Good morning. My name is Anas. I'll be your conference operator today. At this time, I would like to welcome everyone to the Andlauer Healthcare Group 2023 First Quarter Results Conference Call. All lines are in place on mute to prevent any background noise. Please be aware that certain information discussed today may be forward-looking in nature. Such forward-looking information reflects the company's current views with respect to future events. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking information. For more information on the risks, uncertainties, and assumptions relating to forward-looking information, please refer to the company's latest MD&A and annual information form, which are available on SEDAR. Management may also refer to certain non-IFRS financial measures. Although the company believes these measures provide useful supplemental information about financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see the company's latest MD&A for additional information regarding non-IFRS financial measures, including for reconciliations to the nearest IFRS measures. Please note that unless otherwise stated, all references to any financial figures are in Canadian dollars. Following management's remarks, there will be a question and answer session. This call is being recorded on May 4th, 2023. I would now like to turn the conference over to Mr. Michael Andlauer. Please go ahead, sir. Good morning. Thank you. Thank you, Anas. Good morning, everybody. Thank you for joining us today. As in previous calls, I got Peter Bromley, our Chief Financial Officer, with me today. Following my opening remarks, Peter will follow up with a more detailed discussion of our results for Q1. I'll then provide some closing comments and open the line to questions. Well, despite the virtual elimination of COVID-related revenues in our first quarter, we still generated an 11% consolidated revenue growth in our first quarter. As I noted in the previous disclosure, this decline in COVID-related revenue was expected and will continue to be reflected in our consolidated revenue going forward. EBITDA increased 2.7% to CAD 40.5 million in the quarter, compared to CAD 39.4 million in Q1 last year. Our EBITDA margin declined to 24.6% from 26.5% in Q1 a year ago. Net earnings were essentially unchanged on a year-over-year basis at CAD 16.5 million, or CAD 0.39 per share diluted. Our margins and net earnings for the quarter reflect a year-over-year decline in contribution from our U.S. truckload operations as the inflated rate premiums we were able to capture in fiscal 2022 related to COVID revenues, equipment, and driver shortages have virtually diminished. It's clear to us now that our U.S.-based ground transportation revenue and related margins have returned to pre-pandemic levels, and we don't foresee a return to the premiums we achieved in fiscal 2022. We still consider our margins in our U.S. truckload operations to be attractive and in line with our initial projections at the time of our acquisitions of both Boyle and Skelton USA. Now that we have access to more equipment, combined with a robust business pipeline, this will allow us to grow our revenues and make up for the margin shortfalls going forward. Our Canadian business, both on transportation and logistics side, remain robust and resilient despite the COVID-related revenue losses. The business metrics from a service level and employee engagement continue to be very strong, and we expect our business to continue to perform well despite the lack of the COVID-19 tailwinds. I'll now turn the call over to Peter Bromley to review our financial performance in more detail. Great. Thank you, Michael, good morning, everyone. Our consolidated revenue for Q1 totaled CAD 164.8 million, up from CAD 148.4 million in Q1 2022. Our acquisition of LSU accounted for approximately CAD 3.2 million of the CAD 16.4 million increase, with organic growth and fuel surcharge revenue accounting for the rest of the increase. Revenue for our healthcare logistics segment was CAD 46 million, an increase of 18% compared with Q1 last year, reflecting a 21.9% increase in our logistics and distribution revenue attributable to greater outbound order handling activities for Accuristix, increases in transportation billings impacted by fuel surcharge programs from carriers, and incremental revenue from LSU. The overall increase in healthcare logistics segment revenue in the quarter was partially offset by a 4.3% year-over-year decline in our packaging solutions revenue, reflecting the loss of one of our packaging customers, which was in turn offset by organic growth from our remaining base of customers. Revenue in our specialized transportation segment totaled CAD 118.7 million, an increase of 8.6% compared with Q1 last year. The increase was attributable to 11% growth in our ground transportation product line, driven partially by higher fuel costs passed on to customers as a component of pricing. Ground transportation revenue in our Canadian network increased by approximately 2.6%, excluding fuel surcharge revenue. Ground transportation revenue in the U.S. reflects a decline in rate premiums in our Boyle Transportation and Skelton USA operations this quarter, as Michael discussed previously. Our