Q4 2025 Premium Brands Holdings Corp Earnings Call - Q&A

March 19, 2026

Speaker #2: And if at any time during this call you require meeting assistance, please press star zero for the operator. Also note that this call is being recorded on Thursday, March 19, 2026.

Speaker #2: Our speakers today are George Paleologou, CEO and President of Premium Brands, and Will Kaludich, CFO of Premium Brands. At this time, I would like to turn the call over to George.

Speaker #2: Please go ahead.

George Paleologou: Thank you, Sylvie. Good morning and welcome everyone to our 2025 Q4 and year-end conference call. With me here today is our CFO, Will Kalutycz. Hopefully, you've had a chance to listen to our pre-recorded remarks posted on our website this morning. We will now take your questions. Back to you, Sylvie.

Speaker #1: Thank you, Sylvie. Good morning, and welcome, everyone, to our 2025 fourth quarter and year-end conference call. With me here today is our CFO, Will Kaludich.

Speaker #1: Hopefully, you've had a chance to listen to our prerecorded remarks posted on our website this morning. We will now take your questions. Back to you, Sylvie.

Operator 3: Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to withdraw from the Q&A, please press star followed by two. If you're using a speakerphone, we ask that you please lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Martin Landry at Stifel. Please go ahead.

Operator: Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to withdraw from the Q&A, please press star followed by two. If you're using a speakerphone, we ask that you please lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Martin Landry at Stifel. Please go ahead.

Speaker #2: Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your telephone.

Speaker #2: You will then hear a prompt that your hand has been raised. And should you wish to withdraw from the Q&A, please press star followed by two.

Speaker #2: And if you're using a speakerphone, we ask that you please lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions.

Speaker #2: First, we will hear from Martin Landry at Stifel. Please go ahead.

Martin Landry: Hello, Martin.

George Paleologou: Hello, Martin.

George Paleologou: Good morning, guys.

Speaker #3: Hello, Martin.

Will Kalutycz: Hey, Martin.

Speaker #4: Good morning, guys.

Speaker #1: Hey, Martin.

Martin Landry: I would like to start with your revenue guidance for 2026. You're calling for revenues of CAD 9.4 billion at the midpoint. It represents a revenue growth of around 26% year-over-year. I was wondering if you can talk about what type of cadence do you expect on a quarter basis? Is this revenue growth gonna be evenly distributed, or is it gonna be a little bit more front-end loaded?

Speaker #4: I would like to start with your revenue guidance for '26. You're calling for revenues of $9.4 billion at the midpoint. It represents a revenue growth of around 26% year over year or so.

Speaker #4: I was wondering if you can talk about what type of cadence do you expect on a quarter basis? Is this going to be is this revenue growth going to be evenly distributed, or is it going to be a little bit more front and loaded?

Will Kalutycz: Yeah, it'll be. Again, a lot of our growth is ramping up, so you'll have, you know, a sort of ramp up across the year, Martin. Within that, there's obviously the seasonality, you know, Q1 being the softest quarter of the year and Q4 being the next softest and then, you know, Q2 and Q3 sort of being our strong, seasonally strong quarters.

Speaker #1: Yeah, it'll be, again, a lot of our growth is ramping up. So you'll have sort of a ramp-up across the year, Martin. And then within that, there's obviously the seasonality—Q1 being the softest quarter of the year, and Q4 being the next softest, and then Q2 and Q3 sort of being our strong, seasonally strong, quarters.

Martin Landry: Okay. Just to be clear, Will, does that mean that the revenue growth is gonna be higher in Q2 and Q3 when we look at this on a year-over-year basis?

Speaker #4: Okay. Just to be clear, Will, does that mean that the revenue growth is going to be more is going to be higher in Q2 and Q3 when we look at this on a year-by-year basis?

Will Kalutycz: In dollar terms, absolutely.

Speaker #1: In dollar terms, absolutely.

Martin Landry: Okay. What does the EBITDA cadence look like? Again, when we look at your EBITDA dollars growing on a year-over-year basis, when do you expect the biggest growth? Is this gonna be back-end loaded given the commodity cost pressure you've had in H2 of 2025?

Speaker #4: Okay, okay. And then, what does the EBITDA cadence look like? Again, when we look at your EBITDA dollars growing on a year-by-year basis, when do you expect the biggest growth?

Speaker #4: Is this going to be back?

Speaker #1: Back-end loaded. Given the commodity cost pressure you've had in H2 of $25?

Will Kalutycz: We're like on a product basis, by Q2, we're expecting and we're talking mainly two groups, our protein group and our lobster group. I'll separate those and talk about them separately. On the protein group, you know, by the end of Q1, we expect their margins on a per product basis to be back to normal levels. All our final price increases will have impacted by the end of the quarter. That noise is kind of not going into Q2. On the specialty food side then, the rest of the margin expansion is primarily driven by volume growth, which will be the major driver. In terms of the lobster group, you know, 2025 was an incredibly tough year in that segment, with the main fishery.

Speaker #2: Yeah, we're like on a product basis by Q2. We're expecting, and we're talking mainly two groups: our protein group and our lobster group.

Speaker #2: So I'll separate those and talk about them separately. On the protein group, by the end of Q1, we expect their margins on a per-product basis to be back to normal levels.

Speaker #2: All our final price increases will have impacted by the end of the quarter. So, so that noise is kind of not going into Q2.

Speaker #2: So on the specialty food side , then the rest of the margin expansion is primarily driven by volume growth Which will be the major , major driver in terms of the lobster group , you know , 2025 was an incredibly tough year in that that segment with the main fishery .

Will Kalutycz: It's really gonna be a factor of how the fishery goes. We're a little more optimistic. You know, Q1 will still be tough 'cause we're carrying through the issues of 2025, but we'll be through all of our high-cost inventory by that point. Again, on the Premium Foods Distribution Group side or in the lobster group in particular, you should start seeing normalization margins, and so their margins getting back to more normal levels in Q2 and then being steady for the rest of the year.

Speaker #2: So, it's really going to be a factor of how the fishery goes. We're a little more optimistic. You know, Q1 will still be tough because we're carrying through the issues of 2025.

Speaker #2: But we'll be through all of our high-cost inventory by that point. And so again, on the Premium Foods Distribution Group side, or in the Lobster Group in particular, you should start seeing normalization of margins.

Speaker #2: And so their margins are getting back to more normal levels in Q2, and then being steady for the rest of the year.

George Paleologou: What he meant, Martin, is Q1 will be tough for the lobster group, not Premium Brands.

Speaker #3: And what he meant , Martin , is Q1 will be tough for the lobster group . Not not premium brands .

Will Kalutycz: Premium Brands food distributions.

Speaker #2: Premium Brands, food distribution.

George Paleologou: Mm-hmm.

Will Kalutycz: Which is part of that. Yeah.

Speaker #3: Which is part of that. Yeah.

Martin Landry: Okay, in terms of EBITDA cadence, you know, a little of a slower start, but ramping up starting Q2.

Speaker #1: Okay . So , so in terms of EBITDA , cadence , you know , a little bit slow , slower start , but ramping up starting in Q2 .

Will Kalutycz: Exactly.

Speaker #2: Exactly .

George Paleologou: Because of seasonality mainly, Martin, right? That's what we're looking at.

Speaker #3: Because of seasonality , mainly . Martin . Right . That's what .

Will Kalutycz: Seasonality and the beef costs are still gonna be.

Speaker #2: Seasonality and the beef costs are still going to be... And the lobster costs...

George Paleologou: The beef, yeah.

Will Kalutycz: The lobster costs.

George Paleologou: which you've explained. Yeah.

Speaker #3: Which you've explained .

Speaker #2: Yeah .

Will Kalutycz: Yeah.

Martin Landry: Okay. Perfect. Thank you for all the color, and best of luck.

Speaker #1: Okay. Perfect. Thank you for all the color, and best of luck.

Will Kalutycz: Thanks, Martin.

Speaker #2: Thanks , Martin .

Operator 3: Next question will be from Derek Lessard at TD Cowen. Please go ahead.

Operator: Next question will be from Derek Lessard at TD Cowen. Please go ahead.

Speaker #4: Next question will be from Derek LaSalle at TD Cowan. Please go ahead.

Operator 2: Yeah, good afternoon, guys, and congrats on the quarter given the volatility that's going on out there. George, I just want to hit on your comments from the call this morning. You talked about a consumer shift to buying some of the lower cost products. Could you maybe talk about that shift and how that impacted you, and what product categories were you referring to specifically?

Derek Lessard: Yeah, good afternoon, guys, and congrats on the quarter given the volatility that's going on out there. George, I just want to hit on your comments from the call this morning. You talked about a consumer shift to buying some of the lower cost products. Could you maybe talk about that shift and how that impacted you, and what product categories were you referring to specifically?

Speaker #5: Yeah . Good afternoon guys . And congrats on a quarter . Given the the volatility that's going on out there George . I just want to hit on your your comments from from the call this morning .

Speaker #5: You talked about a shift or consumer shift to to to , to buying lower cost lower some of the lower cost products . Could you maybe talk about that shift in how that impacted you and , and what product categories were you referring to specifically

George Paleologou: Derek, what specifically are you referring to in my prepared remarks? I

Speaker #3: Derek, what specifically are you referring to in my prepared I.

Operator 2: No, I was-

Derek Lessard: No, I was-

Speaker #5: I was .

George Paleologou: You know, I think that the point there is that there is definitely a shift away from purchasing ultra-processed foods. I think you're seeing it in all the stats that's coming out. You know, again, the new Dietary Guidelines for Americans, obviously, and narrative from there talks a lot about it. You know, in the US it's quite significant because a lot of the school lunch programs, the food programs for the military, and the SNAP program as well, is changing. A lot of ultra-processed foods do not qualify under those programs. Again, there's definitely a shift towards more wholesome foods with more natural ingredients.

Speaker #3: You know, I think that the point there is that there is definitely a shift away from purchasing ultra-processed foods. I think you're seeing it in all the stats that are coming out.

Speaker #3: You know , you know , again , the , the new US food guide , obviously , and narrative from there talks a lot about it .

Speaker #3: You know , in the US it's quite significant because a lot of the , the school lunch programs , the the food programs for , for the military and the , the Snap program as well is changing a lot of ultra processed foods do not qualify under those programs .

Speaker #3: So , so again , there's definitely a shift towards more wholesome foods with more natural ingredients . Definitely a shift towards protein . Particularly clean protein , which is where we play .

George Paleologou: Definitely a shift towards protein, particularly clean protein, which is where we play. We're seeing that with all the requests we're getting from different customers to provide them with innovation sessions around our products, right? Which is what is driving our growth.

Speaker #3: And we're seeing that with all the requests we're getting from different customers to provide them with innovation sessions around our products, right?

Speaker #3: Which is what is driving our growth.

Operator 2: Yeah, sorry. Sorry, George. Maybe I wasn't clear. I think I'm talking more about the challenging consumer backdrop and if there's been any trade downs.

