Compass Diversified Holdings — Call Transcript 2026

As a reminder, this conference call is being recorded, and the press release and slide presentation regarding today's announcement are available on the Investor Relations section of Cody's website. The archive replay can be accessed on the Cody website following the call. I would now like to turn the conference over to your host, Cody Slach of Gateway Group. Cody, you may now begin. Thank you, Operator. Good morning, everyone, and thank you for joining us. On the call with me today is Elias Sabo, CEO of Cody, Ryan Faulkingham, CFO of Cody, Pat Maciariello, COO of Compass Group Management, and from the Cody investment team, Raj Dalal, Rachel Koh, and Phoebe Madsen. During this call, we may make certain forward-looking statements, including statements about the expected closing of the transaction with The Honey Pot Company, expected accretion and financial impact of the transaction, anticipated future performance of both The Honey Pot Company and Cody, and statements with respect to The Honey Pot Company's pronounced ESG efforts. Words such as believes, expects, plans, anticipates, projects, estimates, and future, and conditional verbs such as will, would, should, could, or may, or variations thereof, and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements, and some of these factors are enumerated in our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as in other SEC filings. Except as required by law, Cody undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that said, I will now turn the call over to Cody's CEO, Elias Sabo. Good morning, everyone, and thank you for joining us today. We are excited to announce that Cody has entered into a definitive agreement to partner with the Honeypot Company, a leading, better-for-you feminine care brand. Beatrice Dixon, co-founder, CEO, and Chief Innovation Officer of the Honeypot Company, has done an amazing job building her business into a leading feminine care brand with distinctive category ownership and unique brand positioning. The Honeypot's business fundamentals align with Cody's high standards, and the company has all the attributes we look for in an acquisition. Once the transaction is closed, Honeypot will bolster Cody's group of innovative, high-free cash flow businesses and give us a presence in the personal care sector of the consumer market. Honeypot's strong leadership team, efficacious products, and enthusiastic customer base all provide the business with tremendous growth opportunities ahead. As we have said before, one of Cody's strongest competitive advantages is our lower-weighted average cost of capital, largely anchored by our eight- and 10-year unsecured bonds, which have allowed us to acquire A-plus businesses when many of our competitors are sidelined. Additionally, as announced last month, we received a $75.2 million equity investment from Allspring Global Investments, which has provided us with the opportunity to jump on this acquisition while many of our competitors are out of the market. In fact, for the first time in 18 months, we've started to see exciting opportunities like the Honeypot Company, so we believe the opportunity to sell primary stock to pre-fund the equity need was a very timely opportunity for our company and shareholders. Allspring is a long-term, patient equity owner that believes in our differentiation and competitive advantages, and we are delighted to have them as shareholders. Like many of Cody's prior acquisitions, our partnership approach with management teams and our speed and certainty to close were key differentiators in this process. I'd like to commend Beatrice and her team, along with the Cody team, for their tremendous effort in bringing this partnership together over the last several weeks. Taking a step back, let me introduce you to the Honeypot Company. Historically, the feminine care industry has been surrounded by stigma, dominated by a handful of large, impersonal brands, and ripe for disruption. A decade ago, Honeypot's co-founder and CEO, Beatrice Dixon, faced persistent feminine health issues and struggled to find safe but effective solutions in the market, motivating her to create home remedies in her kitchen. She founded Honeypot with the goal of normalizing holistic wellness by creating healthier, efficacious feminine care products and cultivating an inclusive, trusted community to educate and support one another. Today, Honeypot is a leading, premium feminine care brand providing a complete, cross-category care system of clinically tested formulas containing plant-derived ingredients. Over the last several years, the business has built impressive scale and cultivated a passionate customer base by normalizing the normal through its authentic brand voice and educational content. Moving to slide five, Honeypot offers a wide selection of feminine care essentials across the personal care, menstrual, consumer health, and sexual wellness categories. Consistent with shifts in consumer preferences towards better-for-you products in other CPG segments, many consumers are seeking healthier feminine care products and are choosing Honeypot for their clinically tested formulas containing plant-derived ingredients. Honeypot's broad portfolio sets it apart from other better-for-you brands by providing the first complete feminine care system, encouraging consumers to cross the aisle with the brand. The company is a science-backed innovation leader in the industry and has brought over 60 products to market since inception. Honeypot maintains a quality assurance and compliance process to ensure its products are safe, high-quality, and powered by herbs. Honeypot plans to further solidify its position as consumers' go-to better-for-you personal care brand by selectively entering new categories and strategically expanding their continuum of care with solutions tailored for underserved life stages. Although a digitally native brand, Honeypot has achieved scaled distribution through its retailer-first strategy. Slide six gives you a sense of the rapid growth Honeypot has achieved in the last few years as they expanded their retail footprint, resulting in greater than 50% gross sales CAGR since 2020. In the early years, Beatrice and her co-founder, Simon Gray, bootstrapped their way into small business by working the local trade show circuit. In 2017, they were noticed by Target, who launched their products in over 1,000 doors. Target was an early champion for Honeypot, and the brand's success there helped propel them to the top of the better-for-you list. Since then, Honeypot has become well-established in the mass channel with full distribution on Core SKUs in Target and Walmart. They have expanded into the drug and grocery channels but still have plenty of room to run here and will look to enter the club channel in the future. In addition to retail, Honeypot has tremendous untapped opportunity in the e-commerce segment. The company launched its Amazon storefront in 2023 and is already seeing great traction in that channel. We look forward to supporting Honeypot as they continue to expand their reach and grow their community. As we've said before, Cody aims to identify and acquire true middle-market leaders in their respective industries, and we are confident we have done just that with the Honeypot Company. Honeypot has earned a unique brand position as the innovation leader with a well-established retail footprint in the better-for-you feminine care space. That said, the company has a significant runway to increase its brand awareness and further expand distribution to continue taking share from stagnant legacy brands and accelerate its growth. Honeypot's distinct marketing strategy is underpinned by their dedication to educating the consumer because it helps break down the stigmas that have made feminine wellness historically difficult to discuss. Their bold, honest, and relatable digital content fosters community learning and especially connects with younger millennial and Gen Z consumers who are much less inhibited in discussing personal topics with friends and family and who expect more from brands than prior generations did. Finally, as is core to Cody's strategy, we are partnering with an exceptional and all-women executive team led by Co-founder and CEO Beatrice Dixon. Honeypot's leadership is passionate about the company's mission to promote holistic wellness, and we are excited to support them in the company's next stage of growth. Turning to slide eight, we believe Honeypot's addressable market is valued at greater than $17 billion, which comprises the personal care categories in which Honeypot operates today. Although the company has earned a loyal community of customers and established itself as the fifth-largest feminine care brand at retail, Honeypot's brand awareness and household penetration significantly trail those of legacy players. The coupling of low awareness with high retention and preference among consumers who have tried Honeypot's products highlights the significant opportunity for accelerated growth that could be achieved with strategic increases in marketing efforts. Furthermore, we expect Honeypot to continue taking share as the only feminine care brand with a demonstrated ability to win in multiple feminine care categories, encouraging customers to develop a full personal care regimen with the brand. Lastly, Honeypot's unique brand voice and focus on consumer education authentically speak to younger generations. As older consumers continue to age out of the category, we believe the company will welcome these consumers into its community at a higher rate than legacy competitors, significantly growing its share of category and propelling faster than market growth. Moving on to page nine, we are excited by the strong financial and operational results the Honeypot team has delivered today. Honeypot's estimated gross sales for the trailing 12 months ended December 23rd, 2023, exceeded $121 million with approximately $29 million of adjusted EBITDA. Since 2020, the Honeypot Company has achieved an impressive gross sales CAGR of approximately 54%. Many of the Honeypot's products are highly consumable and non-discretionary in nature, providing a steady, recurring base of earnings that the company continues to grow as they expand their community. Still more impressive has been the company's ability to grow profitably. The Honeypot benefits from an outsourced manufacturing model, leading to low CapEx spend of roughly 2% of net sales or less per year. Honeypot's free cash flow profile is further bolstered by its tax assets and minimum working capital needs. In the last few years, Honeypot has made significant infrastructure investments in talent and operations, and we expect the company will continue to benefit from operating leverage as they scale further. As far as the terms of the transaction, on slide 10, you can see that Cody has agreed to acquire the Honeypot Company for an enterprise value of $380 million, excluding working capital and certain other adjustments. Honeypot's management team is rolling over significant equity and will remain meaningful owners of the business post-close. We are also pleased that Beatrice Dixon, Co-founder and CEO, and the rest of her team will continue to lead Honeypot in partnership with Cody. We expect to fund the purchase price entirely with cash on hand and anticipate closing the transaction in February. The total outstanding indebtedness after we close the transaction will be approximately $1.7 billion and our full $600 million revolver availability. We truly admire the Honeypot team for the incredible success they have achieved so far and look forward to supporting the company in carrying out its mission to promote holistic wellness for all. This partnership is a testament to the significant competitive advantages Cody possesses. Given our lower cost of capital and the recent investment from Allspring, we were able to act swiftly in this transaction without financing contingencies and with more surety to close. We are excited for this next chapter and believe we are poised for a strong 2024. With that, thank you for attending today and will now take your questions. Operator, please open up the lines. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please for your first question. Your first question comes from Chris Kennedy with William Blair. Please go ahead. Yeah, good morning. Thanks for taking the questions. Can you give an update on the leverage after the Allspring deal, after the sale of Marucci on a pro forma basis for this deal? Thank you. Yeah, hi, Chris. It's Ryan. So, plan tomorrow would be to give you a little color on leverage on our investor day. Certainly, as you mentioned, we had the Marucci sale in the fourth quarter. We had the Allspring investment in the fourth quarter. We're able to fund this with cash. So, I think we'll give you a snapshot of fourth quarter leverage expectations tomorrow. So, hate to be coy right now, but that's probably a better venue to have that discussion. Understood. And then a quick follow-up. You talked about the penetration within households. Can you talk about the brand awareness of this asset? Thank you. Sure. This is Raj Dalal speaking. So we've done extensive consumer surveys, and this brand continues to be, given its kind of recency in the consumer market, we estimate levels in the high 20s of awareness aided versus most of its legacy competitors are 40-50 basis points higher. So there's significant awareness gains that we think we can drive through continued marketing support. Great. Thanks for taking the questions. Look forward to tomorrow. Thank you, Chris. Your next question comes from Matt Koranda with Roth MKM. Please go ahead. Hey, guys. Good morning. So just wanted to maybe hear you unpack some of the growth levers you think you have at your disposal, both near-term and long-term. Sounds like you alluded to more points of distribution or a possibility in maybe the near term, but what about new products? And then just it sounds also like maybe your balance sheet would bring the capability to lean into marketing a bit more to build on that aided awareness. Maybe just speak to sort of some of those growth levers you have at your disposal, especially now with Cody's balance sheet sort of behind Honeypot here. Yeah. So we see a 4.5% household penetration. So there's lots of large, massive kind of white space opportunities, both from a white space distribution, as Elias mentioned. They're just recently entering into the drug channels and the grocery channels and are pretty nascent online. And so there's significant white space distribution. But the company has been very much a leader from a product innovation standpoint and new product development and their proven ability to cross the aisle and not just play in one single category like menstrual, but being in wellness, menstrual, sexual health. We think that there's significant opportunity to continue to innovate and bring disruptive markets into the product portfolio. So lots of white space, lots of levers. I would just add the company's purely domestic at this point as well. And a lot of these brands we've found can extend overseas. Okay. Helpful. And then just maybe could you speak to the mix of revenue? I guess it was unclear on sort of how much is coming from retail versus online for the brand. And maybe within retail, just any rough idea of exposure to sort of the mass retailers. It looks like probably a decent amount to Target, Walmart, whatnot. But any color on sort of how that breaks down would be helpful. Yeah. So it is definitely a retail-first brand. It's, I would say, more than 90% through the retail channels. Its own online platform is more of a customer education tool. So they sell online through their retail partners and Amazon. So it's predominantly retail. Within retail, they have pretty strong distribution over 33,000 doors just in the U.S. And that kind of covers the two large mass retailers, Target and Walmart, who are significant customers and significant sellers for personal care needs in general, right? As well as kind of strong distribution in CVS and Walgreens. Those are the two. Those are the kind of the four main retail partners. Okay. Super helpful. And then maybe just last one. Is there a margin improvement play here? I mean, it looks like mid-20% sort of EBITDA margin looks pretty healthy, especially accretive to the overall Cody sort of profile. But I'm curious, sort of, what more mature feminine hygiene companies might look like in terms of margin profile, what this could look like over a longer period of time, maybe at better scale. Just any color on your thinking in terms of the margins. Yeah. So the company has obviously had very robust growth and has scaled pretty rapidly. In the process of that, they've kind of elevated and upgraded their manufacturing partners. But we think as they continue to scale, they should have better buying power as a whole. And then from an operating leverage standpoint, they've done a great job investing in infrastructure ahead of growth. And so we should see kind of continued flow through to profitability. Yeah. And Matt, I would just kind of add here that this is a relatively young company. \=By when it was founded, household penetration, no matter how you look at it, it's a youthful company. And so on the one hand, you'd clearly expect as we get more buying leverage, margins can improve. There's operating leverage that you can get on kind of fixed investments and overhead. But I think the real play here is to dramatically expand its audience and to increase its marketing and its awareness. So I would caution anyone against thinking that there's margin accretion coming. I would say, as you've seen us do in the past, our goal is to figure out where the best point of attack resources can be deployed and to direct them for high return on invested capital. In this case, it's broadening the brand awareness. And so I think any improvements that can be gained by scale leverage are probably going to be offset and maybe even more than offset by marketing investment. But that's marketing investment that should drive dramatic kind of returns because they're at such a low base, because the products are superior and disruptive to what has really been a stale legacy industry. And what Raj and I had talked about earlier, which is if you think about it, this is a product lifecycle that has a finite amount of time with a person. And so you're going to age out at some point. And this brand really indexes towards kind of the youth who are looking for better-for-you products, less price-sensitive. And so this brand is right where you want it to be. We know there's going to be aging out that are part of the legacy products. And then people coming in are looking for brands like this. So this has all the hallmarks of a company that high Net Promoter Score, great brand loyalty, disruptive products, but with low household penetration. That has all the benefits and the right attributes of what we look for to put marketing dollars against and really expand sort of revenue growth and scale in that way. So I know not 100% what you were asking, but I would say we are looking for opportunities to really kind of promote this brand. And we think its existing portfolio and positioning allows it to really gobble up a lot of market share as we direct more resources in that manner. Perfect. Not what I was asking, but very much what I was looking for for the perspective. So thank you for that, Elias. I'll jump back into you guys. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question is from Matthew Howlett with B. Riley. Please go ahead. Oh, hey, Elias. Hey, Ryan. Thanks for taking the question. Hey, look, anything unique and congrats on the deal. The first question is, anything unique in terms of the structuring or the earn-out with management, the incentives with management? Can you go over anything there that might be different than or unique relative to your other structures of your other portfolio companies? I would say there's nothing, Matt, that is overly unique. It's sort of right down the middle, the fairway of what we would normally have. We have obviously minority shareholders and the two co-founders who are rolling over and the CEO, Beatrice Dixon, who's going to become an equity owner alongside us. But that's typical in virtually all the deals that we do. There's no earn-out here. Kind of straight down the middle of the fairway. Great. And then I'll just add a quick we are implementing a very broad-based option program where we think employee ownership is pretty important. And so we're making the option program available to the entire employee base. Right. And they have standard incentives and things like that in place, right, for management, things of that nature. Correct. There's nothing untraditional here. Right. Okay. Great. And then I guess just a little bit of a background on how this came about. I mean, I think we're all kind of waiting for a deal in healthcare. And I'm sure that's coming. But this seemed like an opportunistic deal that came about. A little bit of a background, how you were introduced and what made this so compelling. Elias, you mentioned, I mean, the M&A market's been slowing. You guys have the ability to pounce when you see a deal come your way, especially something that's attractive. Just a little background on what came about and maybe an update on healthcare while we're waiting. Sure, Matt. I'm going to give a sort of broader view. Then I'm going to ask Raj to talk specifically about how the deal came about and how we were able to really use our advantages to be able to close on the transaction or announce the transaction. First, I think if you think about sort of healthcare, ultimately, when we're thinking about healthcare, one of the things that we talk about is being in a different market, giving us greater diversity, the staple sort of nature of the consumable product, right? In most cases, we're talking about outsourced services. So what we're looking for is some level of predictability. This is sort of a company that almost fits somewhere between our healthcare and our consumer business. It's clearly a consumer products company, but it's got a little bit of a different bent to it, because it's a staple product, it gives us a lot of that. If you think about sort of kind of just a foundational level of profitability that we can then grow and invest off of, this company, like a lot of healthcare businesses, has more of an annuity-like component to its base cash flow, so I would say there's some level of similarity there. Now, at the end of the day, we do healthcare vertical. We are looking to populate that with new investment opportunities. But that doesn't prevent us, nor will it ever prevent us from finding good opportunities in other verticals that we're in and chasing those down. And we're not reserving capital in any way for a future deal that may or may not come. When we see great opportunities, we pounce. And before I turn it over to Raj, I think this is a really unique and great opportunity, Matt. I mean, historically, these types of companies in the wellness category have not traded for kind of 13 times EBITDA multiples. They've traded for multiples that are high teens to 20s and sometimes even high 20s. If you're on trend like this company is with better-for-you products where the customer base is changing just by its own nature to more favor our products, this is a company that I think in different market conditions could have traded at a 50%-100% multiple premium to what we paid. I mean, if you just look over history at where wellness brands have traded at, it's not at multiples like this. So this is a function of the fact that the market is incredibly weak, especially for consumer products companies today. Being a buyer with capital and a balance sheet and not subject to the whims of the debt markets for single asset financing, our competitive advantage in this sector, and I would say even more broadly, is greater than it's ever been from a weighted average cost of capital standpoint, from a speed and certainty to close standpoint. I mean, frankly, it reminds us more of competing in 2020 when we bought BOA and Marucci. That's kind of a competitive dynamic we find ourselves in today. And so this is an extraordinary time for us to be able to put money to work. And whether it's healthcare, whether it's industrial, whether it's a CPG company like this is, honestly, we're a little bit agnostic if the deal is good enough. And I can tell you now, I don't have a crystal ball. I can't tell you this is going to be a home run company for us and we're going to smash it out of the park. We believe we will. I can tell you that the dynamics in terms of characteristics of this company, positioning, and deal terms make this a company that has a huge opportunity to create shareholder value for our shareholders. And that's sort of what we're constantly out there looking for. So that was kind of what I would just say broadly about our capital allocation and thinking about a business like this. But Raj, maybe you can give some specifics on kind of how we chase this down and we're able to secure this company. Yeah, happy to. So it was a process run by Perella Weinberg, but they ran a very limited outreach process, mostly earmarked towards sponsors. I think how we fit into that, they were really looking for a growth-oriented firm with experience in consumer. And I think cultural fit was kind of first and foremost for who the founders wanted to work with. And I think our team really resonated from that last standpoint. And so it was, I would say we participated in a very limited process, but quickly fostered really great connections with management. And at the end of the day, management were the decision makers and we prevailed. So very happy to it's a highly competitive market with a lot of our competitive peers. And I think we rose to the occasion. Yeah. And Matt, just one thing to point here. I mean, a big part of when Bea founded this business, obviously, it was based on her own personal health and wellness. But she has an incredible passion. And her passion, as we've talked about, is to destigmatize even discussing this, to educate, and to provide great products. We say this a lot, and we'll talk about this at our investor day tomorrow. But as we contrast with kind of the competitors that we're normally in market against with private equity, if your goal is to really build a much bigger business that has these social benefits associated with it around education and destigmatization and better products that are creating more health, look, you're not going to do that in a two, three, four-year fund. I mean, it's the problem with private equity. It's been the problem forever. Private equity has been enabled by the fact that the Federal Reserve had lowered interest rates for 20 straight years, and they traded kind of assets. Contrast what we are. We're somebody who buys businesses and builds those for the long term. Now, we occasionally divest if there's a great offer. But that aligns with the mission of what this company wants to do. This company wants to reach a broader audience. It wants to destigmatize discussion around the category. You're not going to do that in a two, three, or four-year fund. And so when you look at the platform we have and you look at what we can sell to management teams and entrepreneurs in terms of how we're going to partner and build your business and the legacy that you've built so far is going to be expanded under our ownership, it's where we have huge competitive differentiation. And we don't need to be the highest price when our cultural values and our operating model aligns as well as it does with our target companies, like in this instance here with The Honeypot. Yeah. I was going to say, you guys, your competitive advantage really showed up here. It looks like you got a great price for these types of companies that go at, like you said, huge multiples you've seen in the past. I guess the final question, I guess it goes without saying, Elias, you typically don't own something in your portfolio that you want to see it get to $100 million of EBITDA. I know we're at $29 million. This is clearly something that you can hold for a while and get up to that 100-plus million of EBITDA over your holding timeframe. No question. I mean, you saw the total TAM here is $17 billion. Now, that's a number that's a little hard to wrap your mind around, obviously, and we're $120 million of sales of that. So if you think about total TAM across all the categories that the company's currently playing in, it's sub 1%. Now, we could look at the SAM, the serviceable addressable market, is probably a little bit smaller than that, but nonetheless, Matt, this is a huge TAM, and it's a disruptive business, and as we're able to bring our resources to help this company continue to execute its strategy, I think getting to $100 million plus EBITDA is well within the purview of what this company has in front of it, and as you know, we match the duration of the opportunity to the duration of our capital. So if that takes five years to get to, or if it takes seven years to get to, or three years to get to, our capital is available for kind of that opportunity. And we see a pathway to get to kind of triple digits EBITDA under our ownership. Really terrific. Thanks a lot. We'll look forward to tomorrow. Thank you, Matt. There are no further questions at this time. I will now turn the call over to Elias for final remarks. Thank you all. We look forward to seeing you tomorrow at our investor day. And we are incredibly enthusiastic to be announcing this partnership today. Thank you. Have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Speaker 6: As a reminder, this conference call is being recorded, and the press release and slide presentation regarding today's announcement are available on the Investor Relations section of Cody's website. The archive replay can be accessed on the Cody website following the call. I would now like to turn the conference over to your host, Cody Slach of Gateway Group. Cody, you may now begin. As a reminder, this conference call is being recorded, and the press release and slide presentation regarding today's announcement are available on the Investor Relations section of Cody's website. as a reminder this conference call is being recorded and the press release and slide presentation regarding today's announcement are available on the investor relations section of cody's website The archive replay can be accessed on the Cody website following the call. the archive replay can be accessed on the cody website following the call I would now like to turn the conference over to your host, Cody Slach of Gateway Group. i would now like to turn the conference over to your host cody slach of gateway group Cody, you may now begin. cody you may now begin

