Q1 2026 High Liner Foods Inc Earnings Call

May 14, 2026

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the High Liner Foods Incorporated conference call for results of Q1 2026. At this time, all participant lines are in a listen-only mode. Following management's prepared remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star key followed by zero for operator assistance at any time. This conference call is being recorded today, Thursday, 14 May 2026, at 10:00AM Eastern Time for replay purposes. I would like to turn the call over to Matt MacDonald, Vice President of Finance and Investor Relations for High Liner Foods. Please go ahead.

Speaker #2: At this time, all participant lines are in a listen-only mode. Following management's prepared remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions.

Speaker #2: If anyone has any difficulties hearing the conference, please press star key followed by 0 for operator assistance at any time. This conference call is being recorded.

Speaker #2: Today, Thursday, May 14, 2026, at 10:00 AM Eastern Time, for replay purposes. And I would like to turn the call over to Matt McDonald, Vice President of Finance and Investor Relations for High Liner Foods.

Speaker #2: Please go ahead. Good morning, everyone. Thank you for joining the High Liner Foods conference call today to discuss the financial results for the first quarter of 2026.

Matt MacDonald: Good morning, everyone. Thank you for joining the High Liner Foods conference call today to discuss the financial results for Q1 of 2026. On the call from High Liner Foods are Paul Jewer, Chief Executive Officer, Kimberly Stephens, Chief Financial Officer, and Anthony Rasetta, Chief Commercial Officer. I would like to remind listeners that we use certain non-IFRS measures and ratios when discussing our financial results as we believe these are useful in assessing the company's financial performance. These measures are fully described and reconciled to IFRS measures in our MD&A. Listeners are reminded that certain statements made on today's call may be forward-looking statements under applicable securities law. Management may use forward-looking statements when discussing the company's investments and acquisitions, strategy, business, and markets in which the company operates, as well as the operating and financial performance in the future.

Speaker #2: On the call from High Liner Foods are Paul Jewer, Chief Executive Officer; Kimberly Stephens, Chief Financial Officer; and Anthony Rasetta, Chief Commercial Officer. I would like to remind listeners that we use certain non-IFRS measures and ratios when discussing our financial results.

Speaker #2: As we believe these are useful in assessing the company's financial performance. These measures are fully described and reconciled to IFRS measures in our MD&A.

Speaker #2: Listeners are reminded that certain statements made on today's call may be forward-looking statements under applicable securities law. Management may use forward-looking statements when discussing the company's investments and acquisitions, strategy, business, and markets in which the company operates.

Speaker #2: As well as the operating and financial performance in the future. These statements are based on assumptions that are believed to be reasonable at the time they were made, and currently available information.

Matt MacDonald: These statements are based on assumptions that are believed to be reasonable at the time they were made and currently available information. Forward-looking statements are subject to risks and uncertainties. Actual results or events, including operating or financial results, could differ materially from those anticipated in these forward-looking statements. High Liner Foods includes a thorough discussion of the risks and other factors that could cause its anticipated outcomes to differ from actual outcome in its publicly available disclosure documents, including its most recent annual MD&A and annual information form. Please note that High Liner Foods is under no obligation to update any forward-looking statements discussed today.

Speaker #2: Forward-looking statements are subject to risk and uncertainties. Actual results or events, including operating or financial results, could differ materially from those anticipated in these forward-looking statements.

Speaker #2: High Liner Foods includes a thorough discussion of the risks and other factors that could cause its anticipated outcomes to differ from actual outcomes in its publicly available disclosure documents, including its most recent annual MD&A and annual information form.

Speaker #2: Please note that High Liner Foods is under no obligation to update any forward-looking statements discussed today. At the closing markets yesterday, May 13, High Liner Foods reported its financial results for the first quarter ended April 4, 2026.

Matt MacDonald: At the close of markets yesterday, 13 May, High Liner Foods reported its financial results for Q1 ended 4 April 2026. That news release, along with the company's MD&A and unaudited condensed interim consolidated financial statements for Q1 2026 have been filed on SEDAR+ and can also be found in the investors section of the High Liner Foods website. If you would like to receive our news release in the future, please visit the company's website to register. Lastly, please note that the company reports its financial results in US dollars, and therefore, the results to be discussed today are also stated in US dollars, unless otherwise noted. High Liner Foods common shares trade on the Toronto Stock Exchange and are quoted in Canadian dollars. I will now turn the call over to Paul for his opening remarks.

Speaker #2: That news release, along with the company's MD&A and unaudited condensed interim consolidated financial statements, for the first quarter of 2026 have been filed on Cedar Plus and can also be found in the investor section of the High Liner Foods website.

Speaker #2: If you'd like to receive our news release in the future, please visit the company's website to register. Lastly, please note that company reports, its financial results in US dollars, and therefore the results to be discussed today are also stated in US dollars unless otherwise noted.

Speaker #2: High Liner Foods' common shares trade on the Toronto Stock Exchange and are quoted in Canadian dollars. I will now turn the call over to Paul for his opening remarks.

Speaker #3: Thanks, Matt. And thank you, everyone, for joining us on today's call. Before I share my perspective on the quarter, I'd like to begin by welcoming Matt to High Liner Foods as our new Vice President of Finance and Investor Relations.

Paul Jewer: Thanks, Matt. Thank you everyone for joining us on today's call. Before I share my perspective on the quarter, I'd like to begin by welcoming Matt to High Liner Foods as our new Vice President of Finance and Investor Relations. Matt brings extensive public market experience, both domestically and internationally, in oil and gas, real estate, and financial services. We are thrilled to have him on board. Now, turning to Q1. When I last spoke to you in February, we were encouraged by the strong start to the year, both in terms of demand for our products and the progress we were making on driving enhanced profitability. As we reported today, despite a volatile and inflationary macro environment, the strong demand we saw at the start of the year persisted through the quarter.

Speaker #3: Matt brings extensive public market experience, both domestically and internationally, in oil and gas, real estate, and financial services. We are thrilled to have him on board.

Speaker #3: Now, turning to the first quarter, when I last spoke to you in February, we were encouraged by the strong start to the year, both in terms of demand for our products and the progress we were making on driving enhanced profitability.

Speaker #3: As we reported today, despite a volatile and inflationary macro environment, the strong demand we saw at the start of the year persisted through the quarter.

Speaker #3: Supported by an earlier lent, promotional activity in product innovation, demand on the top line surpassed our expectations. However, as the first quarter progressed, that outperformance created operational pressure, impacting profitability and delaying the timing of our margin improvement initiatives.

Paul Jewer: Supported by an earlier Lent, promotional activity and product innovation, demand on the top line surpassed our expectations. However, as Q1 progressed, that outperformance created operational pressure, impacting profitability and delaying the timing of our margin improvement initiatives. Challenges included larger than expected constraints on global supply, particularly in key whitefish species, which impacted fill rates and operational efficiency across the supply chain. Against this backdrop, our plants were operating in catch-up mode to respond to higher than planned demand, which coupled with higher inflation and rising input costs, negatively impacted our Q1 margins. I recognize that the strength of the top line has not translated to bottom-line profitability over the past 3 quarters. This is being actively addressed across the business.

Speaker #3: Challenges included larger-than-expected constraints on global supply, particularly in key whitefish species, which impacted fill rates and operational efficiency across the supply chain. Against this backdrop, our plans for operating in catch-up mode to respond to higher-than-planned demand, coupled with higher inflation and rising input costs, negatively impacted our Q1 margins.

Speaker #3: I recognize that the strength of the top line has not translated to bottom line profitability, over the past three quarters, and this is being actively addressed across the business.

Speaker #3: Our focus is on the factors we can control and it comes down to strengthening execution across the organization in three primary areas. Pricing, promotions, and supply chain.

Paul Jewer: Our focus is on the factors we can control. It comes down to strengthening execution across the organization in 3 primary areas: pricing, promotions, and supply chain. First, on pricing. With Lent behind us, we've been able to address pricing with our customers and now have necessary pricing in place across the majority of our portfolio for Q2. However, these are unprecedented times. As raw material costs continue to rise, we are prepared to have more frequent pricing discussions with our customers, particularly as it relates to certain whitefish products. Along with all suppliers, we will be seeking to pass on higher fuel costs. Second, promotions. We are taking a more targeted approach to promotional activity to ensure investments support the bottom line as well as the top line.

Speaker #3: First, on pricing, with lent behind us, we've been able to address pricing with our customers and now have necessary pricing in place across the majority of our portfolio for Q2.

Speaker #3: However, these are unprecedented times and as raw material costs continue to rise, we are prepared to have more frequent pricing discussions with our customers particularly as it relates to certain whitefish products.

Speaker #3: And along with all suppliers, we will be seeking to pass on higher fuel costs. Second, promotions. We are taking a more targeted approach to promotional activity to ensure investment support the bottom line as well as the top line.

Speaker #3: In today's environment, strategic investment and trade is essential to attract a value-conscious consumer to our brands. And to the category in general. However, as we consider future investments, we will put greater emphasis on the importance of optimizing margins and an overall return on investment.