dedicated and last mile delivery product line also contributed to growth in the specialized transportation segment with a 10.9% year-over-year increase in revenue, reflecting ongoing route expansion and increases in fuel costs passed on to customers. Our CAD 7.5 million in air freight forwarding revenue in the quarter was down slightly from CAD 7.6 million in Q1 2022. Reflecting approximately 5.5% lower shipment volume, partially offset by higher rates and fuel costs passed on to customers. Cost of transportation and services was CAD 84.2 million or 51.1% of revenue compared with CAD 72.7 million or 49% of revenue in Q1 last year. The increase in costs was primarily attributable to higher fuel costs in line with increases in revenue related to fuel prices. The higher operating ratio affects lower pricing in our U.S. truckload operations. Direct operating expenses for the quarter were CAD 27 million or 16.4% of revenue compared with CAD 24.8 million or 16.7% of revenue in Q1 last year. The increase reflects outbound volume growth in our Accuristix logistics and distribution operations and our acquisition of LSU on March first last year. SG&A expenses were 8% of revenue for the quarter, compared with 7.6% in Q1 a year ago. The increase reflects growth in our operations and is in line with our expectations. Operating income totaled CAD 23.7 million, a decline of 2% compared with Q1 last year, reflecting the decline in COVID-19 related revenue and reduced contributions from Boyle Transportation and Skelton USA due to the downward pressure on rates. Total comprehensive income was CAD 16.3 million, up from CAD 13.5 million in Q1 last year, reflecting a negative currency translation adjustment of CAD 200,000 in Q1 this year compared to a negative adjustment of CAD 3 million in Q1 last year. Turning to our balance sheet. At the quarter end, we had cash and cash equivalents of CAD 74.4 million and working capital of CAD 102.5 million. This compares to cash and cash equivalents of CAD 65.9 million and working capital of CAD 85 million at the year-end 2022. At quarter end, the amount outstanding on our credit facilities was CAD 50 million under the term facility and nil under our revolving credit facility. We remain well-positioned financially to pursue growth opportunities. I'll now turn it back over to Michael for closing comments. Michael? Thank you, Peter. As I said, we expect our business to continue to grow and perform well despite the lack of COVID-19 tailwinds. We'll have a continued focus on pursuing acquisition opportunities in Canada and the U.S. to further expand our platform and drive incremental growth. As evidence of this focus, this morning we're announcing the appointment of Graham Cromb as our new Chief Strategy Officer to lead our acquisition program. Graham has extensive international experience in supply chain and logistics management through a career spanning 23 years with UPS, including his role as Vice President of European Operations for UPS Healthcare, where he led the integration of several acquisitions and supported the expansion of UPS's distribution facilities network and temperature-controlled fleet in Europe. As we continue to expand on our platform, we'll maintain our disciplined approach with respect to both financial and operating metrics. We will continue to have a constant focus on better serving our customers and taking care of our employees, drivers, and owner-operators. That concludes my formal remarks. I'd like to open the line to questions. Anas, please commence the Q&A. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press Star followed by one on your touchtone phone. You'll hear a twinge tone prompt acknowledging your request, and your question will be pulled in the order they are received. Should you wish to decline from the polling process, please press Star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Kevin Chiang with CIBC. Please go ahead. Hi, good morning, everybody. Thanks for, thanks for taking my question here. Maybe just on what you're seeing in terms of rates. You know, you mentioned a normalization in the U.S. Does it feel like that normalization is done in the sense that the rates that you're coming in at now are a good flow, or do you think there's more downward pressure? Then maybe what you're seeing in Canada in terms of rates, which seem to be holding in better, at least based on some of the data that we track. Yeah. I think your data is giving you some good insight. You know, and you know, obviously, I think when we bought Boyle and Skelton USA, I, you know, I told the market that I, you know, we were there to learn the U.S. market and understand it. Certainly, you know, when we talked about, you know, last quarter about the not really necessarily the headwinds that we're facing, but the tailwinds of COVID, it was truly evidenced in the U.S., where we're moving, you know, the two big molecules around, you know, vaccines to all across the country. You know, cost was really no object at that time. Certainly, you know, having most of our driver fleet vaccinated, allowed us to cross the border and really, you know, charge premiums that were otherwise, wasn't the case. Regardless of the driver shortage, it was more of a demand or less of a supply, crossing