Q1 2025 Premium Brands Holdings Corp Earnings Call - Pre-Recorded

Today, we'll follow the deck that was posted on our website. This morning.

George Paleologou: Our presentation today will follow the deck that was posted on our website this morning. You can also access it by clicking on the link off our press release issued this morning. Before we begin the formal presentation, I'd like to call out that 2025 represents our 25th year of existence as Premium Brands Holdings Corporation. As you know, our CFO, Will Kalutycz and I, were there from the very beginning when our vision was to invest in smaller, more local businesses producing great food with clean and natural ingredients, and to help them scale and grow. We began in Western Canada, and as our business model and strategies were proven out, we expanded across Canada, and later on into the US.

Operator: Our presentation today will follow the deck that was posted on our website this morning. You can also access it by clicking on the link off our press release issued this morning.

You can also access it by clicking on the link off our press release issued this morning.

Before we begin the formal presentation I'd like to call out that 2025 represents our 2050 year of existence as premium brands Holdings Corporation.

George Doumet: Before we begin the formal presentation, I'd like to call out that 2025 represents our 25th year of existence as Premium Brands Holdings Corporation. As you know, our CFO, Will Kalutycz, and I were there from the very beginning when our vision was to invest in smaller, more local businesses producing great food with clean and natural ingredients and to help them scale and grow. We began in Western Canada and as our business model and strategies were proven out, we expanded across Canada and later on into the U.S. Today, we're a resilient and diversified ecosystem of best-in-class specialty food companies run by passionate entrepreneurs that are focused on growing their food prints in North America and, in some cases, even globally.

Speaker Change: Now, our CFO will colluded, Chennai, where they're from the very beginning when our vision was to invest in smaller or local businesses, producing great food with clean and natural ingredients and to help them scale and growth.

Speaker Change: We began in western Canada, and as our business model and strategies were proven out we expanded across Canada and later on into the U S. Today.

Speaker Change: Today, we are a resilient and diversified ecosystem of best in class specialty food companies run by passionate into printers that are focused on growing their footprints in North America and in some cases even globally.

George Paleologou: Today, we're a resilient and diversified ecosystem of best-in-class specialty food companies run by passionate entrepreneurs that are focused on growing their footprints in North America, and in some cases, even globally. Although we have had tremendous growth and success in the US, we're still in the early innings in this market. We see many more opportunities to continue to grow organically and by acquisition. As you know, our strategy is to look for white space opportunities driven by identifying enduring and emerging consumer trends and investing in them well before everyone else. We have done this successfully in frozen sandwiches, cooked and raw skewers, dry cured meats, meat snacks, protein distribution, value-added lobster, and specialty bakery. In each of these growing categories, we have established ourselves as a leading player, either in the Canadian or US markets or both, and have scaled them substantially.

Speaker Change: Although we have had tremendous growth and success in the U S. We're still in the early innings in this market and we see many more opportunities to continue to grow organically and by acquisition.

George Doumet: Although we have had tremendous growth and success in the U.S., we're still in the early innings in this market, and we see many more opportunities to continue to grow organically and by acquisition. As you know, our strategy is to look for white space opportunities driven by identifying, enduring and emerging consumer trends and investing in them well before everyone else. We have done this successfully in frozen sandwiches, cooked and raw skewers, dry cured meats, meat snacks, protein distribution, value-added lobster, and specialty bakery. In each of these growing categories, we have established ourselves as a leading player either in the Canadian or U.S.

Speaker Change: As you know our strategy is to look for white space opportunities driven by identifying and doing an emerging consumer trends and investing in them well before everyone else. We have done this successfully in frozen sandwiches cooked and raw skewers dry cured meats meat snacks approaching distribution value added lobster.

Speaker Change: <unk> and specialty bakery.

Speaker Change: In each of these growing categories, we have established ourselves as a leading player either in the Canadian or U S markets or both and have scaled them substantially.

George Doumet: markets or both and have scaled them substantially. Looking forward, we have many more irons in the fire.

Speaker Change: Looking forward, we have many more irons in the fire.

