Greetings, and welcome to the Celsius Holdings Inc. 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Cameron Donahue, please proceed.

Thank you. Good afternoon, everyone. We appreciate you joining us today for Celsius Holdings Fourth Quarter and Full Year 2017 Earnings Conference Call. Joining me on the call today are John Fieldly, Interim Chief Executive Officer and Chief Financial Officer; and Vanessa Walker, Executive Vice President of Marketing & Innovation. Following the prepared comments, we will open the call to your questions, and instructions will be given at that time. We have filed our annual report with the SEC and issued a press release today. All materials are available on the Company's website at celsiusholdingsinc.com under the Investor Relations section. As a reminder, before I turn the call over to John, the audio replay will be available later today. Please also be aware this call may contain forward-looking statements which are based on forecast, expectations and other information available to management as of today, March 08, 2018. These statements involve numerous risks and uncertainties, including many that are beyond the Company's control. Except to the extent as required by applicable law, Celsius Holdings 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 disclosures contained in today's press release and our quarterly filings with the SEC for additional information. With that, I'd like to turn the call over to John Fieldly for his prepared remarks. John?

Thank you, Cameron. Good afternoon, everyone and thank you for joining us today. 2017 was an outstanding year, we delivered exponential top line revenue growth of nearly 60% over the last year, while maintaining gross profit margins successfully and significantly expanding our global footprint in rapidly growing Asian market, and extending our product portfolio with new concepts and flavors, all while strengthening relationships with our consumers to deliver quantifiable results; and are in position to continue our success in 2018. We are gaining ground and increasing momentum in an industry that was once dominated by only a few massive global brands. There is rapid change occurring in consumer buying preferences, we're establishing ourselves with appealing products in growing markets to capitalize on the direction our industry is headed. Our 2017 accomplishments are rewarding, but just as important, we are increasingly optimistic about 2018 and beyond. Our entry and expansion in Asia market was a critical step in our pursuit of building a global brand. Asia and China in particular, is one of the largest and fastest growing economies in the world, establishing the Celsius brand, operations and distribution through local and regional partners has accelerated our entrance into this market. We committed considerable resources in Asia in 2017 with investments in excess of $7 million to promote our brands establishing local production at sourcing and successfully launching a subset of our product offerings. Our initial area of focus in China has been Beijing, Guangzhou and Shenzhen with initial expansion reaching in 35 cities across 14 provinces. We have gained over 8,000 points of distribution in our initial phase of launch with 50 subs distributors. Our partner, Qifeng Food is key to our success, and one of the reasons we feel confident entering China at this time. Qifeng is a company…

Thanks, John. Seismic shifts have become a reality for consumer goods companies, massive demographic changes are occurring as the millennial generation becomes the largest population worldwide. This young group is evolving global health and wellness trends and continuing to drive product portfolio change for all CPG companies. Technology advancements are changing the way brands are being marketed and sold around the globe, and the rapidly evolving retail landscape and socio economic forces are converging and accelerating this pace of change. At Celsius Holdings we are preparing our product portfolio and business models to harness the power of these disruptive changes, changes which are leveling the playing field for companies our size. We are optimizing our core product proven formula with new additional flavors appealing to the changing case profiles of a millennial and re-strengthened our portfolio with the addition of a natural line extension creating a set of new SKUs with clean nutritionals specifically designed to broaden distribution, meeting retailer and consumer needs for a wider, more natural assortment. These changes in our product portfolio will remove barriers to distribution on the growing natural shelves in the traditional and new channels of trade including e-commerce. This move to create a line free of artificial sweeteners fill the void in our portfolio by creating a Celsius branded option for new and current faithful consumers shopping in any omni-channel format and making ingredient driven purchase decisions. As the brands tagline would fit adorns [ph] packages, just below the brand mark and name, it is a significant and clear message about our shift in positioning from a weight loss or diet brand to our position today as a fitness strength. The live fit statement communicates our key product benefits in an inspiring and challenging way and speaks to a wider health-focused audience resonating…