the border. That was a huge advantage. You know, a lot of artificial spot quote premiums, because of the lack of capacity and the fact that we had a, you know... Unfortunately, I mean, the FDA is not nearly as stringent as Health Canada. As things have, you know, settled down and, I suggest that you're probably not wearing a mask right now. We, you know, we were this time last year, right? We, things have settled down, you know, the U.S. economy seems to be having been hit a little bit more, which has allowed, you know, spot quotes, and particularly in the U.S. to drastically get lower. You know, you know, and I refer to the FDA not having the stringent. You know, so if somebody has a reefer trailer, it can be good enough to move some of the products out of you know, some of these, some of these distribution facilities, wholesalers, etcetera. We felt that. When you look at the numbers. By the way, I mean, well, when I look at the numbers, with, they're in line with when we purchased those companies, which was before COVID. We feel very comfortable. They're, you know, they're higher, they're still premium rates, but we don't feel that there's any, you know, any more pressure. You know, we in our monthly meetings with the management, we feel that this has now settled down. The good news about it, Kevin, is that we have the opportunity now to get more equipment, more drivers. There's out of all the companies, they seem to have the largest pipeline of opportunity. You know, the two companies are working collaboratively, you know, in offering total solutions for some of the pharma clients in the U.S. Okay. That's exceptionally helpful. Maybe just sticking with the US, you know, just given this normalization, and I know you're not competing in like the van truckload market. But, you know, we've heard from some of the players south of the border that just given what have happened with rates, that has opened up the M&A pipeline. I know that's something you've been, you know, looking at a little bit more in 2023, and I guess with the Chief Strategy Officer appointment suggests that you also see deep pipeline. So just wondering how you've seen that pipeline evolve here as rates have settled in. I suspect, you know, some companies are finding themselves in more financial difficulty, and maybe there's more sellers out there. Yes. I think that's the reason why, you know, a bit more focus on M&A. I think, you know, when you grow twice the size as you were, when you were IPO'd and your executive team is relatively lean, to target and focus, sometimes you get, you know, there's distraction of the day-to-day operation. You don't wanna. You wanna focus on the golden goose and making sure that the, you know, everybody's taken care of and the business keeps on operating to the levels of our customers' expectations. So this gives us an opportunity to really focus on M&A. We feel that, you know, that the opportunity is there. You know, as you can see from our liquidity position, we are in a really strong position to take advantage of this. You know, so that's where we are. We're focused. We're excited about the, you know, the future, even the near future. Excellent. You know what? I'll leave it there. Thank you for taking my questions. Thank you, Kevin. Thank you. Your next question comes from Walter Spracklin with RBC. Please go ahead. Thanks very much. Good morning, everyone. Michael, when you're talking about, kind of those, higher margins that you've earned, a little bit, you know, due to some of the opportunities that were presented last year that aren't gonna be there this year, is this kinda going back to, you know, are we talking 100, 200, 300 basis point of normalization? Is there any, you know, kind of frame of reference that you can provide there or? I think the basis points you're talking about, is that margin, basis points or is that bottom line or? EBITDA margin, yeah. The EBITDA margin are, you know, still ahead of what we represented when we IPO'd some short three years ago. There's no doubt that, you know, we had some great tailwinds of last year, in recognizing not only on the U.S. side, but even on the Canadian side. You know, this time of the year, we were flying test kits into pharmacies across the country or by the truckload, 'cause they needed temperature control. You know, a little bit of, you know, not a bit, but quite a bit. I like where our margins are. I always thought that I was kinda surprising myself all the time. I mean, I think everybody seemed to be a little bit kinda eye-opener when we kept on seeing our margins increase over the last year. You know, we're efficient. No doubt that to start off the year, you know, we love to take care of our employees. You know, our frontline employees got 6% increase this year to start off the year. No doubt that we've had some, you know, above average lease increases in light of the industrial climate in Canada. You know, some of our facilities came up for lease and, you know, thank goodness it wasn't on the logistics side and more on the transportation side where it's not as big a cost of our goods sold. You know, we've had some areas where we've beefed up, not only on a capital side, but even on a cost. I mean, our IT integration for Texas is