George Paleologou: Looking forward, we have many more irons in the fire. We are now on slide three, which outlines certain key highlights for the quarter. Q1 revenue came in at CAD 1.68 billion, representing a 14.9% or a CAD 217.4 million increase for the quarter. In general terms, our Canadian Specialty Foods businesses were relatively stable but also showed slight sequential improvement for the quarter. We believe that demand patterns in Canada during the quarter were impacted negatively by volatile macroeconomic environment caused by tariff and election noise and related uncertainties, but we saw signs that the sentiment was beginning to subside by the end of the quarter. Our Specialty Foods core US growth initiatives outperformed during the quarter, delivering 9.9% organic volume growth driven by sandwiches, protein, and specialty bakery groups leveraging newly acquired or newly built capacities.

Speaker Change: We're now on slide three which outlines certain key highlights for the quarter.

George Doumet: We're now on slide three, which outlines certain key highlights for the quarter. First quarter revenue came in at $1.68 billion, representing a 14.9% or a $217.4 million increase for the quarter. In general terms, our Canadian specialty food businesses were relatively stable, but also showed slight sequential improvement for the quarter. We believe that demand patterns in Canada during the quarter were impacted negatively by volatile macroeconomic environment caused by tariff and election noise and related uncertainties, but we saw signs that this sentiment was beginning to subside by the end of the quarter.

Speaker Change: First quarter revenue came in at 168 billion, representing a 14, 9% or $217 4 million increase for the quarter.

Speaker Change: In general terms, our Canadian specialty foods businesses were relatively stable, but also showed a slight sequential improvement for the quarter. We believe that demand patterns in Canada. During the quarter were impacted negatively by volatile macroeconomic environment caused by tariffs and election noise and related uncertainties, but we saw.

Speaker Change: Signs that the sentiment was beginning to subside by the end of the quarter.

Speaker Change: Our specialty foods core U S growth initiatives outperformed during the quarter delivering nine 9% organic volume growth driven by sandwich protein and specialty bakery groups, leveraging newly acquired or newly built capacities.

George Doumet: Our specialty foods' core U.S. growth initiatives outperformed during the quarter, delivering 9.9% organic volume growth driven by sandwich, protein, and specialty bakery groups, leveraging newly acquired or newly built capacity. Including acquisitions, Specialty Foods total U.S. sales grew by $176.6 million to $804.4 million for the quarter, representing 68.6% of its total sales.

Speaker Change: Including acquisitions specialty foods total U S sales grew by $176 6 million to $804 4 million for the quarter, representing 68, 6% of its total sales.

George Paleologou: Including acquisitions, Specialty Foods total US sales grew by $176.6 million to $804.4 million for the quarter, representing 68.6% of its total sales. Overall, despite the recent tariff-related volatility and uncertainty, we remain on plan to achieve or exceed our five-year plan of CAD 10 billion in sales and CAD 1 billion of EBITDA by the end of 2027. Our CFO, Will Kalutycz, will give you more color on the quarter later on in the presentation. We're now on slide 4. As you can see, our acquisition pipeline remains very active, and we expect to complete many more transactions in the months and years to come. We're aware that there have been concerns expressed about our relatively high debt levels.

Speaker Change: Overall and despite the recent tariff related volatility and uncertainty we remain on plan to achieve or exceed our five year plan of $10 billion in sales and $1 billion of EBITDA by the end of 2027.

George Doumet: Overall, and despite the recent tariff-related volatility and uncertainty, we remain on plan to achieve or exceed our five-year plan of $10 billion in sales and $1 billion of EBITDA by the end of 2027.

Speaker Change: Our CFO <unk> will give you more color on the quarter later on in the presentation.

George Doumet: Our CFO, Will Kalutycz, will give you more color on the quarter later on in the presentation.

Speaker Change: We're now on slide four.

Speaker Change: As you can see our acquisition pipeline remains very active and we expect to complete many more transactions in the months and years to come we are aware that there have been concerns expressed about our relatively high debt levels. We are however, very confident that our current capital program has added substantially to our earnings and cash.

George Doumet: We're now on slide four. As you can see, our acquisition pipeline remains very active and we expect to complete many more transactions in the months and years to come. We're aware that there have been concerns expressed about our relatively high debt levels. We are, however, very confident that our current capital program has added substantially to our earnings and cash flow capacity and that this will play a major part in addressing our leverage levels. In addition, we're also focused on completing other initiatives that will help reduce our debt levels without materially impacting our growth plans or our overall profitability.

