GURU Organic Energy Corp.

Welcome to the Guru Organic Energy Fourth Quarter and Fiscal 2020 Results Conference Call and Webcast, being recorded today, January 21st, 2021, at 10 a.m. Eastern Time. At this time, all participants are in a listen-only mode. Following management's presentation, there will be a question-and-answer session open to financial analysts only. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, Please press start followed by zero for operator assistance at any time. Guru's press release, MD&A, and financial statements are available in the investor section of its website and on CEDAR. During the call, the company may refer to certain non-ISRS measures. Reconciliations are available in its MD&A. Also note that all financial figures are expressed in Canadian dollars, unless otherwise indicated. I would also like to remind you that today's presentation may contain forward-looking statements about Guru's current and future plans, expectations and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. As such, please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I will now turn the call over to Carl Goyer, Guru's Chief Executive Officer.

Thank you, operator. Bonjour à tous. Good morning, everyone. And welcome to our first earning call as a public company. Joining me this morning is our CFO, NG Sarah. I am very proud of what Guru has accomplished in 2020 with record revenues of over $22 million. In Q4, sales grew over 50% compared to the prior year to reach $6 million, supported by gross margins above 60%. These results reflect our strong performance in our core markets and the consumer shift to better-for-you energy drink alternatives in the midst of an ongoing global pandemic. I would like to thank our employees for their dedication and good energy, as we like to say, and thank our suppliers and loyal customers for their continued support. The future is bright for Guru. This past fall, we completed a $34.5 million financing and became a TSX-listed company. We had incredible support from our shareholders, and we are very excited to now aggressively pursue our growth. We are committed to creating sustainable long-term value for our stakeholders as we fulfill our mission of cleaning up the energy drink industry. Several steps have been initiated since November in preparation for the important year ahead. This includes hiring key personnel in sales and marketing, launching our most significant consumer research to date, which will inform our strategic marketing decision, the launch of Guru Yerba Mate in Canada, and the hiring of Brand Momentum, a leading experiential and field marketing firm that will accompany Guru in our marketing plan in Ontario, Western Canada, and Atlantic Canada. We are also actively working on expanding the distribution of our products in the convenience, grocery, and drug channels. Discussions in Canada and the U.S. are ongoing, and we have several commitments for new placements between now and the end of spring of 2021. Furthermore, we are pleased with the performance of our online sales, which have experienced accelerated growth this past year, driven by evolving consumer behavior and demand for healthier functional products during the pandemic. We believe this will continue to be an important channel going forward with these consumer behaviors persisting post-pandemic. We plan to continue investing in consumer awareness and reach in this B2C channel. Finally, on the operational front, we have been proactive in ensuring that we have a flexible supply chain as we pursue our growth and as we monitor the impact of the pandemic. Our short-term objective is to significantly increase our presence in our key channels and the velocity of our sales. While this expansion will impact our short-term profitability given the required investment, it will help us achieve higher sustainable gains in the medium to long term. Our proven track record in Quebec and our success to date in California are proof of what we can accomplish, and we now have the means and a clear path forward to replicate this success on a much larger scale. I will now turn the call over to Ingi to discuss our results in more detail. Ingi, over to you.

Thank you, Carl. And bonjour a tous. Good morning, everyone. I'm excited to present for the first time to our shareholders, employees and stakeholders our financial results as a public company. Turning first to our Q4 results. Revenues increased 51% to 6.1 million compared to 4.1 million for the same period last year. The increase primarily reflects market share growth in Quebec. While they continue to recover, Sales in the U.S. were slightly lower, primarily due to the impact of the pandemic on consumer shopping patterns in the natural retail channel, where we are very present. Gross profit totaled $3.7 million, a 41% increase compared to $2.6 million last year. Gross margin was 61% compared to 65%. The decrease is primarily due to enhanced promotional activity that has been industry-wide and higher product costs driven by increased demand for ready-to-drink beverages. As Carl mentioned, we have been proactive in dealing with pandemic-related pressure on the supply of some raw materials in the ready-to-drink space and to support our future growth. We are intentionally maintaining higher inventory levels. We are also strengthening our supply chain by segmenting and shifting some of our production to different geographic areas, both in North America and Europe. We expect these pandemic-related margin pressures to remain in fiscal 2021. SG&E was 4.2 million, or 69% of sales, compared to 3.4 million, or 84% of sales, for the same period a year ago. The improvement as a percentage of sales reflects economies of scale and a more focused sales and marketing spend due to COVID. Adjusted EBITDA was negative 0.4 million compared to a negative 0.6 million last year. Net loss for Q4 was 3.1 million or 11 cents per share compared to a net loss of 0.7 million or 3 cents per share. The $2.9 million of the net loss reflects expenses related to the reverse acquisition of MiraX ahead of our GoPublic transaction. Guru has a strong financial position, which will allow us to fund our expansion activities. At year-end, we had cash and cash equivalents of $30.4 million and unused Canadian dollar and U.S. dollar denominated credit facilities totaling about $6.5 million. Looking now at our full fiscal year 2020 results. For fiscal 2020, we recorded a 26% increase in revenue to a record 22.1 million compared to 17.5 million in fiscal 2019. The increase was driven by market share growth in Quebec, partially offset by slightly lower sales in the US due to the impact of COVID-19. There's no doubt, that the pandemic impacted Guru in fiscal 2020. Prior to its onset, our revenues had grown 52% in Q1 2020 compared to the same period in 2019. Then, in Q2 and Q3, governments imposed restrictions on retailers, stay-at-home orders, and other measures to curb COVID spreads impacted consumer shopping behaviors, distributor and retailer operations, and ultimately, our sales. particularly in the U.S., with California taking measures very early on. But fairly quickly, we saw a recovery, and by Q4, our quarterly revenue growth was back up above 50%. As we enter 2021, the pandemic and government restrictions to curb its spread remain. This makes it difficult to assess what its continued impact on our business may be going forward. Certainly, reduced retail and store traffic due to various restrictions in place in many of our markets may impact short-term velocity. At the same time, we have seen a growth in our online sales and strong customer loyalty, reflecting the appeal of our brand. While the exact impact is hard to predict, we believe any negative impact will be temporary, and we have full confidence in the strength of our brand. and in our ability to achieve our near-term growth objectives. And importantly, on the supply chain front, we have taken proactive measures and have contingency plans in place to support our growth. Turning back now to fiscal 2020 results, annual growth profits increased by 22% to reach $14 million, compared to 11.5% and growth margin of 64% compared to 66% a year ago. Adjusted EBITDA was $1.4 million compared to $1.6 million last year, resulting in an adjusted EBITDA margin of 6% in fiscal 2020 versus 9% in fiscal 2019. Because of the reverse acquisition of Naira X, the company incurred a net loss of $2.2 million or $0.07 per share in fiscal 2020, compared to a net income of $0.7 million or $0.03 per share a year ago. However, excluding this transaction, Guru would have generated income before taxes of $0.7 million in 2020. I'll now turn the call back to Carl to discuss our strategy going forward.