Welcome to The North West Company Inc.'s second quarter results conference call. I would now like to turn the meeting over to Mr. Dan McConnell, President and Chief Executive Officer. Mr. McConnell, please go ahead, sir. Thank you very much, and good morning, everyone. I just want to welcome everybody to our second quarter conference call. Joining me today from The North West Company is John King, our Chief Financial Officer, and Amanda Sutton, our VP of Legal and Corporate Secretary. I'm going to start the meeting actually by asking Amanda to read our disclosure statement. Thank you, Dan. Before we begin, I'll remind you that certain information presented today may constitute forward-looking statements. Such statements are often more fact than expectations, estimates, projections, and assumptions. These forward-looking statements are not guarantees of future performance and are subject to certain risks, which could cause actual performance and financial results in the future to vary materially from those contemplated in the forward-looking statements. For additional information on these risks, please see North West's annual information form and its MD&A under the heading Risk Factors. Back to you, Dan. Thanks, Amanda. I'll begin with a brief overview of our second quarter results as provided in the press release and the report for shareholders, then I'll open up the call for questions. Overall, the results of the quarter are better than they might appear at first glance. I want to highlight a couple of factors that explain this. First, we were up against an extraordinary same-store sales and earnings increase for the second quarter last year, which was pandemic-driven. Second, we had a non-comparable gain resulting from the sale of most of our Giant Tiger stores last year. Finally, a lower foreign exchange rate between the Canadian and U.S. dollar this year had a negative impact on the translation of our international operations. To help sift through some of the noise and put the results in the quarter into context, we've also provided a comparison of sales and earnings measured to pre-pandemic results in 2019, just to give a better indication of our financial performance. With that, let's dive into the second quarter results. Sales in the quarter were down 12.9% compared to last year, largely due to the Giant Tiger transaction. Considering it on a same-store sales basis, sales were down only 4.8%. Also, just to keep this performance in perspective, bear in mind that last year we had a 25.4% increase in same-store sales. When comparing to the second quarter of 2019, same-store sales were up 21.4%, which provides an indication of the amount of pandemic-related consumer spending that was actually retained. Now let's talk about regional specific results. Canadian operations same-store sales were down 8.7% compared to the 30% increase last year. That said, notably compared to 2019, sales were up a very strong 24.6%. We continue to be positively impacted by COVID-19, but to a lesser degree than last year, with increased community spending and government income support being the main factors. Other factors that contributed positively include our strong supplier relationships and the advantage of owning a cargo airline, which has enabled us to maintain a solid in-stock position and meet the continued demand of our customers. One of its challenges in the quarter was the impact of forest fires in British Columbia and Ontario, which resulted in evacuations and store closures in eight of our communities. As a response to this crisis, our teams partnered with the Red Cross to deliver sanitary supplies and food hampers to the evacuated public in Fairford, Shpok, and Winnipeg. This really speaks volumes about how our teams continue to inspire us by making heart their role in the communities. Switching gears to international operations, we continue to experience headwinds, starting with the increase in tourism reserves in our markets like the U.SVI, coupled with income support payments through the American Rescue Plan. In Alaska, wholesale sales related to the USVI Food Box Program were a success, each team delivered 900,000 pounds of produce, dairy, and meat to over 150 communities. This was partially offset by the timing of a Permanent Fund Dividend payment. Last year, a dividend payment of CAD 992 was issued early and paid in the second quarter. The PFD dividend this year is expected to return to its regular calendar timing and be paid in the third quarter. Therefore, regional merchandise comparative sales performance for this quarter was negatively impacted. Overall, international sales increased 2.8% over last year. On a same-store basis, sales remained strong and increased 1.1% to last year. This is very pleasing, especially considering that in Q2 there was a 17.2% increase. The gross profit rate in the quarter was up marginally compared to last year. An increase in the gross profit rate in Canadian operations was driven by changes in the sales plan and lower markdowns. This was largely offset by lower rates in international operations due to the impact of lower gross profit rate as a result of USVI Food Box Program sales, a higher blend of costless sales, and a lot more promotional activity in certain markets. Our selling, operating, and admin expenses were down 40 basis points as a percentage of sales, excluding non-comparable factors, mainly related to the CAD 24.7 million pre-tax gain on the Giant Tiger transaction in 2020. One of the factors contributing to lower expenses in the quarter was a CAD 5.3 million increase in COVID, or a CAD 5.3 million decrease, I apologize, in COVID-related expenses compared to last year. Earnings from operations in EBITDA were down compared to 2020, primarily due to the Giant Tiger transaction gained last year, adjusted EBITDA was up 30.4% or CAD 30.4 million or 56% compared to 2019. I want to take a moment to briefly refer to the performance of the airline. North Star Air ended on a very strong quarter, driven by higher third-party cargo revenues. A gradual increase in passenger travel in the quarter also contributed to improved earnings, especially when compared to the negative impact on passenger-related earnings in the second quarter last year due to the COVID-19 travel restrictions. In aggregate, the impact of all these factors is that net earnings increased CAD 20.2 million to CAD 42.4 million in the quarter. We're up CAD 24.5 million or 136% compared to 2019, which represents a compound annual