Good morning, welcome to KP Tissue's first quarter 2026 results conference call. Today's call is being recorded for replay. All participants are currently in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at the time for you to queue up for questions. If at any time you have difficulties hearing the conference, please press star followed by zero for operator assistance. I will now turn the call over to Doris Grbic, Director of Investor Relations. You may begin your conference. Thank you, operator. Good morning, everyone, and thank you for joining us to review Kruger Products' first quarter 2026 financial results. With me this morning is Dino Bianco, the CEO of KP Tissue and Kruger Products, and Michael Keays, the CFO of KP Tissue and Kruger Products. Today's discussion will include certain forward-looking statements. Actual results could differ materially from these forward-looking statements due to known and unknown risks and uncertainties. A list of risk factors can be found in our public filings. In addition, today's discussion will include certain non-GAAP financial measures. The reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found in our MD&A. The press release reporting our Q1 2026 results was published this morning and will be available on our website at kptissue.com. The financial statements in MD&A will also be posted on our website and on SEDAR+. The investor presentation to accompany today's discussion can be found in the investor relations section of our website. I will now turn the call over to our CEO, Dino Bianco. Dino. Thank you, Doris. Good morning, everyone, and thank you for joining us for our first quarter earnings call for fiscal 2026. Despite a volatile economic environment, we generated Q1 2026 adjusted EBITDA of CAD 86.9 million and a margin of 16%. This is driven mainly by lower year-over-year pulp prices and warehousing costs. Our top line declined slightly by 0.3% due to unfavorable foreign exchange impact and a high year-over-year comparison against the prior year quarter that delivered double-digit revenue growth. Overall, we are pleased with our financial performance in the opening quarter. Looking ahead to the remainder of 2026, market demand for our leading tissue products remains healthy. Production rates across our paper machines and converting lines are exceeding targets at all sites, and this is supporting our continued momentum on the revenue side. In early April, we also began ramping up a state-of-the-art converting line at our Memphis facility, which is expected to add capacity to our growing U.S. network. We will also actively focus on margin delivery in light of escalating input costs, including higher fuel and freight expenses, by continuing to assess our basket of product costs to determine any potential need for pricing. Now let's take a closer look at our quarterly numbers on slide six. As mentioned, we delivered adjusted EBITDA of nearly CAD 87 million in the first quarter of 2026, up 14.6% year-over-year on relatively stable revenue of CAD 544.6 million. Revenue in Canada improved 0.8% in the first quarter, while sales in the United States declined 1.5%. It should be noted that we were lapping a high comparable in the U.S., with sales growth of more than 21% in the first quarter of 2025. Let's look at pulp prices. NBSK average prices in Canadian dollars decreased sequentially and year-over-year in the first quarter of 2026, while BEK prices were up during the same comparable periods. This variance in pulp prices can be attributed to an overcapacity of NBSK in the market. Industry analysts expect both NBSK and BEK prices to trend upwards in 2026, but BEK should accelerate at a faster pace and higher level. Let's move on to our operations on slide eight. As previously mentioned, our manufacturing assets exceeded expectations across all our network sites in the first quarter of 2026. In addition, we are pleased to report that we maintained our strong safety record in Q1. At Memphis, our new state-of-the-art converting line, which launched as scheduled early in the second quarter, will support our renewed focus on premium products, specifically in the bathroom tissue and paper towel categories. With Memphis meeting production targets, we are pleased that the turnaround is progressing well, and I wanna thank the entire Memphis team for making this happen. Regarding our proposed TAD facility in the western U.S., we are finalizing incentives and permitting and financing with the preferred location and expect to make an official announcement before the end of the first half of 2026. The project involves construction of a new state-of-the-art tissue plant featuring the most modern Through-Air Drying paper machine and related converting lines. The facility will allow the company to better service its fast-growing U.S. business with ultra-premium tissue products. The new TAD machine will have an annual production capacity of approximately 75,000 metric tons, with startup expected in late 2028. Let's turn to brand support. We continue developing strong on-air equity campaigns for our Cashmere