Paul Jewer: In today's environment, strategic investment in trade is essential to attract a value-conscious consumer to our brands and to the category in general. However, as we consider future investments, we will put greater emphasis on the importance of optimizing margins and an overall return on investment. Third, supply chain. Given the global supply shortages in some of our key species and the resulting higher raw material costs, the work we are undertaking here focuses on strengthening planning around raw material availability and driving greater efficiency across our operations. While this is still in progress, I'm pleased to report that post-Lent raw material availability and production are improving. We are taking steps to improve capacity utilization by reducing lower return SKUs and focusing our teams on productivity and operational discipline.

Speaker #3: Third, supply chain. Given the global supply shortages in some of our key species, and the resulting higher raw material costs, the work we are undertaking here focuses on strengthening planning around raw material availability and driving greater efficiency across our operations.

Speaker #3: While this is still in progress, I'm pleased to report that post-lant raw material availability and production are improving. We are taking steps to improve capacity utilization, by reducing lower return SKUs, and focusing our teams on productivity and operational discipline.

Speaker #3: In parallel to action on price, promotions, and supply chain, we will continue to manage costs across the organization and remain extremely disciplined in our capital expenditures and capital allocation, to ensure optimal return on investment.

Paul Jewer: In parallel to action on price, promotions, and supply chain, we will continue to manage costs across the organization and remain extremely disciplined in our capital expenditures and capital allocation to ensure optimal return on investment. Our recently announced organizational changes have helped to rightsize our costs to this current reality. To sum up, we have a clear roadmap for stronger bottom-line performance and to restore margins to the level this business is capable of delivering. With that, I will pass the call over to Kimberly to discuss our financial results. Kimberly, over to you.

Speaker #3: Our recently announced organizational changes have helped to right-size our costs, to this current reality. To sum up, we have a clear roadmap for stronger bottom line performance and to restore margins to the level this business is capable of delivering.

Speaker #3: With that, I will pass the call over to Kimberly to discuss our financial results. Kimberly, over to you.

Speaker #2: Thanks, Paul. And hello, everyone. As Paul mentioned, we saw strong top line growth during the first quarter, supported by our targeted promotional activity, the earlier lent-in period, and the underlying strength of our branded and value-added product portfolio.

Kimberly Stephens: Thanks, Paul. Hello, everyone. As Paul mentioned, we saw strong top-line growth during Q1, supported by our targeted promotional activity, the earlier Lenten period, and the underlying strength of our branded and value-added product portfolio. While margins remain pressured due to the ongoing internal and external factors previously discussed, we are applying insights from Q1 to strengthen our execution across pricing, promotion, and plant operations. While simultaneously, we're continuing to identify cost-saving opportunities to support our value proposition in an inflationary and competitive environment. Despite continuing to operate in a volatile and inflationary macroeconomic environment, we continue to see and experience top-line growth in both volume and net sales over the prior year in both retail and food service.

Speaker #2: While margins remained pressured due to the ongoing internal and external factors previously discussed, we are applying insights from the first quarter to strengthen our execution across pricing, promotion, and plant operations.

Speaker #2: While simultaneously we're continuing to identify cost-saving opportunities to support our value proposition in an inflationary and competitive environment. Despite continuing to operate in a volatile and inflationary macroeconomic environment, we continue to see and experience top line growth in both volume and net sales over the prior year, in both retail and food service.

Speaker #2: Sales volume increased in the first quarter by 7 million pounds, or 10.6%, to 73 million pounds compared to 66 million pounds in the first quarter of 2025.

Kimberly Stephens: Sales volume increased in Q1 by 7 million pounds or 10.6% to 73 million pounds compared to 66 million pounds in Q1 2025, due to the timing of the Lenten period, the additional contract manufacturing business, and the volume growth associated with the United States Department of Agriculture, USDA contract. Retail volume was also higher due to the incremental volume associated with the newly acquired brands from Conagra Brands, as well as the company's targeted approach to value-driven promotions and innovations and strong demand in High Liner Foods' diversified product portfolio.

Speaker #2: Due to the timing of the lent-in period, the additional contract manufacturing business, and the volume growth associated with the United States Department of Agriculture (USDA) contract, retail volume was also higher due to the incremental volume associated with the newly acquired brands from ConAgro Brands, as well as the company's targeted approach to value-driven promotions and innovations.

Speaker #2: And strong demand in the High Liner Foods diversified product portfolio. Sales increased, the first quarter, by 66.5 million, or 24.8%, to 334.9 million compared to 268.4 million in the same period last year, driven by the increased volume as well as the increased pricing reflecting inflationary markets.

Kimberly Stephens: Sales increased Q1 by $66.5 million or 24.8% to $334.9 million compared to $268.4 million in the same period last year, driven by the increased volume as well as the increased pricing reflecting inflationary markets. Gross profit increased for Q1 by $3.1 million or 4.9% to $66.6 million, and gross profit as a percentage of sales decreased by 380 basis points to 19.9% as compared to 23.7% in Q1 2025. The increase in gross profit is driven by the increase of sales volume previously mentioned.

Speaker #2: Gross profit increased for the first quarter by 3.1 million, or 4.9%, to 66.6 million and a gross profit as a percentage of sales decreased by 380 basis points to 19.9%, as compared to 23.7 in the first quarter of 2025.

Speaker #2: The increase in gross profit is driven by the increase of sales volume previously mentioned. This is offset, though, by higher raw material costs, including tariffs on select species, elevated promotional activity, unfavorable product mix, and supply chain challenges due to the limited availability of supply.

Kimberly Stephens: This is offset, though, by higher raw material costs, including tariffs on select species, elevated promotional activity, unfavorable product mix, and supply chain challenges due to the limited availability of supply, particularly in the company's key whitefish species, which is reflected in the decline in the gross profit as a percentage of sales. Distribution expenses consisted of freight and storage increased in Q1 by $4.2 million or 33.6% to $16.7 million, compared to $12.5 million in the same period in the prior year. This increase in distribution expense was mainly due to the increased freight costs incurred on the sales associated with the newly acquired brands from Conagra Brands and incremental retail distribution.

Speaker #2: Particularly in the company's key whitefish species, which is reflected in the decline in the gross profit as a percentage of sales. Distribution expenses, consisting of freight and storage, increased in the first quarter by $4.2 million, or 33.6%, to $16.7 million.

Speaker #2: Compared to 12.5 million in the same period in the prior year. This increase in distribution expense was mainly due to the increased freight costs incurred on the sales associated with a newly acquired brand, from ConAgro Brands, and incremental retail distribution.

Speaker #2: Increased storage costs from higher levels of inventory due to the newly acquired brands, and to support strategic purchasing at the beginning of the quarter, also contributed to the overall increase.

Kimberly Stephens: Increased storage costs from higher levels of inventory due to the newly acquired brands and to support strategic purchasing at the beginning of the quarter also contributed to the overall increase. As a percentage of sales, distribution expenses increased to 5% in Q1 compared to 4.7% in the same period in the prior year. Although the distribution costs rose due to the addition of the newly acquired brands, we are pleased to report that these brands generated incremental positive adjusted EBITDA during the quarter, as anticipated. Adjusted EBITDA decreased in Q1 by $2.8 million or 8.7% to $29.3 million, compared to $32.1 million in the same period in the prior year, and adjusted EBITDA as a percentage of sales decreased to 8.7% compared to 12%.

Speaker #2: As a percentage of sales, distribution expenses increased to 5% in the first quarter compared to 4.7% in the same period in the prior year.

Speaker #2: Although the distribution costs rose due to the addition of the newly acquired brands, we are pleased to report that these brands generated incremental positive adjusted EBITDA during the quarter, as anticipated.

Speaker #2: Adjusted EBITDA decreased in the first quarter by 2.8 million, or 8.7%, to 29.3 million, compared to 32.1 million in the same period in the prior year.

Speaker #2: And adjusted EBITDA as a percentage of sales decreased to 8.7% compared to 12%. The decrease in adjusted EBITDA reflects the increase in gross profit previously mentioned, offset by increased distribution and SG&A expenses.

Kimberly Stephens: The decrease in adjusted EBITDA reflects the increase of gross profit previously mentioned, offset by increased distribution and SG&A expenses. Reported net income decreased in Q1 by $7.3 million or 47.7% to $8 million, while diluted earnings per share decreased to $0.27 compared to $0.51 in the prior year. The decrease in net income reflects the expenses related to the recent restructuring efforts that the company undertook to align its cost structure with the current market conditions, as well as the decrease in the adjusted EBITDA previously mentioned. Excluding the impact of certain non-routine or non-cash expenses that are explained in our MD&A, adjusted net income for Q1 of 2026 decreased by $5.2 million or 31.3% to $11.4 million.

Speaker #2: Reported net income decreased in the first quarter by $7.3 million, or 47.7%, to $8.0 million, while diluted earnings per share decreased to $0.27 compared to $0.51 in the prior year.

Speaker #2: The decrease in net income reflects the expenses related to the recent restructuring efforts that the company undertook to align its cost structure with the current market conditions, as well as the decrease in the adjusted EBITDA previously mentioned.

Speaker #2: Excluding the impact of certain non-routine or non-cash expenses that are explained in our MD&A, adjusted net income for the first quarter of 2026 decreased by $5.2 million, or 31.3%, to $11.4 million.

