Good morning, ladies and gentlemen. Welcome to the MTY Food Group Inc. Q4 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session, and 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 the zero for operator assistance at any time. Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call is being recorded today, Thursday, February 16th, 2023. I would now like to turn the call over to Eric Lefebvre, Chief Executive Officer. Please go ahead. Thank you. Good morning, everyone. Thank you for joining us for MTY's fourth quarter conference call for fiscal 2022. The press release in MD&A with complete financial statements and related notes were issued earlier this morning and are available on our website as well as on SEDAR. During the call, we will be referring to forward-looking statements and to certain numbers that are non-IFRS measures. You can refer to our MD&A for more details. I'd also remind you that all figures presented on today's call are in Canadian dollars unless otherwise stated. We're extremely proud of the results realized during fiscal 2022. During the year, we generated organic and acquisition growth to deliver record normalized adjusted EBITDA of over CAD 187 million, while system sales exceeded CAD 4 billion for the first time in MTY's history. Our operations generated cash flows of CAD 143 million or CAD 5.84 per diluted shares. All those highlights were generated during a year marked by numerous challenges, including COVID-related restrictions at the beginning of the year, labor and supply chain constraints, inflationary pressure, and uncertain market conditions. Needless to say, our team and franchisees have shown extraordinary resilience, creativity, and dedication. We continued our growth momentum in the fourth quarter, with both normalized adjusted EBITDA and system sales increasing 25% year-over-year to $53.5 million and $1.2 billion, respectively. During the year, we closed two Küto Comptoir à Tartares early in the fiscal year and BBQ Holdings in late September. The BBQ division therefore contributed only two months to our 2022 results. Although the full impact of the BBQ transaction will only be measured during 2023, its contribution to MTY's results was meaningful in the fourth quarter. Excluding the impact of acquisitions and the impact of changes in foreign exchange rates, system sales grew 10% organically, while organic growth in normalized adjusted EBITDA was 9% in fiscal 2022. For the fourth quarter, specifically, organic growth in system sales and normalized adjusted EBITDA were respectively 4% and 9%. Digital sales continued their progression, growing 8% year-over-year to $208.5 million in the fourth quarter. Digital sales, which includes mostly takeout orders and delivery sales, benefited from the company's increased investments in online ordering and third-party delivery options in the past year. In 2023, we intend to further raise our game by dedicating additional resources to further improving our guests' overall digital experiences, ranging from our websites to online ordering and to every possible way in which we interact with our existing and prospective customers electronically. Moving on to our network, MTY completed the fiscal year with 6,788 locations, of which 6,589 were franchised or under operator agreements, and the remaining 199 locations were operated by the company. 56% of our locations are based in the U.S., 37% in Canada, and 7% international. The Wetzel's Pretzels deal, which closed December 8th, adds over 350 locations to MTY's network across 25 states in the U.S., Panama, and Canada. Sauce Pizza & Wine, which closed on December 15th, is a smaller concept with 13 corporate-owned locations in Arizona. It's expected to be accretive immediately and offers good franchising potential in the medium and long term. With our 3 latest acquisitions, MTY's network has over 7,100 locations, of which approximately 96.5% are franchised and 3.5% are corporately owned. This is slightly higher than MTY's historical average, but given the performance of the newly acquired locations and the infrastructure in place to operate them successfully, we do not intend on liquidating our portfolio of corporate stores. We also do not intend on adding significantly to that number as we remain a franchisor at heart. Looking ahead to fiscal 2023, we expect a major lift in sales and profitability for BBQ Holdings, Wetzel's Pretzels, and Sauce Pizza & Wine. In terms of capital allocation, MTY's priority remains to acquire quality brands and further expand its network. Paying down some of our debt to build capacity for future deals is also a priority. The proportion of free cash flow distributed as a dividend is expected to remain within its historical range. I will now turn the call over to Renée, who will discuss MTY's financial results in greater details. Thank you, Eric. Good morning, everyone. As previously mentioned by Eric, MTY delivered amazing normalized adjusted EBITDA of CAD 53.5 million in the fourth quarter of 2022, which excludes CAD 3.6 million in acquisition-related expenses related to the acquisition of BBQ Holdings and Wetzel's Pretzels. Most of the improvement came from the corporate store segment in the U.S., as well as the processing, distribution, and retail segment in Canada. Excluding the acquisition of Küto Comptoir à Tartares, the Canadian segment realized an impressive organic normalized adjusted EBITDA growth of 27%. In the U.S. and international segments, normalized adjusted EBITDA increased by $7.8 million, mainly due to the acquisition of BBQ Holdings, which generated $5 million in normalized adjusted EBITDA. This level of profitability for BBQ Holdings is highly encouraging, given it represented a two-month