taking longer than we had expected. When you're running two systems, those costs are litigated. There's a bunch of internal things that we can streamline, you know, and some catch up as the year goes along. All in all, I would probably guess that we're, you know, we're in that range, where we are in that range of, you know, 24. We actually in our business plan, we actually exceeded our business plan for this first quarter. We are as an organization, are very happy where our positioning is. We recognize that, you know, Q1 and Q2 have the EBITDA tailwinds of last year that will be hard to replicate. We like our margin levels where we are right now, and we'll improve. It depends which businesses, you know, the margin levels in the U.S., for example, Walter, are less than what our overall margins are. You know, we see a lot in the pipeline on there, and as we bring on more equipment and more drivers, obviously that's gonna increase our EBITDA, but not necessarily our margin. There's a combination of things. We'll do what's right. I like, I've always liked that, you know, that anywhere between, you know, 23% and 26%, you know, depending on the mix of business in it. Yeah, that's great. You mentioned you growing your resources, equipment and labor. You having any issues there at all? Is there any constraints or access to equipment, labor availability and any extra costs that we should be mindful of, particularly on the labor side, due to just the inflation that's out there and in particular in trucking where there is that labor shortage? Yeah. You know, our turnover has been minimal. We're very fortunate on that. Our business, it doesn't spike, and it's not as seasonal as other businesses are as well. I think, you know, I think people like the resilience of our business. As a, you know, as we in the executive team go meet with the employees on a quarterly basis and talk about, you know, where are we gonna be in 5 years or where are we, you know, to be that we're very sustainable. There's a sense of, you know, comfort, and support, I guess. That's bode well for us in the labor market and with all the companies. I don't see any of that. Certainly, Walter, you know, a year ago or two years ago, it was more pressing, for sure. I mean, I know that I remember going to Boston to meet with the Boyle brothers. You know, it was very frustrating times, and big increases were put forth last year to keep drivers because, I mean, the business was such that, you know, and it wasn't just a, you know, 2, 3, 4, 5, 10%. It was greater than that. At this juncture, I don't see any issues with labor. As for e-equipment, we're starting to see it flowing pretty freely right now. You know, maybe as the year goes on, it becomes easier and easier to get equipment. Okay, that's great. My last question here, Michael, when you were going around on an IPO, you had a track record of a very solid kinda 10% top-line growth. You guided for something less than that going forward, conservatively, excluding M&A, let's say in the high single-digit range, though mid-to-high single-digit range. Now that we are lapping, as you mentioned, a couple compares, you know, tougher compares, do we reset that in 2023 to a, to perhaps a lower level and then back up to that mid-to-high single-digit? Do you think you can deliver on, even though a 2022 was a high watermark, you could deliver that kind of growth in 2023? I mean, I think we've shown, you know, we've shown that we, you know, we, you know, I mean, not that I guide myself on what consensus or what the analysts put. I guide myself based on what, you know, what our business units and our business leaders suggest and understand and. It's usually pretty close. You know, even if I look at this quarter, you know, we were off by what, you know, consensus by, what, CAD 1.3 million. If I look at the U.S. business alone, we were CAD 2.3 million year-over-year less than last year. Had we even met our EBITDA targets last year, we would have exceeded all the consensus marks except for maybe a bit of margin. We look at our revenue growth at 10 plus%. That, you know, that shows to me. I know part of it is artificially, with the, you know, higher fuel rates than they were in Q1 last year. We feel good about the organic growth of our industry and our positioning in the marketplace. You know, I guess, Walter, it's a matter of, you know, how much of M&A can we put in the pipeline this year. You know, obviously, Graham Cromb is not gonna be sitting still doing nothing for this. That's an investment into M&A, and we're excited. That I think by default, we will be able to, you know, to exceed. I feel comfortable with growth to the extent of being mid to high single. You know, our budgets are such that we were going for, you know, for 5% area because of the COVID tailwinds, which is consistent to previous. The M&A activity, you know, will increase that. That makes sense. Okay. I really appreciate the color. Thank you, Walter. Thank you. Your next question comes from Tim James with TD Securities. Please go ahead. Good morning, everyone. Thank you very much for the time. My first question, Michael, I'm just wanna return to your comments talking about the U.S., and you mentioned the pipeline being there, the largest really in the