Q1 2026 Organto Foods Inc Earnings Call and Business Update

May 28, 2026

Speaker #2: Okay. Looks like everyone's in. Hello, everyone, and thank you for joining ORGANTO FOODS Q1, 2026 results review and business update. My name is Lauren Bekantzen, and I will be monitoring today's session.

Lauren Beckhansen: Okay, looks like everyone's in. Hello, everyone, thank you for joining Organto Foods' Q1 2026 Results Review and Business Update. My name is Lauren Beckhansen, and I will be monitoring today's session. We will begin with a brief presentation from Steve Bromley, CEO and Co-Chair of Organto Foods, who will walk through the company's first quarter results and operational highlights. Following the presentation, we'll move into the Q&A portion of the session. For those joining us on Zoom, you can submit questions at any time using the Q&A function at the bottom of your screen. We'll aim to address as many questions as possible, including any questions that were submitted in advance of today's session. Before we begin, I'll note that today's discussion may include forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws.

Lauren Beck-Hansen: Okay, looks like everyone's in. Hello, everyone, thank you for joining Organto Foods' Q1 2026 Results Review and Business Update. My name is Lauren Beck-Hansen, and I will be monitoring today's session. We will begin with a brief presentation from Steve Bromley, CEO and Co-Chair of Organto Foods, who will walk through the company's Q1 results and operational highlights. Following the presentation, we'll move into the Q&A portion of the session. For those joining us on Zoom, you can submit questions at any time using the Q&A function at the bottom of your screen. We'll aim to address as many questions as possible, including any questions that were submitted in advance of today's session. Before we begin, I'll note that today's discussion may include forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws.

Speaker #2: We will begin with a brief presentation from Steve Bromley, CEO and co-chair of Organto Foods, who will walk through the company's first-quarter results and operational highlights.

Speaker #2: Following the presentation, we'll move into the Q&A portion of the session. For those joining us on Zoom, you can submit questions at any time using the Q&A function at the bottom of your screen.

Speaker #2: We'll aim to address as many questions as possible, including any questions that were submitted in advance of today's session. Before we begin, I'll note that today's discussion may include forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws.

Speaker #2: These statements may relate to Organto's expectations, plans, objectives, strategies, financial outlook, anticipated growth, operating performance, market opportunities, expansion plans, and other future events or developments.

Lauren Beckhansen: These statements may relate to Organto's expectations, plans, objectives, strategies, financial outlook, anticipated growth, operating performance, market opportunities, expansion plans, and other future events or developments. Forward-looking statements are based on management's current expectations, assumptions, estimates, and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks, assumptions, and uncertainties, please refer to Organto's public disclosure documents, including its MD&A under the company's profile on SEDAR+. Today's discussion may also reference certain non-IFRS measures, including EBITDA or adjusted EBITDA. These measures do not have standardized meanings under IFRS and may not be comparable to similar measures by other companies. Please refer to Organto's public disclosure documents for additional information, including reconciliations where applicable. Nothing discussed today should be considered investment, financial, legal, or tax advice.

Lauren Beck-Hansen: These statements may relate to Organto's expectations, plans, objectives, strategies, financial outlook, anticipated growth, operating performance, market opportunities, expansion plans, and other future events or developments. Forward-looking statements are based on management's current expectations, assumptions, estimates, and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks, assumptions, and uncertainties, please refer to Organto's public disclosure documents, including its MD&A under the company's profile on SEDAR+. Today's discussion may also reference certain non-IFRS measures, including EBITDA or adjusted EBITDA. These measures do not have standardized meanings under IFRS and may not be comparable to similar measures by other companies. Please refer to Organto's public disclosure documents for additional information, including reconciliations where applicable. Nothing discussed today should be considered investment, financial, legal, or tax advice.

Speaker #2: Forward-looking statements are based on management's current expectations, assumptions, estimates, and beliefs, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

Speaker #2: For a discussion of these risks, assumptions, and uncertainties, please refer to Organto's public disclosure documents, including its MD&A under the company's profile on CDAR.

Speaker #2: Today's discussion may also reference certain non-IFRS measures, including EBITDA or adjusted EBITDA. These measures do not have standardized meanings under IFRS and may not be comparable to similar measures used by other companies.

Speaker #2: Please refer to Organto’s public disclosure documents for additional information, including reconciliations where applicable. Nothing discussed today should be considered investment, financial, legal, or tax advice.

Speaker #2: ORGANTO undertakes no obligation to update forward-looking statements except as required by applicable law. Thanks again for taking the time to join us today. I'll now hand things over to Steve Bromley, CEO and co-chair of ORGANTO FOODS.

Lauren Beckhansen: Organto undertakes no obligation to update forward-looking statements except as required by applicable law. Thanks again for taking the time to join us today. I'll now hand things over to Steve Bromley, CEO and Co-Chair of Organto Foods.

Lauren Beck-Hansen: Organto undertakes no obligation to update forward-looking statements except as required by applicable law. Thanks again for taking the time to join us today. I'll now hand things over to Steve Bromley, CEO and Co-Chair of Organto Foods.

Speaker #3: Great. Thanks very much, Lauren, and good afternoon, everyone, or good evening, depending on or good morning, depending on where you are. I appreciate you joining the call today.

Steve Bromley: Great. Thanks very much, Lauren, good afternoon, everyone, or good evening, depending on, or good morning, depending on where you are. I appreciate you joining the call today as we take a little bit of time to review Q1 and where we're going. Today, we'll talk about our performance, both from an operating point of view and a financial point of view for Q1. We'll take a look at what our priorities are as we're moving forward throughout the year, then as Lauren mentioned, we'll take as many questions as we can in the time that we have allotted. Thanks again for joining. As we look at Q1, it was a solid quarter for us. We had record growth, our financial position remains quite solid.

Speaker #3: As we take a little bit of time to review Q1 and where we're going, today we'll talk about our performance from both an operating point of view and a financial point of view for Q1.

Speaker #3: We'll take a look at what our priorities are as we're moving forward throughout the year, and then as Lauren mentioned, we'll take as many questions as we can in the time that we have allotted.

