Good day, ladies and gentlemen, welcome to the good natured Q1 2023 results 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 zero for the operator. This call is being recorded on Wednesday, May 24, 2023. I would now like to turn the conference over to Spencer Churchill. Please go ahead. Thank you, operator. Hello and welcome to the good natured conference call regarding our Q1 results that were released earlier this morning. My name is Spencer Churchill. I'm vice president of Investor Relations and Corporate Development here at good natured Products. I'm joined today by Paul Antoniadis, Executive Chair and CEO of good natured, who will provide an overview of the quarter and commentary on the business and strategy. I'm also joined by Kerry Biggs, our CFO, who will be speaking to the Q1 results in more detail. If you've not yet received a copy of the press release, you can access it under the News tab on the good natured investor website at investor.goodnaturedproducts.com. For those of you unable to listen to the entire call, a recording will be made and available in the Recent Investor Events section of the website. Before I turn the call over to Paul, I'd like to remind listeners that management's prepared remarks contain forward-looking statements within the meanings of securities laws, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. These forward-looking statements include, but are not limited to, expectations surrounding future financial results, new orders and customer additions, new product launches, and M&A activity. We'll also be discussing non-IFRS measures, the definitions for which can be found in our MD&A and press release issued this morning. All financial results discussed on the call are in Canadian dollars unless otherwise noted. With that said, I'll turn the meeting over to Paul. Thank you, Spencer. Welcome everyone, and thank you for joining us today. Q1 represented our continued strategic focus in accelerating our growth in revenue mix contribution from our packaging business group as demand for sustainable packaging remains resilient despite the challenges posed by the macroeconomic uncertainty. Our investments in developing an integrated bio-based manufacturing supply chain in both the U.S. and Canada have been pivotal in enabling the company to execute this focus and take market share. Revenue from our packaging business group grew by 46% year-over-year in Q1, building on the 152% year-over-year growth delivered by the team in 2022. The continued momentum in our packaging business group was primarily driven by a series of organic growth initiatives. To highlight a few, in January we announced that Spring Creek Quail Farms, a family-owned business in Ontario, chose our curbside recyclable Bio-PET packaging for its naturally raised quail eggs that are delivered to grocery stores in the U.S. and Canada, including Kroger, Costco, Loblaws, and Sobeys. In March, we announced that one of our long-term customers, Food For Life, who makes fantastic gluten-free baked goods, recently launched their new no sugar added brownie in good natured plant-based packaging. These are a few great examples of how we're growing organically, not just with net new customers, but also by expanding our relationships with existing customers. Another key growth driver for our packaging business in Q1 was the continued successful integration of our FormTex acquisition, which was completed in July of 2022. The conversion to plant-based products at the FormTex facility in Houston has begun, highlighted last week with the announcement of a new commercial contract with the regional U.S. snack food producer that distributes across several prominent Texas retailers. This is a two-year agreement for our proprietary GoodGuard tamper- evident design in Bio-PET and is expected to deliver about $1.2 million in revenue in year one, with shipments expected to start in Q3 of 2023. The FormTex acquisition is another example of the team's execution of our strategic plan to drive packaging growth while building out our integrated supply chain infrastructure that allows us to leverage our industrial supply chain capabilities, optimize efficiencies, enhance productivity, and deliver innovation packaging solutions that align with the evolving needs of our customers and strong macro drivers for our plant-based packaging. A new macro driver that I want to highlight is the recent White House announcement and release of the US National Bio Strategy Goals, one of which is targeting 90% of all petroleum-based plastics to transition to bio-based, which is very significant for our industry. Combined with additional expected EPA regulations and development programs to support the advancement of both biomaterial engineering and domestic biomanufacturing capabilities, the U.S. is sending a very strong signal to industries that they are prepared to pave the way for climate tech companies like good natured to thrive and grow. These published priorities are directly in line with our growth plan and strategic direction I outlined earlier. The White House policy comes on the heels of regulatory changes at the state level. For example, in Hawaii, where they banned fossil fuel-derived packaging in many food and restaurant applications. We positioned the company to take advantage of this, having announced a distribution relationship with Sustainable Island Products, the primary distributor of compostable packaging products in Hawaii. We believe Hawaii could be an indication of the wave of demand that could come in the continental U.S. on the heels of the National Bio Strategy and as more states contemplate similar regulations as they assess Hawaii's success. Although the industrial business group experienced another year-over-year decline in revenue, which Kerry will speak to shortly, it's