Earnings Call: Q4 2020

Mar 11, 2021

Greetings, and welcome to Celsius Holdings 4th Quarter and 2020 Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cameron Donahue, Investor Relations for Celsius. Thank you, Cameron. You may begin. Thank you, and good morning, everyone. We appreciate you joining us today for Celsius Holdings' Q4 and full year 2020 earnings conference call. Joining me on the call today are John Fieldly, President and Chief Executive Officer and Evan Lebron, Chief Financial Officer. Following the prepared remarks, we will open the call to your questions and instructions will begin at that time. The company filed its Form 10 ks with the SEC and initiate a press release today. All materials are available on the company's website, celsiusholdingsinc.com under the Investor Relations section. As a reminder, before turning the call to John, an audio replay will be available later today. Please also be aware that this call may be contained forward looking statements, which are based on forecasts, expectations and other information available to the management as of March 11, 2021. These statements involve numerous Risks and uncertainties, including many, 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 statements 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 President and Chief Executive Officer, John Fieldly for his prepared remarks. John? Thank you, Cameron. Good morning, everyone, and thank you for joining us today. As we have all been impacted by the COVID-nineteen pandemic, Our Q4 and full year 2020 has been impacted as well, materially impacting several channels of In addition, our EU, Middle East, Southeast Asia and Australia operations, which remain adversely affected by COVID-nineteen pandemic. Traffic and purchasing patterns remain disrupted and online ordering patterns, pantry purchasing and curbside pickup maintains more prevalence in response to the stay at home owners and the shifts in consumer lifestyles. While we have started to improve in the 3rd Q4 with capacity restrictions, as well as reopenings of our hardest hit channels, there still remains uncertainty, as there potentially could be reclosings of additional cases increasing in our regions of operations, which could force extended closures in some states and countries. The health and safety of our employees and partners remains our top priority and the safety precautions have been implemented, which we have developed and adopted in line with guidance from public health authorities. In addition, we continue to monitor the environment and implement contingency plans to mitigate risk to our business. The company's operations are fully operational and our products remain generally available for customers. Even despite these constraints affecting our business in 2020, we persevered to set new records in revenue each quarter and for the full year of 2020. Celsius achieved a new record of over $130,000,000 in revenue with approximately $8,500,000 in income and approximately $15,000,000 in EBITDA. Our Q4 and full year results reflects the tremendous operational and financial achievements Celsius has accomplished. More importantly is the future opportunity as these achievements lay the foundation for future success. This is only the beginning. On the convenience channel side in North America, we did see tangible ACD gains, mostly through our expanded national DSD distribution and expansion through existing chains. These include the largest new customer Speedway, which added about approximately 2,700 locations. Several large convenience chains had their coolers resets pushed back due to COVID-nineteen in 2020, but we expect a very strong spring cooler reset in this channel, both from those that pushed their resets in 2020, as well as new opportunities driven by our category leading growth metrics, which are drastically outpacing the category growth rates. We also discussed another COVID impact in our 3rd quarter earnings call, The aluminum can shortage. The shortage has impacted the entire industry. The large can manufacturers in the U. S. Have all initiated major expansion projects with expected completion times coming somewhere in the back half of twenty twenty one and potentially through 2022. Celsius has successfully navigated this major disruption by leveraging our global relationships and strategic investors to secure the additional cans needed from both our Europe and Asia operations to support our growth. As outlined in our last call, This will impact our gross profit margins by a few points, but we remain confident that the company will run approximately in the low 40% gross profit range Throughout 2021, this initiative and this initial conservative baseline expectation, which we expect to improve upon throughout the year. We continue to explore additional opportunities as they may become available to shorten the duration Celsius is impacted by the can shortage and there is potential for additional domestic can availability in the back half of twenty twenty one. This is due to both a return to higher Turning to some of the financial highlights for the Q4. Overall revenue was up 48 percent to $35,700,000 from $24,100,000 in the year ago quarter. Domestic revenue grew 67 percent approximately to $28,400,000 up from $17,100,000 in the year ago quarter, which was driven by continued strong double digit growth in traditional channels of trade and our expansion with world class retailers and distribution