Speaker 3: Thank you, Operator. Good morning, everyone, and thank you for joining us. On the call with me today is Elias Sabo, CEO of Cody, Ryan Faulkingham, CFO of Cody, Pat Maciariello, COO of Compass Group Management, and from the Cody investment team, Raj Dalal, Rachel Koh, and Phoebe Madsen. During this call, we may make certain forward-looking statements, including statements about the expected closing of the transaction with The Honey Pot Company, expected accretion and financial impact of the transaction, anticipated future performance of both The Honey Pot Company and Cody, and statements with respect to The Honey Pot Company's pronounced ESG efforts. Words such as believes, expects, plans, anticipates, projects, estimates, and future, and conditional verbs such as will, would, should, could, or may, or variations thereof, and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Thank you, Operator. thank you operator Good morning, everyone, and thank you for joining us. good morning everyone and thank you for joining us On the call with me today is Elias Sabo, CEO of Cody, Ryan Faulkingham, CFO of Cody, Pat Maciariello, COO of Compass Group Management, and from the Cody investment team, Raj Dalal, Rachel Koh, and Phoebe Madsen. on the call with me today is elias sabo ceo of cody ryan faulkingham cfo of cody pat maciariello coo of compass group management and from the cody investment team raj dalal rachel koh and phoebe madsen During this call, we may make certain forward-looking statements, including statements about the expected closing of the transaction with The Honey Pot Company, expected accretion and financial impact of the transaction, anticipated future performance of both The Honey Pot Company and Cody, and statements with respect to The Honey Pot Company's pronounced ESG efforts. during this call we may make certain forward-looking statements including statements about the expected closing of the transaction with the honey pot company expected accretion and financial impact of the transaction anticipated future performance of both the honey pot company and cody and statements with respect to the honey pot company's pronounced esg efforts Words such as believes, expects, plans, anticipates, projects, estimates, and future, and conditional verbs such as will, would, should, could, or may, or variations thereof, and similar expressions are intended to identify forward-looking statements. words such as believes expects plans anticipates projects estimates and future and conditional verbs such as will would should could or may or variations thereof and similar expressions are intended to identify forward-looking statements These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. these forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions Certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements, and some of these factors are enumerated in our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as in other SEC filings. Except as required by law, Cody undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that said, I will now turn the call over to Cody's CEO, Elias Sabo. Certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements, and some of these factors are enumerated in our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as in other SEC filings. certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements and some of these factors are enumerated in our annual reports on form 10-k quarterly reports on form 10-q and current reports on form 8-k as well as in other sec filings Except as required by law, Cody undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. except as required by law cody undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information future events or otherwise With that said, I will now turn the call over to Cody's CEO, Elias Sabo. with that said i will now turn the call over to cody's ceo elias sabo

