Good morning and welcome to the MTY Food Group 2025 First Quarter Results Earnings 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 for you at that time for questions, and if anyone has any difficulty hearing the conference, you may press star zero for operator assistance at any time. Listeners, I remind you that portions of today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risk and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on MTY Food Group's risk and uncertainties related to these forward-looking statements, please refer to the company's annual information form dated February 13, 2025, which is posted on SEDAR Plus. The company's press release, MD&A and financial statements were issued earlier this morning and are available on its website and on Cedar Plus. All figures presented on today's call are in Canadian dollars unless otherwise stated. This morning's call is being recorded on Friday, April 11, 2025, at 8:30 A.M. Eastern Time. I would now like to turn the call over to Mr. Eric Lefebvre, Chief Executive Officer of MTY Food Group. Please go ahead, sir. Thank you. Good morning, everyone, and thank you for joining us for MTY's 2025 First Quarter Conference Call. Renee St-Onge, our Chief Financial Officer, is also with us today. The word I would use to summarize our first quarter performance from my perspective is resilience. In the face of an uncertain macro backdrop, MTY and its franchisees continue to execute well. We're taking a measured and thoughtful approach in response to emerging market headwinds. After adjusting for the impact of an extra day resulting from the leap year last year, same-store sales remained largely stable. This performance comes despite significant weather disruptions throughout the quarter, during which we witnessed a higher frequency of extreme cold, floods, and snowstorms, keeping customers home and increasing temporary store closures. These conditions placed downward pressure on system-wide sales during the quarter, particularly on the QSR frozen treats segment. Our other snack brands, such as Wetzel's Pretzels, continued to perform well on all key metrics. Casual dining restaurant segments in both Canada and the U.S. remained resilient as consumers continued to strive for positive restaurant experiences that are priced right. We continue to make positive progress within our digital channels. Digital sales increased by 7% in the first quarter and now represent 22% of total sales. This growth reflects our ongoing investments and brand-level initiatives aimed at enhancing the off-premise customer experience. We are today in a better position to implement more targeted and data-driven marketing strategies with our larger brands, and we continue to improve our ability to use all the best-in-class tools with a number of smaller brands. As a reminder, the average digital sale carries a significantly higher average check than non-digital sales. During the first quarter of 2025, we opened 70 locations and closed 102, resulting in a net decrease of 32. The first quarter has historically been a challenging period for openings and typically brings higher closures. Encouragingly, our current pipeline is strong, with over 100 locations currently under construction. As such, we anticipate an improvement in the pace of restaurant openings in Q2 and Q3. While there will always be ups and downs, we remain committed in achieving net locations growth in the future and are confident in our ability to deliver growth. At the end of Q1, MTY's network comprised 7,047 locations, of which 96.4% were franchised or under operator agreement, and 3.6% were corporately owned. Turning to our financial results, normalized adjusted EBITDA increased modestly despite the negative impact resulting from the leap year last year and the U.S. headwinds mentioned earlier. All segments were relatively flat year over year, with small increases in the franchise and retail segments and a small decrease in corporate restaurants. Margins across all segments held steady, displaying the resilience of our business. MTY continues to generate very strong free cash flows, as one would expect from our asset-like model. Cash flows generated from operating activities were CAD 58.5 million, up 9% year over year, and free cash flows netted lease payments came in at CAD 43.5 million, up 18% year over year. Free cash flows netted lease payments represented 72% of normalized adjusted EBITDA, demonstrating the company's impressive free cash flow generation capabilities. We remained focused on building financial capacity for strategic opportunities while also returning value to shareholders through share buybacks and dividends. In the quarter, we once again repurchased just under 300,000 shares under our normal course issuer bid, bringing the total shares repurchased in the last 12 months to 1.1 million shares, or 4.6% of our float at the beginning of that period. With that, I'll now turn it over to Renee, who will discuss MTY's financial results in greater details. Thank you, Eric, and good morning, everyone. Like Eric mentioned, normalized adjusted EBITDA came in at CAD 60.2 million for the first quarter of 2024, up 1% year over year compared to the same period last year. MTY system sales grew by 2.5% year over year, and company revenues saw a 2.2% boost. Looking at each operating segment separately, franchising operations Canadian