growth rate of 53.7%. Okay. Now I want to transition and make a few brief comments on CapEx and some cash flows. Our capital expenditures in the quarter were CAD 29.7 million, up CAD 16.3 million versus last year. This does include the North Star Air purchase of an ATR 72-500 series airplane. This aircraft is being configured with a wide cargo door, which will give us a competitive advantage in northern Canada, since only 1 other aircraft of this type is serving the region today. This aircraft is expected to be operational late in the fourth quarter and will provide efficiencies in loading and utilization. In addition, the wide door also creates opportunities for specialty payloads and greater third-party revenues. Speaking to share buybacks, in the quarter, we purchased 8.3 million of common shares under our normal course issuer bid, for a total of CAD 13.6 million purchased year to date. We also announced a 2.8% increase in our quarterly dividend. It's important to keep in mind that this is on top of the CAD 0.03 per share or 9% increase last year and is in line with our past record of pre-COVID cases. The near-term outlook continues to be highly influenced by the uncertainties of COVID-19. We do anticipate our same-store sales to be lower in the second half than they were in the second half of 2021 as we lap the strong sales gains in 2020. Likewise, net earnings in the second half of 2021 are expected to be below 2020 but compare favorably to 2019. However, there continues to be uncertainty related to the impact of COVID-19 and the Delta variant, as well as the timing of the economic recovery, which of course makes forecasting quite challenging. To finalize, let me just say that overall, we are very pleased with our financial results in the second quarter, particularly as we were up against the exceptional pandemic-driven results last year. I also want to, again, acknowledge the efforts of our frontline employees, who continue to serve our customers with the challenges of this COVID-19 environment. I am going to open up the call for questions here shortly, but before I do, I do want to give a brief comment on the executive team. I am pleased to announce that Kyle Hill has been appointed the President of the Alaska Commercial Company. Kyle joined North West in 2018 as the Vice President of Strategy and Special Projects, and most recently was the Vice President of Procurement and Marketing for AC. I'm also happy to announce that Jim Caldwell will be joining North West as the President of Canadian Retail, and he'll be starting later this month. Jim is an experienced retail executive, having served in senior roles with Walmart, Lowe's, The Brick, and actually most recently as the President of OK Tire. With that, I'll ask that the operator open up the call for any questions you might have. Thank you. The first question is from Michael Van Aelst from TD Cowen. Please go ahead. Your line is open. Hi, good morning. I just wanted to start off with the price investments that you started a little while back but paused for a while. Are you still planning on increasing your price investments, and if so, when would we expect to see those? Well, as you know, we did halt that. Thanks for the question, Michael Van Aelst. We did halt that this last quarter. There's a lot of volatility in the market currently. We are working on a price investment. It's with the same objective to increase our sales, our value to our customer, and our gross profit dollars. Given the volatility in the market right now, we really feel like that we have to, or we are working on recalibrating some of the metrics on how we go to market with it. Yes, we will. We're currently in kind of a test stage. We expect that we'll probably fourth quarter or first quarter next year is when we would have more surety as to when we could roll it out. Okay. All right. Are you able to give us what the impact of the fire-related closures were on same-store sales? I won't disclose the total, but I could say that it was relatively light, but I actually am not going to give a number out, Michael, at this point. Okay. All right. COVID costs were running, I think going into the quarter, you were talking about CAD 1 million a month in May, and you only did CAD 1.2 million in the quarter. Is that a good gauge for going forward? I would say so, Michael. It's good signs so far. We've been focusing, as you know, on our safety and really keeping people safe. The vaccination rates in a lot of our markets has been high, so that's helped out a lot and as well as participation of most of our store managers are vaccinated as we're encouraging them heavily to do that. It's definitely worked out in our favor. Okay. The fourth ATR that you picked up, originally it said late Q3, and now you're saying late Q4 by the sound of it. Is that just a delay in receiving the aircraft and retrofitting it or It's the retrofit. That's correct, it's the retrofit. Okay. Just receiving some of the parts in today's environment it has pushed it out, but we're quite confident that it's going to come out in Q4. Okay. Understood. Finally, on the PFD, the last I saw was it seemed like there was a holdup in signing off on it, and it was going to get pushed beyond October. Have there been other developments that you believe that it's going to get returned in Q3? No, our best guess right now for what we know is that we do believe it will be stayed in Q3. Okay. What are you hearing for the price? We've heard a range. We've gone from 500 back up to 1,000. I would say they're probably somewhere within that range. Okay. Thank you. Thank you. Thank you. The next question is from Mark Petrie from CIBC. Yeah, good morning. I wanted to just ask about inventory levels. Pretty nicely, obviously, though a lot of different pieces in your business, including FX, and I know you were trying to build inventory, at least selectively. Can you just give us an update on sort of where you're at with your inventory levels across your business and specifically non-food? Absolutely. In fact, we saw that obviously early on, there was a lot of escalation inflation. We went out and we procured as much as we could on the front end, obviously, with our Sealift program. That's something that we took full advantage of, as well as our electronics throughout our banners, actually, getting ready for our third and fourth quarter selling events. I would say that we're in a strong position as it relates to our inventory levels, and we're absolutely ready to meet