George Paleologou: We are, however, very confident that our current capital program has added substantially to our earnings and cash flow capacity, and that this will play a major part in addressing our leverage levels. In addition, we are also focused on completing other initiatives that will help reduce our debt levels without materially impacting our growth plans or our overall profitability. We are now on slide 5. The AGM deck posted on our website yesterday includes a video of our Cleveland, Tennessee sandwich facility, which is close to completion. When completed later this quarter, it will be a world-class facility featuring best-in-class scale, food safety, and automation for the assembly of sandwiches. The map on slide 5 shows the locations of our various operations in North America. Our US-based manufacturing footprint continues to grow.

Speaker Change: Capacity and that this will play a major part in addressing our leverage levels. In addition, we're also focused on completing other initiatives that will help reduce our debt levels without materially impacting our growth plans or our overall profitability.

Speaker Change: We're now on slide five.

Speaker Change: The AGM deck posted to our website yesterday includes a video of our Cleveland, Tennessee Sandwich facility, which is close to completion. When completed later this quarter. It will be a world class facility featuring best in class scale food safety and automation for the assembly of <unk> the.

George Doumet: We're now at Slide 5. The AGM deck posted on our website yesterday includes a video of our Cleveland, Tennessee Sandwich Facility, which is close to completion. When completed later this quarter, it will be a world-class facility featuring best-in-class scale, food safety, and automation for the assembly of sandwiches. The map on slide 5 shows the locations of our various operations in North America. Our U.S.-based manufacturing footprint continues to grow. The red dots on the map are facilities that have been constructed, added to, or were acquired in the past couple of years.

Speaker Change: The map on slide five shows the locations of our various operations in North America.

Speaker Change: Our U S based manufacturing footprint continues to grow the red dots on the map are facilities that have been constructed attitude.

George Paleologou: The red dots on the map are facilities that have been constructed, added to, or were acquired in the past couple of years. We're now on slides 6 to 8. Although our 3 key US growth initiatives, protein, sandwiches, and bakery, showed growth during the quarter, the star of the show was our bakery group, whose sales volumes grew by 33.6%, driven mainly by the onboarding of 2 new programs with 2 key customers. As we have stated in the past, given the nature and size of our US customers, our growth in this market will be lumpy, and our bakery group's substantial growth this quarter is a good example of this. The pictures below show you our state-of-the-art new baking capacity in Canada and the US, and some of the amazing new products we're bringing to market.

Speaker Change: Were acquired in the past couple of years.

Speaker Change: We're now on slides six through eight.

George Doumet: We're now on slides six to eight. Although our three key U.S. growth initiatives, Protein, Sandwiches, and Bakery, showed growth during the quarter, the star of the show was our bakery group, whose sales volumes grew by 33.6%, driven mainly by the onboarding of two new programs with two key customers. As we have stated in the past, given the nature and size of our U.S. customers, our growth in this market will be lumpy, and our bakery group's substantial growth this quarter is a good example of this. The pictures below show you our state-of-the-art new baking capacity in Canada and the U.S.

Speaker Change: Although our three key U S growth initiatives protein sandwiches and bakery showed growth during the quarter. The star of the show was our bakery group, whose sales volumes grew by 33, 6% driven mainly by the Onboarding of two new programs with two key customers as we have stated in the past given the name.

Speaker Change: <unk> and size of our U S customers our growth in this market will be lumpy and our bakery group substantial growth. This quarter is a good example of this.

Speaker Change: The pictures below show you our state of the art, new baking capacity in Canada, and the U S and some of the amazing new products they are bringing to market.

George Doumet: and some of the amazing new products we're bringing to market.

Wil: I will now pass the presentation to our CFO Wil <unk>, who will update you on our financial results for the quarter will.

William Kalutycz: I will now pass the presentation to our CFO, Will Kalutycz, who will update you on our financial results for the quarter. Will? Thanks, George.

George Paleologou: I will now pass the presentation to our CFO, Will Kalutycz, who will update you on our financial results for the quarter. Will?

Speaker Change: Thanks, George before I begin I would like to remind you that some of the statements made on today's call may constitute forward looking information and our future results may differ materially from what we discussed please refer to our MD&A for the 13 and 52 weeks ended December 28 2024.