partners. Our continued strong double digit growth in our e commerce revenue saw Celsius draw within 0.2 of a point of market share within Red Bull on Amazon per stack line. Additionally, our fitness channel saw a 22% growth rate compared to the Q4 of 2019, which is extremely positive given that many gyms continue to operate at limited capacities. International revenue increased 3 percent to $7,300,000 from $7,100,000 in the year ago quarter. Our Nordic revenue increased by approximately 2% to $6,900,000 The market was still strongly impacted by channel closures from COVID and timing of promotional programs. Despite these challenges, we have fully integrated and leveraged our synergistic benefits from the acquisition of Funk Food, which has immediately been accretive to our earnings and is an important step in our strategy to build a global dominant brand. For the quarter, we focused on the collaborative benefits for further integration with marketing, operations and financial integrations, which will improve efficiencies and operational performance. In addition to the strong revenue momentum in the 4th quarter, the company hit record gross margin percentage levels totaling 48.9% and 54.7% when excluding outbound freight. Net income was achieved of 1,700,000 EBITDA of $3,000,000 for the quarter, approximately an 8.5 percent EBITDA margin. Consumer demand for Celsius has grown stronger through 2020 With the most recent reported United States SPINS data, U. S. LULO plus convenience for the 52 weeks ending January 24, 2021 confirms that we have significantly outpaced the category across multiple channels. This includes a 57.9% growth and the total reported channels outpacing the category growth rate by 8 times with an average ACV of approximately 25%, which demonstrates Celsius warrants additional shelf presence placements and provides a runway for future growth. Additionally, 3rd party data reflects the same trends with Nielsen reported all accumulated channels on February 20, 2021. The company's sales were up 88% for the last 2 weeks with a 1% market share of the category and up 97.9% for the preceding 4 weeks. The next highest comp for the most recent 2 week data was Red Bull, which grew at 14.8 and 17.7 over the 4 week timeframe. Our e commerce channel according to Stackline, which tracks energy drink sales on Amazon in the United States for the 4 weeks Ending February 13, 2021, sales in dollars in the energy drink category by Amazon, including energy shots, grew at 177.8 percent versus the same period a year ago. And Celsius sales increased 224.8 percent and our share increased 2.1% to 14.5% of the category, which puts Celsius as the 3rd largest energy drink brand on Amazon, just behind Monster Energy at a 34.2% share, which grew at a 193.7% growth rate and Revvul, which is at 14.7% share and grew at 171.8% growth rate. Being the 3rd largest brand with this share on Amazon reinforces our market opportunity in the energy category in traditional retail. And with a level distribution playing field, A 14.5% share equates to approximately over $2,000,000,000 in reported retail sales according to recent total Nielsen category data. This is why we're so excited with our national distribution network, which will provide us with the opportunity to gain those placements and again verify Celsius warrants better placements and greater distribution. During the Q4, We made significant progress on further building out our national DSD network to service accounts. We secured additional distribution partners in the Anheuser Busch Further expanding availability to new regions. In addition, we have initiated new hires to help optimize and educate our national DSD network. We recently hired Tony Guilfoyle as the EVP of Sales in North America. Tony was formerly with Rockstar Energy, Building their sales organization and leading the growth from initial revenues of $5,000,000 to the multi $1,000,000,000 organization and the buyout through Pepsi. To expedite our growth, we have added over 50 new team members to support our national network and marketing initiatives to drive channel expansion as well as educate and support our partners. We have begun our rollout of Celsius branded coolers. In the Q1 of 2021, we rolled out our first phase of the 1,000 coolers that are currently on order to support our DST partners and key accounts. The initial rollout of the coolers is showing positive ROI with a payback of approximately 3 months and over a 200% increase in velocity rigs. And to this date, we have placed over 200 coolers in key accounts. We have now built out our network to over 150 regional direct store delivery partners. With new partners covering Chicago, San Francisco and many other markets, we estimate that our DSD network now covers approximately 85% of major metropolitan markets in the United States. We further transitioned Target over from wholesale to Big Geyser in New York City during the Q3 and have already seen volumes more than double in those locations. Due to this success, we have further transitioned to about approximately 82% of all targets to DSD as of today and have already begun transitioning CVS, Walmart and others. We anticipate beginning to see these benefits Of our recent announced DSD service retail locations taking place throughout 2021, with the majority of the impact of these transitions and new locations reflected fully in the Q1 of 2021 and then ongoing throughout the transition of the remaining of