Welcome to the GURU Organic Energy Q3 fiscal 2022 results conference call and webcast, being recorded today, September 14, 2022, at 10:00 A.M. Eastern Time. At this time, all participants are in a listen-only mode. Following management's presentation, there will be a question and answer session with financial analysts. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulty hearing the conference, please press star zero for operator assistance at any time. GURU's press release, MD&A, and financial statements are available in the investor section of its website and on SEDAR. During the call, the company may refer to certain non-GAAP measures. Reconciliations are available in its MD&A. Also note that all financial figures are expressed in Canadian dollars unless otherwise indicated. I would also like to remind you that today's presentation may contain forward-looking statements that GURU's current and future plans, expectations and intentions, results, level of activities, performance goals or achievements or other future events or developments. As such, please take a moment to read the disclaimer on forward-looking statements on slide two of the presentation. I would now like to turn the call over to Carl Goyette, GURU's Chief Executive Officer. One moment. Thank you, operator. Good morning, everyone, and welcome to our earnings call. Joining me this morning is our CFO, Ingy Sarraf. This past quarter, we continued to execute on our strategy to replicate our success in Quebec, across Canada, and more selectively into the United States. At the risk of being cliché, this is a marathon, not a sprint. This is a long process built with hard work, small wins, and often challenges, but we are already starting to make headway. Consumer scan data in Canada has shown strong year-over-year sales increases of more than 35% for the last few months. In parallel, our retail internal shipments in Canada increased by 12% in the three months ended July 30, compared to the same period last year. This 23% gap between consumer purchases and our shipments can be mainly explained by inventory depletion at retail and industry-wide labor and logistics disruption. We are confident that in the future, growth in shipments will return to similar growth level as consumer scan data. Despite this growth in shipments, net revenues contracted this quarter versus same quarter last year as a result of our new distribution and sales model in Canada. We have a strong distribution partner that is committed to GURU in Canada and is as confident as ever in our go-to-market plans, our in-store marketing activities, and hence, our ability to meet consumer demand. Fortunately, our sector-leading gross margins of over 54% remain steady as we continue our careful supply chain management and prudent pricing practices, with no issues from a raw material procurement perspective. In terms of product pricing, these are being accepted by consumers as we keep pace with the category. During Q3, we ran our coast-to-coast Good Energy for the Everyday Marketing campaign, our largest Canadian campaign to date. It featured a strong mix of out-of-home TV and digital elements. In addition, the campaign included one of our most comprehensive summer sponsorship and sampling programs, with over 30 events from May to September across Canada to support our rapid pan-national distribution in retail. We are also an official sponsor of CTV's The Amazing Race Canada, the most-watched summer series. As mentioned previously, consumer purchase scan data showed strong year-over-year sales increases of over 35% this summer. Select Canadian retailers outside of Quebec, primarily in urban areas where our consumers were targeted by our marketing campaign, are beginning to report increases in market share. Some urban banners are even exceeding 3%, sometimes placing GURU as the number four energy drink brand. This is consistent with our path to growth in Quebec, which led us today to the number two position in the leading Quebec grocery banner, reaching over 22% market share. Out west, our distribution partner is now outselling forecasts, which is a strong indicator of increased brand awareness and conversion translating into shipments. As with previous campaigns we ran, we ran another round of research, the most significant to date, including a sample of 4,000 consumers in English Canada. Not only are the results positive, but also confirm our strategy and the momentum we're starting to see in consumer scan data. In the results, we saw significant improvement in GURU brand conversion in English Canada, reaching 4% consumer share. In our primary consumer segments, we are seeing improved awareness at 31% and conversion to regular consumption at 6% consumer share. Like in Quebec, the GURU brand in English Canada is growing the category rate by attracting new consumers to the energy drink industry. The goal of our marketing efforts has been to communicate the GURU brand's unique positioning for its progressive consumers, and we are pleased to see that the consumer understands our strongly differentiated product and brand positioning. Most importantly, the benefits of these sequential market research reports are that they provide us key insights on drivers of awareness, trial, and conversion that will allow us to refine and optimize our marketing investments in the future. After quarter end, we continued our marketing investments. We announced our first major sports partnership and became the exclusive energy drink for the Canadian Elite Basketball League Championship weekend in Ottawa. The partnership included a comprehensive media plan that consisted of advertising and fun-filled activation opportunities. Just this month, we launched our Back to Reality national marketing campaign, which is aimed at bringing good energy to progressive urban consumers across Canada through the fall. In Quebec, this includes our latest seasonal launch with Occupation Double TV reality show, a long-standing sponsorship relationship which continues to serve us well in this market. U.S. performance held steady during the quarter as we continue to hold the number one energy drink position in the natural sector in California. According to SPINS, which measures GURU's U.S. consumer scan data, we experienced 23% growth in California in Q3 2023. 