revenues dipped by 2% to CAD 34.5 million. This was mainly due to a CAD 0.4 million decrease in recurring revenues and a CAD 0.5 million decline in turnkey project sales. Meanwhile, in the U.S. and international segment, franchise operations saw a 2% increase in revenues, reaching CAD 58.5 million. A favorable foreign exchange swing of CAD 3.6 million led to the increase, partially offset by a decrease in recurring revenue streams, which was the result of our organic system sales decrease of 3.1%. On the expense side, operating costs in Canada went up by 2% year over year to CAD 19.7 million, mostly due to higher wages. The U.S. and international operating expenses rose by 3% to $30.9 million, affected by $2 million foreign exchange impact, as well as $1.7 million in SEP project implementation and acquisition-related transaction costs. We are happy to say, however, that these increases were partially offset by a CAD 2.1 million reduction in controllable expenses, thanks to the company's continued focus on cost discipline, resulting partly due to the restructuring initiatives put into place in 2024. As for profitability, normalized adjusted EBITDA for the franchise operations came in at CAD 44 million, a 1% increase from last year's CAD 43.4 million, with the margins remaining steady at 47%. Moving over to the corporate operations, Canadian revenues rose 17% to CAD 9.8 million due to a net increase in corporate-owned locations, as well as a shift in mix, resulting in an increase in casual dining restaurants year over year. U.S. and international revenues rose by 2% to $116.1 million, also due to an increase in corporate locations. The increase in corporate store restaurants in the U.S. was the result of taking back select locations in certain underperforming territories in the later half of 2024, with the objective of turning the operations around and refranchising the restaurants. Operating expenses for the Canadian segment rose by CAD 1.3 million to CAD 10.2 million, while the U.S. and international segment rose by 3% to $103.5 million due to a higher number of corporate stores, as well as higher wages and supply chain costs. Normalized adjusted EBITDA of the corporate store segment came in at CAD 12.2 million, relatively stable from last year's CAD 12.4 million, with margins in line at 10%. Globally, revenue from food processing, distribution, and retail grew by 7%, thanks to stronger sales in the Canadian retail segment. A big driver for the increase was a strong Super Bowl performance. Normalized adjusted EBITDA for the segment reached CAD 4 million, up 8% from CAD 3.7 million last year, with margins holding steady at 10%. Turning our attention to our income attributable to owners, it amounted to CAD 1.7 million, or CAD 0.07 per diluted share, compared to CAD 17.3 million, or CAD 0.71 per diluted share in Q1 2024. The decline was mainly due to accounting for the foreign exchange variations on intercompany loans. This accounting loss has no bearing on our healthy operational and financial highlights in the quarter, which saw significant growth in operating and free cash flows. Excluding this foreign exchange impact, adjusted EPS was CAD 0.87 per diluted share versus CAD 0.69 per diluted share in the first quarter of 2024, highlighting the impressive overall performance during the quarter. On that note, moving over to cash flows, as Eric briefly mentioned, the first quarter had cash flows from operating activities of CAD 58.8 million compared to CAD 54.2 million in Q1 of 2024, an increase of CAD 4.6 million, mainly attributable to the decrease in interest paid on long-term debt. Free cash flows netted lease payments increased to CAD 43.5 million in the quarter compared to CAD 36.9 million last year, mainly due to lower capital expenditures. For 2025, we are targeting capital expenditure levels lower than 2024. Moving over to liquidity and capital resources, as of the end of the quarter, the amount held in cash totaled CAD 68.8 million, an increase of CAD 18.4 million since the end of the 2024 fiscal period. As Eric mentioned, during the three months ended February 28, 2025, we repurchased and canceled 287,400 shares for CAD 13.8 million through our NCIB and paid CAD 7.7 million in dividends to our shareholders. We ended the quarter with a net debt of CAD 643.9 million. Considering our strong cash flow generating ability, our debt to EBITDA of approximately 2.5 times is a level of debt that gives us flexibility to make acquisitions should the opportunity arise, while we continue to return capital to shareholders in the form of dividends and share buybacks. I would like to thank you for your time, and I will turn it back to Eric for closing remarks. Thanks, Renee. We've navigated the challenging last few years, the inflationary cycle of 2022 and 2023, turning to macroeconomic headwinds of 2024 and early 2025. The tools at our disposal to address these headwinds are plentiful. We'll continue to drive the business forward with discipline, foresight, and a proactive approach to sustainable growth. Tariffs have dominated the headlines and are front of mind for everyone. It's a rapidly evolving and volatile situation, and we're actively monitoring developments. Our U.S. stores are somewhat insulated because most of our supply chain is U.S.