Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the KP Tissue Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. Before turning the meeting over to management, I would like to remind everyone that this conference call is being recorded on Wednesday, November 8, 2023. I will now turn the conference over to Mike Baldesarra, Director of Investor Relations. Please go ahead. Thank you, operator. Good morning, ladies and gentlemen. My name is Mike Baldesarra. I'm the Director of Investor Relations at KP Tissue Inc. The purpose of this conference call is to review the financial results of the third quarter of 2023 of Kruger Products Inc., which I'll refer to as Kruger Products going forward. With me this morning is Dino Bianco, the Chief Executive Officer of KP Tissue and Kruger Products, and Mark Holbrook, Chief Financial Officer of KP Tissue and Kruger Products. The following discussions and responses to questions contain forward-looking statements concerning the company's activities. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the company's actual results to differ materially from those in the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The company does not undertake to update these forward-looking statements, except if required by applicable laws. There's a page at the beginning of the presentation, which contains the usual legal cautions, including as to forward-looking information, which you should be aware of. I'd like to point out that all figures expressed in today's call are in Canadian dollars, unless otherwise stated. The press release reporting our Q3 2023 results were published this morning and will be accessible from our website at kptissueinc.com. Please be aware that our MD&A will be posted on our website and will also be available on SEDAR. Finally, I'd like to ask that during the call to refer to the presentation we prepared to accompany these discussions, which is also available on our website. We'd also appreciate that during the Q&A period for you to limit your questions to two. Thank you for your collaboration, ladies and gentlemen. I'll now turn the call over to Dino Bianco, our CEO. Dino? Thank you, Mike. Good morning everyone, and thank you for joining us for our third quarter earnings call. We are very pleased with our financial results in the third quarter of 2023, highlighted by robust sales volume in our consumer segment and improved productivity from our network assets. We also benefited from a seasonally strong quarter, lower pulp and other input costs, as well as pricing carryover from 2022. As a result, we outperformed profitability expectations despite an uncertain economic environment. Looking ahead to the fourth quarter, while pulp and transportation costs have likely bottomed, we continue to see inflation in other input costs and SG&A expenses. We believe volume will remain strong, and with our previously announced pricing, margins should be stable. Now, let's take a look at our quarterly numbers on slide six. Revenue increased 10.9% to CAD 473.4 million in the third quarter of 2023, mainly due to higher sales volume and favorable sales mix in our consumer segment, along with selling price increases across all segments and regions in 2022. Revenue is also positively impacted by foreign exchange fluctuations on US dollar sales. Revenue in Canada rose 7.1% year-over-year in the third quarter, while in the U.S., it grew 16.1%, as this market benefited from strong sales growth in both our consumer and AFH segments. In Canada, AFH sales were actually slightly down compared to the third quarter of 2022. As well, the US dollar increased almost CAD 0.05 versus the Canadian dollar year-over-year, which positively affected reported revenues in the United States. These factors, among others, contributed to a 135.7% year-over-year increase in Adjusted EBITDA to CAD 72.4 million in the third quarter. Mark will provide you with more details in his financial overview. On slide seven, pulp average prices in Canadian dollars decreased double digits in the third quarter of 2023 from the previous quarter, while year-over-year, prices dropped more sharply. NBSK and BEK average prices fell 26.2% and 35% year-over-year in Q3 2023. After dropping near the bottom of the price curve, pulp prices are expected to increase, according to industry analysts. Let's move on to our Sherbrooke operations and expansion on slide eight. Our TAD operations continue to perform well, surpassing production expectations on the paper machine and on the converting lines, including the new bathroom tissue converting line. Given supply chain inflation and higher costs, however, we are now anticipating a capital cost increase of CAD 26 million, which would take the project to CAD 378 million for our Sherbrooke expansion. Construction of our new production facility is well underway, with our facial tissue line starting up in Q1 2024. This has been moved due to a shortage of electronic chips that has now been resolved, while the paper machine ramp-up is still expected for Q4 2024. I'm also happy to report that employee hiring and onboarding is tracking to plan for the ramp-up of these new assets. Turning to a facial market update on slide nine. As the leading supplier of facial tissue, we intend to fulfill the demand created by the recent announcement of the Kleenex brand exit from the Canadian grocery channel. We are currently exploring opportunities