Jamieson Wellness Inc.

Thank you for standing by. This is the conference operator. Welcome to the Jameson Wellness Conference Call to discuss the financial results for the first quarter of 2025. As a reminder, all participants are in listen-only mode and the conference is being recorded. Please be advised that the reproduction of this call, in whole or in part, is not permitted without written authorization from the company. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. 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. Palato, please note that a press release covering the company's first quarter 2025 financial results was issued this afternoon, and a copy of that press release can be found in the investor relations section of 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 to all 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 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 these 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 would now like to turn the conference over to Mr. Palato. Please go ahead, sir.

Thank you, Gaylene, and good afternoon, everyone. Thank you for taking the time to join us on the call today. I'll start with an overview of our Q1 performance and key growth activities. Chris will then review the financials in detail before I conclude our prepared remarks and open the floor to questions. In the first quarter, consolidated revenue increased by 14%, with growth in both of our segments and our brand and business exceeding our expectations. We also grew adjusted EBITDA ahead of revenue in the quarter, reflecting both sustained global demand for our products and our teams continued execution of our growth strategy. In China, our business expanded by over 50% as our brand awareness continues to grow. Our investments in demand generation drove growth in social commerce, retail, and cross-border channels. Our business on a key online platform in China nearly doubled in Q1, and successful Women's Day and Chinese New Year campaigns with a top key opinion leader drove more than 1.5 million consumer engagements in the quarter. In Canada, revenue increased by over 14% as strong consumption continued to outpace market growth, led by continued growth in e-commerce and club channels, while lapping lower shipments in Q1 2024 as a result of the labour disruption in this time period last year. International revenue increased by almost 30% in the quarter, driven by increased consumption in multiple markets around women's health and immunity campaigns, and the lapping of lower shipments at the same time prior year due to the work stoppage. In the U.S., we are on track to meet our growth expectations with the Utheory brand as we continue to expand with our new e-commerce partner. Growth in the quarter, driven by strong double-digit consumption increases, was offset by the impact of a large innovation pipe fill in Q1 2024, resulting in an expected shipment decrease of 13%. Utheory Innovation in 2024 was launched in the first half. This year, new product launches are concentrated in the second half of the year, and we will see the results of that beginning in Q3. In our strategic partner segment, revenue increased by almost 15%. New contracts that we secured in the fourth quarter began shipping, and we benefited from some timing of customer orders. It has been a busy start to 2025 at Jameson Wellness, and we have no intention of slowing down. Our 2025 innovation cycle kicked off with several new gummy products launched into the Canadian market to support women's health, digestive health, and immunity. The Utheory GLP-1 lineup, still in its early days, continues to grow in the US market. A new liver health product was launched in China, and we secured new distribution of sleep and prenatal support products in several of our international markets. In March, we successfully launched our new ERP system, which our team has been working hard on for several years to implement. Our new SAP system establishes a platform on which to grow our global operations while enhancing our visibility and improving data management, driving efficiency, and timely decision making. We are proud that the launch went smoothly with no disruption in manufacturing, shipments, or business as our continued focus on executional excellence was on full display. Also in March, we held our first Investor Day here in Toronto. We spent the day introducing the investment community to our very strong leadership team and dove into our strategy and growth aspirations. The event was live streamed and the recording is available to view on our website at jamesonwellness.com. Underpinning all of these projects and accomplishments is the need to ensure they are conducted in a way that is sustainable for our business and our planet. In the quarter, we released our second annual sustainability report, detailing our progress towards our 2030 and 2050 sustainability targets, and you can also find that on our website at jamisonwellness.com. We want to thank you for your support as we continue to deliver innovative natural health solutions and build on our foundation to drive profitable growth. Now let me turn it over to Chris to discuss our financial performance in more detail. Chris?