Will Kalutycz: Thanks, George. Before I begin, I would like to remind you that some of the statements made on today's call may constitute forward-looking information and our future results may differ materially from what we discuss. Please refer to our MD&A for the 13 and 52 weeks ended 28 December 2024, as well as other information on our website for a broader description of the risk factors that could affect our performance. Turning to slide 10. As George mentioned earlier, our sales for the quarter were a record CAD 1.68 billion, up CAD 217 million or 14.9% as compared to Q1 2024. This increase was driven by four factors.

William Kalutycz: Before I begin, I would like to remind you that some of the statements made on today's call may constitute forward-looking information and our future results may differ materially from what we discussed. Please refer to our MD&A for the 13 and 52 weeks ended December 28, 2024, as well as other information on our website for a broader description of the risk factors that could affect our performance.

Speaker Change: As well as other information on our website for a broader description of the risk factors that could affect our performance.

Speaker Change: Turning to slide 10.

Speaker Change: As George mentioned earlier, our sales for the quarter were a record 168 billion up $217 million or 14, 9% as compared to the first quarter of 2024.

William Kalutycz: Turning to slide 10. As George mentioned earlier, our sales for the quarter were a record $1.68 billion, up $217 million, or 14.9%, as compared to the first quarter of 2020. This increase was driven by four factors. Acquisitions, which accounted for $76 million of the increase. Organic volume growth of $58 million, representing an organic volume growth rate of 4%. Forty-five million dollars in selling price increases, which were primarily in response to higher beef, chicken, and lobster costs. and a currency translation benefit of $38 million, resulting from year-over-year weakness in the Canadian dollar. Our organic volume growth in the quarter was driven by the continued success of our U.S.

Speaker Change: This increase was driven by four factors ACA.

Speaker Change: Acquisitions, which accounted for $76 million of the increase.

Will Kalutycz: Acquisitions, which accounted for CAD 76 million of the increase, organic volume growth of CAD 58 million, representing an organic volume growth rate of 4%, CAD 45 million in selling price increases, which were primarily in response to higher beef, chicken, and lobster costs, and a currency translation benefit of CAD 38 million resulting from year-over-year weakness in the Canadian dollar. Our organic volume growth in the quarter was driven by the continued success of our US market-focused initiatives in protein, sandwiches, and bakery, which generated CAD 58 million in volume growth, representing, as George mentioned earlier, an organic volume growth rate of 9.9%. Our Canadian distribution businesses were also a major contributor, generating CAD 22 million of organic growth, representing a 9% organic volume growth rate. These positives were partially offset by a CAD 23 million volume contraction in our seafood group.

Speaker Change: Organic volume growth of $58 million, representing an organic volume growth rate of 4%.

Speaker Change: $45 million and selling price increases, which were primarily in response to higher beef chicken and lobster costs.

Speaker Change: And a currency translation benefit of $38 million, resulting from year over year weakness in the Canadian dollar.

Speaker Change: Our organic volume growth in the quarter was driven by the continued success of our U S market focused initiatives in protein sandwiches, and bakery, which generated $58 million and volume growth, representing as George mentioned earlier and organic volume growth rate of nine 9%.

William Kalutycz: market-focused initiatives in protein, sandwiches, and bakery, which generated $58 million in volume growth, representing, as George mentioned earlier, an organic volume growth rate of 9.9%. Our Canadian distribution businesses were also a major contributor, generating $22 million of organic growth, representing a 9% organic volume growth rate. These positives were partially offset by a $23 million volume contraction in our seafood. This is largely due to lower lobster sales, resulting from demand impacts associated with high selling prices and reduced exports to China caused by the tariff dispute between the U.S. and China.

Speaker Change: Our Canadian distribution businesses were also a major contributor generating $22 million of organic growth, representing 9% organic volume growth rate.

These positives were partially offset by a $23 million volume contraction in our seafood group.

Speaker Change: This was largely due to lower lobster sales, resulting from demand impacts associated with high selling prices and reduced exports to China caused by the tariff dispute between the U S and China.