business. I assume that's relative to the Canadian business. Maybe you could talk about what your revenue opportunities are in the U.S., sort of the nature of those, what's driving those. An update there would be great. Well, we meet every month and look at the pipeline, see what was, you know, what we've met, anticipated. The pipeline's pretty healthy. Now granted it's a much smaller pipe than the Canadian pipe. It's, you know, as a percentage, it's a much bigger pipeline. We are limited by the amount of capacity that we are able to provide, i.e., truck, equipment. You know, I think we're gonna go about it in a, you know, cautious way. I, you know, I would expect double-digit growth in the US market for this year, for sure. Something's in the background. Okay. Yeah. Okay, that's helpful. Thank you. My next question, just general sort of industry question. What are you seeing, if anything, in terms of notable moves by competition? I guess I'm thinking more specifically in Canada, in kind of the two sides of your business. Anything that's impacting you either positively or negatively at this point, or is it all pretty kinda steady as she goes? Yeah, a good question. I think from a transportation side, it's, you know, we're very fortunate to be having that first mover advantage on a national scope. That's about, you know, protecting that. Our competition is bad service. I think you've probably heard me say that before. For us, it's always making sure that we understand the needs of the customer and adapt. I mean, I think, you know, there's a bit of a paradigm. I look at on our logistics business, and I look at capacity issues, and our biggest issues are actually in a 2 degrees Celsius to 8 degrees Celsius space. Our fridges are full. There's definitely a paradigm and change in moving towards more biologics and, you know, injectables versus pills, for example. We're looking at making sure that we have the capacity to manage that. On the logistics side, certainly the big players are there with the Kuehne + Nagel and the UPSs, Lindens, and Omars. There's, you know, they're healthy competitors 'cause they understand the business, but they're there. Hopefully, that gives you a bit of color on the Canada side. Yes, that's great, Michael. Thank you. Just one final question, if I could here. The higher rates that you cited in air freight forwarding, I think your volume was down just over 5%, but air freight rate's up. In addition, you've got some fuel pass-through benefits. I'm just wondering what you could point to in terms of driving those higher air freight rates. You know, it just seems like a pretty positive outcome in this environment, especially for kinda what we're seeing in sort of broader air cargo related rates. Is it because of contracts that you've already got in place or just, you know, again, sort of competitive advantages that allow you to price appropriately? What is driving that? Yeah, pretty much it's a pass-through in our world. You know, obviously our supplier of choice is Cargojet, and in the air. Typically it's, you know, open communication with our clients and there's, you know, annual reviews. Those are, you know, we look at it from that perspective. It's really nothing really extraordinary. Typically, that's pretty consistent across, you know, year-over-year. Okay, great. Thank you very much. Those are all the questions I have. Thank you, Tim. Thank you. Your next question comes from Ty Collin with Eight Capital. Please go ahead. Hi, good morning. Thanks for the questions, guys. Michael, you spoke to the ability to kinda build growth in the U.S. business this year by adding labor and equipment. I'm wondering if there's anything meaningful you can do to help build margins in that business now that you kinda lost that COVID pricing tailwind. Is there anything to do on customer mix or on the cost side of things? Just curious to get your thoughts on that. Yeah. Ty, that's a good question 'cause we looked at that and tried to understand the mix. For us, the mix, the mix is, you know, they're both Boyle and Skelton USA are truckload carriers in the healthcare specialized transportation and also in the defense, in Boyle's case, defense industry. So it's more of exclusive use type of carriage. You know, from a mix standpoint, you have a choice. You can go with a, you know, a third party broker, like a Kuehne + Nagel who manages on behalf of other pharma companies, on a buy and sell standpoint, and they're usually a little bit more aggressive in how they because they wanna make money off that. You, you can go directly with the manufacturer or, you know, the wholesaler distributors have a very strong networking in the U.S., you know, kind of a different makeup than Canada in terms of how pharmaceuticals are distributed. You got your third-party players like the UPS Healthcare in the U.S. as clients. Typically, you know, the margin mix is if you're dealing directly with the manufacturer, you tend to get a better yield because of the quality requirements from their perspective. Even though it might be the same product, it depends who's paying the bill at that time. That's about the only thing I can think of mix. We still offer a premium service, so that hence why we're able to still get the type of