Derek Lessard: Yeah, sorry. Sorry, George. Maybe I wasn't clear. I think I'm talking more about the challenging consumer backdrop and if there's been any trade downs.

Speaker #5: Yeah . Sorry , sorry , George . Maybe I wasn't clear . I think I was talking , I'm talking more about the challenging consumer backdrop .

Speaker #5: And if there's been any trade down,

George Paleologou: You know, again, Derek, as we've said before, from our perspective over the past year or so, we have seen changes in the channels that the consumers are shopping for their food, right? For example, there's been some transition from mainstream retail to club, for example. Again, you're seeing it in some of the reported numbers from some of the publicly traded companies in this space. We're not seeing a lot of changes in regards to the way the consumer eats. The trends that we've been investing in, again, what I mentioned earlier in terms of eating cleaner food, less ultra-processed foods, those are continuing. I was just at a conference in Washington, DC, which showed all the statistics from 2025.

Speaker #3: You know , I again , Derek , as we've said before , from , from our perspective over the past year or so , we have seen changes in the channels that the consumers are shopping for , for their food , right ?

Speaker #3: For example , there's been some transition from mainstream retail to to club , for example . Again , you're seeing it in some of the reported numbers from from some of the publicly traded companies in the space .

Speaker #3: We're not seeing a lot of changes in regards to the way the consumer eats, the trends that we've been investing in.

Speaker #3: Again , what I mentioned earlier in terms of eating cleaner food , less ultra processed foods , those are continuing . I was just at a conference in Washington , DC , which showed all the statistics from from 25 and all of the trends Nine out of ten leading growth categories in all our retail are protein and meat related , nine out of the ten , right .

George Paleologou: All of the trends, nine out of ten leading growth categories in all of retail are protein and meat related. Nine out of the ten, right? Basically the trends that we've been talking about are continuing.

Speaker #3: So, basically, the trends that we've been talking about are continuing.

Will Kalutycz: Hey, Derek, I would add. It's interesting because, you know, where we're seeing the most in our business, and that comment, is on the food service side of things. You know, we are seeing a much more price sensitive consumer. Our food service customers are looking for solutions, price-based solutions. That's historically what we have seen in economically challenged times. Correspondingly, we generally see some pickup or benefit on the retail side as people eat out less. The interesting part, you know, what's driving all our growth, all our capital investment has been around the US, and at this point, it's primarily a retail strategy, so we're not exposed to that food service sensitivity in the US.

Speaker #2: Hey , so , and Derek , I would add , it's interesting because you know , where we're seeing the most in our business and that comment is on the food service side of things .

Speaker #2: You know , we are seeing a much more price sensitive consumer . Our food service customers are , are looking for solutions price based solutions .

Speaker #2: And that's historically what we have seen in economically challenged times. And then, correspondingly, we generally see some pickup or benefit on the retail side as people eat out less.

Speaker #2: The interesting part , and you know , what's driving all our growth , all our capital investment has been around the US . And at this point , it's primarily a retail strategy .

Speaker #2: So, we're not exposed to that food service sensitivity in the U.S.

Operator 2: Okay. Except for maybe products like at the C-stores, right? The impulse buys.

Derek Lessard: Okay. Except for maybe products like at the C-stores, right? The impulse buys.

Speaker #5: Okay . Except for maybe products like at the C stores , right . The impulse buys .

Will Kalutycz: Yeah. Yeah. Although, you know, our biggest exposure there is jerky and you're not seeing that category too well as we called out in our MD&A. I guess, you know, where we are exposed in the food service side on the sandwich business and QSR, again, that unique part of the channel seems to be pretty economically solid. You know, it's sort of that small luxury concept, and it tends to do fairly well or fine through these more economic times, and that's what we're seeing play out today.

Speaker #2: Yeah . Yeah . Although , you know , our biggest exposure there is jerky and and you're not seeing that that category two too well , as we called out in our MDA and I guess , you know , and where we are exposed in the food service side on the sandwich business and QSR again , that that unique part of the channel seems to be pretty economically solid .

Speaker #2: You know, it's sort of that small luxury concept, and it tends to do fairly well, or fine, through these more economic times.

Speaker #2: And that's what we're seeing play out today.

Operator 2: Okay. Then maybe one final one for me before I break queue. Good progress on the free cash flow. It feels like it's held back still a little bit by the working capital. Looks like, you know, as you built up your programs mostly on inventory, can we be expecting a release of that cash in the coming quarters, and when?

Derek Lessard: Okay. Then maybe one final one for me before I break queue. Good progress on the free cash flow. It feels like it's held back still a little bit by the working capital. Looks like, you know, as you built up your programs mostly on inventory, can we be expecting a release of that cash in the coming quarters, and when?

Speaker #5: Okay. And then maybe one final one for me before I break you. Good progress on the free cash flow. It feels like it's held back still a little bit by the working capital.

Speaker #5: Looks like , you know , as you as you built up your , as you built up your programs mostly on inventory . Can we be expecting a really see that cash in the coming quarters ?

Will Kalutycz: Yeah. You know, it's Q1 in a long time I can say I'm a little bit happy at the progress we've made on inventory because when you dig into it, you know, we build about CAD 70 million of inventory for three key protein programs. Our bites program, our sticks program, and our kebab program. It was purposely built to support us through the busy summer seasons. We're building inventory going in those seasons 'cause we can't meet demand with our production capacity if we don't build in the off-season. It's a big, it's a very positive story, the inventory build. You strip that CAD 70 million out, our days purchases in inventory is about 57, and that's starting to get pretty good.

Speaker #5: And when .

Speaker #2: Yeah , you know , it's the first quarter in a long time , I can say I'm , I'm a little bit happy at the progress we've made on inventory because when you dig into it , you know , we build about $70 million of inventory for three key protein programs .

Speaker #2: Our bites program , are sticks program and our kebab program . And it was purposely built to support us through the busy summer seasons .

Speaker #2: We're building inventory going into those seasons because we can't meet demand with our production capacity if we don't build in the off-season.

Speaker #2: So it's a big it's a very positive story . The inventory build , you strip that $70 million out our days purchasing inventory is about 57 , and that's starting to get pretty good .

Will Kalutycz: You know, we're probably targeting, you know, closer to 55, but we're getting very close to targets.

Speaker #2: You know , you know , we're probably targeting closer to 55 , but we're getting very close to targets . So in answer to your question , yes .

Operator 2: Okay.

Derek Lessard: Okay.

Will Kalutycz: In answer to your question, yes, you know, we should see that free cash flow starting in Q2 as we start to liquidate that inventory.

Speaker #2: You know, we should see that free cash flow starting in Q2 as we start to liquidate that inventory.

Operator 2: Awesome. Thanks for the commentary, guys, and good luck.

Derek Lessard: Awesome. Thanks for the commentary, guys, and good luck.

Speaker #5: Awesome . Thanks . Thanks for the commentary , guys , and good luck .

Will Kalutycz: Thanks, Derek.

Speaker #2: Thanks , Derek .

George Paleologou: Next question will be from Michael Glen at Raymond James. Please go ahead.

Operator: Next question will be from Michael Glen at Raymond James. Please go ahead.

Speaker #4: Next question will be from Michael Glenn at Raymond James. Please go ahead.

Michael Glen: Oh, hey.

Speaker #6: Oh , hey .

Will Kalutycz: Hey, Michael.

Michael Glen: Hey. Maybe just to start, Will, can you just give some. You made the comment to the earlier question regarding the beef price inflation, but are you comfortable? I'm just trying to assess. If you look at the USDA data recently, it looks like beef has been moving higher. Like, what level of beef price have you embedded into the guidance? And are you comfortable with that level? We're just trying to get an idea of all of that.

Speaker #2: Hey , Michael .

Speaker #6: Hey . Maybe just to start , will , can you just give some . You made the comment for the earlier question regarding the beef price inflation , but are you comfortable ?

Speaker #6: Like, I'm just trying to assess—if you look at the USDA data recently, it looks like beef has been moving higher.

Speaker #6: What level of beef price have you embedded into the guidance, and are you comfortable with that level? We're just trying to get an idea of all of that.

Will Kalutycz: Yeah, we definitely expect beef to be inflationary this year. You know, the demand continues to be very strong when corresponding to George's earlier comments on consumer trends. At the same time, you know, supply continues to be very tight in North America. We are expecting it to be inflationary. That is built into our guidance. You know, the issue in the back half of last year, and what shocked us so much was what happened with the tariff situation in the US with Brazil. That really created a tremendous amount of volatility that wasn't factored into. You know, taking out those types of black swan events, we feel very comfortable with the pricing strategies we put in place at this point for 2026.

Speaker #2: Yeah . So so yeah , we definitely expect beef to be inflationary this year . It it , it , you know , the man continues to be very strong when corresponding to George's earlier comments on consumer trends .

Speaker #2: And at the same time, you know, supply continues to be very tight in North America. So we are expecting it to be inflationary.

Speaker #2: That is built into our guidance . But , you know , the issue in the back half of last year and what shocked us so much was , was what happened with the tariff situation in the US , with Brazil , that really created a tremendous amount of volatility .

Speaker #2: That was factored into , you know , taking out those types of black swan events . We feel very comfortable with with the pricing strategies we put in place at this point for 2026 .

Michael Glen: Okay. In the third quarter, you provided a figure with specialty gross margin, excluding the higher beef price. Do you have a similar figure for Q4?

Speaker #6: Okay . And in the third quarter , you provided a figure with specialty gross margin , excluding the higher beef price . Do you have a similar figure for Q4 ?

Will Kalutycz: Well, it's interesting because, you know, that figure—what we did in that figure is we looked at our selling price increases in our protein group of businesses, and we compared that to the increase in beef prices. And we took that nominal difference, and that's what we used in the MD&A. What that does not reflect is the fact that that's just a cost recovery. You're still not recovering your margins. In Q4 we actually made great progress on our pricing. When you do that math, it's actually slightly positive. It's about CAD 2 million positive, i.e. our selling price increases, net of commodity and wage inflation was a positive CAD 2 million. The issue now is our percentage margins still haven't come back 'cause the price increases weren't fully implemented.

Speaker #2: Well , it's interesting because , you know that that that figure , what we did in that figure is , is we looked at our selling price increases in our protein group of businesses , and we compared that to the increase in beef prices .

Speaker #2: And we took that nominal difference, and that's what we used in the MD&A. What that does not reflect is the fact that that's just a cost recovery.

Speaker #2: You're still not recovering your margins . And so in Q4 , we actually made great progress on our pricing . So when you do that math , it's actually slightly positive .

Speaker #2: It's about $2 million positive, i.e., our selling price increases, net of commodity and wage inflation, was a positive $2 million. But the issue now is our percentage margins still haven't come back because the price increases weren't fully implemented.

Will Kalutycz: It becomes a little more difficult to come up with that number when you're now going from just a cost recovery basis to what the margin should be. That's why we didn't disclose it this quarter.