SpongeTowels and Scotties brands, along with our Kruger Big Assist program for hockey families, including our role as official partner of the CBC Olympic broadcast. In addition, we activated our annual Scotties Tournament of Hearts campaign. Kruger Products has been a proud sponsor of the Canadian Women's Curling Championship for 45 years. Congratulations to the Innisfree rink for winning the 2026 events in Mississauga. During the first quarter, we launched our Find the Cup to Win promotion for the Stanley Cup playoffs. We introduced a collection of nature-inspired plastic-free Bonterra facial tissue boxes created by Canadian interior designer and TV personality, Sarah Richardson. This collaboration is a natural fit for a sustainable Bonterra brand, blending eco conscious products with stylish home decor. We continued to build trial and awareness behind our new Scotties Ultra Soft brand in the first quarter. Let's turn to slide 10. The data presented is taken from Nielsen and shows Kruger Products branded market share performance in Canada over a 52-week period ending March 21, 2026. The numbers reflect a relatively stable share in the highly competitive bathroom tissue category. In paper towel, our share grew slightly, but we continue to see momentum in this segment, and we intend to continue to build on our number two position. In facial tissue, we raised our leadership position to almost a 47% share of the Canadian market, supported by strong investments in our Scotties brand and innovations. Let's look at our Away- From- Home segment. Q1 2026 revenue volume profitability grew year-over-year but declined sequentially due to seasonality. It should be noted that Away-F rom-H ome revenue growth in the first quarter was mainly driven by the U.S. market, which is seeing stronger performance relative to Canada. Profitability improved from the same period last year, driven by cost savings from paper insourcing. Our Cashmere, Scotties, and Titan wiper brands continued to deliver growth in the first quarter. I will now turn the call over to Michael. Thank you, Dino, and good morning, everyone. Please turn to slide 12 for a summary of our financial performance for the first quarter of 2026. As Dino mentioned, we generated an adjusted EBITDA of CAD 86.9 million on sales of CAD 544.6 million in the quarter, representing a strong year-over-year adjusted EBITDA growth of 14.6%. Net income totaled CAD 19.8 million in Q1 2026, compared to CAD 15.4 million in the first quarter of 2025. The year-over-year increase is due to higher adjusted EBITDA of CAD 11.1 million, lower depreciation expense of CAD 1.5 million, and reduced interest and other finance costs of CAD 1.3 million. These items were partially offset by unfavorable FX difference of CAD 5.6 million, as well as higher income tax expense of CAD 4.2 million. In our quarterly segmented view on page 13, revenue from our Consumer business decreased slightly by 0.8% year-over-year to CAD 461.7 million. The slight decline was primarily due to unfavorable FX impact from U.S. dollar sales, and higher U.S. sales volume was essentially offset by the decrease in Canada. In our Away -From-H ome segment, revenue improved 2.5% year-over-year to CAD 82.9 million, due primarily to higher U.S. volume. The Consumer-adjusted EBITDA in the first quarter totaled CAD 83.9 million, compared to CAD 76.1 million in Q1 2025, with a margin of 18.2%, representing an improvement of 2 points over the same period last year. On a sequential basis, Consumer-adjusted EBITDA increased by CAD 5.8 million from Q4 2025. For our Away-From-Home business, adjusted EBITDA amounted to CAD 6.3 million, compared to CAD 2.8 million in Q1 2025. The margin more than doubled year-over-year to 7.6%, partially driven by the expected benefits of insourcing our paper supply. Sequentially, AFH-adjusted EBITDA decreased CAD 3.4 million from Q4 2025, driven by some of the seasonality we see in Q1 volume for AFH. Moving on to slide 14, we show our consolidated revenue for Q1 2026, which reached CAD 544.6 million, down slightly by 0.3% year-over-year. The decrease was primarily due to unfavorable FX impact, lower selling prices in the U.S., and slightly lower volume in Canada. These items were partially offset by slightly higher AFH and Consumer volume in the U.S. and a small favorability in our Canadian pricing. On a geographic basis, revenue in Canada grew CAD 2.4 million or 0.8% year-over-year, while U.S. revenue decreased CAD 3.9 million or 1.5%. Now on slide 15, we provide the details of our year-over-year profitability. The adjusted EBITDA increased CAD 11.1 million to CAD 86.9 million, resulting in a margin of 16% compared to 13.9% for the same period last year. The year-over-year increase was driven by the lower pulp prices, reduced warehousing costs, partially offset by some of the higher manufacturing overhead costs. If we turn to slide 16, where we compare Q1 revenue to Q4 2025, revenue decreased CAD 15.5 million sequentially or 2.8%, primarily due to lower Canadian sales volume and unfavorable FX impact, which were partially offset by higher selling