Good morning, ladies and gentlemen, thank you for standing by. Welcome to the High Liner Foods Incorporated Conference Call for Results of the First Quarter of 2025. At this time, all participants only mode. [Operator Instructions] Instructions will be provided at that time to queue up for questions. [Operator Instructions] This conference call is being recorded today, Wednesday, May 14th, 2025, at 10

00 AM Eastern time for recording purposes. I would now like to turn the call over to Kimberly Stephens, Vice President of Finance for High Liner Foods. Please go ahead.

Good morning, everyone. Thank you for joining the High Liner Foods conference call today to discuss our financial results for the first quarter of 2025. On the call from High Liner Foods are Paul Jewer, Chief Executive Officer; Darryl Bergman, Chief Financial Officer; and Anthony Rasetta, Chief Commercial Officer. I would like to remind listeners that we use certain non-IFRS measures and ratios when discussing our financial results as we believe these are useful in assessing the company's financial performance. These measures are fully described and reconciled to IFRS measures in our MD&A. Listeners are also reminded that certain statements made on today's call may be forward-looking statements under applicable securities laws. Management may use forward-looking statements when discussing the company's investments, strategy, business, and markets in which the company operates, as well as operating and financial performance in the future. These statements are based on assumptions that are believed to be reasonable at the time that they are made and currently available information. Forward-looking statements are subject to risks and uncertainties. Actual results or events, including operating or financial results, could differ materially from those anticipated in these forward-looking statements. High Liner Foods includes a thorough discussion of these risks and other factors that could cause its anticipated outcomes to differ from actual outcomes in its publicly available disclosure documents, including in its most recent annual MD&A and annual information form. Please note that High Liner Foods is under no obligation to update any forward-looking statements discussed today. Before the market yesterday, May 13, High Liner Foods reported its financial results for the first quarter ended March 29th, 2025. The news release along with the company's MD&A and audited consolidated financial statements for the first quarter of 2025 have been filed on SEDAR+ and can also be found in the Investors section of High Liner Foods' website. If you'd like to receive our news release in the future, please visit the company's website to register. Lastly, please note that the company reports its financial results in U.S. dollars and therefore the results to be discussed today are also stated in U.S. dollars unless otherwise noted. High Liner Foods common shares trade on the Toronto Stock Exchange and are quoted in Canadian dollars. I will now turn the call over to Paul for his opening remarks.

Thank you, Kimberly, and welcome everyone to our first quarter 2025 conference call. I'm joined today by our Chief Financial Officer, Darryl Bergman; and our Chief Commercial Officer, Anthony Rasetta. Before I hand the call over to Darrell to discuss the details of our financial results, I'll begin by sharing my perspective on our performance in the quarter. I'm not alone in reporting that volatile and uncertain macroeconomic, political, and trade environments have a significant ripple effect on the consumer and our business. This is a message we're hearing in earnings calls across industry from both sides of the border. Fortunately, and as demonstrated by our results, the diversification of our global supply chain and cross-border operations that span both food service and retail continue to support our resilience and ability to pivot as needed. As you know, the traditional and culturally significant time for seafood consumption, and this has a material impact on the seasonality of our business. The later timing of Easter in 2025 versus 2024 moved three weeks of the length of period from our first quarter reporting period into the second quarter. This resulted in an impact in the year-over-year results, and leading to a decline in volume, net sales, and adjusted EBITDA compared to the first quarter of 2024. Despite the shift, we are very encouraged by the progress we are making across our business and are well-positioned to build on the strong finish to Q1 and strong start of Q2 to deliver solid financial results for the first half of the year and through the end of 2025. With that, I will hand the call over to Daryl to discuss our financial performance. Daryl?