Speaker #2: So it becomes a little more difficult to come up with that number when you're now going from just a cost recovery basis to what the margin should be.

Speaker #2: So, that’s why we didn’t disclose it this quarter.

Michael Glen: Okay. Just on the Shaw divestment. Does Shaw get netted out of the reported results at the time of sale, so in 60 days, or does it get netted out as a discontinued op from the beginning of the year?

Speaker #6: Okay. And then just on the Shaw divestment, does Shaw get netted out of the reported results at the time of sale?

Speaker #6: So, in 60 days, or does it get netted out as a discontinued op from the beginning of the year?

Will Kalutycz: Yeah, we'll probably, because it's not material, we're gonna argue it's not a discontinued op, so it'll just be netted out from the day we sold. There seems to be a little bit of confusion around the Shaw transaction. Yeah, we've excluded Shaw for the three quarters of the year. That's about CAD 170 million in sales that we've pulled out of the guidance if you wanna compare it sort of pre-Shaw to post-Shaw transaction. On the EBITDA side, for 2026, we're budgeting before restructuring costs about CAD 21 million, most of that being in the last three quarters, about CAD 20 million of it being in the last three quarters. We pulled out that CAD 20 million from our guidance.

Speaker #2: Yeah, well, probably because it's not material. We're going to argue it's not a discontinued OP, so it'll just be netted out from the day we sold.

Speaker #2: And there's there seems to be a little bit of confusion around the Shaw transaction . So yeah , we , we've excluded Shaw for the three quarters of the year .

Speaker #2: That's about $170 million in sales that we've pulled out of the guidance. If you want to compare it, sort of pre-Shaw to post-Shaw transaction.

Speaker #2: And on the EBITDA side for 26 we're we're budgeting before restructuring costs about 21 million . Most of that being in the last three quarters , about 20 million of it being in the last three quarters .

Speaker #2: So so we pulled out that 20 million from our guidance . So , you know , if you want to normalize the guidance for the Shaw numbers , it's 170 million in sales and about 20 million in EBITDA .

Will Kalutycz: you know, if you wanna normalize the guidance for the Shaw numbers, it's CAD 170 million in sales and about CAD 20 million in EBITDA.

George Paleologou: All the numbers that Will has mentioned, Michael, are in Canadian dollars. There seem to be some confusion in terms of what's US or Canadian in some of the commentary I saw. All the numbers you mentioned are in Canadian dollars.

Speaker #3: And all the numbers that Will has mentioned, Michael, are in Canadian dollars. There seemed to be some confusion in terms of what's US or Canadian in some of the commentary I saw. All the numbers you mentioned are in Canadian dollars.

Michael Glen: Okay, got it. Thank you for those figures. I'll step back.

Speaker #6: Okay. Got it. Thank you for those figures. I'll step back.

Will Kalutycz: Okay. Thanks, Michael.

Speaker #2: Okay. Thanks, Michael.

Operator 3: Next question will be from Christopher Li at Desjardins. Please go ahead.

Operator: Next question will be from Christopher Li at Desjardins. Please go ahead.

Speaker #4: Next question will be from Chris Lee at Desjardins. Please go ahead.

Christopher Li: Oh, thanks very much. Sorry, my note might have been the source of the confusion. Apologize for that.

Speaker #7: Oh, thanks very much. Sorry, my note might have been the source of the confusion. I apologize for that.

Will Kalutycz: Hi. Hi, Chris.

Speaker #2: Hi .

Christopher Li: Hi there. Well, I just maybe wanna start with the question on the Stampede acquisition. When the deal was first announced, I think you provided some EBITDA guidance for 2026 of around $90 million. Just wanna check in to see if that's still a reasonable outlook. I'm just asking in the context of your earlier comments around the food service channel being a bit more sensitive. I think Stampede is a bit more leveraged to food service. I know there's some unique advantages, obviously, to that business that maybe make it more resilient. Just wanna check in to see if the outlook for Stampede is still valid.

Speaker #7: Chris . Hi , there . Well , I just maybe want to start with the question on the stampede acquisition when the deal was first announced .

Speaker #7: I think you provided some EBITDA guidance for 2026 of $98 million. I just want to check in to see if that's still a reasonable outlook.

Speaker #7: I'm just asking, in the context of your earlier comments around the food service channel being a bit more sensitive, I think Stampede is a bit more leveraged to food service.

Speaker #7: I know there's some unique advantages , obviously , to that , to that business that maybe make it more resilient . So I just want to check in to just see if outlook for stampede is still valid .

Will Kalutycz: Yeah. The actual number, total number, Stampede was CAD 90 million, and then we had CAD 8 million of synergies built into that number, so a total contribution of CAD 98 million, and we still feel very good about that. The food service exposure, you're absolutely right, that is a different characteristic of Stampede. You know, that was one of the reasons attracted to us 'cause it further diversified our cash flows. It's very interesting because whereas they are seeing their customers are seeing some softness in their sales, you know, which is no surprise. What has been happening is their customers have been coming to them to more product solutions, more LTO-type transactions, which they do incredibly well on in terms of their ability to meet what the customer is trying to do.

Speaker #2: Yeah , so , so the actual number total number , stampede was 90 million . And then we had 8 million of synergies built into that number .

Speaker #2: So a total contribution of 98 million . And we still feel very good about that . The the the food service exposure . You're absolutely right that that is a different characteristic of stampede .

Speaker #2: You know , that was one of the reasons attracted to us because it further diversified our our cash flows . But it's very interesting because whereas they are seeing their customers are seeing some softness in their sales , you know , which is no surprise , but what has been happening is their customers have been coming to them to more product solutions , more LTO type transactions , which they do incredibly well on in terms of their , their ability to meet what the customer is trying to do .

Will Kalutycz: Yeah, if you just looked at one SKU within the Stampede business, you might see some softness, but they're more than making it up in these other opportunities around LTOs and new product development.

Speaker #2: And so , so yeah , the , if you just looked at one skew within the stampede business , you might see some softness , but they're more than making it up in these other opportunities around Ltos and new product development .

George Paleologou: Yeah. The other comment I have, Chris, is that they're not just food service. They do a lot of business with club and retail. This is the part of the business, their business that's growing and will continue to grow in the future.

Speaker #3: Yeah . The other comment I have , Chris , is that they're not just food service . They do do a lot of business with with club and retail .

Speaker #3: This is the part of the business , their business that's growing and will continue to grow in the , in the future , you know , and again , based on some of the , the , the macro trends that I talked about earlier .

Will Kalutycz: You know, again, based on some of the macro trends that I talked about earlier.

David Brown: Okay. That's very helpful. My second question is just again on your revenue outlook. If I look at your specialty foods excluding Stampede, just last year, very strong organic volume growth rate of almost 10%. When you think about your outlook for this year, are you expecting the OVGR to be similar, like almost 9 to 10%? Or do you expect it to accelerate given you have obviously new programs still coming through the year?

Christopher Li: Okay. That's very helpful. My second question is just again on your revenue outlook. If I look at your specialty foods excluding Stampede, just last year, very strong organic volume growth rate of almost 10%. When you think about your outlook for this year, are you expecting the OVGR to be similar, like almost 9 to 10%? Or do you expect it to accelerate given you have obviously new programs still coming through the year?

Speaker #7: Okay , that's very helpful . My second question is just again , on your revenue outlook . If I look at your specialty foods , excluding stampede , just last year , very strong organic volume growth rate of almost 10% .

Speaker #7: When you think about your outlook for this year, are you expecting the over to be similar, like almost 9%, 9%, or 10%, or do you expect it to accelerate given you have, obviously, new programs still coming through the year?

Will Kalutycz: Yeah. For the year, Chris, our organic volume growth rate in the specialty foods, I believe, is about a little over 8.5% for the year.

Speaker #2: Yeah , for for the year . Chris . Our organic volume growth rate in the specialty foods , I believe is about a little over 8.5% for the year .

David Brown: Mm-hmm.

Christopher Li: Mm-hmm.

Will Kalutycz: You know, it accelerated through the year, so by the end of the year we're, you know, around the 10%, I believe, for Q4. For 2026, we're expecting an annual rate closer to the Q4 rate, so going from, you know, 8.5% to about 10% for the year.

Speaker #2: And , you know , it accelerated through the year . So by the end of the year , we're , you know , around the 10% , I believe for Q4 , for 2026 , we're expecting an annual rate closer to the Q4 rate .

Speaker #2: So, going from, you know, eight and a half to about 10% for the year.

David Brown: Got it. Okay. Thanks. I'll just with you. Thanks, sir.

Christopher Li: Got it. Okay. Thanks. I'll just with you. Thanks, sir.

Speaker #7: Got it. Okay, thanks. I'll just—thanks for that.

Will Kalutycz: Okay. Thanks, Chris.

Speaker #2: Okay, thanks, Chris.

Operator 3: Next question will be from Luke Hannan at Canaccord Genuity. Please go ahead.

Operator: Next question will be from Luke Hannan at Canaccord Genuity. Please go ahead.

Speaker #4: Next question will be from Luke Hannon at Canaccord Genuity. Please go ahead.

Luke Hannan: Yeah, thanks. Good morning, guys.

Speaker #8: Yes, thanks. Good morning, guys.

Will Kalutycz: Hey, Luke.

Luke Hannan: I appreciate the added disclosure when it comes to ROIC in the MD&A as well. I just wanted to follow up on it. It's mentioned in there the ramp-up costs that were associated with Shaw Bakers. Overall, do you expect that divestiture to be dilutive at all to ROIC in the near term, just given the contribution of margins in bakery and how much higher

Speaker #2: Hey , Luke .

Speaker #8: I appreciate the added disclosure . When it comes to to ROIC in the mDNA as well . I just wanted to follow up on it's mentioned in there , the ramp up costs that were associated with Shah , but overall , do you expect that divestiture to be dilutive at all to ROIC in the near term , just given the contribution margins in bakery and how much higher ?

Will Kalutycz: No. No.

Luke Hannan: The rest of them?

Will Kalutycz: Well, it's interesting, Luke. If you separate out Shaw from, you know, we look at the ROIC on the different groups within the platform, the specialty foods platform. For our bakery platform, you know, you look at the ROIC on that business, and it was about 7% this year. If you strip Shaw out, it's actually 17.5%. Our Artisan Bread business, which, you know, they were the first plant built in our most recent CapEx cycle. They finished their plant in 2022, and that plant's now coming close to capacity or at capacity. They're hitting it out of the park on ROIC.

Speaker #8: No .

Speaker #2: Well , it's interesting , Luke , if you separate out Shah from it , you know , we look at the ROI on on the different groups within the platform , the specialty foods platform .

Speaker #2: So, for our bakery platform, you know, you look at the ROI on that business, and it was about 7% this year.

Speaker #2: But if you strip Shah out , it's actually 17.5% . Our artisan bread business , which , you know , they built , they were the first plant built in our most recent CapEx cycle .

