Q2 2026 Organto Foods Inc Earnings Call And Business Update

August 13, 2026

Speaker #1: Hello everyone, and thank you for joining our Ganto Foods Q1 2026 results review and business update. My name is Lauren Bekanson, and I will be moderating today's session.

Speaker #1: We will begin with a brief presentation from Steve Bromley, the company's first quarter results and operational highlights. Following the presentation, we'll move into the Q&A portion of the session.

Speaker #1: 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. 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.

Speaker #1: Forward-looking statements. 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 #1: 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 #1: 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.

Speaker #1: 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 #1: 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 #2: Great. Thanks very much, Lauren. And good afternoon, everyone, or good evening, or good morning, depending on where you are. I appreciate the call today as we take a little bit of time to review Q1 and where we're going.

Speaker #2: So 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, and then as Lauren mentioned, we'll take as many questions as we can in the time that we have allotted.

Speaker #2: So thanks again for joining. So 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 #2: It was a really busy period for us, and it's busy when you take a look at the sales growth. And we had, during the quarter, we added 6 new growing partners and key sourcing regions.

Speaker #2: We added 8 new European retailers to our customer portfolio. That brought 3 new geographic regions that we're serving to our customer portfolio, and we added Switzerland, Spain, and the Ukraine.

Speaker #2: We added 4 new sea carriers, we added 2 new parts of origin, where product was being loaded from, and we added 3 new destination parts.

Speaker #2: 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 #2: 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 #2: 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.

Speaker #2: That translated into the largest gross profit in the history of the company, at 1.8 million dollars. That was up 62% from the prior year.

Speaker #2: 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 #2: 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 first quarter of this year versus 6.5% in the first quarter of last year.

Speaker #2: 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.

Speaker #2: So again, very positive to see that leverage. 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 #2: And we had flat earnings of 0 versus a loss in the prior year of 300,000. So really solid P&L activity in the month, resulting in a lot of records for us.

Speaker #2: Our balance sheet continued to be solidified during the quarter. We expanded our Rabobank flexible funding facility from 4 million euros to 7 million euros.

Speaker #2: That really, to support this growth that we're having and fund the working capital that was required. And we also completed an early warrant exercise program in February of last year for gross proceeds of 5 million.

Speaker #2: 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, and we're going to talk a little bit more about them today.

Speaker #2: But 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.

Speaker #2: 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, and we made really good progress on that.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: M&A opportunities. And so we're just thrilled to have a guy like Darryl join the team, as we prepare ourselves for our next phase of growth.

Speaker #2: 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.

Speaker #2: So we're thrilled to have Darryl joining us, and you play a large part in our growth as we continue to build this company. So welcome aboard, Darryl.

Speaker #2: 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 #2: We provide those as much as we can year-round basis. We're dealing with 20 major retailers in Europe. We include number 1 and 2 refreshers in Germany and Austria, and number 1 and 3 are for our business platform is delivering, and it's a part of delivery to our products.

Speaker #2: Today we're going to market 15 countries, and our markets are France and Germany, and Denmark, with other markets continuing to grow. And we have established and expanding supply and logistics networks.

Speaker #2: So we deal with over 10. We ship product from 20 different ports. We see carriers. We have over 10 over the road. In last year, we served about 60 as we grow our business.

Speaker #2: So 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 #2: So what really means something. They stand for us providing equality organic products and fair trade products. They stand for our commitment to sustainability for responsible transparent business practices.

Speaker #2: And they stand for our drive to add value. And to drive value across our entire ecosystem, from our growers and our suppliers, our customers, our shareholders, and of course our team.

Speaker #2: 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 #2: That's an 88% lift. Gross margins were 1.8 million versus 1.1 in the prior year. So 62%. During the quarter, we had two key issues that impacted our margins.

Speaker #2: In bringing on all those new suppliers, bringing on all those new seed carriers, new ports, etc., we did have some one-time costs that we couldn't avoid.

Speaker #2: 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 #2: It would have been great to avoid those, but that didn't happen. Those cost us in the range of 250,000 dollars. And then in addition, later in the quarter, we were impacted by the increased costs related to energy costs.

Speaker #2: With the Middle East war, it was in the latter part of the quarter, impacted us by about 50,000 dollars. And we're obviously in the process of passing those costs through.

Speaker #2: There was some impact in the quarter. So our gross profit was impacted by about 300,000 dollars of costs. Hopefully it won't be recurring. Obviously we're dealing with the volatility that comes with conflict in the Middle East.

Speaker #1: We have restricted cash of another $1 million. Our working capital increased to $15.3 million, so we have a very solid working capital position. We have no long-term debt, and our equity is up 87% since year-end to $16.4 million.

Steve Bromley: That we had restricted cash of another CAD 1 million. Our working capital increased to CAD 15.3 million, so a very solid working capital position. We have no long-term debt. Our equity is up 87% since year-end to CAD 16.4 million. At the same time, we expanded our Rabobank flexible funding facility to fund the growth in the business as well from EUR 4 million to EUR 7 million. We completed the early exercise warrant early exercise program in Q1 for some gross proceeds as well. Overall, when we take a look at Q2, and we'll dive into in a bit more detail, record growth and combined with a solid financial position and lots of exciting things in the pipeline. We always like to take a minute and talk about our guiding principles. These are the principles that shape how we grow.

Steve Bromley: That we had restricted cash of another CAD 1 million. Our working capital increased to CAD 15.3 million, so a very solid working capital position. We have no long-term debt. Our equity is up 87% since year-end to CAD 16.4 million. At the same time, we expanded our Rabobank flexible funding facility to fund the growth in the business as well from EUR 4 to 7 million. We completed the early exercise warrant early exercise program in Q1 for some gross proceeds as well. Overall, when we take a look at Q2, and we'll dive into in a bit more detail, record growth and combined with a solid financial position and lots of exciting things in the pipeline. We always like to take a minute and talk about our guiding principles. These are the principles that shape how we grow.

Speaker #2: But our team is doing a good job managing that. So gross profit up 62% versus the prior year. Our cash overheads down to 6.2%.

Speaker #1: And at the same time, we expanded our Rabobank flexible funding facility to fund the growth in the business as well, from €4 million to €7 million.

Speaker #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.

Speaker #1: And we completed the early exercise warrant—early exercise program—in Q1 for some growth proceeds as well. So overall, when we take a look at Q2—and we'll dive into it in a bit more detail—record growth and, you know, combined with a solid financial position and lots of exciting things in the pipeline.

Speaker #2: 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.

Speaker #2: We have about 5 million just a little under 5 million in cash. At the end of the quarter, our working capital was 14.5 million.

Speaker #1: We always like to take a minute and talk about our guiding principles. These are the principles that shape how we grow, so we're focused on providing healthy, organic food products, and we're focused on driving value across our entire ecosystem.

Speaker #2: 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.

Steve Bromley: We're focused on providing healthy organic food products. We're focused on driving value across our entire ecosystem. That's for our growers, for our suppliers, for our shareholders, for our team members. We want to bring value throughout. We're about sustainability. We're committed to responsible, transparent, and sustainable operations and business practices. Those are the core principles that really guide us on a day-to-day basis. To step back and take a look, we're now serving 20 major retail accounts across Europe, in 16 different countries. We serve the number 1 and 2 largest grocers in France, Austria, and Germany, and the number 1 and 3 largest growers in Denmark. So, we have a vital role to play in servicing the customers and linking our customers with strategic growers and making sure that that product gets to market.