Speaker #2: Adjusted diluted earnings per share decreased to 39 cents from 55 cents in the same period in 2025. With regards to cash flows from operations and the balance sheet, net cash flows from operating activities for the first quarter of 2026 increased by 35.6 million to an inflow of 25 million compared to an outflow of 10.6 million in the same period of 2025.

Kimberly Stephens: Adjusted diluted earnings per share decreased to $0.39 from $0.55 in the same period in 2025. With regards to cash flows from operations and the balance sheet, net cash flows from operating activities for Q1 2026 increased by $35.6 million to an inflow of $25 million compared to an outflow of $10.6 million in the same period of 2025. The increase is primarily driven by favorable changes in non-cash working capital balances, specifically in the collection of our accounts receivable and lower inventory balances in relation to the earlier timing of the Lenten period in 2026 compared to 2025, partially offset with the repayments of our accounts payable balances.

Speaker #2: The increase is primarily driven by favorable changes in non-cash working capital balances, specifically in the collection of our accounts receivables and lower inventory balances in relation to the earlier timing of the lent-in period in 2026 compared to 2025.

Speaker #2: Partially offset with the repayments of our accounts payable balances. Net debt at the end of the first quarter of 2026 decreased by 4.4 million, to 318 million compared to 322.4 million at the end of fiscal 2025, reflecting our higher cash balances partially offset with an increased bank loans and lease liabilities.

Kimberly Stephens: Net debt at the end of Q1 2026 decreased by $4.4 million to $318 million compared to $322.4 million at the end of fiscal 2025, reflecting our higher cash balances partially offset with an increased bank loans and lease liabilities. Net debt to adjusted EBITDA was 3.6x at 4 April 2026 compared to 3.5x at the end of fiscal 2025. We expect the ratio to improve throughout the year and be slightly above the company's long-term target of 3x by the end of fiscal 2026. We are in the process of applying for U.S. tariff refunds. However, this is not currently reflected in our financial statements due to the high level of uncertainty around the process and the timing of collecting these funds.

Speaker #2: Net debt to adjusted EBITDA was 3.6 times at April 4, 2026, compared to 3.5 times at the end of fiscal 2025. We expect the ratio to improve throughout the year and be slightly above the company's long-term target of three times by the end of fiscal 2026.

Speaker #2: We are in the process of applying for US tariff refunds. However, this is not currently reflected in our financial statements, due to the high level of uncertainty around the process and the timing of collecting these funds.

Speaker #2: We are continuing to pursue this, and we will share further updates when appropriate. I'll now hand the call over to Anthony to discuss our operational performance.

Kimberly Stephens: We are continuing to pursue this, and we will share further updates when appropriate. I'll now hand the call over to Anthony to discuss our operational performance.

Speaker #3: Thanks, Kimberly. As you've heard, we delivered a strong quarter on the top line in Q1. And while we have work to do on the bottom line, we are encouraged by the strong demand for our diversified portfolio of products, across species and channels, despite inflation.

Anthony Rasetta: Thanks, Kimberly. As you've heard, we delivered a strong quarter on the top line in Q1, and while we have work to do on the bottom line, we are encouraged by the strong demand for our diversified portfolio of products across species and channels despite inflation. Starting with the retail side of our business, we entered the year with a strong start in January, benefiting from our fall promotional activity as consumers continued to purchase products outside of the promotional period, supporting margins. Building on that momentum, we executed our established lent promotional strategy consistent with prior years, designed to support demand in a pressured consumer environment while reinforcing our market leadership position and supporting category growth.

Speaker #3: Starting with the retail side of our business, we entered the year with a strong start in January, benefiting from our fall promotional activity as consumers continued to purchase products outside of the promotional period, supporting margins.

Speaker #3: Building on that momentum, we executed our established lent promotional strategy, consistent with prior years. Designed to support demand in a pressured consumer environment while reinforcing our market leadership position and supporting category growth.

Speaker #3: Demand during the period exceeded our expectations, driving share gains in US retail and strengthening our hold on the number three manufacturer position in the market, driven across both club and traditional grocers.

Anthony Rasetta: Demand during the period exceeded our expectations, driving share gains in US retail and strengthening our hold on the number three manufacturer position in the market, driven across both club, and traditional grocers. Our premium Sea Cuisine innovations exceeded expectations across multiple new product launches, including Guinness battered fish strips and shrimp, honey chipotle salmon, garlic bread crusted tilapia, and family packs. We also saw growth in our other premium brands, Sea Cuisine, C. Wirthy Atlantic salmon, and positive momentum in our recently acquired brands, Mrs. Paul's and Van de Kamp's, where targeted investments during the first Lenten period with these brands in our portfolio drove strong consumer uptake and volume growth.

Speaker #3: Our premium sea cuisine innovations exceeded expectations across multiple new product launches, including Guinness, battered fish strips and shrimp, honey chipotle salmon, garlic bread crusted tilapia, and family packs.

Speaker #3: We also saw growth in our other premium brands, sea cuisine, a seaworthy Atlantic salmon, and positive momentum in our recently acquired brands, Mrs. Paul's and Vandecamps.

Speaker #3: We're targeted investment during the first lent-in period with these brands in our portfolio drove strong consumer uptake and volume growth. As we announced in March, our new line of frozen sea cuisine skillet meals will be in market starting in June, offering a complete premium quick and easy-to-prepare meal solution to customers, with sole salmon and shrimp options.

Anthony Rasetta: As we announced in March, our new line of frozen Sea Cuisine skillet meals will be in market starting in June, offering a complete premium, quick, and easy to prepare meal solution to customers with sole salmon and shrimp options. I look forward to providing additional updates next quarter. In Canada, we remain the number one branded value-added leader, and our strategy continues to support consumers across the value spectrum in an inflationary and promotionally driven environment. We gained share during the quarter as we expanded support within key retailers and maintained strong positioning across both premium and value offerings, including growth in our Pan-Sear and Catch of the Day products. Turning to food service, we outperformed the category, gaining share and strengthening our market leadership position. We saw strong performance in value-added salmon, shrimp, and haddock, with demands for our products holding steady through Lent.

Speaker #3: I look forward to providing additional updates next quarter. In Canada, we remain the number one branded value-added leader, and our strategy continues to support consumers across the value spectrum in an inflationary and promotionally driven environment.

Speaker #3: We gained share during the quarter as we expanded support within key retailers and maintained strong positioning across both premium and value offerings, including growth in our PanSear and Catch the Day products.

Speaker #3: Turning to food service, we outperformed the category, gaining share and strengthening our market leadership position. We saw strong performance in value-added salmon, shrimp, and haddock, with demands for our products holding steady through lent.

Speaker #3: While we experienced some softness in QSR related to pressures at a key customer, overall performance was supported by growth in casual dining and non-commercial channels, particularly lodging, long-term care, and schools.

Anthony Rasetta: While we experienced some softness in QSR related to pressures at a key customer, overall performance was supported by growth in casual dining and non-commercial channels, particularly lodging, long-term care, and schools. We received strong customer engagement on our fully cooked product line that launched in January and secured a permanent listing with a major convenience customer in the US. We are encouraged by the market reception to this innovation and expanding distribution remains a priority for the year as we demonstrate the potential for fully cooked products in the convenience, non-commercial, and QSR channels. As we move through the year, our focus is on improving realization across pricing and sharpening promotional discipline while continuing to support innovation and leverage the breadth of our diversified portfolio across channels.

Speaker #3: We received strong customer engagement on our fully cooked product line, that launched in January, and secured a permanent listing with a major convenience customer in the US.

Speaker #3: We are encouraged by the market reception to this innovation, and expanding distribution remains a priority for the year, as we demonstrate the potential for fully cooked products in the convenience, non-commercial, and QSR channels.

Speaker #3: As we move through the year, our focus is on improving realization across pricing, and sharpening promotional discipline, while continuing to support innovation and leverage the breadth of our diversified portfolio across channels.

Speaker #3: As Paul noted, pricing actions are underway, with some key product lines priced appropriately in Q2, and we'll support margin improvement as we move through the year.

Anthony Rasetta: As Paul noted, pricing actions are underway with some key product lines priced appropriately in Q2 and will support margin improvement as we move through the year. In parallel, we're maintaining strong cost discipline to help offset ongoing input cost pressures and the lag between incurring higher costs and the ability to pass it on, which, as previously mentioned, is particularly applicable in retail, where pricing often requires longer lead times. We're also working in partnership with our customers to revise our promotional campaigns to ensure a balanced approach that prioritizes long-term profitability. We expect to have fewer promotions now that we're through the important Lent season. As we look to the remainder of the year, our focus will be on sustaining the additional customers we've gained from the success of our promotional activity in Q1, leveraging marketing to support our base business.

Speaker #3: In parallel, we're maintaining strong cost discipline, to help offset ongoing input cost pressures, and the lag between incurring higher costs and the ability to pass it on.

Speaker #3: Which, as previously mentioned, is particularly applicable in retail, where pricing often requires longer lead times. We're also working in partnership with our customers to revise our promotional campaigns, to ensure a balanced approach that prioritizes long-term profitability.