Speaker #2: They finished their plant in 2022, and that plant's now coming close to capacity, or at capacity. And so they're hitting it out of the park on ROA.

Will Kalutycz: You know, Shaw is still in the early days of their ramp up, you know, a lot of start-up costs, a lot of things to work out in their new San Leandro plant. So their ROIC has been suffering because of that.

Speaker #2: You know , Shah is still in the early days of their ramp up . You know , a lot of startup costs , a lot of lot of things to work out in their new new San Leandro plant .

Speaker #2: So their role has been suffering because of that.

Luke Hannan: Okay. Got it. Thanks. Just for my follow-up here on the thought behind keeping that minority stake. I mean, it would seem like the intention would probably be at some point in time down the road for you guys to divest that as well. Is that fair to say?

Speaker #8: Okay . Got it . Thanks . And then as just for my follow up here on the the thought behind the keeping that minority stake , I mean , is it would seem like the intention would probably be at some point in time down the road for , for you guys to divest that as well .

Will Kalutycz: Oh, no, no. Let's be clear. That's a great question, Luke. We only own 74% of Shaw. Our partner down in San Francisco owns the other 26%. So we will have fully exited our investment in Shaw with this transaction. So that $114 million in proceeds we received, that's for 74% of the business.

Speaker #8: Is that .

Speaker #2: No , no , no , let's let's be clear . That's a great question , Luke . We only own 74% of Shah .

Speaker #2: Our partner down in San Francisco owns the other 26%. So we will have fully exited our investment in Shaw with this transaction.

Speaker #2: So so that $114 million US in proceeds we received . That's for 74% of the business . Yeah . So you you need to divide that by 74% to get , you know , sort of a full value of the business concept .

Luke Hannan: Yeah. Okay.

Will Kalutycz: You need to divide that by 74% to get, you know, sort of a full value of the business concept.

Luke Hannan: Sure. Following on that logic then, a rough math, let's say you guys got about 10 times for that stake.

Speaker #8: Sure. And then so, following on that logic, then so rough math would say you guys got about ten times for that stake.

Will Kalutycz: Yeah. Yeah. If you take the CAD 21 million in projected EBITDA for 2026, convert that to US dollars, that's about $15 million US in EBITDA. You take out some. You know, there's still gonna be some ongoing restructuring costs with the business. We're a little over 10x the multiple.

Speaker #2: Yeah , yeah . If you take the 21 million in , in projected EBITDA for , for , for , for 2026 , convert that to US dollars .

Speaker #2: That's about $15 million US in EBITDA. You take out some, you know, there's still going to be some ongoing restructuring costs with the business.

Speaker #2: We were a little over ten times the multiple.

David Brown: Not only that, Luke, but again, as you know, we're not a financial investor here, we're a strategic investor. We found an excellent buyer for the business. Again, there's tangibles and intangibles to this type of transaction, and we're gonna work together with the buyer for mutual benefit in the future. You know, we will be partners with them in the future in our core business.

George Paleologou: Not only that, Luke, but again, as you know, we're not a financial investor here, we're a strategic investor. We found an excellent buyer for the business. Again, there's tangibles and intangibles to this type of transaction, and we're gonna work together with the buyer for mutual benefit in the future. You know, we will be partners with them in the future in our core business.

Speaker #3: , not only that , Luke , but again , as you know , we're we're not a financial investor here . We're a strategic investor and we found an excellent buyer for the business and again , there's tangible and intangibles to this type of transaction .

Speaker #3: And we're going to work together with with the buyer for , for , for mutual benefit in the future . So , you know , we will be partners with them in the future in our core business .

Luke Hannan: Got it. Appreciate it. Thank you very much.

Speaker #8: Got it. Appreciate it. Thank you very much.

Will Kalutycz: Thanks, Luke.

Speaker #2: Thanks , Luke .

Operator 3: Next question will be from Ty Collin at CIBC. Please go ahead.

Operator: Next question will be from Ty Collin at CIBC. Please go ahead.

Speaker #4: Next question will be from Ty Collin at CIBC. Please go ahead.

Ty Collin: Hey, thanks for taking my question.

Speaker #9: Hey , thanks for taking my question For my first one . Hey , Will for my first one , I'm just wondering if you could provide a little more color around the gross margin decline in the quarter .

Will Kalutycz: Hey, Ty.

Ty Collin: Hey, Will. For my first one, I'm just wondering if you could provide a little more color around the gross margin decline in the quarter. I know you guys called out a few factors in the MD&A, but I just wanna understand what the biggest drivers were there since it sounds like commodity headwinds were actually quite a bit lower, sequentially, and just how we should think about that into 2026.

Speaker #9: I know you guys called out a few factors in the MD&A, but I just want to understand what the biggest drivers were there, since it sounds like commodity headwinds were actually quite a bit lower sequentially, and just how we should think about that into 2026.

Will Kalutycz: Now, Ty, are you looking at consolidated or in the individual segments?

Speaker #2: Now, are you looking at consolidated, or in the individual segments?

Ty Collin: I was referring to consolidated, but.

Speaker #9: I was referring to consolidated, but.

Will Kalutycz: Yeah. Okay

Ty Collin: Happy to hear your thoughts.

Will Kalutycz: Yeah. 'Cause, you know, if you're looking at a consolidated basis, the biggest single factor was in our lobster group. You know, going back to my earlier comment of taking selling prices less commodity impacts and looking at what that number is. For Q4, you take our selling price increases on our lobster products and take out the commodity cost impact, commodity cost inflation on the lobster procurement. That was about a CAD 6.5 million hit in the quarter. That was the single largest impact on our gross margins. And then if you look at the specialty foods group, it was my comment earlier. Our protein group's margins are still below where they should be 'cause we're still in the process of realizing on our beef price increases.

Speaker #2: Yeah , okay . Yeah , because , because yeah , because you know , if you're looking at a consolidated basis , the biggest single factor was in our lobster group , you know , going back to my earlier comment of taking selling prices less commodity impacts and looking at what that number is for the fourth quarter , you take our selling price increases on our lobster products and take out the commodity cost impact , commodity cost inflation on the lobster procurement .

Speaker #2: That was about a $6.5 million hit in the quarter. That was the single largest impact on our gross margins. And then, if you look at the Specialty Foods Group, it was, as I commented earlier, our protein margins — the Protein Group's margins — are still below where they should be because we're still in the process of realizing on our beef price increases.

Will Kalutycz: That was a contributing factor, but the single biggest one was the lobster issue.

Speaker #2: So that was a contributing factor, but the single biggest one was the lobster issue.

Ty Collin: Okay. Within specialty foods, it's still more of a commodity issue rather than plant startup or any other sort of.

Speaker #9: Okay , so it's still it's still more of a within specialty foods , it's still more of a commodity issue rather than plant startup or any other sort .

Will Kalutycz: Oh, sorry. You know, that's a great point. Yeah. We had about CAD 10 million of incremental overhead costs associated with our Tennessee facility, our various cooked protein lines that have come on, and with one other new plant that came on that's I'm not recalling right now. So yeah, point, you're absolutely right. You know, partially offsetting that was, you know, we had incredibly strong organic volume growth in the quarter, right? I mean, you know, our US growth initiatives hit 18% organic volume growth. So that's helping to cover some of that plant overhead.

Speaker #2: Of oh , sorry , sorry , you know , that's a great point . Yeah , we had we had about 10 million of incremental overhead costs associated with our Tennessee facility .

Speaker #2: Our various protein lines that have come on . And with one other new plant that came on , that's that's I'm not recalling right now .

Speaker #2: So , so yeah , you're absolutely right . But you know , partially offsetting that was , you know , we had incredibly strong organic volume growth in the quarter , right ?

Speaker #2: You know , our US growth initiatives hit 18% organic volume growth . So so that's helping to cover some of that , that plant overhead .

Ty Collin: Okay. Got it. Just for my follow-up, on the M&A pipeline. I mean, just based on the deck you put out this quarter, it looks like that's emptied out pretty significantly compared to what it was in Q3. Is that because you're seeing fewer quality opportunities out there, or does that reflect more of a deliberate decision to kinda take a breath and focus on some other priorities in the near term?

Speaker #9: Okay . Got it . And then just for my follow up on the M&A pipeline , so I mean , just based on the deck you put out this quarter , it looks like that's emptied out pretty significantly compared to what it was in Q3 .

Speaker #9: Is that because you’re seeing fewer quality opportunities out there, or does that reflect more of a deliberate decision to kind of take a breath and focus on some other priorities in the near term?

George Paleologou: Yeah. We are in a number of discussions, Ty, with some excellent companies. You know, I think we're cautious. Obviously, you know, there is a war going on and we have some concerns around the impact of high gas prices on consumers and those type of things. Certainly, you know, we're very busy. We're always in discussions with companies that we think will complement our portfolio of food companies.

Speaker #3: Yeah , we're we are in a number of discussions . Ty , with some excellent companies . You know , I think we're , you know , we're cautious , obviously , you know , there's a war going on and we have some concerns around impact of high gas prices on consumers and those type of things .

Speaker #3: But certainly , you know , we're very busy . We're always in discussions with companies that we think will , will complement our our , our portfolio of , of , of food companies and , you know , with regards to that schedule in the deck , you know , we're always very careful because we are , we're a big player now and a lot of times when we , you know , disclose discussions as advanced people speculate as to what companies they are .

George Paleologou: You know, with regards to that schedule in the deck, you know, we're always very careful because we're a big player now, and a lot of times when we disclose discussions as advanced, people speculate as to what companies they are. We're trying to be a little more cautious. Again, you know, we're obviously very acquisitive and we're still looking at a number of wonderful opportunities.

Speaker #3: So we're trying to be a little more cautious , but but again , you know , we're obviously very acquisitive and we still we're still looking at a number of , of wonderful opportunities .

Ty Collin: Understood. Thank you. I'll pass the line.

Speaker #9: Understood. Thank you. I'll pass the line.

Will Kalutycz: Thanks, Ty.

Speaker #2: Thanks , Todd .

Operator 3: Next question will be from Neven Josipovic at BMO Capital Markets. Please go ahead.

Operator: Next question will be from Neven Josipovic at BMO Capital Markets. Please go ahead.

Speaker #4: Next question will be from Nevin Yochim at BMO Capital Markets. Please go ahead.

Will Kalutycz: Hi, Neven.

Neven Josipovic: Yeah. Thanks. Hi, guys. Hi, you got Neven on for Steve today. Just a couple questions from our team. I guess the first is, are you able to provide an update on the major meat stick launch you guys had ramping up in Q4? You know, how did that progress? Are you fully ramped up now? And then if you're able to discuss initial margins relative to your expectations.

Neven Yakim: Yeah. Thanks. Hi, guys. Hi, you got Neven on for Steve today. Just a couple questions from our team. I guess the first is, are you able to provide an update on the major meat stick launch you guys had ramping up in Q4? You know, how did that progress? Are you fully ramped up now? And then if you're able to discuss initial margins relative to your expectations.

