Good morning, ladies and gentlemen, and welcome to the Indigo Books & Music Inc. Financial Year 2022 Q4 analyst conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require any assistance, please press star zero for the operator. This call is being recorded on Friday, June 3rd, 2022, and I would like to turn the conference over to Craig Loudon. Please go ahead. Good morning and thank you for joining us to review Indigo's fiscal 2022 results. My name is Craig Loudon and I'm the Chief Financial Officer. Joining us from Indigo today are the Chief Executive Officer, Heather Reisman, and the President, Peter Ruis. Regarding the materials for this conference call, we issued the press release yesterday. It can be found at indigo.ca and on SEDAR. This conference call will be recorded and archived in the investor relations section of the Indigo website. A playback of the call will also be available by telephone until 11:59 P.M. Eastern time on June 10th, 2022. This conference call may contain forward-looking statements, and to the extent that it does, we refer you to our cautionary statement regarding forward-looking statements in the press release and the MD&A related to this fiscal year. I would now like to turn the call over to Heather Reisman. Good morning, everyone, and thank you for joining us. I'm pleased to be reporting on fiscal 2022. Indigo delivered sales of CAD 1.06 billion, and this represents a 17% increase over the previous year. The retail channel recovered from the depths of the pandemic, though the Omicron spike at holiday definitely blunted some of the strong positive momentum generated over the summer and into the fall. Throughout the year, our e-commerce business delivered strong growth results, continuing the momentum this channel has gained throughout the pandemic. Delving in a bit, our core print business posted healthy growth figures, which, as we've been reporting, was driven by a resurgence in the popularity of reading, including a big spike in the new younger demographic who are engaging with recommendations made on TikTok. #BookTok has been a sweeping global phenomenon with over 50 billion views and a community full of energy. We are pleased to be partnering with TikTok Canada for fiscal 2023 to deliver exciting book club content to this growing and important segment. On the general merchandise side, our curated intentional product assortment continues to resonate with the Indigo customer. Our proprietary brands, OUI and NÓTA, both committed to sustainability, are gaining strong customer loyalty, setting a foundation for what we believe will be long-term value for our business. Of significance, this past year, the company returned to profitability, reporting EBITDA of CAD 32.5 million. This was achieved despite constant and continuing cost and delivery pressures on supply chain, those still affected by the pandemic and the store constraints noted earlier. During the year, we advanced efforts under our Write The Future sustainability initiative and will be reporting publicly later this year on actual achievements toward our carbon footprint reduction objectives. I would note that we are looking forward to seeing the impact of several strategic efforts initiated this past year in the year we're currently in, including the upcoming launch of our totally new digital platform and advances in key aspects of product allocation, both efforts designed to provide a truly superior customer experience and improved inventory productivity. Craig will now provide a detailed financial perspective. Thank you, Heather. The results we are discussing are for the 52 weeks ended April 2nd, 2022. Comparative figures reference the 53 weeks ended April 3rd, 2021. Revenue for the full year increased CAD 157.6 million or 17.4% to CAD 1.06 billion from CAD 904.7 million in the prior year. Sustained momentum in the company's omnichannel business was driven by recovery in its retail channel and an e-commerce business that has nearly doubled since before the onset of the pandemic. This net growth was powered by the success of its book and general merchandise product strategies, which delivered meaningful increases in the company's full price business across effectively all of its product categories. As Heather discussed, the company's position as Canada's leading bookseller, combined with the effective mitigation of distribution delays experienced during the holiday sales period, resulted in its ability to capitalize on the heightened demand for reading, delivering growth of CAD 41.6 million in print. The company's evolving product assortment, and notably the lifestyle and kids business, which include its highly successful proprietary brands, meaningfully contributed to the CAD 86.4 million growth in the general merchandise business. As a result of social distancing and government-mandated capacity constraints in stores, we believe that comparable sales are not currently meaningful to evaluate performance. Instead, we've focused on total revenue as discussed, as well as omnichannel sales trends. The retail channel, which is inclusive of orders fulfilled through omnichannel store pickup, increased by CAD 176.2 million or 34.4% to CAD 688.6 million for the fiscal year. Revenue growth was largely driven by traffic improvements with year-over-year increases in