Good morning, ladies and gentlemen, and welcome to the good natured Products Inc. Q2 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 Tuesday, 29 August 2023. I will now turn the call over to Spencer Churchill. Please go ahead. Thank you, Operator. Hello, everyone, and thank you for your interest in good natured. I'd like to welcome you to our conference call regarding our Q2 results that were released earlier this morning. As mentioned, my name is Spencer Churchill. I'm Vice President of Investor Relations and Corporate Development here at good natured. 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 Q2 results in more detail. If you have 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 available in the Recent Investor Events section of the website. Before I turn the call over to Paul, I'd like to remind any listeners that management's prepared remarks contain forward-looking statements within the meaning 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 financial measures, the definitions of which can be found in our MD&A 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. I'd like to start by recognizing our team's focus on executing our strategic priority to grow packaging business group revenue and revenue mix contribution. This is an important contributor to the improvements in our Variable Gross Margin, our seventh straight quarter of positive Adjusted EBITDA, and just under CAD 750,000 of Adjusted EBITDA for the first half of the year. Revenue in Q2 of 2023 from our packaging business group grew by 83% year-over-year compared to Q2 of 2022, and 62% for the first half of the year compared to the first half of last year. We feel it's important to highlight this performance as it demonstrates the relevance of our long-term business model, along with our team's commitment to delivering on our strategic objectives. This is very different from the overall tone in recent quarterly announcements from the packaging industry in general, which in most cases, report a decline in packaging sales numbers. We continue to attract market share with our plant-based packaging offering and remain very positive about our pipeline for growth. This is driven by a combination of new packaging programs expected to enter production in the back half of the year, along with strong macro tailwinds from customers, government regulations, and business sustainability mandates to adopt more sustainable packaging. That said, we keenly recognize the challenge for our business and stakeholders to cycle through reductions in quarterly revenue as we've navigated considerable macro volatility and supply chain normalization that we first identified in Q3 of 2022. We also want to highlight that year-over-year packaging revenue growth comparisons may moderate somewhat in the back half of the year as we lap the first anniversary of the Form Tech acquisition. Kerry will cover more specifics related to our revenue numbers shortly. Our industrial business group has been most impacted by the volatile market conditions. Industry-wide inventory destocking, lower ASP, and increased competition in commodity petroleum-based products that were inherited through our industrial acquisition strategy have been the major contributing factors to the reduction in industrial business group revenue and revenue mix contribution in Q2 of 2023, with less negative impact being felt from our plant-based industrial products. These declines in industrial business group revenue have highlighted our focus on executing on our strategic priority to build our packaging business group into the largest revenue and margin contributor. The full execution of this strategy will see increased usage of our extruded sheet manufacturing capacity for our own thermoform packaging requirements, supplemented with incremental third-party industrial business group revenue, specifically from plant-based materials. To be clear, we will always focus on providing our customers the best plant-based industrial products available to support their business needs, but also ensure we have efficient internal supply chain that supports our packaging business. With the combination of these initiatives and slowly normalizing supply chain industry-wide, we anticipate our industrial business group to show signs of improvement later this year in the current macroeconomic conditions. I'm proud of our team's commitment to embracing this new operating environment and not accepting the status quo. Our Q2 performance continued to center on identifying and implementing cost reductions and gross margin improvement initiatives. As an example of this, our packaging variable gross profit grew at a faster rate than packaging revenue, which represents almost half of our total revenue for the quarter. The strong revenue and margin performance out of our packaging business when combined with productivity enhancements, enable the company to maintain our margins at the mid to upper end of our targeted ranges. To touch on cash management now, liquidity has been at the forefront of our management decisions while navigating this period of considerable volatility. We finished the quarter with CAD 13.2 million in cash and reduced our long-term debt by CAD 1.5 million. In terms of outlook, we remain focused on executing our 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 resilience and a robust pipeline of new business