Speaker #2: Hi ,

Speaker #10: Yeah , thanks . Hi , guys . Hi . You got Nevin on for Steve today ? Just a couple questions from our team .

Speaker #10: I guess the first is, are you able to provide an update on the major meat stick launch? You guys had ramping up in Q4?

Speaker #10: You know , how did that progress ? Are you fully ramped up now ? And then if you're able to discuss , discuss initial margins relative to to your expectations

George Paleologou: Yeah. You know, in terms of the launch, you know, it's gone extremely well. It's exceeded our expectations and customer expectations. Very successful. You know, it's using up a lot of our capacity, which is a good problem to have, I guess, because we're unable to, in some cases, launch other programs that are in the pipeline. You know, I won't comment about margins because we don't like to do that in terms of specific margins about specific SKUs for competitive reasons. But again, yeah, I think everybody's extremely pleased with the launch.

Speaker #3: Yeah . So , you know , in terms of the launch , you know , it's gone extremely well . It's exceeded expectations .

Speaker #3: Our expectations and , and , you know , customer expectations . So very successful . You know , it's using up a lot of our capacity , which is which is a good problem to have .

Speaker #3: I guess , because we're unable to , in some cases launch other programs that , that are in the pipeline . You know , I won't comment about margins because we don't like to do that in terms of specific margins , about specific SKUs for competitive reasons .

Speaker #3: But but again , yeah , I think everybody is extremely pleased with with the launch .

Will Kalutycz: Yeah. Only thing I'd add, Neven, is it is a cost-plus structure. We are on that basis achieving our margins obviously because it's cost-plus that we expected. You know, the challenge in the quarter with the program though, it's such a big program and it's impacting several different plants, including our new Hempler's expansion. You'll probably notice in the deck, you know, it was by far our most significant impact on our restructuring costs in the quarter. You know, that was one of the challenges with program 'cause we made it very clear every product that went into a store had to be 100% the best in quality.

Speaker #2: Yeah . And the only thing I'd add , Nevin , is it is a cost plus structure . So we are on that basis , achieving our margins .

Speaker #2: Obviously , because it's cost plus that we expected , you know , the challenge in the quarter with the program though it's such a big program and it's it's impacting several different plants , including our new Templars expansion .

Speaker #2: So you'll probably notice in the deck, you know, it was by far our most significant impact on costs in the quarter.

Speaker #2: So, you know, that was one of the challenges with the program, because we made it very clear every product that went into a store had to be 100% the best in quality.

Will Kalutycz: That resulted in, as we were ramping up the program and working through equipment issues and stuff, it resulted in a lot of waste, taking such a strict adherence to our quality standards. You know, the good news is we are now through that. You're gonna see that cost, that restructuring cost for that program drop off dramatically in Q1.

Speaker #2: And so that resulted in, as we were ramping up the program and working through equipment issues and stuff, it resulted in a lot of waste, taking such a strict adherence to our quality standards.

Speaker #2: You know , the good news is we are now through that . So you're going to see that that that cost that restructuring cost for that program drop off dramatically in Q1

Neven Josipovic: Great. That's good to hear. A follow-up just on the investment income. It looks like you benefited from a one-time CAD 5 million valuation gain in Q4. Excluding this, it looks like investment income has been consistently in the CAD 15 to 16 million range per quarter. Is that a fair run rate going into 2026?

Neven Yakim: Great. That's good to hear. A follow-up just on the investment income. It looks like you benefited from a one-time CAD 5 million valuation gain in Q4. Excluding this, it looks like investment income has been consistently in the CAD 15 to 16 million range per quarter. Is that a fair run rate going into 2026?

Speaker #10: Great . That's that's good to hear . And a follow up just on the investment income , looks like you benefited from a one time $5 million valuation game in Q4 .

Speaker #10: Excluding this, it looks like investment income has been consistently in the $15 to $16 million range per quarter. Is that a fair run rate going into '26?

Will Kalutycz: Yeah. Yeah. Absolutely. You're absolutely right. That was sort of a one-time gain that, you know, we're not expecting that on a regular basis by any means. That CAD 15 million or so is a good run rate.

Speaker #2: Yeah , yeah , absolutely . And you're absolutely right that that was sort of a one time gain that , you know , we're not expecting that on a regular basis by any means .

Speaker #2: And that $1,515 million or so is a good run rate.

Neven Josipovic: Okay, great. Thanks for the questions, guys.

Neven Yakim: Okay, great. Thanks for the questions, guys.

Speaker #10: Okay, great. Thanks for the questions, guys.

Will Kalutycz: Thanks, Neven.

Speaker #2: Thanks , Evan .

Operator 3: Next question will be from John Zamparo at Scotiabank. Please go ahead.

Operator: Next question will be from John Zamparo at Scotiabank. Please go ahead.

Speaker #4: Next question will be from John Zamparo at Scotiabank. Please go ahead.

Ty Collin: Thank you. Good morning, guys.

John Zamparo: Thank you. Good morning, guys.

Speaker #11: Thank you. Good morning, guys.

Will Kalutycz: Hey, John.

Speaker #3: Hey , John .

Ty Collin: I'd like to get a sense of what level of pricing you've taken on beef products that we'll start to notice?

Speaker #11: I'd like to get a sense of what level of pricing you've taken on beef products that we'll start to notice in Q1 without sharing the numbers , I wonder , does it reflect the peak inflation that we saw in the middle of last year or the lower level of year over year inflation ?

John Zamparo: In Q1, without sharing the numbers, I wonder, does it reflect the peak inflation that we saw in the middle of last year or the lower level of year-over-year inflation we saw in Q4? Just wondering what the baseline is that you've based your pricing off.

Speaker #11: We saw in Q4? Just wondering what the baseline is that you've based your pricing off?

Will Kalutycz: Yeah. It's not the peak, John. We all knew that, you know. Sorry, we didn't know the peak was the peak, but there was a lot of hesitation to price off the peak because it was just so high and, you know, we, you know, weren't sure it could be sustainable, and in fact, it wasn't. We priced off, you know, below it for most of our business. Now, some of our businesses did price off that. They priced, you know, they set prices in that chaos. The reality is, you know, our customers now see what's happened and, you know, we'll probably, to the extent that the pricing was so high, give some of that back.

Speaker #2: Yeah , it's not the peak , John . We all knew that , you know , sorry , we didn't know the peak was the peak , but there was a lot of a lot of hesitation to price off the peak because it was just so high .

Speaker #2: And , you know , we , you know , weren't sure it could be sustainable . And in fact , it wasn't . So we priced off , you know , below it for most of our business .

Speaker #2: Now , some of our businesses did price off that . They priced , you know , and they set prices in that chaos .

Speaker #2: But you know , the reality is , you know , our customers now see what's happened . And you know , we'll probably to the extent that the pricing was so high , give some of that back .

Will Kalutycz: you know, overall, we're priced at, you know, a nice point, you know, between sort of where we are today and that peak, leaving us some flexibility for, like I say, the expected cost inflation where we see for 2026 in the beef category.

Speaker #2: But you know , overall , we're priced at , you know , a nice point . You know , between sort of where we are today and that peak leaving us some flexibility for , like I say , the expected cost inflation , we're we we , we see for 2026 in the beef category .

George Paleologou: The interesting thing, John, as I said earlier, is that despite high beef prices, and these are historically high beef prices, particularly with certain cuts, demand for beef, not dollar-wise but volume-wise, is still going way up. Right? This is something that we haven't seen before. Normally, you know, the price of bellies goes substantially, it impacts the demand for bacon, you know, those type of things. Even if beef prices are historically high, demand in terms of volume continues to increase.

Speaker #3: The interesting thing , John , as I said earlier , is that despite high beef prices and these are historically high beef prices , particularly with certain cuts , demand for beef , not dollar wise , but volume wise is still going way up .

Speaker #3: Right ? This is something that we haven't seen before . Normally , the price of bellies goes up substantially . It impacts the demand for bacon .

Speaker #3: You know, those type of things. But even if beef prices are historically high, demand in terms of volume continues to increase.

John Zamparo: Okay. Thank you for that. Thinking about inflation more holistically, the last time we saw a spike in oil at the start of the Ukraine war, beef costs surged shortly afterward. I think inflation on some other commodities for PBH increased as well. I'm mindful of the comment in the press release of seeing some relief on beef inflation so far, but what's your expectation on commodity inflation for this year, and what are the implications to PBH if we do see a prolonged period of higher natural gas costs leading to higher fertilizer costs leading to higher feed costs?

Speaker #11: Okay . Thank you for that . And then thinking about inflation more holistically , the last time we saw a spike in oil at the start of the Ukraine war , beef costs surged shortly afterwards .

Speaker #11: I think inflation on some other commodities for RP increased as well. I'm mindful of the comment in the press release of seeing some relief on beef inflation.

Speaker #11: So far, but what's your expectation on inflation for this year, and what are the implications to BBH? If we do see a prolonged period of higher natural gas costs leading to higher fertilizer costs, leading to higher feed costs,

Will Kalutycz: Yeah. Well, it's an interesting question, John, because, you know, the supply-demand dynamics that drive the cost of the raw materials we buy are indirectly, but not directly, impacted by the freight that more impacts the packers and the farmers' margins. You know, we're far enough down the channel that it takes a long time till you see any of that kind of impact us. You know, first, what has to happen is there's gotta be a cutback in production, cutback in process. You know, our expectations, at least for the near to mid-term, is other supply-demand and supply-demand dynamics are going to be more important than fuel at this point. Generally, where we see most of the cost in fuel is, at least in the short to mid-term, more in freight.

Speaker #2: Yeah , well , it's an interesting question , John , because , you know , the the supply demand dynamics that drive the cost of the raw materials we buy are there indirectly , but not directly impacted by the freight that more impacts Packers and the farmers margins .

Speaker #2: So, you know, we're far enough down the channel that it takes a long time till you see any of that kind of impact us.

Speaker #2: You know , first what has to happen is there's got to be a cutback in production , cutback in process . So so , you know , our expectations at least for the near to mid-term , is other supply demand .

Speaker #2: And supply demand dynamics are going to be more important than than fuel at this point . Generally , where we see most of the cost in fuel is at least in the short to mid-term is more in freight .

Will Kalutycz: You know, freight, you know, if you go back to, you know, 2022, 2023, we were talking a lot about freight costs as part of the inflation equation. That hasn't been a story for the last couple of years. You know, that's where we do see sort of the more short-term impacts, and it's just not as material to overall margins.

Speaker #2: You know , freight . You know , if you go back to , you know , 20 , 22 , 23 , we were talking a lot about freight costs as part of the inflation equation .

Speaker #2: That hasn't been a story for the last couple of years . So , you know , that's where we do see sort of the more short term impacts .

Speaker #2: And it's just not as material to our overall margins.