to secure additional long-term capacity in addition to our previously mentioned new Sherbrooke facial line, and we continue to invest to build our Scotties brand and to drive growth through baseline and innovation. In the U.S., our facial line in Memphis, which has been up and running for more than a year, continues to exceed its ramp-up curve. As a result, with the addition of the new facial assets, we believe that we're well positioned to satisfy consumer needs for facial tissue across North America. Flipping to our Memphis operations on slide 10, the focus on reliability is delivering better results for our TAD machine manufacturing operations. Production volume and the cost structure are progressing well, allowing us to have a better balance of product production across the two sites with Sherbrooke and Memphis. The deployment of Digital Twin AI tools has proven to be successful on the new facial line, so we will extend this new technology across our TAD operations in Memphis. Finally, we are leveraging learnings from both Sherbrooke and Memphis to create a TAD center of excellence that will bring together best practices from both sites. Now, let's pivot to brand support on slide 11. We are maintaining strong second-half investments to drive brand share. Several multi-brand activities continued in the third quarter, namely our unapologetically human Love Is Messy campaign that included the launch of ethnic versions and a successful Made in Canada promotion. As mentioned earlier, we increased media support of Scotties to build brand awareness in Canada, as there will be a gap in facial tissue demand that needs to be filled. We also maintain investments in our sustainable Bonterra product family, which has a loyal following among environmentally conscious consumers, and we want to build awareness of this brand as we know the product fits the consumer needs. Earlier this month, we celebrated Cashmere's 20th anniversary collection in a fashion show entitled Lovestruck, to kick off October's Breast Cancer Awareness Month. The award-winning runway show featured original couture from 20 world-class Canadian designers, who were up to the challenge of creating garments with our luxuriously soft Cashmere bathroom tissue. A new addition this year was a behind-the-scenes documentary available both on TV and online. Finally, we continued strategic shopper investments behind our White Cloud brand at key accounts in the U.S., including a facial tissue launch at select retailers. Moving to slide 12, the data presented is taken from Nielsen. It shows market share performance over a 52-week period ending September 9, 2023. The data reflects that Kruger Products is gradually regaining share as pricing has stabilized and promotional activity on trademark brands has increased. More specifically, we've seen strong growth on our SpongeT owels brand for the 52-week period ending September 9, 2023, and we expect continued share growth for our bath and facial brands as we move into Q4. Looking at Away-From-Home on slide 13, sales volume in the third quarter was stable year-over-year and sequentially. Although our AFH segment benefited from a seasonally strong quarter, we believe the recovery of this business is now quite sustainable, and in fact, Q3 2023 marked the fifth consecutive quarter that it posted positive EBITDA. Going forward, asset performance continues to support additional volume growth. A cautionary note on the AFH business remains the potential impact of any economic slowdown that could occur in the commercial sector. I will now turn the call over to Mark. Mark? Thank you, Dino, and good morning, everyone. Please turn to slide 14 for a summary of our financial performance in Q3 2023. Dino has already talked about our robust Adjusted EBITDA of CAD 72.4 million on sales of CAD 473.4 million in the quarter. I'll address the net income, which totaled CAD 12.9 million in the third quarter, compared to a loss of CAD 38.8 million in Q3 2022. The CAD 51.7 million increase was mainly due to significantly higher Adjusted EBITDA, along with a lower foreign exchange loss, partially offset by higher income tax expense. In the quarterly segmented view on slide 15, consumer revenue increased 12.8% year-over-year to CAD 390.3 million in the third quarter, and 1.8% sequentially from Q2 2023. Consumer segment revenue rose both in Canada and the U.S. Away-From-Home segment, revenue improved 2.6% year-over-year to CAD 83.1 million and 0.3% sequentially from the previous quarter. Consumer Adjusted EBITDA totaled CAD 65.9 million in the third quarter, compared to CAD 25 million in Q3 2022, with an Adjusted EBITDA margin of 16.9% versus 7.2% for the same respective period. Sequentially, consumer Adjusted EBITDA was up CAD 12.7 million, or 23.9% from Q2 2023. For our AFH business, Adjusted EBITDA amounted to CAD 8.4 million in the third quarter, compared to CAD 5.4 million in Q3 2022, with a robust margin of 10.1%. Sequentially, AFH Adjusted EBITDA was up CAD 2.6 million from Q2 2023, as Q3 is a seasonally stronger quarter. On slide 16, we review year-over-year revenue growth for Q3, which grew CAD 46.4 million or 10.9%. As Dino mentioned, higher sales volume in our consumer segment was the main driver. On a geographical basis, revenues in Canada rose CAD 17.8 million, or 7.1% year-over-year, while U.S. revenues grew by CAD 28.6 million, or 16.1%. On slide 17, we provide an additional