Will Kalutycz: This was largely due to lower lobster sales resulting from demand impacts associated with high selling prices and reduced exports to China caused by the tariff dispute between the US and China. Slide 11 shows a breakdown of our core US growth sales initiatives. As George mentioned, our bakery group generated an amazing 33.6% organic volume growth rate. Our sandwich group returned to high single-digit organic volume growth rates, and our protein group maintained a steady organic volume growth rate of 10%. Turning to slide 12, our adjusted EBITDA for the quarter was CAD 136.5 million, representing an increase of CAD 15.5 million or 12.8% as compared to the Q1 2024. The major drivers of this improvement were our organic sales volume growth and improved production efficiencies across a number of plants.

Speaker Change: Yeah.

Speaker Change: Slide 11 shows a breakdown of our core U S growth sales initiatives.

William Kalutycz: Slide 11 shows a breakdown of our core U.S. growth sales initiatives. As George mentioned, our bakery group generated an amazing 33.6% organic volume growth rate. Our sandwich group returned to high single-digit organic volume growth rates, and our protein group maintained a steady organic volume growth rate of 10%.

Speaker Change: As George mentioned, our bakery group generated an amazing 33, 6% organic volume growth rate or Sandwich group returned to high single digit organic volume growth rates and our protein group maintained a steady organic volume growth rate of 10%.

Speaker Change: Yeah.

Speaker Change: Turning to slide 12, our adjusted EBITDA for the quarter was $136 5 million, representing an increase of $15 5 million or 12, 8% as compared to the first quarter of 2024.

William Kalutycz: Turning to slide 12, our adjusted EBDOT for the quarter was $136.5 million, representing an increase of $15.5 million or 12.8% as compared to the first quarter of 2024. The major drivers of this improvement were our organic sales volume growth and improved production efficiencies across a number of plants. These are partially offset by the impact of rising raw material costs, particularly for certain chicken and beef commodities, on our protein group, and to a much lesser extent wage inflation across most of our business. Our adjusted EBDA margin for the quarter fell by 20 basis points to 8.1%, primarily due to two factors.

Speaker Change: The major drivers of this improvement were our organic sales volume growth and improved production efficiencies across a number of plants.

Speaker Change: These are partially offset by the impact of rising raw material costs, particularly for certain chicken and beef commodities on a protein group and to a much lesser extent wage inflation across most of our businesses.

Will Kalutycz: These were partially offset by the impact of rising raw material costs, particularly for certain chicken and beef commodities on our protein group, and to a much lesser extent, wage inflation across most of our businesses. Our adjusted EBITDA margin for the quarter fell by 20 basis points to 8.1%, primarily due to two factors. The most significant of these is the impact of rising raw material costs, which reduced our adjusted EBITDA margin by approximately 80 basis points. We are addressing this through selling price increases. However, these can take as long as 90 days or more to be implemented. The second factor is recent acquisitions, which are expected to generate margins that are below our average margins for the next couple of quarters as various sales and operational initiatives are implemented.

Speaker Change: Our adjusted EBITDA margin for the quarter fell by 20 basis points to eight 1% primarily due to two factors. The most significant of these is the impact of rising raw material costs, which reduced our adjusted EBITDA margin by approximately 80 basis points. We are addressing this through <unk>.

William Kalutycz: The most significant of these is the impact of rising raw material costs, which reduced our adjusted EBDA margin by approximately 80 basis points. We are addressing this through selling price increases, however these can take as long as 90 days or more to be implemented. The second factor is recent acquisitions, which are expected to generate margins that are below our average margins for the next couple of quarters as various sales and operational initiatives are implemented. Partially offsetting these factors is the benefit of sales leveraging coming from organic growth and improved plant efficiency.

Speaker Change: Selling price increases. However, these can take as long as 90 days or more to be implemented.

Speaker Change: The second factor is recent acquisitions, which are expected to generate margins that are below our average margins for the next couple of quarters as various sales and operational initiatives are implemented.

Speaker Change: Partially offsetting these factors is the benefit of sales leveraging coming from our organic growth and improved plant efficiencies.

Will Kalutycz: Partially offsetting these factors is the benefit of sales leveraging coming from our organic growth and improved plant efficiencies. Turning to slide 13. Our adjusted earnings and earnings per share for the quarter were CAD 30.5 million and CAD 0.68 per share, respectively, representing increases of 27.1% and 25.9%, respectively, as compared to Q1 2024. The improvement in our profitability is due to the solid growth in our adjusted EBITDA and lower interest rates, partially offset by higher depreciation, interest, and lease costs associated with the major investments we have been making in new production capacity to support our US market growth initiatives. Turning to slide 14. For the quarter, we spent CAD 66.2 million on capital expenditures, consisting of CAD 38.3 million of major project CapEx, CAD 13.6 million of smaller project CapEx, and CAD 14.3 million of maintenance CapEx.