Thank you, Vanessa. Total revenue for the fourth quarter of 2017 was $9.1 million compared to $6.3 million in the fourth quarter of 2016. The 46% increase was driven by 92% year-over-year increase in domestic revenues which was driven from branded growth rates of 151% in health and fitness accounts and an 80% growth in internet retailer accounts and a 73% increase in retail accounts. This growth was partially offset by a 12% decline in international revenue that was primarily driven by decline in orders from our Nordic distributor, as a result of order timing impacted by a new cane [ph] design launch in the first quarter of 2018. We remain excited about further opportunities in this market, specifically with the launch of our new BCAA product and the expansion into Norway, both commencing in the first quarter of 2018. This Nordic revenue decline was partially offset by new revenues from China and Hong Kong. Gross profit for the fourth quarter of 2017 was $3.8 million or 41.6% of revenues compared to $2.6 million or 41% of revenues for the corresponding period last year. The improvement in gross profit was driven almost entirely by higher revenues and the diligent management of motional allowances and cost of goods. Bills and marketing expenses for the three months ending December 31, 2017 were $7.3 million compared to $2.0 million for the three months ending December 31, 2016, an increase of 265%. This increase is due primarily to increases in investment in sales and marketing programs of roughly around $4.9 million with a focus on expansion in the launch of products in Asia, mainly focused on China and Hong Kong. In addition, increases in human resource investments during that period was $333,000 and increases in warehousing costs was $108,000 due to increasing inventory levels…

[Operator Instructions] Our first question is with Jeff Van Sinderen with B. Riley. Please proceed with your question.

John, let first say congratulations to you and Vanessa your whole team on terrific progress in 2017 and also for putting out positive adjusted EBITDA for the year.

Thank you, Jeff. We're very excited on the results this year, it really demonstrates the momentum that we've been able to accomplish and our team is executing well. And I think it's all proven our hard work is reflected in these financial results, so thank you.

Could you speak a little bit more about the international launch timing that impacted the quarter? It sounds like the new can I guess it was -- sounds like an anomaly; so should we expect revenues in that segment to be up in Q1? Just wondering how to think about that.

When you look at -- Sweden was impacted, usually the fourth quarter has been a little softer for us in regards to our Nordic volumes, due to it being outside of the beverage season. They also had some timings of orders in regards to some production at our production facility and we were transitioning out of a new packaging design in the market which they will be rolling out in Q1. When you're looking at our quarterly revenues on the international front, in regards to Sweden and the Nordic area, we are very excited and optimistic about the second line in their product portfolio, the DCA product which is rolling out momentarily and we continue to gain traction we are maintaining our top position in the fitness category there, and we're seeing -- we continue to see strong results according to Nielsen data. So we are very confident about the momentum we were able to capture on annual basis in that region, and continue to move into 2018.

And how is the DCA rollout going, I know it's very early days but just wondering what sort of response you've gotten there with that?

Yes, it's just rolling out now. We commenced production about three weeks ago, it's now available in a few local fitness centers and we'll be rolling in out -- our partner, our master distributor will be rolling it out through their infrastructure where they have a very high ACV in the fitness channel. So that will be the first point of entrance and then, as it continues to progress and gain traction, we'll roll that second line into the hypermarkets or the mass retail.

And then speaking about distribution, can you give us any more color on how the rollout with 7-Eleven will go? What you're expecting there? Then any other thoughts on -- I guess extending distribution in 2018?

Sure. We put it -- we did announce the partnership with 7-Eleven in regards to the addition of our new Heat line that we launched in 2017. And that is very promising, we are very excited about that. We launched in 7-Eleven now, about 2.5 years ago and it shows you that the product is turning well to have them continue to partner with Celsius. We are in all their DCs with our core line and by having Celsius Heat now entered into the 7-Eleven system, that allows us to gain placement in over 22 of their DCs. So we will go after that, we will leverage that and be able to gain additional placements throughout the country; so at this point in time through our hybrid network we were able to deliver a Celsius Heat case at a retailer -- any retailer throughout the country which is we are very excited about. And initial feedback has been very positive, we're rolling through specific targeted programs to get that on-shelf, to get complete compliance. It will be a slower rollout as it was with our core line when we first launched 7-Eleven, keep in mind they have 8,000 stores but they work on a franchised model; so we are rolling through that, we're attending a lot of events, and we have a variety of tactical programs to support that.

If we could turn to Asia for a moment, I think you said that was up 85% sequentially, just wondered if there is any more color you can give us on how the China business is progressing? How sell-through's are there? What the outlook is in that region?

We've been very excited with our partner as we mentioned, Qifeng Foods has been -- we're very satisfied with the execution at store level. We know a lot of other brands are entering that marketplace, and they are having a lot of challenges with execution. The execution that we are seeing is a very targeted, we are going -- we are aligning and creating an energy set and our product is being positioned right next to the sell -- the Red Bull product, as well as Monster and CareAbout. So we are defining that set, our placements have been very good, we are gaining ACV hearing about 35 of the sub-distributors of a total of 500 sub-distributors that are available; so we are gearing up momentarily as we speak and we'll continue to roll that out and leverage Qifeng's network.