Speaker #3: We expect to have fewer promotions now that we're through the important Lent season, and as we look to the remainder of the year, our focus will be on sustaining the additional customers we've gained from the success of our promotional activity in the first quarter, leveraging marketing to support our base business.

Speaker #3: While the environment remains challenging, the strength of our portfolio, and the capability of our team give me confidence in our ability to execute. Paul?

Anthony Rasetta: While the environment remains challenging, the strength of our portfolio and the capability of our team give me confidence in our ability to execute. Paul?

Speaker #4: Thanks, Anthony. As we move through the balance of the year, we're focused on taking the appropriate actions across pricing, promotions, and supply chain to strengthen our margin performance.

Paul Jewer: Thanks, Anthony. As we move through the balance of the year, we're focused on taking the appropriate actions across pricing, promotions, and supply chain to strengthen our margin performance. We are well-positioned to make these necessary adjustments and return to the level of profitability we have proven our business can deliver. As a market leader with a diversified global supply chain and product portfolio, we have many strategic advantages we can leverage to help strengthen our value proposition to customers and consumers while meeting our own financial goals. Similarly, we are fortunate to have a talented and committed team with a track record of navigating through significant headwinds that demonstrates the resilience of our business. While our operating environment certainly remains challenging, I am confident in our ability to improve how we manage the factors within our control.

Speaker #4: We are well positioned to make these necessary adjustments, and return to the level of profitability we have proven our business can deliver. As a market leader, with a diversified global supply chain, and product portfolio, we have many strategic advantages we can leverage to help strengthen our value proposition to customers and consumers, while meeting our own financial goals.

Speaker #4: Similarly, we are fortunate to have a talented and committed team, with a track record of navigating through significant headwinds, that demonstrates the resilience of our business.

Speaker #4: While our operating environment certainly remains challenging, I am confident in our ability to improve how we manage the factors within our control. At the same time, the investments we have made over the past 12 to 18 months in our brands, innovation, and capabilities will continue to serve us.

Paul Jewer: At the same time, the investments we have made over the past 12 to 18 months in our brands, innovation, and capabilities will continue to serve us. We will continue to build on that foundation, leveraging new innovations and our market leadership position to attract more consumers to seafood, a category that remains under-penetrated. That said, our focus is squarely on profitable growth. While we have work to do and do not expect an immediate turnaround, we are confident in our ability to stabilize performance and deliver higher adjusted EBITDA year over year in 2026. Importantly, we are doing this from a position of strength. Our balance sheet remains solid, our supply chain is resilient, and we are well-positioned to deliver long-term value. With that, we will open the line for questions.

Speaker #4: We will continue to build on that foundation, leveraging new innovations and our market leadership position, to attract more consumers to seafood, a category that remains underpenetrated.

Speaker #4: That said, our focus is squarely on profitable growth. While we have work to do, and do not expect an immediate turnaround, we are confident in our ability to stabilize performance and deliver higher adjusted EBITDA year over year in 2026.

Speaker #4: Importantly, we are doing this from a position of strength. Our balance sheet remains solid, our supply chain is resilient, and we are well positioned to deliver long-term value.

Speaker #4: With that, we will open the line for questions.

Speaker #5: Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star, followed by a one on your touch-tone phone.

Operator: Thank you, sir.

Operator: Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press Star followed by 1 on your touch tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press Star followed by 2. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Thank you. Please go ahead and press Star 1 now if you have any questions. First, we will hear from Kyle McPhee at ATB Cormark. Please go ahead, Kyle.

Operator 2: Ladies and gentlemen, if you do have any questions at this time, please press Star followed by 1 on your touch tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press Star followed by 2. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Thank you. Please go ahead and press Star 1 now if you have any questions. First, we will hear from Kyle McPhee at ATB Cormark. Please go ahead, Kyle.

Speaker #5: You will then hear a prompt that your hand has been raised. And, should you wish to decline from the polling process, please press star, followed by two.

Speaker #5: And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Thank you. Please go ahead and press star one now if you have any questions.

Speaker #5: First, we will hear from Kyle McPhee at ATB Coremark. Please go ahead, Kyle.

Speaker #6: Hello, everyone. First one from me. I just want to try and better understand the year-over-year volume gain in Q1, up 11%. I understand the favorable lent period shift, the acquired volume from ConAgra, the bigger USDA contract, all helping, but there's still a delta versus what I thought your volume would be.

Kyle McPhee: Hello, everyone. First one from me. I just want to try and better understand the year-over-year volume gain in Q1 up 11%. I understand the Lent, the favorable Lent period shift, the acquired volume from Conagra, the bigger USDA contract, all helping, there's still a delta versus what I thought your volume would be, a positive delta. It seems like it's maybe explained by the, you mentioned a contract manufacturing volume win. Is this a new customer win in Q1 or just a prior win you haven't lapped? If it is new, you know, is this just a seasonal win during the Lent period when demand is higher, or is this a durable new win for High Liner?

Speaker #6: A positive delta. So it seems like it's maybe explained by the you mentioned a contract manufacturing volume when is this a new customer win in Q1, or or just a prior win you haven't lapped?

Speaker #6: And if it is new, is this just a seasonal win during the lent period when demand is higher? Or is this a durable new win for High Liner?

Kimberly Stephens: Thanks, Kyle, for your question. Yeah, I would say the volume drivers are kind of split into a third, a third, a third. Like, Conagra was a third of the drivers to our incremental volume. As you indicated that the additional contract manufacturing business that we gained this quarter as well as the USDA contract that I mentioned in my remarks, was also about a third. Then the remaining amount was split between, I'd say, the lent timing shift as well as the incremental growth in our base business.

Speaker #4: Thanks, Kyle, for your question. So yeah, I would say the volume drivers are kind of split into a third, a third, a third. And so ConAgra was a third of the drivers to our incremental volume.

Speaker #4: As you indicated, the additional contract manufacturing business that we gained this quarter, as well as the USDA contract that I mentioned in my remarks, was also about a third.

Speaker #4: And then the remaining amount was split between, I would say, the lent timing shift, as well as the incremental growth in our base business.

Speaker #6: And, Kyle, in terms of the contract manufacturing customer, it is a new customer. It is not just for the Lent period; it is a longer-term relationship that we're certainly very happy to be working with them on.

Paul Jewer: Kyle, in terms of the contract manufacturing, customer, it is a new customer. It is not just for the lent period. It is a longer term relationship that we're certainly very happy to be working with them on. Great product that runs well through our plants.

Speaker #6: Great product that runs well through our plants.

Speaker #1: Got it. Okay, that's helpful. So it sounds like the delta was at the contract manufacturing and just growth of the base business. So great to see.

Kyle McPhee: Got it. Okay, that's helpful. It sounds like the delta was that contract manufacturing and just growth of the base business. Great to see. Second question. I just wanna better understand the, you know, the volume gains versus price gains versus gross margin percentage decline pattern you posted this quarter. It was a bit of an odd combo of moving parts. It seems a bit odd to me that gross margin percentage came down so much despite taking so much price gains to offset, you know, species inflation and tariffs while still holding volume gains. Was it a huge, you know, abnormal negative hit from volume mix that hit gross margin percentage so much this quarter? Was it, you know, a big shift into lower margin value or contract manufacturing? Any color there to just help me understand?

Speaker #1: Second question, I just want to better understand the volume gains versus price gains versus gross margin percentage decline pattern you posted this quarter. Bit of an odd combo of moving parts.

Speaker #1: Seems a bit odd to me that gross margin percentage came down so much, despite taking so much price gains to offset species inflation and tariffs.

Speaker #1: While still holding volume gains, was it a huge abnormal negative hit from volume mix that hit gross margin percentage so much this quarter? A big shift into lower margin value or contract manufacturing?

Speaker #1: Any color there to just help me understand?

Speaker #4: Yeah, again, Kyle, the main driver of our impact on our gross margin this quarter was really due to the higher raw material costs. And I would say that's about two-thirds of the business.

Kimberly Stephens: Yeah. Again, Kyle, the main driver of our impact on our gross margin this quarter was really due to the higher raw material costs. I would say that's about two-thirds of the business. As you saw, the inflationary impact of being able to add that to our net sales, kept net sales higher. I would say that two-thirds of the impact of GP was really related to the higher raw material costs. In addition to that, you were seeing that we had higher trade promotions in the quarter as well. As Paul indicated, that impacted our plant performance.

Speaker #4: And as you saw, the inflationary impact of being able to add that to our net sales kept net sales higher. But I would say two-thirds of the impact of GP was really related to the higher raw material costs.

Speaker #4: And then in addition to that, you were seeing that we had higher trade promotions in the quarter as well. And then as Paul indicated, that impacted our plant performance.

Speaker #6: And so Kyle, in terms of the higher raw material costs, that's particularly in our whitefish species. The increases in cod and haddock in particular were significant.

Paul Jewer: Kyle, in terms of the higher raw material costs, that's particularly in our whitefish species. The increases in cod and haddock in particular were significant, and we just weren't able to pass it on fully, particularly during the lent period. That did have an impact on margins as Kimberly identified. Of course, the other thing I would highlight if you're looking at margin as a rate, with the significant inflation on the top line dollars, even if you deliver similar EBITDA dollars, it's deflationary from a rate perspective. That was also a factor.