Steve Bromley: We're focused on providing healthy organic food products. We're focused on driving value across our entire ecosystem. That's for our growers, for our suppliers, for our shareholders, for our team members. We want to bring value throughout. We're about sustainability. We're committed to responsible, transparent, and sustainable operations and business practices. Those are the core principles that really guide us on a day-to-day basis. To step back and take a look, we're now serving 20 major retail accounts across Europe, in 16 different countries. We serve the number one and two largest grocers in France, Austria, and Germany, and the number one and three largest growers in Denmark. So, we have a vital role to play in servicing the customers and linking our customers with strategic growers and making sure that that product gets to market.

Speaker #2: 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 2 and 4 weeks, and then in our warehouses another week and a half as everything gets moved through, ripened, and sold.

Speaker #1: That's for our growers, for our suppliers, for our shareholders, for our team members. We want to bring value throughout. And we're about sustainability. We're committed to responsible, transparent, and sustainable operations and business practices.

Speaker #1: And those are the core principles that really guide us on a day-to-day basis. To step back and take a look, we're now serving 20 major retail accounts across Europe.

Speaker #2: Nice strong working capitalization of 14.5 billion. If you went back to the end of fiscal 2024, we had negative working capital. So it's a significant shift in our balance sheet.

Speaker #2: 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.

Speaker #1: In 16 different countries, we serve the number 1 and number 2 largest grocers in France, Austria, and Germany, and the number 1 and number 3 largest growers in Denmark.

Speaker #2: Really driven by the early warrant exercise program. And then you compare that versus fiscal 24, where we were negative equity. So nice solid growth in the business, and the profitability of the business, and our balance sheet that's really nice and stable in positions us to be able to fund our growth initiatives going forward.

Speaker #1: As you know, we have a vital role to play in servicing our customers and linking our customers with strategic growers, making sure that product gets to market.

Speaker #1: Our core products remain bananas, ginger, mangoes, and blueberries, as well as other seasonal products. Over time, you'll see us add to the portfolio, but our first and foremost goal was to stabilize the platform, drive growth, and get EBITDA positive.

Steve Bromley: Our core products remain bananas, ginger, mangoes, and blueberries, other seasonal products. Over time, you'll see us add to the portfolio. Our first and foremost goal was to stabilize the platform, drive growth, and get to EBITDA positive. So we are there, and so now the real fun begins. Also on our operating platform, as I mentioned, we go to market in 16 countries in Europe. We source from numerous places around the world. As noted on here, we now have the 3 Centers of Excellence operating to support the European platform today. If we dive a little bit more into the numbers. For the quarter, we were up 61% in sales to CAD 27.7 million and up to CAD 53.3 million year to date, so up 73%. That CAD 53.3 million leaves us tracking well over CAD 100 million run rate.

Steve Bromley: Our core products remain bananas, ginger, mangoes, and blueberries, other seasonal products. Over time, you'll see us add to the portfolio. Our first and foremost goal was to stabilize the platform, drive growth, and get to EBITDA positive. So we are there, and so now the real fun begins. Also on our operating platform, as I mentioned, we go to market in 16 countries in Europe. We source from numerous places around the world. As noted on here, we now have the three Centers of Excellence operating to support the European platform today. If we dive a little bit more into the numbers. For the quarter, we were up 61% in sales to CAD 27.7 million and up to CAD 53.3 million year to date, so up 73%. That CAD 53.3 million leaves us tracking well over CAD 100 million run rate.

Speaker #2: Our market cap is sitting about 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.

Speaker #2: And we believe that will continue to continue to grow as we move the business forward. Always want to talk about our strategy going forward.

Speaker #1: So, we are there. And so, now the real fun begins. Also, on our operating platform, as I mentioned, we go to market in 16 countries in Europe.

Speaker #2: Today, our product mix is primarily fresh, high-volume, lower-margin products. And we're going to market in Europe with those products. That's by design. That's by intention.

Speaker #1: We source from numerous places around the world. And, as noted here, we now have the three Centers of Excellence operating to support the European platform today.

Speaker #2: 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.

Speaker #1: So, if we dive a little bit more into the numbers, for the quarter we were up 61% in sales to $27.7 million, and up to $53.3 million year-to-date, so up 73%.

Speaker #2: And now our efforts are focused on continuing to grow the fresh program in Europe, but also adding new products to the portfolio in Europe.

Speaker #1: That 53.3 leaves us tracking well over 100 million dollar run rate. And the 27.7 million in Q2, you know, really puts you at about 110 million dollar run rate.

Speaker #2: 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.

Steve Bromley: The CAD 27.7 million in Q2 really puts you at about CAD 110 million run rate. Our gross profit, as I mentioned, was CAD 2.1 million or 7.5% of sales in the quarter, and CAD 3.9 million or 7.3% of sales in the year to date for the 6 months. So up 65% in the quarter and 63% year to date. The growth, when you factor in the impact of our currency hedging initiatives, was up 204% over the prior year. So we had a very poor position last year. We have a stable position this year. That's really driven some nice growth, 204% and 108% year to date. Our cash overheads are CAD 1.7 million in the quarter. So you see how our cash overheads grew from CAD 1.2 million to CAD 1.7 million in the quarter.

Steve Bromley: The CAD 27.7 million in Q2 really puts you at about CAD 110 million run rate. Our gross profit, as I mentioned, was CAD 2.1 million or 7.5% of sales in the quarter, and CAD 3.9 million or 7.3% of sales in the year to date for the six months. So up 65% in the quarter and 63% year to date. The growth, when you factor in the impact of our currency hedging initiatives, was up 204% over the prior year. So we had a very poor position last year. We have a stable position this year. That's really driven some nice growth, 204% and 108% year to date. Our cash overheads are CAD 1.7 million in the quarter. So you see how our cash overheads grew from CAD 1.2 to 1.7 million in the quarter.

Speaker #2: We'd also like to expand the fresh program into North America. And 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 #1: Our gross profit, as I mentioned, was $2.1 million, or 7.5% of sales in the quarter, and $3.9 million, or 7.3% of sales year-to-date for the six months.

Speaker #2: 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 the leverage, the core platform that we have in place, but move from volume to value and shift our product mix to higher value products.

Speaker #1: So, up 65% in the quarter and 63% year-to-date. The growth, when you factor in the impact of our currency hedging initiatives, was up 204% over the prior year.

Speaker #2: And with that, increased margins. But 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.

Speaker #1: So we had a very poor position last year. We have a stable position this year, and so that's really driven some nice growth: 204% and 108% year-to-date.

Speaker #1: Our cash overheads were $1.7 million in the quarter—so you see how our cash overheads grew from $1.2 million to $1.7 million in the quarter.

Speaker #2: 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 6 to 12 months should bring on that regard.

Speaker #1: But as a percentage of sales, declined from 6.8 to 6.3. And we expect that, you know, we expect that continue to trend down. You know, our longer-term goal is to have those cash overheads well under 5% and heading for 4.