-centric for those stores. We don't source 100% within the U.S., but our exposure is more limited. In Canada, we also purchase most of what we need domestically, but there are some products that inevitably need to be imported. If countertariffs were imposed by the Canadian government, we would need to manage their impact. In both countries, our supply chain teams are working hard to identify alternative sources for the goods that are imported and organize the supply chain in case we need to move from one supplier to another. We are confident in our ability to manage any situation by leaning into our robust supply chain and procurement capabilities, strategic menu adjustments, and, if necessary, pricing actions. I'd like to end off by saying that this quarter has demonstrated resilience in our system sales, and we feel good about our pipeline of new store openings. Cash flow generation remains strong, and our balance sheet is healthy. We remain committed to achieving long-term growth and delivering strong results, strong returns for our shareholders. I thank you for your time, and we will now open the lines for questions, Operator. Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you have a question, please press the star key followed by one on your touch-tone phone. You will hear a one-tone prompt acknowledging your request. Your questions will be polled in the order they are received. If you would like to decline from the polling process, please press the pound key. Please ensure you lift the handset if you are using a speakerphone before pressing any keys. One moment for your first question. Our first question comes from the line of Vishal Sridhar from National Bank. Your line is open. Hi, thanks for taking my question. I just wanted to get your thoughts on a comment that was indicated in the disclosure material where you say, "We see significant value in share repurchases at current levels as a highly accretive use of capital, and we're going to remain disciplined in evaluating strategic acquisition opportunities." Wondering if something has changed more so from the last quarter and how we should contemplate acquisitions and even the pace of repurchases going forward. No, I don't think anything's changed. It's a continuity of what we're seeing out there. I mean, our priority remains to acquire good companies and good concepts that we can add to our portfolio. That being said, acquiring MTY at the moment makes sense given our share price. We're buying back shares at around the same pace we've been acquiring for the last few months. We're in a position now at the pace we're going, we're going to reach the maximum amount allowed by the TSX. We're still on pace for that. We're still buying back our shares, and we're still building our treasure chest for acquisitions. It's not if we want to acquire companies. It's more when we'll be able to cross the finish line with some of the projects we're working on. Okay. How do you evaluate the backdrop right now for acquisitions? Obviously, it's a very volatile situation, as you commented. I presume the earnings outlook as we go through the year may change, or the consumer backdrop may change. I wanted to get your thoughts. Do you think there's better prices available, and it's something to be prudent, or do you think it's more of a long-term view and you'll buy as available? It is always a long-term view. Whenever we acquire something, it is not about next quarter or the quarter after. As you know, these acquisitions are based on long-term forecasts that we have for the cash flow generation and the growth potential of each of these concepts. Just to comment on what you are seeing in the consumer, there is a lot of noise about what the consumer is doing or might be doing. Right now, as we stand today, I am not seeing any material change in consumer behavior. There are ups and downs based on all the various factors we are seeing and all the noise that we are hearing in the media, but the consumer is still there, and people still look for positive experiences in our restaurants. I do not think it has a material impact on valuations yet. I'm not sure if it will have an impact because the consumer is still there. Time will tell. As far as we're concerned, it's not smooth sailing because of everything that's going on, but consumers are still there, and it's business as usual. Okay. With respect to that comment where you said the consumers are still there, is that a comment in Canada and the U.S., and does it apply in equal proportion for both? On the Canadian side, it's certainly stronger than the U.S. at the moment. There are periods where one territory is going to be stronger than the other. Right now, we're seeing Canada as our strongest territory. It's the same also since the beginning of Q2. The U.S. consumer is still there. It's a little bit more choppy in the U.S., but there's still good potential, and we have a lot of concepts that are still doing well. Thank you. Our next question came from the line of Derek Lefebvre from TD Cowen. Your line is open. Yeah, good morning, everybody. Eric, I just maybe wanted to touch a little bit on the Canadian same-store sales for Q1. Maybe talk about, I guess, the order of magnitude of the weather impact and the extra day. Maybe just maybe a comment around the GST holiday. It doesn't seem like you guys benefited much, if any. Yeah. The extra day is important, obviously. It was a Thursday last year, February 29th. We had five