Speaker 8: Good morning, everyone, and thank you for joining us today. We are excited to announce that Cody has entered into a definitive agreement to partner with the Honeypot Company, a leading, better-for-you feminine care brand. Beatrice Dixon, co-founder, CEO, and Chief Innovation Officer of the Honeypot Company, has done an amazing job building her business into a leading feminine care brand with distinctive category ownership and unique brand positioning. The Honeypot's business fundamentals align with Cody's high standards, and the company has all the attributes we look for in an acquisition. Once the transaction is closed, Honeypot will bolster Cody's group of innovative, high-free cash flow businesses and give us a presence in the personal care sector of the consumer market. Honeypot's strong leadership team, efficacious products, and enthusiastic customer base all provide the business with tremendous growth opportunities ahead. Good morning, everyone, and thank you for joining us today. good morning everyone and thank you for joining us today We are excited to announce that Cody has entered into a definitive agreement to partner with the Honeypot Company, a leading, better-for-you feminine care brand. we are excited to announce that cody has entered into a definitive agreement to partner with the honeypot company a leading better-for-you feminine care brand Beatrice Dixon, co-founder, CEO, and Chief Innovation Officer of the Honeypot Company, has done an amazing job building her business into a leading feminine care brand with distinctive category ownership and unique brand positioning. beatrice dixon co-founder ceo and chief innovation officer of the honeypot company has done an amazing job building her business into a leading feminine care brand with distinctive category ownership and unique brand positioning The Honeypot's business fundamentals align with Cody's high standards, and the company has all the attributes we look for in an acquisition. the honeypot's business fundamentals align with cody's high standards and the company has all the attributes we look for in an acquisition Once the transaction is closed, Honeypot will bolster Cody's group of innovative, high-free cash flow businesses and give us a presence in the personal care sector of the consumer market. once the transaction is closed honeypot will bolster cody's group of innovative high-free cash flow businesses and give us a presence in the personal care sector of the consumer market Honeypot's strong leadership team, efficacious products, and enthusiastic customer base all provide the business with tremendous growth opportunities ahead. honeypot's strong leadership team efficacious products and enthusiastic customer base all provide the business with tremendous growth opportunities ahead As we have said before, one of Cody's strongest competitive advantages is our lower-weighted average cost of capital, largely anchored by our eight- and 10-year unsecured bonds, which have allowed us to acquire A-plus businesses when many of our competitors are sidelined. Additionally, as announced last month, we received a $75.2 million equity investment from Allspring Global Investments, which has provided us with the opportunity to jump on this acquisition while many of our competitors are out of the market. In fact, for the first time in 18 months, we've started to see exciting opportunities like the Honeypot Company, so we believe the opportunity to sell primary stock to pre-fund the equity need was a very timely opportunity for our company and shareholders. Allspring is a long-term, patient equity owner that believes in our differentiation and competitive advantages, and we are delighted to have them as shareholders. As we have said before, one of Cody's strongest competitive advantages is our lower-weighted average cost of capital, largely anchored by our eight- and 10-year unsecured bonds, which have allowed us to acquire A-plus businesses when many of our competitors are sidelined. as we have said before one of cody's strongest competitive advantages is our lower-weighted average cost of capital largely anchored by our eight- and 10-year unsecured bonds which have allowed us to acquire a-plus businesses when many of our competitors are sidelined Additionally, as announced last month, we received a $75.2 million equity investment from Allspring Global Investments, which has provided us with the opportunity to jump on this acquisition while many of our competitors are out of the market. additionally as announced last month we received a $75.2 million equity investment from allspring global investments which has provided us with the opportunity to jump on this acquisition while many of our competitors are out of the market In fact, for the first time in 18 months, we've started to see exciting opportunities like the Honeypot Company, so we believe the opportunity to sell primary stock to pre-fund the equity need was a very timely opportunity for our company and shareholders. in fact for the first time in 18 months we've started to see exciting opportunities like the honeypot company so we believe the opportunity to sell primary stock to pre-fund the equity need was a very timely opportunity for our company and shareholders Allspring is a long-term, patient equity owner that believes in our differentiation and competitive advantages, and we are delighted to have them as shareholders. allspring is a long-term patient equity owner that believes in our differentiation and competitive advantages and we are delighted to have them as shareholders Like many of Cody's prior acquisitions, our partnership approach with management teams and our speed and certainty to close were key differentiators in this process. I'd like to commend Beatrice and her team, along with the Cody team, for their tremendous effort in bringing this partnership together over the last several weeks. Taking a step back, let me introduce you to the Honeypot Company. Historically, the feminine care industry has been surrounded by stigma, dominated by a handful of large, impersonal brands, and ripe for disruption. A decade ago, Honeypot's co-founder and CEO, Beatrice Dixon, faced persistent feminine health issues and struggled to find safe but effective solutions in the market, motivating her to create home remedies in her kitchen. She founded Honeypot with the goal of normalizing holistic wellness by creating healthier, efficacious feminine care products and cultivating an inclusive, trusted community to educate and support one another. Like many of Cody's prior acquisitions, our partnership approach with management teams and our speed and certainty to close were key differentiators in this process. like many of cody's prior acquisitions our partnership approach with management teams and our speed and certainty to close were key differentiators in this process I'd like to commend Beatrice and her team, along with the Cody team, for their tremendous effort in bringing this partnership together over the last several weeks. i'd like to commend beatrice and her team along with the cody team for their tremendous effort in bringing this partnership together over the last several weeks Taking a step back, let me introduce you to the Honeypot Company. taking a step back let me introduce you to the honeypot company Historically, the feminine care industry has been surrounded by stigma, dominated by a handful of large, impersonal brands, and ripe for disruption. historically the feminine care industry has been surrounded by stigma dominated by a handful of large impersonal brands and ripe for disruption A decade ago, Honeypot's co-founder and CEO, Beatrice Dixon, faced persistent feminine health issues and struggled to find safe but effective solutions in the market, motivating her to create home remedies in her kitchen. a decade ago honeypot's co-founder and ceo beatrice dixon faced persistent feminine health issues and struggled to find safe but effective solutions in the market motivating her to create home remedies in her kitchen She founded Honeypot with the goal of normalizing holistic wellness by creating healthier, efficacious feminine care products and cultivating an inclusive, trusted community to educate and support one another. she founded honeypot with the goal of normalizing holistic wellness by creating healthier efficacious feminine care products and cultivating an inclusive trusted community to educate and support one another Today, Honeypot is a leading, premium feminine care brand providing a complete, cross-category care system of clinically tested formulas containing plant-derived ingredients. Over the last several years, the business has built impressive scale and cultivated a passionate customer base by normalizing the normal through its authentic brand voice and educational content. Moving to slide five, Honeypot offers a wide selection of feminine care essentials across the personal care, menstrual, consumer health, and sexual wellness categories. Consistent with shifts in consumer preferences towards better-for-you products in other CPG segments, many consumers are seeking healthier feminine care products and are choosing Honeypot for their clinically tested formulas containing plant-derived ingredients. Honeypot's broad portfolio sets it apart from other better-for-you brands by providing the first complete feminine care system, encouraging consumers to cross the aisle with the brand. Today, Honeypot is a leading, premium feminine care brand providing a complete, cross-category care system of clinically tested formulas containing plant-derived ingredients. today honeypot is a leading premium feminine care brand providing a complete cross-category care system of clinically tested formulas containing plant-derived ingredients Over the last several years, the business has built impressive scale and cultivated a passionate customer base by normalizing the normal through its authentic brand voice and educational content. over the last several years the business has built impressive scale and cultivated a passionate customer base by normalizing the normal through its authentic brand voice and educational content Moving to slide five, Honeypot offers a wide selection of feminine care essentials across the personal care, menstrual, consumer health, and sexual wellness categories. moving to slide five honeypot offers a wide selection of feminine care essentials across the personal care menstrual consumer health and sexual wellness categories Consistent with shifts in consumer preferences towards better-for-you products in other CPG segments, many consumers are seeking healthier feminine care products and are choosing Honeypot for their clinically tested formulas containing plant-derived ingredients. consistent with shifts in consumer preferences towards better-for-you products in other cpg segments many consumers are seeking healthier feminine care products and are choosing honeypot for their clinically tested formulas containing plant-derived ingredients Honeypot's broad portfolio sets it apart from other better-for-you brands by providing the first complete feminine care system, encouraging consumers to cross the aisle with the brand. honeypot's broad portfolio sets it apart from other better-for-you brands by providing the first complete feminine care system encouraging consumers to cross the aisle with the brand The company is a science-backed innovation leader in the industry and has brought over 60 products to market since inception. Honeypot maintains a quality assurance and compliance process to ensure its products are safe, high-quality, and powered by herbs. Honeypot plans to further solidify its position as consumers' go-to better-for-you personal care brand by selectively entering new categories and strategically expanding their continuum of care with solutions tailored for underserved life stages. Although a digitally native brand, Honeypot has achieved scaled distribution through its retailer-first strategy. Slide six gives you a sense of the rapid growth Honeypot has achieved in the last few years as they expanded their retail footprint, resulting in greater than 50% gross sales CAGR since 2020. In the early years, Beatrice and her co-founder, Simon Gray, bootstrapped their way into small business by working the local trade show circuit. The company is a science-backed innovation leader in the industry and has brought over 60 products to market since inception. the company is a science-backed innovation leader in the industry and has brought over 60 products to market since inception Honeypot maintains a quality assurance and compliance process to ensure its products are safe, high-quality, and powered by herbs. honeypot maintains a quality assurance and compliance process to ensure its products are safe high-quality and powered by herbs Honeypot plans to further solidify its position as consumers' go-to better-for-you personal care brand by selectively entering new categories and strategically expanding their continuum of care with solutions tailored for underserved life stages. honeypot plans to further solidify its position as consumers' go-to better-for-you personal care brand by selectively entering new categories and strategically expanding their continuum of care with solutions tailored for underserved life stages Although a digitally native brand, Honeypot has achieved scaled distribution through its retailer-first strategy. although a digitally native brand honeypot has achieved scaled distribution through its retailer-first strategy Slide six gives you a sense of the rapid growth Honeypot has achieved in the last few years as they expanded their retail footprint, resulting in greater than 50% gross sales CAGR since 2020. slide six gives you a sense of the rapid growth honeypot has achieved in the last few years as they expanded their retail footprint resulting in greater than 50% gross sales cagr since 2020 In the early years, Beatrice and her co-founder, Simon Gray, bootstrapped their way into small business by working the local trade show circuit. in the early years beatrice and her co-founder simon gray bootstrapped their way into small business by working the local trade show circuit In 2017, they were noticed by Target, who launched their products in over 1,000 doors. Target was an early champion for Honeypot, and the brand's success there helped propel them to the top of the better-for-you list. Since then, Honeypot has become well-established in the mass channel with full distribution on Core SKUs in Target and Walmart. They have expanded into the drug and grocery channels but still have plenty of room to run here and will look to enter the club channel in the future. In addition to retail, Honeypot has tremendous untapped opportunity in the e-commerce segment. The company launched its Amazon storefront in 2023 and is already seeing great traction in that channel. We look forward to supporting Honeypot as they continue to expand their reach and grow their community. In 2017, they were noticed by Target, who launched their products in over 1,000 doors. in 2017 they were noticed by target who launched their products in over 1,000 doors Target was an early champion for Honeypot, and the brand's success there helped propel them to the top of the better-for-you list. target was an early champion for honeypot and the brand's success there helped propel them to the top of the better-for-you list Since then, Honeypot has become well-established in the mass channel with full distribution on Core SKUs in Target and Walmart. since then honeypot has become well-established in the mass channel with full distribution on core skus in target and walmart They have expanded into the drug and grocery channels but still have plenty of room to run here and will look to enter the club channel in the future. they have expanded into the drug and grocery channels but still have