prices. Geographically, revenue in Canada declined by CAD 17.5 million or 5.7%, while U.S. revenue increased by CAD 2 million or 0.8%. On slide 17, adjusted EBITDA improved sequentially by CAD 2.7 million or 3.2% to CAD 86.9 million, mainly due to lower manufacturing overhead costs, reduced SG&A expenses, and slightly higher selling prices. These factors were partially offset by lower Canadian volume, elevated freight costs and warehousing expenses, higher pulp prices, and an unfavorable FX impact. The adjusted EBITDA margin reached 16.0% in the first quarter compared to 15.0% in Q4 2025. Turning to our balance sheet and financial position on slide 18. Our cash position continued to improve, reaching CAD 205.9 million at the end of the first quarter, up from CAD 196.1 million at the end of Q4 2025. The increase was primarily due to the higher adjusted EBITDA. Long-term debt at quarter end stood at CAD 1.058 billion, a decrease of CAD 16.1 million sequentially, reducing net debt by CAD 14.4 million. Our leverage ratio also declined to 2.9 x compared to 3.1 x in Q4 2025, further demonstrating our commitment to strengthening our balance sheet. To conclude my section, we will review capital expenses on slide 19. Our CapEx for Q1 2026 totals CAD 16 million, and for 2026 we expect to be in the range of CAD 100 million to CAD 120 million, which will include some spending related to strategic projects that we've previously shared. Thank you for joining us this morning, and I will now turn the call back to Dino. Thank you, Michael. Let's turn to my closing comments. To summarize, you know, very pleased with our profitability in the first quarter, we intend to actively focus on margin delivery given escalating and uncertain input costs. We will continue to monitor our total basket of product costs to assess any need for potential pricing. Secondly, we're ramping up our new converting line in Memphis, which will add capacity to our U.S. network. In addition to the stronger performance, I think we have a great opportunity to increase sales driven by that capacity. We will continue investing in our brands to drive long-term share growth. We expect our Away-F rom-H ome segment to continue to deliver against the profitable growth model. As mentioned, we are finalizing the details for the new TAD tissue plant in the western U.S., which is expected to start up in late 2028. We continue to develop our organizational capability to strengthen our adaptability and resilience. Finally, our adjusted EBITDA outlook for the second quarter of 2026 is expected to be in the range of our first quarter 2026 results. We will now be happy to take your questions. Your first question comes from the line of Hamir Patel from CIBC Capital Markets. Your line is now open. Hi, good morning. Good morning. Dino, could you walk us through the cost mitigation initiatives that you've put in place since the war in the Middle East started? With respect to pricing, are there any planned increases in the market? This is all recent news, obviously, we're watching it very closely. It didn't have a significant impact on Q1, but if prices stay where they are, they will probably, they will likely have a greater impact towards the second half of the year. I would say from a cost mitigation point of view, it's been pretty well business as usual. We haven't made any dramatic changes. We have rejected some cost increases from our suppliers that we felt were a little aggressive or premature, so we have taken that stand. The other thing, Hamir, when we look at pricing our business, we look at our basket of goods. That would include pulp, which is the biggest driver, both NBSK and BEK, and then other key factors like freight and packaging and labor and so forth. We'll manage the whole basket. Pulp's been a little favorable. Some of the other oil and oil-based costs are starting to increase, so we're watching the dynamics of what's going on. Listen, at the end of the day, we're gonna deliver our margin and we'll do it through, you know, cost initiatives, as well as pricing if we have to. Okay. Fair enough. Sorry, just, Dino, just to confirm, you don't have any new price increases that are currently in the market? Nothing has been announced, in the market currently, no. Okay. I noticed your parent company, Kruger Inc, announced a CAD 333 million project to enter the wipes nonwovens market. Are there gonna be any sales synergies across the enterprises once this new venture comes online? Yeah. Clearly, you know, we're looking at it. Wipes has always been an adjacency opportunity for us. I think with this investment it gives us an opportunity to decide where we wanna play, if and where we wanna play in that segment. I know my team is actively involved in looking at future plans and what opportunities we may have given what I think is a strong investment and a strong point of difference in the marketplace. Okay. Great. And just lastly, I noticed the TAD, the slide deck referenced late 2028. Has there been any sort of change in timing there? I think previously you just sort of pointed to 2028 as, I just wasn't sure if