and defining and growing that brand position, leveraging strategic investments, innovating, optimizing our sales strategies, reducing cost of goods and marginalizing our run rates, which truly creates value to the value chain. Moving on to our financials. Just look at the last several years and quarters. Actually, we've had over 10 quarters of year-over-year, on a quarterly basis, growth each and every quarter. And just looking at the last 3 quarters, we have sequential growth on a quarterly basis. North America is at a 63% CAGR growth. The company overall is at a 45% CAGR. Looking at just the first 9 months of 2019, we've already cycled our full year revenue of 2018 in North America and on a great trajectory. With the recent acquisition we did, we're on a normalized run rate of over $100 million as we head into 2020. Most importantly, looking at gross profits, and I know many of you also look at Monster -- looking at Monster, they're doing $1 billion a quarter, generating over 60% gross profit margins, Celsius is doing approximately $20 million a quarter, generating over 50% gross profit margins, excluding outbound freight, when you're comparing apples-to-apples. We do include outbound freight in our cost of goods. So when comparing us against Monster, it's important to look at that because we do have a lot of opportunity for further accretion in our gross profit margins as we optimize our production, optimize our logistics and continue to leverage our scale as we build volume. Some highlights recently in the third quarter, as I mentioned, 20% gross profit -- over $20 million in sales. That was a record -- another record quarter for the company. North America was up 47%. Gross profit was at 42.2% for the quarter. So we saw an increase on a year-to-date basis. Net income was derived to $1 million, $2.6 million in EBITDA -- adjusted EBITDA. We had $20 million in cash on our balance sheet, $8.8 million in inventory and approximately 70 million shares outstanding. Very well positioned. What's also important to highlight is some of the key investors behind the company. I talked about Li Ka-shing. About 1/4 of the company is owned through Horizon Ventures, Li Ka-shing, that's network of opportunities, not only through Asia but in -- but through Europe. And it's also one of the assets. It is that A.S. Watson owns 15 -- over 15,000 health and beauty stores throughout Asia and Europe. And then Carl DeSantis, one of the early really visionaries behind the company, built Rexall Sundown, was the Chairman and Founder, and sold it for over $1.8 billion back in 2000, very big believer and envisionary behind the company. As Sean mentioned, myself, I'm the CEO and President. I've been with the company since 2012, over 8 years. I've been with the company now really going through this transformation. It was a turnaround story when I started. And we've been growing this business each and every day, and it really made a solid platform for future growth. I have over 20 years experience, consumer products going back to Eckerd Drugs as well, CPG experience. And Edwin Negron, who is our CFO, has over 30 years’ experience in domestic and international and operational experience. So we have a good team. We have a solid Board of Directors. We have Hal Kravitz, who has over 30 years’ experience with Coca-Cola, background of extensive CPG experience; Regan Ebert, set extensive experience as well, VP of Keurig Dr. Pepper, Marketing, General Mills, PepsiCo. And we have one of the original sharks, Kevin Harrington, on our Board of Directors as well as many others. A good well round of industry executives on our Board. Some key takeaways, resounding consumer demand with its trend forward, rapidly growing revenues and gross profits, expanding portfolio offering, innovative, capitalizing on the evolution in the energy drink category, well positioned. We're transforming this organization for growth each and every day, and we're extremely disciplined-driven team. Back to you for some Q&A, but thank you all for joining and...

Thanks, John. I think that was very comprehensive. We've got some questions here. I guess first one I got is, how does the demographic of your core consumer compared to the likes of a Red Bull or a Monster consumer?

Yes, that's what's really great about the opportunity as well with Celsius because we were born in the gyms, the health clubs, vitamin specialty. We actually have a broader appeal than your traditional energy drink, which historically, has been this 18 to 24 male. So this evolution that's taking place, it's -- we're in a really good position. Our demographics, about 48% female, 52% male, and that's really because of the way I think the product was -- where we've come from, we're authentic and the gym is not -- it's for multi-generational demographics. But also, we index a little bit higher in age because of that. So 18 to 44 is the age demographic we're seeing consuming the product. So it really is -- has a much broader appeal than, say, a traditional energy drink has, which expands the opportunity even further.

Great. I think another one here is, I guess, with the energy drink shelf becoming more competitive, how do you ensure that you're getting your rightful space, your fair share?

Yes. That's -- it's been a journey over the last several years. We finally have really hit momentum. The beverage industry is about as competitive as they come, although I think every category is -- any business is competitive, but you got over 5,000 new brands coming to market each year. There is a lot of venture-backed PE funds getting behind brands. One thing that gives us that competitive edge is the authenticity behind the product and the momentum that we're seeing these other channels of trade. So we're getting a lot of feedback of all of our retailers, either expanding their sets. And for the first time, really hearing from the convenience store channel that they're updating their sets beyond what they traditionally call Bubba or the traditional energy drink consumer. So there's a lot of opportunity here really to capitalize on this migration, transformation in the category. Celsius is one of those choices you're going to put in that performance energy set.

