Rogers Sugar Inc.

Good morning, ladies and gentlemen. Welcome to the Roger Sugar, Inc. Analyst Call August 12 Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press the star zero for the operator. Before we begin, please be reminded that today's call may include forward-looking statements regarding our future operations and expectations. Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. Please also note that we may refer to some non-IFRS measures in our call. Please refer to the forward-looking disclaimers and non-IFRS measure definitions included in our public filings with the Securities Commission for more information on these items. A replay of this call will be available later today. The replay numbers and passcodes have been provided in our press release, and an archived recording of this call will also be available on our website. I'll now turn the call over to Mike Walton, President and CEO of Roger Sugar. Please go ahead.

Thank you, Operator, and good morning, everyone. Thank you all for joining us today. I'll begin the call today with a discussion of market conditions in our sugar and maple markets, and then go into some highlights of our third quarter. I will also update you on our LEAP project, which continues to move ahead as we prepare to meet the growing needs of our sugar customers over the long term. Then I will turn it over to JS, our Chief Financial Officer, for a detailed review of our financial results. I will conclude with an outlook for the remainder of fiscal 2025. As usual, we have an investor's presentation accompanying this call. This presentation is available on the investor section of our website if you want to follow along. I'll begin by stating that we are in a very resilient business. On our last quarterly call, I shared with you that the impact of changing expectations around trade and tariffs had very little impact on our business and that of our customers. It is worth noting that much of what we and our customers export to the United States is administered under the KUSMA. which has not been impacted by the recent announcements on tariffs. Obviously, we cannot predict the future, but we anticipate that this will continue to be the case going forward. While the headlines may point to a lot of volatility in discussions around tariffs on goods exported to the U.S., the reality is that our business performance remains consistent with our stated expectations. We are closely monitoring this evolving situation and engaging regularly with the key stakeholders. We are committed to being timely and transparent in our disclosures to the market around this topic. As of today, we see no reason to change our outlook for steady underlying demand for our sweeteners in the market. And we believe our Rogers Refine Strategy has put us on the right path to meet that demand in the years ahead. That conviction is well supported by the strong results of our most recent quarter. I am very pleased with our operating and financial performance. Sales volumes in our sugar segment this quarter increased by about 3% over the same period last year and by more than 5% for the first nine months of the year. This is consistent with our assessment of stable demand growth in this segment. Our maple segment continues to deliver strong results, underpinned by the growth in demand we've seen globally since the beginning of 2024. Maple sales volumes increased by 20% in the quarter and 15% for the year to date, mainly from incremental orders by our existing customers. As the largest exporter of maple products in the world, we are pleased that consumers are appreciating the unique flavor of this all-natural sweetener. and we want to continue to innovate with new products to meet that demand. Speaking of our maple business, we recently decided to align the name of our maple segment to the rest of our business. Going forward, our maple company will be known as Lantic Maple Incorporated, replacing our former name of the Maple Treat Corporation. Different names, but still the same amazing products delivered to our customers. It brings the maple business closer to our roots and creates a more unified presence here in Canada and beyond our borders. Our growth and success are products of our focus on executing on our strategy of delivering value to our customers and our shareholders. The elements of this strategy are set out in our Rogers Refined Framework. They are modernizing and growing in our sugar business, driving profitability in maple, maintaining a strong balance sheet, and advancing our ESG program. It is clear that the steps we have taken to deliver on each of these pillars have made us a stronger and more resilient organization. Rogers Refined is not just a financial plan. It's a new way of operating where everyone knows what they need to do when they come to work. With our customers facing changing trade conditions, it's not enough to be resilient. We have to pivot. That means reacting quickly, capitalizing on opportunities, and mitigating risks. Times like these put that model to the test, and I'm happy to say that we came through. We are on the best footing in our history, in an excellent position to continue to meet the needs of our customers and deliver consistent, profitable, and sustainable growth for our shareholders. Now I'll touch on some high-level measure of our performance this quarter. JS will discuss it in more detail in his presentation. Our consolidated adjusted EBITDA for the quarter increased by 8% to almost 37 million. This represents an increase of more than 2 million over a very strong third quarter last year. For the year to date, consolidated adjusted EBITDA was 111 million, an increase of 7% over the prior year. To put that in perspective, The $111 million in EBITDA we generated in the first nine months of 2025 is more than what we generated in any full year prior to 2023. That's how much this business has improved over the last few years, and we took advantage of favorable market dynamics and optimized our production facilities. Our strong performance this quarter was led by our sugar segment, which showed improved profitability, especially in our domestic market. We continue to see favorable demand conditions in the market for refined sugar. Although the mix of that demand can shift from one quarter to another, our strategy is to anticipate those shifts and pivot as necessary to provide our customers with the sugar they need in the form they need it. Our maple segment continues to show solid profitability this quarter from strong demand. Although it did not match the record financial results of the previous quarter, it continues to reflect the recovery in global demand that began nearly two years ago and the productivity improvements we implemented over the same period. Our results this quarter reflect the strong market conditions in both our business segments, combined with our efforts to deliver on the pillars of our Rogers Refined Framework. Now turning to our Eastern Sugar Expansion Project, The construction phase of our relief project is progressing as planned. During the second quarter, we made the decision to focus our efforts on the Montreal portion of the project. This is the location of the incremental 100,000 metric tons of sugar refining capacity that we plan to bring into service to serve the Eastern market. This quarter, we scaled back our work on the logistics capacity increase in Toronto to align the completion date with the in-service date of our production expansion in Montreal. And we reassigned some of those resources from Toronto to the primary construction site in Montreal. At our Montreal location, we completed the construction of the new electrical room, advanced the refurbishment of the main expansion building, and began the installation of sugar refining equipment and logistics infrastructure. As we move ahead, Activity will continue to be busy. In fact, by fall, we will have double the construction workforce on site. It is great to see some of the new production equipment being delivered and installed in our refurbished facility in Montreal. Our estimate for the total cost to complete LEAP project remains consistent with our year-end update, ranging between 280 and 300 million. We continue to believe that the LEAP project is on track to produce refined sugar by the end of calendar 2026. The incremental capacity from LEAP will be vital to meet industry demand in the years ahead. The last 12 months have seen food manufacturers announce various capacity expansions that have yet to come online. This last quarter, one more announcement was added to that pipeline. This supports our assessment of strong underlying long-term demand growth for refined sugar. This additional capacity gives food manufacturers the confidence that we will be there to support them in their own plans for growth. We are very excited by the many business opportunities and challenges that we see ahead of us in the near future. Now I'll turn the call over to JS for discussion of our financials.