things have been pushed out a quarter or two. Yeah. I think it's always been late 2028 in our mind. I would say the process is probably taking a little longer just, you know, given a lot of uncertainty in the world and market and just working very closely with our lead location and it's pretty dynamic and I think we're moving in a very positive direction. As I said, I hope we have an announcement out before the end of Q2. Still progressing on plan, still progressing with the 2028 startup. We just wanted to create a little more certainty that it's more later in 2028 than earlier. Great. Thanks. That's all I had. I'll turn it over. Your next question comes from the line of Ahmed Abdullah from National Bank of Canada. Your line is now open. Good morning, and thanks for taking my question. Your adjusted EBITDA margin improvement was pretty substantial. How much of that expansion came from the costs going down versus the Memphis productivity gain? Ahmed, it's Michael here. You know, overall, the improvements over complete operation network definitely had a positive impact on our cost structure. That enabled us to obviously offset, you know, the slight increases that we saw in pulp or even fuel towards the end of the quarter. Overall, you know, we still ended the quarter in a positive position overall in their cost structure. We do expect this performance to be as strong in the coming quarters as well. Obviously, if the fuel and other commodities continue to increase at the rate they've been increasing over the last few weeks, this decisions, you know, around our commodity contract that we have with customers and so on will trigger pricing discussions, at least with the ones that are on contract to be able to maintain the margins that you've seen in Q3, Q4, and Q1. You know, we believe that our margin will stay fairly strong throughout events like this compared to when it was in 2022 based on how we're approaching commodities today versus the past. Okay. Thanks. Does that mean that your Q2 outlook kind of accounts for some pricing that's already embedded in that? No, there's been no announcement for pricing, as Dino mentioned already. You know, even when we do announcements, these can take up to two months to take effect. Based on where we're at today, there's currently no announcement made in the market for pricing. Understood. Just touching on volumes, your Canada Consumer volumes were a bit lower while pricing was better. Are you seeing some category softness there, or is there some, you know, deliberate pricing moves happening there? Yeah, it's a good question. It's Dino here. We are seeing category softness. You know, Nielsen reported data for Q1, which show the category down 1% on units. I think that's driven by a few things, you know, a little slower, lower population growth. I think that's temporary, there's an adjustment going on in population. I think there is some less discretionary in spending on paper towel, which is more of a discretionary product. We've seen that segment down a little more than the average. I think consumers are pantry de-loading or moving to just-in-time buying for tissue, which is probably having some impact there. Maybe there's some, you know, non-measured channels where consumers are shopping, like ethnic or health that we're not picking up. There has been some softness in the market in Q1. Actually, both in Canada and the United States, we're much closer to the Canadian market because of our brands. It's been down about 1%. Okay. Thanks for the color. I'll pass the line. Your next question comes from the line of Sean Steuart from TD Cowen. Your line is now open. Thanks. Good morning, everyone. Dino, I know this won't have a bearing on your U.S. expansion plans. GP has announced, more tissue capacity growth, on the TAD side in 2028 as well. I guess the question is more around in sector operating rates, the industry's ability to absorb more supply. How do you see operating rates for the broader industry trending and ability to bring your project in as others are also adding supply? Yeah. Great question, Sean. You know, before we announced our project, we did extensive long-term scenario planning on demand forecasts and capacity forecasts to use industry information, including some conservative numbers around population growth. It continued to show the need for all the announced machines and potentially a few more. Obviously, GP coming in now kind of validates that the market will be tight. As we look out to 2033, the market will continue to be tight. We still believe that utilization rates will be in the mid-low 90s, which is probably a stable place to be. There might be some bumpiness, if you will, as individual sites start up over time. As you know, there's quite a few sites starting up in 2027, 2028, 2029. We don't see a change in the long-term dynamics. You know, we feel comfortable with the first of all, location that we're gonna have, the ability to service a lot of our existing customers that are growing, and be able to service, you know, existing customers versus having to go after new customers. We feel