Speaker #3: So, thanks again for joining. As we look at the first quarter, it was a solid quarter for us. We had record growth, and our financial position remains quite solid.

Speaker #3: It was a really busy period for us, and it's busy when you take a look at the sales growth that we had during the quarter.

Steve Bromley: It was a really busy period for us, and it's busy when you take a look at the sales growth that we had. During the quarter, we added six new growing partners in key sourcing regions. We added eight new European retailers to our customer portfolio. That brought three new geographic regions that we're serving to our customer portfolio. We added Switzerland, Spain, and Ukraine. We added four new sea carriers. We added two new ports of origin where product was being loaded from. We added three new destination ports. From an operating and commercial point of view, it was an incredibly busy Q1. We're proud of the progress that we made. It wasn't perfect. We had some additional costs in the quarter related to all of that expansion and integration, a heavy lift and a great job by the team.

Speaker #3: We added six new growing partners and key sourcing regions. We added eight new European retailers to our custom work portfolio. That brought three new geographic regions that we're serving to the to our customer portfolio, and we added Switzerland, Spain, and the Ukraine.

Speaker #3: We added four new sea carriers. We added two new ports of origin where product was being loaded from, and we added three new destination ports.

Speaker #3: So, from an operating and commercial point of view, it was an incredibly busy first quarter. We're proud of the progress that we made. It wasn't perfect.

Speaker #3: We had some additional costs in the quarter related to all of that expansion and integration, but a heavy lift and a great job by the team.

Speaker #3: And that resulted in record results. We had our largest sales quarter in the history of the company. Our sales were 25.6 million. Up 88% versus the prior year.

Steve Bromley: That resulted in record results. We had our largest sales quarter in the history of the company. Our sales were CAD 25.6 million, up 88% versus the prior year. That translated into the largest gross profit in the history of the company at CAD 1.8 million. That was up 62% from the prior year. We didn't see the growth completely in gross profit, i.e., if sales went up 88%, you'd hope gross profit went up 88%. It only went up 62%. We'll talk about it. There were a number of one-time issues that impacted us in the quarter. Even with that, and those issues were related to all of the platform expansion that was going on.

Speaker #3: And that translated into the largest gross profit in the history of the company at $1.8 million. That was up 62% from the prior year.

Speaker #3: So we didn't see the growth completely in gross profit, i.e., of sales went up 88%. You'd hope gross profit went up 88%. It only went up 62%.

Speaker #3: We'll talk about it. There were a number of one-time issues that impacted us in the quarter. But even with that, and those issues were related to all of the platform expansion that was going on, even with that, record gross profit, we continued to see our cash operating costs, our SG&A management fees, labor and benefits continue to lever down against sales down to 6.2% in the in the first quarter of this year versus 6.5% in the first quarter of last year, and 7.7% versus all of last year.

Steve Bromley: Even with that record gross profit, we continued to see our cash operating costs, our SG&A management fees, labor, and benefits continue to lever down against sales down to 6.2% in Q1 of this year versus 6.5% in Q1 of last year, and 7.7% versus all of last year. Our costs went up later in the year as we onboarded more business versus Q1 of last year. Again, very positive to see that leverage. That translated, as we expected, into positive EBITDA. We have positive EBITDA in the quarter, which is in line with what our expectations were. We had flat earnings of zero versus a loss in the prior year of CAD 300,000. Really, really solid P&L activity in the month, resulting in a lot of records for us. Our balance sheet continued to be solidified.

Speaker #3: Our costs went up later in the year as we onboarded more customers, more business versus Q1 of last year. So again, very positive to see that leverage.

Speaker #3: That translated, as we expected, into positive EBITDA. So, we had positive EBITDA in the quarter, which is in line with what our expectations were.

Speaker #3: And we had flat earnings of zero, versus a loss in the prior year of $300,000. So, really, really solid P&L activity in the month, resulting in a lot of records for us.

Speaker #3: Our balance sheet continued to be solidified during the quarter. We expanded our RoboBank flexible funding facility from $4 million to $7 million euros. That really to support this growth that we're having and fund the working capital that was required.

Steve Bromley: During the quarter, we expanded our Rabobank flexible funding facility from €4 million to €7 million. That really to support this growth that we're having and fund the working capital that was required. We also completed an early warrant exercise program in February of last year for gross proceeds of CAD 5 million. We'll get into the balance sheet in a couple of minutes, but it remains very strong. At the same time, we expanded our leadership team during the quarter. We're going to talk a little bit more about more expansion today. We increased the management team by taking resources that we had and focusing them on key areas, really to allow us to both leverage our operating expertise and dedicate time to strategic growth, which is really important to us. During the quarter, we continued to expand our strategic growth pipeline.

Speaker #3: And we also completed an early warrant exercise program in February of last year for gross proceeds of $5 million. We'll get into the balance sheet in a couple of minutes, but it remains very, very strong.

Speaker #3: At the same time, we've expanded our leadership team during the quarter, and we're going to talk a little bit more about further expansion today.

Speaker #3: But, you know, we increased the management team by taking resources that we had and focusing them on key areas, really to allow us to both leverage our operating expertise and dedicate time to strategic growth, which is really, really important to us.

Speaker #3: And during the quarter, we continued to expand our strategic growth pipeline. So we're looking at a number of opportunities to bolt on new businesses to the platform.

Steve Bromley: We're looking at a number of opportunities to bolt on new businesses to the platform, and we made really good progress on that, and we'll talk about that in a minute. When we're talking about our team, I'm really excited to announce and introduce to everyone Darryl Bergman, who, come next Monday, will assume the role of President, reporting to myself and working very closely with the entire team. We're thrilled to have Darryl join us. He comes with deep operational, financial, and strategic growth expertise and lots of public company expertise. He's been involved in numerous business development opportunities, M&A opportunities, we're just thrilled to have a guy like Darryl join the team as we prepare ourselves for our next phase of growth.

Speaker #3: And progress on that, and we'll talk about that in a minute. When we're talking about our team, I'm really excited to announce and introduce to everyone Darryl Bergman, who, come next Monday, will assume the role of President.

