Supremex Inc.

Good morning, ladies and gentlemen, and welcome to the Supremex first quarter 2022 earnings 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 star followed by zero for operator assistance. This call is being recorded on Thursday, May 12, 2022. I would now like to turn the conference over to Martin Goulet. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us for Supremex's first quarter conference call. My name is Martin Goulet from MDC Capital Markets Advisors, the investor relations consulting firm supporting Supremex with IR activities. With me today is Stuart Emerson, President and CEO, and Mary Chronopoulos, Chief Financial Officer and Corporate Secretary. Following their comments, we will open the call for questions. For a more detailed analysis of our results, please refer to financial statements MD&A, and press release published earlier this morning and available on the company's website at www.supremex.com and on CEDAR. In addition, we posted a presentation supporting this conference call, which is available through the webcast and on the company's website. I'd like to remind listeners that this conference call contains forward-looking information within the meaning of applicable gain securities laws. Please refer to the forward-looking statement as detailed in the presentation supporting this conference call. Furthermore, risks and uncertainties are discussed in the Annual Information Forum dated March 30, 2022, under the heading Risk Factors and updated in the company's latest MD&A. During this call and in the presentation, we may refer to various non-IFRS measures, including, but not limited to, EBITDA, adjusted EBITDA, adjusted debt earnings, adjusted earnings per share, free cash flow, and ratio of total debt to adjusted EBITDA. These terms are defined in the company's MD&A. And unless stated otherwise, all figures are expressed in Canadian dollars. With that, let me turn the call over to Stuart.

Hey, thank you, Martin, and welcome, everyone. Let's turn to slide 43 for an overview of the first quarter. I am very pleased with our results. We delivered solid 18% top-line growth and increased our margins in a period of steep inflation. Q1 was the ninth consecutive quarter of year-over-year improvement in adjusted EBITDA. That earnings rose more than 50% to $6.3 million, or 24 cents per share. This solid performance was driven by selling price and mix improvement, impressive increased revenue across all lines of business, which more than offset inflationary pressures and a tight paper market, and by the continued improvements in efficiency across the operating platform. Envelope revenue was up by 16.7% to $44.7 million, mainly driven by average selling price increases required to offset material cost increases. And packaging and specialty products revenue rose 21.5% to $18.6 million, reflecting revenue growth in both Canada and the U.S. and across each of our lines of business. Packaging revenue was also supported by a full quarter of last year's small acquisition of Vistagraphics, communication. CFO Mary Karnopoulos will provide additional details in a moment. I would like to share a couple of important specific insights with you. The first is around the envelope segment. You may notice that we now refer to the envelope segment as one geographic entity where we used to segregate Canada and the U.S. in prior period. Per the strategy laid out in 2014-2015, we had ambitious plans to broaden our geographic reach, and we and the market now see ourselves as a bona fide North American player. And with that, the secular decline in Canada becomes much less relevant as penetrated access to a 20 times larger U.S. market has delivered and provides significant ongoing growth opportunities for Supremex from our existing envelope facilities. The second is around supply chains. In both envelope and packaging, we are operating in a period of a significantly constrained paper market. Although we have solid relationships with suppliers for a multitude of reasons, supply is tight and it's a real challenge to meet existing obligations, much less capitalize on new opportunities. Backlogs are very strong, there are a lot of opportunities, and all of our facilities have available capacity, but paper continues to be an inhibitor to growth and will be for the next few quarters. To address this tightness, we have sought out alternative sources of supply, and while it won't solve all of our problems, I'm pleased to report that we have secured additional shipments of high-quality paper, which is expected to start to arrive in early Q3. These alternative sources come at a premium price, but taking care of committed customers and meeting obligations is paramount to us, and we believe going this route in the long term is in the best interest of all Supremex stakeholders. To summarize, there is demand for our products, To date, we've been able to pass through inflation as witnessed over the past several quarters, and with this new supply, we have a great opportunity to better service customers. And finally, a quick update on our plan to move the folding carton plant in the town of Mount Royal. The move has been delayed to 2023 as we renegotiated a one-year lease extension for the facility. Pushing out the move provides the team with more time to plan and can be supported by Stéphane Gabois, our new Director of Operations on the packaging side. With that, I'd like to turn the call over to Mary for a review of our Q1 financial results. Mary?