AGM 2020

Aug 27, 2020

Hello, and welcome to the Annual Meeting of Stockholders of e. L. F. Beauty Inc. Please note that today's meeting is being recorded. During the meeting, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Tarang Amin, Chairman and Chief Executive Officer of e. F. Beauty Inc. Mr. Amin, the floor is yours. Thank you. Good morning, everyone, and welcome to the twenty twenty e. L. F. Beauty Annual Meeting of Stockholders. I'm Tarang Amin, Chairman and Chief Executive Officer. I hope that you're staying safe and well. Joining me from the company by telephone are Scott Milston, our General Counsel and Casey Catton, our VP of Investor Relations. We also have representatives from Deloitte and Touche, our independent auditors. Before we begin, I'd like to say a few remarks about the company. We'll then handle the formal business of the meeting, which is described in our proxy statement and have a short question and answer session. FY 2020 was a terrific year for e. F. Beauty. For the full year, we grew net sales 11%, expanded gross margin 300 basis points and delivered adjusted EBITDA of $63,000,000 while almost doubling our investment in marketing and digital. Of the top five color cosmetics brands in The U. S, we grew the most market share. As a step back, our success in FY 2020 is consistent with the vast majority of our sixteen year history as a company with sales growth in 15 of our sixteen years. The one year that we did not grow, calendar year 2018, made us reexamine our strengths and opportunities. We determined that in order to reach greater growth potential, we needed to refine our strategy. In order to structure that strategic realignment, we dedicated company wide resources to thoroughly assess each activity at e. F. On that assessment, we focused on five strategic imperatives, which combined, we believe would enable e. F. To establish a powerful base business and platform for growth. These five strategic imperatives were anchored in reenergizing the brand, a major step up in digital, our unique innovation capabilities to make prestige quality products accessible, driving national retailer productivity and generating cost savings. We supported these strategic imperatives by enhancing our high performance team with additional brand innovation and digital talent. Six consecutive quarters of sales growth demonstrate the success of these initiatives in reasserting our multiple areas of competitive advantage. Today, e. F. Beauty has a strong operating platform and we're executing effectively against our objectives. I'm especially proud of our talented team that's delivering these results in a highly challenging environment due to COVID-nineteen. The strength of our platform gives us the ability to drive even greater value creation through strategic extensions. We've made a series of investments in our team, infrastructure and capabilities that can be leveraged to grow emerging brands. Today, we have two promising strategic extensions. Our first strategic extension was the acquisition of Well People, a pioneer in clean beauty. Clean is one of the fastest growing segments within beauty as consumers become increasingly conscious of the ingredients in their products. We also recently announced that we're developing a new lifestyle beauty brand with Alicia Keys, 15 time Grammy award winning artist, producer, actress and New York Times bestselling author. When thinking about the overall strategic framework of the company, e. F. Beauty is a parent brand that stands with every eye, lip, face and paw. This deep commitment to inclusive, accessible, cruelty free beauty has fueled the success of our namesake brands since 02/2004. We continue to expand our portfolio with new brands that support our purpose and values. E. L. F. Cosmetics makes the best of beauty accessible to every eye, lip and face. We make high quality prestige inspired cosmetics and skincare products at an extraordinary value and are proud to be 100% vegan and cruelty free. Well People is a clean beauty pioneer, raising the standard for high performance plant powered cruelty free cosmetics since 02/2008. The new lifestyle beauty brand with Alicia Keys will have an inclusive point of view and an authentic voice. It will bring new meaning to beauty with a focus on inner beauty, wellness and connection. I believe that our company is strong and our future is bright. Though the environment around us continues to be challenging, I'm proud of our team and how we're navigating major category headwinds during COVID-nineteen. Our mission to make the best of beauty accessible to every eye, lip and face is more important than ever. I'm so grateful to our team, our partners and the consumers that we serve. With that, I'd now like to officially call the meeting to order. Ginger Lawrence from Computershare will act as Inspector of Election. She has signed an oath promising to execute faithfully the duties of the Inspector of Election. The oath of office will be filed with the minutes of this meeting. The Inspector of Election has determined that a quorum is present and we may proceed with business. We have four proposals to be considered today. Each proposal will be voted on separately. The first proposal is the election of three Class I directors, each to serve for a three year term or until his or her respective successor is duly elected and qualified. The nominees are Kirk Perry, Sabrina Simmons, and Maureen Watson. The second proposal is approval on an advisory basis of the compensation of our named executive officers. The third proposal is indication on an advisory basis of the preferred frequency of the say on pay vote. The fourth proposal is the ratification of the appointment of Deloitte and Tuche as our independent registered public accounting firm for the fiscal year ending 03/31/2021. The polls are now open. Stockholders who have voted by proxy do not need to vote again unless they wish to change their vote. If you have not already voted or you wish to change your vote, please vote electronically using the voting link on the meeting website. I'll give everyone a few moments to vote. The polls are now closed. Scott, can you announce the preliminary results? Yes. Thanks, Tarang. The Inspector of Election has tallied the votes and the preliminary results are each nominee has been elected as a Class I Director to serve for a three year term until his or her respective successor is duly elected and qualified. The compensation of our named executive officers has been approved on an advisory basis. Stockholders have indicated that one year is the preferred frequency of the say on pay vote. And the appointment of Deloitte and Touche as our independent registered public accounting firm for the fiscal year ending 03/31/2021 has been ratified. Remember that these results are preliminary. We will report the final results within four days of the meeting. Thanks Scott. Since there's no more business to attend to, the meeting is now adjourned. We'll now turn to the Q and A session. As a reminder, to limitations of the meeting website, only stockholders that registered for the meeting are permitted to ask questions. Each stockholder will only be permitted one question due to time constraints. If there are any other matters of individual concern to a stockholder, please contact our Investor Relations team. We will try to answer all questions asked that meet these requirements. Due to time constraints or if a question appears to be of individual concern, we may not answer the question during this meeting but we'll try to respond individually. Casey, are there any questions? Thanks, Turing. It appears that there are no questions at this time. I'll turn the meeting back to Tarang for closing remarks. Well, you everyone for joining us today and thank you for your support of e. F. Beauty. We look forward to updating you on our continued progress during our Q2 earnings call in November. Thank you and be well. This concludes the meeting. You may now disconnect.