average transaction values. While adverse pandemic conditions softened compared to fiscal 2021, the emergence of the Omicron variant meaningfully dampened sales during the company's seasonally strong holiday quarter. Online channel revenue decreased by CAD 48.3 million or 13.1% to CAD 321.7 million for the fiscal year, reflecting the rebound of retail as discussed. However, the online business accelerated over the course of the pandemic, sustaining sales levels at 98% above fiscal 2020. This sustained growth has allowed the company's online channel to evolve into an integral pillar of its long-term growth trajectory. As shopping behaviors continue to evolve and as customers increasingly leverage the company's digital platforms as the beginning of their purchase journey for product discovery. As a result, customers are coming into stores with strong intent to purchase, bolstering the high retail conversion rates as discussed. While we monitor and report on channel economics, I should note we are increasingly evaluating the business as a whole at an omni-channel level. Cost of sales increased by CAD 51.3 million to CAD 619.2 million for the fiscal year. Excluding the impact of online shipping costs, cost of sales increased by CAD 55 million to CAD 560.8 million for the period. As a percentage of total revenue, this represents a decrease to 52.8% compared to 55.9% in the prior year. The strength of the company's product assortment and a refined promotional cadence allowed the company to achieve its highest ever omni-channel merchandise margin rate. While this was particularly a result of the rebound of the company's retail channel, which typically has a higher margin profile, the online channel also delivered record merchandise margin rate performance. Remarkably, these improvements more than offset the adverse impacts of higher inbound freight costs triggered by the global supply chain constraints and inflationary pressures. Online shipping costs increased by CAD 3.7 million- CAD 58.4 million this year, driven by increased fuel charges and additional shipping premiums incurred in response to severe flooding experienced in British Columbia during the third quarter. Overall, operating, selling, and administration costs increased by CAD 53.6 million- CAD 350 million for the fiscal year. These costs were offset by external COVID-19 support of CAD 12.9 million, markedly lower than the CAD 44.0 million the company was eligible for and recognized in net occupancy abatements and government rent and payroll subsidies in the prior year. Operating costs also increased on the return of higher sales volumes in the retail channel. The company has also increased its strategic spending to build on the e-commerce momentum generated during the pandemic. Adjusted EBITDA improved by CAD 60.8 million- CAD 32.5 million for the fiscal year. Higher adjusted EBITDA was driven by strong sales and merchandise margin performance. These exceptional results were achieved against lower external COVID-19 labor support and a corresponding increase in retail operating expenses and unfavorable macroeconomic conditions. The company recognized net earnings of CAD 3.3 million for the fiscal year or CAD 0.12 net earnings per common share, compared to a net loss of CAD 57.9 million or CAD 2.09 net loss per common share for the same period last year, an improvement of CAD 61.2 million. With no outstanding debt, its cash balance of CAD 86.5 million, an increase to the fiscal 2021 ending balance, the company is well positioned to see through the remaining COVID-19 uncertainty and the execution of its post-pandemic growth strategy. At this point, we would like to open the call for any questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question at this time, please slowly press star followed by one on your touch-tone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from question queue, please press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and slowly press star one now if you have a question. Your first question will be from David McFadgen at BMO Capital Markets. Please go ahead. Oh, hi. Yeah, a couple of questions. So I look at your superstore revenue, you did CAD 595 million in fiscal 2022. When I look back just prior to COVID, if we say look at the fiscal 2019 year, you did about CAD 711 million. I was just kind of wanting to get your views on, do you think you can get back to that level soon? Will we all go back to our normal society here? Yeah. Hi, David, it's Heather. How are you? Doing well. How are you? What we're seeing is that traffic is still not where it used to be, and particularly in the downtown core. We're just looking, for example, at downtown of Toronto, which is a key market for us. Traffic is still only about 60% of what it was. But what we are seeing is the beginning of movement up. It was 50 or 65% down a couple of months ago. What we need to see is the traffic come back to at least 90 or 95% of where it is. It's slowly getting there. It's slowly moving there. I just looked at new numbers. From Vancouver, for example, where tourism is back in the downtown core, people are starting to come back. This is one of those things that we can't force it. We just have to sort of see the trend and be hopeful that, you know, by the time the holidays come around, we'll