margins that we're getting. As much as, you know, the margin mix has gone down, it's still very attractive for business. I feel very comfortable with even the margin that we have today, compared to what we paid for the, for these entities and what it looks like forward. I don't... You know, truckload tends to be, you know, somewhat commoditized business. I was always fearful, and that's why we only bought 50% the first go around, just so I can understand it better. I don't think I can mix that. I think where the opportunity comes, Ty, is, you know, you know, maybe through, maybe looking at, you know, the empty miles where the mix of lanes, to ensure that we're selective in where we wanna go to making sure that our drivers are once they've unloaded, they don't have to go too far to pick up another load. We're looking at a facility outside of Olive Branch, for example, where a lot of healthcare clients are, just outside of Memphis, and just to look at, you know, a facility there that increase our business mix and, lower empty miles, for example. We. You know, the management teams both at Skelton and Boyle are very experienced, understand, very passionate, hands-on, and I think by default that, you know, we might get some margin increase, but it won't be significant, I think. We are in a position to increase our business. Okay, that's great color. Thanks for that, Michael. You know, looking at the 2.6% growth rate you reported in Canadian ground transportation, XD fuel surcharges, you know, certainly a little bit lower than the historical growth rate on that business. Can you just help us unpack that number in particular a little bit, what some of the moving parts were, and is that kind of a good growth rate for us to think about for the balance of this year in that business? Yeah, Ty, that's, you know, and I think I alluded to earlier on about, you know, flying test kits and these are anomalies that we were going through this time last year and into Q2, I might add. April was a very big month particularly on the ATS Health Care side of the business. Yeah. I would anticipate that being consistent in the next quarter. As COVID-related revenues go down, as it trended towards the end of the year, we will then by default be seeing higher growth rates in the later quarters of the year. Like I, you know, I know that it's, you know, it's not, you know, slight misses and margin growth, but I think it's, you know, to me it's just, it is truly a one-time, you know, issues that we've. Our business really hasn't changed, comparatively to, you know, when we IPO'd, and it keeps on growing. Got it. Appreciate the comments, Michael. Bye. Thank you. Your next question comes from Endri Leno with National Bank. Please go ahead. Hey. Yeah, good morning. Thanks for taking my question. The first one, I just want you to go back a little to the premium rate that you're talking about. I was wondering if you're able to give us any color in that were the premiums on the COVID revenues realized last year higher than what you realized on the rest of the U.S. business, or were they similar? Yes, Endri, they were higher. There's no doubt that they were higher. You know, it's funny, no, it's not funny, but when we went into the vaccine distribution with government, it was so vague and always on a per dose basis. You know, everything was new to everybody. So part of it was to ensure that... To me, you know, our executives were being bonused on ensuring that that execution was 100%. So for me, it was, you know, I took this on as, you know, being a responsible Canadian and ensuring that we did the right thing for Canadians. Frankly, I went into it not expecting to make money on that part of the business. You know, the urgency, expediency, the last-minute requirements, you know, and the fact that we were charging on a per dose basis, not knowing, you know, if we were sending, you know, 20 doses to a pharmacy or, you know, 2,000 doses to a hospital or 20,000 doses to a distributor or wholesaler, kinda, you know, you kinda threw it up in the air. As it turned out, those margins were much higher than normal. That goes through even, you know, at LSU as well, where they were mandated to do the Quebec vaccine. That was, like I say, it was an anomaly. The, you know, I refer to the test kits or other related product. There was a sense of urgency then as well, as Omicron was, you know, was, I guess, more contagious than the previous one. Yeah. Those are the things that, you know, last minute, when somebody wants something last second, you tend to get a premium on that, which is higher than normal. No, thank you. That's a great color, Michael. I just wanted to clarify one thing. The U.S. truckload, is that like around 15%-20% of your top line or is that a good range to think about it? Uh- One- One more time, Endri. Say it, Is our truckload business about 15% of our top line? The U.S. The U.S. business is about 20% of our top line. Yeah. Okay. By the way. The truckload. Yes. Which is, which is our U.S. business. Yeah. All of our U.S. business, Endri. By the way, speaking of truckload, we talked about margins. The cross-border business that we did during last year was that those were exceptional premiums because we were one of the few carriers that had