growing 18,000 doors from the same point in 2018. We expect this number to grow even further in the coming quarters as Retailers execute their planogram resets, which were delayed due to COVID. On our co packing front, Celsius went Live on production with a new dedicated co packer plant in North Carolina. This brings our total U. S. Co packer footprint to 8 locations that are active, which will help protect the future out of stocks and support our massive growth. In Europe, we continue to capture incremental benefits and synergies from the full integration of Folk Food Group, a Nordic wellness company into our operations. The business was immediately accretive to earnings is an important step in our strategy to build a global dynamic brand. As the United States and Europe operations were impacted by COVID and was impacted mainly due to supply constraints with the fast protein snack portfolio, which were partially offset by the growth in Celsius sales in the regions, We continue to see great opportunities and momentum in the market. In Sweden, we launched a great tasting blueberry frost And in Finland, despite shutdowns, we launched a new flavor, Positive Energi and Strotella bar under the Fast brand, which was the number one selling bar in the country. In addition, we are evaluating the UK and working with Amazon Europe to further expand our e commerce opportunities throughout Europe. In China and APAC, recoveries continued and we saw positive sales momentum regained. In China, we maintain a licensing royalty model in the market where our distributor covers 76 cities and now has over 60,000 locations of distribution as of the end of 2020. And in Malaysia, We maintain a direct relationship with the local distributors. We maintain approximately 2,000 retail locations with plans to reenter the gyms, Vitamin Specialty Gyms and other retailers As with Europe and the United States, we see great opportunity to capitalize on the changes in consumer preferences for better for you offerings and we see tremendous opportunities in the enormous market of Asia. Now moving to marketing. On the marketing front, we continue to activate targeting new and existing customers where they live, work and play, building meaningful and emotional connections through robust integrated marketing programs even while consumers are at home. Specifically during the quarter, despite continued COVID restrictions, we sponsored targeted events both in person and in virtual, Fulfilled over thousands of cans in hands in the quarter in key markets that were open, continue to support our first responders. We handed out over 500,000 cans, the nurses, doctors, COVID testing sites, even the firefighters in the California fighting the California fires were handed out cans. In addition, we reactivated our Live Fit tour, which is an integrated experiential sampling tour. We further activated our Sweat with Celsius On Instagram, our live workouts have continued and we further leveraged and built out our brand ambassador program and influencer programs, reaching more consumers in a meaningful way. In addition, we partner with our key accounts, most recently Walmart, where we handed out over 100,000 sticks to college students going back to school. And we kicked off a targeted integrated college brand ambassador program, which targets universities and key markets around the country. Celsius is driving the momentum in the energy category, hitting record North America sales growth in January February of 2021 through tracked Nielsen channels outpacing the category growth. Our brand is resonating with a diverse consumer base, expanding the category demographics and supported by the increased focus on health and wellness, specifically in the energy category, where functional energy is recognized throughout the industry as a driver of future growth and shelf presence with retailers. The Celsius consumer brings significant value to retailers, not just as an expanded age bracket and a 50% female demographic, but our consumers are reoccurring, regularly consuming Celsius as part of a daily lifestyle, further expanding the channel. Our national DSD network is now in place, positioning Celsius to grab further market share on our expediated basis, especially in the convenience channel. The entire team is excited and are confident we are just getting started on the opportunity in front of us. Before turning the call over to Edwin, I also want to add additional color on our ESG environmental, social, governance commitments and initiatives, many which have been ongoing. As we have increased our public visibility, both with consumers and investors, It is paramount that we articulate this dedication. With that, the company is currently in the process of reviewing Best in class reporting standards to ensure all material components of ESG are covered in our initial report. In the interim, The following are some specific items detailing key operational components at Celsius on this commitment. We are committed to sustainability And to the principles to reduce, reuse and recycle, approximately 95% of our products are sold aluminum cans, which are 100% recyclable. In addition, with our 12 ounce cans, we can ship approximately 3 times as many in a standard semi trailer versus 12 ounce glass bottles. Our can suppliers are leading initiatives reducing the amount of aluminum in each can and also increase the amount of recycled aluminum in each can being manufactured. We have