plenty of room to run here and will look to enter the club channel in the future In addition to retail, Honeypot has tremendous untapped opportunity in the e-commerce segment. in addition to retail honeypot has tremendous untapped opportunity in the e-commerce segment The company launched its Amazon storefront in 2023 and is already seeing great traction in that channel. the company launched its amazon storefront in 2023 and is already seeing great traction in that channel We look forward to supporting Honeypot as they continue to expand their reach and grow their community. we look forward to supporting honeypot as they continue to expand their reach and grow their community As we've said before, Cody aims to identify and acquire true middle-market leaders in their respective industries, and we are confident we have done just that with the Honeypot Company. Honeypot has earned a unique brand position as the innovation leader with a well-established retail footprint in the better-for-you feminine care space. That said, the company has a significant runway to increase its brand awareness and further expand distribution to continue taking share from stagnant legacy brands and accelerate its growth. Honeypot's distinct marketing strategy is underpinned by their dedication to educating the consumer because it helps break down the stigmas that have made feminine wellness historically difficult to discuss. As we've said before, Cody aims to identify and acquire true middle-market leaders in their respective industries, and we are confident we have done just that with the Honeypot Company. as we've said before cody aims to identify and acquire true middle-market leaders in their respective industries and we are confident we have done just that with the honeypot company Honeypot has earned a unique brand position as the innovation leader with a well-established retail footprint in the better-for-you feminine care space. honeypot has earned a unique brand position as the innovation leader with a well-established retail footprint in the better-for-you feminine care space That said, the company has a significant runway to increase its brand awareness and further expand distribution to continue taking share from stagnant legacy brands and accelerate its growth. that said the company has a significant runway to increase its brand awareness and further expand distribution to continue taking share from stagnant legacy brands and accelerate its growth Honeypot's distinct marketing strategy is underpinned by their dedication to educating the consumer because it helps break down the stigmas that have made feminine wellness historically difficult to discuss. honeypot's distinct marketing strategy is underpinned by their dedication to educating the consumer because it helps break down the stigmas that have made feminine wellness historically difficult to discuss Their bold, honest, and relatable digital content fosters community learning and especially connects with younger millennial and Gen Z consumers who are much less inhibited in discussing personal topics with friends and family and who expect more from brands than prior generations did. Finally, as is core to Cody's strategy, we are partnering with an exceptional and all-women executive team led by Co-founder and CEO Beatrice Dixon. Honeypot's leadership is passionate about the company's mission to promote holistic wellness, and we are excited to support them in the company's next stage of growth. Turning to slide eight, we believe Honeypot's addressable market is valued at greater than $17 billion, which comprises the personal care categories in which Honeypot operates today. Their bold, honest, and relatable digital content fosters community learning and especially connects with younger millennial and Gen Z consumers who are much less inhibited in discussing personal topics with friends and family and who expect more from brands than prior generations did. their bold honest and relatable digital content fosters community learning and especially connects with younger millennial and gen z consumers who are much less inhibited in discussing personal topics with friends and family and who expect more from brands than prior generations did Finally, as is core to Cody's strategy, we are partnering with an exceptional and all-women executive team led by Co-founder and CEO Beatrice Dixon. finally as is core to cody's strategy we are partnering with an exceptional and all-women executive team led by co-founder and ceo beatrice dixon Honeypot's leadership is passionate about the company's mission to promote holistic wellness, and we are excited to support them in the company's next stage of growth. honeypot's leadership is passionate about the company's mission to promote holistic wellness and we are excited to support them in the company's next stage of growth Turning to slide eight, we believe Honeypot's addressable market is valued at greater than $17 billion, which comprises the personal care categories in which Honeypot operates today. turning to slide eight we believe honeypot's addressable market is valued at greater than $17 billion which comprises the personal care categories in which honeypot operates today Although the company has earned a loyal community of customers and established itself as the fifth-largest feminine care brand at retail, Honeypot's brand awareness and household penetration significantly trail those of legacy players. The coupling of low awareness with high retention and preference among consumers who have tried Honeypot's products highlights the significant opportunity for accelerated growth that could be achieved with strategic increases in marketing efforts. Furthermore, we expect Honeypot to continue taking share as the only feminine care brand with a demonstrated ability to win in multiple feminine care categories, encouraging customers to develop a full personal care regimen with the brand. Lastly, Honeypot's unique brand voice and focus on consumer education authentically speak to younger generations. Although the company has earned a loyal community of customers and established itself as the fifth-largest feminine care brand at retail, Honeypot's brand awareness and household penetration significantly trail those of legacy players. although the company has earned a loyal community of customers and established itself as the fifth-largest feminine care brand at retail honeypot's brand awareness and household penetration significantly trail those of legacy players The coupling of low awareness with high retention and preference among consumers who have tried Honeypot's products highlights the significant opportunity for accelerated growth that could be achieved with strategic increases in marketing efforts. the coupling of low awareness with high retention and preference among consumers who have tried honeypot's products highlights the significant opportunity for accelerated growth that could be achieved with strategic increases in marketing efforts Furthermore, we expect Honeypot to continue taking share as the only feminine care brand with a demonstrated ability to win in multiple feminine care categories, encouraging customers to develop a full personal care regimen with the brand. furthermore we expect honeypot to continue taking share as the only feminine care brand with a demonstrated ability to win in multiple feminine care categories encouraging customers to develop a full personal care regimen with the brand Lastly, Honeypot's unique brand voice and focus on consumer education authentically speak to younger generations. lastly honeypot's unique brand voice and focus on consumer education authentically speak to younger generations As older consumers continue to age out of the category, we believe the company will welcome these consumers into its community at a higher rate than legacy competitors, significantly growing its share of category and propelling faster than market growth. Moving on to page nine, we are excited by the strong financial and operational results the Honeypot team has delivered today. Honeypot's estimated gross sales for the trailing 12 months ended December 23rd, 2023, exceeded $121 million with approximately $29 million of adjusted EBITDA. Since 2020, the Honeypot Company has achieved an impressive gross sales CAGR of approximately 54%. Many of the Honeypot's products are highly consumable and non-discretionary in nature, providing a steady, recurring base of earnings that the company continues to grow as they expand their community. Still more impressive has been the company's ability to grow profitably. As older consumers continue to age out of the category, we believe the company will welcome these consumers into its community at a higher rate than legacy competitors, significantly growing its share of category and propelling faster than market growth. as older consumers continue to age out of the category we believe the company will welcome these consumers into its community at a higher rate than legacy competitors significantly growing its share of category and propelling faster than market growth Moving on to page nine, we are excited by the strong financial and operational results the Honeypot team has delivered today. moving on to page nine we are excited by the strong financial and operational results the honeypot team has delivered today Honeypot's estimated gross sales for the trailing 12 months ended December 23rd, 2023, exceeded $121 million with approximately $29 million of adjusted EBITDA. honeypot's estimated gross sales for the trailing 12 months ended december 23rd 2023 exceeded $121 million with approximately $29 million of adjusted ebitda Since 2020, the Honeypot Company has achieved an impressive gross sales CAGR of approximately 54%. since 2020 the honeypot company has achieved an impressive gross sales cagr of approximately 54% Many of the Honeypot's products are highly consumable and non-discretionary in nature, providing a steady, recurring base of earnings that the company continues to grow as they expand their community. many of the honeypot's products are highly consumable and non-discretionary in nature providing a steady recurring base of earnings that the company continues to grow as they expand their community Still more impressive has been the company's ability to grow profitably. still more impressive has been the company's ability to grow profitably The Honeypot benefits from an outsourced manufacturing model, leading to low CapEx spend of roughly 2% of net sales or less per year. Honeypot's free cash flow profile is further bolstered by its tax assets and minimum working capital needs. In the last few years, Honeypot has made significant infrastructure investments in talent and operations, and we expect the company will continue to benefit from operating leverage as they scale further. As far as the terms of the transaction, on slide 10, you can see that Cody has agreed to acquire the Honeypot Company for an enterprise value of $380 million, excluding working capital and certain other adjustments. Honeypot's management team is rolling over significant equity and will remain meaningful owners of the business post-close. We are also pleased that Beatrice Dixon, Co-founder and CEO, and the rest of her team will continue to lead Honeypot in partnership with Cody. The Honeypot benefits from an outsourced manufacturing model, leading to low CapEx spend of roughly 2% of net sales or less per year. the honeypot benefits from an outsourced manufacturing model leading to low capex spend of roughly 2% of net sales or less per year Honeypot's free cash flow profile is further bolstered by its tax assets and minimum working capital needs. honeypot's free cash flow profile is further bolstered by its tax assets and minimum working capital needs In the last few years, Honeypot has made significant infrastructure investments in talent and operations, and we expect the company will continue to benefit from operating leverage as they scale further. in the last few years honeypot has made significant infrastructure investments in talent and operations and we expect the company will continue to benefit from operating leverage as they scale further As far as the terms of the transaction, on slide 10, you can see that Cody has agreed to acquire the Honeypot Company for an enterprise value of $380 million, excluding working capital and certain other adjustments. as far as the terms of the transaction on slide 10 you can see that cody has agreed to acquire the honeypot company for an enterprise value of $380 million excluding working capital and certain other adjustments Honeypot's management team is rolling over significant equity and will remain meaningful owners of the business post-close. honeypot's management team is rolling over significant equity and will remain meaningful owners of the business post-close We are also pleased that Beatrice Dixon, Co-founder and CEO, and the rest of her team will continue to lead Honeypot in partnership with Cody. we are also pleased that beatrice dixon co-founder and ceo and the rest of her team will continue to lead honeypot in partnership with cody We expect to fund the purchase price entirely with cash on hand and anticipate closing the transaction in February. The total outstanding indebtedness after we close the transaction will be approximately $1.7 billion and our full $600 million revolver availability. We truly admire the Honeypot team for the incredible success they have achieved so far and look forward to supporting the company in carrying out its mission to promote holistic wellness for all. This partnership is a testament to the significant competitive advantages Cody possesses. Given our lower cost of capital and the recent investment from Allspring, we were able to act swiftly in this transaction without financing contingencies and with more surety to close. We are excited for this next chapter and believe we are poised for a strong 2024. With that, thank you for attending today and will now take your questions. We expect to fund the purchase price entirely with cash on hand and anticipate closing the transaction in February. we expect to fund the purchase price entirely with cash on hand and anticipate closing the transaction in february The total outstanding indebtedness after we close the transaction will be approximately $1.7 billion and our full $600 million revolver availability. the total outstanding indebtedness after we close the transaction will be approximately $1.7 billion and our full $600 million revolver availability We truly admire the Honeypot team for the incredible success they have achieved so far and look forward to supporting the company in carrying out its mission to promote holistic wellness for all. we truly admire the honeypot team for the incredible success they have achieved so far and look forward to supporting the company in carrying out its mission to promote holistic wellness for all This partnership is a testament to the significant competitive advantages Cody possesses. this partnership is a testament to the significant competitive advantages cody possesses Given our lower cost of capital and the recent investment from Allspring, we were able to act swiftly in this transaction without financing contingencies and with more surety to close. given our lower cost of capital and the recent investment from allspring we were able to act swiftly in this transaction without financing contingencies and with more surety to close We are excited for this next chapter and believe we are poised for a strong 2024. we are excited for this next chapter and believe we are poised for a strong 2024 With that, thank you for attending today and will now take your questions. with that thank you for attending today and will now take your questions Operator, please open up the lines. Operator, please open up the lines. operator please open up the lines