that will drive higher value products into our revenue mix. With that, I will hand it over to Kerry Biggs, CFO of good natured, to talk through the Q2 financial results in more detail. Over to you, Kerry. Yeah, thanks very much, Paul, and hello to everyone today on the call. Let's go through Q2 now. Revenue for Q2, 2023, was CAD 18.3 million, compared to CAD 25.5 million for Q2 2022, and CAD 20.3 million for the prior quarter, Q1 of 2023. So in terms of business mix, as Paul mentioned earlier, the packaging business group represented 47% of total revenue for Q2 2023, compared to 19% last year, Q2 2022 quarter. Packaging business group revenue increased 83% year- over- year, as Paul noted, driven by the addition of new customers, cross-selling new products to existing customers, and the acquisition of FormTex in Houston in July of 2022. The industrial business group contributed 49% of total revenue for Q2 2023, compared to 78% last year, Q2 2022. So the industrial business group revenue declined 55% year-over-year. In addition to the factors Paul outlined and noted earlier, we also continue to witness, as we outlined in prior quarters, an overall industry shift in our industrial business group to just-in-time ordering as supply chains have begun to normalize. Onto margins. Variable Gross Margin, a non-IFRS measure defined in our MD&A and press release for Q2 2023, was 37% in Q2 2023, compared to 33% in Q2 2022, and 38% in Q1 2023. There were three key factors that influenced this year-over-year increase in Variable Gross Margin. First, higher mix of revenues from the packaging and general merchandise business groups in Q2 2023, as compared to Q2 2022, with the higher packaging mix driven by the factors previously mentioned above. Second, a lower industrial business group revenue mix contribution. And finally, third, productivity enhancements in the variable cost of products, such as direct labor efficiency, as evidenced by the 32% decline in Q2 2023 variable cost of products, which exceeded the decline in revenue as compared to Q2 2022. On the gross margin front, gross margin for Q2 2023 was 25.5%, compared to 26.4% for Q2 2022. The slight year-over-year decline was primarily due to higher overhead expenses associated with the acquisition of FormTex in Houston, higher utility costs, and an increase in equipment depreciation. Overall, we are maintaining our targeted ranges for variable gross margin of 28% to 35% and gross margin of 21% to 28%, which is supported by our focus on increasing the mix of revenue contribution from our packaging business group through both organic growth initiatives and potential acquisitions. On the SG&A side, SG&A of CAD 3.7 million for Q2 2023 was down 19% compared to Q2 2022, driven by a reduction in headcount, specifically 214 individuals last year to 181 at the end of Q2 2023, along with a number of other cost-saving initiatives that we've put in place. These savings were partially offset by increased headcount associated with the FormTex acquisition, as well as overall growth in average wage rates across the board. Excluding SG&A expenses associated with the FormTex acquisition, Q2 2023 SG&A, excluding acquisition activity and one-time charges, declined 22% on a year-over-year basis. So just as an example, if we annualize the Q2 2023 quarterly SG&A costs, our SG&A annualized for the full fiscal year would be CAD 14.9 million. Comparing that to the CAD 17.9 million of SG&A costs for the full fiscal year 2022, our 2023 run rate is now trending at over CAD 3 million lower as a result of these cost-saving initiatives that we have put in place. And really, to echo Paul's earlier comment on our team not being satisfied with the status quo, there are ongoing efforts since Q3 last year to identify inefficiencies, introduce improvements, and drive down our operations costs. We believe management's early identification of the incoming market volatility and our relentless pursuit of managing cash and liquidity is another factor that provides confidence to our stakeholders about our commitment to operational excellence in the face of challenging, macro conditions. Onto the EBITDA side. Adjusted EBITDA, again, a non-IFRS measure for Q2 2023, was CAD 0.1 million, compared to CAD 1 million in Q2 2022, and CAD 0.7 million in Q1 2023, last quarter. The year-over-year decline in adjusted EBITDA mainly reflects the lower revenue and resulting lower gross profit, offset slightly by the decline in SG&A and fulfillment and, logistics costs. So as a percent of revenue, Adjusted EBITDA was 0.3% in Q2 2023, compared to 4% in Q2 2022. I'll just comment on net income, net loss. The company reported a net loss of CAD 3.6 million in Q2 of 2023, compared to a net loss of CAD 3 million in Q2 2022, and a net loss of CAD 2.5 million last quarter, Q1 2023. Again, 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 the increased interest costs of our variable rate debt and higher debt levels and depreciation costs, primarily associated with the purchase of the company's Ayr, Ontario, facility. So turning to the balance sheet, the company strengthened its liquidity position with the completion of a brokered private placement with net proceeds realized of CAD 4.4 million. Beyond giving the company fuel for organic growth in its packaging business group and an opportunity to consider additional strategic acquisitions, this financing