Speaker #3: Reporting to myself and working very, very closely with the entire team. We're thrilled to have Darryl join us. He comes with deep operational, financial, and strategic growth expertise.

Speaker #3: And lots of public company expertise. He's been involved in numerous business development opportunities, M&A opportunities. And so we're just thrilled to have a guy like Darryl join the team.

Speaker #3: As we prepare ourselves for our next phase of growth. And as I mentioned, Darryl will start on Monday next week with an initial focus on supporting the operations and helping us position the company for continued growth.

Steve Bromley: As I mentioned, Darryl will start on Monday next week with an initial focus on supporting the operations and helping us position the company for continued growth. We're thrilled to have Darryl joining us, and he'll play a large part in our growth as we continue to build this company. Welcome aboard, Darryl. Just to go back and talk a little bit about the business before we dive into the numbers. Our core products are banana, ginger, mangoes, and other seasonal items. We provide those as much as we can on a year-round basis. We're dealing with 20 major retail accounts today in Europe. That includes the number one and two largest grocers in France, Germany, Austria, and the number one and three largest growers in Denmark.

Speaker #3: So we're thrilled to have Darryl joining us. And he'll play a large part in our growth as we continue to build this company. So welcome aboard, Darryl.

Speaker #3: So just to go back and talk a little bit about the business before we dive into the numbers. Our core products are banana, ginger, mangoes, and other seasonal items.

Speaker #3: We provide those as much as we can on a year-round basis. We're dealing with 20 major retail accounts today in Europe, and that includes the number one and two largest grocers in France, Germany, Austria, and the number one and three largest grocers in Denmark.

Speaker #3: So our business platform is delivering, and it's a key part of delivery of core products to this retail base. Today, we're going to market in 16 countries in Europe.

Steve Bromley: Our business platform is delivering, and it's a key part of delivery of core products to this retail base. Today, we're going to market in 16 countries in Europe. Our larger markets are France, Germany, and Denmark, with other markets continuing to grow. We have an established and expanding supply and logistics network. We deal with over 10 key sourcing partners that would represent over 500 growers. We ship product from 20 different ports into six ports in Europe. We use six different sea carriers. We have over 10 over-the-road type service providers. Last year, we served about 60 customers, and that continues to grow as we grow our business. It's an expansive operation that we're continuing to build as we build our core business. We always like to talk about our guiding principles because they anchor our growth.

Speaker #3: Our larger markets are France, Germany, and Denmark, with other markets continuing to grow. And we have an established and expanding supply and logistics network.

Speaker #3: So we deal with over 10 key sourcing partners that would represent over 500 growers. We ship product from 20 different ports into six ports in Europe.

Speaker #3: We use six different sea carriers. We have over ten over-the-road type service providers. And last year, we served about 60 customers, and that continues to grow as we grow our business.

Speaker #3: So, it's an expansive port. It's an expansive operation that we're continuing to build as we build our core business. We always like to talk about our guiding principles because they anchor our growth.

Speaker #3: Those three leaves in our new logo really mean something. They stand for us providing healthy, quality organic products and fair trade products. They also stand for our commitment to sustainability and responsible, transparent business practices.

Steve Bromley: Those three leaves in our new logo really mean something. They stand for us providing healthy, quality organic products and fair trade products. They stand for our commitment to sustainability, for responsible, transparent business practices. We like to always refer to these as we talk about what we're doing as we grow our business. When we take a look at the results for Q1, as I mentioned, sales were CAD 25.6 million, up from CAD 13.6 million in the prior year. That's an 88% lift. Gross margins were CAD 1.8 million versus CAD 1.1 in the prior year, so up 62%. During the quarter, we had two key issues that impacted our margins.

Speaker #3: And they stand for our drive to add value, and to drive value across our entire ecosystem—from our growers and our suppliers, to our customers, our shareholders, and, of course, our team.

Speaker #3: And so, we like to always refer to these as we talk about what we're doing as we grow our business. So when we take a look at the results for Q1, as I mentioned, sales were $25.6 million, up from $13.6 million in the prior year.

Speaker #3: That's an 88% lift. Gross margins were $1.8 million versus $1.1 million in the prior year, so up 62%. During the quarter, we had two key issues that impacted our margins.

Speaker #3: In bringing on all those new suppliers, bringing on all those new sea carriers, new ports, etc., we did have some one-time costs that we couldn't avoid.

Steve Bromley: In bringing on all those new suppliers, bringing on all those new sea carriers, new ports, et cetera, we did have some one-time costs that we couldn't avoid. Primarily product losses and extra costs related to some logistics as we got everything running appropriately. That impacted us in the quarter. The good news is that's not an ongoing issue, and the team has worked really hard to address those. It would have been great to avoid those, but that didn't happen. Those cost us in the range of CAD 250,000. In addition, later in the quarter, we were impacted by the increased costs related to energy costs with the Middle East war. It was in the latter part of the quarter, impacted us by about CAD 50,000, and we're obviously in the process of passing those costs through. There was some impact in the quarter.

Speaker #3: Primarily, product losses and extra costs related to some logistics, as we got everything running appropriately. So, that impacted us in the quarter. The good news is that's not an ongoing issue, and the team has worked really hard to address those.

Speaker #3: It would have been great to avoid those, but that didn't happen. Those cost us in the range of $250,000. And then, in addition, later in the quarter we were impacted by the increased costs with the Gulf due to the Middle East war.

Speaker #3: It was in the latter part of the quarter and impacted us by about $50,000. And we're obviously in the process of passing those costs through.

Speaker #3: But, you know, there was some impact in the quarter. So our gross profit was impacted by about $300,000 of costs that hopefully won't be recurring.

Steve Bromley: Our gross profit was impacted by about CAD 300,000 of costs that hopefully won't be recurring. Obviously, we're dealing with the volatility that comes with the conflict in the Middle East, but our team is doing a good job managing that. Gross profit up 62% versus the prior year. Our cash overheads down to 6.2%, and as I mentioned, EBITDA positive for the quarter. We were EBITDA positive last year. It was our only EBITDA positive quarter of last year. We expect EBITDA positive to continue as we go forward each quarter. From a balance sheet point of view, as I mentioned, we're still seeing nice strength. We have about just a little under CAD 5 million in cash at the end of the quarter. Our working capital was CAD 14.5 million.