George Paleologou: The other thing, John, and you know, you're making a little bit of a circular argument there because ultimately the best thing about high prices is high prices, right? right? There's a point where demand for beef will come down. It hasn't happened yet. Ultimately, if prices for beef continue to go up, there will be a point where demand will go down, and that'll bring prices down, right? That's what I kinda wanted to explain earlier, right? The other part is that demand remains high, but beef comes from either domestic sources or from imports, right? Imports tend to be cheaper, and the US now has opened up to more imports, right? The more supply, that should keep prices lower rather than higher. There's a number of dynamics there that will impact price.

Speaker #3: The other thing, John, and you know, you're making a little bit of a circular argument there, because ultimately the best thing about high prices is high prices, right?

Speaker #3: Right . So there's a point where demand for beef will come down . It hasn't happened yet , but ultimately , if prices for beef continue to go up , there will be a point where demand will go down and that will bring prices down , right ?

Speaker #3: That's what I kind of wanted to explain earlier , right . The other part is that demand remains high , but beef comes from either domestic sources or from imports , right .

Speaker #3: And imports tend to be cheaper. And the US now has opened up to more imports, right? So the more supply, that should keep prices lower rather than higher.

Speaker #3: So, there's a number of dynamics there that will impact price.

John Zamparo: Okay. Thank you for that. If I could squeeze one more in. I know you just sold one business, but I wonder if we can get an update on your plans to divest of other non-core assets. This is something that's been discussed in the past. I don't know if there is anything you can say, but is there any you can share about those plans or expected timeline for completion?

Speaker #11: Okay . Thank you for that . And if I could squeeze one more in , I know you just sold one business , but I wonder if we can get an update on your plans to of other non-core assets .

Speaker #11: This is something that's been discussed in the past. I don't know if there is anything you can say, but is there anything you can share about those plans or expected timeline for completion?

George Paleologou: Yeah. We're in a number of discussions, John, with regards to exiting investments and businesses that we deem non-core. You know, we expect to close some more transactions in 2026. We don't know exactly when, but we're definitely in a number of advanced discussions in that regard.

Speaker #3: Yeah , we have a number of , of we're in a number of discussions . John , with , with regards to exiting investments and businesses that , that we deem non-core , you know , we expect to close some in , in some more transactions in , in 26 , we don't know exactly when , but we're definitely in a number of , of advanced discussions in that regard

John Zamparo: Okay. I'll leave it there. Thank you very much.

Speaker #11: Okay, I'll leave it there. Thank you very much.

George Paleologou: Thank you, John.

Speaker #3: Thank you John .

Operator 3: Next question will be from Vishal Shreedhar at National Bank. Please go ahead.

Operator: Next question will be from Vishal Shreedhar at National Bank. Please go ahead.

Speaker #4: Next question will be from Rochelle Sreedhar at National Bank. Please go ahead.

Operator 1: Hi. Thanks for taking my questions.

Vishal Shreedhar: Hi. Thanks for taking my questions.

Speaker #12: Hi . Thanks for taking my questions relating to special . Good afternoon . Final time Related to . Related to the specialty foods and the organic volume growth that you posted .

George Paleologou: Hi, Vishal.

Operator 1: Good afternoon. Related to the specialty foods and the organic volume growth that you posted. My assumption based on discussions through the year was there was an anticipated acceleration through the year, culminating in Q4 as a meat stick program launch. We saw, you know, the growth kinda sequentially slow, albeit still strong, and within the protein group in particular. I was hoping if you can comment on that or if there was something that happened partway through the quarter that might have changed the trajectory.

Vishal Shreedhar: Good afternoon. Related to the specialty foods and the organic volume growth that you posted. My assumption based on discussions through the year was there was an anticipated acceleration through the year, culminating in Q4 as a meat stick program launch. We saw, you know, the growth kinda sequentially slow, albeit still strong, and within the protein group in particular. I was hoping if you can comment on that or if there was something that happened partway through the quarter that might have changed the trajectory.

Speaker #12: My assumption, based on discussions throughout the year, was that there was an anticipated acceleration through the year, culminating in Q4 as a meat stick program launched.

Speaker #12: But we saw , you know , the growth kind of sequentially slow , albeit still strong . And within the protein group in particular , in particular , I was hoping , if you can comment on that or if there was something that happened partway through the quarter that might have changed , changed the trajectory .

Will Kalutycz: No. If you look year over year for quarters sequentially, it did get stronger every quarter, the organic volume growth rate for the group. On a quarter-over-quarter basis, the only thing, you know, without drilling into it a little bit more, would be seasonality, Vishal. That would be the only kinda factor maybe to consider.

Speaker #2: No . If you look year over year for quarters sequentially , it did get stronger every quarter . The organic volume group growth rate for the group on a quarter over quarter basis , the only thing you know , without drilling into it a little bit more , would be seasonality .

Speaker #2: The shell, that would be the only kind of factor maybe to consider.

George Paleologou: Yeah. The other factor, Vishal, is the absolute timing of launches, right? These are big launches, and the timing makes a difference in terms of what we report.

Speaker #3: Yeah , the other factor , Vishal , is the absolute timing of launches , right ? These are big , big launches . And the timing makes a difference in terms of what we report

Operator 1: I see. Okay. Regarding from Q3 to Q4, the seasonality would have been the impact that we should consider in terms of the change in trajectory.

Vishal Shreedhar: I see. Okay. Regarding from Q3 to Q4, the seasonality would have been the impact that we should consider in terms of the change in trajectory.

Speaker #12: I see , I see okay , so so regarding from Q3 to Q4 , the seasonality would have been would have been the impact that we should consider in terms of the , the change in trajectory .

Will Kalutycz: Yeah. Yeah.

Operator 1: Okay. Got it.

Vishal Shreedhar: Okay. Got it.

Speaker #2: Yeah , yeah , it's really the acceleration is sort of on a year over year quarter comparison

Will Kalutycz: It's really the acceleration is sort of on a year-over-year quarter comparison.

Operator 1: Right. Q3 would not have had the large meat stick launch. It started in Q4, partway through. Is that correct?

Vishal Shreedhar: Right. Q3 would not have had the large meat stick launch. It started in Q4, partway through. Is that correct?

Speaker #12: Right. But Q3 would not have had the large meat stick launch. It started in Q4, partway through. Is that correct?

George Paleologou: Correct.

Will Kalutycz: Yes. Correct.

Speaker #2: Correct. Yes. Correct.

George Paleologou: Correct, Vishal. It was delayed to Q4.

Speaker #3: Correct. It was delayed to the fourth quarter.

Operator 1: Okay. In terms of the clients that you acquired-

Vishal Shreedhar: Okay. In terms of the clients that you acquired-

Speaker #12: Okay. And in terms of —

Will Kalutycz: It was partway through Q4 that it launched. It wasn't the full quarter.

Speaker #2: It was partly partway through the fourth quarter that it launched. It wasn't the full quarter.

George Paleologou: Was launched in Canada in Q1. It did not launch in Canada until Q1 2026.

Speaker #3: And was launched in Canada in Q1. So it did not launch in Canada until Q1 '26.

Operator 1: Okay. With respect to, Will, the comments that you provided earlier on in this call, and you said you anticipate an acceleration of trends through the year, recognizing seasonality in Q2 and Q3. Is the suggestion then that we should anticipate Q1 organic volume growth to slow before reconstituting through Q2 and Q3, Q1 slow sequentially, albeit still growth? Is that possibly the implication?

Vishal Shreedhar: Okay. With respect to, Will, the comments that you provided earlier on in this call, and you said you anticipate an acceleration of trends through the year, recognizing seasonality in Q2 and Q3. Is the suggestion then that we should anticipate Q1 organic volume growth to slow before reconstituting through Q2 and Q3, Q1 slow sequentially, albeit still growth? Is that possibly the implication?

Speaker #12: Okay . And with respect to Will , the comments that you provided earlier on in this call , and you said you anticipate an acceleration of trends through the year , recognizing seasonality in Q2 and Q3 is the is the suggestion then that we should anticipate Q1 organic volume growth to slow before reconstituting through Q1 , Q2 , and Q3 .

Speaker #12: Q1 slow sequentially , albeit still . Growth . Is that . Yeah ,

Will Kalutycz: Yeah. Again, on a year-over-year basis, Vishal, it will accelerate. On a quarter-over-quarter basis, I'd have to go back. I'm not sure what the answer to that would be.

Speaker #2: Again , on a year over year basis , Vishal , it will accelerate on a quarter over quarter basis . I'd have to go back .

Speaker #2: I'm not sure what the answer to that would be.

Operator 1: Okay.

Vishal Shreedhar: Okay.

Will Kalutycz: I would suspect so because they're both seasonally slow quarters. Like I say, you know, one of the biggest drivers of our growth has been the stick launch, and that was partway through Q4, so we'll get a full quarter in Q1.

Speaker #12: Okay .

Speaker #2: I would I would suspect I would suspect so because they're both seasonally slow quarters and like I say , the , you know , one of the biggest drivers of our growth has been the stick launch .

Speaker #2: And that was partway through Q4, so we'll get a full quarter in Q1.

Operator 1: Right. Okay. You commented on the restructuring costs, the CAD 25 million. How should we think about the restructuring costs? They were building through the year, and they were, you know, larger than they usually have been for PDH, and those are adjusted out, I understand. In 2026, how should we think about the restructuring costs that are going to be incurred? Do you have a sense in your plan?

Vishal Shreedhar: Right. Okay. You commented on the restructuring costs, the CAD 25 million. How should we think about the restructuring costs? They were building through the year, and they were, you know, larger than they usually have been for PDH, and those are adjusted out, I understand. In 2026, how should we think about the restructuring costs that are going to be incurred? Do you have a sense in your plan?

Speaker #12: , right ? Okay . And , and you commented on the restructuring costs , the 25 million and , and how should we think about the restructuring costs we're building through the year ?

Speaker #12: And there were , you larger than they usually have been for PVH and those are adjusted out . I understand , but in 2026 , how should we think about the restructuring costs that are going to be incurred ?

Speaker #12: Do you have a sense in your plan?

Will Kalutycz: Yeah. You know, it you know, Q4 came in higher than our original plan. We had two major issues that caused the variance. You know, we've got a slide in the deck that outlines sort of the individual initiatives. Just the labor transition issues at our Shaw Bakers facilities in San Francisco, the degree of challenges around that wasn't anticipated, so that was about a $5.7 million variance in the quarter. As you know, Shaw Bakers has been sold, you know, so we're not gonna see, we'll see some in Q1, but we won't see any more after that.

Speaker #2: Yeah , yeah . You know , Q4 came in higher than our original plan . You know , we had two major issues that caused the variance .

Speaker #2: Some , you know , we had , you know , we've got a slide in the deck that outlines sort of the , the , the individual initiatives , just the labor issues that our shore facilities in San Francisco , the degree of challenges around that wasn't anticipated .

Speaker #2: So that that was about a $5.7 million variance in the quarter . As you know , shore Baker's has been sold , you know , so we're not going to see , you know , we'll see some in Q1 , but we won't see any more after that .