initiated a program to reduce the miles on cans through strategic placements of warehouses in conjunction with our co packer locations and end consumer served, as well as focusing on more completed loads of full transit, also reducing the carbon footprint on our transportation. On a social and healthful aspects, Celsius is clinically proven functional energy drink, which sellers metabolism, burns body fat and promotes a healthy active life With our 8 essential vitamins and no sugar, we are a great alternative to sugary energy drinks and encouraging people to live a healthy active lifestyle. Our European team has implemented significant programs in addition to these items listed, including saving over 158 tons of CO2 emissions By utilizing rail on inbound shipments and have also implemented strategies to reduce plastics on packaging. As mentioned, this is just a highlight of some of the key items already at the core of Celsius and we look forward to providing more detailed report reflecting our commitments to our eCSG environmental, social and governance policies. I will now turn the call over to Edwin Negron Cabala, our Chief Financial Officer for his prepared remarks. Edwin? Thank you, John. Our 4th quarter results for the 3 months ended December 31, 2020 Delivered revenue of $35,700,000 an increase of $11,500,000 which translates to a solid 48% growth when compared to $24,100,000 for the same period last year. The increase was primarily due to strong growth in North American sales revenue, which was a record $28,400,000 up a robust 67% From the $17,100,000 in the prior year quarter and accounted for 98% of the increase in total revenue. European revenue for the Q4 of 2020 was $6,900,000 up 2% from the $6,800,000 in the Q4 of 2019. The European business was affected by some stock outs as well as the impact of the pandemic. Agent revenue amounted to $224,000 an increase of 6% from the prior year quarter pertaining to our royalty income from our China licensee. Revenue from all other areas amounted to $117,000 up 266 percent from $32,000 reflecting the expansion or business development into other geographies. Gross profit in Q4 2020 increased by $7,300,000 landing at $17,400,000 which translates to a substantial 74% growth from $10,000,000 for the same quarter in 2019. Gross profit margin for the 3 months ended December 31, 2020 was a very healthy 48.9%, up 700 basis points from 41.9% in the Q4 of 2019. If we then exclude outbound freight, Gross margin profitability would amount to a robust 57.2%, up 7 50 basis points compared to the same normalized figure of 49.7% in the Q4 of 2019. Additionally, we performed an overall estimate or analysis of the $7,300,000 increase, which reflected that approximately $2,500,000 or 35% of this increase pertains to price or cost optimizations. Specifically, this relates to lower promotions or discounting in the quarter and the beneficial impact of the stronger euro currency as well as some synergistic beneficial impacts in the supply chain. We then estimated that approximately $4,800,000 or 65% of the increase is related to favorable volume impact. While we have very good tailwinds in all these areas during the Q4, these results may not be indicative or transferable to the immediate future periods. As there are indications that our margins will come under pressure due to increased costs related to the sourcing of cans, The strengthening of the U. S. Dollar and the increase in fuel costs, which have a direct and high correlation to our freight costs and an indirect impact in the processing costs and the cost of other raw materials. Now turning to operational expenditures. Selling and marketing expenses for the 3 months ended December 31, 2020 were $11,200,000 An increase of $4,200,000 or 59.5 percent from $7,000,000 in the same quarter in 2019. This increase reflects the impact of the consolidation of the operational results of our European business following our October 9, 2019 acquisition. Specifically, our investments in marketing activities amounted to $4,700,000 An increase of $2,300,000 when compared to the prior year quarter. This increase not only reflects the consolidation of the European business, but also a catch up of the experiential marketing activities since these types of events were significantly limited in prior quarters. Additionally, the 2020 quarter reflects increases of $520,000 related to sales and marketing investments For additional employee resources and $1,400,000 of incremental expenses pertaining to trade marketing activities as well as distribution and storage costs. These increases are directly related to the greater business volume as well as include the impact of the European business integration. Additionally, Currency impacts were estimated to increase sales and marketing expenses by $75,000 when compared to the prior year quarter. General and administrative expenses for the 3 months ended December 31, 2020 were $5,700,000 An increase of $1,300,000 or 30 percent from $4,400,000 for the 3 months ended December 31, 2019. This increase also reflects the impact of the consolidation of the operational results of our European business. Furthermore, employee costs increased by $474,000 when compared to the prior year quarter, which also reflects increases in headcount in order to have a good infrastructure to properly support the growing business. The increase also reflects the impact of foreign currency translation in this area, which was