Colabor Group Inc.

Good morning, ladies and gentlemen, and welcome to Colorbor's fourth quarter 2024 results conference call. At this time, note that all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during the call you require me to distance, please press star zero for the operator. This call is being recorded on February 26, 2025, and I would like to turn the conference over to Monsieur Louis Frenet.

Merci, Sylvie. Thank you, Sylvie. Good morning, everyone, and welcome to Collabore Group's fiscal 2024 fourth quarter and year-end result 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 ended December 28, 2024. The press release and disclosure documents can be found on our website, on the website cdarplus.ca and on our website colabar.com. Joining me today on this call is Pierre Blanchet, our Chief Financial Officer, who, following my initial remarks, will provide an overview of our financial results. Our four-quarter and full-year results demonstrate that we can win even in challenging macroeconomic environments. Because of our diversification strategy within the HRI market and investments made to expand our presence in western Quebec, we've managed to offset the effect of challenging backdrop in the restaurant and retail channel and set the table for a bright future for Calabar. In the fourth quarter, sales grew by 3.2%. driven by distribution sales growth at 5.6%, which compensate for weaker wholesale revenues. Weakness in restaurant channels put pressure on our adjusted EBITDA margins, which still represent a healthy 5.6% of sales in the fourth quarter of 2024, down from 5.9% in the equivalent quarter of last year. Because of our efficient management of working capital, we increased our cash flows from operations by 18.6% to $10.6 million. By prioritizing sound capital allocation, we've also ended the year with a strong balance sheet. Our leverage ratio represents 2.4 times adjusted EBITDA from 2.7 at the end of last year. Fiscal 2024 was a milestone year in the second half of our 2020 to 2025 strategic plan. We entered the year having completed an important CapEx project that would provide us with a base to triple the size, the market of our distribution activities. Starting in Q1, we slowly ramped up the facility by serving our new chain customers And once we felt we had the required level of service, we started going after market share. While headwind affected the restaurant industry in 2024, our diversification strategy and ability to gain market share allowed us to grow our distribution sales, mitigating the effect of the difficult macro environment in this activity. We also completed a small acquisition of the Baudry Cadrin distribution assets, which help us raise synergy at our eastern Quebec facility and create cross-selling opportunities. For fiscal 2024, we generated 35.4 million of adjusted EBITDA, down by 2.2 million. Margins stood at 5.4, down from 5.6 last year from the effect of a lower sales volume. By soundly managing operations and prudently allocating capital, we ended the year in a strong financial situation with healthy cash flows. This provides us with the means to accelerate our growth and profitability plan. On February 19th, we announced the conclusion of a highly strategic acquisition which will further consolidate our position as the largest food distributor and boost our presence in western Quebec. This follows into the footstep of the ramp up of our new facility in St. Bruno. I would like to once again go over the strategic, rational, and key benefits of this transaction, which is expected to close before the end of the current, which is the second quarter. The price paid was $51.5 million, and the deal represents annual revenues of $225 million. We acquired certain distribution assets of ADEME+, which operates under Méran+, all of the equity of Tout Prêt, a processor and distributor of ready-to-use fresh cut fruits and vegetables, and concurrently concluded a six-year supply agreement for the four Méran depot stores. This was a cost-effective way to accelerate our presence in western Quebec with an added value and complementary customer mix. The distribution asset purchase are primarily working capital, customer contracts, and certain tangible assets. By adding this volume to our legacy business, we will increase our purchasing power and supplier revenues, which will benefit everyone. We can also Extract cross-selling opportunities with our private label and specialty products, seafood and meat with our Noref and Lausanne division, adding also the tout prêt opportunity. On slide six, we can see that together on a pro forma basis, our new customer mix move in favor of restaurants and retail, which represents 58% of revenues up from 48% prior to the transaction. Institutional accounts will practically maintain their share of revenues at 19% down from 20, while wholesale customers will represent 18% of revenues down from 25%. Overall, these transactions favorably impact our customer mix, allowing us to achieve an optimal risk-reward profile. Along with revenue synergies, this transaction brings potential efficiency gain and operating synergies, including some interesting route optimization, capacity, and geographical utilization that we aim to gradually realize over the next two years. Efficiently managing our customer mix and product portfolio has allowed us to raise our gross margin in the past few years. We will maintain this approach in the years to come to mitigate any possible headwinds. In conclusion, the acquisition announced last week is highly strategic and accretive to earnings per shares. Because of our sound financial situation and financing structure accompanying the deal, our leverage ratio will also remain manageable as we expect it to land in the mid-threes. upon closing of the transaction. 2025 marks the last year of our five-year strategic plan. The Alimplus acquisition runs off this journey quite nicely. We now have a catalyst for growth and operational efficiency and stronger foundation on which to realize our longer-term ambition. The acquisition of Alimplus raised our market share in the Quebec food service market from 11 to 16%. As the third largest distributor in a highly fragmented market, our long-term ambition is to consolidate the market and create a strong and competitive Quebec supplier focused on supporting our local artisans, producers, and manufacturers. We are all very excited by the potential of a LM Plus brings to Calabar and look forward to welcoming new customers and employees to our platform shortly.

Jack, on this, I turn the call over to you.