Speaker 6: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please for your first question. Your first question comes from Chris Kennedy with William Blair. Please go ahead. Thank you, ladies and gentlemen. thank you ladies and gentlemen We will now begin the question and answer session. we will now begin the question and answer session Should you have a question, please press star, followed by the one on your touch-tone phone. should you have a question please press star followed by the one on your touch-tone phone You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. you will hear a three-tone prompt acknowledging your request and your questions will be pulled in the order they are received Should you wish to decline from the polling process, please press star, followed by the two. should you wish to decline from the polling process please press star followed by the two If you are using a speakerphone, please lift the handset before pressing any keys. if you are using a speakerphone please lift the handset before pressing any keys One moment, please for your first question. one moment please for your first question Your first question comes from Chris Kennedy with William Blair. your first question comes from chris kennedy with william blair Please go ahead. please go ahead

Speaker 5: Yeah, good morning. Thanks for taking the questions. Can you give an update on the leverage after the Allspring deal, after the sale of Marucci on a pro forma basis for this deal? Thank you. Yeah, good morning. yeah good morning Thanks for taking the questions. thanks for taking the questions Can you give an update on the leverage after the Allspring deal, after the sale of Marucci on a pro forma basis for this deal? can you give an update on the leverage after the allspring deal after the sale of marucci on a pro forma basis for this deal Thank you. thank you

Speaker 1: Yeah, hi, Chris. It's Ryan. Yeah, hi, Chris. yeah hi chris It's Ryan. it's ryan So, plan tomorrow would be to give you a little color on leverage on our investor day. Certainly, as you mentioned, we had the Marucci sale in the fourth quarter. We had the Allspring investment in the fourth quarter. We're able to fund this with cash. So, I think we'll give you a snapshot of fourth quarter leverage expectations tomorrow. So, hate to be coy right now, but that's probably a better venue to have that discussion. So, plan tomorrow would be to give you a little color on leverage on our investor day. so plan tomorrow would be to give you a little color on leverage on our investor day Certainly, as you mentioned, we had the Marucci sale in the fourth quarter. certainly as you mentioned we had the marucci sale in the fourth quarter We had the Allspring investment in the fourth quarter. we had the allspring investment in the fourth quarter We're able to fund this with cash. we're able to fund this with cash So, I think we'll give you a snapshot of fourth quarter leverage expectations tomorrow. so i think we'll give you a snapshot of fourth quarter leverage expectations tomorrow So, hate to be coy right now, but that's probably a better venue to have that discussion. so hate to be coy right now but that's probably a better venue to have that discussion

Speaker 5: Understood. And then a quick follow-up. You talked about the penetration within households. Can you talk about the brand awareness of this asset? Thank you. Sure. Understood. understood And then a quick follow-up. and then a quick follow-up You talked about the penetration within households. you talked about the penetration within households Can you talk about the brand awareness of this asset? can you talk about the brand awareness of this asset Thank you. thank you Sure. sure

Speaker 4: This is Raj Dalal speaking. This is Raj Dalal speaking. this is raj dalal speaking So we've done extensive consumer surveys, and this brand continues to be, given its kind of recency in the consumer market, we estimate levels in the high 20s of awareness aided versus most of its legacy competitors are 40-50 basis points higher. So there's significant awareness gains that we think we can drive through continued marketing support. So we've done extensive consumer surveys, and this brand continues to be, given its kind of recency in the consumer market, we estimate levels in the high 20s of awareness aided versus most of its legacy competitors are 40-50 basis points higher. so we've done extensive consumer surveys and this brand continues to be given its kind of recency in the consumer market we estimate levels in the high 20s of awareness aided versus most of its legacy competitors are 40-50 basis points higher So there's significant awareness gains that we think we can drive through continued marketing support. so there's significant awareness gains that we think we can drive through continued marketing support

Speaker 5: Great. Thanks for taking the questions. Look forward to tomorrow. Great. great Thanks for taking the questions. thanks for taking the questions Look forward to tomorrow. look forward to tomorrow

Speaker 6: Thank you, Chris. Your next question comes from Matt Koranda with Roth MKM. Please go ahead. Thank you, Chris. thank you chris Your next question comes from Matt Koranda with Roth MKM. your next question comes from matt koranda with roth mkm Please go ahead. please go ahead

Speaker 2: Hey, guys. Good morning. So just wanted to maybe hear you unpack some of the growth levers you think you have at your disposal, both near-term and long-term. Sounds like you alluded to more points of distribution or a possibility in maybe the near term, but what about new products? Hey, guys. hey guys Good morning. good morning So just wanted to maybe hear you unpack some of the growth levers you think you have at your disposal, both near-term and long-term. so just wanted to maybe hear you unpack some of the growth levers you think you have at your disposal both near-term and long-term Sounds like you alluded to more points of distribution or a possibility in maybe the near term, but what about new products? sounds like you alluded to more points of distribution or a possibility in maybe the near term but what about new products And then just it sounds also like maybe your balance sheet would bring the capability to lean into marketing a bit more to build on that aided awareness. Maybe just speak to sort of some of those growth levers you have at your disposal, especially now with Cody's balance sheet sort of behind Honeypot here. And then just it sounds also like maybe your balance sheet would bring the capability to lean into marketing a bit more to build on that aided awareness. and then just it sounds also like maybe your balance sheet would bring the capability to lean into marketing a bit more to build on that aided awareness Maybe just speak to sort of some of those growth levers you have at your disposal, especially now with Cody's balance sheet sort of behind Honeypot here. maybe just speak to sort of some of those growth levers you have at your disposal especially now with cody's balance sheet sort of behind honeypot here