contribution in a seasonally soft quarter for this portfolio of brands. The additional weight of corporate locations arising from the acquisition of BBQ Holdings caused the fourth quarter consolidated normalized adjusted EBITDA margins to decrease from 29% to 22%. The newly added corporate locations fueled the corporate location segment, which went from a loss in the 4th quarter of 2021 to a CAD 7.4 million profit in 2022, with a normalized adjusted EBITDA margin of 9%. The processing distribution and retail segment had margins increase from 11% to 16%, while the franchising segment saw a drop from 55% to 44% year-over-year. The decrease in the franchising segment margin is mostly due to the higher expected credit loss provision taken on leases receivable, as well as higher amount of low-margin revenues generated, such as turnkeys and sale of various supplies, equipment, and materials to franchisees. In term of net income attributable to owners, it amounts to CAD 7.1 million or CAD 0.29 per diluted share in the fourth quarter, compared to CAD 24.9 million or CAD 1.00 per diluted share in the same period last year. The decrease in both cases was mainly due to acquisition costs, higher non-cash impairment charges on intangible assets, as well as higher interest paid on long-term debt. Company revenue grew 65% year-over-year to CAD 242 million in the fourth quarter, mainly driven by the BBQ Holdings acquisition. The two-month impact following the deal delivered growth for franchise operations and corporate restaurants of CAD 4.3 million and CAD 67.6 million, respectively, in the U.S. and international segments. In Canada, franchise operations and food processing, distribution and retail were the major revenue contributors, with year-over-year growth of 25% and 22%, respectively. Turning to liquidity and capital resources, cash flows from operations totaled CAD 35.5 million in the fourth quarter of 2022 compared to CAD 31.9 million in the fourth quarter of 2021. The increase of 11% in operating cash flow stems mostly from the strong adjusted EBITDA we generated during the quarter. For free cash flows amounted to CAD 32.9 million or CAD 1.34 per diluted share in the fourth quarter compared to CAD 35.6 million or CAD 1.44 per diluted share in the same period last year. The decrease in free cash flows is due to the sale of two portfolio of Papa Murphy's corporate-owned locations in 2021. In the fourth quarter, we reimbursed CAD 23.9 million of long-term debt and paid CAD 5.1 million in dividends to shareholders. For the full fiscal year, we paid CAD 80.2 million in long-term debt and CAD 20.5 million in dividends to shareholders. We also repurchased 256,400 shares for CAD 14.6 million under our NCIB program in fiscal 2022. Following the year-end, we raised our dividends by 19% to CAD 0.25 per share. This marked our 10th increase since we first declared our dividends in November 2010. At the end of the fiscal year, MTY had a healthy cash position of CAD 59.5 million and long-term debt of CAD 561 million, mainly in the form of bank facilities and promissory notes on acquisitions. During the fourth quarter, we raised our revolving credit facility to CAD 900 million in anticipation for the acquisition of Wetzel's Pretzels. The additional capacity also gives MTY added flexibility for future acquisitions. Following the acquisition, we anticipate the debt to normalized adjusted EBITDA ratio will fall between 3 and 3.5 times EBITDA, which is around the comfort level we have communicated in the past. Given MTY's cash flow generation ability, the current leverage does not impair the possibility of realizing more acquisitions in the future. With that, I thank you for your time, and we'll now open the line for questions. Operator? Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you want to ask a question, please press star followed by the number one. If you want to withdraw your question, please press star two. Your questions will be posed in the order they are received. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from John Zamparo from CIBC. Please go ahead. Yeah. Well, in terms of integration, it's going extremely well. We have two teams that are completely engaged and really wanting to work with the rest of MTY doing exactly what you mentioned is, which is accelerating growth, and, you know, improving profitability for our franchisees and for the company. It's going extremely well. In both cases, we're really happy with what we're seeing. In terms of growth plans and everything, they remain intact. We're trying to accelerate the plans. We're not necessarily changing the plans, but if we can push and help to accelerate everything, we will. We have a number of initiatives we're working on. Nothing we can announce at this point yet, but there are a lot of things that we're working on that we feel are very promising for the future in both cases. Okay. On BBQ, is it fair to assume there's no change in plan on potential refranchising of your corporate stores in that, in their portfolio? Yeah, that's correct. The corporate store portfolio is really well run, and we have a good team of corporate store performance people that really manage the corporate stores. You know, they're among the best stores we have in the network, and that's what we want to do. If we have a corporate store, it should be run as the example, and these stores are run really well. We have the infrastructure in place to run them. The profitability we derive from those restaurants is really something we don't want to part with. Although we don't intend on building more corporate stores or necessarily reacquiring a large number of corporate stores in the future, you know, we also don't necessarily want