2022 versus Q3 2021, showing continued strength in the U.S. market. We are also aiming to expand our distribution network in that state, as the California lifestyle and progressive value is the perfect match for our brand and target audience. In alignment with this, we are participating in a 12-week Costco California roadshow. While it's still early in the program, consumer response and sales have been very positive. In August, we launched our GURU Guayusa Tropical Punch in targeted banners in the U.S., including the Costco roadshow as of last week. Many more banners will be launching next spring during planogram reset period. These activities are being undertaken to replicate the success of what is today the number one ranked in 2022 innovation SKU in Quebec. As for online, we continue to show strong sales performance and over 50% growth in the quarter compared to the same period last year. To improve profitability in the segment, we have reduced our investment in consumer acquisition. I will now turn the call to Ingy, who will provide you with more details on our Q3 results. Ingy, over to you. Thank you, Carl, and good morning, everyone. I'll begin with net revenue for the quarter, which was CAD 7.7 million compared to CAD 8 million for the same three months in 2021. Despite the lower revenue, shipment volume for the quarter increased by 14% from the same quarter a year ago due to higher velocity and increased points of sale in Canada. As such, the decline in quarterly revenue is attributed to the change in our business model in Canada, as well as industry-wide labor shortages and logistic constraints. For the nine-month period, net revenue increased by 3% to CAD 22.3 million from CAD 21.7 million for the same period in 2021, as overall shipment volume grew by 20%. U.S sales were CAD 1 million in Q3 2022, compared to CAD 1.1 million in the same quarter in 2021. For the Q3, gross profit totaled CAD 4.2 million, compared to CAD 5 million last year, and gross margin was 64.8% in Q3 2022, compared to 62.6% in Q3 2021. For the nine-month period, gross profit totaled CAD 12.2 million for 2022, compared to CAD 13.6 million for fiscal 2021. While gross margin for the nine-month period was 54.5% in 2022, compared to 62.5% in 2021. The year-over-year decrease in gross margin was anticipated due to the change in our Canadian distribution, sales, and merchandising model, and comprised distribution, selling, and merchandising fees, a portion of which was previously categorized as SG&A expenses. Gross margin was also slightly impacted by higher product costs driven by inflationary pressures on input and transportation costs. SG&A was CAD 11 million for the Q3 of fiscal 2022, compared to CAD 7.2 million for the same period in fiscal 2021. In Q3 2022, selling and marketing expenses accounted for 76% or CAD 8.5 million of the SG&A. We will continue to invest in our brands moving forward while optimizing spend based on market research insights mentioned by Carl earlier to return to profitability. Adjusted EBITDA was a loss of CAD 6.5 million for the quarter, compared to a loss of CAD 2 million for the same three-month period in the previous year. The decline was largely a result of higher selling and marketing expenses and, to a lesser extent, lower gross margin, as explained above. Net loss for the quarter totaled CAD 6.5 million or CAD 0.20 per share, compared to a net loss of CAD 2 million or CAD 0.07 per share for the same period a year ago. The increase in net loss reflects the lower margins and the additional costs associated with the brand, field, and trade marketing activities. Just before the end of the quarter, on July 21st, we announced our intention to enter a normal course issuer bid. The NCIB began July 25th, 2022, and runs for one year. The NCIB allows for the purchase for cancellation of up to 500,000 shares, which represents about 1.5% of our shares outstanding as at July 14th, 2022. To date, we have purchased 8,460 shares under the program. While our capital will continue to be primarily aimed at growing our market share to generate sustainable long-term growth, having an NCIB program in place provides us with flexibility to repurchase shares on an opportunistic basis. As at July 31st, 2022, our financial position was very strong, with cash and cash equivalents and short-term investments of CAD 44.8 million and unused credit facilities totaling about CAD 10 million. This will allow us to continue to pursue our growth objectives and the related investments required for our climb back to profitability. Carl, back to you for your concluding remarks. Thank you, Ingy. While we are enthusiastic by the results we are seeing so far, we recognize more work is required. We do not believe current revenue or sales volume is anywhere close to being normalized. As such, in a transition year for GURU and the current economic context, we are working very closely with our distribution and retail partners to improve retail availability and execution. With all this in mind, we have great confidence in our game plan and our differentiated brand. These short-term pains do not change our long-term game plan and ambition. Finally, we are proud that GURU is the fastest growing energy drink brand in Canada for the last 18 consecutive months. To support that strong position, we, together with our distribution partner, are fully committed to executing well at store level, as well as making the right investments in sales and marketing to increase awareness and conversion to drive growth with a clear path to return to profitability. This concludes our formal remarks. I will now turn the call over to the operator for the Q&A. Certainly. As a reminder, please dial star one one on your telephone to ask a question. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question will come from Martin Landry of Stifel. Martin, your line is open. You may begin. Hi. Can you hear me? Yes. Yes. Bonjour, Martin. Hi, good morning. Hi, Martin. Good morning. My first question would be on your, you know, you're discussing that you've had a couple of out-of-stock positions during the quarter. I was wondering, when did you realize that your inventory was getting depleted and you had more and more out of stocks? What actions did you take to resolve the situation during the quarter? We started to realize this over the course of beginning of the summer, I would say, when seasonality started peaking. That's when we saw this. Situation is mainly in Quebec, where labor shortages are more prevalent. We're still very confident that this is gonna be corrected. We just had the two best shipment weeks in Canada since the beginning of our partnership with PepsiCo. This is a very, very good sign. Yes, we started realizing this in the course of the summer. We put corrective action in place. We've received a strong commitment from our distribution partner that this is well under control now. Okay. So have you put, like, a plan in place to maybe deal with something like that if it reoccurs? Absolutely. You touched on, you know, the brand awareness as a result of your survey. I believe I heard 30%. I was wondering if you can give us some context first. Is this, I would assume it's aided brand awareness. How did that evolve versus your last research surveys? Yeah. Well, yes, it is. It is aided awareness, Martin. The 31% is with one of the three main segments that we're targeting. What we're seeing. This is the largest research. Remember, every quarter since over the last year, we've been doing these sequential research to understand the results of our marketing. This was the largest to date with 4,000. So it's 4,000 consumers. It's a large sample. We are seeing an acceleration in awareness, but also in conversions, right? What is encouraging is not only awareness is increasing, we're seeing improvements in consideration, in trial, in conversions to regular and loyalty for the GURU brand. This is where we're seeing awareness is increasing, mainly with that segment, although all segments are increasing, but not to the same magnitude. Where we're seeing the biggest improvement is conversion lower down the funnel, which is very encouraging because this is also what we're seeing in the scan data. Okay. Just to be clear, I may have missed this, but what segment are we talking about? Can you give us an order of magnitude of the improvement in the brand awareness? Yes. Yes, I can. For competitive reasons, I'm not gonna disclose specifics around the segmentations because this is really proprietary. It's really something that we own. We've identified 5 different consumers, 5 different segments of consumers. Three of which the GURU brand really resonates well with. Obviously, most of our marketing activities are targeted towards those three segments. The improvements we're seeing are with those three segments. In total, for example, the awareness is increasing by a few points. It's gone from 20% in the beginning, moved to 21, 22, 23. It's moving in the right direction. What I'm saying is that the improvements, for example, we've doubled our consumer share. Our consumer share that at the bottom of funnel used to be 2%, is now 4%, of consumers that are saying GURU is their regular brand. Right? That's in total. That improvement is even more significant with one specific segment, which is the primary target for GURU, where in awareness is at 31% and consumer share is at 6%. Six percent of the consumers in that segment are saying that GURU is now their preferred brand or their regular brand. Okay. Okay, thank you for the details. I think the best news, Martin, about this, you know, there's a lot of information in that research. Yes, there are improvements in conversions, but I just wanna reinforce how good learnings we're seeing in this. We're really getting to understand better our consumers, what's driving trial, what's driving regular purchases down the funnel so that we can optimize our marketing in the future. I'm not sure if you're still there. I don't see your name, Martin, anymore. No, he has been removed. Okay. Maybe he has some other questions. If he wants to go log back in, please allow him. Our next question will come from Amr Ezzat of Echelon. Your line is open. Hi, it's Amr from Echelon. Thanks for taking my questions, Carl and Ingy. Good morning. Hi, Amr. Good morning. If I could just piggyback on Martin's first question on Canada. If I look at just the quarterly performance quarter-over-quarter to exclude the change in business model or distribution model, you're up 24% versus last quarter. Is there a way for you guys to quantify how much the industry-wide labor and logistics constraints you spoke to had on the numbers? The second