Jamieson Wellness Inc.

Good afternoon, everyone. Welcome to the Jameson Wellness Conference call to discuss the financial results for the fourth quarter and full year 2024. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Please be advised that the reproduction of this call in whole or in part is not permitted without written authorization from the company. As a reminder, today's call is being recorded. On the call today from management are Mike Pilato, President and Chief Executive Officer, and Chris Snowden, Chief Financial Officer and Corporate Secretary. Before I turn the call over to Mr. Pilato, please note that a press release covering the company's fourth quarter 2024 financial results was issued this afternoon, and a copy of that press release can be found in the investor relations section on the company's website. Please note that the prepared remarks which will follow contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you all to risk factors contained in Jameson's press release issued this afternoon and in filings with the Canadian Securities Administrators. for a more detailed discussion of the factors that could cause actual results to differ materially from those of projections and any forward-looking statements. The company undertakes no obligation to publicly correct or update the forward-looking statements made during the presentation to reflect future events or circumstances, except as it may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non-IFRS financial measures during this teleconference. A reconciliation of this non-IFRS financial measures was included with the company's press release issued earlier today. Also, please note that unless otherwise stated, all figures discussed today are in Canadian dollars and are occasionally rounded to the nearest million. I will now turn the call over to Mr. Pilato to get started. Please go ahead, sir.

Thanks, John. Hello, everyone, and thanks for taking the time to join us for our Q4 and 2024 results. On today's call, I will share our strong 2024 performance with you in some detail before turning it over to Chris for a review of our Q4 financials and guidance for 2025. Then I'll conclude with some additional colour around our key operational and strategic initiatives before taking your questions. 2024 was another strong year for Jameson Wellness, as global consumer demand for our products reached new highs and health and wellness continued to dominate consumer trends. Our strategic execution and brand strength drove market share gains across all key markets, delivering 14% branded revenue growth in the year. Importantly, this performance also translated into substantial cash generation, with record cash flows and EBITDA margins exceeding our expectations. Looking at the year from a high level, Consolidated revenue increased nearly 9%, crossing the $700 million mark to $734 million. Adjusted EBITDA was a record high of $141 million, with adjusted EBITDA margins of over 19%. Adjusted diluting earnings per share was $1.61, and diluted earnings per share was $1.19. Strong results in 2024 stemmed from consistent, coordinated execution of our strategy. driving growth across all branded business units. Branded revenue continued its momentum with growth of just over 14%, offset by 16% lower strategic partners revenue, as expected and discussed on past calls. We began shipping to a new customer in the strategic partner segment in Q4, driving 7% growth, and we anticipate this portion of our business to reach 2023 highs again in 2025. We further expanded our Canadian market leadership in 24 through targeted marketing programs that celebrated our heritage of domestic manufacturing, quality, and trust. This business delivered strong revenue growth, exceeding overall market performance with increases in both dollar and unit consumption, reflecting sustained consumer interest in foundational health products and innovative natural solutions, and the success of in-market pricing during the year. The continued successful implementation of our accelerated investment strategy in China delivered nearly 80% reported revenue growth in this key market. Our targeted investments to drive brand awareness and increase market penetration in traditional retail channels yielded strong results. We continue to see growth through successful demand-driving marketing initiatives supporting our cross-border e-commerce programs, particularly during promotional windows like the 6-18 and 11-11 events. Our 11.11 campaign in Q4 grew by 51%, comping impressive growth in the prior year as well. Our Utheory expansion continued to gain traction in 24, with new distribution, e-commerce, and international expansion revenue increasing by almost 20%. Consumer consumption within our traditional customer set continued to outpace market growth, particularly for trending products like Ashwagandha and Shilajit. In Q4, we continued to see distribution gains drive growth, partially offset by the timing of promotional purchases within our traditional distribution base, and we were proud to get our GLP-1 support products to market as a test launch. Innovation and consumption growth were the core drivers of our international growth of plus 16% on a constant currency basis in 24, with notable gains in both the Middle East and Europe, as consumers deepened their engagement with the Jameson brand. This strong performance, complemented by market expansion, demonstrates continued momentum throughout our global footprint. Looking at the year ahead, we're executing from an even stronger foundation. The global megatrends propelling our industry continue to gain momentum, creating unprecedented opportunities for growth. Our strategic marketing investments are already delivering tangible results, driving revenue growth, improving profitability metrics, and generating sustained improvements in cash flow. The remarkable journey we've been on since 2017 is truly just the beginning of what this exceptional company will achieve. With our latest guide for 25 showing revenue and adjusted EBITDA growth of 144% and 130% respectively since our IPO. With that, I'm going to turn it over to Chris for some more details on our financials.