important to note we have aligned our industrial business group capabilities with our packaging strategic growth objectives to create intercompany demand for industrial products that will help keep these operations running at a higher capacity utilization during the short-term challenges faced by this business group. The declines in the industrial revenue was particularly concentrated in commodity petroleum-based products that were inherited through our industrial acquisition strategy. This industrial customer segment, not surprisingly, has faced more competitive pressures, higher declines in average selling price, and lower demand from their end users, even when compared to our plant-based industrial customers. Despite the rapid changes to the operating and macro conditions, the team delivered our sixth consecutive quarter of positive Adjusted EBITDA, positive cash flows from operations, gross margin improvements, and an ending cash balance of CAD 11.6 million, which is essentially unchanged from where we started the year. This was achieved by our continued efforts to lower our cost of production and a focus to reduce costs as evidenced in our 20% quarter-over-quarter decline in SG&A. In terms of outlook, we remain keenly focused on executing a long-term strategy to make plant-based packaging the largest portion of our business. Demand for sustainable packaging is where we continue to see market resiliency that will drive higher value products into our revenue mix while leveraging our integrated supply chain to help mitigate market softness in our industrial business group. Our business plan anticipates declining industrial business group volumes from external customers through the next several quarters. We will continue to activate cost saving initiatives to lower our cost of production, reduce labor and general expenses. With that, I want to formally introduce Kerry Biggs, our new CFO at good natured. We are very excited to have Kerry join the team, and he brings a wealth of experience as a public market CFO and formerly part of the senior finance team at lululemon. Over to you, Kerry. Thanks very much, Paul Antoniadis, and hello to everyone on the call today. I'll now talk through Q1 financial results in more detail. Revenue for Q1 2023 was CAD 20.3 million compared to CAD 25.9 million for Q1 2022 and CAD 23.3 million in Q4 2022, the prior quarter. In terms of business mix, the industrial business group contributed 52% of total revenue for Q1 2023, compared to 73% for Q1 2022. The decrease in industrial revenue mix was driven by a higher growth rate in packaging revenue versus our industrial revenue, lower ASPs and a general market softening as our industrial thermoforming customers continued to de-stock inventory buildup from prior quarters. The packaging business group represented 44% of total revenue for Q1 2023, compared to 24% for Q1 2022. The increase in revenue mix was driven by organic growth and the acquisition of FormTex completed in July 2022, as Paul had just mentioned. The top four customers in Q1 2023 represented 28% of total revenues, compared to 31% in Q1 of 2022. Moving to variable gross margin. Variable gross margin is a non-IFRS measure defined in our MD&A and press release, and for Q1 2023 was 38% compared to 32% in Q1 2022 and 33% in Q4 2022. Really there's three key factors that influenced this year-over-year increase in variable gross margin. First, a higher mix of revenues from the packaging business group in Q1 2023 as compared to Q1 2022, again driven by the factors Paul had previous mentioned. Second, a decline in some industrial input costs in Q1 2023, compared to Q1 2022 that more than offset the decline in industrial ASPs over the same period. Third, productivity improvements in the business in Q1 2023 associated with the variable cost of products such as direct labor efficiencies versus Q1 of 2022. Following on from this, gross margin for Q1 2023 was 28% compared to 26% for Q1 2022 and 25% in the prior quarter, Q4 2022. The year-over-year increase in gross margin was largely driven by the same factors that impacted Variable gross margin as we just discussed. We are maintaining our target ranges for variable gross margin of 28%-35%, and gross margin of 21%-28%, which is supported by our focus to increase the mix of revenue contribution from our packaging business group through organic growth initiatives and potential acquisitions that will help us advance that objective. On the SG&A front, SG&A, CAD 3.8 million was up slightly, up 1% compared to Q1 2022 and down 21%, compared to the prior quarter, Q4 2022. The year-over-year increase was driven by headcount additions from the FormTex's acquisition, and higher average overall wage rates. That was partially offset by cost saving initiatives, that we have put in place and continue to put forth. Adjusted EBITDA, a non-IFRS measure defined in our MD&A and press release for Q1 2023 was CAD 0.7 million, compared to CAD 1.2 million for Q1 2022 and CAD 5,000 for Q4 2022. The year-over-year decline in Adjusted EBITDA mainly reflects the lower revenue and resulting lower gross profit, offset slightly by the 15% decline in fulfillment and logistics expenses. As a percent of revenue, Adjusted EBITDA was 3% in Q1 2023 compared to 4% in Q1 2022. Overall, the company reported a net loss of CAD two and a half million in Q1 2023, compared to a net loss of CAD 1.6 million in Q1 of 2022, and a net loss of CAD 4.9 million in the prior quarter, Q4 2022. The year-over-year increase in net loss was primarily due to the factors already outlined above when I spoke to Adjusted EBITDA, as well as increased financing costs associated with increased interest costs of our variable rate debt and higher debt levels, primarily associated with the purchase of the company's Ayr, Ontario facility. Turning