our customers' need coming here into the third and fourth quarter. Okay, perfect. You mentioned the USDA Farmers to Families Food Box program in Alaska. What's the status of that program, and do you expect it to be a factor in your ability to grow that part of your business? We've learned a lot from it, Mark. We're not participating in the USDA Food Box Program currently. What we have done is we've cascaded it into a sales opportunity, and we're still doing that type of service, but it's not being paid for by the USDA. It's something that we're just working with different communities and offering this service, much of what we learned when we were providing this service for the USDA. No, it's not being compensated for by the USDA, but it has cascaded into a solid business opportunity for us to provide those types of products to the number of the communities that we're not in today, as well as obviously the ones we are. How material is that? Is that subsidy going away? Is that a material impact on your business? I understand you're saying you've learned things and now, in some respects, presents an incremental opportunity. It not being subsidized, does that matter to sales growth as you lap it, I guess? Yeah, it's definitely impactful. It's not a program that they're offering currently. There was 900,000 pounds, as I indicated, that we put through this program. It's not huge, but it's not invisible either. Okay. Mark is actually, you know, it's not like it's a quantum. It's all good. Okay. I guess just my last question is sort of a broader one. I just wanted to ask about your sort of various health initiatives in the North. I know this is a business that you guys have participated in for a long time, but you've gone through various sort of evolutions of it, and I know it's somewhere that you've launched new businesses, I think last quarter, the Healthy For You business, if I have that right. Can you just sort of in a broader context, talk about where you're at, kind of with regards to your offering, and if you think that will be a material opportunity in the next 24 months? Well, we're continuing to evolve it, Mark, and as you're aware, we just opened up our store Astro Hill in Iqaluit. It's a Healthy For You. We're in optical services there, and it's still early on, but it's been shown to be a valuable service to our consumers. It's really just to continue on. It checks a lot of boxes. It's obviously a great service to our community, and it's definitely a void in Northern Canada today. We feel with our competitive advantages, we think we can continue to offer better service in that regard. It's really a continued evolution is probably the best way I can put it. Okay. Appreciate all the comments and all the best. Thanks, Mark. Thank you. Once again, please press star one on your device's keypad if you have a question. The next question is from Stephen MacLeod from BMO Capital Markets. Please go ahead. Your line is open. Well, thank you. Good morning, Dan. Good morning, John. I just wanted to ask a quick question about just what you're seeing in terms of your northern Canadian communities with respect to trends in out shopping, just with restrictions having been relaxed. Are you beginning to see more of your community residents increasing the proportion of out shopping, which obviously, in shopping was a big benefit to you through COVID? You know what? Not as much in northern Canada, very marginal. AC, or in Alaska operations, there was some more out shopping, but really, in northern Canada, it's been very marginal. The comparison we say is that the higher the vaccination rates, the more people are stay-at-home currently because of the lower vaccination rates outside of the community. It has kind of led to stronger business results, obviously, people staying in market. We haven't seen that open up that we might have anticipated earlier on, but we expect that later on in the year, it'll probably open up a little bit more as vaccinations start to match those of some of the communities in surrounding areas. Right. Okay. That's helpful. Last quarter, I think you had mentioned that exiting COVID or maybe once things normalize, you sort of expect to return to kind of a mid-single-digit growth rate, in terms of same-store sales growth. Is there anything that would have changed your view, or is that still kind of what you're expecting once things settle out? No. We're still under that same expectation. Yeah. Okay, great. The increased dividend was a surprise, obviously. You announced a nice increase just two quarters ago. Can you talk a little bit about what your priorities are for excess cash flow as you sort of move through the next 12 to 24 months? Well, obviously, we've announced our AC strategy, I believe it was two quarters ago now. That's some of our priority. We've got three new stores that we're going to be opening this year. We just opened Astro Hill. We had a store earlier in the quarter in, or sorry, it was last quarter in Rankin Inlet. We are following suit with our AC strategy. We have other opportunities, kind of tuck-in acquisitions that we're actively pursuing in Alaska as well as Canada. There's nothing major, but that's really what we're looking at kind of for continuing to pursue in the near term. There's also the e-commerce strategy that we're starting to roll out in Alaska, that's another initiative that we're putting a lot of focus to. Other than that, it's really just sticking to the game plan. Obviously, now I've been in the role for four weeks and really starting to take a look and see what the opportunities might be with a new leader coming in for Canada. I expect a lot more focus. We're going to be looking even harder than we already are for new acquisitions and opportunities just to further our footprint and continue to service the customers that we know we can bring a value to. Right. Okay, that's great. Are you still sort of focused on, when you think about acquisition opportunities, you're still focused largely on health and other complementary businesses that would tie in nicely to the retail store base? Yes. That's correct. Yeah. Great. Okay, well, thank you. Thank you. Thank you. There are no further questions registered at this time. I will return the call back to Dan McConnell. Okay. Well, thank you very much, and I appreciate the join here for my first conference call, and I look forward to speaking with you next quarter. Thank you. Thank you. The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.