Steve Bromley: But as a percentage of sales declined from 6.8% to 6.3%, and we expect that to continue to trend down. Our longer-term goal is to have those cash overheads well under 5% and heading for 4%. On a year-to-date basis, 6.2% of sales. A little bit up in Q2 because we added more team members to deal with the growth of the business. Record EBITDA of CAD 400,000, about 1.5% of sales. We have no intention of stopping there. We want to continue to grow EBITDA as a percentage of sales. But in our journey, this is where we expected to be, so we are very pleased by that. Year to date, CAD 500,000 versus -CAD 200,000 in the prior year. Heading in the direction we expected and feeling positive about how the financials shook out.

Speaker #2: 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, drive to sales of 100 million.

Speaker #1: And on a year-to-date basis, 6.2% of sales—so, a little bit up in Q2, because we added more team members to deal with the growth of the business.

Speaker #2: We were over 25 in the first quarter, so we're on pace for over 100 million this year. And hopefully we'll be able to receive that a bit.

Speaker #1: And record EBITDA: $400,000, about 1.5% of sales. We have no intention of stopping there. We want to continue to grow EBITDA as a percentage of sales, but on our journey, this is where we expected to be.

Speaker #2: 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 #2: Given the complexity that we're building into our supply chain, combined with the volatility that came with some of the geopolitical issues, but we want to continue to improve our gross margin.

Speaker #1: So we're very pleased by that. And year-to-date, $500,000 versus negative $200,000 in the prior year. So heading in the direction we expected and feeling positive about, you know, how the financials shook out.

Speaker #2: 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.

Speaker #2: And 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 really we're working hard now to utilize technologies and AI to drive efficiencies in a true transparency and reduce waste across the platform.

Speaker #1: When we take a look at the balance sheet, our current assets grew to $27.5 million, versus $14.9 million at year-end. When you think that the business doubled in size, the working capital doubled in size as well.

Steve Bromley: When we take a look at the balance sheet, our current assets grew to CAD 27.5 million versus CAD 14.9 million at year-end. When you think that the business doubled in size, the working capital doubled in size as well, going from CAD 7.6 million to CAD 15.3 million. But compare that to -CAD 14.6 million in 2024. The combination of the strengthening of our operations and the restructuring of our balance sheet leaves us in a really good position with strong working capital, no outstanding debt or short-term loans, and an equity position of CAD 16.4 million. Strong growth and profitability coming into the business combined with a strong balance sheet. Just taking a look, we have 190 million shares outstanding. About 20% is owned between management and the board. Our fully diluted shares are about 210 million, and our market cap is sitting in and around CAD 125 million.

Speaker #1: Going from $7.6 million to $15.3 million. But compare that to minus $14.6 million in 2024. So a combination of the strengthening of our operations and the restructuring of our balance sheet leaves us in a really good position with strong working capital.

Speaker #2: So 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.

Speaker #2: 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 #1: No outstanding debt or short-term loans, and an equity position of $16.4 million. So, strong growth and profitability coming into the business, combined with a strong balance sheet.

Steve Bromley: Strong growth and profitability coming into the business combined with a strong balance sheet. Just taking a look, we have 190 million shares outstanding. About 20% is owned between management and the board. Our fully diluted shares are about 210 million, and our market cap is sitting in and around CAD 125 million.

Speaker #2: We've added more people to the team. As 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 and so we need good, strong resources in place and we're continuing to do that.

Speaker #1: Just taking a look: we have 190 million shares outstanding, about 20% is owned between management and the board. Our fully diluted shares are about 210 million in our market cap is sitting in and around 120, 125 billion dollars.

Speaker #2: 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.

Speaker #1: So, with the earnings comes a stable positioning with our cap table. Oh, pardon me. Last, before I turn it over to Darryl, I want to go back and talk about our focus on evolving our product mix.

Steve Bromley: With the earnings comes a stable positioning with our cap table. Pardon me. Last before I turn it over to Darryl is I want to go back and talk about our focus on evolving our product mix from volume to value, and with that, driving increased margins. We readily focused when we repositioned, we focused the business on categories where we really felt we deserved to win, understanding that they were not always the highest margin categories, and we would go back to some of the higher margin categories as we built the business. We are in the process of doing that. Clearly, as part of our growth strategy, we want to continue to grow our Eurofresh platform, which is where we go to market today to the 16 countries and the key customers that we have.

Speaker #2: 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 #2: So we're working hard at that. Then lastly, we want to drive market awareness and visibility. 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.

Speaker #1: From volume to value, and with that, driving increased margins. We readily focused when we repositioned. We focused the business on categories where we really felt we deserved to win.

Speaker #2: 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.

Speaker #1: Understanding that they weren't always the highest-margin categories, and we would go back to some of the higher-margin categories as we built the business.

Speaker #1: So we're in the process of doing that. Clearly, as part of our growth strategy, we want to continue to grow our Euro Fresh platform, which is where we go to market today to the 16 countries and the key customers that we have.

Speaker #2: So 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 #1: So, we want to add new customers and geographies, and also add new, higher-margin products. So, over the course of this year, you should expect to hear from us on new products that we'd like to add to the portfolio.

Steve Bromley: We want to add new customers and geographies and also add new higher-margin products. Over the course of this year, you should expect to hear from us on new products that we would like to add to the portfolio. We want to expand this portfolio into North America, so we are looking at a number of options to do that, which is very exciting. Why do we want to be in North America? That would leave us as the only current organically focused business that we are aware of in the fresh side of the business with operations on both sides of the ocean. We think that would bring some huge benefits to both our customers and our growers. We are actively working on that and it is a key focus for us. Then with the platform in place, we want to add non-fresh products.

Speaker #1: Thank you. We will start off as one of the first ones that came in. What drove Organto's Q1 2026 performance?

Speaker #1: We want to expand this portfolio into North America, so we're looking at a number of options to do that, which is very exciting. And why do we want to be in North America?

Speaker #2: 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.

Speaker #1: That would leave us as the only current organically focused business that we're aware of within the Fresh side of the business, with operations on both sides of the ocean.

Speaker #2: Those customers come on between the end of January and the end of February. So they played a large role in the growth of the business.

Speaker #2: And then 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, but growth came both from continued growth from existing customers, which is really important to us.

Speaker #1: And we think that would bring some huge benefits to both our customers and our growers. So we're actively working on that, and it's a key focus for us.

Speaker #1: And then with the platform in place, we want to add non-Fresh products. So think about oils, nuts, and seeds, and those sort of things.

Steve Bromley: Think about oils, nuts, and seeds and those sort of things. Also value add. Think about further processing of a number of those raw materials and fresh products or non-fresh products that we have today into value-added ingredients or right into consumer packaged products. It is a long journey, but we are on the journey and it is where we are really focused and we are spending a lot of time in that area. Of course, we want to support all of these developments with a digital technology platform and shared services platform as well. We are in the early stages of what we expect to be a very exciting growth platform, growth curve for the business as we go forward.

Speaker #2: 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 #1: And then also value-add. So think about further processing a number of those raw materials and fresh products, or non-fresh products that we have today, into value-added ingredients or directly into consumer packaged products.