Speaker #6: And we just weren't able to pass it on fully, particularly during the lent period. So that did have an impact on margins as Kimberly identified.

Speaker #6: And of course, the other thing I would highlight, if you're looking at margin as a rate, with the significant inflation on the top line dollars, even if you deliver similar EBITDA dollars, it's deflationary from a rate perspective.

Speaker #6: So, that was also a factor.

Speaker #1: Got it. Okay. And just to confirm, when you we can back into your implied price gains. I think it was around 14%. That would be net of the promotional activity that kind of offsets pricing gains.

Kyle McPhee: Got it. Okay. Just to confirm, you know, we can back into your implied price gains, I think it was around 14%. That would be net of the promotional activity that kinda offsets pricing gains. Is that correct?

Speaker #1: Is that correct? That's where that moving price was? Got it. Okay. Thank you. I'll pass the line.

Paul Jewer: That's correct.

Kyle McPhee: Got it.

Paul Jewer: Yep.

Kyle McPhee: Okay. Thank you. I'll pass it along.

Speaker #5: Thank you. Next question will be from Nevin, your chip. At BMO Capital Markets, please go ahead, Nevin.

Operator 2: Thank you. Next question will be from Nevin Jarczew at BMO Capital Markets. Please go ahead, Nevin.

Operator: Thank you. Next question will be from Nevin Jarczew at BMO Capital Markets. Please go ahead, Nevin.

Speaker #6: Yeah, good morning. Thanks for taking the questions. I'm a new USDA contract that supported volumes this quarter. Wasn't fully ramped up to start Q1.

Nevin Jarczew: Yeah, good morning. Thanks for taking the questions. On the new USDA contract that supported volumes this quarter, was it fully ramped up to start Q1? Should we expect a similar year-over-year contribution to the remainder of 2026?

Nevan Yochim: Yeah, good morning. Thanks for taking the questions. On the new USDA contract that supported volumes this quarter, was it fully ramped up to start Q1? Should we expect a similar year-over-year contribution to the remainder of 2026?

Speaker #6: And then should we expect a similar year-over-year contribution to the remainder of 2026?

Anthony Rasetta: Hey, Nevin. It's Anthony. Yes, we're fully ramped up on USDA. We won a few different products that we're producing for them. If you recall, we talked about that coming online in terms of the award of that contract in Q4 2025. That'll stay pretty steady through the next 2 quarters, then we'll be lapping it in Q4.

Speaker #2: Hey, Nevin. It's Anthony. Yes, we're fully ramped up on USDA. We won a few different products that we're producing for them. If you recall, we talked about that coming online in terms of the award of that contract in the fourth quarter.

Speaker #2: Of 2025. And so that'll stay pretty steady through the next two quarters. And then we'll be lapping it in the fourth quarter.

Speaker #1: Okay, thank you. And then on the supply chain pressures that you're seeing on whitefish, is that all related to fish supply, or is there something going on with transport or otherwise?

Nevin Jarczew: Okay. Thank you. On the supply chain pressure that you're seeing on whitefish, is that all related to fish supply, or is there something going on with transport or otherwise? If you could just give an update on what the situation looks like today.

Nevan Yochim: Okay. Thank you. On the supply chain pressure that you're seeing on whitefish, is that all related to fish supply, or is there something going on with transport or otherwise? If you could just give an update on what the situation looks like today.

Speaker #1: And then if you could just give an update on what the situation looks like today.

Paul Jewer: Sure, yeah. It is not related to transport and certainly not in the first quarter, because that would have been raw material inventory we were acquiring towards the end of last year. It is related to challenging quotas on cod in particular, in Norway, and also in Alaska. But also in haddock, driven by some shift, we believe as cod became more difficult to acquire, there was some shift to haddock and to other species. We've been certainly helping drive some volume to other species like pollock or Cape hake. We'll continue to do that as we see challenges in cod quotas. You know, we're also, as you know, supporting cod aquaculture.

Speaker #2: Sure. Yeah. It is not related to transport, and certainly not in the first quarter, because that would have been raw material inventory we were acquiring towards the end of last year.

Speaker #2: It is related to challenging quotas on cod in particular. In Norway, and also in Alaska. But also in haddock, driven by some shift we believe as cod became more difficult to acquire.

Speaker #2: There was some shift to haddock. And to other species. And we've been certainly helping drive some volume to other species like pollock, or Cape Hague.

Speaker #2: And we'll continue to do that as we see challenges in cod quotas. We're also, as you know, supporting cod aquaculture. We're also very pleased to be buying cod again from Newfoundland, where the stocks are improving quite significantly.

Paul Jewer: We're also very pleased to be buying cod again from Newfoundland, where the stocks are improving quite significantly. We have more optimism as we look forward. The supply constraints were particularly acute during the Lent period when demand is highest. As we come through Q2, we expect to be in a much better supply position across really all of our species for the H2 of the year.

Speaker #2: So we have more optimism as we look forward. The supply constraints were particularly acute during the Lent period when demand is highest. As we come through the second quarter, we expect to be in a much better supply position across really all of our species for the back half of the year.

Speaker #1: Great. Thanks for taking my questions.

Nevin Jarczew: Great. Thanks for taking my questions.

Nevan Yochim: Great. Thanks for taking my questions.

Speaker #5: Thank you. Next question will be from Luke Hannon at Canaccord Genuity. Please go ahead, Luke.

Operator 2: Thank you. Next question will be from Luke Hannan at Canaccord Genuity. Please go ahead, Luke.

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

Speaker #2: Yes, thanks. Good morning. I wanted to start with my first question, I guess, is just on your expectations for the year. You're still calling for year-on-year EBITDA growth.

Luke Hannan: Yeah, thanks. Good morning. I wanted to start with my first question, I guess is just on your expectations for the year. You're still calling for year-on-year EBITDA growth. How should we think or I guess, how are you guys thinking about or how are you reflecting the expected imposition of the Section 301 tariffs coming in later this year? How has that been reflected in your expectations or your forecast for the year, if at all?

Speaker #2: How should we think, or I guess, how are you guys thinking about, or how are you reflecting the expected imposition of the Section 301 tariffs coming in later this year?

Speaker #2: How has that been reflected in your expectations or your forecast for the year, if at all?

Speaker #4: Yeah, great question. We have not included in our expectations any tariff recovery at this stage, as we identified in our disclosure. It's too early to do that.

Paul Jewer: Yeah. Great question. We have not included in our expectations any tariff recovery at this stage. As we identified in our disclosure, it's too early to do that. Obviously we're working hard to recover some of the tariffs that we paid, and that will be incremental to our expectations for the H2 of the year. You know, we're really, as we identified in our prepared remarks, expecting to see some improvement as we move through the H2 of the year. You know, we still have work to do in Q2, but with our performance in the back half of last year, with the steps that we've taken on pricing, promotion, supply chain improvement, with the acquisition of the Conagra Brands mid last year, all of those things give us confidence in the back half of 2026.

Speaker #4: Obviously, we're working hard to recover some of the tariffs that we paid. And that will be incremental to our expectations for the back half of the year.

Speaker #4: We're really, as we identified in our prepared remarks, expecting to see some improvement as we move through the back half of the year. We still have work to do in the second quarter, but with our performance in the back half of last year, with the steps that we've taken on pricing, promotion, supply chain improvement, with the acquisition of the ConAgra brands mid-last year, all of those things give us confidence in the back half of 2026.

Paul Jewer: You know, we still have work to do in Q2, but with our performance in the back half of last year, with the steps that we've taken on pricing, promotion, supply chain improvement, with the acquisition of the Conagra Brands mid last year, all of those things give us confidence in the back half of 2026.

Speaker #2: So just. Recovery for a second. I know you guys talked about you disclosed 41.3 million as the amount that you guys paid in IEPA tariffs.

Luke Hannan: Just on recovery for a second. I know you guys talked about, you disclosed $41.3 million as the amount that you guys paid in IEEPA tariffs. I know there's not much you guys can say at this point because there's just so much uncertainty, but we've heard from some other companies that whatever they paid in tariffs may not necessarily be what they get as far as refunds. Is your overall high level expectation though, that that amount will have to be broken down and shared potentially with some of your suppliers who presumably also would've been paying tariffs?

Speaker #2: I know there's not much you guys can say at this point, because there's just so much uncertainty. But we've heard from some other companies that whatever they've paid in tariffs may not necessarily be what they get.

Speaker #2: As far as refunds, is your overall high-level expectation, though, that that amount will have to be broken down and shared potentially with some of your suppliers who presumably also would have been paying tariffs?

Speaker #4: Yeah, I mean, at this stage, we can't really talk about what we'll do with refunds until we actually know that we'll get refunds.

Paul Jewer: I mean, at this stage, it's we can't really talk about what we'll do with refunds until we actually know that we'll get refunds. You're certainly right about that. We're, you know, we're working hard on that process. Big kudos to our teams 'cause, you know, it's been a significant amount of effort, but we've got very strong support and documentation for the refunds we've applied for. Listen, whenever there are significant cost increases, particularly, you know, as we face in seafood on raw material costs, it's always a conversation with our customers and, you know, we'll continue to have that discussion with them as we, you know, look at the opportunities to continue to support the category as we go forward.