Thank you, Paul, and hello, everyone. As Paul mentioned, the diversification in our business continues to support our resilience in a challenging market, and our consistent execution is helping us to remain on track for a strong first half of the year. Now turning to our financial results for the first quarter of 2025. Sales volume decreased in the first quarter by GBP1 million or 1.5% to GBP66 million. The lower sales volume is due mainly to the impact of a later Lenten timing, as Paul noted, as well as traffic slowdown in foodservice with consumers continuing to pull back on dining outside the home. This is partially offset, however, by growth in our contract manufacturing business and an increase in volume in our retail business, where the company's targeted approach to value-driven promotions and innovation is supporting expanded distribution, especially in the growing club channel. The company also saw high consumer demand for alternative species. Sales decreased in the first quarter by $8.6 million or 3.1% to $268.4 million, driven by the previously mentioned volume impact inclusive of the decline in foodservice, the largest part of our business, as well as product mix. This is partially offset by pricing, expanded distribution, and increased volumes in retail as well as contract manufacturing growth, which Anthony will provide more insight on here shortly. The FX impact in the quarter for the conversion of a weaker Canadian dollar to reported U.S. Dollar sales for our Canadian-denominated operation resulted in an approximate $3.5 million decrease compared to the conversion impact for the same period in 2024. Gross profit decreased in the quarter by $2 million or 3.1% to $63.5 million and gross profit as 1% of sales increased by 10 basis points to 23.7% as compared to 23.6% in the first quarter of 2024. The decrease in gross profit reflects the decrease in sales and increased promotional activity, partially mitigated by favorable pricing reflected in the improved gross margin as a percentage of sales. High Liner Foods continues to drive improvements across operations to ensure prudent cost management. The FX impact of the weaker Canadian dollar decreased the value of reported U.S. dollar gross profit from our Canadian operations in 2025 by approximately $1 million relative to conversion impact last year. Adjusted EBITDA decreased in the first quarter by $2.1 million or 6.1% to $32.1 million, and adjusted EBITDA as a percentage of sales decreased to 12% compared to 12.4%. The decrease in adjusted EBITDA reflects the decrease in gross profit, increased net SG&A expenses, and increased distribution expenses. The FX impact of the weaker Canadian dollar resulted in a decrease in the value of reported adjusted EBITDA in U.S. dollars by 400,000. Reported net income decreased in the first quarter by 1.3 million or 7.8% to 15.3 million, while diluted earnings per share increased to $0.51 compared to $0.49 in the prior year. The decrease in net income reflects the decrease in adjusted EBITDA outlined above and higher income taxes offset by a decrease in finance and business acquisition integration and other expenses. Including the impact of certain non-routine or non-cash expenses that are explained in our MD&A adjusted net income in the first quarter of 2025 decreased by 2 million or 10.8% to 16.6 million. Adjusted diluted earnings per share remained consistent with the prior year at $0.55. With regards to cash flow from operations and the balance sheet. Net cash flows from the operating activities in the first quarter of 2025 decreased by 28.1 million to an outflow of 10.6 million, compared to an inflow of 17.5 million in the same period in 2024. The decreases driven by unfavorable changes in non-cash working capital balances, specifically a higher increase in accounts receivable balances compared to prior year and lower reductions in inventory partially offset with increased account payable balances in the first quarter of 2025 compared to the same period last year, primarily due to the later timing of the Lenten period in 2025. Capital expenditures were 3.1 million in the first quarter of 2025 compared to 2.4 million in the prior year, reflecting the continued investment in our business. Net debt at the end of the first quarter of 2025 increased by 41.5 million compared to 200 and sorry compared, sorry, let me rephrase that. Net debt at the end of the first quarter of 2025 increased by 241.5 million to 274.7 million, compared to 233.2 million at the end of fiscal ‘24, reflecting higher bank loans and a lower cash balance partially offset by lower long-term debt and lease liabilities at March 29th, 2025 as compared to December 28th, 2024. The higher net debt is due to slightly higher inventory levels in Q1 versus prior year, which is in line with the later Lenten timing. Net debt to adjusted EBITDA was 2.7x at March 29th, 2025, compared to 2.3x at the end of fiscal 2024. The ratio increased due to higher net debt and the lower rolling 52 weeks adjusted EBITDA compared to the fiscal 2024. In the absence of any major acquisitions or unplanned capital expenditures in 2025, we expect this ratio to continue to be lower than the company's long-term target of 3x at the end of fiscal 2025. In closing, I want to reiterate that we are on track for a strong first half of the year. Our dedicated and experienced team's financial flexibility, combined with our targeted, thoughtful, and consistent strategy, continues to support our leading position in the market. As we navigate the evolving trade environment and the impact of tariffs, we are taking the necessary steps to implement plans, including pricing actions and other supply chain initiatives, to mitigate the impact of these tariffs and reduce the estimated impact on our company and on our customers. With that, I will now pass the call over to Anthony to discuss our commercial highlights.