estimated at 3% of the total consolidated employee costs. Depreciation and amortization also reflected an increase of $220,000 when compared to the prior year quarter. Additionally, There was a reclassification of amortization expenses of $430,000 which were previously presented In the other expense area during the prior quarters of 2020. Furthermore, stock option expense For the last quarter of 2020, reflected an increase of $144,000 when compared to the prior year quarter. All other administrative expenses resulted in a net decrease of approximately $63,000 as the prior year quarter included acquisition related expenses of approximately $126,000 If we exclude stock option expense as well as depreciation and amortization expenses, operational G and A expenditures Truly represented 8.8 percent of revenue, which compares favorably to 10.8% with the prior year quarter. On a comparable basis, as it also excludes the $126,000 of acquisition costs. Other income and expenses. Total other income amounted to approximately $1,300,000 for the 3 months ended December 31, 2020, which represents an increase of $1,100,000 from other income of $150,000 for the same period in 2019. This increase is mainly related to A favorable impact of net foreign currency exchange gains when compared to the prior year quarter of approximately $330,000 Additionally, the current year quarter reflected incremental net interest income of approximately $160,000 Lower bond amortization costs of $50,000 the favorable impact of the reclass of amortization expenses to the G and A area of $430,000 and a net favorable impact of $140,000 pertaining to all other income and expense components. As a result of all of the above, 4th quarter net income totaled $1,700,000 or $0.02 per basic and diluted shares Based on 71,900,000 basic shares and 76,500,000 fully diluted shares. This compares to a net loss of $1,100,000 available to common stockholders or a loss of $0.02 per basic and diluted shares Based on a weighted average of 68,900,000 shares and 72,600,000 fully diluted shares in the year ago period. Adjusted EBITDA for the Q4 was $3,000,000 an increase of $2,400,000 when compared to $606,000 in the year ago quarter. We believe this information and comparisons of adjusted EBITDA and other non GAAP financial measures Enhance the overall understanding and visibility of our true business performance. To that effect, a reconciliation of our GAAP results to non GAAP Financial figures has been included in our earnings release. Now focusing on some liquidity aspects. As of December 31, 2020, the company had cash of $43,200,000 and working capital of approximately $64,900,000 which translates to an increase of $40,100,000 when compared to 24 point $8,000,000 as of December 31, 2019. Also on October 30, 2020, the company paid off the bonds payable The acquisition of our European business in the amount of approximately $10,000,000 and are now debt free. Furthermore, cash flows provided by operating activities totaled $3,400,000 for the year 2020, representing a $2,400,000 increase from $1,000,000 in 20.19. The increase was primarily driven by operating income adjusted for non cash items. The increase was further driven by efficient management of accounts payable, accrued expenses and other liabilities And partially offset by cash utilization pertaining to increases in accounts receivables, inventories And prepaid expenses, which are directly related to the significant growth in business volume. Now turning to some Additional metrics used to monitor the business. This provides a good perspective of our operational performance using Q4 business volume as a basis for their computations. Our DSOs or daily sales outstanding landed at 37 days as of December 31, 2020. Similarly, our inventory days on hand amounted to 91 days and our payable days were also 37 days. Additionally, operational cash flow for the year amounted to 43% of operational income despite the net increases in working capital, which translated to a use of cash of over $13,000,000 As such, we have very good liquidity in order to plow back into the business and make investments that yield a high ROI and continue to accelerate top line growth. Finally, We have included the full year 2020 financial results in our earnings press release. That concludes our prepared remarks. Operator, you may now open up the call for questions. Thank you. Thank you. We will now be conducting a question and answer A confirmation Our first question comes from the line of Jeff Van Sinderen With B. Riley and Company, please proceed with your question. Good morning, everyone. And let me say congratulations on the continued progress. It appears that the Nielsen data is showing acceleration vis a vis your comments regarding early 2021. Is that correct? And then any thoughts on the Nielsen sell through data versus your actual sell through in Q4. Just wondering if there might be something in terms of sell in versus sell through that didn't quite match some of the sell through data that we're showing on Nielsen. Any thoughts there? Yes, excellent. Thank you, Jeff. Yes, the team did a The team worked really hard. It was just a monumental year when you look at it all around for the company. But you are correct that Nielsen data is extremely strong. What we're seeing, I know the most recent Nielsen data had us somewhere around 80% to 90% growth rate on the 2 week 4 weeks. So That's looking really at the Q1. The results we shown