Great. I guess the U.S. energy drink market has maintained a pretty healthy premium for a number of years. Like what gives you -- I guess with the increased fragmentation that we're seeing, what gives you confidence that, that premium in the category can be maintained. Or does that present a risk, I guess?

Yes, I think the pricing architecture, there is massive opportunity for premiumization in the category, mid-tier and then value brands. I think you've seen that in every category. I don't see that changing. What is very interesting is, we all know about Bang and really REIGN. When they did their launch, there was heavy discounting in the market. We do not discount the Celsius portfolio during that time. We maintain pricing and we actually continue to see same-store sales increase. So it really shows you that Celsius is building this premium position within the category, which definitely is a stronger brand position to have. So we don't see that we're going to be effective by that. And we see great opportunities.

Great. I guess -- yes, I guess, you had touched on this, but the area of growth between Bang and REIGN, and the performance energy set. What -- do you believe that, that's incremental growth to the overall energy drink category. Do you think that, that's really just cannibalizing or just a shifting of consumers from the one products.

Yes. I think when you look at the category, it's going to grow 84% by 2025. We're definitely -- there's definitely attracting new consumers into the category. I think they're coming from coffee, you're seeing them coming from CSDs. There's new consumers coming in that are trying it for the first time. We're all in need of more energy. I think you're starting -- you're also seeing these with Celsius, with Green tea and guarana and ginger, it's something the category really hasn't had for some time in mainstream. You're seeing it's more approachable. And you're seeing the category go up and millennials are over-indexing on a daily -- really the usage occasions as well. So I think there is some crossover from traditional energy into performance energy. But overall, it's going to grow the overall category. You're going to see the category continue to grow.

Great. You had touched on this also, but just to sort of reframe it, like, in your view, like, what are the most important like avenues of growth available to Celsius from here?

Most important avenues right now, we see massive opportunity in convenience channel. There's 70% of energy drink sales that drive immediate consumption. When you look at where our sales are mainly generated from today, it is all take home. So take home, and then that's when the usage occasion is taking place. We only have a 12% share in the convenience channel. There's a long road ahead for opportunity, continuing to increase our distribution as well as continue to grow in existing accounts by adding incremental flavors and continuing to drive that ACV and the velocity rates within given outlets.

Okay. That's great. Yes, I think that's -- if you have any other questions. I think that's what we have for now.

Why -- it seems like you guys have a big run rate growth ahead. I’m just wondering a bit more about the strategy going [indiscernible]

Yes. No, it's...

Can you repeat the question just for the people on the online.

Yes. Just online, repeating the question, is the international. The international presence in the Nordics as well. Looking at that, how do we see the focus within those given markets with the opportunity in North America. So how we arrived in the Nordics is quite interesting. That goes back to really over 7 years ago where 2 individuals discovered Celsius in Miami, a little bit of a story there. And they took the product back with some investors, started the product and sold it in the gyms and health clubs and transferred it over to the hypermarkets. So actually, it was a good opportunity for Celsius selling to a distributor. They built the brand for us in the market. That's really how we arrived there. Today, we sell over 20 million cans to a population of 10 million people. So it wasn't a core strategy for the company in the beginning. It was a good way for the company to receive immediate cash on cans being sold that we're producing in North America, and it's going back really in 2010, is when they first launched. So we've continued to nurture that relationship. And the company -- those 2 founders sold the company to a company in Finland called Func Food. Func Food acquired the company back in 2000. Roughly around 2015 -- 2016, they acquired the company. And as they've gone through that process, they did a leverage buyout where the company came into some financial challenges due to the debt structure. Through that process, we wound up acquiring our Nordic partner, maintain and secure that distribution, and also gives us a platform for European expansion. And through that process, we did acquire the protein snack portfolio. So it's one of the top-selling really protein portfolios in Finland, and there is some opportunities for cross-pollination. We're very focused on continuing to drive positive ROI, gross profits and improve the bottom line. So we are not going to distract the company, focusing on our resources on growing this portfolio. But where it makes sense, we see opportunities for incremental dollars, we're going to go ahead and execute that.

Well, the things that are in your control, like your executional risk [indiscernible] performance.

Question is, when you look at executional risks and some areas where we can get better as we continue to move forward. I think executional risk, we've worked a lot on transforming this organization. It's a small organization. We're up to 63 in North America. Globally, we're up to 120 employees, constantly evolving. We're not investing heavily ahead of revenue. So we're -- as we're ramping up, we add resources very methodically to make sure we're driving positive growth. We meet every week, strategizing supply chain, doing risk assessments to make sure we're able to -- the worst thing we can do is run out of stock as a consumer products company. It is -- as Sean mentioned, there's so much competition. Those 5,000 -- the competition is fierce. You run out of stock, you lose the space. We do not have the manpower to make sure that shelf space stays maintained. It could set us back 6 months, maybe a year. Maybe we'd never get this place back. But we have noticed when Celsius lands on a shelf, there is an extremely high continuity rate where we stay. So those are some of the risks that we have. But we're keeping inventories at over 3 months on hand. We're working with our co-packers. We have some contingencies in place. We're not optimized by any means on our -- when you really look at days on hand within our inventory but we're doing that strategically. So we don't -- so we mitigate some of those risks versus maximizing inventory turns and those type of things, so.

