Trubar Inc

Hello and thank you everyone for joining us today. Welcome to our TrueBar Inc. Investor Webinar where today we will be reviewing our financial results for the third quarter of 2025 and discussing the acquisition of TrueBar by ATTI. This call is being recorded. Please note portions of today's call other than historical performance include statements of forward-looking information within the meaning of applicable securities laws. These statements These standards are made under the safe harbor provisions of those laws. Please refer to today's press release and our management discussion analysis for our disclosure of risk and uncertainties. We provide forward-looking statements solely for the purpose of providing information about the management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly or any updates or revisions to any forward-looking statements to reflect any change in our expectations or changes in events, conditions, assumptions, or circumstances on which any of these statements is based, except if it is required by law. We use terms such as the justity of the law. gross revenue, gross profit, and gross margin, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set in our management discussion analysis. Joining me on the call today are Erica Grossman, co-founder and CEO of TrueBar, along with the company's executive chairman, Kingsley Ward. With that, let me turn the call over to Kim and Erica.

Thanks, Bernie. Good morning, everyone. And thank you for joining our call. This is a momentous day for Truebar. It's a day that we have been diligently working towards over the last few years, since we became actively involved in the brand. In that short time, we have completed a major restructuring of the business, divested non core assets, changed our corporate name to Truebar Inc. enhanced our quality and safety programs, improved our supply chain efficiency, and implemented a new ERP solution. In addition to all this, we assembled a world-class leadership team with deep expertise and a demonstrated track record of building and scaling consumer brands. These steps had one primary purpose. to enable us to focus our attention and resources exclusively on the growth and expansion of the True Bar brand. This morning's announcement marks the beginning of a new chapter for the True Bar team with the acquisition of the brand by Etty. Etty is a leading privately held consumer products company based in Turkey, with a growing portfolio of brands in international markets. For additional information, please refer to their website, ettyinternational.com. Under the terms of the agreement, Etty will acquire all the outstanding shares of Truebar. Truebar shareholders will receive $1.64 Canadian per share of all in cash. This represents a premium of 64% to the closing price of TrueBar shares on the TSX Venture Exchange on November 21, 2025, the last trading day prior to this announcement. It also represents 102% premium to the 60-day volume-weighted average price of the TrueBar shares on the TSX-V as of November 21, 2025. The transaction is subject to the approval of TrueBar shareholders and other customary closing conditions. Shareholders will vote on the transaction at a special meeting that is anticipated to be held in January 2026, with the closing of the transaction expected during the first quarter of 2026. We convened a special committee of the True Bar Board to review, evaluate, and negotiate this agreement. Based on the special committee's in-depth analysis of the agreement, including the opinions of our bankers and advisors, our board is extremely confident that this transaction represents a significant premium for TrueBar shareholders at this stage in the brand's development. Importantly, this agreement also delivers on our commitment to creating long-term value for our shareholders. I want to thank the True Bar Board and the Special Committee for their counsel, expertise, and considerable investment of time in making this acquisition possible. In particular, I want to recognize Richard Kellum for his leadership of the Special Committee and for serving as our point person in negotiating this very favorable agreement. I also want to acknowledge and thank Erica Grousman, who, as the founder of the TrueBar brand, has demonstrated determination, perseverance, creativity, and leadership in building this great brand and putting us in a position to move forward with this transaction with Etty. Last but not least, I want to thank the whole TrueBar team, for their incredible work and many, many long days, nights, and weekends spent with them doing really two jobs, managing the extensive due diligence process that we had to go through for this transaction, as well as achieving the spectacular growth in this quarter. Again, my thanks to you, Erica, for leading the team. and building this incredible brand and helping Etty through all of their due diligence activities. I'll now turn the call over to you to talk about our third quarter results.