Speaker 8: Yeah. So we see a 4.5% household penetration. So there's lots of large, massive kind of white space opportunities, both from a white space distribution, as Elias mentioned. They're just recently entering into the drug channels and the grocery channels and are pretty nascent online. And so there's significant white space distribution. But the company has been very much a leader from a product innovation standpoint and new product development and their proven ability to cross the aisle and not just play in one single category like menstrual, but being in wellness, menstrual, sexual health. Yeah. yeah So we see a 4.5% household penetration. so we see a 4.5% household penetration So there's lots of large, massive kind of white space opportunities, both from a white space distribution, as Elias mentioned. so there's lots of large massive kind of white space opportunities both from a white space distribution as elias mentioned They're just recently entering into the drug channels and the grocery channels and are pretty nascent online. they're just recently entering into the drug channels and the grocery channels and are pretty nascent online And so there's significant white space distribution. and so there's significant white space distribution But the company has been very much a leader from a product innovation standpoint and new product development and their proven ability to cross the aisle and not just play in one single category like menstrual, but being in wellness, menstrual, sexual health. but the company has been very much a leader from a product innovation standpoint and new product development and their proven ability to cross the aisle and not just play in one single category like menstrual but being in wellness menstrual sexual health We think that there's significant opportunity to continue to innovate and bring disruptive markets into the product portfolio. So lots of white space, lots of levers. I would just add the company's purely domestic at this point as well. And a lot of these brands we've found can extend overseas. We think that there's significant opportunity to continue to innovate and bring disruptive markets into the product portfolio. we think that there's significant opportunity to continue to innovate and bring disruptive markets into the product portfolio So lots of white space, lots of levers. so lots of white space lots of levers I would just add the company's purely domestic at this point as well. i would just add the company's purely domestic at this point as well And a lot of these brands we've found can extend overseas. and a lot of these brands we've found can extend overseas

Speaker 2: Okay. Helpful. And then just maybe could you speak to the mix of revenue? I guess it was unclear on sort of how much is coming from retail versus online for the brand. And maybe within retail, just any rough idea of exposure to sort of the mass retailers. It looks like probably a decent amount to Target, Walmart, whatnot. But any color on sort of how that breaks down would be helpful. Okay. okay Helpful. helpful And then just maybe could you speak to the mix of revenue? and then just maybe could you speak to the mix of revenue I guess it was unclear on sort of how much is coming from retail versus online for the brand. i guess it was unclear on sort of how much is coming from retail versus online for the brand And maybe within retail, just any rough idea of exposure to sort of the mass retailers. and maybe within retail just any rough idea of exposure to sort of the mass retailers It looks like probably a decent amount to Target, Walmart, whatnot. it looks like probably a decent amount to target walmart whatnot But any color on sort of how that breaks down would be helpful. but any color on sort of how that breaks down would be helpful

Speaker 8: Yeah. So it is definitely a retail-first brand. It's, I would say, more than 90% through the retail channels. Yeah. yeah So it is definitely a retail-first brand. so it is definitely a retail-first brand It's, I would say, more than 90% through the retail channels. it's i would say more than 90% through the retail channels Its own online platform is more of a customer education tool. So they sell online through their retail partners and Amazon. So it's predominantly retail. Within retail, they have pretty strong distribution over 33,000 doors just in the U.S. And that kind of covers the two large mass retailers, Target and Walmart, who are significant customers and significant sellers for personal care needs in general, right? As well as kind of strong distribution in CVS and Walgreens. Those are the two. Those are the kind of the four main retail partners. Its own online platform is more of a customer education tool. its own online platform is more of a customer education tool So they sell online through their retail partners and Amazon. so they sell online through their retail partners and amazon So it's predominantly retail. so it's predominantly retail Within retail, they have pretty strong distribution over 33,000 doors just in the U.S. within retail they have pretty strong distribution over 33,000 doors just in the u.s And that kind of covers the two large mass retailers, Target and Walmart, who are significant customers and significant sellers for personal care needs in general, right? and that kind of covers the two large mass retailers target and walmart who are significant customers and significant sellers for personal care needs in general right As well as kind of strong distribution in CVS and Walgreens. as well as kind of strong distribution in cvs and walgreens Those are the two. those are the two Those are the kind of the four main retail partners. those are the kind of the four main retail partners

Speaker 2: Okay. Super helpful. And then maybe just last one. Is there a margin improvement play here? I mean, it looks like mid-20% sort of EBITDA margin looks pretty healthy, especially accretive to the overall Cody sort of profile. Okay. okay Super helpful. super helpful And then maybe just last one. and then maybe just last one Is there a margin improvement play here? is there a margin improvement play here I mean, it looks like mid-20% sort of EBITDA margin looks pretty healthy, especially accretive to the overall Cody sort of profile. i mean it looks like mid-20% sort of ebitda margin looks pretty healthy especially accretive to the overall cody sort of profile But I'm curious, sort of, what more mature feminine hygiene companies might look like in terms of margin profile, what this could look like over a longer period of time, maybe at better scale. Just any color on your thinking in terms of the margins. But I'm curious, sort of, what more mature feminine hygiene companies might look like in terms of margin profile, what this could look like over a longer period of time, maybe at better scale. but i'm curious sort of what more mature feminine hygiene companies might look like in terms of margin profile what this could look like over a longer period of time maybe at better scale Just any color on your thinking in terms of the margins. just any color on your thinking in terms of the margins

Speaker 8: Yeah. So the company has obviously had very robust growth and has scaled pretty rapidly. In the process of that, they've kind of elevated and upgraded their manufacturing partners. But we think as they continue to scale, they should have better buying power as a whole. And then from an operating leverage standpoint, they've done a great job investing in infrastructure ahead of growth. And so we should see kind of continued flow through to profitability. Yeah. yeah So the company has obviously had very robust growth and has scaled pretty rapidly. so the company has obviously had very robust growth and has scaled pretty rapidly in In the process of that, they've kind of elevated and upgraded their manufacturing partners. in the process of that they've kind of elevated and upgraded their manufacturing partners But we think as they continue to scale, they should have better buying power as a whole. but we think as they continue to scale they should have better buying power as a whole And then from an operating leverage standpoint, they've done a great job investing in infrastructure ahead of growth. and then from an operating leverage standpoint they've done a great job investing in infrastructure ahead of growth And so we should see kind of continued flow through to profitability. and so we should see kind of continued flow through to profitability

Speaker 1: Yeah. And Matt, I would just kind of add here that this is a relatively young company. Yeah. yeah And Matt, I would just kind of add here that this is a relatively young company. and matt i would just kind of add here that this is a relatively young company \=By when it was founded, household penetration, no matter how you look at it, it's a youthful company. And so on the one hand, you'd clearly expect as we get more buying leverage, margins can improve. There's operating leverage that you can get on kind of fixed investments and overhead. But I think the real play here is to dramatically expand its audience and to increase its marketing and its awareness. So I would caution anyone against thinking that there's margin accretion coming. I would say, as you've seen us do in the past, our goal is to figure out where the best point of attack resources can be deployed and to direct them for high return on invested capital. In this case, it's broadening the brand awareness. \=By when it was founded, household penetration, no matter how you look at it, it's a youthful company. \=by when it was founded household penetration no matter how you look at it it's a youthful company And so on the one hand, you'd clearly expect as we get more buying leverage, margins can improve. and so on the one hand you'd clearly expect as we get more buying leverage margins can improve There's operating leverage that you can get on kind of fixed investments and overhead. there's operating leverage that you can get on kind of fixed investments and overhead But I think the real play here is to dramatically expand its audience and to increase its marketing and its awareness. but i think the real play here is to dramatically expand its audience and to increase its marketing and its awareness So I would caution anyone against thinking that there's margin accretion coming. so i would caution anyone against thinking that there's margin accretion coming I would say, as you've seen us do in the past, our goal is to figure out where the best point of attack resources can be deployed and to direct them for high return on invested capital. i would say as you've seen us do in the past our goal is to figure out where the best point of attack resources can be deployed and to direct them for high return on invested capital In this case, it's broadening the brand awareness. in this case it's broadening the brand awareness And so I think any improvements that can be gained by scale leverage are probably going to be offset and maybe even more than offset by marketing investment. But that's marketing investment that should drive dramatic kind of returns because they're at such a low base, because the products are superior and disruptive to what has really been a stale legacy industry. And what Raj and I had talked about earlier, which is if you think about it, this is a product lifecycle that has a finite amount of time with a person. And so you're going to age out at some point. And this brand really indexes towards kind of the youth who are looking for better-for-you products, less price-sensitive. And so this brand is right where you want it to be. We know there's going to be aging out that are part of the legacy products. And so I think any improvements that can be gained by scale leverage are probably going to be offset and maybe even more than offset by marketing investment. and so i think any improvements that can be gained by scale leverage are probably going to be offset and maybe even more than offset by marketing investment But that's marketing investment that should drive dramatic kind of returns because they're at such a low base, because the products are superior and disruptive to what has really been a stale legacy industry. but that's marketing investment that should drive dramatic kind of returns because they're at such a low base because the products are superior and disruptive to what has really been a stale legacy industry And what Raj and I had talked about earlier, which is if you think about it, this is a product lifecycle that has a finite amount of time with a person. and what raj and i had talked about earlier which is if you think about it this is a product lifecycle that has a finite amount of time with a person And so you're going to age out at some point. and so you're going to age out at some point And this brand really indexes towards kind of the youth who are looking for better-for-you products, less price-sensitive. and this brand really indexes towards kind of the youth who are looking for better-for-you products less price-sensitive And so this brand is right where you want it to be. and so this brand is right where you want it to be We know there's going to be aging out that are part of the legacy products. we know there's going to be aging out that are part of the legacy products And then people coming in are looking for brands like this. So this has all the hallmarks of a company that high Net Promoter Score, great brand loyalty, disruptive products, but with low household penetration. That has all the benefits and the right attributes of what we look for to put marketing dollars against and really expand sort of revenue growth and scale in that way. So I know not 100% what you were asking, but I would say we are looking for opportunities to really kind of promote this brand. And we think its existing portfolio and positioning allows it to really gobble up a lot of market share as we direct more resources in that manner. And then people coming in are looking for brands like this. and then people coming in are looking for brands like this So this has all the hallmarks of a company that high Net Promoter Score, great brand loyalty, disruptive products, but with low household penetration. so this has all the hallmarks of a company that high net promoter score great brand loyalty disruptive products but with low household penetration That has all the benefits and the right attributes of what we look for to put marketing dollars against and really expand sort of revenue growth and scale in that way. that has all the benefits and the right attributes of what we look for to put marketing dollars against and really expand sort of revenue growth and scale in that way So I know not 100% what you were asking, but I would say we are looking for opportunities to really kind of promote this brand. so i know not 100% what you were asking but i would say we are looking for opportunities to really kind of promote this brand And we think its existing portfolio and positioning allows it to really gobble up a lot of market share as we direct more resources in that manner. and we think its existing portfolio and positioning allows it to really gobble up a lot of market share as we direct more resources in that manner

Speaker 2: Perfect. Not what I was asking, but very much what I was looking for for the perspective. So thank you for that, Elias. I'll jump back into you guys. Thank you. Perfect. perfect Not what I was asking, but very much what I was looking for for the perspective. not what i was asking but very much what i was looking for for the perspective So thank you for that, Elias. so thank you for that elias I'll jump back into you guys. i'll jump back into you guys Thank you. thank you

Speaker 6: Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question is from Matthew Howlett with B. Riley. Please go ahead. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. ladies and gentlemen as a reminder should you have a question please press star followed by the one Your next question is from Matthew Howlett with B. your next question is from matthew howlett with b Riley. riley Please go ahead. please go ahead

