GURU Organic Energy Corp.

Welcome to the Guru Organic Energy 4th Quarter and Year-End 2023 Results Conference Call and Webcast, being recorded today, January 25, 2024, 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 available be provided at that time for you to queue up for questions. If anyone has any difficulties hearing in the conference, please press star followed by zero for operator assistance at any time. Uber's press release, MD&A, and financial statements are available in the investor section of its website and on Cedar Plus. During the call, the company may refer to certain non-GAAP measures. Reconciliations are available in its M, D, and 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 Goyette, Guru's Chief Financial Executive Officer.

Thank you, Operator. Bonjour à tous. Good morning, everyone, and welcome to our earnings call. Joining me this morning is our CFO, Angie Serrat. For those who are following the webcast, you can turn the presentation to slide five. Fiscal 2023 marked the end of our transition period with PepsiCo and a return towards growth for Boone. Over the last three quarters, we have posted average sales growth of over 10%, ending the year with 13% growth in the fourth quarter. Several factors contributed to this improved performance over the last three quarters. First, Our retail sales growth in the rest of Canada continued to pose steady gains, mainly in major urban centres, and enabled us to climb to the fourth place among energy drink brands in British Columbia. Secondly, our online activities in the United States experienced significant growth this year. In addition, we have increased our presence in the Warehouse Club sales channel, where the number of rotational programs continues to grow, thanks to strong demand for our products. Finally, we continue to enjoy profitable growth in our core market of Quebec, where we are the third largest brand. One of the driving forces behind our success has been the popularity of our innovations, such as Tropical Punch and Fruit Punch. In recent years, both the consumer and the energy drink category have evolved considerably. In order to succeed and thrive in this fiercely competitive market, we have proactively adjusted our marketing strategies and consistently introduce new, innovative, and appealing products. Our success in the Quebec market is based on a product and brand that delivers good energy and that tastes great. We continue to see through market research that once consumers try a Guru product, a large portion of them adopt it as one of their favorite energy drink brands and become advocates for the brand. This is why we decided to expand in Canada and the U.S. Innovation is at the heart of our expansion strategy since it gives consumers even more choices to enjoy Guru's good energy. We are currently on track with our priorities for 2024. We try to grow sales and reduce loss to accelerate our return to profitability. As a matter of fact, in fiscal 2023, we significantly reduced our net loss by $5.6 million, or 32%. while continuing to achieve growth margins of over 52%. Turning to slide 6. This year marks our 25th anniversary, and with it comes a year of exciting initiatives, including new flavors. This spring will feature the unveiling of our Revent website, with enhanced Transactional features, this digital upgrade aims to improve transaction execution and ensuring a superior consumer experience. We've also been working on our 2024 planograms with PepsiCo and retailers across Canada. In the first quarter, we will be introducing Peach Mango Punch to retailers in Canada, along with an amazing new innovation in our Quebec market to be unveiled early in the second quarter. We are excited to share additional details of our growth plans for 2024 as we move forward. Lastly, we have participated in two successful rotational programs with Costco Québec in 2023. The latest 16-week program started in November and is performing well. We're confident that we will have the opportunity to showcase GURU in the rest of Canada as well. Please turn to slide seven as we review our U.S. and online 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 and premium food stores, online platforms, and the wholesale club channel. Fourth quarter U.S. sales grew by over 121%. to $1.3 million from $0.6 million in Q4 of 2022. The strong performance was mainly due to continued online growth and lower comparison due to last year's one-time price discount. To illustrate the positive momentum of our U.S. online activities, we achieved over 130% growth on Amazon Prime Day event and triple sales during Black Friday and Cyber Monday on Amazon. compared to the same period last year. On the heels of our strong online performance, we launched Fruit Punch in our new 2024 innovation, Peach Mango Punch, in the US on Amazon in December and January, respectively, and will proceed with their retail launch in February. This is the first time we have initiated the launch in the US before Canada. The move was a strategic one, motivated, by the timing and success of our punchline energy drinks in the US on Amazon. Going forward, we'll continue to work on growing our online activities with a focus on the US market and profitable growth. In the retail channel, Tropical Punch also continued to perform extremely well as our number one selling product in the natural food and grocery channels, giving us momentum for additional listings. In fact, Ofu's Market just confirmed the listing of Tropical Punch nationally in over 500 stores for the upcoming spring reset period. Also, the addition of Fruit Punch and Peach Mango Punch to the U.S. Punch lineup could help us boost sales in this channel. Finally, we look forward to further growth in Costco wholesale as we will feature our Punchline innovations in two rotational programs scheduled to start in February in California and in the Midwest. I will now turn the call to Ingi, who will provide you with more details on our financial results for the fourth quarter. Ingi, over to you.

Thank you, Carl, and good morning, everyone. Turning to slide nine, I will begin by reviewing our latest financial results. Q4 represents the third consecutive quarter of growth for Guru, with net revenue increasing by 13% to $7.7 million, from $6.8 million for the same quarter in 2022. Sales in Canada grew to $6.4 million, driven by increased sales velocity. In the U.S., sales grew to $1.3 million in Q4 2023, mainly due to continued online growth. Growth profit also increased to $4.1 million in Q4 2023, from $3.5 million in Q4 2022. Growth margin grew to 53.4% in Q4, from 52.1% for the same quarter last year, and from 51.2% in Q3 2023. The sequential growth from Q3 2023 was mainly due to selling larger formats in the US and an improved product mix in Canada, which allowed us to decrease costs. SG&E was $8.3 million in Q4 2023, compared to $7.8 million in Q4 2022. Selling and marketing expenses increased to $5.7 million from $5.5 million in Q4 last year. As we made more targeted in-store investments, signed our first professional active deal, and produced our first national social media campaign. Net loss for the fourth quarter decreased to $3.7 million compared to a net loss of $3.9 million for the fourth quarter last year. Net loss for fiscal 2023 decreased by $5.6 million to $12 million from a net loss of $17.6 million a year ago, mainly due to lower selling and marketing expenses and higher net financial income during this fiscal year. Adjusted EBITDA amounted to a loss of $3.8 million in Q4 compared to a loss of $4 million for the same period last year. As at October 31, 2023, Guru had cash equivalents and short-term investments of $33.8 million and unused credit facilities of $10 million. Our prudent balance sheet management allows us to be in a strong financial position to continue self-funding our growth with the ability to deploy the right investments aimed at our return to sustained profitability. Carl, back to you for concluding remarks.