Thanks, Daryl, and hello, everyone. It was another strong quarter of operational performance as we advanced our strategy to provide choice and value to customers and consumers. We executed some great promotional strategies in market for Lent across retail and foodservice. But as Paul mentioned, the full impact is not yet visible in our financial results, given the timing of Lent and three weeks of prime promotional time for seafood being pushed into the second quarter. In the first quarter, we continue to experience some softness in foodservice and an improving operating environment in retail. Looking first at foodservice. While our business was once again impacted by the traffic slowdown in the industry, we continue to hold our own, gaining share and offsetting the impact of market weakness more effectively than our competitors. We were able to quickly help mitigate the impact of market headwinds by leaning into the quick service restaurant channel and the resilience of our institutional customers, especially in education. During the quarter, we continued to see increased demand for alternative species, demonstrating the enhanced value these offerings provide to our foodservice operators. As we showcase choice and value-driven solutions to our customers, our sales force is extremely proactive in the market, demonstrating how our diverse portfolio of products, as well as services can help operators optimize menus, showcase innovation, and support back-of-house efficiencies. For example, we have some great limited-time promotions in market right now on both sides of the border with leading QSR brands that are supporting our growth in the channel. We were thrilled to translate one promotion into a permanent menu spot for a fish rack, demonstrating how we are working with our customers and consumers to rethink the potential of seafood as a healthy, versatile fast food option. Our growth in QSR is well-timed as consumers continue to seek value and trade down from casual dining in search of enhanced value. Turning to our retail business, where it's a brighter picture. Despite having three weeks less of Lenten promotional activity compared to the prior year, volumes and sales grew in our retail business in the first quarter. As the consumer shifted back to retail, we are well-positioned to capitalize on the increased traffic with targeted promotional activity and a diverse portfolio. We are delivering quality meal time solutions, whether consumers are seeking an elevated dining experience to take the place of eating out or affordable protein options. In Canada, the performance of our value-added offering improved during the quarter. However, elsewhere in the market, we continue to feel the competitive pressure of a highly promotional value-focused environment. We continue to mitigate the impact of these challenges in the same way that I have discussed on previous calls by offering choice across price points, working closely with our customers to deliver targeted promotional campaigns, and targeting growth in the club channel by pairing value, volume, and innovation. From a product perspective, notable call ups include the continued positive reception to our Tortilla Crusted Tilapia as well as our new shrimp innovations launched under our High Liner brand across major retailers, we are leaning into our brand heritage and joining forces with other leading Canadian brands and retailers to promote are made in Canada products. That being said, the improvement in our retail business is even more pronounced south of the border. During the first quarter, we gained market share in both dollars and pounds in the U.S., outperforming the category. Our three core brands, Seaworthy, Fisher Boy, and Sea Cuisine, all grew during the first quarter, with Fisher Boy knocking Seaworthy off the podium as the fastest growing brand in our category for the quarter. It's a title we're more than happy to share across the portfolio. Innovation continues to be a hit in U.S. club retailers. We saw strong quarter-over-quarter as well as year-over-year results from innovations such as our Sea Cuisine Cheddar Biscuit Tilapia and Brown Butter Crumb Cod despite the shift of Lent. Across both club and mainstream retailers, we saw strong results from the launch of our latest innovation, Sea Cuisine shrimp skewers. We are encouraged by the positive reaction to our skewers, which we expect to continue, especially as we head into grilling season. Looking ahead, we'll remain focused on strong operational performance as the backbone of our strategy to support our customers and consumers during uncertain economic times. With that, I'll hand the call over to Paul for his final remarks before we open it up to questions. Paul?

Thanks, Anthony. You've heard today that our base businesses are solid, our solutions are relevant, and our businesses supported by a diverse supply chain that continues to be a source of competitive advantage. We continue to be nimble and focused on driving profitable growth by serving our customers with the solutions they need, leveraging our supply chain, and optimizing the efficiency of our operations. As we look to the rest of 2025 and beyond, we remain committed to preserving our balance sheet strength while prudently allocating capital to appropriately balance investment in our business and organic growth with the return of capital to our shareholders through our dividend and ongoing share buyback. We are taking a disciplined patient approach to M&A, and we'll continue to evaluate opportunities across the value chain that fit within our portfolio, provide the appropriate return on investment profile, and are aligned with our long-term value creation objective. In the short-term, we will continue to focus on the factors within our to mitigate market challenges. This includes closely monitoring the evolving global trade environment, and we'll leverage our global supply chain and plan in both the U.S. and Canada to mitigate any potential headwinds on our business. As Darryl mentioned, we are implementing plans, including pricing actions and other supply chain initiatives as appropriate, to reduce any impact on our company and our customers. I remain confident in the inherent stability and strength of our business to deliver adjusted EBITDA growth for the year and continued improvement on the top line. With that, I'll now hand over the call to the operator for questions. Operator?

Thank you. [Operator Instructions] And with that, our first question comes from the line of Kyle McPhee with Coremark Securities.

Just starting on some of the moving parts on the revenue line? Are you able to kind of quantify the length, time, impact on volume if you want? How much of a year-over-year drag was it on kind of ballpark basis?