Will Kalutycz: The other one was the product launch, the stick product launch, which, you know, again, to keep our product quality standards at the level we wanted resulted in a tremendous amount of waste. That waste was higher than expected. Those two issues are essentially gone now. Those are the big variances, the big numbers in the quarter. We are expecting for 2026 a much lower number. You know, you got a little bit of carryover on the sticks. The Tennessee project is now complete. Our Piller's project is making some good progress now, so we expect that's the only one to go out into Q2. After that, it's sort of some miscellaneous projects. It will certainly be a much, much lower number in 2026 than it was in 2025.

Speaker #2: And then the other one was the product launch . The stick product launch , which , you know , again , to keep our product quality standards at , at the level we wanted resulted in a tremendous amount of waste .

Speaker #2: That waste was higher than expected . So those two issues are essentially gone now . So those are the big variances . The big numbers in the quarter .

Speaker #2: We are expecting, for 2026, a much lower number. You know, you got a little bit of carryover on the sticks. The Tennessee project is now complete.

Speaker #2: Our pillars project is making some good progress now. So we expect that's the only one to go out into Q2. And then after that, it's sort of some miscellaneous projects.

Speaker #2: So, it will certainly be a much, much lower number in '26 than it was in '25.

Operator 1: Okay. Thank you very much.

Vishal Shreedhar: Okay. Thank you very much.

Speaker #12: Okay. Thank you very much.

Will Kalutycz: Thanks, Vishal.

Speaker #2: Thanks , Michelle .

George Paleologou: Thanks, Vishal.

Operator 3: Next question will be from Christopher Li at Desjardins. Please go ahead.

Operator: Next question will be from Christopher Li at Desjardins. Please go ahead.

Speaker #4: Next question will be from Chris Lee at Desjardins. Please go ahead.

Christopher Li: Oh, hello again. Maybe just a question on leverage. I think pro forma Stampede, your leverage is around 3.9 times, and you're still targeting that to get to the low 3s, I think, by end of this year, early 2027. Can you just walk us through kind of what are the key drivers that will get you there, and how much visibility do you have to achieve that target?

Speaker #7: Oh , hello again . Maybe just a question on leverage . I think proforma stampede , your leverage is around 3.9 times . And you're still targeting that to get to the low threes .

Speaker #7: I think by end of this year , early 2027 . Can you just walk us through kind of what are the key drivers that will get you there and how much visibility do you have to achieve that target ?

Will Kalutycz: Yeah. So, no, in terms of getting to our targeted total debt to EBITDA ratio of 3 or better, absolutely still targeting end of 2026, early 2027. That has not changed. Again, you know, the key drivers are, first off, leveraging the capacity we've invested in, so growth in our EBITDA. That's gonna be the biggest single driver. There will be some debt paydown 'cause you're gonna see a nice improvement or a significant improvement in our free cash flow. The Shaw transaction takes our turns down about 0.2 to 0.3 turns. So that's an immediate benefit, when we close that transaction. You know, those are probably the big immediate factors driving it.

Speaker #2: Yeah . So yeah , no . In terms of getting to our targeted total debt to EBITDA ratio of three or better . Absolutely .

Speaker #2: Still targeting end of 26 , early 27 , that has not changed . Again , you know , the key drivers are first off leveraging the capacity we've invested in .

Speaker #2: So, growth in our EBITDA—that's going to be the biggest single driver. There will be some debt paydown because you're going to see a nice improvement, or significant improvement, in our free cash flow.

Speaker #2: The Sha Sha transaction takes our turns down about 0.2 to 0.3 turns. So that's an immediate benefit when we close that transaction. You know, those are probably the big immediate factors driving it.

George Paleologou: Some of the other non-core investments.

Speaker #3: And some of the other non-core

Will Kalutycz: If there's another transaction, that would only accelerate it. Just based on our modeling, our assumptions, and status quo with the transactions that have happened so far, you know, that's the plan, Chris.

Speaker #2: If those happen that that if there's another transaction that would only accelerate it . But just based on our modeling and our assumptions and status quo with the transactions that have happened so far , you know , that's that's the plan .

Speaker #2: Chris .

Christopher Li: Okay. Yeah, that was my other question, is predicated on more divestiture, but it doesn't sound like it.

Speaker #7: Okay. Yeah, that was my other question—was, is it predicated on more divestiture? But it doesn't sound like it is.

Will Kalutycz: No, absolutely not. That would only accelerate it.

Speaker #2: No, absolutely not. That would only accelerate it.

Christopher Li: Okay. George Paleologou, thanks for the update on sort of your thoughts about, around non-core assets. That was helpful. I know another group of businesses that you look at is you kind of call it strategic assets. Any sort of update on that in terms of monetizing some of those assets this year?

Speaker #7: Okay . And then , George , thanks for the update on sort of your thoughts about around non-core assets . That was helpful .

Speaker #7: I know another group of businesses that you look at is you kind of call it strategic assets . Any sort of update on on that in terms of monetizing some of some of those assets this year

George Paleologou: You know, Chris, I would say that as you could see, we are growing substantially in the US. We still think that we're in the early innings in the US. We're in some areas now we've added a lot of capacity, and we are looking for more capacity, for example in sticks as we speak. We're always trying to sharpen our focus. We like the opportunities we see in certain parts of the business. We're looking at our overall business a little differently, but I can't say more than that.

Speaker #3: You know , again , you know , Chris , I would say that that , you know , as you could see , we are growing substantially in the US .

Speaker #3: We still think that we're in the early , early innings in the in the US , we're , you know , in some areas now we've added a lot of capacity and we are looking for more capacity for examples in in sticks as we speak .

Speaker #3: And so we're we're always trying to sharpen our focus . You know , we , we like the opportunities we see in certain parts of the business and , you know , we're , we're looking at our , our overall business a little differently .

Speaker #3: But I can't say more than that Again , really excited by some of the , the growth opportunities we're , we're seeing organically and by acquisition in the US market .

George Paleologou: Again, really excited by some of the growth opportunities we're seeing organically and by acquisition in the US market.

Christopher Li: Okay. Sorry, I was not clear. I was thinking more just in terms of you guys maybe partnering up with someone, you know, like a supply chain partner where we can allow you to take some of the capital out of some of your assets.

Speaker #7: Okay , sorry , I was not clear . I was thinking more just in terms of you guys , maybe partnering up with someone , you know , like a supply chain partner where you can allow you to take some of the capital out of your , some of your assets .

George Paleologou: As I said earlier, Chris, that is part of what we view as some monetization of potentially non-core assets, right? So that's one of the ways that we're looking at, you know, to basically take some capital from a part of a business where maybe the returns are not as high as the potential returns we could make by employing it in the US, in our core businesses there, right? That's part of that process. As I said earlier, we're in a lot of that type of discussions. I don't know at this point timing, but certainly there's a lot on the go in that regard. There's a lot of very good companies that are interested in partnering with us in some of our segments.

Speaker #3: As I said earlier , Chris , that that is part of what we view as some monetization of potentially non-core assets . Right ?

Speaker #3: So, so that's one of the ways that we're looking at, you know, to basically take some capital from a part of the business where maybe the returns are not as high as the potential returns.

Speaker #3: We , we could make by employing it in , in , in the US , in our , in our core businesses , there , right ?

Speaker #3: That's part of that process . And as I said earlier , we're in a lot of those type of discussions . I don't know at this point timing , but , but certainly there's a lot on the go in that regard .

Speaker #3: There's a lot of very good companies that are that are interested in partnering with us in , in some of our segments .

Christopher Li: Okay, thanks for clarifying that. My last question, Will, just going back to your comment about the free cash flow, you know, improving. Can you just remind us or share with us what is your CapEx projection for this year? Also maybe from a working capital perspective. I know last year there was a usage of about CAD 300 million. What is your expectation for 2026?

Speaker #7: Okay . Thanks for clarifying that . And then my last question . We're just going back to your comment about the free cash flow .

Speaker #7: You know , improving . Can you just remind us or share with us what is your CapEx projection for , for this year ?

Speaker #7: And also, maybe from a working capital perspective, I know last year there was a usage of about $300 million. What is your expectation for 2026?

Will Kalutycz: On the CapEx, you know, we really talk about three buckets. One is our maintenance CapEx, you know, which we're projecting CAD 70 to 75 million for the year. The second is our approved major CapEx projects, and we've got a slide that outlines those in the presentation. You know, there's about CAD 67 million left to spend on those projects over the next three quarters, Q1 through Q3 of 2026. We have smaller CapEx projects. Generally, we spend about, you know, CAD 70 million plus on those projects, is our expectations going forward with Stampede joining the group. You know, as of today, that's what's committed to or that's the plan.

Speaker #2: So on the CapEx, you know, we're really talking about three buckets. One is our maintenance CapEx, which we're projecting at $70 to $75 million for the year.

Speaker #2: The second is our approved major CapEx projects, and we've got a slide that outlines those in the presentation. You know, there's about $67 million left to spend on those projects over the next three quarters.

Speaker #2: Q one through three of 26 . And then we have smaller CapEx projects . And generally we spend about , you know , 70 million plus on those projects is our expectations going forward with stampede joining the group ?

Speaker #2: So , you know , as of today , that's that's what's committed to or that's the plan . But you know , if I mentioned earlier our sandwich group is , is running into capacity issues .

Will Kalutycz: You know, if I mentioned earlier, our sandwich group is running into capacity issues, you know, so we may look at other projects in the future, but at this point, that's all that's in the pipeline. In terms of working capital, like I say, you know, we've made good progress on our core inventories. You know, the issue at the end of the year was the build-up to support our growth. You know, going forward, really the driver is just gonna be our growth, and buying opportunities. There'll be volatility around that. I can't give you a number around on net working capital. I'll, other than to say it will increase with the growth of our business.

Speaker #2: You know, so we may look at other projects in the future, but at this point, that's all that's in the pipeline.

Speaker #2: In terms of working capital . Like I say , you know , we've made good progress on our core inventories . You know , the issue at the end of the year was the the build up for to support our growth .

Speaker #2: So , you know , going forward , really the drivers just going to be our growth and , and buying opportunities . There'll be volatility around that .

Speaker #2: So I can't give you a number on net working capital, other than to say it will increase with the growth of our business.

Christopher Li: Okay. No, that's helpful. Thanks, everyone, and best of luck.

Speaker #7: Okay. No, that's helpful. Thanks, everyone, and best of luck.

Will Kalutycz: Thanks, Chris.

George Paleologou: Thanks, Chris.

Speaker #2: Thanks , Chris .

Speaker #3: Thanks , Chris .

Operator 4: Ladies and gentlemen, a reminder to please press star one should you have any questions at this time. Next, we will hear from Ryland Conrad at RBC Capital Markets. Please go ahead.

Operator: Ladies and gentlemen, a reminder to please press star one should you have any questions at this time. Next, we will hear from Ryland Conrad at RBC Capital Markets. Please go ahead.

