Andrew Peller Limited

All participants, your meeting is ready to begin. Good afternoon, ladies and gentlemen. Welcome to the year-end fiscal 2020 results conference call. I would now like to turn the meeting over to Mr. David Mills. Please go ahead.

Well, it's actually good morning, everyone. Before we begin, let me remind you that during this conference call, we may make statements containing forward-looking information. This forward-looking information is based on a number of assumptions and is subject to a number of known and unknown risks and uncertainties. could cause actual results to differ materially from those disclosed or implied. We direct you to our earnings release, MD&A, and other securities filings for additional information about these assumptions, risks, and uncertainties. And I'll turn things over to Mr. John Peller, Chief Executive Officer. Thanks, David.

And good morning, everyone. Joining you from my home here in Burlington. And also on the call is Steve Attridge, our CFO in Burlington. Randy Powell, our president, and Steve's going to speak to some of our financial results, and Randy will outline some of our major business initiatives for the years. Let me start by saying that for our year ending March 31, our fiscal 2020 was another very positive year for our company. Our sales for the year were flat, but Our earnings were up very nicely as we continue to strengthen our product mix into areas where we're getting higher margins. And those increased earnings have allowed us to both improve our results, but also to allow us to invest more in new areas as we look to grow our product portfolio in cider and craft beer the whiskey and distilled spirits. So all in all, it's been a very, very busy year and we're pleased with all the work that we've got done. So our net earnings rose to 23 and a half million or 55 cents a share, up from $22 million in fiscal 2019. Obviously the last part of our fourth quarter and particularly the month of March, was impacted with the onset of COVID-19. You know, we were most fortunate that right out of the gate, you know, our beverage alcohol category was deemed essential by the federal government. And as a result, you know, the main liquor stores across the country were kept open. And we adjusted to ensure our production facilities remained open and as well as the retail stores that we have here in Ontario at our wine shop. And we had our estate winery stores open for curbside pickup, but from a tourism standpoint, you know, visitation and normal events and activities are were not open for that period. They've just opened out west now. As you may have heard, the western markets are opening restaurants and the estate wineries are just opening now under a very strict regimen and protocol. And in Ontario, as you're aware, both restaurants and our estate wineries can do curbside pickup, but they've yet to open them up more broadly to consumer traffic. I must tell you I'm incredibly proud of the work that our management team did. They met twice a day remotely and through the weekends for three or four weeks to ensure that we kept our employees safe and all our operations ran strong. Our demand was particularly strong in March, and particularly the four-litre products were in high, high demand. And our team did a great job. And as well, not surprisingly, our e-commerce direct-to-consumer business became very, very popular and a great deal of effort and went into ensuring that we met all the demand that came through that channel as well. You know, if there is a silver lining with COVID for us, One of the very positive things that I think is going to come out of this going forward is that governments, both provincially and federally, are going to realize that a lot of the globalization that they promoted wasn't necessarily in their long-term economic interest. And it was made clear to me through my discussions with provincial and federal governments you know, politicians that they were lamenting the fact that so much of our manufacturing has left the country and that our supply chains in food, in agriculture, obviously in PPE and health were badly compromised. And that, you know, a lot of the value that they expected by promoting globalization had not accrued to us nor protected us in ways that we should have been protected. These are things that I've been promoting for 20 years. but I have been beaten back by kind of liberal trade messages. And I think going forward, you know, for us even trying to get the interprovincial trade shipments approved, we haven't been able, simple policies that they could have done to help promote manufacturing and sustainable business models here in our country, they've not been supportive. And I really do believe that that will change positively for us going forward. The beverage alcohol industry remains strong. You've no doubt heard us say over the years that in the last 20 years, whether it was 9-11 or the financial collapse in 2008 and 2009 or past recessions, we tend to power right through them and perform well. And we expect to do the same this time around. And as I told you, the sales through our liquor board and grocery channels and our e-commerce were particularly strong in April and May. And they offset a lot of the business that we lost because restaurants are closed. Our own restaurants are not open. Our estate, winery, tourism, and special event businesses down are, you know, our sales to duty free are non-existent as the airport business has dried up. And while we've been able to offset some of that and most of that in the first two months, we don't expect to be able to offset that for the entire year. So that it's likely we'll have some revenue impairment in the 5% to 10% for the year. And having said that, we're really looking at investing in our business as if everything was full bore. And our eyes are definitely... on our future and we're going to continue to make the investments we know that are critical for the next five to 10 years. So we're pleased and happy with the investments that we're making and we're definitely excited with our prospects for our future. So at this point, I'll just turn it over to Steve and then to Randy and if there are questions at the end, we'll be happy to address them. Over to you, Steve. Thanks, John.