Yes, it's hard to quantify. But what I would say is we had a very strong March to finish the quarter, and we had a very strong April to start Q2, and when you look at the four-month period rather than the three-month period, we're quite pleased with both the top-line performance and the bottom-line performance. And, of course, we'll comment on that more when we release our first half results, Q2, and first half results in August.

And then you've called out more retail channel wins. Is this new wins landed within Q1, or is this kind of the benefit of wins we've seen over the last couple of quarters that just have not been lost. Just wondering how the ongoing momentum looks in the retail channel for wins.

Yes, Kyle, it's Anthony. It's actually both. So the success we've been seeing in our club channel is something that started in the back half of last year, as we continue to launch new innovation as well as up our promotional activity. But in addition, we increased promotions in the first part of this year for Lent. And as I talked about Fisher Boy, our value brand was the fastest-growing brand in the category. And then we have even more innovation that we just launched, like the Sea Cuisine shrimp skewers I mentioned previously. In addition to that, we're building new distribution across the portfolio, across Sea Cuisine seaworthy, our Atlantic salmon business as well as in Fisher Boy. And so that's new and driving some acceleration in the first quarter.

Got it. Okay. Great to hear that. And then on the gross margin line, your gross margin percentage was flattish year over year, and that's despite FX headwinds, mix headwinds from what I think is increased contract manufacturing, and value category gains, higher promotional activity. So, where is this big positive offset coming from that's allowing you to hold margin steady despite all these headwinds? Can you kind of isolate some of those big main positive moving pieces so we can assess their ability?

Yeah. Sure. So, a couple of things I'd comment on there. One is the mix shift; there was some mix shift to contract manufacturing. You're right. That performance was better this quarter than a year ago, but it didn't have a significant impact on margins. So we're pleased overall with how mix landed and the impact on margins. I think we're doing all we can to manage costs well in the business and where necessary, passing on price, particularly in a few species where there has been cost inflation in order to support margin. The other thing that supported the overall positive mix is a good growth in branded value-added product in the quarter, and so I think when you balance all of those things out, you're right, we are pleased with the margin performance that we have to deliver.

And your next question comes from the line of Luke Hannan with Canaccord Genuity. Please go ahead.

Paul, I just wanted to come back to this. If we were to go back to last quarter, I think you had mentioned that a reasonable expectation for the year, as far as volumes, would be mid-single-digit growth. Are you still comfortable with that being the outlook? And then, if so, can you frame up for us where contract manufacturing sort of fits within that? I mean, you mentioned volumes are stronger thus far in Q1, specifically for contract manufacturing, but is there more that we should expect on that front as 2025 plays out?

No. I don't think we would expect more on contract manufacturing. We're just happy to see it back to being a stable level compared to what was down a bit in 2024. On the volume front, we still believe that we can grow volumes as you suggested through the rest of the year. Then, as I mentioned earlier, we did have a strong performance in April, because of the later length. So off to a good start there. The only thing that will be, of course, keeping our eyes on, particularly in the back half of the year, is what impact, if any, does an inflationary tariff impact environments have on the customer, the consumer. That would be the only caller I would say, where we would -- we'll want to evaluate that. But in terms of our performance, and what we can drive in our business from our innovation efforts, from improving execution, from promotional activity and all the things that Anthony highlighted were doing for the customer and the consumer, we do have confidence in both the top line and bottom-line trajectory for the balance of the year.

And then maybe following up on what you just mentioned there, the tariff situation. I appreciate it's probably difficult to pull this impact out, but I mean, have you seen play, did you see anything play out either in Q1 or thus far into Q2 that showed a specific consumer response to tariffs, or at this point, I think the overall commentary that we've heard from yourself and then from other folks in our coverage universe is just broader. Macro pressures seem to be what's driving the consumer more. I guess the question is, are you seeing anything specific thus far in consumer behavior that seems to be directly tied to tariffs as opposed to just broader macro weakness?

Yes, no, nothing specific thus far, it would certainly be too early in our business in particular, when you think about the length of our supply chain, the fact that we build up good inventory going into the Lent period, and thus far, the consumer has continued to support seafood consumption. So, nothing we highlight there, but we'll continue to monitor it, and make sure with the diversity of our supply chain, we have lots of mitigation plans that we'll focus on to try to help out our customers and consumers wherever we can. We'll have to price if that's necessary, and we'll continue to bring value to the consumer, including with some of the alternative species we've launched over the last year or two, which also help the customer as it facing potentially higher prices across categories.

Last one for me. And then I'll pass the line. Just on innovation. You touched on a few of the different skews that you've introduced during the quarter and then also in quarters past. Can you frame up for us, I mean, it seems like some companies are leaning a little bit more into innovation, particularly now, given the trade down environment, as it seems to be there's an element of resilience or durability to volume growth there. Can you frame up for us the pace of innovation introduction that you have in your portfolio right now? Is it any different from what you've done in years past?

