KP Tissue Inc.

Good morning and welcome to KP Tissue's second quarter 2026 results conference call. Today's call is being recorded for replay. All participants are currently in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at the time for you to queue up for questions. If at any time you have difficulties hearing the conference, please press star followed by zero for operator assistance. I will now turn the call over to Doris Grbic, Director of Investor Relations. You may begin your conference.

Thank you, Operator. Good morning, everyone, and thank you for joining us to review Kruger Products' second quarter 2026 financial results. With me this morning is Dino Bianco, the CEO of KP Tissue and Kruger Products, and Michael Keays, the CFO of KP Tissue and Kruger Products. Today's discussion will include certain forward-looking statements. Actual results could differ materially from these forward-looking statements due to known and unknown risks and uncertainties. A list of risk factors can be found in our public filings. In addition, today's discussion will include certain non-GAAP financial measures. The reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found in our MD&A. The press release reporting our Q2 2026 results was published this morning and will be available on our website at kptissueinc.com The financial statements and NDNA will also be posted on our website and on CDAR+. The investor presentation to accompany today's discussion can be found in the investor relations section of our website. I will now turn the call over to our CEO, Dino Bianco. Dino?

Thank you, Doris. Good morning, everyone, and thank you for joining us for our second quarter earnings call for fiscal 2026. We maintained strong momentum in the second quarter of 2026, Highlighted by double-digit growth year-over-year and adjusted EBITDA to $90.6 million. This growth, achieved against an uncertain economic environment, was mainly driven by higher sales volume in the U.S. and lower pulp prices. Revenue grew nearly 3% in the second quarter, reflecting strong growth from our away-from-home business. Looking ahead to the second half of 2026... We anticipate ongoing market softness in the Canadian consumer market with some consumers trading down to private label products to contend with inflationary pressure. We have put in place a trademark recovery plan for the second half of 2026 which should deliver improving shares as we move through the year. Given the recent tariff announcements affecting North America, we do not expect the impact on our business to be significant. We will continue to closely monitor the impact of potential tariffs and develop contingency plans to mitigate any associated financial risk. For the longer term, we are making progress towards securing a preferred location for a new TAT facility in the western United States. And now I'd say let's take a closer look at our quarterly numbers on slide six. As previously mentioned, we delivered adjusted EBITDA of more than $90 million in the second quarter of 2026. This is up 25% year over year on a revenue of $550.9 million. Revenue in Canada declined 2.6% in the second quarter, reflecting the market softness I mentioned earlier. It should also be noted that we are facing a high comparable in Canada, with sales growth of 7.4% or $20.7 million in the second quarter of 2025, which is driven by strong made-in-Canada activities and promotion last year. Revenue in the U.S. remained robust with sales growth of 9.5% in the second quarter of 2026. Let's go to slide 7, which shows pulp average prices in Canadian dollars that increased sequentially in the second quarter of 2026. On a year-over-year basis, NBSK average prices declined 13.4% due to continued overcapacity, while BEK average prices were up 15.2% during the same period. Again, industry analysts expect both NBSK and BEK prices to trend upwards late into 2026 and into 2027, but BEK should accelerate at a faster pace and a higher level. Let's move on to our operations on slide eight. Production rates for paper machines and converting operations continue to exceed expectations across our network in Q2 and the first half of the year in general. We are very pleased to continue to maintain a strong safety culture and strong safety results through the middle of the year. At Memphis, our new state-of-the-art converting line, which launched early in the second quarter, is progressing ahead of plan, allowing us to expand our capacity and produce a wide range of high-quality tissue products for our U.S. customers. We are also pleased that our Memphis facility is delivering on key safety, productivity and Sustainability Metrics. And finally, as previously mentioned, we are progressing towards selecting a new TAT facility in the Western United States. Let's turn to slide nine on brand support. During the second quarter, we continued equity building campaigns for our cashmere, sponge towels, Scotties and Bonterra brands. We also leveraged our Made in Canada positioning with activities supporting cashmere and purex bathroom tissue. In addition, we modernized our cashmere packaging to enhance brand segmentation for our ultra-strong, ultra-soft, and original offerings, which should make it easier for consumers to shop our products. Also, during the second quarter, we launched our national and international award-winning Cashmere Ultra Luxe Bathroom Guide in Montreal, recognizing exceptionally luxurious restaurants' bathrooms in the Montreal area. We also introduced several product innovations in the second quarter, including the launch of sponge napkins premium, offering premium softness and strength in a napkin. And we expand our collection of nature-inspired plastic-free Bonterra official tissue boxes created by Canadian designer and TV personality Sarah Richardson with the introduction of single box offerings. Turn to slide 10. The data presented is taken from Nielsen and shows Kruger Products branded market share performance in Canada over a 52-week period ended June 13, 2026. The numbers reflect a soft Canadian market due to inflationary pressures and slower population growth. We also experienced some share losses in the bathroom tissue and paper towel categories with some consumers trading down to private label products. As previously mentioned, A share recovery plan has been put in place for the second half of 2026, which should deliver improving shares as we move through the year. In facial tissue, we increased our leadership position to 47% of the Canadian market, supported by continued strong investments in our Scottish brand and innovations. Let's look at Kruger Pro, our away-from-home segment on slide 11. Q2 2026 revenue and volume grew year-over-year, but profitability declined slightly due to high transportation costs. Although volume rose in both Canada and the United States in the second quarter, our U.S. business continued to drive stronger growth versus Canada. On a sequential basis, Kruger Pro delivered increased revenue volume and profitability. During the second quarter, we also announced a price increase to offset inflationary impacts on our Kruger Pro business, primarily driven by higher fuel and transportation costs. and finally strong operational performance continued to support sustained growth in the commercial market. I will now turn the call over to Michael.