Speaker 7: Oh, hey, Elias. Hey, Ryan. Thanks for taking the question. Hey, look, anything unique and congrats on the deal. The first question is, anything unique in terms of the structuring or the earn-out with management, the incentives with management? Can you go over anything there that might be different than or unique relative to your other structures of your other portfolio companies? Oh, hey, Elias. oh hey elias Hey, Ryan. hey ryan Thanks for taking the question. thanks for taking the question Hey, look, anything unique and congrats on the deal. hey look anything unique and congrats on the deal The first question is, anything unique in terms of the structuring or the earn-out with management, the incentives with management? the first question is anything unique in terms of the structuring or the earn-out with management the incentives with management Can you go over anything there that might be different than or unique relative to your other structures of your other portfolio companies? can you go over anything there that might be different than or unique relative to your other structures of your other portfolio companies

Speaker 8: I would say there's nothing, Matt, that is overly unique. It's sort of right down the middle, the fairway of what we would normally have. We have obviously minority shareholders and the two co-founders who are rolling over and the CEO, Beatrice Dixon, who's going to become an equity owner alongside us. I would say there's nothing, Matt, that is overly unique. i would say there's nothing matt that is overly unique It's sort of right down the middle, the fairway of what we would normally have. it's sort of right down the middle the fairway of what we would normally have We have obviously minority shareholders and the two co-founders who are rolling over and the CEO, Beatrice Dixon, who's going to become an equity owner alongside us. we have obviously minority shareholders and the two co-founders who are rolling over and the ceo beatrice dixon who's going to become an equity owner alongside us But that's typical in virtually all the deals that we do. There's no earn-out here. Kind of straight down the middle of the fairway. But that's typical in virtually all the deals that we do. but that's typical in virtually all the deals that we do There's no earn-out here. there's no earn-out here Kind of straight down the middle of the fairway. kind of straight down the middle of the fairway

Speaker 7: Great. And then I'll just add a quick Great. great And then I'll just add a quick and then i'll just add a quick

Speaker 8: we are implementing a very broad-based option program where we think employee ownership is pretty important. And so we're making the option program available to the entire employee base. Right. And they have standard incentives and things like that in place, right, for management, things of that nature. Correct. There's nothing untraditional here. Right. we are implementing a very broad-based option program where we think employee ownership is pretty important. we are implementing a very broad-based option program where we think employee ownership is pretty important And so we're making the option program available to the entire employee base. and so we're making the option program available to the entire employee base Right. right And they have standard incentives and things like that in place, right, for management, things of that nature. and they have standard incentives and things like that in place right for management things of that nature Correct. correct There's nothing untraditional here. there's nothing untraditional here Right. right

Speaker 7: Okay. Great. And then I guess just a little bit of a background on how this came about. I mean, I think we're all kind of waiting for a deal in healthcare. And I'm sure that's coming. But this seemed like an opportunistic deal that came about. A little bit of a background, how you were introduced and what made this so compelling. Okay. okay Great. great And then I guess just a little bit of a background on how this came about. and then i guess just a little bit of a background on how this came about I mean, I think we're all kind of waiting for a deal in healthcare. i mean i think we're all kind of waiting for a deal in healthcare And I'm sure that's coming. and i'm sure that's coming But this seemed like an opportunistic deal that came about. but this seemed like an opportunistic deal that came about A little bit of a background, how you were introduced and what made this so compelling. a little bit of a background how you were introduced and what made this so compelling Elias, you mentioned, I mean, the M&A market's been slowing. You guys have the ability to pounce when you see a deal come your way, especially something that's attractive. Just a little background on what came about and maybe an update on healthcare while we're waiting. Elias, you mentioned, I mean, the M&A market's been slowing. elias you mentioned i mean the m&a market's been slowing You guys have the ability to pounce when you see a deal come your way, especially something that's attractive. you guys have the ability to pounce when you see a deal come your way especially something that's attractive Just a little background on what came about and maybe an update on healthcare while we're waiting. just a little background on what came about and maybe an update on healthcare while we're waiting

Speaker 8: Sure, Matt. I'm going to give a sort of broader view. Then I'm going to ask Raj to talk specifically about how the deal came about and how we were able to really use our advantages to be able to close on the transaction or announce the transaction. First, I think if you think about sort of healthcare, ultimately, when we're thinking about healthcare, one of the things that we talk about is being in a different market, giving us greater diversity, the staple sort of nature of the consumable product, right? Sure, Matt. sure matt I'm going to give a sort of broader view. i'm going to give a sort of broader view Then I'm going to ask Raj to talk specifically about how the deal came about and how we were able to really use our advantages to be able to close on the transaction or announce the transaction. then i'm going to ask raj to talk specifically about how the deal came about and how we were able to really use our advantages to be able to close on the transaction or announce the transaction First, I think if you think about sort of healthcare, ultimately, when we're thinking about healthcare, one of the things that we talk about is being in a different market, giving us greater diversity, the staple sort of nature of the consumable product, right? first i think if you think about sort of healthcare ultimately when we're thinking about healthcare one of the things that we talk about is being in a different market giving us greater diversity the staple sort of nature of the consumable product right In most cases, we're talking about outsourced services. So what we're looking for is some level of predictability. This is sort of a company that almost fits somewhere between our healthcare and our consumer business. It's clearly a consumer products company, but it's got a little bit of a different bent to it, because it's a staple product, it gives us a lot of that. If you think about sort of kind of just a foundational level of profitability that we can then grow and invest off of, this company, like a lot of healthcare businesses, has more of an annuity-like component to its base cash flow, so I would say there's some level of similarity there. Now, at the end of the day, we do healthcare vertical. We are looking to populate that with new investment opportunities. In most cases, we're talking about outsourced services. in most cases we're talking about outsourced services So what we're looking for is some level of predictability. so what we're looking for is some level of predictability This is sort of a company that almost fits somewhere between our healthcare and our consumer business. this is sort of a company that almost fits somewhere between our healthcare and our consumer business It's clearly a consumer products company, but it's got a little bit of a different bent to it, because it's a staple product, it gives us a lot of that. it's clearly a consumer products company but it's got a little bit of a different bent to it because it's a staple product it gives us a lot of that If you think about sort of kind of just a foundational level of profitability that we can then grow and invest off of, this company, like a lot of healthcare businesses, has more of an annuity-like component to its base cash flow, so I would say there's some level of similarity there. if you think about sort of kind of just a foundational level of profitability that we can then grow and invest off of this company like a lot of healthcare businesses has more of an annuity-like component to its base cash flow so i would say there's some level of similarity there Now, at the end of the day, we do healthcare vertical. now at the end of the day we do healthcare vertical We are looking to populate that with new investment opportunities. we are looking to populate that with new investment opportunities But that doesn't prevent us, nor will it ever prevent us from finding good opportunities in other verticals that we're in and chasing those down. And we're not reserving capital in any way for a future deal that may or may not come. When we see great opportunities, we pounce. And before I turn it over to Raj, I think this is a really unique and great opportunity, Matt. I mean, historically, these types of companies in the wellness category have not traded for kind of 13 times EBITDA multiples. They've traded for multiples that are high teens to 20s and sometimes even high 20s. But that doesn't prevent us, nor will it ever prevent us from finding good opportunities in other verticals that we're in and chasing those down. but that doesn't prevent us nor will it ever prevent us from finding good opportunities in other verticals that we're in and chasing those down And we're not reserving capital in any way for a future deal that may or may not come. and we're not reserving capital in any way for a future deal that may or may not come When we see great opportunities, we pounce. when we see great opportunities we pounce And before I turn it over to Raj, I think this is a really unique and great opportunity, Matt. and before i turn it over to raj i think this is a really unique and great opportunity matt I mean, historically, these types of companies in the wellness category have not traded for kind of 13 times EBITDA multiples. i mean historically these types of companies in the wellness category have not traded for kind of 13 times ebitda multiples They've traded for multiples that are high teens to 20s and sometimes even high 20s. they've traded for multiples that are high teens to 20s and sometimes even high 20s If you're on trend like this company is with better-for-you products where the customer base is changing just by its own nature to more favor our products, this is a company that I think in different market conditions could have traded at a 50%-100% multiple premium to what we paid. I mean, if you just look over history at where wellness brands have traded at, it's not at multiples like this. So this is a function of the fact that the market is incredibly weak, especially for consumer products companies today. If you're on trend like this company is with better-for-you products where the customer base is changing just by its own nature to more favor our products, this is a company that I think in different market conditions could have traded at a 50%-100% multiple premium to what we paid. if you're on trend like this company is with better-for-you products where the customer base is changing just by its own nature to more favor our products this is a company that i think in different market conditions could have traded at a 50%-100% multiple premium to what we paid I mean, if you just look over history at where wellness brands have traded at, it's not at multiples like this. i mean if you just look over history at where wellness brands have traded at it's not at multiples like this So this is a function of the fact that the market is incredibly weak, especially for consumer products companies today. so this is a function of the fact that the market is incredibly weak especially for consumer products companies today Being a buyer with capital and a balance sheet and not subject to the whims of the debt markets for single asset financing, our competitive advantage in this sector, and I would say even more broadly, is greater than it's ever been from a weighted average cost of capital standpoint, from a speed and certainty to close standpoint. I mean, frankly, it reminds us more of competing in 2020 when we bought BOA and Marucci. That's kind of a competitive dynamic we find ourselves in today. And so this is an extraordinary time for us to be able to put money to work. And whether it's healthcare, whether it's industrial, whether it's a CPG company like this is, honestly, we're a little bit agnostic if the deal is good enough. And I can tell you now, I don't have a crystal ball. Being a buyer with capital and a balance sheet and not subject to the whims of the debt markets for single asset financing, our competitive advantage in this sector, and I would say even more broadly, is greater than it's ever been from a weighted average cost of capital standpoint, from a speed and certainty to close standpoint. being a buyer with capital and a balance sheet and not subject to the whims of the debt markets for single asset financing our competitive advantage in this sector and i would say even more broadly is greater than it's ever been from a weighted average cost of capital standpoint from a speed and certainty to close standpoint I mean, frankly, it reminds us more of competing in 2020 when we bought BOA and Marucci. i mean frankly it reminds us more of competing in 2020 when we bought boa and marucci That's kind of a competitive dynamic we find ourselves in today. that's kind of a competitive dynamic we find ourselves in today And so this is an extraordinary time for us to be able to put money to work. and so this is an extraordinary time for us to be able to put money to work And whether it's healthcare, whether it's industrial, whether it's a CPG company like this is, honestly, we're a little bit agnostic if the deal is good enough. and whether it's healthcare whether it's industrial whether it's a cpg company like this is honestly we're a little bit agnostic if the deal is good enough And I can tell you now, I don't have a crystal ball. and i can tell you now i don't have a crystal ball I can't tell you this is going to be a home run company for us and we're going to smash it out of the park. We believe we will. I can tell you that the dynamics in terms of characteristics of this company, positioning, and deal terms make this a company that has a huge opportunity to create shareholder value for our shareholders. And that's sort of what we're constantly out there looking for. So that was kind of what I would just say broadly about our capital allocation and thinking about a business like this. But Raj, maybe you can give some specifics on kind of how we chase this down and we're able to secure this company. I can't tell you this is going to be a home run company for us and we're going to smash it out of the park. i can't tell you this is going to be a home run company for us and we're going to smash it out of the park We believe we will. we believe we will I can tell you that the dynamics in terms of characteristics of this company, positioning, and deal terms make this a company that has a huge opportunity to create shareholder value for our shareholders. i can tell you that the dynamics in terms of characteristics of this company positioning and deal terms make this a company that has a huge opportunity to create shareholder value for our shareholders And that's sort of what we're constantly out there looking for. and that's sort of what we're constantly out there looking for So that was kind of what I would just say broadly about our capital allocation and thinking about a business like this. so that was kind of what i would just say broadly about our capital allocation and thinking about a business like this But Raj, maybe you can give some specifics on kind of how we chase this down and we're able to secure this company. but raj maybe you can give some specifics on kind of how we chase this down and we're able to secure this company