Got another one here, is -- just given the older demographic that -- versus other energy drinks or the core energy drinks that are in the space, that Celsius appeals to, is there any incremental -- or do you see any risk with the Coke Energy rollout versus your portfolio?

Yes. I mean we keep a close eye on the global market. We are starting to see some discounting in Europe within that Coke Energy, which is putting some pricing pressure on the category within Europe, especially in the Nordics. We are holding and maintaining our premium position. But we're watching that closely. I -- we think it's going to really help the category grow and expand. And we talked about that. You're trading consumers over from traditional to this performance energy, better for you, functional energy. I think it's going to take more people from the CSD category and introduce them to the energy category for the first time. I'm comfortable with the Coke, comfortable trying Coke Energy, and then you start to explore the category as we all do. And migrate over to Celsius would be a great -- a bridge there. So I think it's great for the category.

I think we have one over here.

[indiscernible] just trying to figure out, going to right place at the right time [indiscernible].

Yes. The question is right time, right place, we've been around for a long time, and how do we get to where we're at, is -- the company -- there's a variety of things that worked. And every brand goes through an evolution, right? Really identifying what is working with the brand? How is it connecting with consumers? How do we scale and grow the business? And when you look at where Celsius has been, the key has been, it's vitamin specialty, gyms and health clubs, really the backbone of Celsius. The product actually originally started off with its thermogenic properties as going after diet and sports nutrition. Over the last -- the evolution of the brand at Celsius Live Fit, live your best, help you through your peak performance, deliver better, healthy active lifestyle. So those trends, those seismic trends in the category has shifted as well. I think we all know sports apparel. If you look at sports apparel category and our leisure wear. Look at what happened in the Sparkling Water category. These health and wellness trends continue to build momentum, and we have been leveraging and capitalizing on these health and wellness trends. And that's what has allowed us to gain distribution in mass margins -- mass merchants and gain additional shelf space. The product is working and its authenticity -- it's authentic. There's not many other brands out there that are as authentic as Celsius is within the category. So it has to do with a lot variety of -- it's our journey from where we've been, the opportunity in the market, the transformation and the evolution within the category.

We have one more over here.

Yes. Seems to be doing a really great job [indiscernible] sort of agile around supply. As you start thinking about [indiscernible] ambitious but do you have some pretty healthy [indiscernible] capital rate?

Well, due to the margins on the product, this 50% gross profit margins given where we are, we have been driving profitable growth. We were investing in '17 and '18 at $12 million into China on the early stage of the brand incubation. We are driving profitable growth. We have sufficient capital. There is -- we have really good leverage where we're at. And I don't see any foreseen future need for capital at this point. We're going to leverage the -- our balance sheet as it is.

Next question. Go ahead.

[indiscernible] Yes. That was exactly my question. Beyond -- like beyond your [indiscernible] that you're getting, which is, obviously, driving your growth but what's the kind of [indiscernible]?

Yes. I think a good metric is that convenience store channel data that I showed for you because we increased only 2% ACV in the convenience channel from 2018 and '19. So there wasn't as much growth in store distribution, but we're growing at 44.5%. So we're seeing about a 30% to 35% growth rate in existing accounts. So same-store sales are up. And that's -- I think that's -- when you look at that and you look at the journey where we've been in some of these key retailers. As an example, Target started off with 2 flavors in a small format test in 500 stores, rolled this out nationwide, continue to add a flavor in each reset. You really don't see buyers doing that unless you continue to drive same-store sales growth within the category. So it's right around 30% to 35%. Same thing with the drug channel in CVS and Rite Aid. It was a small test. And due to the success we keep rolling out further into more stores and more flavors as well.

[indiscernible]

We have -- according to the buyer on Amazon, we have one of the highest continuity rates within the category, which is really great to see -- are subscribing safe. The data we're getting from our sampling company, we have one of the highest conversion rates than many other brands that they've sampled. And it's roughly around a 76% purchase intent once someone has tried the product. And I think that goes back, if you haven't tried the product, you get a nice experience with the product, it taste great. There's 2.7 grams of vitamins, but you don't taste those vitamins. The way the product's built, it was really built well. Greg Horn actually formulated the product. And he was the prior CEO of GNC and built many of the blockbusters for GNC within their portfolio. So the product is built right, it taste great. You get a nice experience on it, makes you feel good. And you don't get the crash because of the way the product is formulated and you don't get the jitters. That's one big thing we hear from consumers as well.

Caffeine [indiscernible]

We do have caffeine in the product and taurine as well and guarana. They're biotin. There's a lot of good ingredients in there, vitamins in there.

Great. All right. I guess with that, thank you, John, for joining us today.

Thank you. Thank you for having us.

All right. Great.