to the balance sheet, we ended the quarter strong with CAD 11.6 million in cash, again, down slightly from the year-end 2022 position, which had a cash balance of CAD 11.9 million. Net working capital at the end of the quarter was CAD 8.8 million, compared to CAD 10 million at December 31, 2022. Cash generated by operating activities in Q1 of 2023 was CAD 0.8 million, compared to CAD 3.1 million in Q1 of 2022 and CAD 4 million in Q4 of 2022. At the end of Q1 2023, we had CAD 105 million in assets against CAD 88 million in liabilities, which equates to an asset to liability ratio of 1.19 times compared to 1.22 times as at December 31, 2022. As a final note, the company remains in compliance with all associated covenants on the asset-based lending facility with Wells Fargo. I'll wrap up by encouraging listeners to visit our investor website at investor.goodnaturedproducts.com, where you can download our MD&A for additional commentary on our Q1 2023 financials. I'll now turn the call back over to Spencer. Spencer? Thanks, Kerry Biggs. Operator, could you now please give instructions for the Q&A session? Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset up before pressing any keys. One moment please for your first question. The first question comes from Ahmed Abdullah of National Bank of Canada. Please go ahead. Yeah, thank you, and thanks for taking my question. Just on the outlook and with regards to the de-stocking dynamic at the industrial business group, where do we stand at the moment, via the inventory levels at your customers and the normal run rate that you expect them to get to? This is, I'll take that question, Kerry. What we're seeing in the supply chain, there's obviously some heavy de-stocking coming out of 2022. Overall, the supply chains have normalized back to pre-COVID levels. Most of our downstream thermoform customers are moving to, you know, they're coming out of their inventory levels to just in time. You know, if you couple that with the variable or the unpredictable demand levels on the commodity petroleum side, I think we're gonna start to see that de-stocking, you know, from our perspective at the end of Q2, for sure normalize 100% back into the kind of just in time, which was kind of back in the pre-COVID levels. Okay. just touching on that comment around the demand cycle changes, do you see that as becoming a more pronounced impact on results going forward? You gotta remember, like back in 2022, there was a lot of hoarding going on, you know, inventory buildup 'cause people couldn't find the inventory levels. We were really preemptive in our planning where we, you know, we built up proactively anticipating that supply chain bottleneck. This is a, you know, kind of a non-exclusive to good natured. I think in general, you know, as you, as we look at the comparisons and, you know, in the next couple quarters, you know, we're going up against those, what I'm gonna call it, you know, inventory buildup because of the instability. We'll start to see those, you know, we began to see easing last year of supply chains Towards the, you know, Q3 period, the middle of Q3. I think, you know, that's kind of the comparisons that we're up on the industrial side. We're gonna balance that by, you know, driving our packaging growth. Like, you know, we use that industrial capability. We, you know, we acquire those industrial companies to really support and create a platform for growth on our packaging business. Our packaging business, as you can see, is doing fantastic. As, you know, we deal with that uncertainty on these commodities, it's our intentions to, you know, hyper accelerate our packaging growth to more than, you know, utilize a higher level of the capacity of those industrial facilities. You know, our focus more is on packaging. It's a higher value to the company. It's a higher value in the revenue mix. You know, those industrial business groups, although you know, our intentions is to sell industrial, you know, product on the market, plant-based product, but our aim is to really use that capability to explore our packaging. I don't know if there's anything else, Kerry, that you'd like to add or any other comments from your side. No, I think that's pretty good, Paul. I think you kinda hit it on the head. I think you're seeing, with our margins, you're seeing the normalization of the supply chain and ASPs are down, but our cost inputs are down just as much. Yeah, I think that's good. Yeah. Just last one from me. On the packaging side, you highlight ASPs are down. I think that's more on the industrial. On the packaging, are you kind of able to keep some of the pass-throughs that you've worked on in the past and not necessarily, you know, pass them back on to the customers? No, I mean, we. You know, if you look at our growth in Q1, on top of our prior year growth, that business group is also experiencing ASP declines. It's just the demand level is very, very strong. You know, we're adding a lot of net new. You know, this White House announcement, the amount of inbounds that we're receiving and interest, particularly in the bio-PET space is exceptionally strong. You know, we need to be mindful and purposeful that now is the time for us to strike, right? As we see capacity, you know, industrial and the commodity side soften, we need to capitalize on this packaging demand, and we intend to. We are really gonna demonstrate our focus on executing on the packaging business. Like we're very, very, very optimistic and frankly super confident on what we're seeing on the packaging business group. That's great. Thanks. I'll pass the line. Thank you. Once again, ladies and gentlemen, if you do have a question, please press star one at this time. The next question comes from Ahmad Shaath of Beacon Securities. Please go ahead. Hey, guys, congrats on a