Good morning, ladies and gentlemen, and welcome to the Indigo Books & Music Inc. Financial Year 2023 Q1 Analyst 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 Thursday, August eleventh, 2022. 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 2023 Q1 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. The 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 August eighteenth, 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 quarter. I would now like to turn the call over to Heather Reisman. Good morning, everyone, and thank you for joining us. This quarter, we delivered strong sales growth, posting revenues that exceeded the Q1 results in any of our three preceding fiscal years. Specifically, sales were CAD 205 million, a CAD 33 million increase over last year and a CAD 12 million increase from fiscal 2020. Worth noting, this growth was delivered notwithstanding that retail traffic, though very much improved over last year, has yet to come close to pre-pandemic levels. The double-digit growth was achieved in both our print business and our general merchandise business. Our print business has benefited from a few things, including the sustained engagement of a younger demographic, very much influenced by support for reading on TikTok. On the general merchandise side of our business, it is worth noting that our top proprietary brands, OUI, NÓTA and Love & Lore, continue to be key pillars of growth for Indigo, contributing over 30% of general merchandise growth overall. We believe this demonstrates the value of our investment in this area of our business. Unfortunately, much of the financial benefit of this strong growth has been blunted as Indigo, like the retail industry as a whole, has been impacted by a uniquely challenging macroeconomic environment. Significant increases in fuel prices and challenges throughout many supply chains have continued to exert inflationary pressures on costs and negatively impact the timing of product deliveries. A few other things I will note, though, on the horizon. We are looking forward to the upcoming launch this fall of our fully redesigned and advanced digital platform. The new indigo.ca will allow us to provide our customers with an exceptional shopping experience and better showcase our thoughtfully curated, much expanded assortment. We will also, as promised, be publicly sharing our initial advances toward our goal of being a net zero company. We are early in our journey, but determined to achieve our ambition. In closing, let me just share that Indigo is approaching an important milestone. This year marks our 25th anniversary. We have some exciting initiatives planned, and we look forward to experiencing this milestone with all of our stakeholders. I'd like to now ask Craig to provide a more detailed financial perspective on the quarter. Thank you, Heather. The results we are discussing are for the 13 weeks ended July 2, 2022. Comparative figures reference the 13 weeks ended July 3, 2021. In the Q1, the company generated revenue of CAD 205 million compared to CAD 172 million for the same period last year. This represents an increase of CAD 33 million, or 19%. This exceeded the company's top line Q1 performance compared to the preceding three fiscal years, driven by success in the omnichannel business and double-digit growth across both the print and general merchandise categories. As Heather discussed, the print business has continued to benefit from a resurgence of reading leveraged through the company's recent partnership with TikTok Canada to further capitalize on the popularity of reading from hashtag BookTok. From a general merchandise perspective, we continue to be pleased by the success of our proprietary brands, which have been a lever for sales growth. As COVID-19 restrictions ease compared to the prior year, we also noted an improvement in sales in our giftable lifestyle categories and paper products. As a result of social distancing and the government-mandated capacity constraints in stores in the prior year, we believe that comparable sales are not currently meaningful to evaluate performance. Instead, we have focused on total revenue. Sales in the retail channel, which is inclusive of orders fulfilled through omnichannel store pickup, increased by CAD 54 million or 60% to CAD 144 million for the quarter ended July 2, 2022, compared to CAD 90 million for the same period last year. The company's retail network benefited from easing pandemic conditions as stores remained open for the full quarter compared to rolling closures in the same period last year. While traffic still remains below pre-pandemic levels, the company has generated higher conversion and increased average transaction values in the channel while seeing some of this impact. Online channel revenue decreased by CAD 23 million or 30% to CAD 52 million for the quarter, compared to CAD 75 million for the same period last year. The change in demand is impacted by the rebound of the retail channel. However, we continue to see sustained growth online and sales in this quarter were 80% above pre-pandemic fiscal 2020 levels. The online channel continues to be a key area of growth and investment for the company. As we monitor the ever-evolving shopping behaviors of our customers, we see that Indigo customers are increasingly leveraging the company's digital platforms at the beginning of their purchase journey for product discovery, impacting demand on the online channel and conversion for the retail channel. While we monitor and report on channel economics, we are increasingly evaluating the business as a whole at an omnichannel level. Cost of sales increased by CAD 21 million to CAD 123 million for the 13-week period ended July 2, 2022. Excluding the impact of online shipping costs, cost of sales increased by CAD 24 million to CAD 113 million for the quarter. As a percentage of total revenue, this represents an increase to 55% compared to 52% in the Q1 of the prior year. Macroeconomic conditions throughout the quarter have had an adverse effect on cost of sales, resulting in higher freight costs stemming from the ongoing global supply chain disruptions, as well as additional inflationary pressures. Online shipping costs decreased by CAD 3 million to CAD 10 million for the 13-week period ended July 2, 2022. Despite higher than normal variable shipping costs impacted from elevated fuel costs, total shipping costs decreased in line with the change in demand of the online channel. Overall, operating, selling, and administrative costs increased by CAD 50 million to CAD 84 million for the period. These costs were offset by external COVID-19 support of CAD 1 million, markedly lower than the CAD 7 million the company was eligible for and recognized in net occupancy abatement to government rent