Good morning and good afternoon, ladies and gentlemen, and welcome to the Premium Brands Holdings Corporation Third Quarter 2024 Earnings Conference Call question and answer session. At this time, all lines are in listen-only mode. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, November 6, 2024. Our speakers today are George Paleologou, CEO and President of Premium Brands, and Will Kalutycz, CFO of Premium Brands. I would now like to turn the conference over to George. Please go ahead. Good morning and welcome everyone to our 2024 third quarter conference call. With me here today is our CFO, Will Kalutycz. Hopefully you've had a chance to listen to our pre-recorded call posted on our website this morning. We will now take your questions. Your first question comes from Martin Landry with Stifel. Your line is now open. Hi, good morning, guys. Good morning. My first question is on the delays in onboarding your new clients. I'm just trying to understand and just, you know, confirm, you know, has there been cancellation of programs or has there been renegotiation of terms? Has there been reduction in volumes or is this just again, just normal, lengthy onboarding procedures? Any color would be helpful to understand what's going on. Yes, Martin, there's absolutely not been any cancellations at all. As you know, we've included the business development pipeline in the deck. We've actually launched some programs later on in the quarter, launching some in the fourth quarter as well. As we mentioned in the last conference call, some of the onboarding times take longer because the customers are so large. So again, nothing unusual. The pipeline is as robust as it has ever been. Okay. And it's a good segue into actually that slide that you're referring to, Slide 14 on your U.S. pipeline. I thought it was very interesting. So you, you are highlighting business opportunity of CAD 704 million that could be completed in 2025. That's obviously an annual revenue run rate. So you know. For us it's a bit difficult to then put this into a forecast. Just trying to understand, you know, if you would be in our shoes and looking at modeling 25, like how much of that number, you know, could boost your revenues for 25. I again, Martin, it's a tough, a difficult question because of the whole timing issue we've been facing, you know, and the reality is all, you know, those first two columns with numbers in them totaling CAD 1 billion, all of those are active and all of those could potentially hit 2025. It's not just the CAD 700 million in the first column. The way we look, just to give you a bit of background and color around those columns, that highly likely column, those are initiatives that when we sit down and go through them with our businesses, they're 80%-100% probabilities. So very, very confident in achieving those. And it's just timing versus the likely are a little bit earlier. They're probably 60%-80% probability range. So when we look at that in rough terms, in terms of modeling, maybe 50% hitting by the middle of the year, and you know, you know, the vast majority of those hitting, you know, a run rate by the end of the year. But again, you know, the challenge we've been dealing with for the last several quarters is the timing around these initiatives. You know, as George mentioned, we're very confident we're going to get there. We're in great discussions with the customers. Nothing's been canceled. It's just been one of those working through the process, figuring out the listing structure, figuring out the right launching time, and dealing with the processes in these large customers we're dealing with. Okay. And then, maybe last question for me. In the Specialty Food segment, when you exclude your large client that has had some softness in its sales, you say that your volume growth is up 2.3%. It does look a little weak. And you're calling out a couple of items. You're calling out beef jerky weakness, the sales increases, you're calling out delays in product launches and you're calling out a weak spending in the convenience store segment and food service. So maybe with beef jerky and the weakness in food service, convenience store, just again, for modeling purposes, when did that happen and how long, like, is this going to be something that's going to be with us for the next year? Just to understand a little bit, you know what like is this a recent impact? Has that been going on for a long time or any color would be helpful? Yeah. So in terms of, you know, I'll start with a bit of the positive, you know, in terms of the Canadian portion, which, you know, in the quarter as we talked about, generated that, you know, it's roughly stable a little bit up year over year in volume terms. We do expect that to continue to increase, improve over the coming quarters in terms of the economy factor for Specialty Foods, because I'm going to talk mostly about Specialty Foods first and I'll give you some general comments on Premium Food Distribution Group. In terms of the economy, it's really been the C-store sector that's been challenging for us because the reality is we're generally dealing with, particularly in our U.S. initiatives with these large customers that are pretty resilient in the face of the economic challenges being faced down there in the U.S., and so that is maybe there's one more quarter until we start lapping the C-store impacts that we've been seeing now for about a year, so that's really an end of 2024 story and stabilizing in 2025. That's the same with jerky as well. And a big part of the jerky story is the C-store channel. And so we'll start lapping that at the end of this year. And so, yeah, you know, in 2025, those should be stable to, you know, maybe starting to see a little bit of organic growth from them. So that's not going to be the headwind it was this year. And Martin, I should comment too, that, you know, we will, you know, we didn't give any specific guidance for the balance of 2024, but with our Q4 