to part with the portfolio. There might be stores here and there that we might sell if geographically it doesn't make sense for us because, you know, it's a little bit harder to operate. Other than that, we'll probably keep the portfolio intact. Okay, understood. You mentioned franchisee profitability. I know there's a lot of puts and takes on this, but any measurement you can give, or even just qualitatively on overall franchisee profitability in 2022 compared to either 2021 or pre-pandemic? Yeah. Well, obviously for franchisees, it's, you know, they're especially in certain areas, and maybe certain brands more than others, obviously with the number of brands we have, they're not all affected the same way. You know, there is inflation on costs, whether it's labor or food or packaging. There's also a shift in the way consumers go about the business and, you know, delivery orders, for example, take a drain on our profitability. You know, we have regular discussions with our franchisees. For the most part, we have access to their P&Ls as well, and we try to work with them to improve profitability as much as possible. The good news is so far, we've been able to adjust prices to, you know, to offset the increase in costs as we're going through, and the customers are accepting the price increases. You know, it's not easy. We need to react fast. The cost increases happen a lot faster than they used to happen, and it's a little bit more complicated in that type of environment. That being said, we're a nimble team. We're all entrepreneurs, and we're reacting fast. What we're seeing now is that for the vast majority of our franchisees, the profitability is very satisfactory. Obviously there are exceptions to that, and for the vast majority of the network, the profitability is good, and the customers are taking the price increases, relatively well, so no impact on traffic for the moment. Okay. That's helpful. Thanks. Just a couple more. One is on closures. It was relatively high this quarter. I don't imagine you're going to guide us on this, but I wonder if you feel confident that closures will decline in 2023 vs 2022. Yeah. Well, they need to. You know, this is certainly not a number we're happy with. We had, you know, we had some better quarters earlier in the year, and then in Q4, you know, the number of closures was a lot higher. This is not a number we're proud of. This is not a number that we expected to be that high. Obviously we're addressing the situation with our teams. And, you know, we make it a priority to focus on our existing stores. It's a lot easier to keep an existing store than to open a new one. We need to preserve the integrity of our network, and that's been a main area of focus for the team. Everybody understands what we need to do to keep those stores open. So, you know, as long as it's a priority, it's communicated, we have conversations with our franchisees also a little bit more regularly to make sure that we understand where they're at. If we can help them sell their assets instead of closing their assets, then it's better for both our franchisee and the franchisor. Yeah, the closures were high in Q4. There's no doubt about it. Okay, understood. My last one's on the food processing segment. I wonder if you can give a sense of how many points of distribution you're in right now and how that's grown just because that business is growing well into double digits for years. I just would like to get some sense of how large you think that business can get over time. Yeah. Well, the market is huge. We're only addressing a very small portion of the network. At the moment, we're predominantly in Eastern Canada. We have some business in the U.S. as well, you know, there's the runway for us is huge. As you know, this is a more cyclical market. We go up and down depending on the performance of grocers. If they generate a lot of traffic, we will tend to go better, if they don't, then it's gonna be a little bit softer. The runway is huge, and, you know, this could well become a very important, it is a very important segment for MTY, but it could become even bigger as the year, go by, and we certainly have aggressive targets for our team. Okay, great. That's all for me. Thank you very much. Thank you. Your next question comes from George Doumet from Scotiabank. Please go ahead. Good morning. This is Taha calling on George's behalf. Congrats on the quarter. Following up on retail and distribution, it seems to me that you have a high margin year during this quarter. I was wondering if you could provide some color on that and the sustainability of this going forward. Yeah. These margins always depend on a lot of different things. They depend on the sales mix we have. You know, depending on whether we're selling a certain product or another, the margins will shift. They also depend on the price of commodities. As you know, we can't change the price very rapidly with grocers, so we tend to absorb a little bit of the price increases or decreases for a certain amount of time. I would say the margin is probably higher than normal in Q4. Do we hope we'll be able to repeat it? We do. Is this something that's gonna happen every quarter going forward? Probably not. As we increase our revenues, we will continue to absorb the fluctuations of the market. Where we're gonna land, I'm not sure, but this is on the high side for sure. Thank you. Very helpful. Can you provide some color on Papa Murphy's performance? How did it comps, how the competition is looking around on that part? Yeah. For Q4, the sales of Papa Murphy's were down like low single digit. We closed a lot of stores also in 2022, unfortunately. The performance was not exactly where we wanted it to be, but we felt