Speaker #3: Obviously, we're dealing with the volatility that comes with the conflict in the Middle East. But our team is doing a good job managing that.

Speaker #3: So gross profit up 62% versus the prior year. Our cash overheads down to 6.2%. And as I mentioned, EBITDA positive for the quarter. We were EBITDA positive last year.

Speaker #3: It was our only EBITDA-positive quarter of last year. We expect EBITDA-positive results to continue as we go forward each quarter. From a balance sheet point of view, as I mentioned, we have nice strength.

Speaker #3: We're still seeing nice strength. We have about $5 million—just a little under $5 million—in cash at the end of the quarter.

Speaker #3: Our working capital was $14.5 million. That was up some $7.6 million at the end of last year, which really goes to the growth that we had in the business, primarily in receivables as our sales are way up, and also in inventory because we have a lot more product moving around on the water.

Steve Bromley: That was up from CAD 7.6 million at the end of last year, which really goes to the growth that we had in the business, primarily in receivables, as our sales are way up, and also in inventory because we have a lot more product moving around on the water. Keep in mind that our product is on the water between two and four weeks, and then in our warehouses another week and a half, as everything gets moved through, ripened, and sold. A nice strong working capital position of CAD 14.5 million. If you went back to the end of fiscal 2024, we had negative working capital, it's a significant shift in our balance sheet.

Speaker #3: Keep in mind that our product is on the water between two and four weeks, and then in our warehouses another week to week and a half, as everything gets moved through, ripened, and sold.

Speaker #3: But, you know, a nice, strong working capital position of $14.5 million. If you go back to the end of fiscal 2024, we had negative working capital.

Speaker #3: So it's a significant shift in our balance sheet. We have no long-term debt on the balance sheet, and we have equity of $15.7 million, up from $8.8 million at the end of last year.

Steve Bromley: We have no long-term debt on the balance sheet, and we have equity of CAD 15.7 million, up from CAD 8.8 million at the end of last year, really driven by the early warrant exercise program. When you compare that versus fiscal 2024, where we were -equity. Nice solid growth in the business and the profitability of the business and a balance sheet that's really nice and stable and positions us to be able to fund our growth initiatives going forward. Our market cap is sitting about CAD 150 million. A reminder that about 19% of the company is held at the board and management level. We've seen nice growth in the stock over the last year. We believe that that will continue to grow as we move the business forward. Always want to talk about our strategy going forward.

Speaker #3: Really driven by the early warrant exercise program, and then, you know, when you compare that versus fiscal '24, where we were negative equity.

Speaker #3: So, nice solid growth in the business and the profitability of the business, and a balance sheet that's really nice and stable and positions us to be able to fund our growth initiatives going forward.

Speaker #3: Our market cap is sitting at about $150 million. A reminder that about 19% of the company is held at the board and management level.

Speaker #3: And we've seen nice growth in the stock over the last year. And, you know, we believe that that will continue to grow as we move the business forward.

Speaker #3: I always want to talk about our strategy going forward. Today, you know, our product mix is primarily fresh, high-volume, lower-margin products. And we're going to market in Europe with those products.

Steve Bromley: Today, our product mix is primarily fresh, high volume, lower margin products. We're going to market in Europe with those products. That's by design, that's by intention. When we restructured and repositioned the business, we said, first, we get a nice core base in place where we're paying all the bills. We're there now. Now our efforts are focused on continuing to grow the fresh program in Europe, but also adding new products to the portfolio in Europe, new products that offer higher margins. They're not as high volume. They're specialty products where we can add those to our portfolio and take them to our existing group of customers. We'd also like to expand the fresh program into North America. I know we've been talking about that for a while, but we are working on it, and we have some good opportunities in development.

Speaker #3: That's by design. That's by intention. When we restructured and repositioned the business, we said, first, we get a nice core base in place where we're paying all the bills.

Speaker #3: We're there now. And now, we—our efforts are focused on continuing to grow the fresh program in Europe, but also adding new products to the portfolio in Europe—new products that offer higher margins.

Speaker #3: They're not as high volume. They're specialty products where we can add those to our portfolio and take them to our existing group of customers.

Speaker #3: We'd also like to expand the fresh program into North America. I know we've been talking about that for a while, but we are working on it, and we have some good opportunities in development.

Speaker #3: And then, of course, we'd like to move into non-fresh and then value-added products as well over time. The whole idea here is to leverage the core platform that we have in place, but move from volume to value, and shift our product mix to higher-value products.

Steve Bromley: Of course, we'd like to move into non-fresh and then value-added products as well over time. The whole idea here is to leverage the core platform that we have in place, but move from volume to value and shift our product mix to higher value products, and with that, increased margins. Strategically, we are where we wanted to be right now, which is a nice growing platform, moving into EBITDA positive, paying the bills so that we can fund ourselves as we go, and move into higher margin products. As I mentioned earlier, we have opportunities that we're assessing in literally every one of the categories that I've noted here. We're excited by what the next six to 12 months should bring on that regard.

Speaker #3: And with that, increased margins. But strategically, we are where we wanted to be right now, which is, you know, a nice, growing platform. Moving into EBITDA positive, paying the bills so that we can fund ourselves as we go and move into higher-margin products.

Speaker #3: And as I mentioned earlier, we have opportunities that we're assessing in literally every one of the categories that I've noted here. And so we're excited by what the next six to twelve months should bring in that regard.

Speaker #3: So, just to wrap this up—our key priorities for 2026: obviously, we want to continue to grow the business on the Euro Fresh platform that we have today and drive to sales of $100 million.

Steve Bromley: Just to wrap this up, our key priorities for 2026, obviously, we want to continue to grow the business on the Eurofresh platform that we have today, drive to sales of CAD 100 million. We were over CAD 25 in Q1, so we're on pace for over CAD 100 million this year. Hopefully, we'll be able to exceed that a bit. We want to continue to focus on gross margin. I'm really proud of the work that the team did to maintain the margins that we had this quarter, given the complexity that we were building into our supply chain, combined with the volatility that came with some of the geopolitical issues. We want to continue to improve our gross margin.