vaccinated drivers that could cross the border. Great. Thank you. The other question I had, it was on the customer loss in packaging. Any color you can give us there? What led to their departure? Are you looking to replace them? I would appreciate any color. Yeah, that's probably the most commoditized part of our business. Interestingly enough, when we got into this business, Endri, we felt that it was super complementary because we're holding the product in the facilities, and then we're able to, you know, to offer an ancillary service. Interestingly enough, in the healthcare industry, the co-packaging decision-making is not necessarily aligned with, you know, people responsible for inventory and orders, et cetera. Those were areas where all of a sudden it became a little bit more commoditized part of our business and hence price sensitive. We, you know, we lost a piece of our business last year when Bayer. Bayer loved the concept, some other companies didn't. Bayer divested themselves of some of the businesses. We kept the inventory, the co-packaging, they felt it was, you know, they can get it somewhere else cheaper than so be it. As it turns out, you know, the space that we had, actually, we're retrofitting a lot of that space to more premium. We actually Our revenue per square foot is actually gonna increase as we retrofit that space. It's a by-product. I'll be honest with you, Endri, we don't pay as much attention as maybe we should. I say that because our attention is probably focusing on higher premium business. Oh, thank you. Good color. The last one for me, just wanted to ask a bit on the regulatory front. There were a couple of moves by the FDA to increase regulations. I think they're trying to push something later this year. The White House are looking to nearshore some of the supply chains. Have there been any developments there that you can share, or is it status quo? No, unfortunately, Endri, I wish they would hurry up. No, it's been more status quo. Obviously, with the economy kinda slowing, it seems, it feels like the economy is slowing down a little quicker in the U.S. than it is in Canada. You know, so there's more pressures, I think, internally with corporations to be cost conscious, even going up the chain to pharmaceuticals. That's where, you know, that's where the FDA can help companies like us. We haven't seen much of a movement, to be honest, to answer your question. Thank you. That's it for me. Thanks. Thank you. Your next question comes from Justin Keywood with Stifel. Please go ahead. Good morning. Thanks for taking my call. Had some questions on the M&A opportunity. What multiples do you think you could transact at? The pipeline described, is that mostly proprietary source deals? Hey, Justin. Good morning. I'll answer the first question first. It really depends the type of business, the multiples are and also the fit. If we're going to go out there and go and buy a business that is complementary to the healthcare but not as synergistic, then we'll pay a lesser multiple. If we feel that, you know, we truly have a tuck-in operation, we'll, you know, we'll pay a premium to it. It, every case is different. To us, it's making sure that we have the right fit, both culturally, and it, and it complements or improves our ability to take care of the customer. We're very focused on that. I think there's a lot of opportunities and frankly, we want to make sure that we're focused on where we want to grow our business. Hence why we've hired Graham to really start focusing and looking at these projects and sit down with our executive team and making sure that we're all aligned going forward. The multiples will be that it depends, right? I mean, I see how that you and analysts, you know, do multiples, and you have different multiples between logistics and transportation. We have both businesses in our portfolio, so it all depends. Remind me what the next question was. Sorry. No problem. On the deal pipeline, is it mostly proprietary-sourced or there's some competitive processes within that? Yeah, that would be proprietary. Yes, absolutely. Great. Then on the balance sheet, obviously in great shape, but we've also seen 10 consecutive interest rate hikes. What's the comfort level maybe in a net debt to EBITDA range as far as taking on leverage within the business to do M&A? Yeah, we have a lot of opportunity, but I'll let Peter answer that question for us. Sure. Morning, Justin. Michael, we've got lots of dry powder with our credit facilities and we're, you know, we've got cash sitting there, ready for M&A. We're certainly comfortable. Our leverage right now is less than 0.5, right? It's I think it's 0.48 in our financials for the quarter. We can take that up to three or even higher, you know, but we would want to keep it kind of sub two on an ongoing basis. We can flex it up, but, you know, we're conservative. Our balance sheet has been conservative throughout our public life, we would expect to keep it that way in large measure. Obviously, if there's a significant M&A opportunity, we can flex it up. Understood. Thank you for taking my questions. Thank you, Justin. Thank you. Your next question comes from Konark Gupta with Scotiabank. Please go ahead. Hi, good morning. This is Joey filling in