part of that question is, you know, like you spoke to September being very strong, but with that issue, did it spill over into August? Should we expect, I guess, that to impact fiscal Q4 results as well? Yes. Well, the first part of the question, it's extremely hard, right? It's extremely hard to quantify what we I think we're being very transparent with the fact that labor issues and have impacted in-store inventories. Like, it's very clear when you're seeing that, for example, scan data is up 35%. So this means that 35% more dollars or consumption of GURU has increased by 35%, but shipments in Canada are only up 12%. Clearly, this is an indication that there is inventory reduction. That's the really the first piece. The second piece of your question was. Can you remind me, Amr, what the second piece was? The second part. The second part. Yeah. Would we see, like, spillover from these issues into your fiscal Q4 results? The latest scan data that we have remains very strong. As I said in the beginning of the call, the shipments in the last few weeks have been strong, right? This is very reassuring. We're confident that shipments will continue to be strong. Shipments from our main distributor to the retailers will remain very strong till the end of the year. Seasonality is also not at its peak, so it also helps with making sure that supply can meet demand in the fall. Understood. One thing for sure, Amr Ezzat, is that, you know, without being able to quantify this, both the scan data would have been higher and our shipment would have been higher, right? Sales would have been better. That's why we're saying we're all hands on deck on execution, on making sure that that execution at retail, including shipments, is on track. We expect this to go back. We expect basically shipments to be aligned, at least aligned with the scan data in the future. Okay. No, that's very good color, Carl. If I turn my attention to the U.S., I do know that last quarter was skewed with Sam's Club program. Mm-hmm. CAD 1 million in sales that you guys reported looks pretty sort of flattish relative to the last few quarters normalizing for Sam's. Can you maybe give us a little detail about what's happening south of the border and what to expect in terms of growth? Yes. The reality, Amir, is that we're being methodical. I think we've been very clear about how focused we would be in California. We are very successful where we are focusing, right? Where we have focused over the last few months has really been California. It's been the natural channel, and lately it's been the club channel. Right. That's why you mentioned Sam's Club, which had an impact last quarter. We're also doing a new roadshow in California, which I mentioned in my remarks. Wherever we're focused, California scan data is up 23%, so there is momentum natural. We're maintaining our number one position in that channel. With focus comes the results of focus. For example, we had some discussions with some banners where we said, "You know what? Instead of having national doors, which are unproductive and unprofitable, we are focusing some of those doors with some banners in California to make sure that those doors are become profitable." We see the velocity increase with those banners by being focused, having store coverage, supported by the marketing efforts. Does that help, Amir? Yeah, it helps. We could sort of discuss it more offline. If you'll allow me one more. Yes. There's been a lot of noise on Pepsi's move south of the border with their new partnership in the space. I obviously don't expect you guys to comment on that partnership specifically. As we approach the one-year anniversary of your partnership, maybe you could sort of update us on how that relationship has been evolving. No, the relationship is very strong, very healthy. These partnerships that we're hearing just shows for us it doesn't change anything. It really doesn't change anything in our plan. It just demonstrates how important this space is for distributors, for retailers, for consumers. Everybody's starting to realize that selling chemicals to consumers is probably not the most sustainable way. There is an attractive space for better for you energy drinks, and this is where we play, this is where we're being very focused. Specifically on the PepsiCo relationship, it's strong, it's healthy, it's collaborative. It's a transition year, obviously. There is a lot of learnings in there, but we've been reassured by all the senior people in PepsiCo that this is a partnership that's strong, and we have a strong contract with them as well. There's really no reason for you or investors to worry about that partnership. It's as healthy as ever. Understood. Thanks. I'll pass the line. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, you will need to press star one one on your telephone. Again, to ask any follow-up questions, please press star one one. Our next question will come from John Zamparo of CIBC. Your line is open, John. Good morning, John. Good morning. Hi, John. I wanted to start just on a couple housekeeping items. I may have missed it, so apologies if so, but on the 14% volume growth in the quarter, can you split that between Canada and the U.S., Carl? I think you may have mentioned it on a previous answer that Canada was 12%, but just wanted to clarify that. Yeah. Canada was 12%. Mm-hmm. Total 14. Okay. I can do the math on U.S at that point. The scan data that you shared for Canada, July and August, do you have that for the full quarter? Yeah, we could have provided. It's roughly the same, the same numbers. It's four-week period. I think August or PP8, like it's four periods. I think it