MTY Food Group Inc.

Good morning and welcome to the MTY Food Group 2026 Third Quarter Earnings Conference Call. At this time, all participants are in the listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided for you at that time for questions. If anyone has any difficulty hearing the conference, you may press star zero for operator assistance at any time. Listeners are reminded that portions of today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on MTUI food groups, risks, and uncertainties related to these forward-looking statements, please refer to the company's Annual Information Form dated February 19, 2026, which is posted on CEDAR+. The company's press release, MD&A, and financial statements were issued earlier this morning and are available on its website and on Cedar+. All figures presented on today's call are in Canadian dollars unless otherwise stated. This morning's call is being recorded on Friday, October 9, 2026 at 8.30 a.m. ET. I would now like to turn the call over to Mr. Eric Lefebvre, Chief Executive Officer of MTY Food Group. Please go ahead, sir.

Thank you and good morning, everyone. Renée and I will begin today's call by going through our third quarter results, followed by addressing the conclusion of the company's strategic review. Starting with our third quarter results, there was a combination of challenges and advancements over the summer. We were pleased to see same-store sales sequentially improve in Canada to essentially flat, while softer results prevailed in the U.S. at minus 2.7%. The third quarter was not only impacted by persistent consumer caution, but also by the timing of Labor Day, which pushed the lucrative long weekend into Q4. In the current environment, we remain focused on driving compelling guest experiences, exciting menu innovation, and leveraging the power of digital sales to drive our banners. Despite growing complexity in the restaurant industry, our discipline has allowed us to maintain our core franchise segment margins stable at 54% and increased our free cash flows to shareholders by over 10% in Q3. Last quarter's performance brings our free cash flows net of rent payments per diluted share to $5.57 in the last 12 months, an increase of 6.7% over the previous 12 months. The food processing, distribution and retail segment was also able to maintain relatively stable margins, despite facing challenges and timing issues on key product promotions. Although revenues for this segment were down this quarter, our brands continue to have significant growth potential in this category, and we expect results to show steady improvement in the coming quarters. Shifting to store openings, our pipeline remains robust, as demand for some of our concepts from new and existing franchisees remains strong. 27 new stores that were slated for Q3 have been pushed into Q4 as a result of various uncontrollable delays resulting in negative net openings in the third quarter. Therefore, we continue to expect a healthy level of net new store openings by next quarter and in subsequent periods. Moving to corporate stores, our decision to exit numerous underperforming locations is well underway and we expect the bulk of these one-time costs to be reflected over the next two quarters. The associated benefits will gradually follow starting next quarter. We've also identified an additional seven stores for closure, in addition to the 68 previously announced, bringing the total to 75 stores. Our cost estimate remains the same as before, despite the additional locations identified for closure. The rationalization of corporate store marks an important step for the company in our pursuit of value creation, growth, and taking decisive action. In the past 12 months, we've shown our commitment to creating shareholder value, and I'm excited by the many opportunities before us. With that, I'll turn it over to Renée to discuss the financials. Renée.

Thank you, Eric, and good morning, everyone. Before we begin, just a reminder that we transition to a 52-week reporting basis, ending on the Sunday closest to quarter end, and in this case, it's August 30th. Therefore, there is one day less in actual results compared to the prior year. Normalized adjusted EBITDA came in at $60.8 million during the 13-week period, a decrease of $13.2 million due to a reduction in profitability for the corporate store segment. Corporate store segment profits were negatively impacted by a combination of weaker sales, a $4.6 million delta in non-recurring employee retention credits that we received last year, as well as $0.5 million in lease exit costs. We remain disciplined in our analysis of corporate stores Identifying those that are worth reinvesting in and others that are better suited for closure. We anticipate significant improvements in the segments next year, including an estimated 2.5 million benefits directly attributable to the closures of underperforming locations. At the end of Q3, we had already closed 50 of the 75 locations identified for closure. Turning to our bread and butter, the franchise segment, revenue increased 1.6% to $102.4 million for the quarter. The lifted revenues came from the U.S. and international segment, with increases in recurring revenue streams and higher sales related to our gift card program. Consolidated normalized adjusted EBITDA for the segment improved by 1%, while margins held steady at 54%, as we offset wage inflation by improved cost efficiency in our controllable expenses. Moving to the food processing distribution and retail segment, revenues decreased by 12.6% to $41.6 million, primarily due to delays in promotional activities. MTY has launched several new exciting products in the segment, and we expect a recovery in sales momentum by next year. Normalized adjusted EBITDA decreased by $0.7 million, broadly in line with the decline in revenues, as operating expenses remain closely aligned with sales levels. Despite the decrease, normalized adjusted EBITDA margins improved to 11% compared to 10% in the prior year. Digital sales totaled $279.2 million this quarter, an increase of 0.5%, excluding the impact of foreign exchange. The sales channel represented 19.8% of total sales in Q3, up from 19.3% last year. We continue to see significant potential in Canada to expand our market share in digital sales. In terms of net income, we saw an increase of 5.9% in adjusted earnings per share in Q3, reaching $1.26 per share, primarily due to foreign exchange and lower income tax expenses. We continue to generate strong free cash flows, net of lease payments with an increase of 10.3%, primarily due to lower taxes paid and improved working capital movement compared to prior year, as well as higher proceeds on disposal of corporate stores. Moving to our balance sheet, we ended the quarter with net debt of $515.1 million and have repaid over $20 million so far in Q4. This brings our net debt to EBITDA ratio to approximately 1.9 times. And with that, I'll turn the call over to Eric to discuss the conclusion of our strategic review.