solid quarter. I guess most of my questions were asked already, but maybe, Paul, remind us of the CapEx program, the efficiencies that you've been working on so far, and then how much of that benefit have you guys captured already, and how much is yet to come? Maybe if you can talk to now that you have FormTex under your belt for a while, what do you see of opportunity there in terms of capacity improvement or operational improvement as well? Yeah, sure. Absolutely. I'll start just contextually. You know, the industrial business groups that we acquired in, you know, 2021, in December of 2020, basically 2020, really kind of set the stage for us in a supply chain constrained environment to ensure that our packaging growth was not at risk and actually could be put on the offense. We followed that very closely with the FormTex acquisition that you just asked about. We're very confident with the FormTex acquisition, which we reference as our Houston, Texas facility. Because Texas, you know, they love to buy from Texas-based companies, and that's our, the second largest economy from a state perspective in the U.S. You know, even though we're just about at the year cycle, I think you're going to see, you know. You know what we're seeing in general is the benefit of having access into the Texas side, whether it's produce, whether it's grocers, whether it's food producers or wholesale bakers. You know, we think that's, you know. That facility's got the capacity to grow. Related to the CapEx, I just wanna make sure I properly answer that question. Like, you know, for every dollar of CapEx, we wanna deploy, you know, as much as we can into packaging. Like, we're very focused in this macro environment of as supply chains level out, to capitalize on these macro trends. You know, this White House announcement and what's going on in Hawaii is a massive leading indicator that we are absolutely on, spot on a trend in policies that are taking place at state and federal level now. You know, we don't build a business, I've said this for years, around government policy, but we are seeing post that announcement, that was made by the White House, the level of inbound that just means, you know, just reinforces to Kerry and I and the whole team. Whether it's OpEx or whether it's CapEx, it has to go into packaging. Now, the efficiency associated with an integrated supply chain, you know, we've made some big progress with that. I still think there's opportunity for improvements. I think our numbers are starting to show some of those improvements. I, you know, we've activated and continuing to activate cost saving initiatives and productivity initiatives. Not only from our input costs, but just our general operation. Like, we wanna get into a cost structure and productivity structure that really showcases this integrated supply chain. I still think we're in the early innings of those savings, but they're starting to show with our variable margins being at the higher end of the range. That's great. I appreciate that color. Maybe an update on, I know maybe probably the M&A pipeline maybe on hold a little bit, but any potential seconds at least or opportunities you see there that you can capitalize on? Well, I mean, the short answer is yes. We've gotta do it. The deal's gotta be right. You know, this environment's actually amplifying opportunities. Again, we're very focused on packaging. It has to be properly constructed if it takes place. Our main goal strategically is to really accelerate the growth in packaging. We believe by doing that, as the economy recovers and, you know, it's going to recover, we're gonna be in a position to further accelerate our market share in plant-based packaging. I don't know, Kerry, if there's anything else you would like to add to that. Yeah, no, I think, I think that's fair, Paul. You know, I would say, you know, we are being extremely prudent with capital and, you know, so on the CapEx front or M&A front, you know, I'd say, you know, to Paul's point, it needs to be in the strike zone, and it needs to be at a value that makes extreme sense at this point. Yeah, I think it's, I think it's there to be had. Yeah, we're being prudent with anything we do on the M&A front right now. That's good. Last one, maybe a housekeeping item. Just back in our FormTex, I'm assuming if FormTex didn't grow, maybe you can give us a little more color there. Your packaging organic growth is around 20% or in that range. Is that a fair number? Well, we give our kinda organic metric at the, you know, as you know, on an annual basis at the end of the year. I would say that at a, at a broad view, we're very, very confident in what we're seeing in packaging. That's why we wanna make sure, on this call, that we really land that message very clearly. You know, This is not a new message, just contextually. We've been saying, you know, that we've been positioning this message from, you know, Q3 and we're really going to demonstrate this acceleration here in the year for reasons that we've already, you know, kind of discussed. I will say in FormTex, you know, there's capacity for us to continue to utilize. We intend to fill that up with a bundle of new customers. Sounds good. Thanks. Thanks, guys, for answering all my questions and congrats on a solid performance. I'll jump back in the queue. Thank you. I'm seeing no more questions in the queue. I will turn the call back to Spencer Churchill for closing remarks. Thank you, operator. For anyone who didn't have the opportunity to ask a question or wishes to ask a question offline, please send these to invest at goodnaturedproducts.com with your contact details, and we'll respond to them as soon as possible. Thank you for, to everyone for joining us, and have a great rest of your day. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.