GURU Organic Energy Corp.

Energy third quarter 2023 results conference call and webcast being recorded today, September 14th, 2023 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 with financial analysts. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulty hearing the conference, please press star then 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 CDAR+. During the call, the conference may refer to certain non-GAAP measures. Reconciliation 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 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 would now like to turn the conference over to Carl Goyette, Gourou's Chief Executive Officer.

Thank you, operator. Bonjour à tous. Good morning, everyone, and welcome to our earnings call. Joining me this morning is our CFO, Indy Seraf. For those who are following the webcast, you can turn to the presentation to slide five. We are very pleased with the results achieved in Q3, an all-time record quarter in terms of net revenue with $8.9 million. Our C&E and fruit punch, as well as higher velocities in Canada, were the main contributors to the growth in this quarter. During the last two quarters, we have been building on the sales momentum and gaining traction on many fronts, while being very disciplined when it comes to our spending. with a more targeted marketing approach to retail and online activities. This strategy has resulted in a reduction of our net loss to $3 million in Q3 from $6.5 million last year. We are seeing sustained sales progression in urban centres in English Canada, with market share pockets of up to 6% in certain grocery banners. This performance is a result of continued marketing to increase brand awareness and trial, notably through our spring and summer national marketing campaigns featuring the launch of Fruit Punch, currently ranked as our number one flavored product in Quebec, as well as our sponsorship of the Canadian Elite Basketball League and the Amazing Race Canada. Our record performance in Q3 attests to the resilience of our brand and our capacity to grow in a highly price competitive environment. Marked by our successful innovations, creative marketing, and ability to offer the best natural energy drink to consumers in Canada and in the U.S. To put our growth in perspective, consider the following Nielsen statistics. First, the energy drink category as a whole continues to hold an impressive growth rate of 15% over the last 52 weeks in Canada. And second, Guru is still the fastest growing brand in English Canada with a growth rate of over 44% in all channels over the same period. confirming our current strategy. As a last note on competition, you may have seen in the last few weeks that several brands of energy drinks have been recalled for not respecting Canadian regulations regarding to caffeine content levels and labeling. We support those regulatory measures as we believe that good energy should not come at the expense of health, and this aligns with our mission to clean up the energy drink industry. Turning to slide six, Since the beginning of the year, we have put more emphasis on building direct connections in Canada with consumers through our in-store activations, social media content, and influencer engagement. We recently announced our partnership with Grady Dick, the Toronto Raptors' first draft pick of 2023, who will become a Guru brand ambassador. Grady is a rising NBA rookie star at the start of his professional career, who wished to be affiliated with a responsible and clean beverage company. We are thrilled that Grady has joined the Guru team and look forward to him playing a significant role with us. This partnership also represents Guru's commitment to promoting the amazing sport of basketball in Canada. We also decided to do something different for our fall marketing campaign. with a first social media challenge that will be hosted by Grady, as well as other high-profile influencers in Quebec, Toronto, Vancouver, over the next eight weeks. Our goal with the Feel Good Energy Challenge, held in English and French, is aimed at leveraging the power of celebrities and influencers across Canada to continue building brand awareness and engagement. As in the last few years, we will return to Canadian university campuses this fall by hosting back to school activities. This initiative has been gaining traction over the years and enables GURU to continue building brand awareness in the young adult demographic, just like we did historically in Quebec, which earned us the number one leadership position with the 18 to 25 young adult demographic in that province. On top of our marketing initiatives, Our in-store execution continues to improve each quarter with our distribution partner. PepsiCo has been working diligently towards making our energy drinks more available to retailers and consumers in Canada, including upcoming listings in Freshco and Farm Boy grocery outlets in English Canada. We're also working with PepsiCo to increase our presence in the food service sector, including universities and recreational channels. Lastly, we are moving forward with our efforts to enter the wholesale Club Channel market, which we believe has the potential to boost brand awareness, trial, and market share. Starting this September, we're thrilled to say that we're participating in a rotational program with Costco Quebec, which will feature Guru Original in 24 Costco locations. Please turn to slide seven as we review our U.S. operations. Our U.S. expansion strategy differs from our Canadian strategy as we look to expand in selective areas and channels where we can realize the best return, namely through natural food stores, online platforms, and the wholesale club channel. Q3 net revenue in the U.S. grew by over 38% to over $1.4 million, driven by less promotional pricing, improved online execution, and a record performance during Amazon's Prime Day this past July. We also completed a very successful rotational program in over 40 Costco locations in Los Angeles by selling an exclusive format of Guayusa Tropical Punch, which sold faster than expected. This rotational program allowed us to showcase our Tropical Punch to a larger market of Better For You consumers, which we hope will open doors to new opportunities in the U.S. Tropical Punch has been performing extremely well, becoming Guru's number one selling skew in natural food stores and grocery channels. It's also our fastest growing product in the grocery and drug channel. This December, on the heels of our Tropical Punch success in the States, we will launch Fruit Punch together with new innovations to be unveiled in the coming months. This timing will allow us to launch our latest and newest innovations starting with the online channel just in time for the holidays. Online sales continue to increase in Q3, driven by improved execution, return on ad spend, and Amazon's Prime Day record performance. We will continue to work on growing this segment's performance with a focus on the U.S. market and profitable growth. I will now turn the call to NG, who will provide you with more details on our financial results for the third quarter. NG, over to you.

Thank you, Carl, and good morning, everyone. Turning to slide nine. As Carl mentioned, this was our best quarter to date. Net revenue increased by 15% to a record $8.9 million in Q3, from $7.7 million for the same quarter in 2022. In Canada, sales grew by 11% to $7.5 million, driven by increased sales velocities and the summer's marketing campaigns. U.S. sales grew by 38% to $1.4 million, mainly due to online sales optimization and stronger return on lower promotional spend in all channels. Gross profit increased to $4.5 million from $4.2 million in Q3 2022. Gross margin decreased to 51.2% in Q3 2023 from 54.8% for the same quarter last year. mainly due to higher cost of goods sold and more promotional activity in Canada due to the fiercer competitive environment. SG&E was $8.1 million for Q3 2023, compared to $11 million for the same quarter last year. Selling and marketing expenses decreased to $5.7 million from $8.5 million in Q3 2022. as we took on a more targeted approach to our investment in sales and marketing campaigns during the current fiscal year. General and administrative expenses decreased to $2.4 million from $2.5 million in Q3 2022. Net loss per the quarter decreased significantly to $3 million, or $0.09 per share, compared to a net loss of $6.5 million for the third quarter last year, or $0.20 per share. The improvement in our net loss position mainly reflects the decrease in costs associated with brand, field, and trade marketing activities. In Q3, adjusted EBITDA amounted to a loss of $3 million, a $3.5 million improvement from a loss of $6.5 million for the same period last year, mainly due to lower selling and marketing expenses. As of July 31, 2023, Guru had cash and cash equivalents of $38.7 million and unused credit facilities totaling about $10 million. Our prudent balance sheet management puts us in a strong financial position to continue self-funding our growth with the ability to deploy the right investments aimed at our return to generating sustained profitability. Carl, back to you for concluding remarks.