Jamieson Wellness Inc.

Welcome to the Jameson Wellness Conference call to discuss the financial results for the third quarter of 2025. 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 for management is Mike Pilato, President and Chief Executive Officer, and Chris Snowden, Chief Financial Officer. Before I turn the call over to Mr. Pilato, please note that a press release covering the company's third quarter 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 the prepared remarks, which will follow. Continuous 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, under-reliance should not be placed upon them. We refer you to all risk factors containing Jameson's press release issued this afternoon and in filings with the Canadian security administrators for a more detailed discussion of the factors that could cause actual results to differ materially from Zola's 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 law. Finally, we would like to remind listeners that the company may refer to certain non-IFRS financial measures during the 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.

Thank you, Konstantin, and thank you to those joining the call to discuss our Q3 results. I am on the line today from our Jameson office in Shanghai, and will be heading over to join the team at the China International Import Expo later this morning. More on that in a moment, but good morning to those listening at 6 a.m. here in Shanghai, and good afternoon and good evening to those of us back home in North America. I'll start with an overview of our Q3 performance and highlights. Chris will then review the financials in detail before I conclude our prepared remarks and open the floor to questions. In Q3, we delivered another strong quarter with 16.5% branded growth and momentum across every major region. In China, our revenue is up over 60% in the quarter, and we grew our share position across all major digital platforms. We are proud to share that Jameson was recently named Vitamin Mineral Supplement Store of the Year on Douyin, one of the top social and e-commerce platforms in the country, with over 700 million daily active users. Our team on the ground here in Shanghai continues to actively evolve our marketing strategy to stay in line with consumer trends and behaviors, and it is paying off. Programs amplified by a diverse network of respected wellness influencers are delivering solid results across multiple platforms and channels. We're also continuing to see growth in our club and retail channels in China and significant gains in consumer trial and key brand equity metrics as we continue honing our marketing programs for maximum consumer engagement. Utheory continues to scale with revenue growth of almost 17% in Q3. Strong growth in both digital and traditional channels was led by product innovations, including our new ashwagandha gummy, in line with increasing consumer demand we're seeing for this ingredient in major markets around the world. Deeper consumer engagement with the brand continues to be a focus as our marketing and innovation teams continue to work together to meet evolving consumer needs. Internationally, revenue was up almost 20% in the quarter. We're driving double-digit growth in key markets led by the Middle East, with strong gains in markets such as Saudi Arabia, where Jameson now ranks as a leading foreign brand. We continue to see strong execution of promotional campaigns in support of the magnesium category and health parts in key markets, as an example. In Canada, our marketing campaigns featuring our product quality and Canadian-made message continues to resonate. driving growth and reinforcing trust in a market where we are the category leader. Innovation is also a key driver of growth, with our expectations for the year exceeded at the end of September, three months ahead of schedule. This is largely due to our new magnesium product launch earlier this year, resonating strongly with consumers in this trending category, over-delivering versus our expectations. We continue to closely monitor innovations launched last year, and those too continue to perform. led by ashwagandha and iron gummy products, highlighting the importance of the fun and delicious formats that Jameson is known for. We are not taking our foot off the gas in Canada. Products launched in the past couple of months will continue to drive performance through the end of Q4. As a result of our exceptionally strong branded performance, we have increased the midpoint of our branded revenue guide for fiscal 2025 and raised the top end of our revenue expectations from both China and Utheory. which Chris will discuss in more detail shortly. Our results this quarter and the quarters before it continue to reinforce what we already know. Momentum in the vitamin and mineral supplement category continues to be strong with no signs of slowing. Consumers continue to increase the amount of time they spend online focusing on education while engaging with digital communities to support their health and wellness journey. It is imperative that we understand this rapidly and changing environment and continue to show up where and how our consumers expect us to. In support, I am pleased that we have welcomed Gail Tate to our board of directors, effective at the end of October. Gail is a CPG and tech executive with over 25 years' experience, including roles at Google and L'Oreal. She has an impressive track record of driving enterprise expansion and value, particularly through digital innovation in both C-suite and board roles. She currently serves on the board of a leading cosmetics and skincare company, where she has helped guide the company through a period of hyper-growth, pioneering in non-traditional digital channels to drive connection with consumers. Gail's appointment comes at the perfect time as Jameson's digital journey continues to evolve, and we look forward to leveraging her expertise and insights as we grow. And as I mentioned earlier, I'm in Shanghai this week supporting our team at the China International Import Expo. As our presence in China continues to grow, events like this offer fantastic opportunities to bring Jameson to the forefront with local and international media, industry, consumers, and also a chance to continue to foster relationships with officials at all levels of government. This is Jameson's first time attending this expo, and I'm really looking forward to experiencing it firsthand and representing our incredible brand on this global stage. And with that, I will turn the call over to Chris to discuss the financials in more details. Chris, over to you.