Speaker #4: So you're certainly right about that. And we're working hard on that process. The big kudos to our teams because it's been a significant amount of effort.

Speaker #4: But we've got very strong support and documentation for the refunds we've applied for. Listen, whenever there are significant cost increases, particularly as we've faced in seafood on raw material costs, it's always a conversation with our customers.

Speaker #4: And we'll continue to have that discussion with them as we look at the opportunities to continue to support the category as we go forward.

Speaker #2: Okay. And I want to go back to my first question to make sure this is absolutely clear because, Paul, you did say you're not going to you're not expected to recover.

Luke Hannan: Okay. I wanna go back to my first question to make sure this is absolutely clear 'cause Paul, you did say you're not expected to recover, or rather you haven't built in that you're expecting to recover these tariff refunds. My question was around IEEPA tariffs are rolling off. We're expecting Section 301 tariffs will come on later this year. With that knowledge or with that expectation, you're still expecting to deliver year on year EBITDA growth, like that's been reflected in your guidance?

Speaker #2: Or rather, you haven't built in that you're expecting to recover these tariff refunds. But my question was around IEPA tariffs are rolling off. We're expecting Section 301 tariffs will come on later this year.

Speaker #2: With that knowledge or with that expectation, you're still expecting to deliver year-on-year EBITDA growth? That's been reflected in your guidance?

Speaker #4: Yeah. I mean, at this stage, what's included in our expectations is the tariffs were currently paying, right, which is largely a 10% tariff on everything going into the US.

Paul Jewer: Yeah. I mean, at this stage, what's included in our expectations is the tariffs we're currently paying, right? Which is largely a 10% tariff on everything going into the US. If there are incremental tariffs, again on top of that, then we'll have to, you know, certainly manage that in our business. That is currently, you know, we don't know what will come of those Section 301 tariffs at this stage if there are more on, you know, the countries that are providers of our seafood. Yeah, you're right, we'll have to wait to see there. Of course the other increasing cost that we'll be managing through the H2 of the year is the rising costs associated with fuel.

Speaker #4: If there are incremental tariffs, again, on top of that, then we'll have to certainly manage that in our business. That is, currently we don't know what will come of those 301 tariffs at this stage.

Speaker #4: If there are more, on the countries that are providers of our seafood. So yeah, you're right. We'll have to wait and see there. And of course, the other increase in costs that will be managing through the back half of the year is the rising costs associated with fuel.

Paul Jewer: You know, as we have historically shown in the past, you know, while it may have some short-term impact, we work hard at making sure that we get back to the kinds of margins that we're typical to delivering.

Speaker #4: But as we have historically shown in the past, while it may have some short-term impact, we work hard at making sure that we get back to the kinds of margins that we're typical to delivering.

Speaker #2: With the fuel surcharges that you guys have in market now, is the expectation that that higher fuel cost will be fully passed through, partially passed through?

Luke Hannan: With the fuel surcharges that you guys have in market now, is the expectation that higher fuel cost will be fully passed through, partially passed through? How should we think about that?

Speaker #2: How should we think about that?

Speaker #4: Yeah. I mean, we're obviously working as hard as possible to have it fully passed through. But you're never able to get it fully passed through just from a timing perspective and other things.

Paul Jewer: I mean we're obviously working as hard as possible to have it fully passed through, but You're never able to get it fully passed through just from a timing perspective and other things. We've reflected some negative impact associated with fuel costs in our forecast for the back part of the year at this stage.

Speaker #4: So we've reflected some negative impact associated with fuel costs in our forecast for the back part of the year at this stage.

Speaker #2: Okay. Thanks. And then last one, and then I'll pass the line. Just on the ConAgra brands, I know you guys talked about when you initially acquired them, I think the expectation was for an incremental US 4 million of EBITDA for 2026.

Luke Hannan: Okay, thanks. Last one and then I'll pass the line. Just on the Conagra Brands, I know you guys talked about when you.

Luke Hannan: Okay, thanks. Last one and then I'll pass the line. Just on the Conagra Brands, I know you guys talked about when you initially acquired them. I think the expectation was for an incremental $4 million of EBITDA for 2026. I just wanted to confirm if that's still reasonable. Then also I know at the time the expectation was to capture all the synergies, it would take 12 to 18 months. Can you just share what headway or what progress you've made on that front thus far?

Luke Hannan: Initially acquired them. I think the expectation was for an incremental $4 million of EBITDA for 2026. I just wanted to confirm if that's still reasonable. Then also I know at the time the expectation was to capture all the synergies, it would take 12 to 18 months. Can you just share what headway or what progress you've made on that front thus far?

Speaker #2: I just wanted to confirm if that's still reasonable. And then also, I know at the time, the expectation was to capture all the synergies it would take 12 to 18 months.

Speaker #2: Have you guys made can you just share what headway or what progress you've made on that front thus far?

Speaker #4: Yeah, absolutely. So what we're really pleased to share is that the ConAgra brands have actually performed really well under our ownership. And so as I indicated in my remarks, we saw incremental year-over-year adjusted EBITDA growth just in line with our expectations for the ConAgra brands as a standalone.

Kimberly Stephens: Yeah, absolutely. What we're really pleased to share is that the Conagra Brands have actually performed really well under our ownership. We, as I indicated in my remarks, we saw incremental year-over-year adjusted EBITDA growth just in line with our expectations for the Conagra Brands as a standalone. We are on track of recognizing the synergies, I would say throughout 2026 and on track to kind of target that $11 million in 2027.

Speaker #4: We are on track. Recognizing the synergies, I would say throughout 2026 and on track to kind of target that 11 million in 2027.

Speaker #2: So baked into the outlook is still that 4 million for this year? Okay. Thank you.

Luke Hannan: Basically the outlook is still that $4 million for this year?

Kimberly Stephens: Correct.

Luke Hannan: Okay. Thank you.

Speaker #1: Thank you. Next question will be from Ryland Conrad at RBC Capital Markets. Please go ahead, Ryland.

Operator 2: Thank you. Next question will be from Ryland Conrad at RBC Capital Markets. Please go ahead, Ryland.

Operator: Thank you. Next question will be from Ryland Conrad at RBC Capital Markets. Please go ahead, Ryland.

Speaker #5: Hey, good morning. Thanks for taking my questions. To start, just on the pricing actions for the retail channel—I guess, can you confirm that those have now been fully in effect post-rent and through Q2?

Ryland Conrad: Good morning. Thanks for taking my questions. To start, just on the pricing actions for the retail channel, I guess can you confirm that those have now been fully in effect post-Lent? Through Q2, are you seeing any demand elasticity from consumers in response to those price increases?

Speaker #5: Are you seeing any demand elasticity from consumers in response to those price increases?

Speaker #2: Hey, Ryland. It's Anthony. Yes, we have, because of what we talked about in the fourth quarter of last year and early this year, there was a lag in being able to get the pricing passed through on retail, given blackout windows and the Lent timing and longer lead times in retail.

Anthony Rasetta: Hey, Ryland, it's Anthony. Yes, Because of what we talked about in the Q4 of last year and early this year, there was a lag in being able to get the pricing passed through on retail given blackout windows and the Lent timing and longer lead times in retail. The majority of customers have accepted and we're into our pricing right now. It's a little early to tell on price elasticity because some of it's just hitting the market and, you know, we're obviously lapping Lent from last year in the latter part of April. I think it's still too early to tell.

Speaker #2: So the majority of customers have accepted and were into our pricing right now. It's a little early to tell on price elasticity because some of it's just hitting the market.

Speaker #2: And we're obviously lapping lent from last year, and the latter part of April. So I think it's still too early to tell what I would say overall is that as you saw in our Q1 results in spite of the inflation, the demand has held up well, probably better than we thought in terms of the elasticity impact.

Anthony Rasetta: What I would say overall is that as you saw in our Q1 results, in spite of the inflation, the demand has held up, well, probably better than we thought, in terms of the elasticity impact. We'll continue to monitor it and see how the consumer reacts to it, and then make sure that we have, because of the breadth of our portfolio across, you know, value and premium, hopefully we have the right solutions for them regardless.

Speaker #2: But we'll continue to monitor it and see how the consumer reacts to it and then make sure that we have because of the breadth of our portfolio across value and premium, hopefully, we have the right solutions for them regardless.

Speaker #5: Okay. Got it. And then just in light of the solid volume performance in Q1 that came in ahead of your expectations, in balancing that with the current macro environment, are you still expecting to deliver low single-digit volume growth for the full year, or has that changed?

Ryland Conrad: Okay, got it. Just in light of the solid volume performance in Q1 that came in ahead of your expectations, in balancing that with the current macro environment, are you still expecting to deliver low single-digit volume growth for the full year or has that changed?

Speaker #2: Yeah. No, I think our expectations are still in line with that, Ryland. I'd say on a year-to-go basis, like you mentioned, there will be some inflation and price elasticity impact.

Anthony Rasetta: Yeah, no, I think our expectations are still in line with that, Ryland. I'd say on a year-to-go basis, you know, like you mentioned, there will be some inflation and price elasticity impact. What we're doing on proactive pricing and promotional optimization. Then in Q4, we'll get into lapping that USDA contract manufacturing. That will slow some of the volume pace versus what we've seen, but still expecting that range of volume growth on full year.