Speaker #2: 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.

Speaker #1: So it's a long journey, but we're on the journey, and it's where we're really focused, and we're spending a lot of time in that area.

Speaker #2: And we expect to see that throughout the balance of the year.

Speaker #1: And, of course, we want to support all of these developments with a digital technology platform and a shared services platform as well. So we're in the early stages of what we expect to be a very exciting growth platform.

Speaker #1: Thank you, Steve. Next question. How have inflation-rising fuel costs and potential disruptions around the strategic formulas impacted Organto?

Speaker #2: It's a really good question. And change is every day with the craziness that's going on, but it's certainly impacted us in the quarter. The major impact has been on fuel energy and primarily in our particular case, bunker fuel.

Speaker #1: Growth curve for the business as we go forward. So, with that, let me turn it over to Darryl to talk about our key priorities as we look to the back half of the year and beyond, and then we'll wrap it up with some Q&A.

Steve Bromley: With that, let me turn it over to Darryl to talk about our key priorities as we look to the H2 of the year and beyond, and then we will wrap it up with some Q&A. Darryl?

Speaker #2: Which is what the ships and then, of course, there's over-the-road fuel as well. We haven't felt much in as far as grower inputs and packaging type costs.

Speaker #1: Darryl?

Speaker #2: Yeah, it sounds good. Thanks, Steve. Turning to key priorities, let me jump right in. Our primary focus for the balance of 2026 is going to be execution.

Darryl Bergman: Sounds good. Thanks, Steve. Turning to key priorities, let me jump right in. Our primary focus for the balance of 2026 is going to be execution. We have built significant momentum in the H1 and our priority is going to be converting that momentum into sustainable, profitable growth. We will continue scaling our core European fresh platform, as Steve noted. We already are operating at an annualized run rate at above CAD 100 million, and we see further opportunities through existing new customers, existing customers, and a broader product portfolio. That said, I believe it is important to note that growth is not just about revenue. We are focused on managing growth margins through better supply chain leverage, product mix, pricing, and risk management while continuing to drive operating cash flows towards that target that Steve mentioned of just below 5% of sales.

Speaker #2: So those are all going to come over time. 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 #2: We've built significant momentum in the first half, and our priority is going to be converting that momentum into sustainable, profitable growth. We'll continue scaling our core European Fresh platform, as Steve noted.

Speaker #2: 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 full impacts are being realized.

Speaker #2: We are already operating at an annualized run rate above $100 million. And we see further opportunities through new customers, existing customers, and a broader product portfolio.

Speaker #2: So we think in 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.

Speaker #2: Then at the same time, we've really gone to work on our supply chain. To ship 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.

Speaker #2: That said, I believe it's important to note that growth is not just about revenue. We're focused on managing gross margins through better supply chain leverage, product mix, pricing, and risk management, while continuing to drive operating cash flows towards that target that Steve mentioned, of just below 5% of sales.

Speaker #2: 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 material impact going forward.

Speaker #2: We're continuing to focus on leveraging our platform, which means continuing to grow our core categories while selectively adding higher-margin products and using technology and AI to improve efficiency, transparency, and waste reduction.

Darryl Bergman: We are continuing to focus on leveraging our platform, which means continuing to grow our core categories while selectively adding higher-margin products and using technology and AI to improve efficiency, transparency, and waste reduction. Strengthening the organization to support the next phase of growth is always in focus. The additional resources and organizational changes we have made are intended to give us operating depth and execution capability. We deeply believe that talent drives growth, and we will continue to look to talent to accelerate our strategy. Strategic expansion remains an important part of our growth plan. We have dedicated resources to building our pipeline and evaluating strategic growth and M&A opportunities. The emphasis is on opportunities that complement our platform and support our longer-term growth objectives.

Speaker #2: But I caveat that answer with this stuff's changed in every day. I don't think the higher fuel costs are going away anytime soon even if there is a resolution to the conflict.

Speaker #2: It's going to take time. So it's very cooperative. We're working with our growers. We're working with our customers. We're working with our supply chain and logistics partners.

Speaker #2: Strengthening the organization to support the next phase of growth is always in focus. The additional resources and organizational changes we have made are intended to give us operating depth and execution capability.

Speaker #2: And 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.

Speaker #2: We deeply believe in talent—that talent drives growth. We will continue to look to talent to accelerate our strategy. Strategic expansion remains an important part of our growth plan.

Speaker #2: And it's not escapable. And I think at the end of the day, the unfortunate reality is we as consumers are going to we're going to be paying more for our food going forward because there's really not a lot of other options.

Speaker #2: We have dedicated resources to building our pipeline and evaluating strategic growth and M&A opportunities. The emphasis is on opportunities that complement our platform and support our longer-term growth objectives.

Speaker #1: 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 U.S.

Speaker #2: Finally, we believe that there's an opportunity to increase market awareness of what Organto is building, particularly with investors focused on health, wellness, and sustainability.

Darryl Bergman: Finally, we believe that there is an opportunity to increase market awareness of what Organto is building, particularly with investors focused on health and wellness and sustainability. As we look to the balance of 2026, the message is straightforward. We continue growing the core business, protect and improve margins and operating leverage, strengthen the platform, and selectively pursue strategic opportunities that fit our strategy, will accelerate our growth, and we have built momentum. We will continue to drive forward, all while striving for best-in-class execution. I will pass it back to Steve.

Speaker #1: expansion?

Speaker #2: 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 and so we're there now.

Speaker #2: So, as we look to the balance of 2026, the message is straightforward: we continue growing the core business, protect and improve margins and operating leverage, strengthen the platform, and selectively pursue strategic opportunities that fit our strategy.

Speaker #2: 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 #2: We'll accelerate our growth, and we've built momentum. We will continue to drive forward, all while striving for best-in-class execution. I'll pass it back to Steve.

Speaker #2: 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 #1: Super. Thanks, Darryl. Appreciate it. Yeah. So with that, that's the end of our opening remarks. Clearly, we're pleased with the progress that we've made.

Steve Bromley: Super. Thanks, Darryl. Appreciate it. Yeah. With that is the end of our opening remarks. Clearly, we are pleased with the progress that we have made. We have got lots of work to do. The job is just beginning. It is not over, and that is the fun, and that is the opportunity. But clearly, we are very excited about the future. As we say, the future is bright, execution is key, and the time is now. With that, Lauren, I will turn it back over to you, and you can queue up the chat room if there is any questions. Hopefully, there are.

Speaker #2: 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 portfolios, acquire additional fresh category products, and more importantly, acquire non-fresh categories.

Speaker #1: We've got lots of work to do. The job is just beginning; it's not over, and that's the fun and that's the opportunity. But clearly, we're very excited about the future.

Speaker #2: So think about seeds and nuts and oils and those sort of things. Same capital-efficient business models, but diversifying our product portfolio. And while we're not there, the real opportunity is to margin stack.

Speaker #1: And as we say, the future is bright. Execution is key, and the time is now. So, with that, Lauren, I'll turn it back over to you.

Speaker #1: And you can queue up the chat room if there are any questions. Hopefully, there are, so we'll leave it with you for a sec.