Speaker Change: Turning to slide 13.

Speaker Change: Our adjusted earnings and earnings per share for the quarter were $35 million and <unk> 68 per share respectively.

William Kalutycz: Turning to slide 13, our adjusted earnings and earnings per share for the quarter were $30.5 million and $0.68 per share, respectively, representing increases of 27.1% and 25.9%, respectively, as compared to the first quarter of 2024. The improvement in our profitability is due to the solid growth in our adjusted EBITDA and lower interest rates. Partially offset by higher depreciation, interest and lease costs associated with the major investments we have been making in new production capacity to support our U.S. market growth initiative.

Speaker Change: Representing increases of 27, 1% and 25, 9%, respectively as compared to the first quarter of 2024.

Speaker Change: The improvement in our profitability is due to the solid growth in our adjusted EBITDA and lower interest rates, partially offset by higher depreciation interest and lease costs associated with the major investments, we've been making in new production capacity to support our U S market growth initiatives.

Speaker Change: Turning to slide 14.

Speaker Change: For the quarter, we spent $66 2 million on capital expenditures, consisting of $38 $3 million of major project Capex.

William Kalutycz: Turning to slide 14. For the quarter, we spent $66.2 million on capital expenditures, consisting of $38.3 million on major project CapEx. $13.6 million in smaller project CapEx and $14.3 million in maintenance CapEx. We define Project CAPEX as investments that are expected to generate an unlevered after-tax internal rate of return of 15% or greater. All other capital expenditures are classified as Maintenance CAPEX. Primarily all of our major project CapEx expenditures in the quarter were on investments to increase the production capacities, and in many cases operating efficiencies, of our protein and sandwich groups businesses. Looking forward, we expect to spend over the next four quarters another $112 million on these projects.

Speaker Change: <unk> $13 6 million and smaller project, Capex and $14 $3 million of maintenance Capex we.

Speaker Change: We defined project Capex is investments that are expected to generate an unlevered after tax internal rate of return.

Will Kalutycz: We define project CapEx as investments that are expected to generate an unlevered after-tax internal rate of return of 15% or greater. All other capital expenditures are classified as maintenance CapEx. Primarily, all of our major project CapEx expenditures in the quarter were on investments to increase the production capacities, and in many cases, operating efficiencies of our protein and sandwich groups' businesses. Looking forward, we expect to spend over the next 4 quarters, another CAD 112 million on these projects. This will bring our total investment since 2022 in production capacity and efficiencies to largely support our protein, sandwich, and bakery groups' US sales initiatives to nearly CAD 1 billion. Correspondingly, this will provide us with approximately CAD 1.7 billion of incremental sales capacity based on our 2024 annual sales of CAD 6.5 billion. Slide 15 shows some of the key metrics we use to assess our financial position.

Speaker Change: 15% or greater all other capital expenditures at classified as maintenance Capex.

Speaker Change: Primarily all of our major project Capex expenditures in the quarter were on investments to increase the production capacities in many cases operating efficiencies of our protein and sandwich group's businesses.

Speaker Change: Looking forward, we expect to spend over the next four quarters and another $112 million on these projects.

Speaker Change: This will bring our total investments since 2022 and production capacity and efficiencies to largely support our protein sandwich and bakery group's U S sales initiatives to nearly $1 trillion.

William Kalutycz: This will bring our total investments since 2022 in production capacity and efficiency. to largely support our Protein Sandwich and Bakery Group's U.S. sales initiatives to nearly one trillion dollars. Correspondingly, this will provide us with approximately $1.7 billion of incremental sales capacity based on our 2024 annual sales of $6.5 billion.

Speaker Change: Correspondingly this will provide us with approximately $1 7 billion of incremental sales capacity based on our 2024 annual sales of $6 5 billion.

Speaker Change: Slide 15 shows some of the key metrics, we use to assess our financial position our.