Thank you, Kingsley, and good morning, everyone. We're very excited about today's announcement and the very bright future for TrueBar as part of Etty. Turning to our third quarter results, we delivered another strong performance in line with our expectations. Our results demonstrated the growing strength of the TrueBar brand and the continued execution of our strategy. The foundation of that strategy is our focus on expanding distribution, accelerating our marketing efforts, and advancing our innovation pipelines. Looking at our financial performance in Q3, our net revenue was $21.6 million, an 88% increase over Q3 24. This is another record quarter of growth. Our gross profit was $8.9 million, an increase of 76% versus a year ago quarter. However, our gross margin percentage was 41%, which was down first Q3 24, reflecting our continued investment in trial and awareness programs with our retail partners to build our brand. This investment was as planned and is very much in line with early stage brand building programs in CPG. Our adjusted EBITDA was $1.4 million in the quarter, an increase of 39% versus the year-ago quarter. Looking at our revenue breakdown for Q3, we had a solid growth across all channels, direct-to-consumer, physical, retail, and club. Retail was up 206% in the quarter, followed by direct-to-consumer at 170%, and the club channel at 50%. I'm very excited about our continued progress growing all our revenue and diversifying our mix across all channels. This is reflected in our sales breakdown by segment for the year to date. compared to the same period in 2024. Based on our performance for the year to date, we are reaffirming our full year guidance for net revenue in the range of $65 to $70 million. That's a 50 to 60% year-over-year increase driven by our current footprint, new doors we opened in 2025, and increasing velocities across all our channels. Our growth, particularly over the last 18 months, has been driven by the expansion of our retail footprint across North America. During the third quarter, we strengthened our regional footprint with the addition of more than 500 stores across the US, Midwest, Pacific Northwest, and Colorado. and major grocery chains, including Mayer, King Soopers, and Fred Meyer. We also continued our retail expansion in Canada with launches in Costco, Patterson Food Group, and Healthy Planet stores. Another highlight of the quarter was the launch of our True Bar Kids line, an allergy-friendly, nut-free bar that went into Sprouts nationwide. This launch continues to generate solid listing momentum across multiple channels, including e-commerce. True Bar Kids marks a major step in advancing our innovation strategy, where our focus is on developing new flavors, pack sizes, and bar sizes, all designed for new occasions to enjoy the brand. As we look ahead to become part of the Etsy team, I want to also add my thanks to the True Bar board of directors for their leadership, guidance, and support that they've provided to me and my team. I also want to thank my incredible team for all of their commitment, their dedication to make this day possible. It is very gratifying for me to see this growth and momentum that we have built for the True Bar brand. I'm very excited for us to have this opportunity to begin a new chapter as part of a larger global enterprise with the expertise and resources to take this business to the next level. With all of that, I'll turn it back to you, Fern. Thank you.

Thank you, Eric and King. We will now open the floor to questions. Our first question. Our first question is from Noel Atkinson from Flair Securities. Noel, you may unmute your mic.

Hi, yes, it's Noel Atkinson from Flair. Good morning, Eric and King and Fern. Congratulations on the announcement for the acquisition and also on the impressive Q3 results. That was very, very strong results. So I was wondering if you could talk just quickly on what were the drivers that contributed to your decision to accept an acquisition at this stage? And then also, secondly, as a follow-on on Eddie, you know, do they have a significant sales footprint in the U.S.? Are they kind of looking to you to be the sharp edge of the spear for them in the U.S. market?

Yeah, thanks, Noel. Look, let's just look to the experience of the board really is what helped us think about, you know, the opportunity that was presented when the conversation started with Erica back in the first quarter of the year. It was conversations amongst the board. that led to conversations with senior bankers and advisors in the space. And it became very clear to us that the the price that was being offered for the business was extremely fair, considering the brand's development point where we've gotten in our development to this date. And I want to, you know, highlight that, you know, we struck up the special committee activity, and there was a lot of time, energy, and effort. Really appreciate the team's work on that front to assess this opportunity. Obviously, you don't take this lightly. And so we went through that process and came to a unanimous conclusion that this made a lot of sense for us at this time. Sorry, no, what was the second part of that question?

Just on Etty, do they have much exposure in the U.S. market already, or is Truebar going to be their new lead product into the U.S. market?

Look, Noel, Etty is a private company. we're really not at liberty to talk about their plans for the future. So just know that we are extremely excited about the opportunity for this brand to be placed in their hands. They have decades, decades of experience. And we'll just continue, I think, to build this brand with our wonderful team at True Bar and achieve spectacular success going forward. It's really where we're at.

Okay, great. And thank you very much.

Vern, you're on mute. I don't know if there are any more questions.

Yeah, no, we have some questions coming in from the crowd. Sure. I'm just organizing them right now. We have one question come in. Can you provide any background on how the transaction came together and elaborate on the rationale for this fire? Sure.

Yeah, so I'll just keep this. It's really very simple. Erica was introduced to these folks back in the first quarter of this year, and discussions began. And as you can tell, Erica is a very good salesperson and has built this incredible brand, and it wasn't difficult for her to walk the Etsy team down the road to the conclusion that, them buying this business made a ton of sense. And as far as making the decision, I'm going to repeat myself here. Making the decision to transact at this point in time was really reached – with an extensive amount of discussion with the board, advisors, and bankers, with decades of experience in the space, some of the biggest players in the world were were were connected, contacted, and you know, we all came to the conclusion based on their advice, the bankers and advisors, that this was a very, very fair price for the business, and we made ourselves comfortable, and obviously Erica had to be super comfortable with, you know, placing this brand in the hands of the Etsy team going forward. So I hope that answers the question there, folks. Erica, you want to add any color to that? You're on mute.

Thank you. No, I'm super excited to become part of their family, per se, and everything that you said is accurate. So I think they're very excited to also be a part, to have True be a part of their infrastructure.

Thank you. Any other questions there, Fer?

Yeah, we have a question coming in as to expected closing dates.

Yeah, okay. So, folks, obviously, information will be following, but we hope to close this early in the first quarter, hopefully January, but it could spill into February depending on how the process unrolls.

Okay, I do not see any further questions right now at this time. So I think we can close up the call.

All right, well, before we close, I do want to thank all our shareholders for their incredible support over these last few years. We are blessed with the faith that you put in all of us to guide this company forward. And again, thank you for that support. With that, we'll wrap for the day. Thank you all. Bye now.