Thank you, Mike. And good morning and good afternoon, everyone, wherever you may be listening from. In the third quarter, consolidated revenue increased by 13.2% to $199.3 million. Growth was driven by our Jameson brand segment, which exceeded expectations with growth of 16.5%, increasing to $180.5 million. Each of our branded business units grew revenue in the third quarter as follows. China increased by 63%, primarily driven by successful digital performance marketing campaigns. Utheory increased by 16.8%, driven by strong consumption in e-commerce, innovation, and growth in our traditional channels. International increased by 19.3%, driven by growth in core markets in the Middle East and innovation and with distribution gains. Canada increased by 4%, largely reflecting consumer consumption, driven by our latest marketing campaign and innovations. Revenue in our strategic partner segment had expected decrease of $2.4 million in the third quarter, impacted by a reduction of our consumers' business and timing of our onboarding new customer contracts. Consolidated gross profit margin increased by $16 million in the third quarter, mainly driven by higher branded revenue and margins. Consolidated gross profit margin increased by 350 basis points, mainly due to a higher proportion of growth in Jameson brand sales. In the Jameson brand segment, gross profit increased by $16 million, mainly driven by revenue growth and higher margins. Gross profit margin in Jameson Brands increased by 290 basis points, mainly driven by higher branded volumes in China, our highest margin business. In Strategic Partners, gross profit was $2.4 million, which is consistent with the same quarter of last year, and gross profit margin increased by 170 basis points, mainly driven by customer and program mix. SG&A expenses increased by 24.7% in the quarter. Excluding the impact of specified costs, SG&A expenses increased by $12.2 million, or 31.7%, of which approximately $6.8 million was mainly due to the timing of variable compensation, and $5.3 million was due to investments to grow our brand in through variable e-commerce marketing campaigns and the weighting of influencer programs scheduled for the quarter. Specified costs of $1.8 million are mainly comprised of system development costs and post-implementation startup costs associated with our SAP implementation, plus other non-recurring expenses primarily related to non-operating legal costs. Operating income increased by $5.4 million driven by higher gross profit and partially offset by our investments in SG&A. On a normalized basis, operating income increased by $3.6 million and adjusted EBITDA increased by $4.1 million to $38 million. Adjusted net earnings was $17.7 million, or $1.8 million higher than the third quarter of the previous year. A reconciliation of adjusted EBITDA and adjusted net earnings is provided in today's press release announcing our third quarter results. Turning to the balance sheet and cash flow. We generated cash from operations before working capital considerations of $22.8 million, an increase of $4.3 million from the prior year. Cash invested in working capital increased by $20.8 million, mainly due to higher inventories to support seasonality, including growth of our business, and to help secure supply amidst tariff uncertainties and port congestion. In the third quarter, we purchased, for cancellation, 255,705 common shares under our NCIB program for aggregate consideration of $8.8 million at an average price of $34.52 per share. In Q3, we distributed $9.7 million in dividends and ended the quarter with almost $128.8 million in cash and available operating lines. Based on the strength of our cash flow forecast in the year, we have announced a dividend of 23 cents per common share or approximately $9.6 million in aggregate. The dividend will be paid on December 15th 2025 to common shareholders of record at the close of business on December 1st, 2025. Now turning to outlook. Our 2025 investments in digital performance marketing and innovation continue to provide returns, while consumer consumption remains strong across each of our primary markets. As a result, we have narrowed our full year guidance for fiscal 2025. maintaining the midpoint of our growth expectation for both consolidated revenue and adjusted EBITDA. We now expect the following consolidated results. Revenue to range between $810 and $830 million, 10.4 to 13.1% growth from our previous expectation of 9 to 14.5% growth. Adjusted EBITDA to range between $158 and $162 million or 12% to 15% growth from our previous expectation of 11% to 15.5% growth. Adjusted diluted EPS to range from $1.82 to $1.88 or 13% to 17% growth from our previous expectation of 11% to 18% growth. We are adjusting our segment outlook for fiscal 2025 to reflect higher Jameson Brands revenue in China delivered by continued success of our digital investment strategy, innovation and category growth and lower strategic partner revenue to account for the planned reductions with an existing customer and timing of onboarding our new customers and programs. For Q4 2025, our guidance reflects continued Jameson Brands growth, building a pronged upon strong momentum in the first three quarters of 2025. Jameson Brand's business is based on strong consumer consumption, product innovation, and distribution gains. In the fourth quarter of 2025, we expect the following. Consolidated revenue of between $263 and $283 million, reflecting growth of 7% to 16%. Revenue in the Jameson brand segment is expected to increase by 8% to 17.5% to approximately $218 to $238 million, driven by consumer demand, innovation, and growth across all key markets. Revenue in the strategic partner segment is expected to grow by up to 10% to approximately $45 million due to new business partnerships. We anticipate adjusted EBITDA to range from between $65.8 and $69.8 million. As well as fact, 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? Thank you, Chris.