William Kalutycz: Slide 15 shows some of the key metrics we use to assess our financial position. Our senior debt leverage decreased as compared to the fourth quarter of 2024 from 3.5 to 1 to 3.4 to 1 due to a convertible debenture issue we completed in the quarter and the growth in our adjusted EBDI. These factors were partially offset by continued investment in positioning our businesses for growth, a temporary advance to our Clearwater business, and higher working capital levels. As George mentioned earlier, over the course of 2025, we expect to make solid progress in reducing our debt leverage driven by the expected growth in our adjusted EBITDA.

Speaker Change: Our senior debt leverage decreased as compared to the fourth quarter of 2024 from three five to one to three four to one due to the convertible debenture issue, we completed in the quarter and the growth in our adjusted EBITDA.

Will Kalutycz: Our senior debt leverage decreased as compared to Q4 2024 from 3.5 to 1 to 3.4 to 1 due to a convertible debenture issue we completed in the quarter and the growth in our adjusted EBITDA. These factors were partially offset by continued investment in positioning our businesses for growth, a temporary advance to our Clearwater business, and higher working capital levels. As George mentioned earlier, over the course of 2025, we expect to make solid progress in reducing our debt leverage, driven by the expected growth in our adjusted EBITDA, the sale and leaseback of real property associated with certain recent project CapEx, and ongoing efforts to reduce the amount of inventory held by our businesses. In terms of liquidity, we finished the quarter in a strong position with CAD 624 million in unused credit capacity.

Speaker Change: These factors were partially offset by continued investment in positioning our business businesses for growth.

Speaker Change: A temporary advance to our Clearwater business and higher working capital levels.

Speaker Change: As George mentioned earlier over the course of 2025, we expect to make solid progress in reducing our debt leverage driven by the expected growth in our adjusted EBITDA.

Speaker Change: The sale and leaseback of real property associated with certain recent project Capex and.

William Kalutycz: Sale and lease back of real property associated with certain recent project cutbacks and ongoing efforts to reduce the amount of inventory held by our business.

Speaker Change: Ongoing efforts to reduce the amount of inventory held by our businesses.

Speaker Change: In terms of liquidity, we finished the quarter in a strong position with $624 million in unused credit capacity.

William Kalutycz: In terms of liquidity, we finished the quarter in a strong position with $624 million in unused credit capacity.

Speaker Change: The next and final slide shows a variety of our free cash flow and dividend metrics over the last 10 years.

William Kalutycz: The next and final slide shows a variety of our free cash flow and dividend metrics over the last 10 years. For the quarter, we generated $46.7 million in free cash flow, up 18.5% as compared to the first quarter of 2024. Similarly, our free cash flow per share for the quarter increased by 18% as compared to the first quarter of 2024. These increases largely reflect the early stages of us starting to generate returns on the investments we have been making in new production capacity.

Will Kalutycz: The next and final slide shows a variety of our free cash flow and dividend metrics over the last 10 years. For the quarter, we generated CAD 46.7 million in free cash flow, up 18.5% as compared to Q1 2024. Similarly, our free cash flow per share for the quarter increased by 18% as compared to Q1 2024. These increases largely reflect the early stages of us starting to generate returns on the investments we have been making in new production capacity. In terms of dividends, subsequent to the quarter, we declared a dividend of CAD 0.85 per share for Q2 2025. That concludes our presentation. Please join us on our Q&A conference call later today at 10:30 AM Vancouver time, 1:30 PM Toronto time. Thank you.

Speaker Change: For the quarter, we generated $46 $7 million in free cash flow up 18, 5% as compared to the first quarter of 2024.

Speaker Change: Similarly, our free cash flow per share for the quarter increased by 18% as compared to the first quarter of 2024.

Speaker Change: These increases largely reflect the early stages of us starting to generate returns on the investments we've been making in new production capacity.

Speaker Change: In terms of dividends subsequent to the quarter, we declared a dividend of <unk> 85 per share for the second quarter of 2025.

William Kalutycz: In terms of dividends, subsequent to the quarter, we declared a dividend of $0.85 per share for the second quarter of 2025.

Speaker Change: That concludes our presentation. Please join us on our Q&A Conference call. Later today at 10 30, a M. Vancouver time, 130 PM Toronto time.

Operator: That concludes our presentation. Please join us on our Q&A conference call later today at 10.30 a.m. Vancouver time, 1.30 p.m. Toronto time. Thank you.

Speaker Change: Thank you.