Well, thank you, Mike, and good morning, everyone. I will begin my financial remarks on slide 10. To begin, I would like to remind our audience that we present our financial results on an adjusted basis as we believe this is more representative of our business. This is consistent with the presentation in our MD&A. The adjustments are non-cash and consist mainly of transactions related to hedging activities. All the adjustments are described and reconciled in our MD&A. Consolidated revenues in the quarter were $314 million, compared with $309 million in the third quarter last year. The increase was mainly related to higher volume sold in our maple segment. Revenues from the sugar segment were down 2.5% in the quarter due to the lower average commodity price for raw sugar, which has marginal impact on overall profitability. Sales volume for the sugar segment were up almost 3% for that period. For the first nine months of 2025, our revenues grew by about 7%, with strong contributions from both our sugar and maple segments. Consolidated adjusted EBITDA for the third quarter increased by over $2 million, or 8% year-over-year, to just under $37 million. This strong profitability continues to underpin our efforts to fortify our balance sheet. Our free cash flow for the trading 12 months grew by 18% to $88 million. This strong free cash flow allows us to execute on our strategy, including funding our growth, investing in operational improvements, and maintaining a strong balance sheet. Now let's have a look to the individual business segments, beginning with sugar. As mentioned earlier, Revenues for the sugar segment declined by about 2.5% to $246 million, largely driven by a lower price for raw number 11 sugar, which, as you know, is a pass-through for us. Volume growth of about 3% was driven by a rebound in export demand, partially upset by reduced demand for liquid sugars. Adjusted growth margin per ton of sugar was $243, an increase of $18 per ton compared to the third quarter last year. The main drivers of this increase were a favorable sales base, along with market-based incremental pricing to customers. Our maintenance costs were in line with expectations and with the prior period quarter, as the increase we've seen in the first half of 2025 was non-recurring. We noted an increase of just over $2 million in administrative and selling expenditures in the third quarter of 2025 compared to the same period last year, associated mainly with non-recurring severance costs. Overall, the sugar segment delivered strong results in the third quarter, showing an increase of 8% or almost $2.4 million in adjusted EBITDA. On the maple side, financial results remain strong, although lower than the record adjusted EBITDA in the second quarter. Our maple segment accounted for about 22% of consolidated revenues in the quarter and 11% of consolidated adjusted EBITDA. Revenues in our maple segment increased by 19% to more than $67 million in the third quarter. Growth in Maple revenues was driven by a 21% increase in volume driven by incremental orders from existing customers. Adjusted growth margin in Maple decreased to 8.2% or 5.5 million compared with 10.4% or 5.8 million in the same period last year. The current quarter's margin was unusually low compared to our expectations. There were two main contributors to the year-over-year decrease. The first was an unfavorable customer mix during the quarter due to timing, as the incremental volume was sold to export customers at the lower margin contribution per unit. The second was the impact of higher costs for the purchase of syrup compared with last year, as we benefited from lower cost purchases in 2024. We anticipate our adjusted gross margin in maple to be in line with our expectations of approximately 10% going forward. Adjusted EBITDA in maple amounted to $4 million in the third quarter, a decrease of $300,000 from last year's third quarter. We continue to invest in operating efficiencies in our maple segment and expect this segment to be a strong contributor to our overall profitability in 2025. Both of our business segments continue to support our strong financial performance in 2025. Adjusted net income for the quarter increased to $17 million, or $0.13 per share. For this year to date, adjusted net income was $53 million, or $0.41 per share, both in line with the same period last year. CapEx for the quarter was about $30 million, of which $25 million was related to our LEAP project. We currently expect to spend approximately $90 million on the LEAP project for fiscal 2025. We established a funding plan for LEAP to ensure we had access to capital well in advance of our spending needs. This allows us the flexibility to adjust to conditions in the capital markets while preserving our balance sheet strength. The plan includes the equity issue completed in 2024, access to our revolving line of credit, loans from Investissement Québec, and our own growing level of internally generated capital. Following the end of the third quarter, the seven series of ventures matured and were repaid in cash as planned. We are monitoring conditions in the financial markets as we review our future funding needs. Having a healthy balance sheet and strong cash flow from operations means we can take advantage of funding opportunities as they arise in accordance with our business objectives. It also means we are able to deliver a stable, well-covered dividend to our shareholders. I am pleased to announce that we are maintaining our common share dividend at $0.09 per share this quarter. We are happy to be in a position to maintain a healthy dividend while still investing for growth and preserving our balance sheet strength. With that, I'll turn the call back over to Mike to provide a summary and outlook for 2025.