[Operator Instructions] Our next question is with Anthony Cysteine [ph], private investor. Please proceed with your question.

Good Afternoon. I just want to congratulate you guys there on your successful 2017 and with the continued growth and expansion. I guess my question is just concerning as the interim that's still in front of Mr. Fieldly's title. I guess it's been a year now and I was wondering if we should expect a permanent fill or you to have the interim removed from your title and in your future otherwise I was just kind of curious what we should be expected of the Board of Directors to be filling that job hopefully sooner than later, permanently without the interim. Based on the past year, I think this really is definitely -- we're in the chance and the opportunity to fill the job permanently but that's not my decision; I was just hoping that you could shed some light on that in light of a year passing now.

First of all, thank you Anthony for those comments. We have been performing well over the last couple years and our results this year are phenomenal, team has really executed, we are focused, I will tell you that the Board is going through -- continuously move through that process, they do have a committee and we are anticipating that there would be announcements sometime in the near future there, or going to their final process. So it is -- the Board is focused on finding a permanent CEO, and we look for -- as soon as we have a final formal announcement, we will be sharing that with everyone. But I can assure all our investors, we are focused on driving shareholder value and driving on delivering results, and I think that's demonstrated in our 2017 results. So -- but thank you for that kind comments, Anthony.

[Operator Instructions] Our next question is with Gerry David [ph] with Gerry David & Associates. Please proceed with your question.

John and Vanessa, I don't have a question but just a comment. I have to say this is one of the most exciting times for Celsius, the quantum growth that you've had this past year, your expansion, the broadening of the product lines, I am personally excited about Celsius in the future and as an investor in the company, I congratulate everybody at Celsius on just an outstanding job, so that's my comment.

Thanks.

Our next question is with Diane Maggie [ph], a private investor. Please proceed with your question.

Yes, congratulations from me too, it's great to see the expansions continuing. My question is about the aluminum -- the cost of aluminum considering the President is going to prepare tariffs on aluminum coming in from China and others. Do you get your aluminum from domestic sources or is this going to affect your cost of the product?

Thank you, Diane and we appreciate you being an investor, I know you're a long time investor as well, we appreciate your commitment and interest in Celsius. One thing, it's very interesting when you say that about our -- some of our input costs into our cost of goods. We have -- we are committed as an organization through our supply chain and continue to drive improvements in our gross profits and that's with all of our suppliers, so we are leveraging our suppliers as we continue to scale and grow. We will be able to continue to gain efficiencies throughout our supply chain. And I think that's demonstrated in our 2017 results, when you look at our overall gross profit margins which includes outbound freight which is 42.7% of gross profits and we were looking at almost 60% increase in revenues all while maintaining our gross profit margins which that shows you the focus and dedication of our staff, our management team, not only on sales and promotional costs; promotional allowances are included in our net revenue number as reported which the team did a great job controlling, and also our cost of goods and outbound freight charges. So we are monitoring our costs very closely. We have not been affected by the increase in tariffs as you mentioned which is anticipated, we will be monitoring that closely. Our aluminum actually represents a fairly small amounts of our cost of goods; so the financial impact or burden will likely be immaterial to our overall gross profit margins as we are positioned to further improve gross profit margins as we continue to scale and grow. So thank you for your interest and I appreciate all the support, and we are focused on and dedicated on improving results.

Ladies and gentlemen, our question-and-answer session has concluded. And I would like to turn the call back over to John Fieldly for closing remarks.

Thank you. Our 2017 results demonstrates the excitement and demands for our products. We are gaining momentum and we look forward to 2018 and leveraging our global infrastructure. Domestically, we just concluded a successful selling season and are in the final negotiations with multiple known accounts which we will be announcing once purchase orders are received. In Asia, we are currently on-track to grow revenues and deliver tangible results as we continue to penetrate and leverage our partner's network of over 500 sub-distributors. And in the Nordic region, despite the normal seasonality we received in the fourth quarter and the delays in production, we expect continued growth and additional upside opportunities with our new expansion into Norway, and our new expansion in our product portfolio with BCAA line which launches in Sweden and Finland in the first quarter of 2018. I truly congratulate our entire team at Celsius as they have done an outstanding job. We are focused, disciplined and results driven, and are committed to driving shareholder value. In addition, I would like to thank all of our investors for their support and commitment to Celsius. And before I close, I want to highlight that we will be presenting at the upcoming ROTH Capital Conference on March 12, as well as the B. Riley Investor Conference which takes place May 24 to 26. Thank you everyone for your time today, and have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.