results, you know, we expect to have better clarity, particularly around the food service customer that we talked about for the impact on this quarter. And so, you know, our intention is to provide 2025 guidance with our Q4 results. Okay, that's helpful. Thank you. Your next question comes from Derek Lessard with TD Cowen. Your line is now open. Yeah, good morning, gentlemen. So maybe, Will, I just want to hit on the last one. On your last point there and talk about the larger client there. Is there anything to suggest that there's a permanent impairment? And if not, do you have a sense of when that recovery would be? Yeah, Derek, I think overall the QSR segment in the U.S. slowed down during the quarter. I think that a lot of large QSR players have reported and, you know, again, you know, there was a definite slowdown in QSR with regards to our large customer. I think it's well known, it's well publicized in terms of the strategies they have in place to turn it around. And, you know, we're obviously supportive and we don't think anything is not permanent, as you say. We think that they're on the right track in terms of addressing their traffic issues. Okay, that's fair, George. So I guess if I can ask another question, and I know obviously I'm talking hypotheticals, but if it were permanent, do you think you could find a home with other potential customers to take up that capacity? I think that in the deck, Derek, we've included. I can't remember which page it was, but we basically have a breakdown of the different channels that we service now in our sandwich group. Basically seven different channels now are being serviced by us, all developed more recently as we've added more capacity. All I could say is that we have growth opportunities in each one. For 2025 we fully expect to be shipping product to the international markets as well. There's a lot of growth, growth initiatives with regards to the other channels other than the QSR channel. As I said earlier, there's no question that the QSR channel in general was slower during the quarter, but we have all kinds of other initiatives in other channels. For example, club was a very strong growth channel for us during the quarter and we expect to see more growth there in the future as we've added capacity to the system. Derek, I would add when we look at our five-year plan and you know we continue to remain very bullish on achieving that CAD 10 billion sales target. You know the growth in there related to our sandwich group and the capacity we put in place is about CAD 1.2 billion rough numbers and you can see from the slide that you know, the opportunities in the channel excluding any growth or impact from that large food service customer, you know, CAD 650 million. So just current initiatives get us halfway there today. And you know we have been, you know, one of our biggest issues in our sandwich group has been struggling with a lack of capacity. So now that that capacity is there, we expect their pipeline to, you know, over the coming year to grow dramatically as they continue discussions with other customers. As evidenced by the new channels we've opened up again outlined on page eight of the deck. Derek. Yeah, George, and one last one for me before I recuse. Can you maybe just talk about the international opportunity and what that looks like? Again over the last few quarters we've made some progress in getting some listings with a club store chain and we're getting more opportunities. We're looking at a number of sandwich SKUs with them for the Asian market. Thank you. Thanks Derek. Your next question comes from Kyle McPhee with Cormark Securities. Your line is now open. Just to t alk a bit more about the U.S. growth programs turning on with all your new capacity in Q2. You mentioned, you know, in some of your color that you were having deep bottlenecking issues at some of the new U.S. facilities. You know, the bakery, I think, cooked protein are a couple examples. Can you provide an update on the operational side of things? Have you now sorted through all the issues, you know, into Q4 and beyond? Yeah. So on the bakery group, we are still in the process of, you know, it's one of our ongoing projects with the San Leandro plant, the new laminated dough plant. And you'll see from our CapEx slide, Kyle, that we still are investing. We're not yet completed that project. And a lot of the investment going on right now is around the automation processes. So the basic capacity is in place and the last part of the project is just investing in the efficiencies. And so that is not yet there. You know, we do expect there. I think that project's supposed to wind up or be completed by the end of this year. There's a little bit of investment still to go and then there's still a bit of a learning curve with, you know, it's a new employee workforce, you know, and that takes some time bringing it up to speed combined with learning this new technology. You know, that operation was a good portion of our restructuring costs in the quarter because of some of those inefficiencies. But our newer artisan bread facility in B.C. here, Kyle, is running really well and making a lot of progress in terms of opening up new accounts and new customers in the U.S. which is part of the growth that you saw, the organic growth you saw with our bakery group overall. Got it. Okay. Is it fair to say, you know, there's no operational issues at the other new U.S. facilities as of now? Aside from this bakery? Well, the Hempler's expansion, we still, there's a lot of new technology in that plant that we're still playing with and figuring out a bit. So. But yeah, we're close to completed that, but, you know, it's still not humming at 100%. Okay. On your new slide about the U.S. sales pipeline, I noticed that the bakery sales programs are mostly classified as early stage. You know, what's happened there? I thought, you know, a lot of the bakery sales programs were pretty visible among some key clients of