insight into profitability in the third quarter. Adjusted EBITDA increased by CAD 41.7 million to CAD 72.4 million, representing a margin of 15.3%, from CAD 30.7 million in Q3 last year, or a margin of 7.2%. Several factors contributed to generating strong Adjusted EBITDA in the third quarter, including higher sales volume and favorable sales mix, selling price increase carryover from 2022, lower pulp and input costs, and increased productivity in operations, along with lower freight costs. These factors were partially offset by higher warehousing and SG&A expenses, as well as an unfavorable FX impact. Now I'll turn to slide 18, where we compare Q3 revenues sequentially to Q2 2023. Revenue improved by CAD 7.1 million, or 1.5%, mainly due to higher sales volume in our consumer segment, partially offset by higher promotional spending. Geographically, revenue in Canada rose by CAD 2.4 million, or 0.9% sequentially, while revenue in the U.S. grew by CAD 4.7 million, or 2.3%. On slide 19, Adjusted EBITDA in the third quarter increased sequentially by CAD 17.4 million, or 31.6%, on higher sales volume, lower pulp prices, reduced warehousing costs, increased productivity in operations, and lower G&A costs. These factors were partially offset by higher promotional and marketing spending. Adjusted EBITDA was up 3.5 margin points from 11.8% in Q2. Turning to our balance sheet and financial position on slide 20, our cash position stood at CAD 151.1 million at the end of the third quarter, an increase of CAD 62.9 million from Q2 2023. Significant increase in cash sequentially was mainly due to the strong Adjusted EBITDA generated in Q3 2023, combined with reduced working capital. Total long-term debt at quarter end was CAD 1.1 billion, down CAD 11.8 million from the end of the previous quarter. Net debt decreased CAD 74.8 million sequentially, CAD 948.8 million, as we remained disciplined with our capital spending and generated cash from reduced working capital. As a result, our net debt to last twelve months Adjusted EBITDA ratio significantly decreased to 4.3x in the third quarter, from 5.7x in Q2 2023, and 9.5x in Q3 2022. Leverage improved on the strength of lower net debt and higher Adjusted EBITDA in the last twelve months. We expect deleveraging will continue its downward trend in Q4 2023, despite significantly ongoing investments in our Sherbrooke expansion project, as Adjusted EBITDA keeps growing on a last twelve months basis. At quarter end, total liquidity, representing cash and cash equivalents and availability from revolving credit agreements, stood at CAD 277.6 million. In addition, CAD 22.5 million of cash was held for the Sherbrooke expansion project. I will conclude my section by reviewing capital expenditures on slide 21. Total CapEx in Q3 2023 was CAD 28.5 million, including CAD 21.6 million for the Sherbrooke expansion project. Year-to-date, CapEx stood at CAD 105.9 million after three quarters completed. Due to significant inflation across the supply chain and interest rate increases during construction, the capital cost of the Sherbrooke expansion project is now expected to reach CAD 378 million, from CAD 352 million. The additional CAD 26 million in capital cost is being financed by investments from Kruger Products and a CAD 8.2 million increase in the construction loan facility. We continue to monitor the project closely to minimize any impact of further inflation. For fiscal 2023, we have slightly reduced our CapEx forecast to between CAD 190 million and CAD 210 million, since spending related to the Sherbrooke expansion project will now be more heavily weighted towards the final year of the project in 2024. Consequently, we are anticipating CapEx for 2024 to range between CAD 170 million and CAD 190 million, including the Sherbrooke expansion project. Thank you for joining us this morning, and I'll now turn the call back over to Dino. Thank you, Mark. Please turn to slide 23 for my closing comments. We have demonstrated remarkable agility and resilience amid an uncertain economic environment, as reflected by broad top-line growth and strong profitability in the third quarter. We are intensifying investments in our brands to drive long-term growth. We are exploring additional opportunities to increase our facial capacity in order to meet strong Away-From-Home segment continues to deliver against a sustainable profit model on the strength of five consecutive quarters of positive EBITDA. We remain focused on asset productivity to help offset rising costs and maintain our margins while driving demand for our new assets. Our leverage ratio has significantly improved as Adjusted EBITDA over the last 12 months continues to trend upwards, and our net debt levels have decreased. Finally, we will keep investing in organization and culture to drive future growth. Now, let's turn our attention to the outlook for the fourth quarter of 2023. We are expecting margins to stabilize, and we will continue to reinvest in the business to drive long-term value. Accordingly, Adjusted EBITDA for Q4 2023 is expected to be in the CAD 60 million-CAD 65 million range. I also want to take this opportunity to thank our employees across North America for the turnaround in our business after a very difficult 2022. Their efforts, resilience, and agility is the key driver of the turnaround of our performance. We will now be happy to take your questions. Operator? Operator, are you there? We're ready for questions. Operator, are you there? We're ready for questions now. We'll give the operator another minute to catch up. Stay tuned. Hello, and apologies for the delay. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order that they are received. Should you wish to decline from the polling process, please press the star followed by the two. Our first question comes from the line of Hamir Patel of CIBC Capital Markets. Please go ahead. Hi, good morning. Morning. Are you seeing more pressure in Canada from some of your grocery customers, just given the sort of political pressure that they've been under to lower pricing? That's a great, great question, Hamir. We, you know, we live in strange times with what's going on with respect to the actions around who's to blame for inflation. You know, look, at this point, I think everybody who's been involved with this understands from the business side that, you know, we've come through a pandemic. We've got global supply chains that are in flux, and quite frankly a lot of money being printed over that time, and I think that's why you're seeing what you're seeing in terms of inflation across almost every commodity, every sector. You know, as it relates to pressure from our retailers, at the end of the day, you know, we've passed on our cost increases, and there's obviously a timing lag. You saw that last year, we got hurt by it. This year, we're benefiting a bit by that. At the end, in the long- term, though, supply and demand and competitive pressures will dictate, will dictate the pricing. So I would say that you know, within a range, our pricing is where it needs to be, and we'll have to watch what what goes on with respect to commodity movements, but not just items like pulp and and freight, which we always talk about, but every single line item on on anybody's P&L, whether it be IT costs or or labor costs or insurance, they're all going up, and I think we just need to you know, view the business on a total cost basis as it relates to how we reflect our pricing. Great. Thanks, Dino. That's helpful. And just looking at the AFH segment, what type of margins would you be targeting there for 2024? Well, I'm not going to give you 2024. I've always said we should be 5%-1 0%, and we're certainly pushing up now into the high single digits. I think if I look at that business, I think the volume curve is very strong, particularly growth in the U.S. I think our pricing models now are more stable and reflective of managing through cost changes. Our operations are running well. I think the last piece in the puzzle would be that sourcing more internal paper. We do buy paper on the market, and that costs us an upcharge. And with the new paper machine coming in next year, that should help relieve some of that pressure. It'll come in late next year, b ut that should allow AFH to move closer to the 10% range as, longer term, as we have internal paper supply. Okay, great. Thanks, Dino. That's all I had. I'll turn it over. Thanks, Hamir. Thank you. Your next question comes from the line of Kasia Kopytek of TD Securities. Please go ahead. Morning, Kasia. Kasia, you may go ahead and ask your question. If you have your phone muted, could you please unmute? As there's no response from the line of Kasia Kopytek, we will go to our next question from the line of Zachary Evershed of National Bank Financial. Please go ahead. Good morning, everyone. This is Nate calling in for Zach. So my question is, based on where you guys are on the cost curve and how the market is approaching price hikes, do you still stick to your previous guidance on where margins shake out in the long- term, especially with pulp prices coming back? And do you still expect there to be a 12-16 week lag on pricing, or have sales channels kind of adapted to quickly moving costs? Yeah, it's a lot packed into that question. You know, obviously, in my previous answer to Hamir, we're looking beyond just pulp total costs. So as you know, I said in my prepared remarks that pulp has bottomed out, and we're starting to see some upward movement. We're watching that closely, and as we reflect on our pricing, and we manage that long- term, we want to make sure that that price is on the right side of the equation, not just for pulp, but as I mentioned, all the other input costs. There always is a lag getting to the market on pricing. It's just built into the way that the market, the consumer, the grocery industry works, both U.S. and Canada. There needs to be a lead time provided to retailers so that they can adjust their pricing accordingly. So we have to build that in when we're thinking about price changes. And we know what it is now, so we're pretty comfortable on if we move pricing, that we would be reflecting that lag that happens, more longer lag on the upside than on the downside, but still a lag on both sides, and we would reflect that in any pricing changes that we announce to the marketplace. As far as margin management, I do believe we're getting it in a stable range of where we should be. You know, last year was unusually high. This quarter was probably our most favorable quarter as it relates to margin. As you think about where costs are going, we're, you know, within a range. We're now being fairly stable on our pricing margins, as I mentioned in our guidance as well. Thanks. That's very helpful. And so touching on Kleenex leaving Canada, what