here is the 4th quarter And but there has been some lags on the scan data to the selling on the timing of shipments with the company, Putting up numbers, but we've been pretty consistent on North America growth at a 60%, 60 6% growth rate this most recent quarter in Q4. But we wouldn't really driving that trajectory. So we'll see how we transpire here. That is what's happening at the register and it's great See, we're just as excited as everyone else. Okay. And then could you maybe speak more to some of the resets That are happening that were delayed due to COVID, understand some of those are happening for spring and how you expect that to impact your business heading into the peak summer period? Yes. I mean, when you look at the stores that were added in 2020, it's roughly about 18,000 locations. And as we said, I mean, we're really impacted in 2020 due to the reset delays. So that looks very promising to take place Really over the next several months is what we're hearing, these spring resets. And mainly a lot of them are kind of coming in the convenience channel. That's where we were really hindered in 2020. So we expect a sizable increase in our store count Over the next several months as they get resets and these retailers go back into resetting deployment rates. We haven't disclosed any Key accounts that will be coming on, but we're excited on what we're hearing. We'll let everyone know as soon as they are finally reset, But we're looking to be very optimistic as we sit here today looking at the Nielsen data and then what's the combination of new distribution coming on board in the next several months. Okay, great. And then if I could just squeeze in one more follow-up. Just any more color you could give us on flipping to DSDs In the near term or I could say in the first half, where you aren't fully converted, just to look out there? Yes. We are fully committed to DSD. The transition, when we transition our key accounts over to the preferred DSD model, we're seeing Very much increased velocities, most importantly, keeping Celsius in stock and also getting those secondary and third displays And also most importantly, getting the product cold. So we have started CVS. We further expanded with CVS. I mentioned that earlier in the call. If you recall in Q3, we did convert the New York City metropolitan market over to Big Geyser. And due to the success we've seen there, we've already started to Further transition out other markets around the country. In addition, 711 is a big initiative in 2021, transitioning that volume Over to DSD, we're working with all of our key accounts on this transitional plan. So 711 will be transitioning Right around the May timeframe, starting on the West, and then we'll be bringing it over to the East, really zone by zone as they do the recording. So Excited about that. And we are fully committed to DSD. All the new distribution coming on will be serviced by DSD as well. And did you say 200% increases you were seeing with where you put in the coolers? Was that right? Yes, that is right. We've already placed about 200 coolers. We have over 1,000 coolers on order currently. And we are Our team is doing a great job placing these coolers and strategic accounts, and we're seeing roughly fairly short period of payback Upwards to 3 months and also over a 200% increase in some of these stores. And we do have some stores that are actually returning into the number one selling energy drinks in these locations. So with the right placement and kind of what we see on Amazon with the 3rd largest brand on Amazon giving Celsius the same opportunity and the same shelf presence will turn At the same rate, if not better than the major leading brands. Okay. Thanks and continued success. Thank you very much, Jeff. Thank you. Our next question This comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question. Hi, John and Edwin. How are you? Hello, Joe. Excellent, Jeff. So, now that it's been a year since the Funk acquisition, I was wondering if you had an opportunity Break out any of the growth metrics, which would include that because I know that some of their streams are streams that are direct now And they were previously in your hands. When you look at The year over year, when you look at 2019 to 2020, you're looking at pretty much comparisons on apple to apple basis there. I guess, when you look at Yes. Well, remember, John, at the end of last year, 3 and 4 fully consolidated was only 2 quarters Versus this year where we have 3 quarters. So Jeff, I don't know if that's what you're looking for, but it's a little bit of apples and oranges from that perspective. Yes. I guess when you look at the Q4, Jeff, that's where I was alluding to in regards to looking at fairly close to almost a comp. As we stated on the earlier call, they were impacted by COVID and our fast protein snack portfolio, which is a large Shunk of sales that come out of Finland was impacted due to out of stocks. A lot of the confectionery manufacturers We're operating at limited capacity unfortunately during that time. So we've had some disruptions in supply chain, but we do still feel very optimistic. We're very excited about the opportunity we have in Europe. Same opportunity in North America is in Europe. We expect this to continue to improve As we go through and work through 2021 and get through this pandemic, which seems very promising. Great. Okay. Could you give us any Additional color on how the launch has gone