Speaker #2: Today, we're big in banana and ginger as an example on the fresh side. What about banana type ingredients and banana type consumer products? Same with ginger.

Operator: Yep.

Steve Bromley: We will leave it with you for a sec.

Speaker #3: Yep, yep. No, of course. So that brings us to the end of the formal presentation. We do have a couple of questions in the queue already, but just a reminder to everybody: if you'd like to submit a question, you can do so using the Q&A function.

Operator: Yep. Yep. No, of course. That brings us to the end of the formal presentation. We do have a couple questions in the queue already. But just a reminder to everybody, if you would like to submit a question, you can do so using the Q&A function in Zoom. You may need to click more, the three dots in order to access it. But please do feel free to submit questions. We will do our best to get through as many as possible with the time that we have today. I will just give it 30 seconds or so to let some questions come in, and then we will jump right into it.

Speaker #2: So we're looking at a lot of those opportunities as well. So you can take margin on the same product two or three times. We're planning on it becoming a big part of our growth going forward.

Speaker #3: In Zoom, you may need to click 'More'—the three dots—in order to access it. But please do feel free to submit questions, and we will do our best to get through as many as possible with the time that we have today.

Speaker #2: A nice combination of quick internal growth on the base business and then very selective creative acquisitions that we can bolt on. 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.

Speaker #3: So I'll just give it 30 seconds or so to let some questions come in, and then we'll jump right into it.

Speaker #2: And you can get way down the road on things and find out that a deal won't come together. But we're encouraged and we're spending a lot of time there.

Speaker #1: Okay.

Steve Bromley: Sure.

Speaker #1: Thanks, Steve. Our next question. What caused the increased costs and estimates going forward for Q2?

Speaker #2: So I think as I said on the call, we had about 300,000 in incremental costs give or take a little bit. In gross profit.

Speaker #2: 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: Okay, well, I think we're good to begin. Let's start with the first question here: How much of your growth this year was with new customers versus increases with existing customers?

Operator: Well, I think we are good to begin. Let us start with the first question here. How much of your growth this year was with new customers versus increases with existing customers? You have now reported two consecutive EBITDA positive quarters.

Speaker #2: And some of that was on us. Some of it was on the carriers. But we ended up losing the better part of 250 in the quarter.

Speaker #3: You have now reported two consecutive EBITDA-positive quarters.

Speaker #2: On that, not too much we can do about it. The team is working incredibly hard and we don't think those will continue. And then the rest of the cost was really related to cost increases as I mentioned.

Speaker #1: Yeah. So, yeah. So, I don't—

Steve Bromley: Yeah. I do not-

Speaker #3: Sorry, ignore that part right there. Yeah.

Operator: Sorry. Ignore that last part there, yeah.

Speaker #1: Sorry. So the first question that you raised was: How much comes from existing customers, and how much came from new customers?

Steve Bromley: Sorry. The first question that you raised was how much comes from existing customers and how much came from new customers?

Speaker #2: And we're managing that best we can and don't think it'll have a material impact. We expect we haven't given guidance, but we expect sales to continue to grow.

Speaker #3: Yes, that's correct.

Operator: Yes, that's correct.

Speaker #1: In really ballpark numbers, about 60% of our growth—so if you think about the 73% growth that we had this year—about 60% of that, give or take a few percentage points, comes from new customers that we've added to the portfolio.

Steve Bromley: In really ballpark numbers, about 60% of our growth. If you think about the 73% growth that we had this year, about 60% of that, give or take a few percentage points, comes from new customers that we've added to the portfolio. Keep in mind that we added Switzerland and Spain and Ukraine as new countries to serve. About 60% from new customers and about 40% of our growth from existing customers. I guess if you peel the onion back on the 70% growth, about 30-plus percent would be internal, from existing customers year-over-year, and then 40% from new customers.

Speaker #2: In the second quarter and hopefully gross profit. We'll move accordingly. Our G&A spending is tightly controlled. So we expect to continue to see positive results going forward.

Speaker #1: Our next question comes from Nicholas. What products drove the growth in Q1? Anything new aside from bananas?

Speaker #1: Keep in mind that we added Switzerland, Spain, and Ukraine as new countries to serve. So about 60% is from new customers, and about 40% of our growth is from existing customers.

Speaker #2: It was primarily banana and ginger where we saw growth. And those were the categories that we were really focused on. Because we saw those as our biggest growth opportunities.

Speaker #1: So I guess if you peel the onion back on the 70% growth, about 30-plus percent would be internal, from existing customers, year over year, and then 40% from new customers.

Speaker #2: Sort of challenge we have is you add more products for growth or you just continue to grow hard on what you have in the portfolio.

Speaker #2: And we 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: Great, thanks, Steve. Our next question here: You have now reported two consecutive EBITDA-positive quarters. Do you expect this trend to continue, and what are your longer-term expectations?

Operator: Great. Thanks, Steve. Our next question here. You have now reported two consecutive EBITDA positive quarters. Do you expect this trend to continue, and what are your longer-term expectations?

Speaker #1: 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?

Darryl Bergman: I'll grab that one, Steve.

Speaker #1: I'll grab that one, Steve. Okay.

Speaker #2: 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.

Steve Bromley: Okay.

Darryl Bergman: I think the answer to the trending is yes. We don't give specific guidance, but as I addressed in my speaking to the key priorities, we are focusing on long-term and continuing to drive our top line, with a focus on managing gross margins, through our better supply management leverage, our product mix, our pricing, our risk management, while, as we mentioned a few times in the presentation, we continue to drive those operating costs towards our target of below 5%.

Speaker #2: I think the answer to the trending is yes. We don't give specific guidance, but as I addressed in my comments about the key priorities, we are focusing on the long term and continuing to drive our top line.

Speaker #2: And 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 marks was the largest month that we had in the quarter as all the new customers came on.

Speaker #2: With a focus on managing gross margins through our better supply management leverage, our product mix, our pricing, and our risk management—while again, as we’ve mentioned a few times in the presentation—we continue to drive those operating costs towards our target of below 5%.

Speaker #2: So when you take a look at it, you just can't divide the quarter by three and figure out what the day's receivables are. The last part of the quarter was higher as we get into the higher products.

Speaker #3: Okay, great. Thank you. Next question: how are the organic and sustainable foods markets faring with rising inflation?

Operator: Okay, great. Thank you. Next question. How are the organic and sustainable foods markets faring with rising inflation?

Speaker #2: I'm not worried about our receivables. In we credit insure our receivables as well. And by the way, we haven't had any significant bad debts we're also credit insured on those.

Speaker #1: Darryl, I can take this one. Look, it's a crazy time out there right now. There's super inflation. A lot of that inflation is landing in food products.

Steve Bromley: Carol, I can take this one. Look, it's a crazy time out there right now. There's super inflation. A lot of inflation's landing in food products. All of us go to the shopping, well, most of us go to the shopping center, and you see the increases in prices. It's interesting, the organic and sustainable foods consumers, they're lifestyle choices that are made. For the most part, we don't see demand fall off because of what we're seeing at the moment. I guess there's a limit to everything. How high can the prices go? Normally, what's happening, though, the organic and the conventional are both going up and down. We haven't seen a real erosion in the consumer. We're watching it all the time.