yours. Why is it now called early stage? If you look at, for the last couple of quarters, if you look at our slide on the growth rates in the bakery group, you know, they've been like 20%-25%. You know, the reality is a lot of the projects have hit and they're now reflected. This doesn't capture anything that, you know, that was achieved by the end of Q3 so we'll still have the run rate benefit of a lot of those programs, but this is just new stuff. There we just had, you know, I think we've talked about this in the past, Kyle. A lot of their programs were success with a customer in one region and expanding it into other regions with that customer. That's why you're seeing a lot of this immediate growth, easy growth, and then these are new discussions on top of it. So if you look at the run rate growth of them next year, you know, it will continue to be quite stellar. Got it. Okay. I'll pass along for now. Thanks. Thanks. Your next question comes from Vishal Shreedhar with National Bank. Your line is now open. Hi, thanks for taking my questions. Wondering about the Canadian conventional business. You highlighted that as a weak part in your Canadian business. Overall, the conventional segment of the supermarket. Wondering if you're seeing some turnaround in that. I would say that we're seeing signs of consumer confidence returning in Canada. We're not there yet, but we are seeing signs of improvement in the sentiment of the consumer. And you know, we think it has to do with the lower interest rate environment and obviously the lower inflation as well. So we'll just keep our fingers crossed. Thank you. With respect, Will, to the balance sheet, how should we expect that to unfold given this speed bump associated with the large QSR customer and the delays? When do you anticipate you'll be back into your targeted time frame? Your targeted targets? Yeah, it certainly, you know, the quarter did set us back a little bit. The reality is we still expect by the end of 2025 to be within our targeted range. You'll see in quarter four, there's going to be a lot of moving parts with the, you know, the asset sales we talked about in the press release and then, as George mentioned in his comments, that we are very close on completing a number of acquisitions this quarter, but overall you're not going to see much of a change in the balance sheet. Assuming all that plays out like planned in Q4, but with Q1, Q2 next year, you should start seeing deleveraging and being back in our targeted range by the end of the year. Okay, and with respect to the acquisitions that you aim to capture, I presume we should think equity and how much equity should we be thinking? Is there a way for us to model it? Unfortunately, it's not a big component of it. Again, we don't want to get into the details of it at this point, Michael, but it's certainly not a big component. There's other components of contingent consideration, minority interest investment, those sorts of things as well built into there. It's not going to move the needle in terms of our outstanding shares. Okay, that's helpful. Thank you for that. And with respect to that large QSR customer, just to get your understanding on it. So they are embarking on strategy changes and one of the topics out there is possible SKU rationalization. Wondering if that's been talked about on your side and how should we think about the impact on PBH if that manifests? Yeah, Vishal, we can't really comment on the specifics of the customer. I think you know that food is a big component of what they do. There's lots of discussions around innovations, new launchings, timing of launchings, promotions, all of those things as usual with any sort of big partner customer. But we can't really get into more detail than that. Okay, I appreciate it. Thank you. Thanks, Vishal. Your next question comes from Mark Petrie with CIBC. Your line is now open. Yeah, hi there. I actually just wanted to follow up on that last topic and hoping you could just help us understand the dynamics that you experienced in Q3. Exactly. Was it, was the sales slowdown for you just a reflection of sales slowdown at the customer or was there another factor in terms of destocking or issues with inventory levels or anything like that? Yeah, no, it's a great question, Mark, because absolutely there was sort of some volatility to the ordering patterns. And so our expectation is some of it is just ordering patterns, but outside of that, when you look at the customers units sold, our decline was in line with it. So we're not exactly clear at this point, but we are sort of cautiously optimistic for Q4 that there is some volatility from the ordering patterns that will benefit Q4. Right. Okay, and I guess just going back to Q2, maybe, you know, can you give us a sense of what type of growth you would have experienced or what type of performance there would have been in that period? Because my understanding was that some of their deceleration had already kind of begun in Q2 as well, so just trying to sort of square all that up. Not that we experienced, Mark. You know, we were hitting our numbers, but you know, our projections that they had given us by the end of Q2 and. Some of that, Mark, could be that volatility of ordering, certainly that could be a factor. Also they launched a new product in the quarter and so there was a little bit of channel fill in Q2 that would have helped as well. What I would also say, Mark, is that because we have other QSR customers in Canada and the U.S. up to the end of Q2, customers were frequent in QSR. Maybe the casual dining was slowing down, but QSR was certainly robust. And in the third quarter we've seen a slowdown with regards to QSR in general. So I'm sure that there's a little bit of that in what happened in Q3. Yeah, okay. Okay, that's helpful. And then I also wanted to follow up on just the comments with regards to the Canadian market and your comments about recovering from the impact of a weaker consumer environment. You