with strawberry guava? And any commentary on The Tagostik portfolio and its growth perhaps for this quarter, if you break it out or you'll break it out? Thank you. Excellent, Jeff. The strawberry guava we launched has been one of the most successful launches in the fitness channel. Although this fitness channel has been closed due to disruptions in given markets, It was one of the fastest turning items in that channel we saw in the Q4. It's a great tasting flavor, also has done extremely well on Amazon With that, and we're looking to further expand the availability there. So if you haven't tried it, go out and try it, it's a great tasting flavor, it is available. When you look at our stick business, our on the go sticks, it is the bulk of our business is cans today. That brings up the largest portion of our revenue, but we are seeing good growth with the Ondigo 6, they're now available at Walmart. We're seeing good rotations on Amazon, Vitamin Shoppe Publix down in the Southeast took the Styxon chain wide, so it's available there, all flavors. And we're getting more interest on those. We're seeing a lot of our core consumers purchasing our On the Go sticks. It's a lot of very versatile, also making some interesting smoothies and It's in combination. So it is a good piece of our business, although the bulk of our business today is the RTD business. Got it. Okay. And then lastly from me is on the margin side, the 4th quarter margins were quite strong or exceptionally strong, I should say. And You seem a little cautious on the pull through, although you've got now 8 active co packer locations. So anything to read into there as far as modeling purposes on how you margins to play out during 2021? Yes. Jeff, there's a lot of variables there. And you're right, we're being somewhat cautious because There's again several aspects that play favorably now even the strength of the euro, which we're seeing that pull back a little bit. We're also seeing increase in costs as it relates to the cans, the sourcing. And again, all these things, For the most part, we're anticipating obviously it's going to have a short term kind of pressure on downwards towards the margins. But the important thing is that we have inventory, especially as it relates to the cans, that kind of thing. And we're looking to do some things also to Manage the impact of the currencies and so forth. But you're absolutely right. I mean, there's a lot of variables there and we're being somewhat cautious as it relates to the immediate Q1, Q2. Got it. Okay. Again, congrats on the quarter. Thanks very much. Thank you. Thank you, Jeff. Our next question comes from the line of Anthony Vendetti with Maxim Group. Please proceed with your question. Thanks. I was just wondering, John, if you could comment a little bit on the International growth, looks like there was a pause this quarter. You mentioned some of the COVID-nineteen Impact, can you speak specifically to which countries you think saw the most impact? And do you think starting here in the Q1, things start to bounce back? Or is it going to be a couple of quarters In terms of growth bouncing back internationally? Yes. Thank you, Anthony. I mean, when you look at the Nordics, they have been impacted. There's talks Currently about Sweden also closing down again. I know Finland as well has been impacted. We're seeing some closures there. Q1 likely will be has the potential to see another impact given some of the constraints and government closures and mandates. But The underlying business is extremely healthy and extremely strong. We have a lot of opportunity there, not only in Sweden, Norway and Finland, but also we're looking at some partnerships in the UK as well as Germany and Russia. So there's some opportunities as we further expand out. But it is we really are sitting at a point where really over the next several quarters, we'll have to see how this evolves. I mean the vaccine is rolling out, so and that's rolling out very quickly. So that should also provide additional confidence with these governments. And No, we're keeping an eye on it, but the underlying financial conditions are improving. Also winter will be breaking as well. So We're excited for that getting to the back into summer beverage season. Keep in mind, historically, their Q4 has been one of their lowest quarters, historically. So It does have a seasonality to the business, and we expect just like any year, we do expect some seasonality within the business. So But we are extremely optimistic. Okay. And then just remind me when did Funk Foods close because It's now going to be apples to apples here in the Q1. Was it partially apples to apples or when did it close in In 2019, was it end of 3rd quarter, 4th quarter? Yes. The actual date was October 25. October 25th? Correct. 