Speaker #3: We were over $25 million in the first quarter, so we're on pace for over $100 million this year. And hopefully, you know, we'll be able to exceed that a bit.

Speaker #3: We want to continue to focus on gross margin. I'm really proud of the work that the team did to maintain the margins that we had this quarter.

Speaker #3: Given the, you know, the complexity that we were building into our supply chain, combined with the volatility that came with some of the geopolitical issues.

Speaker #3: But we want to continue to improve our gross margin. It's a major focus for us. And we want to continue to really control our cash operating costs so that we can drive those below 5% of sales.

Steve Bromley: It's a major focus for us, and we want to continue to leverage, really control our cash operating costs so that we can drive those below 5% of sales. At the same time, as I mentioned, those are more financially driven. We want to increase the core product portfolios that we have, add new categories with higher margins, add new geographies, add new regions, and then really we're working hard now to utilize technologies and AI to drive efficiencies and improve transparency and reduce waste across the platform. That's a major initiative that is underway now, and we'll have a lot more to say about our technological efforts here over the next period of time. We want to continue to build organization depth, and obviously with the announcement of Darryl joining the team yesterday, that's really positive. The reorganization that was put in place is working really well.

Speaker #3: And then at the same time, as I mentioned, those are more financially driven. We want to increase the core product portfolio that we have, add new categories with higher margins, add new geographies, add new regions, and then, you know, really we're working hard now to utilize technologies and AI to drive efficiencies and improve transparency and reduce waste across the platform.

Speaker #3: So that's a major initiative that is underway now. And we'll have a lot more to say about our our technological efforts here over the next period of time.

Speaker #3: We want to continue to build organization depth. And obviously, with the announcement of Darryl joining the team yesterday, that's really positive. The reorganization that was put in place is working really well.

Speaker #3: We've added we continue to grow, and we need to continue to do that because at the end of the day, it's all about the team, and we're going to succeed as a team or, you know, and so we need good, strong resources in place, and we're continuing to do that.

Steve Bromley: We've added more people to the team as we continue to grow, we need to continue to do that because at the end of the day, it's all about the team, and we're going to succeed as a team. We need good, strong resources in place, and we're continuing to do that. We want to continue to push on our strategic expansion and pipeline development. We've dedicated resources in our reorg to look at strategic expansion and continue to build out that pipeline. We're really excited by what we have in the pipeline. I hope the next time we're chatting, we'll be able to provide more detail into some of the opportunities that we have there. We're working hard at that. Lastly, we want to drive market awareness and visibility.

Speaker #3: We want to continue to push on our strategic expansion and pipeline development. You know, we've dedicated resources in our reorg, you know, to look at strategic expansion and continue to build out that pipeline.

Speaker #3: We're really excited by what we have in the pipeline. I hope the next time we're chatting, we'll be able to provide more detail into some of the opportunities that we have there.

Speaker #3: So we're working hard at that. And then lastly, we want to drive market awareness and visibility. You know, Organto is now getting to the point over 100 million, and now through EBITDA positive, even covering all of the corporate overheads related to being public.

Steve Bromley: Organto is now getting to the point over CAD 100 million and now through EBITDA positive, even covering all of the corporate overheads related to being public. We have a great story to tell, and we're going to be dedicating more effort to get out to make sure that people know who we are, what we're doing, and why we're excited about the future. With that, I'll take a pause, and then if the team could gather the questions out of the Q&A bucket, and we'll take questions here for a bit.

Speaker #3: We have a great story to tell, and we're going to be dedicating more effort to get out to make sure that people know who we are, what we're doing, and and why we're excited about the future.

Speaker #3: So with that, I'll take a pause, and then if the team could gather the questions out of the Q&A bucket, we'll take questions here for a bit.

Speaker #3: Thank you. Yeah, just as a quick reminder to everybody, you should be able to submit questions yourselves using the Q&A function on Zoom. It might be in the More option.

Lauren Beckhansen: Thank you. Yeah, just as a quick reminder to everybody, you should be able to submit questions yourselves using the Q&A function on Zoom. It might be in the more option, but please do feel free to submit. We will start off with one of the first ones that came in. What drove Organto's Q1 2026 performance?

Lauren Beck-Hansen: Thank you. Yeah, just as a quick reminder to everybody, you should be able to submit questions yourselves using the Q&A function on Zoom. It might be in the more option, but please do feel free to submit. We will start off with one of the first ones that came in. What drove Organto's Q1 2026 performance?

Speaker #3: But please do feel free to submit. We will start off with one of the people that came in. What drove Organto's Q1 2026 performance?

Speaker #3: Well, from a top-line basis, you know, there were really two key drivers to the top line. The first driver, of course, was we onboarded eight new customers.

Steve Bromley: Well, from a top-line basis, there were really two key drivers to the top line. The first driver, of course, was we onboarded eight new customers. Those customers come on between the end of January and kind of the end of February. They played a large role in the growth of the business. Expanded sales with our existing customers also was a key factor. I would put those at about 60/40 or 50/50. I apologize, I don't have the exact number, growth came both from continued growth from existing customers, which is really, really important to us. First, we want to make sure that we're serving our existing customers well and they want to do more business with us, because as we bring on more additional customers, we can continue that growth funnel.

Speaker #3: Those customers come on between the end of January and kind of the end of February, so they played a large role in the growth of the business.

Speaker #3: And then expanded growth, pardon me, expanded sales with our existing customers also was a was a key was a key factor. I would put those at about 60/40 or 50/50.

Speaker #3: I'm apologize. I don't have the exact number, but growth came both from continued growth from existing customers, which is really, really important to us.

Speaker #3: First, we want to make sure that we're serving our existing customers well, and that they want to do more business with us, because as we bring on additional customers, we can continue that growth— that growth funnel.

Speaker #3: Very little of the growth came from new products. So it was essentially our core products that were being sold. To new and existing customers.

Steve Bromley: Very little of the growth came from new products, so it was essentially our core products that were being sold to new and existing customers. We expect to see that throughout the balance of the year.

