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And following positive indicators from early testing, we are scaling marketing through the summer and beyond. With leadership from our new CFO, Girish Satya, we will also share a critical new productivity initiative today, enabling these turning points and allowing greater visibility for the first time in the Zevia's path to profitability. As a pioneer in the consumer's number 1 choice in natural soda, Zevia's focus remains taking better-for-you beverages mainstream. Our mission focuses on global health for people and the planet. And in Q1, we removed another 2,800 metric tons of sugar from consumers' diet, never having sold a plastic bottle. Zevia is more affordable than 64% of nonalcoholic beverages in North America and more accessible than recent functional entrants in adjacent carbonated beverage category.

In Q1, net sales were within previously communicated expectations. Volume and revenue at the start of the year were impacted by SKU distribution setbacks with 2 key customers following the challenges we encountered with our supply chain transition in 2023 and in transition in our portfolio as we drive focus on the fastest-growing and highest potential portion of our soda portfolio. Consumer demand remained strong despite revenue results. Velocity which is a measure of sales per point of distribution has improved every 4-week period since the start of the year and grew at 9% versus prior year, the past 4 weeks ending April 21st. And an impressive 21% in the food channel which is our largest channel. Scan sales are also accelerating overall, leading the carbonated soft drink and the diet zero soda category in dollar and in unit growth.

Zevia grew at 9.4% in the latest read, 23% in food and double digits across all top food accounts. We expect net sales to accelerate in the back half of the year given these trends and following recent spring resets. Our performance in key strategic channels and customers have been strong which I will cover shortly. We've communicated a 4.5% price increase effective May 6 on soda multipacks and our gross margins are strong and improving sequentially. Zevia's much-needed route to market evolution is underway as we launch direct store delivery in the Pacific Northwest. Recall that Zevia has grown for over a decade, featuring only multipack and selling to a loyal base in the natural channel and in natural sections in food. The launch of DSD will enable singles distribution and channel expansion, plus improved in-store presence and promotional effectiveness in our existing distribution footprint.

This move to broad availability of a trial package supported by brand marketing is key to accelerating market penetration. The first launches in our direct store delivery network include Columbia Distributing and Hayden Beverage Company launching this week and we are in parallel setting our first regional convenience store partners. This is a critical evolution for Zevia, building out on a stable foundation. With new brand Visual ID fully in market and our first omnichannel marketing efforts underway as of April, including new advertising campaigns in key metros across the U.S., we are seeing early signs of immediate positive impact in scan data performance in those markets versus rest of market. The Zevia product portfolio has always been a rational solution for the tension between health and taste and soda but now it finds its personality, bringing a differentiated brand identity through digital and end-market marketing activation.

We'll share more strategically and creatively after the next earnings call but look for Zevia in the market in a new way through the summer. These marketing and DSD efforts along with the productivity initiative that Girish will detail, are fundamental to Zevia's long-term growth plan and our vision to build an iconic brand. I'll turn it over to Girish to step through our productivity initiatives to provide an overview of Q1 financial results and speak to guidance. I'll be back to speak to channel and customer performance, brand health indicators and then to share closing thoughts.

Girish Satya: Thank you, Amy. Good morning, everyone and thanks for joining the call today. Before discussing our Q1 results, I wanted to take an opportunity to speak about some of our strategic priorities and how we will be evolving our approach to the business in the short and medium term. I will first start with an overview of my first 60 days, how that has shifted our focus slightly and provide an overview of our first quarter financial results, including providing full year guidance and then pass it back to Amy. I was drawn to Zevia by its history of innovation and its strong consumer value proposition as the first mover in the better for use of the space which has seen tremendous growth over the past several years. I spent my first 60 days at Zevia getting up to speed not only on the category but also in understanding the business at a granular level.

What I uncovered during this time was that Zevia does indeed have a very unique product and consumer value proposition as I originally expected but was being held back by a cost structure as it inefficient and hampering our ability to invest in growth. Specifically, there is a significant opportunity to reduce the cost of our product, while maintaining or increasing its quality as well as decreasing the cost of fulfillment in order to fund greater investment in the brand and changes in the route to market. The changes in route market should accelerate top line growth by taking advantage of the opportunity in the convenience channel as well as singles distribution where we under-index versus the competitive set. Today, we are announcing a productivity initiative that is intended to advance our long-term growth and profitability ambitions, while increasing shareholder value.

The company-wide initiative is focused on allowing us to quickly evolve our route-to-market strategy and improve operating margins, while also protecting and increasing our investments in marketing and promotions. This productivity initiative encompasses 3 pillars: brand maximization, margin enhancement and improving operational discipline and we expect these initiatives will deliver between $8 million and $12 million in annualized savings which we estimate will start to be realized in Q3 2024. We anticipate that we will realize these annualized savings targets over the next 4 to 6 quarters. First, from a brand maximization standpoint, we will look to accelerate our rollout of DSD partners, increasing our investment in digital channels and brand activation, while increasing the frequency and efficacy of our product innovation pipeline.