Chris. Thank you, Mike. And good afternoon, everyone. In the fourth quarter, Consolidated revenue increased by 11.1% to $244.8 million, driven by growth in both Jameson Brands and our strategic partners segment. Jameson Brands revenue increased by 11.9% to $202.6 million. Jameson Canada revenue increased 11.4% to $105 million, driven by strong consumer consumption and in market pricing. Utheory revenue was $56.3 million in the quarter with international new distribution and e-commerce revenue increasing by over 25% in the quarter through innovation and expanded offerings. Total Utheory growth was 2.3% or 9% year to date. Despite double digit consumption growth, this was offset by the impact of pricing changes associated with our new e-commerce partnership, and the timing of promotional purchases within our traditional customer base. In China, revenue increased 38.9% on a constant currency basis. This is in addition to the 90% pro forma growth in the fourth quarter of 2023. This reflects the successful investment strategy to drive trial, brand awareness, market penetration, and our highly successful 1111 e-commerce programs. Jameson International revenue increased by 14.2% on a constant currency basis, driven by innovation and growth in the Middle East and Europe. Strategic Partners revenue grew 7.1% in the quarter, driven by customer ordering patterns and the initial shipment of new programs commencing during the fourth quarter. Normalized gross profit margin increased by 400 basis points after adjusting for the normalization of fair value inventory acquired in the prior year. Within the Jameson brand segment, gross profit margin increased by 620 basis points to 46.6%, while normalized gross profit margin increased by 490 basis points, mainly driven by volume growth, operating efficiencies, and favorable channel mix in China. Gross profit margin in the strategic partner segment decreased by 130 basis points to 13.8% in Q4, impacted by lower volumes in year. SG&A expenses of $49.1 million in Q4 increased by $6.8 million, or 16%, compared to Q4 2023. Excluding the impact of specified costs, SG&A expenses increased by $9.1 million, mainly driven by the timing of variable compensation and investments to grow our brands as we continue to prioritize our global expansion initiatives. Specified costs of $3.8 million in Q4 are mainly comprised of $2.1 million in developmental costs associated with our IT system implementation to augment our system infrastructure. Adjusted net earnings were $34.6 million in the quarter, representing a year-over-year increase of 21%. Our adjusted earnings per diluted common share was $0.80, a 19% increase compared to the prior year. A reconciliation of adjusted EBITDA and adjusted net earnings is provided in today's press release, announcing the company's fourth quarter results. Turning to the balance sheet and cash flow. We generated $37.8 million in cash in the fourth quarter from operations, an increase of almost 45% compared to the prior year. Cash from operations before working capital considerations of $41.3 million was more than double the $20.4 million generated in the prior year's fourth quarter. Higher cash flow was primarily related to higher earnings, as volumes and expanded margins drove growth in the bottom line. Excluding non-cash items, cash invested in working capital increased by $9.2 million, driven by timing of sales and customer collections in the quarter, partially offset by higher outstanding payables. In the fourth quarter, we distributed almost $9 million in dividends and ended up with $237 million in cash and available operating lines. Based on our strong cash flow and earnings, We have announced a dividend of 21 cents per common share, payable on March 14th, 2024, to all shareholders of record as of March 7th. Now turning to guidance. In 2025, we remain focused on profit contribution, driving operating efficiency at the gross margin level while continuing to invest to drive growth in our Jameson and Utheory brands. In fiscal 2025, we expect... Consolidated revenue between $800 million and $840 million, representing 9 to 14.5% growth. Adjusted EBITDA of between $157 and $163 million, or growth of 11 to 15.5%. Adjusted EBITDA margins to range from 19 to 19.5%. Adjusted diluted earnings per share, of $1.82 to $1.93 or growth of 13% to 20%. We expect our Jameson brand segment to deliver revenue growth of 9% to 14.5% in 2025, driven by ongoing traction in China and growth in the US through our focus on expanded digital e-commerce. We expect strategic partners revenue to grow between 10% and 15% driven by new customer initiatives and programs. Our 2025 guidance does not consider any potential impact of tariffs imposed on trade between Canada and the United States. As such, actual results may differ from those expressed or implied in this guidance due to unforeseen changes in trade policies or economic conditions. A complete discussion of our 2025 and our Q1 2025 guidance as well as factors impacting our expected performance, is included in the outlook section of our MD&A file this evening. Now with that, I will turn the call back to Mike.