Look, it’s Anthony. Yes, definitely. We're ramping up our focus on innovation. We think that in this environment in particular, the breadth of the portfolio we've always been proud of in having value mainstream and premium products is really important, but also making sure that we have the right products for the right channels where consumers are shifting to. So as I mentioned earlier, we're certainly upping our innovation focus in club and value channels and have focused on distribution there. We continue to bring even premium products into retail when consumers are potentially eating out at restaurants less and looking for restaurant-quality experiences at home. And so what we're doing to expand distribution on our C.Wirthy, the Atlantic salmon brand, and then introduce new shrimp innovation in both Canada and U.S. are important. And then in food service, we're using innovation to also bring value to the consumer with alternative species. So cotton Havoc, in particular, are challenged on pricing and supply availability. And so by introducing alternative species like Kate Cake most recently or Southern Blue Whiting, which we've had previously a good quality whitefish, but offering value against our existing core species. That's how we've been focusing, but definitely ramping up innovation.

And your next question comes from the line of Devin Klein with BMO Capital Markets. Please go ahead.

Hoping with a poll on the tariff team here a little bit more. Just wondering if there was any impact on your raw material costs in Q1. And then, Paul, if you can kind of expand on some of those mitigation steps that you talked about taking, just for the remainder of the year.

Yes, sure. So, no impact really on raw material costs in Q1. We'll start to see some impact in raw material costs, perhaps in Q2, late Q2, it will really start to flow through, come out of inventory, if you will, and flow into COGS more in the back half of the year. From a mitigation perspective, I think the primary mitigation is the diversity of our supply chain. So we buy seafood from, I think, close to 30 countries around the world. We have multiple suppliers of many of the species that we procure. We've got very strong relationships there. We can move either the source of the raw material around, where that's possible, or also move where the primary processing of that raw material occurs, and we've done some of that. We've done a lot of that over the course of the last five years, but we've even looked at doing that a little more recently, as we've seen differential tariffs on different countries. And then finally, we have the benefit, I think somewhat uniquely of having value added manufacturing facilities in both Canada and the US. So that gives us the opportunity to ensure that we're producing the product in the right place to meet the customer's needs in those geographies. So we feel good about the mitigation strategies we have in place to try to reduce the cost impact, so that we don't have to pass on as much price into the market as possible, but of course, then that is the other mitigation is if costs are up for the industry, then, we'll pass the pawn where necessary.

And then maybe this is an extension. Are you able to provide an update on the US Trade Representative 25% tariff exclusion? I believe it's coming due at the May. Just wondering if you have any indication on what could happen there with the best lump sum to some of the current negotiations.

We don't know. I assume it's being it's part of the conversations that are ongoing with regards to tariffs. And we'll -- as we've done already, as we've seen tariffs change over the course of the last days and weeks and months, we'll continue to react accordingly as we get more clarity on that.

Last quarter you talked about bringing Norcod products into North America. Are you able to provide an update there, just on timing? And then do you have a sense of how these products could be used, whether that would be in retail, food service, and then value added, or otherwise?

Yes, I think we're very happy with the progress we've made. We've got the right processing arrangements in place so that the Norcod product is coming into the market in the form that we want, frozen fills and loins, and portion, and we think initially it'll more likely be food service where that product is targeted, and more likely actually not be value added, because it's frankly a wonderful more premium eating experience, and we think there are parts of the food service channel that -- where that product will fit very, very well. We think it'll be available in the market, certainly no later than Q4 this year.

That's exciting. And then just one last one for me on leverage. If you hit your target per year, your EBITDA growth based on my forecast, it looks like net debt to EBITDA would be around 2x, maybe the net sub-2x level. Just wondering if you have a minimum floor where you'd start to use buybacks, make sure you don't go below a certain level.

Yes, I think we're probably forecasting like as you said, to get the end of the year to about 2.3 back to where we were, we're at 2.7 now, our target range is around 3. Again, what's going to move that Nevin is how we look at -- both are invested in the business, and also looking at inorganic opportunities, but with respect to a floor specifically, we're going to maximize, and the use of -- that type of capital across the range. And probably, I wouldn't go think we'd get down to the 1.7 range, but we definitely be above two.

Thank you. And we have no further questions at this time. I would like to turn it back to Paul Jewer for closing remarks.

Thank you, operator, and thank you, everyone, for joining the call today. We look forward to updating you with our results for the second quarter of 2025 on our next conference call in August.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.