Secondly, in order to support margin growth, we are focusing our resources on accelerating cost savings including optimization of our contract manufacturing strategies, reduced shipping logistic costs and product costs. Lastly, we will look to build a culture that emphasizes the returns across growth initiatives, while also managing working capital, including the reduction of inventory. We are also announcing today that we have completed a full-scale organizational review with the goal of reducing redundancies and removing excess management layers as a part of an effort to streamline our operations. This is expected to result in a restructuring charge of between $500,000 to $800,000 to be recognized in Q2 2024 and primarily consists of employee severance costs and we expect the annualized benefit of this action will result in approximately $2.5 million in savings as a part of the broader productivity initiative.

I will now discuss our first quarter results. It's important to understand that performance in the prior period, Q1 of 2023 benefited from a number of decisions around promotion and supply chain that resulted in short-term positive impact on profitability but these negatively impacted performance in subsequent quarters. In the first quarter of 2024, we delivered net sales of $38.8 million, down 10.4% versus same time prior year. We saw a decrease in volumes of 10.4% or $4.9 million, reflecting a delay in the recovery of SKU level distribution at retailers. This was partially offset by a positive effect from our price increase last year which contributed $0.4 million. Gross margin was 45.7%, returning historical levels and up 5 percentage points on a sequential basis but down 0.8 percentage points versus the same quarter a year ago.

The decrease from prior year was driven by investments in an enhanced Visual ID to improve on-shelf visibility but offset by a favorable pack mix impact on COGS as we adapt our portfolio productivity. Net loss was $7.2 million compared to a net loss of $2.9 million last year, an increase of $4.3 million. Adjusted EBITDA loss was $5.5 million compared to an adjusted EBITDA loss of $0.5 million same time prior year. We ended the quarter with approximately $28.7 million of cash and short-term investments on our balance sheet. And don't forget that we also have a revolving credit line for an additional $20 million. So as of the end of the quarter, we had approximately $50 million in total liquidity. The productivity initiative is intended to help us get closer to a position where we are sustainably generating cash which is very important to us.

That being said, it won't happen overnight as we look to balance returning the organization to growth. We are aiming to make steady progress over the coming quarters in terms of reducing our losses which we expect to begin to show up in the financials in Q3 2024 with the goal of achieving sustainable adjusted EBITDA profitability on a quarterly basis in 2026, depending how quickly we accelerate our rollout of a national DSD footprint. Turning to guidance. As previously articulated, it has taken longer than anticipated to recover points of distribution post our supply chain challenges. As a part of the broader productivity initiative, we've considered the steps necessary in order to alter the trajectory of the business and reset the foundation for growth.

We're encouraged by the increasing product velocities across recent time periods and believe that this is a signal of healthy underlying demand for the brand. Now that our supply chain is both stable and scalable, we are focused on rebuilding the base CSD business, while simultaneously evolving our route to market and portfolio to include single distribution. We expect net sales for the full year of 2024 to be in the range of $158 million to $166 million and our net sales expectations for Q2 2024 in the range of $38 million to $40 million, reflecting both the delay in recovery of SKU level distribution at the start of the year and the expected improvement in the back half of the year as we begin to realize the benefits of our increased investment in promotion, our price increase, marketing and our DSD launch.

While we do not provide formal guidance on gross margin and adjusted EBITDA, we do expect gross margins to remain in the mid-40s and expect sequential improvement in the back half of the year in adjusted EBITDA as we begin to realize some of the savings from the productivity initiative. I'll turn it back to Amy.

Amy Taylor: Thanks, Girish. I'll put our guidance in context of our longer-term outlook with a focus on brand health indicators, recent retail highlights and the opportunity ahead. While the full year 2024 guide is not reflective of the brand's overall momentum given the soft start. The brand velocity is now growing 9% year-over-year and 21% in the food channel, as mentioned, improving sequentially each read this year. Zevia grew 67% of the world's largest retailer in the first quarter versus prior year and accelerated again in this past 4-week period to 98%. Zevia led the CSD category growth in food, in dollars and units through Q1 and logged 23% dollar growth there in the last 4-week period ending April 21st. This past 4-week total market scan rate is encouraging as Zevia soda grew 9.4% across all channels in dollars and 7% in units, leading CSD and the diet zero soda categories, with all conventional grocery and key natural customers growing at double digits.

For numerator panel data, consumer spending on Zevia is up once again in the past 12-month period, per household by 9%, per trip by 4% and in purchase frequency by 6%, outstanding average beverage shoppers by 41%. We expect these trends to continue. Zevia's brand strength, along with the productivity initiative Girish has outlined, give us confidence in our ability to expand reach, grow the base and build towards profitability going forward. Early indicators on the impact of now ramping out of store marketing are positive. Along with the price increase, strong balance sheet and route to market changes, we believe our productivity plan demonstrates how the business is ready to scale. We're bullish on the years ahead. Thank you for the time this morning and we're prepared to take your questions.

Operator?

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