start to see the real return to the original trend. That is what we expect, while not losing some of the momentum of the online channel. Okay. Sorry, Dave, Craig, if I could just point out one other thing. It seems like a lifetime ago, but we need to remember in Q1 of this fiscal year that we still had significant store closures in Ontario. Right. You know, in broader Ontario initially, but Toronto was closed for a significant chunk of Q1. That's the other thing you're seeing in those numbers. You know, our run rate now would be better than that. Okay. You know, obviously you benefited significantly from COVID as per your online revenue, was up obviously substantially. It was down in the fourth quarter, and I'm just kind of wondering what your view is on that revenue line. Do you think you can hold it here at, say, CAD 300 million, CAD 320 million level, or do you think it's probably gonna go back down? You know that we never make prediction, even though you ask all the time. No. In general, as people come out, online will go down. That said, we have announced publicly a launch of a major re-platforming in online and the introduction of some quite significant expansion in assortment. While we don't expect it to be as robust as when all the stores were closed, we continue to see this as a growth channel for sure. Okay. When you talk about launching, you know, your new digital platform, are you just talking about the online experience or does that include social media, maybe social commerce as well? Well, we already have. I mean, to the extent that people are transacting, you know, when they see something on Instagram, they can click through or we're already participating there. What will really drive the change is the overall apps change, both what you approach on desktop, mobile, and all aspects of how we behave on digital. We have a pretty significant plan ahead of us. Okay. When is that launching, Heather? The new platform will launch, I think, mid to end of September. Peter, is that right? Mid to end of September? A little bit later. Okay. Early October. Is that when? Early October. But definitely in time for the holiday. Okay. In time for the holiday. Okay. Can you give us an update on your general merch product line? Like, how are you feeling about it? How confident are you in that product line? We're feeling pretty positive about both, our own proprietary and also where we are coupling our own proprietary with brands and products that we see as idiosyncratic relevant to our customer and the position we're trying to take. We're feeling very positive and we have a significant emphasis behind this curated assortment and it is growing for sure. Okay. Maybe a question for you, Craig. Just as business continues to grow, can you keep the SG&A kind of where it is or do you see that, you know, ramping up a lot? Go ahead, Craig. Sorry. Can you repeat that, David? My phone crackled. I didn't hear you. Yeah, just on the SG&A line, I was just wondering. Yeah. If you think you can hold it here or it's gonna climb as the business grows. I was just wondering if you can get some margin leverage and hold the SG&A here to improve the overall Yeah, for sure. retail margin. At the home office level, we can hold it. No question. I think what you are seeing in certainly operating costs in any event is you know the shift to online. OUI probably have CAD 3 million dollars with you know dollars that are shifted out of retail and in online. As you know as a little bit of that shifts back, that will go down or if it's net new revenue, it's a profitable channel now, so that's fine. Yeah, we see you know part of our big plan going forward is to drive this growth that the SG&A as a percent of sales will go down. Absolutely. Okay. Sorry, Craig, could you just confirm what you were saying, CAD 30 million kind of additional cost? Just talking about operating costs because when you Yeah, yeah. You know. Cost, yeah. To David's point earlier with, you know, retail not quite back to where it is. Obviously, that's a bit more of a fixed cost network. When we've driven exceptional volume into online, you know, it's meant more shipping costs and more fulfillment costs. You know, those are more variable. Excluding that part, David, yeah, we absolutely see leverage in our fixed cost base over the coming years that will drive to the bottom line. Okay. Just one last one. Can you give us an idea on what you think the CapEx spend will be this year? Yeah, it'll probably be in the, you know, between CAD 20 million and CAD 25 million. I'd say around CAD 23 million. A little higher this year, given a significant re-platform of our digital experience. Okay. All right. Thank you. Thanks, David. As a reminder, ladies and gentlemen, if you would like to ask a question, please slowly press Star followed by one on your touchtone phone. At this time, Mr. Loudon, we have no further questions. Please proceed. Thank you for your time and attention today. We appreciate you calling in and look forward to reconnecting on a quarterly basis. Our first quarter results will be announced on or around August tenth. Thank you again for your support and have a great day. Thank you, sir. Ladies and gentlemen, this does conclude the Conference Call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Have a good weekend.