Speaker #3: So and and we expect to see that throughout the balance of the year. Thank you, Steve. Next question. How have inflation-rising fuel costs and potential disruptions around the Strait of Hormuz impacted Organto?

Lauren Beckhansen: Thank you, Steve. Next question. How have inflation, rising fuel costs, and potential disruptions around the Strait of Hormuz impacted Organto?

Lauren Beck-Hansen: Thank you, Steve. Next question. How have inflation, rising fuel costs, and potential disruptions around the Strait of Hormuz impacted Organto?

Speaker #3: Yeah, it's a really good question. And it changes every day with the craziness that's going on. But it's certainly impacted us in the quarter.

Steve Bromley: Yeah, it's a really good question. It changes every day with the craziness that's going on, but it certainly impacted us in the quarter. The major impact has been on fuel, energy, and primarily in our particular case, bunker fuel, which is with the ships. Of course, there is over-the-road fuel as well. We haven't felt much, as far as grower inputs and packaging-type costs, although those are all going to come over time. We were very much limited in Q1. We were able to manage everything, and it kind of happened later in the quarter. It started later in the quarter, so we didn't have a lot of impact. We're seeing more impact as we get into Q2 as the full impacts are being realized. We've taken a number of steps.

Speaker #3: The major impact has been on fuel energy, and primarily in our particular case, bunker fuel, which is what the ships use. And then, of course, there's over-the-road fuel as well.

Speaker #3: We haven't felt much you know and as far as grower inputs and and packaging-type costs. Although those are all going to come over time.

Speaker #3: You know, so we were very much limited in the first quarter. We were able to manage everything, and it kind of happened later in the quarter.

Speaker #3: So it started later in the quarter, so we didn't have a lot of impact. We're seeing more impact as we get into the second quarter, as the, you know, the full impacts are being realized.

Speaker #3: And so we've taken a number of steps. Obviously, the first step is to get to our end customers and work to pass that cost through, which we're doing.

Steve Bromley: Obviously, the first step is to get to our end customers and work to pass that cost through, which we're doing. At the same time, we've really gone to work on our supply chain to shift certain supply chain routes, shift carriers, et cetera, to really make sure that we have the lowest cost option given the premiums that are being passed through. It's a big undertaking by our commercial and operating teams. I think we've had good success. We don't expect it to have material impact going forward. I caveat that answer with, this stuff's changing every day. I don't think the higher fuel costs are going away anytime soon, even if there is a resolution to the conflict, it's going to take time. It's very cooperative.

Speaker #3: And then at the same time, we've really gone to work on our supply chain. To you know, shift the shift certain supply chain routes shift carriers, et cetera, to really make sure that we have the lowest cost option given you know, the the the premiums that are being passed through.

Speaker #3: So, it's a big undertaking by our commercial and operating teams. I think we've had good success. We don't expect it to have a material impact going forward.

Speaker #3: But I caveat that answer with this stuff's changing every day. You know, I don't think the the higher fuel costs are going away anytime soon, even if there is a if even if there is a resolution to the conflict, it's going to take time.

Speaker #3: So it's very cooperative. We're working with our growers, we're working with our customers, and we're working with our supply chain and logistics partners. We're all doing the best that we can to manage through.

Steve Bromley: We're working with our growers, we're working with our customers, we're working with our supply chain and logistics partners. We're all doing the best that we can to manage through. I think we've done a pretty good job. If you take a look at a lot of other sort of larger food producers, everyone's feeling it, and it's not escapable. I think at the end of the day, the unfortunate reality is we as consumers are going to be paying more for our food going forward, because there's really not a lot of other options.

Speaker #3: I think we've done a pretty good job. If you take a look at a lot of other, sort of larger food producers, you know, everyone's feeling it.

Speaker #3: And it's not escapable. And I think at the end of the day, the unfortunate reality is we, as consumers, are going to be paying more for our food going forward.

Speaker #3: Because there's really not a lot of other options. Thank you, Steve. Our next question: M&A was a major part of SunOpta's growth strategy. What has Organto seen in terms of acquisitions and potential U.S. opportunities?

Lauren Beckhansen: Thank you, Steve. Our next question. M&A was a major part of SunOpta's growth strategy. What is Organto seeing in terms of acquisitions and potential US expansion?

Lauren Beck-Hansen: Thank you, Steve. Our next question. M&A was a major part of SunOpta's growth strategy. What is Organto seeing in terms of acquisitions and potential US expansion?

Speaker #3: Expansion? Yeah, I think, as I said, you know, look, we see a real opportunity here to get out and build off the platform that's in place.

Steve Bromley: Yeah, I think as I said, we see a real opportunity here to get out and build off the platform that's in place. The time was not right until recently to do that from the point of view is that you need a platform that's standing on its own. We're there now. We've been building a pipeline. We see real opportunity. We've indicated that we would like to establish a platform in the US. We've done a lot of work on it. Unfortunately, we don't have anything concrete to share today. We really would like to do that. We also have a contingency plan to build it on our own, if we can't find something that's a platform, but I'm pretty confident we will. I think it's also a real opportunity to diversify our product portfolio.

Speaker #3: The time was not right until recently to do that, from the point of view that you need a platform that's, you know, standing on its own, and so we're there now.

Speaker #3: So we've been building a pipeline. We see real opportunity. We've indicated that we would like to establish a platform in the U.S. We've done a lot of work on it.

Speaker #3: Unfortunately, we don't have anything concrete to share today. But we really would like to do that. We also have a contingency plan to build it on our own.

Speaker #3: If we if we can't find something that's a platform. But I'm pretty confident we will. I think it's also a real opportunity to diversify our product portfolio.

Speaker #3: So, you know, acquire additional fresh category products and, more importantly, acquire non-fresh categories. So, think about seeds and nuts and oils and those sort of things.

Steve Bromley: Acquire additional fresh category products, and more importantly, acquire non-fresh categories. Think about seeds and nuts and oils and those sort of things. Same capital efficient business models, but diversifying our product portfolio. While we're not there, the real opportunity is to margin stack. Today, we're big in banana and ginger as an example on the fresh side. Well, what about banana type ingredients and banana type consumer products? Same with ginger. We're looking at a lot of those opportunities as well. You can take margin on the same product two or three times. Look, we're planning on it becoming a big part of our growth going forward. A nice combination of quick internal growth on the base business and then very selective, accretive acquisitions that we can bolt on.