Speaker #2: And by the way, receivables have come down a little bit. Now that we're at the run rate and we're caught up, then it's more consistent now.

Speaker #1: And so all of us go to the shopping—well, most of us go to the shopping center—and you see the increases in prices.

Speaker #2: So I don't think there's any issues there.

Speaker #1: It's interesting. The organic and sustainable foods consumers, their lifestyle choices that are made, and so, for the most part, we don't see demand fall off because of what we're seeing at the moment.

Speaker #1: 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?

Speaker #2: We've brought on the bulk of the new business that we expected to bring on in Q1. And if you follow what happened last year is last year's probably the best proxy.

Speaker #1: I mean, I guess there's a limit to everything. How high can the prices go? Normally, what's happening, though—the organic and the conventional—they're both going up and down.

Speaker #2: We had a nice bump into Q2 and 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.

Speaker #1: And so we haven't seen a real erosion in the consumer. We're watching it all the time. I guess the good news for us is that consumers are continually focusing more and more on healthy and organic foods.

Speaker #2: And given that much of our business is contracted, we're not going to go to 40 million next quarter, but we're going to see it get up into the close to the 30 million range, I would think.

Steve Bromley: I guess the good news for us is that consumers are continually focusing more and more on healthy and organic foods, which is great. Connecting lifestyle and diet to health, which is positive. So there's growth in the category. Might the category slow down a little bit for a period of time? We haven't seen it, but can't predict the future. Look, we've realized continued growth, and what we're not seeing is sort of a rapid change of flavor for consumers, where they're like, "Look, I just can't afford any of that stuff anymore." What we see is that consumers, once they've made the lifestyle choice, they continue to buy what they buy, and they change other purchasing decisions. But the whole health and wellness thing is important, and so they're not trading down.

Speaker #1: Which is great. And the connection between lifestyle and diet to health is positive, so there's growth in the category. Might the category slow down a little bit for a period of time?

Speaker #2: 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 #2: Now we're working with some of our core retailers for some promotions. Throughout the summer, but 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.

Speaker #1: We haven't seen it, but can't predict the future. But look, we've realized continued growth and what we're not seeing is sort of a rapid change of flavor for consumers, where look, and I just can't afford any of that stuff anymore.

Speaker #1: What we see is that consumers, once they've made the lifestyle choice, continue to buy what they buy, and they change other purchasing decisions.

Speaker #2: Then bananas. And also I think the statistic is that 80% of school lunchboxes normally either have an apple or a banana in it. And of course, there's no school lunchboxes in the regions that we're selling in in the summer.

Speaker #1: But the whole health and wellness thing is important, and so they're not trading down.

Speaker #2: So there's not as many bananas going into that. So we normally see a strong Q2. A little bit of a dip in Q3 and then strong again in Q4.

Speaker #3: Okay, thank you. Next question. How sticky are—I think this is referring to the earlier question that we answered—how sticky are these new customers?

Operator: Okay. Thank you. Next question. How sticky are these new customers? I think this is referring to the earlier question that we had answered. As long as you can provide quality supply, do they keep ordering?

Speaker #2: And then next year when we get back into the contracting cycle, we see another lift going into Q1. Are we plan to see another lift before we go into Q1?

Speaker #2: That's before any acquisitions and it's also before any new products that we're also looking at to put in the back half of the year.

Speaker #3: As long as you can provide quality supply, do they keep ordering?

Speaker #1: Yeah. So most of our customers, depending on the product category, make commitments—sort of annual commitments, or in some categories, every three months.

Steve Bromley: Well, most of our customers, depending on the product category, make commitments of annual commitments or in some categories, every 3 months. Look, they are sticky, but we have a job to do, and they will not be sticky if we do not do our job. So we have got to get them product. We have got to execute on all of the steps in the process that we are responsible for, and we have got to get them good quality product. That is what we have to do. As long as we do it, we feel that they can be sticky customers. If you think about it, and you take a look at our growth, we grew 194% last year, and the year before, I think we grew 40% or 50%.

Speaker #1: That's all the time we have for questions today. Thank you everyone for joining Organto Foods Q1 2026 results review and business update. For additional information, we encourage you to visit Organto's website at organto.com.

Speaker #1: Look, they're sticky, but we have a job to do. And they won't be sticky if we don't do our job. So we've got to get them product, we've got to execute on all of the steps in the process that we're responsible for.

Speaker #1: As well as the company's public filings available on CR. 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.

Speaker #1: And we've got to get them good quality product. That's what we have to do. And so long as we do it, we feel that they can be sticky customers.

Speaker #1: If you think about it, and you take a look at our growth, we grew 194% last year, and the year before, I think we grew 40 or 50%.

Speaker #1: A lot of that's with existing customers. And as I said in the numbers earlier, like 30% of our growth is from existing customers. So, one is for them to be sticky and, two, is for them to be—I don't know what the right word is.

Steve Bromley: A lot of that is with existing customers, and as I said in the numbers earlier, 30% of our growth is from existing customers. One is for them to be sticky, and two is for them to be, I do not know what the right word is, sticky sticky. We want not only to continue to do business, but we want to do more and more every year. So far, we have been lucky. But look, we are like everybody. We are not perfect. We will end up with quality challenges at times, and that will impact our volumes with a particular customer for a period of time. But if we do our job, they are good partners and sticky to us.

Speaker #1: Sticky, sticky. We want not only to continue to do business, but we want to do more and more every year. And so far, we've been lucky.

Speaker #1: But look, we're like everybody. We're not perfect. We'll end up with quality challenges at times, and that will impact our volumes with a particular customer for a period of time.

Speaker #1: But if we do our job, they're good partners and they're sticky to us.

Speaker #3: Okay, our next question opens up by saying, "Good progress on new regions and retailers. Is growth being driven by core products, or do you see scope to expand into value-added products like juices, etc.?"

Operator: Okay, our next question opens up first by saying, "Good progress on new regions and retailers. Is growth being driven by core products, or do you see scope to expand into value-added products like juices, et cetera? Would this require investment, or could third-party manufacturing be enough to unlock additional value?

Speaker #3: Would this require investment, or could third-party manufacturing be enough to unlock additional value?

Speaker #1: Yeah. No, listen, a core part of our platform—of our strategic growth of the platform—is to move and add value. So, an example, examples that I would give you is organic bananas.

Steve Bromley: Yeah. No, listen, a core part of our platform, of our strategic growth of the platform is to move and add value. Examples that I would give you is organic bananas. Well, 30% of organic bananas never end up in the marketplace because they are not of retail quality. So they go to all types of different things. One of the fastest-growing food categories is organic baby food, and one of the biggest ingredients in organic baby food is organic banana puree. It is a value-added product. That is an example of something that we have consideration to do as we move forward. I think there are lots of opportunities. First, you have to have the core base operating, then you can go and value add. That is our intention, and that is core to the strategy. Sorry. That is core to this strategy.

Speaker #1: Well, 30% of organic bananas never end up in the marketplace because they're not of retail quality. So they go to all types of different things.

Speaker #1: One of the fastest-growing food categories is organic baby food, and one of the biggest ingredients in organic baby food is organic banana puree.

