Colabor Group Inc.

Good morning, ladies and gentlemen, and welcome to Calabar's fourth quarter 2023 results conference call. At this time, all lines on the list in only mode, but following the presentation, we will conduct a question and answer session open to analysts only. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Friday, March 1st, 2023. Before turning the meeting over to management, I would like to remind listeners that this conference call contains forward-looking information within the meaning of acceptable Canadian securities laws and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I refer the audience to the forward-looking statement as detailed in the presentation supporting this conference call and available on the company's website in the Investors section under Events and Presentation at www.calabor.com. Furthermore, risks are discussed through the most recent MD&A under the heading Risks. And I would like to turn the conference over to Louis Frenette, President and CEO of Calabor Group. Please go ahead, sir.

Thank you, Suzy. Good morning, everyone, and welcome to Calabor Group. fourth quarter of fiscal 2023 results conference call this is louis frenette president and chief executive officer last evening we released our earnings results for the 16 and 52 week period and december 30th 2023 the press release and disclosure documents can be found on our website and at cedarplus.ca the accompanying Presentation can also be accessed online in the investors section at calabar.com. Joining me today on this call is Pierre Blanchet, our Chief Financial Officer, who, following my initial remark, will provide an overview of our financial results. I am happy to report another strong quarter for Calabar. For an 11th consecutive quarter, our transformation strategy has provided consistent revenue growth and sustained improvement to our profitability. We are ending the year on a positive note with available growth runway and a strong balance sheet. In the fourth quarter of fiscal 2023, we achieved 1.6% consolidated revenue growth or 5.8% when adjusting for last year additional week. driven by 9.1% revenue growth in our distribution segment, or 14.2% adjusted for the additional week last year. We also achieved a 70 basis point improvement to our gross margin in the quarter, resulting from sustained improvement to our product and customer mix. Together, revenue growth and above-mentioned improvements led to 18.2% adjusted EBITDA growth in the fourth quarter. By the end of the year, we also completed an important milestone in our transformation and growth strategy with the relocation of our wholesale activity and the head office. The move to our new custom-built strategic facility in Saint-Domingue was completed successfully on time and on budget. I am proud to say that we achieved this significant endeavor while maintaining our level of customer service. We didn't achieve this impressive capex and move alone. I would like to take this opportunity to express my gratitude to everyone involved, from our employees who demonstrated their unwavering engagement by supporting us during this operation, to our consultants, and Montani, our builder and landlord, who accompanied us along this journey to ensure a smooth transition. This facility will unlock significant growth potential for our distribution platform, tripling the size of our addressable market in the province of Quebec. Prior to this new distribution center, we could only efficiently reach one-third of the addressable HRI market. With our new hybrid facility, we can now effectively reach 90% of our total addressable distribution market in the province. The facility was custom built to provide optimal freezing and refrigeration capabilities. It allows us to perform both our wholesale and distribution activities on the same footprint. It provides us with the ability to maximize our inventory turnover and productivity, and improve our operating cost efficiency. As Pierre Blanchet will further discuss in his remarks, because of our improving profitability and strong cash flows, we were able to complete this important investment program without materiality affecting our leverage ratio. which stands at 2.4 times adjusted, barely up from 2.3 times at the beginning of the year. You can see a picture of the new facility on page five of the accompanying presentation. As we stand today, we are now entering year four of our five-year strategic plan. We have everything on hand to continue successfully executing our growth and profitability objectives and deliver further shareholder value. As seen on slide six of the presentation, our top priorities in 2024 will remain on first generating profitability growth. We will continue improving our customer mix and product portfolio. We will focus on our private label brand and further improve our category management practices to obtain the optimal mix of private and national brands. Second, growing our reach from 30% to 90% of the addressable HRI market. Our recent move to our new strategic facility in St. Bruno will play a pivotal role in accelerating our growth in Western Quebec. Once we moved in at the end of 2023, we started serving our existing wholesale clients and major distribution accounts out of this new facility. This is running smoothly, and we will gradually start serving new Western Quebec distribution clients out of this facility in the second half of 2024. Now that this strategic capex is completed, we are also more comfortable looking at small accretive M&A opportunities, always while striving to maintain a healthy level of leverage and flexibility for future growth projects. In yesterday's earnings press release, we also disclosed the acquisition of certain assets related to food service activities of Groupe Boudry. These activities generated an annual revenue run rate of approximately $15 million. This acquisition will provide operational synergies to Calabar and cross-selling potential. These newly acquired clients, mainly located in eastern Quebec, will be served out of our facility located in Saint-Nicolas-les-Vies, close to Quebec City. There has been a long-standing relationship with Groupe Boudry, and they will continue to be clients of Calabar on the wholesale side. Third. improving our employer brand. Attracting and retaining the best talent is a key success factor for Calabar. The facility in Saint-Denis and recent launch of our new employer brand will continue to this effort as being an employer of choice in our industry and in the communities where we operate. We are also keeping an eye out of the evolving ESG disclosure landscape with a new with a view of integrating our ESG objectives in our financial disclosure next year. Fourth and last pillar, renew and refreshing our brand. Enhancing the quality and incorporating locally sourced components into our offering will continue to be a priority for Calabao. Our end identity as a Quebec-based business and our personalized approach to customer service is an important differentiator from other larger distributors operating within the province. Before I turn the call over to Pierre, for those who have followed our transformation story over the last three years, you have seen us prudently manage through the pandemic and even emerge in a much stronger position. I'm very proud of what our team has achieved in the last three years. We are entering 2024 with a resilient business and capacity for growth. We are in a good position to face the current macroeconomic environment. Even as we are feeling some pockets of weakness in the higher end segment of the restaurant channel, our diversification within the HRI market and strong cash flows have allowed us to de-risk our business and balance sheet. Over the last few years, we have also significantly improved our product offering and raised our level of customer service. As a result of our focus on quality service and locally sourced offering, are positioning us well in the market and helping us attract and retain customers. And our new facility allows us to significantly extend our total addressable market in Quebec.

Pierre, with this, I will turn the call over to you. Please unmute.