Speaker 4: Yeah, happy to. So it was a process run by Perella Weinberg, but they ran a very limited outreach process, mostly earmarked towards sponsors. Yeah, happy to. yeah happy to So it was a process run by Perella Weinberg, but they ran a very limited outreach process, mostly earmarked towards sponsors. so it was a process run by perella weinberg but they ran a very limited outreach process mostly earmarked towards sponsors I think how we fit into that, they were really looking for a growth-oriented firm with experience in consumer. And I think cultural fit was kind of first and foremost for who the founders wanted to work with. And I think our team really resonated from that last standpoint. And so it was, I would say we participated in a very limited process, but quickly fostered really great connections with management. And at the end of the day, management were the decision makers and we prevailed. So very happy to it's a highly competitive market with a lot of our competitive peers. And I think we rose to the occasion. Yeah. And Matt, just one thing to point here. I mean, a big part of when Bea founded this business, obviously, it was based on her own personal health and wellness. But she has an incredible passion. I think how we fit into that, they were really looking for a growth-oriented firm with experience in consumer. i think how we fit into that they were really looking for a growth-oriented firm with experience in consumer And I think cultural fit was kind of first and foremost for who the founders wanted to work with. and i think cultural fit was kind of first and foremost for who the founders wanted to work with And I think our team really resonated from that last standpoint. and i think our team really resonated from that last standpoint And so it was, I would say we participated in a very limited process, but quickly fostered really great connections with management. and so it was i would say we participated in a very limited process but quickly fostered really great connections with management And at the end of the day, management were the decision makers and we prevailed. and at the end of the day management were the decision makers and we prevailed So very happy to it's a highly competitive market with a lot of our competitive peers. so very happy to it's a highly competitive market with a lot of our competitive peers And I think we rose to the occasion. and i think we rose to the occasion Yeah. yeah And Matt, just one thing to point here. and matt just one thing to point here I mean, a big part of when Bea founded this business, obviously, it was based on her own personal health and wellness. i mean a big part of when bea founded this business obviously it was based on her own personal health and wellness But she has an incredible passion. but she has an incredible passion And her passion, as we've talked about, is to destigmatize even discussing this, to educate, and to provide great products. We say this a lot, and we'll talk about this at our investor day tomorrow. But as we contrast with kind of the competitors that we're normally in market against with private equity, if your goal is to really build a much bigger business that has these social benefits associated with it around education and destigmatization and better products that are creating more health, look, you're not going to do that in a two, three, four-year fund. I mean, it's the problem with private equity. It's been the problem forever. Private equity has been enabled by the fact that the Federal Reserve had lowered interest rates for 20 straight years, and they traded kind of assets. Contrast what we are. And her passion, as we've talked about, is to destigmatize even discussing this, to educate, and to provide great products. and her passion as we've talked about is to destigmatize even discussing this to educate and to provide great products We say this a lot, and we'll talk about this at our investor day tomorrow. we say this a lot and we'll talk about this at our investor day tomorrow But as we contrast with kind of the competitors that we're normally in market against with private equity, if your goal is to really build a much bigger business that has these social benefits associated with it around education and destigmatization and better products that are creating more health, look, you're not going to do that in a two, three, four-year fund. but as we contrast with kind of the competitors that we're normally in market against with private equity if your goal is to really build a much bigger business that has these social benefits associated with it around education and destigmatization and better products that are creating more health look you're not going to do that in a two three four-year fund I mean, it's the problem with private equity. i mean it's the problem with private equity It's been the problem forever. it's been the problem forever Private equity has been enabled by the fact that the Federal Reserve had lowered interest rates for 20 straight years, and they traded kind of assets. private equity has been enabled by the fact that the federal reserve had lowered interest rates for 20 straight years and they traded kind of assets Contrast what we are. contrast what we are We're somebody who buys businesses and builds those for the long term. Now, we occasionally divest if there's a great offer. But that aligns with the mission of what this company wants to do. This company wants to reach a broader audience. It wants to destigmatize discussion around the category. You're not going to do that in a two, three, or four-year fund. And so when you look at the platform we have and you look at what we can sell to management teams and entrepreneurs in terms of how we're going to partner and build your business and the legacy that you've built so far is going to be expanded under our ownership, it's where we have huge competitive differentiation. We're somebody who buys businesses and builds those for the long term. we're somebody who buys businesses and builds those for the long term Now, we occasionally divest if there's a great offer. now we occasionally divest if there's a great offer But that aligns with the mission of what this company wants to do. but that aligns with the mission of what this company wants to do This company wants to reach a broader audience. this company wants to reach a broader audience It wants to destigmatize discussion around the category. it wants to destigmatize discussion around the category You're not going to do that in a two, three, or four-year fund. you're not going to do that in a two three or four-year fund And so when you look at the platform we have and you look at what we can sell to management teams and entrepreneurs in terms of how we're going to partner and build your business and the legacy that you've built so far is going to be expanded under our ownership, it's where we have huge competitive differentiation. and so when you look at the platform we have and you look at what we can sell to management teams and entrepreneurs in terms of how we're going to partner and build your business and the legacy that you've built so far is going to be expanded under our ownership it's where we have huge competitive differentiation And we don't need to be the highest price when our cultural values and our operating model aligns as well as it does with our target companies, like in this instance here with The Honeypot. And we don't need to be the highest price when our cultural values and our operating model aligns as well as it does with our target companies, like in this instance here with The Honeypot. and we don't need to be the highest price when our cultural values and our operating model aligns as well as it does with our target companies like in this instance here with the honeypot

Speaker 7: Yeah. I was going to say, you guys, your competitive advantage really showed up here. It looks like you got a great price for these types of companies that go at, like you said, huge multiples you've seen in the past. I guess the final question, I guess it goes without saying, Elias, you typically don't own something in your portfolio that you want to see it get to $100 million of EBITDA. I know we're at $29 million. This is clearly something that you can hold for a while and get up to that 100-plus million of EBITDA over your holding timeframe. Yeah. yeah I was going to say, you guys, your competitive advantage really showed up here. i was going to say you guys your competitive advantage really showed up here It looks like you got a great price for these types of companies that go at, like you said, huge multiples you've seen in the past. it looks like you got a great price for these types of companies that go at like you said huge multiples you've seen in the past I guess the final question, I guess it goes without saying, Elias, you typically don't own something in your portfolio that you want to see it get to $100 million of EBITDA. i guess the final question i guess it goes without saying elias you typically don't own something in your portfolio that you want to see it get to $100 million of ebitda I know we're at $29 million. i know we're at $29 million This is clearly something that you can hold for a while and get up to that 100-plus million of EBITDA over your holding timeframe. this is clearly something that you can hold for a while and get up to that 100-plus million of ebitda over your holding timeframe

Speaker 8: No question. I mean, you saw the total TAM here is $17 billion. No question. no question I mean, you saw the total TAM here is $17 billion. i mean you saw the total tam here is $17 billion Now, that's a number that's a little hard to wrap your mind around, obviously, and we're $120 million of sales of that. So if you think about total TAM across all the categories that the company's currently playing in, it's sub 1%. Now, we could look at the SAM, the serviceable addressable market, is probably a little bit smaller than that, but nonetheless, Matt, this is a huge TAM, and it's a disruptive business, and as we're able to bring our resources to help this company continue to execute its strategy, I think getting to $100 million plus EBITDA is well within the purview of what this company has in front of it, and as you know, we match the duration of the opportunity to the duration of our capital. Now, that's a number that's a little hard to wrap your mind around, obviously, and we're $120 million of sales of that. now that's a number that's a little hard to wrap your mind around obviously and we're $120 million of sales of that So if you think about total TAM across all the categories that the company's currently playing in, it's sub 1%. so if you think about total tam across all the categories that the company's currently playing in it's sub 1% Now, we could look at the SAM, the serviceable addressable market, is probably a little bit smaller than that, but nonetheless, Matt, this is a huge TAM, and it's a disruptive business, and as we're able to bring our resources to help this company continue to execute its strategy, I think getting to $100 million plus EBITDA is well within the purview of what this company has in front of it, and as you know, we match the duration of the opportunity to the duration of our capital. now we could look at the sam the serviceable addressable market is probably a little bit smaller than that but nonetheless matt this is a huge tam and it's a disruptive business and as we're able to bring our resources to help this company continue to execute its strategy i think getting to $100 million plus ebitda is well within the purview of what this company has in front of it and as you know we match the duration of the opportunity to the duration of our capital So if that takes five years to get to, or if it takes seven years to get to, or three years to get to, our capital is available for kind of that opportunity. And we see a pathway to get to kind of triple digits EBITDA under our ownership. So if that takes five years to get to, or if it takes seven years to get to, or three years to get to, our capital is available for kind of that opportunity. so if that takes five years to get to or if it takes seven years to get to or three years to get to our capital is available for kind of that opportunity And we see a pathway to get to kind of triple digits EBITDA under our ownership. and we see a pathway to get to kind of triple digits ebitda under our ownership

Speaker 7: Really terrific. Thanks a lot. We'll look forward to tomorrow. Really terrific. really terrific Thanks a lot. thanks a lot We'll look forward to tomorrow. we'll look forward to tomorrow

Speaker 8: Thank you, Matt. Thank you, Matt. thank you matt

Speaker 6: There are no further questions at this time. I will now turn the call over to Elias for final remarks. There are no further questions at this time. there are no further questions at this time I will now turn the call over to Elias for final remarks. i will now turn the call over to elias for final remarks

Speaker 8: Thank you all. We look forward to seeing you tomorrow at our investor day. And we are incredibly enthusiastic to be announcing this partnership today. Thank you. Have a great day. Thank you all. thank you all We look forward to seeing you tomorrow at our investor day. we look forward to seeing you tomorrow at our investor day And we are incredibly enthusiastic to be announcing this partnership today. and we are incredibly enthusiastic to be announcing this partnership today Thank you. thank you Have a great day. have a great day

Speaker 6: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Ladies and gentlemen, this concludes your conference call for today. ladies and gentlemen this concludes your conference call for today We thank you for participating and ask that you please disconnect your lines. we thank you for participating and ask that you please disconnect your lines