Speaker #1: It's a value-added product. That's an example of something that we have under consideration as we move forward. So, I think there are lots of opportunities.

Speaker #1: First, you have to have the core base operating. Then, you can go and value add. And so that's our intention, and that's core to the strategy I'm trying to move—sorry.

Speaker #1: That's core to this strategy. And if you go to the far right of the chart, that's all about the value-added ingredients and consumer packaged products.

Steve Bromley: If you go to the far right of the chart, that is all about the value-added ingredients and consumer packaged products. So it is core to our strategy. We see it as a huge opportunity. It is an opportunity to grow the business, it is an opportunity to diversify the customer base of the business, and it is an opportunity to improve margins. So, that is core to what we do. Then the second part of the question, Lauren, had something to do with assets or. Oh.

Speaker #1: So it's core to our strategy. We see it as a huge opportunity—an opportunity to grow the business and to diversify the customer base of the business.

Speaker #1: And it's an opportunity to improve margins, so that's core to what we do. And then the second part of the question, Lauren, had something to do with assets, or—oh, sorry.

Speaker #3: Yeah, I can just— I can re-ask it. Would this require investment, or could third-party manufacturing be enough to unlock additional value?

Operator: Yeah, I can re-ask it. Would this require investment, or could third-party manufacturing be enough to unlock additional value?

Speaker #1: Well, look, we have this sort of strategy called OMP or OPM, other people's money. So when we want to move into categories, if there is if there's processing capacity around, we'd like to start there.

Steve Bromley: Well, look, we have this sort of strategy called OPM, other people's money. When we want to move into categories, if there is processing capacity around, we would like to start there. Then when we get to a point where we can fill up our own facilities, do that. So it could be a combination, or it could be all third party packed, or it could be all with our own platform. So we are open to all of those ideas, and until we know which one we are doing, we do not know what the option is. But preferable to start with using somebody else's platform to prove out the model.

Speaker #1: And then, when we get to a point where we can fill up our own facilities, do that. So it could be a combination, or it could be all third-party packed, or it could be all with our own platform.

Speaker #1: So we don't—we're open to all of those ideas, and until we know which one we're doing, we don't know what the option is.

Speaker #1: But it's preferable to start by using somebody else's platform to prove out the model.

Operator: Okay. Thank you, Steve. Our next question. What is the plan to diversify away from bananas?

Speaker #3: Okay, thank you, Steve. Our next question: What is the plan to diversify from bananas?

Speaker #1: Yeah, so very good question. And I think the plan to diversify away is really laid out on this chart again. We're going to selectively add new products to the platform where we deserve to win.

Steve Bromley: Yeah. Very good question, and I think the plan to diversify away is really laid out on this chart again. We are going to selectively add new products to the platform where we deserve to win. We really like the berry category because, in this new GLP-1 world, blueberries and blackberries and strawberries and raspberries are becoming snacks, and you see people eating them like they used to eat a bag of chips. We really like the berry categories. We like a number of other different categories. We are going to selectively add those to the platform as we move forward. Then, as we note, we are looking to acquire, and I can assure you when we are looking to acquire, we would prefer to acquire businesses that do not do any of the products that we do.

Speaker #1: And so we really like the berry category because in this new GLP-1 world, blueberries, blackberries, strawberries, and raspberries are becoming snacks, and you see people eating them like they used to eat a bag of chips.

Speaker #1: So, we really like the berry categories. We like a number of other different categories as well. So we're going to selectively add those to the platform as we move forward.

Speaker #1: And then, as we note, we're looking to acquire, and I can assure you, when we're looking to acquire, we would prefer to acquire businesses that don't do any of the products that we do.

Speaker #1: And that's where we can really drive a lot of value and synergy. So, on top of all of that, it's value-add.

Steve Bromley: That is where we can really drive a lot of value and synergy. Then on top of all of that, it is value add, it is non-fresh, it is nuts, seeds, and oils. That is our strategy. We are working on a whole bunch of phases of that all at the same time. I would be pretty disappointed if a year from now, we were focused on the three or four core products that we have. I think it will be much more robust by that stage of the game. Keeping in mind that we did what we did entirely intentionally. If you went back three years ago, we had 25 different products. Today, we are focused on a core number of products. That is proving to be really successful, and over time we will expand, which is really important.

Speaker #1: It's non-fresh—it's nuts, seeds, and oils. So that's our strategy. We're working on a whole bunch of phases of that all at the same time.

Speaker #1: But I'd be pretty disappointed if, a year from now, we were focused on the three or four core products that we have. I think it will be much more robust by that stage of the game.

Speaker #1: Keeping in mind that we did what we did entirely intentionally. If you went back three years ago, we had 25 different products, and today we're focused on a core number of products.

Speaker #1: And that's proving to be really successful. And over time, we'll expand, which is really important. And by the way, when you talk about bananas—and I don't know if I have the right number—but I don't want you to think that we just do a banana.

Steve Bromley: By the way, when you talk about bananas, and I do not know if I have the right number, I do not want you to think that we just do a banana. I believe we have 56 different SKUs of bananas, just to put that in perspective. It is organic, it is Fair Trade, it is size, it is sugars, it is everything. It is a major category for us, no doubt. I do not want you to leave the impression that all we do is sell one banana. There are 56 different ones. I think it is 56. I might have the number wrong, but there is a lot of complexity within that category on its own.

Speaker #1: I believe we have 56 different SKUs of bananas, just to put that in perspective. It's organic, it's fair trade, it's size, it's sugars—it's everything.

Speaker #1: So, it is a major category for us, no doubt. But I don't want you to leave with the impression that all we do is sell one banana.

Speaker #1: There are 56 different ones—I think it's 56. I might have the number wrong, but it's a lot. There's a lot of complexity within that category on its own.

Speaker #3: Thanks, Steve. Our next question: you have mentioned M&A as a key part of Organto's growth strategy. Where do you focus, and do you have any updates on potential opportunities?

Operator: Thanks, Steve. Our next question: You have mentioned M&A as a key part of Organto's growth strategy. Where are you focused, and do you have any updates on potential opportunities?

Speaker #1: Darryl, do you want to grab this one?

Steve Bromley: Darryl, do you want to grab this one?

Speaker #2: Sure. With respect to M&A, again, going back and looking at the value step chart that Steve talked about, we're looking into not only continuing to expand on our European platform, but as we look to go forward, we're looking to expand into our North American platform as well.

Darryl Bergman: Sure. With respects to M&A, again, going back, looking at the value step chart that Steve talked about, we are looking into not only continuing to expand in our European platform, but as we look to go forward, looking to expand into our North American platform as well. Listen, the M&A pipeline in both geographic regions is strong. With respects to potential opportunities, I am pleasantly surprised with respects to, like I said, the strength of that M&A pipeline, and there is definitely opportunities going forward with respects to us to execute on the strategy that we are looking at. There is nothing currently in place that we can talk robustly about. Hopefully by the end of the year, that will change.

Speaker #2: The M&A pipeline in both geographic regions is strong. And, with respect to potential opportunities, I'm pleasantly surprised with, like I said, the strength of that M&A pipeline, and there are definitely opportunities going forward with respect to us executing on the strategy that we're looking at.