also enabled us to renegotiate the terms of our asset-based lending facility with Wells Fargo. I think as previously disclosed, the minimum 12 months TTM trailing adjusted quarterly EBITDA requirements for the remainder of 2023 have been waived. Again, to achieve this deal, we agreed to a 20% increase or a CAD 1 million increase in our liquidity requirements, which ultimately does not have a material impact on our financial planning for the current fiscal year. We have ample liquidity to cover the CAD 3 million cash liquidity requirement portion of the overall CAD 6 million liquidity requirement under the facility, given our CAD 13 million in cash in the bank at the end of the quarter. We do want to be clear that the equity private placement was not completed to satisfy any conditions of the lending facility with Wells. Continuing with the discussion on our balance sheet, we have taken steps this quarter to get more granular in our disclosure and classification of our debt stack to provide more clarity to the market. You know, we want to call out that almost 60% of our debt outstanding is secured against hard assets. In the case of the company's outstanding mortgages that are secured against land and buildings, accounting rules require us to value them at book on our balance sheet, regardless of the current market value of those assets. We're continually working to find opportunities to restructure and renegotiate our long-term debt. As an example, in the quarter, we successfully renegotiated a June 2023 lump sum payment of CAD 500,000 due to the government of Canada's Western Innovation Initiative program into monthly installments to be paid over a 24-month period. We also reduced our leverage from 2022 year-end by almost CAD 1.5 million, as seen on the cash flow statement. In addition, we're in flight to consolidate a leased warehouse into our Ayr facility, which will further lower our long-term debt under our lease obligations. We ended the quarter with CAD 13.2 million of cash, up from CAD 11.9 million in cash at the end of 2022. Again, net proceeds of CAD 4.4 million from the equity financing in June of 2023, and CAD 0.1 million of positive cash flow from operations in the first half of the year were partially offset by the CAD 1.5 million of net debt repayments I've noted, and CAD 1.4 million in growth CapEx. Net working capital at the end of the quarter was CAD 9.2 million, compared to CAD 10 million as at 31 December 2022. We had CAD 102 million of assets against CAD 85 million in liabilities, which equates to, an asset to liability ratio of 1.21 times at quarter end, compared to 1.22 as at 31 December 2022. So with that, 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 Q2 2023 financials. So with that, I'll just turn it back over to Spencer. Spencer? Thanks, Kerry. Operator, could you now please give instructions for the Q&A session? Thank you. Ladies and gentlemen, should you have a question, please press the star followed by the one on your phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please lift your handset before pressing any keys. One moment, please, for your first question. Your first question comes from Ahmad Abdullah from National Bank of Canada. Please go ahead. Yeah. Hi. Thank you, guys, for taking my question. Looking at your packaging revenue results, the Q3 of last year marks a high watermark for the segment. Do you still expect to see some growth in the coming Q3 against these tough comparables? Yeah, Ahmed, this is Paul. Thanks for the question. Happy to hear your voice. Yeah, as we mentioned, you know, July first represented kind of our last or first year anniversary of the FormTex acquisition. So we do expect our packaging growth to start to moderate. We've been on that by saying we've got a really strong packaging pipeline, and we announced, as an example, our second largest organic, organic growth packaging program in the history of the company. And that program, along with several other programs, are going to start entering into the production cycle in the latter part of the year. So we anticipate, you know, the growth rate to moderate while these new programs get up and running through our production. Okay, that's fair. On the industrial business group results, can you give us a bit of color related to the stabilizing of the business you acknowledged in your outlook? I mean, do you expect stabilizing to happen at the new run rate level of around CAD 9 million quarterly revenue, or is there a chance that we see growth back to prior levels, at least the Q1 of this year? Yeah, I think what you're seeing just industry-wide is, you know, you know, just to ground ourselves, so 2022 was a really kind of unique environment where supply chains were exceptionally disrupted. People were paying premium just to get access to supply chains or to slot up in production timelines. Like we're—I think at one point in time, you know, our production was backlogged, you know, almost 13 weeks or beyond 13 weeks. That world is gone. So the comparison to, as you know, we call it normalizing, like I think industry-wide, we're seeing that normalization not only go back to that pre-supply chain disruption period, inflation period, but everyone's moving to just in time. Now, those comparisons are going to, you know, are gonna lapse. We began to see that in Q3 of 2022, and so you'll begin to