have competitive actions looked like with respect to that gap in supply? Has this spurred any concrete plans for investments and consolidation within the industry, or is everyone still looking cautious on CapEx? I can't talk about everyone, but I'll tell you our position. I mean, you know, first of all, Kleenex did announce at the end of August that they were leaving the, the grocery side of their business, the consumer side, in the grocery channel. So we were preparing already, as you know, to increase our capacity on facial through the PHOENIX Project, which I mentioned is now gonna come on board in Q1. I also mentioned that we're looking for additional capacity. Now, as we redo our projections for demand across North America, including the new use for Kleenex, we're gonna need more capacity, so we're in the process of doing that, and making sure that we've got capacity to supply not just the Canadian market, but our U.S. customers. We're also seeing strength in facial. As it relates to what's going on at retail, you know, we've been working with our customers, and I'm sure our competitors have as well, just to rethink what this category looks like now with the exit of Kleenex and the remaining players, and how the section should be set up as it relates to the key three players being private label, ourselves, and Royale. And looking at how we now look at that section, how innovation will come into play over the next little while. Obviously, from a capacity point of view, we will be okay. I can't speak for our competitors. So, you know, that's kind of a total category approach that we're taking. We're the market leader with Scotties, and, you know, we believe being the market leader, we have a strong obligation, as we always had with Kleenex or without, to really, drive the category and, and provide, you know, both consumer and customer benefit as it relates to facial. Thanks. And just one quick last one. Looking ahead for AFH on Q4, can we expect the same seasonality from Q3 to Q4? Q4 tends to be a little weaker in AFH. And you know, if you read any of the reports now, with restaurant visits down and so forth, we're just, w e're a little worried about that. I mean, I'm not gonna give you guidance specifically on AFH. I think all the things that have driven their success will continue to be there. The one piece that we just have to, that we have maybe not as much control over, is what's happening in the economic environment. As I think every comment we make about AFH will now add the line around, you know, depending on what happens in the economic environment around us, because if there is an economic slowdown, as we probably are already, and if that gets into a deeper recession, the first channel that starts to feel that pain is going to be the commercial industrial section. But I do feel, you know, what AFH has put in place is sustainable. The pricing model is sustainable, the operational performance that group has, the mix of customers is more diversified than it ever was, so that should help provide some insulation there if the market does turn down. Thanks. Those are all the questions I had. Thank you. Just to remind everyone, if you have a question, please press the star followed by the one. Our next question comes from the line of Kasia Kopytek of TD Securities. Please go ahead. Okay, let's try this again. Hi everyone. One question for me. Around your increased promotional spending going forward, is that a level that we should think about as normalized for you guys? Or is it going to be temporarily elevated over the next little while as you look to catch up on some of those brand-building activities you weren't able to engage in over the last year? Hi, Kasia. I'm assuming you, y ou cut out a little bit. Did you say marketing spending? Yeah. I'm just curious whether the increased marketing spending that you signaled you're going to be having over the next little while, is that a normalized level, or is it going to be temporarily elevated as you look to catch up on some of the activities you weren't able to engage in over the last year? Well, I think there's two things going on. Certainly, we continue to increase our marketing spend as our business is getting bigger, our company is getting larger. You know, obviously, our brands are growing, so we continue to and inflation happens in that, in marketing spend as well. So the absolute level goes up. But I think as it relates to this year, we came into the year, you know, after a tough year last year, uncertainty in the year, we purposely weighted our marketing spend to the back half. We wanted to make sure that we were earning profit before we started spending marketing. You know, we have discretion over how we spend that marketing. So what you're seeing, you know, somewhat in Q3 and you'll see in Q4, is just more marketing spend in the way the year balanced out. As we look forward, you know, we will continue to increase our marketing investment in line with the growth of our business, as we see our brands continuing to grow. Okay, thanks for that, Dino. That's all I had. Thanks, everyone. Thanks, Kasia. There are no further questions at this time. Please proceed. Okay. Thank you, for joining us on this call today. We look forward to speaking with you again following the release of our fourth quarter results for 2023. Thank you, and have a great day. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.