Speaker #2: There's nothing currently in place that we can talk robustly about, but hopefully, by the end of the year, that will change.

Speaker #3: Okay, thank you, Darryl. How are you dealing with rising fuel costs?

Operator: Okay. Thank you, Darryl. How are you dealing with rising fuel costs?

Steve Bromley: Hmm. Yeah, good question. Yes, and the costs change every day, right? It's an incredible time. Look, I think we're really using three different things that we're doing. Obviously, we're working with our customers and passing price through wherever possible. Clearly, from the stability of our margins from Q1 to Q2, we've had some good success there. I think that's really important. It's also required us to work closely with the shipping lines. Quite frankly, we've had to ship volumes between shipping lines based on how hedged they were on some of the BAF, which is the diesel fuel for the boats. We've had to ship that around. We work very closely with various shipping companies. We've also had to work with our growers, who are our key partners. We've all had to flex, bend, and move in order to maintain the margins.

Speaker #1: Darryl, good question. Yes. And the costs change every day, right? It's an incredible time. Look, I think we're really using three different things that we're doing.

Speaker #1: Obviously, we're working with our customers and passing price through wherever possible. And clearly, from the stability of our margins from Q1 to Q2, we've had some good success there.

Speaker #1: So I think that's really important. It's also required us to work closely with the shipping lines, and quite frankly, we've had to shift volumes between shipping lines based on how ahead they were on some of the BAF, which is the diesel fuel for the boats.

Speaker #1: So, we've had to shift that around. We've worked very closely with various shipping companies. We've also had to work with our growers, who are key partners.

Speaker #1: And so we’ve all had to flex, bend, and move in order to maintain the margins. And look, two weeks ago, we were talking about the fact that, oh geez, I think all of these fuel surcharges will be starting to come off and we can go back and adjust some pricing and do some things.

Steve Bromley: Two weeks ago, we were talking about the fact that, "Oh, geez, I think all these fuel surcharges will be starting to come off, and we can go back and adjust some pricing and do some things." Then, 48 hours later, oh, they're all back on and they're going up. I'm really proud of our team. I think they've done an exceptional job in a really fast-moving environment, and I think it's a credit to them. I was looking at our sales are up 61% in the quarter, and our gross margin's up 65%. A large player in the fresh space, who would be known by most people, but I don't want to call them out. Their sales went up 3%, and their EBITDA went down 31%.

Speaker #1: And then, 48 hours later, no, they're all back on and they're going up. And so I'm really proud of our team. I think they've done an exceptional job in a really fast-moving environment.

Speaker #1: And I think it's a credit to them. I was looking at our sales—they are up 61% in the quarter, and our gross margin is up 65%.

Speaker #1: A large player in the fresh space would be known by most people, but I don't want to call them out. Their sales went up 3%, and their EBITDA went down 31%.

Speaker #1: And in reading the report, it was nothing more than demand was there. Costs killed us. And so, I think our team, being smaller and more nimble, we're able to really manage well.

Steve Bromley: In reading the report, it was nothing more than, "Demand was there, costs killed us." I think our team being smaller and more nimble, we're able to really manage well and that makes us very encouraged for the future. It's not a perfect science by any stretch of the imagination, but I think the team's done well, and our guys can quote you the prices of fuel every day. Yeah. I think we've managed well, and we'll continue to manage it. By the way, we're not the only company, right?

Speaker #1: And that makes us very encouraged for the future. It's not a perfect science by any stretch of the imagination, but I think the team has done well.

Speaker #1: And our guys can quote you the price of the fuel every day. And so, yeah, we’re managing. I think we’ve managed well, and we’ll continue to manage it.

Speaker #1: And by the way, we're not the only company, right? Everybody's got the same problem—at different levels, but everyone's dealing with the same issue.

Steve Bromley: Everybody's got the same problem, at different levels, but everyone is dealing with the same issue, so misery loves company, and everybody's working hard, all the way from the retailers who have to manage price, to the growers who have to manage margins, to ourselves who have to handle all the logistics and the marketing and all of that sort of stuff. Everybody's involved.

Speaker #1: So, misery loves company and everybody's doing it—everybody's working hard. All the way from the retailers who have to manage price, to the growers who have to manage volumes and manage margins, to ourselves, who have to handle all the logistics and the marketing and all of that sort of stuff.

Speaker #1: So it takes everybody's involved.

Speaker #3: Great. Thank you, Steve. We are getting close to time, so we only have

Operator: Great. Thank you, Steve. We are getting close to time, so we only have

Speaker #1: By the way, I want to say one more thing. And if you're talking to a food company that tells you they aren't impacted by it, they're not telling you the truth.

Steve Bromley: By the way, I want to say one more thing, and if you're talking to a food company that tells you they aren't impacted by it, they're not telling you the truth. Everybody's impacted. Sorry, Lauren, that was an aside.

Speaker #1: Everybody's impacted. Sorry, Lauren, that was an aside.

Speaker #3: No, no, that's all right, Steve. Okay. So we have time for one more question, and this one is for Darryl. Darryl, what are your observations now that you've been with the company for a few months?

Operator: No, that's all right, Steve. Okay, so we have time for one more question, and this one is for Darryl. Darryl, what are your observations now that you've been with the company for a few months? Any surprises?

Speaker #3: Any surprises?

Darryl Bergman: Okay. Let's start with observations. So, after my first few months, I'm very encouraged by the growing strength of the underlying business, the team, and the growth opportunity. There's strong board leadership alignment, accountability, operating cadence, and financial discipline. With respect to surprises, in terms of surprises, I have to say the biggest surprise is the breadth of opportunity relative to the size of the organization. Like I said, there's a number of attractive growth initiatives in front of us. That just reinforces, though, the importance of prioritization, resource allocation, discipline, execution. The opportunity's there. Our challenge is going to be making sure we remain focused and execute consistently.

Speaker #2: Okay, let's start with observations. After my first few months, I'm very encouraged by the growing strength of the underlying business, the team, and the growth opportunity.

Speaker #2: There's strong board leadership alignment, accountability, operating cadence, and financial discipline. With respect to surprises—in terms of surprises—I have to say the biggest observation, or the biggest surprise, is the breadth of opportunity.

Speaker #2: Relative to the size of the organization, like I said, there's a number of attractive growth initiatives in front of us. That just reinforces the importance of prioritization, resource allocation, discipline, and execution. The opportunity is there.

Speaker #2: Our challenge is going to be making sure we remain focused and execute consistently.

Speaker #3: Okay, great. Thank you, Darryl. So that is all the time that we have for questions today. Thank you for joining us for Organto Foods' Q2 2026 results review and business update.

Operator: Okay. Great. Thank you, Darryl. That is all the time that we have for questions today. Thank you for joining us for Organto Foods' Q2 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 or Darryl or any members on the team. Thank you again for joining us, and 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 SEDAR.

Speaker #3: If you have any follow-up questions, please feel free to reach out to Organto directly through the website, or contact Steve, Darryl, or any members of the team.

Speaker #3: Thank you again for joining us, and have a great day.

Steve Bromley: Thank you. Take care.