see, again, industry-wide, along with our industrial group, particularly on the petroleum products that we have yet to convert, those comparisons will become, less, unique, right, and challenging. At the same token, as people are moving into just in time, we start to go into, you know, comparisons that are, are more in that normalized supply chain. We'll start to see, the revenue growth, not only at the current run rate, but we believe our industrial plant-based business in the industrial side is where we're really starting to invest more, initiative, to increase the mix of our industrial, industrial plant-based business as an overall mix to that group. But I just also want to balance, like we're, you know, final comment is we're focused on our packaging growth. Like, I think, Ahmed, the demand on our packaging business is, it's a unicorn. Like, if you look at our 85% growth, the strength in our pipeline, the recent announcement, like, we have a lot of confidence, that based on the, the macro comments I made, there's a tremendous amount of business for us to go and grab. Okay, that's fair. Just one last one for me. Sure. On the Variable Gross Margin, your first half Variable Gross Margin has been tracking at, like, 37%, but you kept the outlook range of 28% to 35%. Is there an expectation for an elevated cost base in the second half of the year? Can you give us some color also as to why that's the case, if it is the case? Yeah, I will say that we're just maintaining that gross margin range just because we want to, you know, set expectations in the market. We do believe that our variable gross margin based off factors Kerry has spoken to, myself with the packaging mix, that we'll be able to hit the upper range of that variable gross margin. But for us, it's more of just being conservative as it relates to our variable gross margin. There are some things that we're also looking internally from a production kind of productivity improvement. So we believe there's still upside in that variable gross margin range. But for us, it's just we want to be consistent through the year, like we manage this business to, you know, on an annual basis, not quarter- to- quarter, and, and we just want to be consistent with those expectations. I don't know, Kerry, if there's anything else you'd like to add to that. Yeah, maybe just specifically to your question, you know, we do not foresee any, you know, unforeseen or known costs to be, you know, pushed through the business over the last, you know, call it four or five months of the year. So maybe I'll just, you know, keep it as simple as that. Okay, thanks. That's fair. I'll pass the line. Thank you, guys. Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from D'Angelo Volpe from Beacon Securities. Please go ahead. Hi, I'm calling on behalf of Ahmed. Thank you for taking my question. Just wondering how you think we should think about the ramp-up of the new contract with the pharma customer? And, is there any potential for expansion with this customer? Yeah, the way you should look at the pharma ramp-up is we're moving now to full-on spike in getting that program up on its feet. We're very, very confident in securing the multi-year supplier agreement. I would probably look at that to start to hit the production on the latter part of Q3 to early Q4, because it's a... You know, basically involves the preparation of all the packaging tooling, so it takes a little bit of time to get into production. Is there upside on that? I would say based off of the scale of that program, there's a little bit of upside, but we have a majority market, what we call share of wallet with that customer. Okay. And then, sorry, just to re-highlight, and then you guys feel confident that there is potential for expansion with the customer? Slight expansion. Slight. Okay. Thanks, thanks for that. I'll, I'll hop back into the queue. And once again, if you'd like to ask a question, press star one. And there are no further questions at this time. I will turn your call back over to Spencer Churchill for closing remarks. Actually, I'm sorry, we have Ahmed Abdullah, that is from National Bank of Canada. Please go ahead. Yeah, one final question. I see you highlighted an appraised value of your real estate at around CAD 30 million. Is there something here to read into it? Is that normal course to get a third-party appraisal, or is that required for some potential transaction that's happening? I'll let you take that question, Kerry. Yeah, no, I think under some of our agreements, you know, with the vendors that, you know, we purchased the assets, you know, we required certain of these appraisals. So, normal course business. So yeah, it's ultimately, you know, we're doing our due diligence just to make sure we understand. But under the terms of some of these purchase agreements in the past, you know, we, we're required to get these, so good to have them in our hip pocket, and it just kind of goes to show that, you know, there is significant value that backs some of the mortgage debt that supports the business. Okay, that's fair. Thanks for the call. Spencer, please proceed with your 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@goodnaturedproducts.com, with your contact details, and we'll respond as soon as possible. Thank you to everyone for joining us, and have a great rest of your day. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.