and payroll subsidies in the Q1 of the prior year. Costs increased in response to higher sales volume of the retail channel compared to the rolling closures in the Q1 last year. The company also undertook additional strategic investments in the quarter, investing in talent, marketing initiatives and technology. As Heather mentioned, Indigo looks to provide customers with a revitalized digital experience later this year as we build on the e-commerce momentum that has been generated. Adjusted EBITDA changed by CAD 4 million to a loss of CAD 19 million for the 13-week period ended July 2, 2022, compared to a loss of CAD 15 million in the same period last year. Excluding the impact of external COVID-19 support, adjusted EBITDA improved by CAD 2 million to a loss of CAD 20 million, compared to a loss of CAD 22 million in the prior year. While Indigo noted strong sales growth in the quarter, adverse macroeconomic conditions had a negative impact on costs. This was furthered by the discussed additional investments made by the company. Net loss for the 13-week period ended July 2, 2022 was CAD 25.4 million or CAD 0.91 net loss per common share, compared to a net loss of CAD 21.9 million or CAD 0.79 net loss per common share for the same period last year, a change of CAD 3.5 million. This is inclusive of the external COVID-19 support discussed. The company finished the quarter with a cash balance of CAD 43 million and no outstanding debt. No advances were made on the available CAD 25 million revolving credit facility. 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, please slowly press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw from the question queue, you will need to please press star and two. Once again, ladies and gentlemen, please press star one if you have any questions. Your first question will be from David McFadgen at Cormark Securities. Please go ahead. Oh, yeah. Hi. A couple of questions. I'll just start off with a question on the margins. I've been although it does seem in the last week, you know, the oil markets do seem to be softening a bit, so hopefully there may be some relief down the path on that. Just to clarify what you said, you think that Christmas quarter you'll start to see an improvement in margin centers as cost pressures ease up. Is that correct? Yeah. I think now, you know, we gotta see where all the other inflationary impacts happen on raw materials, et cetera. You know, we're trying to buy better. OUI, we're doing many things to overcome that. Certainly the inbound freight drag we saw in the Q1, yes, it will be improved. It will not be back to historic levels, though, because we're still seeing a premium of 2.5 times on those containers. Okay. Just on the SG&A, I noticed that went up a fair bit in the quarter. I thought that before you're gonna hold SG&A here, but now it seems like you have SG&A gains. Is this a new level for SG&A or do you think this is gonna go potentially higher even from here? No. Well, I think probably what you're seeing in that are two things. First of all, this quarter last year, Toronto and most of Ontario, the stores were closed. So naturally we do have higher labor with stores being open. The other thing is, given the closures and also restrictions in other geographies, we mentioned this in the disclosure, but we had CAD 7 million of external support, given all those COVID impacts, in the Q1 last year, that came from both government programs and landlords, who shared some of the closure pain with us. That's the other thing you're seeing. Last year, the costs would've been artificially lowered by that amount. Okay. Just on revenue, you know, there's obviously concern that we could be going into potential recession. We had two quarters of negative GDP. Just wondering if you're starting to see that show up on revenue that you're generating in store, say, like so far this quarter. I wouldn't say we're seeing any change in that behavior yet. I mean, we have noted in some of the disclosures that, you know, traffic is still in physical stores below pre-pandemic levels. People are converting much higher and spending more when they come in. We don't see any indication of that yet. The other thing I'll just note is historically, you know, in recessions, you know, reading has held up and also, you know, even on the GM side, we have you know, some smaller price point items. You know, we've held up reasonably well in those periods in the past. We have not seen any of that. Okay. Yeah. Yeah. I know you guys don't like to provide guidance, so I'm just wondering, I don't know if you can answer this one. Do you think that your cash position in 2023 will be the same or higher as 2022? I expect cash at year-end will be higher than it was last year. Okay, great. Can you give us sort of your target date for having the fully revamped digital platform that you're gonna unroll in the fall? It's probably an October timeframe. Okay. All right. That's good for me. Thank you. Thanks, David. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. Your next question will be from David Moscovitz at Heartland. Please go ahead. Yes, good morning. Congratulations on continued sales growth. That's fantastic. Thank you. Looking at the fact set here this morning, looks as if your enterprise value is about CAD 6 million, market value less the cash. How do you feel about that, and what can be done to change it? You know, obviously we think it's greatly undervalued. Well, he's back at his desk. So, yeah, you know, look, obviously we think there's big opportunity here, that it's very undervalued. I think, you know, the last few years with the pandemic and everything that's happened has been a difficult period. I think though there's a broader market issue in play at the moment as well. You know, I actually don't agree with the valuation, but I don't dictate that. Okay. Speaking of costs, what does it cost a company to be a public company these days in terms of compliance and- I think. Hi, it's Heather Reisman speaking. We don't break out the cost of doing this, but is there something behind your question? Is your question why is it public? Well, well, since you asked it, go ahead. No. What is it you're trying to sort out here? Well, you're talking about increased costs. I'm just wondering what it costs to be public. Yeah, I don't know. I mean, it's probably CAD 2 million, you know, by the time all the effort and costs and audit fees and whatnot. You know, I wouldn't say that's the drag on any valuation. Okay. Thank you. Yeah. Okay. Thanks very much. Thank you. 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 Q2 results will be announced on or around November ninth. Thank you again for your support and have a great day. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Thank you.