Speaker #3: Same capital-efficient business models, but, you know, diversifying our product portfolio. And while we're not there yet, you know, the real opportunity is to get margins back.

Speaker #3: So you know, today you know, we're big in banana and ginger as an example on the fresh side. Well, you know, what about banana-type ingredients and banana-type consumer products?

Speaker #3: Same with ginger, so we're looking at a lot of those opportunities as well. You know, you can take margin on the same product two or three times.

Speaker #3: So, look, I hope it becomes a—we're planning on it becoming a big part of our growth going forward. You know, a nice combination of quick internal growth on the base business and then very selective, accretive acquisitions that we can bolt on.

Speaker #3: So, you know, we've got a team of people now that are dedicating a significant amount of time, and for anybody that's been in the M&A world, these things don't happen overnight.

Steve Bromley: We've got a team of people now that are dedicating a significant amount of time. For anybody that's been in the M&A world, these things don't happen overnight. You can get way down the road on things and find out that a deal won't come together. We're encouraged and we're spending a lot of time there.

Speaker #3: And you can get way down the road on things and find out that a deal won't come together. But we're we're we're encouraged and we're spending a lot of time there.

Speaker #3: Thanks, Steve. Our next question. What caused the increased costs and estimates going forward for Q2? Sorry, could you repeat the question? What caused the increased costs and estimates going forward for Q2?

Lauren Beckhansen: Thanks, Steve. Our next question, what caused the increased costs and estimates going forward for Q2?

Lauren Beck-Hansen: Thanks, Steve. Our next question, what caused the increased costs and estimates going forward for Q2?

Steve Bromley: Sorry, could you repeat the question?

Lauren Beckhansen: What caused the increased cost and estimates going forward for Q2?

Lauren Beck-Hansen: What caused the increased cost and estimates going forward for Q2?

Speaker #3: Yeah, so I think, you know, as I said on the call, we had about $300,000 in incremental costs, give or take a little bit.

Steve Bromley: Yeah. I think, as I said on the call, we had about CAD 300,000 in incremental costs, give or take a little bit, in gross profit. We ended up with situations where, because of the new logistics and everything, we had a little bit of the wrong product in the wrong place at the wrong time, and some of that was on us, some of it was on the carriers. We ended up losing the better part of CAD 250,000 in the quarter on that. Not too much we can do about it. The team has worked incredibly hard and we don't think those will continue. The rest of the cost was really related to cost increases, as I mentioned. Yeah, we're managing that best we can and don't think it'll have a material impact.

Speaker #3: On in in gross profit. The bulk of that being from our own you know, like we ended up with situations where because of the new logistics and everything, we had a little bit of the wrong product in the wrong place at the wrong time.

Speaker #3: And some of that was on us. Some of it was on the carriers. Every you know, but we ended up losing the better part of 250 in the quarter on on that.

Speaker #3: There's not too much we can do about it. The team has worked incredibly hard, and we don't think those issues will continue. The rest of the cost was really related to cost increases, as I mentioned.

Speaker #3: And yeah, we're managing that as best we can and don't think it'll have a material impact. So, you know, we expect—you know, we haven't given guidance, but we expect sales to continue to grow.

Steve Bromley: We haven't given guidance, but we expect sales to continue to grow, in Q2 and, hopefully gross profit will move accordingly. Our SG&A spending's tightly controlled. We expect to continue to see positive results going forward.

Speaker #3: In the second quarter, and you know, hopefully gross profit will move accordingly. You know, our SG&A spending is tightly controlled, so we expect to continue to see positive results going forward.

Speaker #3: Great, thank you, Steve. Our next question comes from Nicholas. What products drove the growth in Q1? Anything new aside from bananas? Yeah, no, it was primarily banana and ginger.

Lauren Beckhansen: Great. Thank you, Steve. Our next question comes from Nicholas. What products drove the growth in Q1? Anything new aside from bananas?

Lauren Beck-Hansen: Great. Thank you, Steve. Our next question comes from Nicholas. What products drove the growth in Q1? Anything new aside from bananas?

Steve Bromley: Yeah, no, it was primarily banana and ginger where we saw growth. Those were the categories, Nicholas, that we were really focused on, because we saw those as our biggest growth opportunities. The sort of challenge we have is, do you add more products for growth or do you just continue to grow hard on what you have in the portfolio? We sort of ran with those two core products. We've got some other ones and we're looking to build others, but the bulk of the growth came from those categories.

Speaker #3: Where we saw growth, and those were the categories, Nick, that we were really focused on because we saw those as our biggest growth opportunities.

Speaker #3: You know, the sort of challenge we have is you know, do you add more products for growth or do you just continue to grow hard on on what you're you know, what you have in the portfolio.

Speaker #3: And so, you know, we sort of ran with those two core products. You know, we've got some other ones and we're looking to build others.

Speaker #3: But the bulk of the growth came from those categories. Thank you. Our next question also comes from Nicholas. What are your views on the increased accounts receivable quarter over quarter?

Lauren Beckhansen: Thank you. Our next question also comes from Nicholas. What are your views on the increased accounts receivable quarter over quarter? Have you started collecting on that subsequent to the quarter?

Lauren Beck-Hansen: Thank you. Our next question also comes from Nicholas. What are your views on the increased accounts receivable quarter over quarter? Have you started collecting on that subsequent to the quarter?

Speaker #3: Have you started collecting on that subsequent to the quarter? Yeah, no, receivables certainly went up. You know, a lot of that was related to the growth in the business.

Steve Bromley: Yeah. No, receivables certainly went up, and a lot of that was related to the growth in the business. I can't remember the exact numbers, but less than 5% is over 60 days. We're collecting on the receivables. We don't think there's any problem with the receivables. They were a little higher as a percentage of sales at the end of the quarter, but the quarter was, because of the way customers were ramping up the quarter, March was the largest month that we had in the quarter as all the new customers came on. When you take a look at it, you just can't sort of divide the quarter by three and figure out what the day's receivables are because the last part of the quarter was higher as we get into the higher products. I'm not worried about our receivables.