Thank you, Mike, and good afternoon. In the first quarter, consolidated revenue increased by 14% to $146 million. This growth was driven by Jameson Brands, which exceeded our expectations with growth of 13.9%. We also grew our strategic partners segment with an increase of 14.9%. Looking deeper into our branded revenue growth by business unit, Jameson in Canada grew by 52.1% compared with Q1 2024, driven by digital commerce outpacing the market and continued growth in domestic retail and club channels. As expected, U Theory revenue declined by 13% as strong double digit consumption growth was offset by the timing of innovation with a large pipe fill in Q1 2024. For comparison, Q1 2025 revenue grew by 19.3% when compared with Q1 2023. Revenue in Canada increased by 14.3%, driven by consumption and pricing growth of 11.2%, and the timing impact on shipments from our Q1 2024 labour disruption. International revenue increased by 28.8%, driven by growth in the Middle East and Asia, contributing 18.3%, and 10.5% growth from the timing due to the labor disruption in the prior year. Consolidated gross profit increased by $12.4 million, while normalized gross profit increased by $10.4 million, mainly driven by higher revenues and increased margins. Gross profit in the first quarter of the prior year included non-recurring costs associated with the work stoppage previously mentioned. Consolidated gross profit margin increased by 440 basis points to 37.8% in the quarter, while normalized consolidated gross profit margin increased by 270 basis points. Margin improvement was primarily due to the branded volume-driven efficiencies and favorable channel mix. In the Jameson brand segment, gross profit increased by $12.7 million, while normalized gross profit increased by $10.4 million, mainly driven by revenue growth and higher branded margins. Gross profit margin in the Jameson brand segment increased by 520 basis points, while normalized gross profit margin increased by 320 basis points to 41.7%. mainly due to volume-driven efficiencies and favorable channel mix in China. In our strategic partner segment, gross profit margin decreased by 320 basis points to 9.8%, while normalized gross profit margin decreased by 160 basis points, mainly impacted by customer mix. In the quarter, selling general and administrative expenses of $49.6 million reflected an increase of 25.4%. Excluding the impact of specified costs, SG&A increased by $7.3 million, or 21%, mainly driven by investments in resources and marketing to grow our brands globally, most notably in China. Specified costs of $7.4 million are mainly comprised of IT system costs, and the donations to support communities impacted by the wildfires adjacent to our facility in California. Operating income in the third quarter increased by $2.1 million, driven by higher gross profit and partially offset by our investment in resources and brands. On a normalized basis, operating income increased by $2.8 million and adjusted EBITDA increased by $3 million or 18.6% to $19.1 million. Adjusted net earnings in the quarter was $5.9 million, or $2 million higher than the prior year. A reconciliation of adjusted EBITDA and adjusted net earnings is provided in today's press release announcing our first quarter results. Turning to the balance sheet and cash flow. In Q1, we generated cash from operations before working capital of $4.7 million, consistent with the prior year. Cash generated from working capital increased by $38.8 million, mainly due to the timing of customer collections, partially offset by higher planned inventories. Also in the quarter, we purchased for cancellation 348,160 common shares under our NCIB program for an aggregate consideration of $10 million and an average share price of $28.71. In Q1, we distributed $8.9 million in dividends and ended the quarter with $246.1 million in cash and equivalent available operating lines. Based on the strength of our cash flow forecasted in the year, we have announced a dividend of 21 cents per common share, or approximately $8.8 million in aggregate. The dividend will be paid on June 13th, 2025 to common shareholders of record at the close of business on May 30th, 2025. Now turning to the outlook. We maintain our outlook for fiscal 2025. In the second quarter, our guidance reflects shipment growth built upon a very strong growth in the second quarter of the prior year. In Q2, we expect the following. Revenue in the Jameson brand segment is expected to increase between 5% and 10%, comparing to exceptional growth in the second quarter of 2024, with growth of 17.2% as a result of the order backlog from the prior year work stoppage impacting that year's first quarter. Revenue in the strategic partner segment is expected to decrease between 20 and 30% due to existing customer order timing and innovation with several new programs shifting into the third quarter. Based on the factors noted, we expect consolidated revenue of between $185 and $195 million, contributing growth of up to 5%. We anticipate adjusted EBITDA to range between $32 and $34 million, or growth of up to 7.5%. Our 2025 guidance does not include any potential impact from tariffs imposed on trade between the United States and other countries. While we recognize the situation is constantly evolving, based on the currently announced tariff framework, we do not expect a material impact on our business or earnings guidance. As such, actual results may differ from those in this guidance due to unforeseen changes in trade policies or economic conditions. A complete discussion of our outlook for the second quarter and full year fiscal 2025, as well as factors impacting our expected performance, is included in the outlook section of our MD&A filed this afternoon. And with that, I will turn the call back to Mike for closing comments. Mike.