Speaker #2: What we're doing on proactive pricing and promotional optimization and then in the fourth quarter, we'll get into lapping that USDA contract manufacturing. So that will slow some of the volume pace versus what we've seen, but still expecting that range of volume growth on the full year.

Speaker #5: Okay. Great. Thank you. And maybe last for me, just on gross margins, given the incremental kind of year-over-year pressure in Q1, do you still see that '21% to '21.5% range as being achievable for this year?

Ryland Conrad: Okay, great. Thank you. Maybe last for me, just on gross margins, given the incremental kind of year-over-year pressure in Q1, do you still see that 21% to 21.5% range as being achievable for this year?

Paul Jewer: I think at this stage, Given what we delivered in the first quarter from a rate perspective and given what I highlighted in terms of just the inflation that's in the top line, and the effect on margin percentage, I think it'll probably be a little below the that 21% range. Certainly better than, as we finish the year, better than where we are, we're starting the year from a rate perspective.

Speaker #4: I think at this stage, what we given what we delivered in the first quarter from a rate perspective and given what I highlighted in terms of just the inflation that's in the top line, and the effect on margin percentage, I think it'll probably be a little below the 21% range but certainly better than as we finish the year, better than where we're starting the year from a rate perspective.

Speaker #5: Okay. Thanks very much.

Ryland Conrad: Okay. Thanks very much.

Operator 2: Thank you. Next question will be from Frederic Tremblay at Raymond James. Please go ahead, Fred.

Operator: Thank you. Next question will be from Frederic Tremblay at Raymond James. Please go ahead, Fred.

Speaker #1: you. Next question will be from Frank Fred Cattali at Raymond James. Please go ahead, Fred.

Speaker #6: Hey, good morning. Could you speak to the promotional environment through the year, geographically, and then how that's being balanced with upward pricing adjustments and maintaining share?

Frederic Tremblay: Hey, good morning. Could you speak to the promotional environment through the year, geographically, and then how that's being balanced with upward pricing adjustments and maintaining share?

Fred Gatali: Hey, good morning. Could you speak to the promotional environment through the year, geographically, and then how that's being balanced with upward pricing adjustments and maintaining share?

Speaker #2: Sure. Yeah. So as we mentioned, obviously, the most intense promotional period for us and the category is in Q1 with lent timing. We definitely will still continue to appropriately promote on our business.

Anthony Rasetta: Sure. Yeah. As we mentioned, so as we mentioned, the, obviously the most intense promotional time period for us and the category is in Q1 with Lent timing. We definitely will still continue to appropriately promote on our business. You won't see the level of depth and frequency on those promotions throughout the year. It's very similar in terms of how we operate between Canada and the US and across retail and food service. Lent tends to be the peak promotional timing and period. It slows down a bit in the summertime and then picks up again before the holidays at the end of the year, and then ramping up for Lent 2027. Again, you should see less than we saw on the, in Q1.

Speaker #2: You won't see the level of depth and frequency on those promotions. Throughout the year, it's very similar. In terms of how we operate, between Canada and the US and across retail and food service, lent tends to be the peak promotional timing and period.

Speaker #2: It slows down a bit in the summertime, and then picks up again before the holidays at the end of the year, and then ramps up for Lent 2027.

Speaker #2: So again, you should see less than we saw in the first quarter. We're trying to make the right balanced decisions on the balance of the year to appropriately support our brands.

Anthony Rasetta: We're trying to make the right balanced decisions on the balance of the year to appropriately support our brands. We don't wanna lose the strong momentum we've gained. I mean, Sea Cuisine is the fastest growing brand in US retail right now, and we have great innovation out in the market. We talked about Guinness and I mentioned the meals platform that we're launching. Appropriately, we'll still put some investment behind driving trial so that we can have consumers try our products and then continue to buy it on base business or when it's not on promotion ongoing.

Speaker #2: We don't want to lose the strong momentum we've gained. I mean, Sea Cuisine is the fastest-growing brand in US retail right now, and we have great innovation out in the market.

Speaker #2: We talked about Guinness and I mentioned the Meals platform that we're launching. And appropriately, we'll still put some investment behind driving trial so that we can have consumers try our products and then continue to buy it on base business or when it's not on promotion ongoing.

Frederic Tremblay: On the fully cooked offering, that was launched in January, how is that resonating versus expectations?

Speaker #6: And on the fully cooked offering, that was launched in January, how is that resonating versus expectations?

Fred Gatali: On the fully cooked offering, that was launched in January, how is that resonating versus expectations?

Speaker #2: Yeah. It's off to a great start. So we had fully cooked launch, as we talked about in January of the year. We had it within a national convenience customer in the US.

Anthony Rasetta: Yeah, it's off to a great start. We had fully cooked launch, as we talked about in January of the year. We had it in a national convenience customer in the US. That was intended to be a limited time offer during Lent, but they were so pleased with the velocity and the sales on it that they agreed to take it as a full-time item. We've also secured some more listings, particularly in the non-commercial side of food service, so servicing hospitals, long-term care facilities, areas where they're really looking for that convenient, easy solution. Yeah, we believe it's off to a great start and provides that great convenient and value offering that our customers and consumers are looking for.

Speaker #2: That was intended to be a limited-time offer during lent, but they were so pleased with the velocity and the sales on it that they agreed to take it as a full-time item.

Speaker #2: We've also secured some more listings, particularly in the non-commercial side of food service. So servicing hospitals, long-term care facilities, areas where they're really looking for that convenient, easy solution.

Speaker #2: And so, yeah, we believe it's off to a great start and provides that great convenient and value offering that our customers and consumers are looking for.

Speaker #6: Okay. And let's talk from me. If we look at one of the companies, you have a stake in Norquad, recently raised capital. Could you just speak to your participation there and then the strategy going forward, what you plan to do with that?

Frederic Tremblay: Okay. Last one from me. If we look at one of the companies you have a stake in, Norcod recently raised capital. Could you just speak to your participation there and then the strategy going forward, what you plan to do with that?

Fred Gatali: Okay. Last one from me. If we look at one of the companies you have a stake in, Norcod recently raised capital. Could you just speak to your participation there and then the strategy going forward, what you plan to do with that?

Speaker #4: Yeah. Sure. So Norquad is a company that we have been investing in over the past couple of years. And we are selling their product in the market in the US today.

Paul Jewer: NorCod is a company that we have been investing in over the past couple of years. We are selling their product in the market in the US today. Very pleased to be doing that, as I mentioned earlier, particularly with the constraints on wild cod, and certainly a great premium product. We did make a small additional investment in NorCod as part of their last financing round. Look forward now as they continue to grow their top line and improve their operational performance to results from operations being sufficient to support the growth of their business going forward.

Speaker #4: Very pleased to be doing that. As I mentioned earlier, particularly with constraints on wild-caught cod and certainly a great premium product. We did make a small additional investment in Norquad as part of their last financing round.

Speaker #4: And look forward now, as they continue to grow their top line, and improve their operational performance to results from operations being sufficient to support the growth of their business going forward.

Speaker #6: Thank you.

Frederic Tremblay: Thank you.

Fred Gatali: Thank you.

Speaker #1: Thank you. Next question will be from Georges Dumay at Ventum Financial. Please go ahead, Georges.

Operator 2: Thank you. Next question will be from George Doumet at Ventum Financial. Please go ahead, George.

Operator: Thank you. Next question will be from George Doumet at Ventum Financial. Please go ahead, George.

Speaker #7: Hi. Good morning, everybody. I'd like to get your thoughts on retail. Are there any trends or themes that you can highlight when it comes to promo in general, versus this year compared to the other Lent periods?

George Doumet: Hi, good morning, everybody. I'd like to get your thoughts on retail. Are there any trends, themes that you can highlight when it comes to promo in general versus this year versus the other Lent periods? How would you characterize the retail environment right now? Do you think promo in general could remain elevated over the next couple of quarters? Just your thoughts there, please.

Speaker #7: And how would you characterize the retail environment right now? And do you think promo in general could remain elevated, I guess, over the next couple of quarters?

Speaker #7: Just your thoughts there, please.

Speaker #2: Sure. Hey, George. It's Anthony. Definitely saw, with the earlier Lent timing and with the consumers looking for value, that there was elevated promotion for our category in particular.

Anthony Rasetta: Sure. Hey, George, it's Anthony. Definitely saw with the earlier Lent timing and with consumers looking for value that there was elevated promotion. For our category in particular, I don't expect that level of intensity to remain after Q1. What we are seeing, I think, which is positive for us, is as consumers are, you know, looking for better value and are struggling with being able to go out and go to restaurants, they're looking for restaurant quality at home. We saw the real benefit of that in actually the premium parts of our portfolio in Sea Cuisine and C. Wirthy, where with our innovation, our increased distribution, and then just the portfolio of products that we provide, that consumers are actually moving even in Canada on our Pan-Sear side of the business.

Speaker #2: I don't expect that level of intensity to remain after the first quarter. What we are seeing, I think, which is positive for us, is that as consumers are looking for better value and are struggling with being able to go out and go to restaurants, they're looking for restaurant-quality at home.