Speaker #3: So, you know, I can't remember the exact numbers, but less than 5% is over 60 days. And we're collecting on the receivables. We don't think there's any problem with the receivables.

Speaker #3: They were a little higher as a percentage of sales at the end of the quarter, but that was because of the way customers were ramping up during the quarter. You know, March was the largest month that we had in the quarter, as all the new customers came on.

Speaker #3: So, you know, when you take a look at it, you just can't sort of divide the quarter by three and figure out what the day's receivables are, because the last part of the quarter was, you know, higher as we get into the higher products.

Speaker #3: We're not worried about our receivables, and we credit insure our receivables as well. By the way, we haven't had any significant bad debts.

Steve Bromley: We credit insure our receivables as well. By the way, we haven't had any significant bad debts, but we're also credit insured on those, so we're feeling Yeah. By the way, receivables have come down a little bit now that we're at the run rate and we're caught up and it's more consistent now. Don't think there's any issues there.

Speaker #3: But we're also credit insured on those, so we're feeling, yeah, but—and they have, and by the way, receivables have come down a little bit.

Speaker #3: Now that we're at the run rate and we're caught up, you know, it's more consistent now. So I don't think there's any issues there.

Speaker #3: Great, thanks, Steve. And our last question, unless there are any others coming through: Do you think that this growth is repeatable through to 2027?

Lauren Beckhansen: Great. Thanks, Steve. Our last question, unless there are any others coming through, do you think that this growth is repeatable through to 2027?

Lauren Beck-Hansen: Great. Thanks, Steve. Our last question, unless there are any others coming through, do you think that this growth is repeatable through to 2027?

Steve Bromley: Listen, we've brought on the bulk of the new business that we expected to bring on in Q1. If you follow what happened last year, last year is probably the best proxy. We had a nice bump into Q2 then the rest of the year flattens out a little bit because a lot of the new business that's been brought on, has been brought on. Given that much of our business is contracted, we're not going to go to CAD 40 million next quarter. We're going to see it get up into the close to the CAD 30 million range, I would think, and we'll see that throughout the year. Keep in mind that in the summer season, primarily driven by our banana category, we see volumes drop a little bit in the summer.

Speaker #3: Yeah, so listen, you know, we’ve brought on the bulk of the new business that we expected to bring on in Q1. And if you kind of follow, you know, what happened last year—last year’s probably the best proxy.

Speaker #3: We had a nice bump into Q2, you know, and then, you know, the rest of the year flattens out a little bit because a lot of the new business that's been brought on has been brought on.

Speaker #3: And given that much of our business is contracted, you know, you don't like we're not going to go from if we're not going to go to 40 million next next quarter.

Speaker #3: But, you know, we're going to see it get up into the close to the $30 million range, I would think. And we'll see that throughout the year.

Speaker #3: Keep in mind that in the summer season, primarily driven by our banana category, we see volumes drop a little bit. Now we're working with some of our core retailers on some promotions.

Steve Bromley: Now we're working with some of our core retailers for some promotions throughout the summer. Summer volumes drop, primarily on the banana category, which is a large category for us because in the summer when it's hot out, consumers tend to eat more citrus and local fruits than bananas. Also, I think the statistic is that 80% of school lunchboxes normally either have an apple or a banana in it. Of course, there's no school lunchboxes in the regions that we're selling in the summer, so there's not as many bananas going into that. We normally see a strong Q2, a little bit of a dip in Q3, and then strong again in Q4.

Speaker #3: Throughout the summer, some summer volumes drop, primarily in the banana category, which is a large category for us. Because in the summer and in heat—wait, that didn't sound right.

Speaker #3: In the summer, when it's hot out, consumers tend to eat more citrus and local fruits. Then bananas; and also, I think the statistic is that 80% of school lunchboxes normally either have an apple or a banana in them.

Speaker #3: And of course, there's no school lunchboxes in the regions, so we're selling in the summer. So there's not as many bananas going into that.

Speaker #3: So, we normally see a strong Q2, a little bit of a dip in Q3, and then strong again in Q4. And then, next year when we get back into the contracting cycle, we see another lift going into Q1.

Steve Bromley: Next year, when we get back into the contracting cycle, we see another lift going into Q1, or we plan to see another lift before we go into Q1. That's before any acquisitions, and it's also before any new products that we're also looking at to put in H2.

Speaker #3: Are we planning to see another lift before we go into Q1? That's before any acquisitions, and it's also before any new products that we're also looking at putting in in the back half of the year.

Speaker #3: Great. Thank you, Steve. That's all the time we have for questions today. Thank you, everyone, for joining ORGANTO FOODS Q1 2026 Results Review and Business Update.

Lauren Beckhansen: Great. Thank you, Steve. That's all the time we have for questions today. Thank you, everyone, for joining Organto Foods' Q1 2026 Results Review and Business Update. A replay of today's webinar will be made available following the session. For additional information, we encourage you to visit Organto's website at organto.com, as well as the company's public filings available on SEDAR. If you have any follow-up questions, please feel free to reach out to Organto directly through the website or contact Steve and the team. Thank you again for joining us, and hope you all have a great day.

Lauren Beck-Hansen: Great. Thank you, Steve. That's all the time we have for questions today. Thank you, everyone, for joining Organto Foods' Q1 2026 Results Review and Business Update. A replay of today's webinar will be made available following the session. For additional information, we encourage you to visit Organto's website at organto.com, as well as the company's public filings available on SEDAR. If you have any follow-up questions, please feel free to reach out to Organto directly through the website or contact Steve and the team. Thank you again for joining us, and hope you all have a great day.

Speaker #3: A replay of today's webinar will be made available following the session. For additional information, we encourage you to visit ORGANTO's website at organto.com. As well as the company's public filings available on Cedar.

Speaker #3: If you have any follow-up questions, please feel free to reach out to ORGANTO directly through the website or contact Steve and the team. Thank you again for joining us and hope you all have a great day.

Steve Bromley: Thanks, guys. Take care.

Operator: Goodbye