Speaker #4: Ladies and gentlemen, a reminder to please press star one should you have any questions at this time. Next, we will hear from Rylan Conrad at RBC Capital Markets.

Speaker #4: Please go ahead .

Ryland Conrad: Hey, good morning, guys.

Speaker #13: Hey , good morning guys . Hi , Ronnie . Just on the revenue guidance for 2026 . Could you unpack your assumptions there for growth in Canada

Will Kalutycz: Hi, Ryland.

Ryland Conrad: Just on the revenue guidance for 2026, could you unpack your assumptions there for growth, in Canada?

Will Kalutycz: We don't give specific guidance on Canada, Rylan. But in general terms, it's not a big piece of our expectations for the year. You know, at best, it's probably 2 to 3% volume growth would be our general expectation on the specialty food side. A little bit higher on the premium food distribution group, which is primarily on the distribution side of Canadian business. But again, the excitement in our business, the big driver of our volume growth is going to be or is our US initiatives. It'll be interesting to see 2026 because 2025 it was our protein, sandwich, and bakery groups. We've got a lot of exciting stuff happening in our culinary group right now. You know, we built a new facility in Maine.

Speaker #2: We don't give specific guidance on Canada, Rylan. But in general terms, it's not a big piece of our expectations for the year.

Speaker #2: You know , it's best . It's probably 2 to 3% volume growth would be our general expectation on the specialty food side a little bit higher on the premium food distribution group , which is is primarily on the distribution side of Canadian business .

Speaker #2: But again , the excitement in our business , the big growth driver of our volume growth is going to be or is our US initiatives .

Speaker #2: And it'll be interesting to see 2026, because 2025, it was our protein sandwich and bakery groups. We've got a lot of exciting stuff happening in our culinary group right now.

Speaker #2: You know , we're we built a new facility in Maine . We've made some investments here on the West Coast in our culinary capacity and , and it's an exciting category with a lot of opportunities .

Will Kalutycz: We've made some investments here on the West Coast in our culinary capacity. It's an exciting category with a lot of opportunities. We expect them actually to be a nice driver of growth, you know, start registering on our organic growth in 2026. Again, all of that centered around the US and the investments we're making in the US.

Speaker #2: And we expect them actually to be a nice driver of growth. You know, start registering on our organic growth in 2026.

Speaker #2: But again, all of that centered around the US and the investments we're making in the US.

Ryland Conrad: Okay. Great. And then just on the beef jerky sales within specialty foods, could you just remind us when that headwind began to emerge in 2025? How have sales or the year-over-year kind of sales decline trended sequentially? Like, are you seeing incremental pressure there or is it generally stable?

Speaker #13: Okay , great . And then just on the beef jerky sales within specialty foods , could you just remind us when that headwind began to emerge in , in 2025 ?

Speaker #13: And how have sales or the year over year kind of sales decline trended sequentially ? Like are you seeing incremental pressure there , or is it generally stable ?

Will Kalutycz: It's a little volatile. It seems to go up and down a bit. It was a tougher quarter this in Q4 because, you know, for the last number of quarters, you've been seeing contraction in our jerky sales, and that reflects what's happening in the market. You know, it's a very high cost product that has been, you know, historically targeted at a young male consumer, and so a much more price sensitive consumer in the C-store channel. Correspondingly, you've seen that whole category come under pressure given the high beef prices. The other factor, though, that accelerated or made it a bit bigger in Q4 versus where it had been trending is we also have some very successful turkey tender programs.

Speaker #2: It kind of it's a it's a little volatile . It seems to go up and down a bit . It was a a tougher quarter .

Speaker #2: This this in Q4 because , you know , you know , for the last number of quarters , you've been seeing contraction in our jerky sales .

Speaker #2: And that reflects what's happening in the market . You know , it's a very high cross product , high cost product that has been , you know , historically targeted at a young male consumer .

Speaker #2: And so a much more price sensitive consumer in the C-store channel . And correspondingly , you've seen that whole category come under pressure , given the high beef prices .

Speaker #2: So the other factor, though, that accelerated or made it a bit bigger in Q4 versus where it had been trending is we also have some very successful turkey tender programs.

Will Kalutycz: They're like a turkey jerky almost. Turkey prices have just gotten so incredibly high we've started exiting categories because the price point has just gotten too high. It was a little higher this quarter because of that. Outside of that, you know, if you look at the category in general, that's kind of where our jerky sales have been trending as well.

Speaker #2: There , like a turkey jerky , almost . And , and turkey prices have just gotten so incredibly high that they're we've started exiting categories because the price point is just gotten too high .

Speaker #2: So it was a little higher this quarter because of that . But outside of that , you know , if you look at the category in general , that's kind of where our jerky sales have been trending as well .

George Paleologou: Again, if you go back a few years when we partnered with Oberto. Oberto was a jerky company, effectively a national jerky company with very little business in sticks. At the time, we said that the opportunity for Oberto and for us is to leverage the Oberto platform to grow the premium stick business. Today, effectively, you know, it's a much larger company, but it's predominantly one of the leading stick companies in the US today. As Will said, we just haven't been focusing on jerky. You know, jerky's a legacy type of item, but really the big focus in terms of marketing, promotions, capacity expansions has all been in sticks. We were right.

Speaker #3: Again , if you go back a few years , when we partnered with Obertos , Alberto's was a jerky company , effectively national Jerky company with very little .

Speaker #3: Business in sticks. And at the time, we said that the opportunity for Obertos and for us is to leverage the Obertos platform to grow the premium stick business.

Speaker #3: And today, effectively, you know, it's a much larger company, but it's predominantly one of the leading companies in the US today.

Speaker #3: As we all said , we just haven't been focusing on on jerky , you know , Jerky's a legacy type of item . But but really the big focus in terms of marketing , promotions , capacity , expansions has all been in sticks .

George Paleologou: You know, the stick industry, particularly the premium stick industry, has exploded in the US.

Speaker #3: And we were right , you know , the stick industry has particularly the premium stick industry has exploded in the US

Ryland Conrad: Okay. I appreciate that color. Just last for me, a modeling question on corporate costs. I guess, is it safe to assume this kind of CAD 30 million annual run rate is good going forward? I know it's consistently been in this kind of CAD 8 to 10 million range through Q1, Q2, Q3 and then drops quite a bit in Q4. Just how should we be thinking about that?

Speaker #13: Okay , I appreciate that color . And then just last for me modeling question on corporate costs , I guess , is it safe to assume this kind of 30 million annual run rate is , is good going forward ?

Speaker #13: I know it's consistently been in this kind of $8 to $10 million range through the first three quarters, and then drops quite a bit in Q4.

Speaker #13: So just how should we be thinking about that?

Will Kalutycz: Yeah, you know, the volatile factor there is discretionary employee discretionary costs, so bonuses. Clearly, with the challenges in the protein group, you know, the Shaw Bakers group, and the lobster group, discretionary compensation was down significantly. That, you know, that's one of the factors you see driving the decrease in the corporate costs and SG&A in general. You kinda have to normalize that for that. You know, going forward, 2026, assuming we hit our numbers as we expect, you should expect a higher corporate cost because of higher discretionary compensation.

Speaker #2: Yeah . So , you know , the big the volatile factor there is discretionary employee discretionary costs . So bonuses and clearly with the challenges in the protein group and the , you know , the shop bakery group and the lobster group , discretionary compensation was down significantly .

Speaker #2: So that , you know , that's one of the factors you see driving the decrease in the corporate costs . And S , G and A in general .

Speaker #2: So so you kind of have to normalize that for for , for , for that . And so , you know , going forward .

Speaker #2: 26, assuming we hit our numbers as we should, we should expect a higher corporate cost because of higher discretionary compensation.

Ryland Conrad: Okay. Perfect. Thank you.

Speaker #13: Okay, perfect. Thank you.

Will Kalutycz: Thanks.

Speaker #2: Thanks .

Operator 3: Next question will be from Derek Lessard at TD Cowen. Please go ahead.

Operator: Next question will be from Derek Lessard at TD Cowen. Please go ahead.

Speaker #4: Next question will be from Derek LaSalle at TD Cowan. Please go ahead.

Operator 2: Yeah, thanks for the follow-up. By the way, I did see $20+ US jerky prices at Logan Airport, so I get that point.

Derek Lessard: Yeah, thanks for the follow-up. By the way, I did see $20+ US jerky prices at Logan Airport, so I get that point.

Speaker #5: Yeah . Thanks for the follow up . And by the way , I did see $20 plus US turkey prices at Logan Airport .

Speaker #5: So, I got that point.

George Paleologou: Yep. No, no surprise there, Derek.

Speaker #3: Yes. No, no surprise there, Derek.

Operator 2: Yeah. I just, Will, I just want to clarify the sales guidance to CAD 9.25 to 9.55. To be clear, if it was including the Shaw Bakers, those numbers would have been CAD 170 million higher?

Derek Lessard: Yeah. I just, Will, I just want to clarify the sales guidance to CAD 9.25 to 9.55. To be clear, if it was including the Shaw Bakers, those numbers would have been CAD 170 million higher?

Speaker #5: Yeah , I just well , I just want to clarify the , the sales guidance , the 9.25 to 9.55 to be clear , if it was including the Shaw Bakery , it would have those numbers would have been $170 million higher .

Will Kalutycz: Yeah.

Speaker #2: Yeah, 170 to 180 to, you know, to reflect sort of the range concept.

Operator 2: Okay.

Derek Lessard: Okay.

Will Kalutycz: 170 to 180, you know, to reflect sort of the range concept.

Operator 2: Got it.

Derek Lessard: Got it.

Will Kalutycz: In Canadian.

Speaker #5: Got it .

Speaker #2: And , and .

Operator 2: Okay. The same thing on the EBITDA, correct?

Derek Lessard: Okay. The same thing on the EBITDA, correct?

Speaker #5: Okay. And the, and the same thing on the EBITDA, correct?

Will Kalutycz: Correct.

Speaker #2: Correct .

Operator 2: Okay. That's it. Thanks, guys.

Derek Lessard: Okay. That's it. Thanks, guys.

Speaker #5: Okay. That's it. Thanks, guys.

Will Kalutycz: Okay. Thanks, Derek.

Speaker #2: Okay. Thanks, Jerry.

Operator 3: Thank you. At this time, we have no other questions registered, so I would like to turn the call back over to George Paleologou.

Operator: Thank you. At this time, we have no other questions registered, so I would like to turn the call back over to George Paleologou.

Speaker #4: Thank you. At this time, we have no other questions registered, so I would like to turn the call back over to George Paleologou.

George Paleologou: Yes. I'd like to thank everyone for attending today. Thank you very much.

Speaker #3: Yes, I'd like to thank everyone for attending today. Thank you very much.

Operator 3: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.

Speaker #4: Thank you sir . Ladies and gentlemen , this does indeed conclude your conference call for today . Once again , thank you for attending .

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