Thursdays in that month. It is just over 1% on same-store sales, the impact. It brings our same-store sales total to about flat, just under flat, and it brings our Canadian same-store sales positive. As far as the weather is concerned, there has not been much weather in Canada. We did have a snowstorm Valentine's Day weekend, the historical snowstorms in Quebec and Ontario. It cost us Thursday, Friday, Saturday, and Sunday. That hurt us a little bit, but it is hard to measure exactly what the impact of that would have been versus a normal Valentine's Day weekend. Okay. On the GST holiday, anything to talk about there? Yeah. Again, it's another one that's hard to measure. Certainly, in Quebec, it had no impact. The 5% doesn't really necessarily make a big difference for the consumer. The impact is probably a little bit bigger in the Atlantic provinces because the entire sales tax was wiped away. We were performing well before, and we're still performing well after. It's hard to measure whether it had an impact or not, but what's important is that the sales are still there before and after. I can't really comment whether that created some lift or not. Okay. That's fair. Just maybe one last one for me. Could you maybe talk about, you said you're actively monitoring the tariff developments. I understand that it's an extremely fluid environment, but you did say that you're implementing some mitigation strategies. Just curious if you could maybe talk about some of those strategies that you've got on the go. Yeah. We're not necessarily implementing the strategies because right now, the impact is relatively minimal. We don't have to change much. We're just preparing. They always say, "Plan for the worst and hope for the best." We're planning in case there would be countertariffs between Canada and the U.S., for example, or if there's massive tariffs impacting some of our supply chain coming from Mexico for produce, for example. We're preparing a bunch of scenarios to prepare. If these countertariffs or heavy tariffs do come to fruition, or not necessarily fruition in this case, but are enacted, the entire supply chain will reorganize itself. What the impacts are going to be is still a big question mark. We're preparing for a number of different scenarios. We have a tariff task force that's implemented now in our groups. We are just preparing to make sure that we do not run out of food and to make sure that our franchisees are not too penalized and also to make sure we do not take pricing where we would need to take pricing. Okay. Thanks, Eric. I appreciate the commentary. Our next question comes from the line of John Zamparo from Scotiabank. Your line is open. Thank you very much. Good morning. I wanted to come back to the same-store sales performance subsequent to the quarter. I appreciate the comments so far. It's such a dynamic environment. I wonder if you've seen any noticeable shift in spending within segments, in other words, quick service versus fast casual versus casual. Our top-performing concepts at the moment are the casual dining. We have not really seen major shifts. I would say that right now, we are seeing more variation than normal. The ups are higher and the downs are lower than normal. We do not see the small changes that we typically see. We see heavier changes in both ways. We have not seen any major shift in consumer spending right now. Hopefully, that stays that way. Okay. And then shifting to franchisees, I wonder how you would describe the sentiment among that group at the moment, both thinking about their profitability levels, but also their willingness to open new stores in this environment. As I mentioned earlier, our new store pipeline is really, really strong, probably the strongest it's ever been. We're pretty happy with that. We're swinging hammers on over 100 stores as we speak. We're very confident with our pace of openings for Q2 and Q3. I think the desire to open new stores and proven concepts hasn't necessarily gone down. As far as profitability is concerned, our franchisees are entrepreneurs. They're small business owners. I think it's normal that they're worried about profitability because of all the noise that we hear in the media and because of all the back and forth that creates a lot of uncertainty. Their profitability hasn't been affected by everything that's going on yet. Hopefully, it won't be. If it does get impacted, then I can give an example when eggs price soared in the U.S. It was a challenging time for our village and franchisees who sell a lot of eggs. We need to address that and take some pricing in these cases to make sure that our margins remain viable. There are a number of tools that we can use, but where there is no substitute for a certain product and price increases, we will need to protect our franchisees. I think consumers understand that if they are buying eggs, they understand that it is a little bit more expensive. Now, the eggs are back to a more normal price, but there are ups and downs that are a little bit more abrupt. Okay. On M&A, coming back to that topic, I think—correct me—but I think typically you've been fairly agnostic on restaurant type or geography for what you target. Is that still the case, would you say? Or are there specific segments or regions or brands? Maybe you don't have to share what they are, but are you getting more targeted in what you're interested