that, you know, the curve was softening. What we're seeing now since the beginning of Q1 is a much better performance from Papa Murphy's. Our sales are up, you know, same store sales, system sales are both up compared to last year. We just had a really good Valentine's Day. We were feeling pretty good about where Papa Murphy's is. Q4 was kind of a soft landing and hopefully now we're past that point and we're on the rise now. Thank you. Very helpful. Thank you. Thank you. This is Echo the congratulations on navigating a difficult year everybody. I think you did. Thanks for the color on the organic system sales growth. I was wondering, Eric, if maybe you could add some color to both, you know, in Canada and U.S. around pricing. You did touch on it, I was wondering if, you know, how much of that 4% organic growth is pricing vs traffic. Yeah. It's hard to quantify because I mean, our systems and the number of different POSs we have don't allow us to be able to know exactly what pricing vs traffic is. You know, a good portion of that is certainly in pricing. We did have to increase our price compared to last year, and different brands had to increase prices by different amounts. There is pricing that was taken for every single one of our brands. A good portion of the increase in sales for the organic increase in sales for the fourth quarter is driven by traffic. Although we do have much fewer stores than we had Q4 last year, unfortunately. The individual stores we have did much better than they did last year. It's a mixed bag, I would say. Okay. I know it's a difficult question to ask, but in terms of future pricing, like how well-positioned are you? Do you need to take more price going forward? Yeah, that's a big question mark. We don't know what the market is going to be like in the future. I wish I had a better crystal ball, but mine doesn't really work that well. We'll need to react to what the market throws at us. If we see stabilization of the costs for our restaurants, maybe we'll be able to keep the prices intact. If we see a major rise in our costs, we'll need to adjust price. If you look at, you know, in certain territories in which we operate, we're gonna see some pretty massive raises in minimum wage. Although we're really not necessarily paying minimum wage in most of our restaurants anymore, it does have an impact on the salary structure. In these cases, we'll have to adjust prices likely. We'll see, we'll see how the market goes for 2023, but we're ready to react. Our teams are prepared. We have all the science behind, you know, what we need to increase and when and by how much. Hopefully the market stabilizes and we don't need to do it. If we do need to do it, we'll be ready. Okay. Maybe just to follow up on that, you just alluded to minimum wage increases. What are the, I guess the, where are the biggest markets that you're expecting those increases? Yeah. Well, a few markets already announced their increases. For example, Quebec, which is an important territory for us, is going to increase on the 1st by a material amount. That's, that's going to have an impact for sure. We're always watching California. That's, that's also a little bit more unpredictable for California and we don't know where that territory is going to go, but they might have some influence on the rest of the market, so we'll be watching. I would say those are the two main ones that we're watching at the moment. Okay. I'm curious to, you know, given the, you know, the level of inflation and the price increases you've had to push through and everybody's had to do it, what are you seeing in terms of promotional or competitive activity overall in your markets? It depends for which product. You know, you could tell, for example, in pizza, which is, you know, a very competitive market, there tends to be a little bit more extreme value offers in the market. For other types of restaurants, we don't see it that much. I think everybody's trying to protect their margins now. The traffic is pretty good in general, so you know, this is not a time when you need to really go aggressive on the price point to drive traffic. There is some promotional competition. Nothing that's not normal, so we're nothing unexpected there. I would say it's a pretty good time in terms of, the extreme value offers that might be offered out there in the market. Okay. That's helpful. One last one for me. Can you just maybe just talk about the write-down in... I think in the press release you talked about five brands or five banners. What banners are they or were they? Yeah. I don't necessarily want to talk specifically about the banners in this case. You know, the, the impairment charges we had to take are mostly related to the change in the discount rate, not necessarily in the performance of the brand. As you know, the interest rates have been going up and, there's been, speculation about a potential recession also which, makes our risk, our risk premium, go up a little bit. The, the write-downs are mostly caused by the increase in our, in our cost of capital more than because of the performance of the brand. In the context, I'd rather not necessarily discuss about the brand specifically because we do believe those brands are good, and they're not necessarily impaired. Obviously we need to comply with the rules and there are a certain number of parameters that we need to abide by and that's one of them. Okay. That's fair and appreciate the color. Thanks, Eric. Thank you. As a reminder, should you have a question, please press star one. There are no further questions at this time. Thank you. This concludes your conference call for today. We thank you for participating, and please disconnect your lines. Have a good day.