comfortable in the long-term dynamics of setting up that site, and we'll be ready with some contingency planning if there's some short-term bumpiness, if you will, as the sites come up. Okay, thanks for that. With respect to your Western U.S. project, I guess what's left to finish off before you officially move ahead with it and we can get a better sense of the project economics and funding plan? I would say there's the two. There's two left. One is in a broad bucket, would be just finalizing the incentive investment stuff, scenarios from the city, counties and states. We're on the verge of getting those all contracted up. I think we have agreements in principle now on all of them. Now it's a matter of getting pen to paper and get an understanding how that will play out and the obligations of both parties. Working aggressively with that side of it. The second side, which is probably will be the last piece, is just the final approval on financing. We've been working with our lead banks around the project and getting their interest in it. Obviously, that won't be signed up until everything comes together, but we don't see any issues with that. Those are really the two last pieces. That's all I had. Thanks very much, guys. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one on your touch-tone phone. If you are using a speakerphone, please make sure to lift your handset before you press any keys. Your next question comes from the line of Frederic Tremblay from Desjardins. Please go ahead. Thank you. Good morning. Looking at the revenue drivers in the quarter, we see favorable pricing in consumer Canada, but lower volumes, and then the opposite in the U.S. with unfavorable pricing and higher volumes. Does that mean that we've reached a key pricing level in terms of consumer price elasticity? Do you expect resistance if you had to pass through additional costs in future quarters? Yeah, I would say that, you know, our pricing has been stable. I think what you're seeing is a bit more of a mix aspect there that's going on in Canada specifically. We have not made any pricing changes up or down since since the last update. Yeah, nobody wants the price. I mean, we understand how constrained the consumer is and the mindset of consumers. It's a tough market out there. We would only do it if that was our last resort. That's why we're being careful to watch it and making sure we're evaluating a full basket of goods. You know, it's a volatile market out there, the oil prices you could argue I mean, I can't argue, it is fact. It's event based. If that event goes away, then we could see that coming back down to maybe more normal levels. Pulp has been certainly pushing a little more upwards with BEK moving quicker, so we'll see how fast and how high that starts to go. At the end of the day, all I can say is, you know, we're gonna certainly target our margin delivery. We're gonna do it through some cost incentives, right? If we have to, we're gonna price for the business. That will only be determined once we understand the cost environment around us. On the U.S. side, the U.S. side, a little different. In Canada, we price to general market. In the U.S., we've got contracts. Some of those expire at different points in time. They're based on the same basket of goods, but they just make, you know, they don't all happen at the same time. You'll see some ebb and flow of decreases and increases at any point in time, depending on when those contracts come due. That's probably what you're seeing a little bit of on the U.S. side. That's very helpful. Thanks for that. Just moving to the Away-F rom-H ome channel, just your general thoughts on the demand outlook given the uncertain macro environment. If I'm not mistaken, I think for the quarter you mentioned a bit more strength in the U.S. compared to Canada and AFH. Wondering if you could provide a bit more color on the factors behind that. I just think, you know, at least in the first quarter, maybe it has changed in the month of April and May, there was more strength in the U.S. marketplace just as economically. I think there's more, you know, higher consumer confidence, just more, better indicators around GDP performance and so forth. I think that's driving it. Specifically, for us, we're a smaller player in the U.S., so it's, you know, growth with our customers will show more of an impact on our total business than anything in Canada because of the fact that, you know, we're still coming off a small base. Great. That's all I had. Thank you. Thank you. There are no further questions at this time. I would like to turn the call back to Dino Bianco for closing comments. Sir, please go ahead. Great. Thank you. Thank you. Thank you all for joining us on the call today. We look forward to speaking with you again following the release of our second quarter results for 2026. I do wanna remind you that on June 15th at 11:00 A.M. Eastern Time, we will be hosting our annual meeting of shareholders at the TMX Market Centre in Toronto. Your vote and participation at the annual meeting are important to us. Thank you, and have a great day.