in on the M&A side? We're still largely agnostic on geography and type of restaurant. Obviously, we're primarily going to focus on a very heavy franchise model. We're not necessarily that interested in corporate store models, which tend to be a little bit more challenged these days. We're seeing a lot of activity on the corporate store chains. We're monitoring, but this is not necessarily our primary focus. Other than that, I mean, any type of restaurant, any geography can do well if it's operated well and if people do a good job and if there's an appeal to potential consumers. We're agnostic, and we look at each opportunity on its own, not necessarily based on a type of food or geography. Got it. Okay. One last one for me, specific to this quarter, the closures skewed more towards Canada. Can you add some color there? Was there anything that was sort of one time that you think will not impact other quarters? I know this is always tough to predict, but is there anything you can add on that topic? Yeah. There was a little bit of a mixed bag in terms of closures during Q1. Obviously, there is one, the Goose Oak Theaters that went bankrupt, affected our TCBY chain. So we had to close all those stores at once. That obviously will not happen again in the future. Other than that, it is a little bit of a mixed bag. Q1 typically is a little bit more sensitive. January and February are typically slower months. This is when some of our franchisees choose to stop operations after the Christmas period. Historically, it has been like that. It is probably going to be like that in the future as well. There is no necessarily discernible trend that we would say, "Yeah, this is something that is going to last in the future. Okay. Great. Understood. I'll leave it there. Thank you very much. Ladies and gentlemen, if there are any additional questions at this time, please press star followed by one. As a reminder, if you are using a speakerphone, please lift the handset before pressing the keys. Our next question comes from the line of Michael Glenn from Raymond James. Your line is open. Hey, good morning. Eric, the change in CapEx cadence that you're seeing in this year versus last year, can you just help give some insight into what's changed on the CapEx front where you're spending less money this year versus last year? Yeah, for sure. Last year, we had some construction that we had to do on a few stores. For example, the two Baton Rouge and Desjardins and LaSalle. We had some other stores that we needed to build because they were pre-committed. That does not happen this year. There is no intention to build corporate stores other than the famous Dave's new prototype that we just built and that we just opened a few weeks ago. We announced all of last year, we announced that the CapEx cadence would slow down and that we had visibility on the lower CapEx. We are just realizing what we said we would. Okay. Did you guys give a number for CapEx for the year, a guidance on it? No, we didn't give a number. All we were saying is that it should be materially lower than last year. Okay. In the opening remarks, Renee sort of highlighted that there has been a creeping higher uptick in corporate stores taking place, and you spoke to some of that. Is there any specific intention on MTY's part to divest its corporate casual dining stores in the U.S.? Yes and no. We do not want to give them away because they produce valid EBITDA. They bring dollars back home. There is no desire to increase that portfolio. Right now, the stores you see being added are mostly Papa Murphy's, where territories are being abandoned by some large franchisees where we think the operations were not optimal, and we can turn them around and refranchise them down the road. Yes, there will be some targeted sales of corporate stores. I do not want to announce numbers. It will not necessarily be all of our stores for sure, but there will be some targeted sales of corporate stores in the casual dining portfolio coming. Okay. Perfect. And then just on the consumer, you have seen headlines, and I know you referenced you read about this in the media, but a very active push to value menu offerings in the U.S. Are you responding across to any of your brands right now in competitive intensity on the value side? Yes. I think every brand, whether it's U.S. or Canada, needs to have a value offer to attract consumers and get people into the store. They won't necessarily buy that. Consumers won't necessarily buy that value offer, but at least it gives them a reason to come into the store. Yes, I would say pretty much every brand has to play in that value offer. We have no choice. Okay. From your franchisees on the U.S. side, are you hearing anything or any dialogue regarding labor challenges or labor availability coming up? No, I think labor is pretty stable. There are pockets here and there where it's more complicated. There always is. I wouldn't say the labor situation is better or worse than it's been before. We're in a business where we have a high churn in our employees, and we need to constantly renew our workforce. That's the nature of our business. This year or this month is no different than it was before. Okay. Thank you for taking the questions. There are no further questions at this time. This concludes the conference call for today. Thank you for participating. You may now disconnect.