Speaker #2: And so we saw the real benefit of that in actually the premium parts of our portfolio, in Sea Cuisine and Seaworthy, where with our innovation, our increased distribution, and then just the portfolio of products that we provide, consumers are actually moving, even in Canada, on our pan-sear side of the business.

Speaker #2: We saw the most growth in the premium side of it. So I think that as consumers are looking for those restaurant-quality experiences at home, that bodes well for the retail environment.

Anthony Rasetta: We saw the most growth in the premium side of it. I think that as consumers are looking for those restaurant quality experiences at home, that bodes well for the retail environment. I think the promotional intensity that we saw in Q1 won't be as elevated for the balance of the year.

Speaker #2: But I think the promotional intensity that we saw in Q1 won't be as elevated for the balance of the year.

Speaker #7: Okay, helpful. And maybe following up—Anthony, I know it's early days, but when would you expect to be behind, from a timing perspective at least, on the negative volume response that can come up?

George Doumet: Okay, helpful. Maybe following up, Anthony, I know it's early days, but when would you expect to be behind from a timing perspective at least, the negative volume response that could come up? Is it more of a Q3 shift thing? Is it more of a Q4 thing? When do you think we'll be kind of, you know, better gauged to see when we're behind it?

Speaker #7: Is it more of a Q3 thing? Is it more of a Q4 thing? When do you think we'll be kind of better gauged to see when we're behind it?

Speaker #2: You're talking volume pressure associated with pricing? Like in elasticity?

Anthony Rasetta: You're talking volume pressure associated with pricing, like in elasticity?

Speaker #7: Correct.

George Doumet: Correct. Correct.

Anthony Rasetta: Yeah, I think, I think we will have the best understanding by the end of Q2 as to what's happening with elasticity. As Paul said, the increases in raw material costs are largely known at this point, while they're not fully behind us, but we'll have most of that reflected on our brands and products. For the majority of the business, I would say we'll have a good indication by the end of Q2. Some of it with the predictions on some of the whitefish species in particular will take us into Q3 where there'll be some elevated pricing. Certainly coming out of Q3, I would expect to have full visibility on price impacts and elasticity and consumer response to that.

Speaker #2: Yeah. I think we will have a bet the best understanding by the end of the second quarter as to what's happening with elasticity. As Paul said, the increases in raw material costs are largely known at this point.

Speaker #2: Well, they're not fully behind us, but we'll have most of that reflected on our brands and products. So, for the majority of the business, I would say we'll have a good indication by the end of the second quarter.

Speaker #2: Some of it, with the predictions on some of the whitefish species in particular, will take us into the third quarter, where there'll be some elevated pricing.

Speaker #2: So certainly coming out of the third quarter, I would expect to have full visibility on price impacts and elasticity and consumer response to that.

Speaker #7: Okay. Thanks. And maybe for Kimberly, understanding it's a little bit of a crystal ball question. I know there's a lot of moving parts, but can you maybe quantify the impact that you would expect from working capital this year given all the stuff that's going on?

George Doumet: Okay, thanks. Maybe for Kimberly, understanding it's a little bit of a crystal ball question. I know there's a lot of moving parts, but can you maybe quantify the impact that you would expect from working capital this year, given all the stuff that's going on? Maybe just hoping you guys can give us an updated target on where you see leverage ending the year.

Speaker #7: And maybe I was hoping you guys could give us an updated target on where you see leverage ending the year.

Speaker #4: Yeah. Absolutely. As you saw what happened in Q1, we were able to offload a lot of free cash flow. And we anticipate that to continue into the back half of the year.

Kimberly Stephens: Yeah, absolutely. As you saw what happened in Q1, we were able to offload a lot of free cash flow. We anticipate that to continue into the back half of the year. We, as I indicated in my remarks, we expect to slowly deleverage throughout the year and be just slightly above our 3 times target by the end of 2026.

Speaker #4: As I indicated in my remarks, we expect to slowly de-leverage throughout the year. And be just slightly above our three-times target by the end of 2026.

Speaker #7: Okay. Those are my questions, guys. And sorry, one last one, actually. On buybacks, is that something we'd have to wait to get to that kind of three-times?

George Doumet: Okay. Those are my questions, guys. I'm sorry, one last one, actually. On buybacks, is that something we'd have to wait to get to that kind of 3x? How do you think about maybe capital allocation to shareholders given where your stock price-

Speaker #7: How do you think about maybe capital allocation to shareholders given where your stock is? Is that more of yeah, go ahead. Thanks.

Kimberly Stephens: Yeah.

George Doumet: Is that more of? Yeah, go ahead. Thanks.

Speaker #4: Yeah. You would have seen that we pulled back a little bit on our share buyback in leading into mid-Q1. And that is due to the fact that while we have competing priorities in our capital allocation, de-leveraging is at the top of that list at the moment.

Kimberly Stephens: Yeah, you would have seen that we pulled back a little bit on our share buyback in leading into mid Q1, and that is due to the fact that, you know, while we have competing priorities in our capital allocation, de-leveraging is at the top of that, of the list at the moment. We didn't cut it completely because we still believe in the value of what it does, in terms of the value of our stock as well, as returning the capital to our shareholders. We will continue to buy back shares alongside with our de-leveraging initiatives.

Speaker #4: But we didn't cut it completely because we still believe in the value of what it does in terms of the value of our stock as well as returning the capital to our shareholders.

Speaker #4: So we will continue to buy back shares alongside with our de-leveraging initiatives.

Speaker #7: Great. Thanks for your answers.

George Doumet: Great. Thanks for your answers.

Speaker #1: Thank you. Next question will be from Kyle McPhee at ATB Cormac. Please go ahead, Kyle.

Operator 2: Thank you. Next question will be from Kyle McPhee at ATB Cormark. Please go ahead, Kyle.

Operator: Thank you. Next question will be from Kyle McPhee at ATB Cormark. Please go ahead, Kyle.

Kyle McPhee: Well, just a couple quick follow-ups. One of the many moving parts you guided to helping margins throughout the rest of the year, one was that you briefly mentioned was cutting out, I think, lower margin SKUs. Is that a notable moving piece like we will notice it in volume drag in Q2 and beyond, or is that a small incremental moving piece?

Speaker #7: Just a couple of quick follow-ups. One of the many moving parts that you guided to helping margins throughout the rest of the year. One was that you briefly mentioned was cutting out, I think, lower margin SKUs.

Speaker #7: Is that a notable moving piece? We will notice it in volume drag in Q2 and beyond, or is that a small incremental moving piece?

Speaker #2: No, it's a smaller incremental piece. But you can actually be quite helpful as we look at the efficiency of our plants.

Paul Jewer: No, it's a smaller incremental piece, but can actually be quite helpful as we look at the efficiency of our of our plans.

Speaker #7: Got it. Okay. And then the Sea Star win for your pre-cooked product lineup that you launched—was that effective for the full Q1? And can you, and it sounds like it's a permanent listing now.

Kyle McPhee: Got it. Okay. The C-Store win for your pre-cooked product lineup that you launched, was that effective for the full Q1? It sounds like it's a permanent listing now, so can you help us kinda quantify the size, how meaningful that is?

Speaker #7: So, can you help us kind of quantify the size? How meaningful that is?

Speaker #2: Yeah. Look, I think fully cooked is still very much in its infancy. And that initial win with the customer as much as there are over 1,000 stores in the US that we're servicing with it, I wouldn't say is the largest driver of our growth so far.

Anthony Rasetta: Yeah. Look, I think fully cooked is still very much in its infancy. You know, with that initial win with the customer, as much as there are, you know, over 1,000 stores in the US that we're servicing with it, I wouldn't say it's the largest driver of our growth so far. Seeing the good everyday volume that we'll get out of it, which will be lower velocity in terms than what we saw during Lent, 'cause we're outside of peak season, we'll continue to build with the distribution that we're picking up in non-commercial, and then the continued work that we do to get traction in QSR in particular.

Speaker #2: But seeing the good everyday volume that we'll get out of it, which will be lower velocity in turns than what we saw during Lent because we're outside of peak season, will continue to build with the distribution that we're picking up in non-commercial and then the continued work that we do to get traction in QSR in particular.

Speaker #7: Got it. Okay. That's it. Thank you.

Kyle McPhee: Got it. Okay. That's it. Thank you.

Speaker #1: Thank you. Ladies and gentlemen, a reminder to please press star one on your telephone keypad should you have any questions. And at this time, Mr. Jewer, it appears we have no other questions.

Operator 2: Thank you. Ladies and gentlemen, a reminder to please press star 1 on your telephone keypad should you have any questions. At this time, Paul Jewer, it appears we have no other questions. Please proceed.

Operator: Thank you. Ladies and gentlemen, a reminder to please press star 1 on your telephone keypad should you have any questions. At this time, Paul Jewer, it appears we have no other questions. Please proceed.

Speaker #1: Please proceed.

Speaker #2: Thank you, operator. And thank you all for joining our call today. We look forward to updating you with our results for the second quarter of 2026 on our next conference call in August.

Paul Jewer: Thank you, operator, and thank you all for joining our call today. We look forward to updating you with our results for Q2 2026 on our next conference call in August.

Speaker #1: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your line.

Operator 2: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your line.

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