2019, October 25th, 2019. So yes, there's And you're right. Going forward, that's one of the things I was making some comments prior. Even now Q4, again, last year was basically 2 months versus this quarter being 3 months. But again, there's a lot of intricacies since last year because of the transaction. We were still not fully operational there, so to speak. They didn't have a lot of inventory. And then at the end of Q4, it really took off. Okay. Yes. No, that's helpful. Thank you, Edwin. And then just in terms of these coolers, You mentioned the strategy this year of rolling those out 200 now, rolling out 1,000 or a little bit more than that. What's the total cost for rolling out a 1,000? Do you expect approximately? Yes. We haven't disclosed that. It is a positive ROI opportunity for us given our high velocity rates. We have 1,000 initially on order right now, and we're looking for some other opportunities with some key accounts we're in discussions with. We have the potential to roll out double that number by really by the end of 20 21. So we're working with some key customers. We're seeing as long as we continue to see a good rate of return on these, we'll continue to get those placed in In key format. So, but we haven't disclosed the cost, but it is we said the payback is roughly about 3 months for us currently. So it is a great investment for us and we'll continue to get these coolers placed and we'll continue to order them and work with our distributors And key accounts. Okay. And then, Speedway, you said 2,700 locations. So you're in all 2,700 as of today. Is that the right number? And is there any more Stanshan there? Yes. We're in approximately 2,700 today with roughly 2 flavors. And we are in the process of getting Potentially, the opportunity to get another some additional flavors listed in the next cut in. So we think Speedway is going to be a great account for us. We've seen the great results at 711 over the years, the continued growth year over year at 711 and in many of our key convenience chains and partners. And if you look at where Speedway's locations are, those are generally really good markets for Celsius. So We think it's going to be a great partnership and we're at just the beginning of Speedway. So definitely look for more flavors there on the Quarters to come and years to come. So, look for a great partnership. And then just in terms of the flavors, John, just Whether it's Target or Walmart, is there when are those resets coming up? Is there do you believe near term Expansion or SKU expansion in those stores? Yes. When you look at the resets that we are anticipating, it is historically, it's been right around March 15 Due to April 15th, it's usually like the spring reset window and the convenience channel can get pushed back due to COVID as well, Maybe runs into March or May. We're working closely with our partners. Everyone's on a little bit of a different schedule on timing This year, usually, as we all know, we have a big event in North America at MAX in October, and then we look forward to those resets coming in spring in the convenience channel. So Everyone's working on a little bit slightly different calendar in 2021, but we do expect these resets to take place over the next several months and you will be seeing additional flavors on shelf. What's interesting on the flavors on shelf, as we spoke about this before, Anthony, is when we add additional flavors, it doesn't cannibalize Sales, it actually increases sales at an increasing rate for the whole portfolio. So it's all incremental to us and that's what we've seen. We look forward to continuing to drive positive momentum. Okay. And then just lastly on the sales and marketing side, other than the Increased expense for coolers. Are there any other programs running, whether it's additional sampling or I know you guys To do the Tough Mudder's sponsor that, but is there any other events coming up, Whether it's the Olympics or anything like that, that you're looking to Put money towards marketing dollars towards to increase the exposure. I know you mentioned the college rollouts and the sampling there. But any other programs? Yes, we have a lot of great things in the work coming this summer. We have some big things planned. We're really excited about that. We got a great summer launch plan, so be on the lookout for that. And we have a variety of things we're working on within our marketing vehicles. I touched A couple of them on the call. We'll keep the we won't disclose too much of what we're doing in regards to tactics, but You will be seeing more of Celsius out there as we continue to increase our household penetration, really building that brand In a meaningful way with consumers. So we have a variety of different vehicles and mediums we will be executing As we really get to the beverage season this year, which we're really excited about, we think we're well positioned, better positioned than any year ever as we enter summer season. Okay, great. All right. I'll hop back in the queue. Thanks, John. Thanks, Edward. Thank you. Excellent. Thank you, Anthony. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you. On behalf of the company, I'd like to thank everyone for their continued interest and support. Our results demonstrates our products are gaining considerable momentum. We are capitalizing on today's global health and wellness trends and transformation taking place in today's energy drink category. Our active healthy lifestyle position is a global position with mass appeal. We're building upon our core and leveraging opportunities and deploying best practices. We have a winning portfolio, strategy and team in a large rapidly growing market that consumers want. Our mission is to take Celsius to more consumers profitably. I'm very proud of our dedicated team as without them this tremendous opportunity would not be possible. In addition, I'd like to thank all of our investors for their continued support and confidence in our team. Thank you everyone for your interest in Celsius. Be safe, stay healthy and have a great day. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.