for Konark. My first question is regarding the packaging division. It seems that packaging revenue rebounded from Q4 and looks similar to or slightly above the pre-pandemic run rate. How do you see the segment trend over the remainder of the year? Hi, Joe. Is it Joey? Yeah. Hi, Joey. Yeah, I think the reason it's trending is because of the seasonality of the business. Our largest client was, you know, a lot of those moved forward into Q1, so I think that's where you're seeing that. Where is it trending? I think I alluded to, I think it was, I think it was Ty, a question by Ty Collin that or Endri that suggested that. It was Endri, actually. Yeah. That suggested that, we're not, you know, maybe we're not putting as much focus on the business, but we are the customers that we have, we do, you know, they're they've been customers for years, and we keep on taking care of them and continue to, but we're not really putting as much focus on the packaging side of things. Who knows? Maybe Graham will come up with a suggestion that we should be, you know, focusing on that. At this juncture, our executive, you know, team is really focusing more on the logistics and transportation side of things. Okay. Yeah. Having said that, part of our packaging initiative is Credo, and Credo continues to grow. It's not high margin business at all, but it's very, it's very complementary and essential, especially with now that a lot of our business is becoming more, injectables and biopharma. So that becomes a good, a good piece of business, in the AHG network. Okay, great. Just on the fuel side of things, can you remind us about your fuel lag, considering the recent drop in diesel prices? Which of the five product segments are most sensitive to fuel price fluctuations in terms of revenues or margin? You're talking about fuel lag? Yeah. Yeah. I mean, I just... Our fuel lag depends on our business. Typically on the logistics side, you know, it changes. It can either be a month, up to a month or a week, typically. It's an, you know, different indexes, you know. Typically, you know, for example, in the Cargojet case, they, you know, we will try to mimic whatever they do, so that way it's consistent within our customer base. It's a pass-through, right? We're trying to be, you know, sensitive to that. On the US side of things, it's less, you know, less sensitive on that, truly pass-through there. We don't see much, you know, not a great lag. There's, you know. Okay, great. That's all the questions for me. Thank you. Thank you, Joey. Thank you. Endri has the following question. Your line is now open. Oh, thanks very much for the follow-up. Just the question I have is that, Michael, you mentioned that Credo continues to grow with Biologics, and I think earlier in the call you mentioned that the fridges are full with injectable and Biologics. Are you able to share, I mean, what the margin of handling these products? How does it compare to the rest of the business? Well, the rest of the business overall, but even, like, just kind of pills in general. Any color there? Thanks. I... I... It's pretty hard to deal with the, to identify the margin because when we're sending products on Credo, it can either go by air or it can go by ground. It's, you know, it's truly in line with the rest of our business. You know, certainly from a customer standpoint, it's a, it's an opportunity to, you know, from That's where quality becomes a big factor. The Credo product is qualified and best in class to move that product, 'cause obviously the product inside there is. You know, it's not that big of a premium compared to the rest of our business. It is an extra piece of business that otherwise, instead of putting it in a corrugate, you're putting it in the Credo box, and we're charging extra for that Credo use, so that Credo box, whether they're leasing the equipment from us or they purchased it from us. Certainly from an ESG standpoint, it's the most sustainable product out there. I remember, you know, times where some of the big pharma's were sending everything in Styrofoam and gel packs and, you know. In the pharma industry, Health Canada doesn't allow it to have multiple use when it goes in a gel pack and Styrofoam. Guess where those are ending up? In making GFL's life even better. you know, because we have a closed-looped network, and while these Credo boxes might be worth, you know, 500 plus dollars US per box, it's the fact that we're able to use them for long periods and qualified by Health Canada, we're able to give just as good value, if not better value as to our clients, not only from a quality standpoint, but even from a cost standpoint and from an ESG standpoint. It's best thing we can do. Appreciate it. Thank you. Thanks, Endri. Thank you. There are no further questions at this time. Mr. Andlauer, back over to you. Well, thank you very much, everyone. I'm glad that, you know, even though we've had the tailwinds of, be the beneficiary, last year, and we don't have that, the tailwinds of COVID, I'm glad I'm able to speak to you without a mask today and that we're, we're all in good health and, as is, Andlauer Healthcare Group. Have yourself a great day. Look forward to seeing you next quarter. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.