was 37%, the month before 35. I think the month before that, which you're missing, is 26. The other month before that was 33%, right? If you average the last three months or average the last four months, it's around 33%, 34%. Obviously, the last two months being the more bigger weighted because they are bigger months, but it really is an average of 34%, 33% over the last four periods of four weeks. Okay. Understood. The press release referenced more work on execution and marketing, and you mentioned spending less on customer acquisitions, but I wonder if you can drill down a bit more on that and give some examples of where you'd like to see improvements in the coming quarters. Okay. The less spend on. Just to make sure we're clear on consumer acquisition was related to online, e-commerce specifically. Not at all to retail, right? What we mean by execution is because we really think that in order to be successful in the beverage industry, you need to be doing great marketing, right? You also need to make sure that you're available in stores and well-executed in stores. The two things need to work at the same time. Right? Now we're seeing good indications of that our marketing is working, both from a scan data perspective, but also from the research that we mentioned earlier. We are also recognizing that we can execute better at the store level, right? We think that, you know, we need to make sure that we're always in stock, absolutely well-executed, and in that sense, this is where we wanna put our efforts, and this is where we're working with our partners to make sure that we're as well-executed at retail as we are executing in the marketing side. Okay. Just to better understand that, is all of that within your control though? Or is much of that, you know, the responsibility of distribution partners or retailers? I'm just trying to get a sense of. Yeah. How much you can control that dynamic. We can certainly influence this. Like, this is a partnership, and we play a role. In this transition year, we're establishing the ways of working. As I was mentioning, this partnership is solid. We are learning to work together, learning to dance together, and obviously this is complementary. There is some portions that were outside of our control. Like the labor shortages that impacted the Quebec market were outside of our control. We are very confident that this is gonna come back to normality. We have the strong partners. We have everything to succeed, right? There's just. It's a bump in the road in a transition year. Okay, fair enough. On the SG&A side, can you give a sense of what the cadence will be, sales and marketing spend? I mean, presumably this quarter's not a run rate in perpetuity, and I would think Q4 would have some pretty healthy spending. Just would like to get a sense of when we're gonna see peaks and troughs in sales and marketing. Anything you could quantify would be helpful as well. Yeah. I'll answer that one. For sales and marketing, like we said, you know, from the beginning, 2022 was really a transition year where we were gonna invest more, much more, you know, in sales and marketing, get some learnings, and that's exactly what we're doing. Of course, in 2023, we will be rebalancing that spend to make sure that it's based on learnings, and it's optimized as well, you know. In other words, what I'm trying to tell you is, like you said, you know, this Q3 and Q4, which is the end of the summer campaign and the fall campaign, are really, you know, exceptional quarters. Does that help? Right. Okay. Yeah. Should we interpret that as 2023 will be lower than 2022 on sales and marketing or roughly in line? Yeah, your interpretation, your initial interpretation makes sense. Okay. Last one on the U.S. I just wanna better understand the prior answer, 'cause when we look at scan data versus booked revenue, scan data has exceeded revenue growth pretty materially for all but one quarter over the past year and a half. I just would've thought at some point we'd start to see this reverse. Is it that retailers or distributors are just permanently running with lower inventories? I know there's you know, some puts and takes on the U.S business that's different from Canada, but just any commentary you can add would be helpful. This is exactly it. Like, Like, there has been. Clearly, when in the beverage industry, if you look typically growing brands will have shipments that are somewhat aligned, right? At least aligned with the scan data. What we've seen in the last year, absolutely right, what we've seen in the last quarter is scan data is exceeding shipments. We expect this to correct. It is a consequence of many things, right? The biggest one is obviously a transition from a broad line wholesale model to a DSD model, where inventory at retail is less, right? It's a different model. But also, the impact of labor shortages that accelerate or increase that difference. In the future, as I said, we expect that scan data and shipments should be aligned. It's just normal, right? You need. At some point, if people are drinking the beverage, if they're drinking GURU, you need to ship. You'll be shipping the cans. If I could just sneak in one more. The labor issues you're referring to, are those unique to Canada or are you seeing that in the U.S as well? It's been mainly felt in Quebec. Right. Okay. Which is our biggest market. That's all for me. Thank you very much. Thank you, John. I'm showing no further questions from our phone lines. I would now like to turn the call back to Carl Goyette for closing remarks. Thank you, operator, and to all the analysts and the listeners. Thank you for joining us this morning. Merci.