said you're sort of seeing signs of consumer confidence in Canada. Is what are those signs? Like is that just less trade down, less promo penetration? Is it behavior from the retailers? Like what are those signs? I think it's a little bit of a ll of the above, Mark. It's tough to be specific, but anyway, we look at a lot of numbers in terms of demand through different channels. Right. We sell to pretty well all the sales channels and we're seeing a little bit of movement. We think that the Canadian consumer was very, very conservative for quite a while, mainly because of the high interest rate environment and the high inflation, and we're just starting to see some evidence that things are improving out there. Yeah, okay, got it, thank you. And just last one, on the distribution business and the volume growth specifically, could y ou just sort of help clarify the k ind of performance by region? Because I think you said that Canada turned positive and then was the deterioration in international and U.S. a little less so or what was the dynamic there e xactly. Yeah. No, the big story or the big headwind in at least on the sales line for Premium Food Distribution was our lobster business. It was incredible. The Canadian fishery, if you recall from last quarter, actually the Q2 fishery went quite well and that positioned us well with inventory going into Q3. The Maine fishery has been very poor again this year and again it seems to be because of water temperatures which is creating lower catch rates for the fishers because the lobsters aren't moving around as much, and there's a whole story there. Anyway, so what's happened is because of the poor Maine fishery, the pricing environment has gotten quite high for lobsters. That's prevented a lot of promotion and obviously less supply coming into the market. So that's hurt the top line of our Premium Foods Distribution Group. But the good news with the story is our group went into the quarter with some good inventory positions, well priced and were very disciplined in their pricing. So they actually made up for somewhat in their margins and what they could sell it for. But that was really the big headwind in Premium Food Distribution Group. Okay. And just to be clear, that manifested in the U.S. and in international, but. Oh, yeah, yeah. Sorry. Yeah, that. That was a North American international story. You know, we saw that the retail story was a lot of. It was primarily a US story. But then our exports down to. Exports to China were down again. Combination of high prices and. And the economy there. And similarly, our exports to Europe were down again. High prices in the economy there. Yeah, understood. Okay. Thanks for all the comments and all the best. Thanks, Mark. Your next question comes from Chris Li with Desjardins. Your line is now open. Good morning [Foreign language]. Hope you're both doing well. Morning, Chris. Hey, Chris. Good morning. First, thanks for the additional disclosure on the revenue contribution from that large QS customer. I guess my question, when I sort of do the math, it looks like revenues from that customer were around CAD 196 million for the quarter or down around 6% compared to last year. Just wondering if that CAD 196 million revenue is a fair run rate to assume for the next few quarters, or do you anticipate maybe further contraction in Q4 and that's why you kind of refrain from providing an updated 2024 outlook? Again, Chris, you know, because that large customer is a public company, we can't really speak specifically as to the volumes we do with that customer. But, you know, I would say that overall, if you look at other QSR chains and the declines in terms of the traffic and the revenues, you know, you can come to probably the right conclusion in terms of, you know, the volume impact. Gotcha. Okay, that's great. And I'm trying to figure out, Joe, just in terms of. Was last quarter kind of the bottom in terms of all the transitory challenges that they face or, you know, or is Q4 Q1 still going to be more. More sort of pressure? Just trying to figure out from that side. Yeah, there's a lot of public disclosure on them, Chris. So I kind of refer you to public disclosure. Okay. No, that's great. And then I guess maybe want to just ask about, you know, if you can also talk a little bit more about just the revenue outlook for the other core U.S. Specialty Food segments. You know, as you know in your press release, the organic volume growth rate, excluding that large U.S. customer was quite solid, up 8% in the quarter. And I'm just wondering is sort of high single-digit, you know, a good organic volume growth target for next year for that U.S. Specialty Food to exclude that large U.S. customer is that. Yeah. If you look at the quarter, Chris, and you look at the three product or business groups in that U.S. initiative, slide those growth rates that we show for the quarter X, the customer we've been talking about should be stable to better going forward. You know, again, driven by that pipeline of opportunities as things start hitting the road. Okay, so in other words, well, like if you did 8% in Q3 when you say stable or better. You mean like could be exactly as? Good as higher than 8%. Yeah. Yes, exactly. Yeah. I just want to add to Will's comment, Chris, is that as we've said before, historically the challenge for us has been capacity. Right. We've got a lot of programs that are successful with customers in the U.S. In many cases they want to roll them out to new geographic areas. And you know, as we speak today, you know, we are having to provide them with guidance as to when we will bring new capacity on stream. Some of it is organic, of course, capital investment that's organic and some of it will come through acquisition. So again, there's a pretty good visibility with regards to these opportunities. Okay, that's helpful. And then just maybe still on the Specialty Foods group. So when I look out to make sure, assuming you can achieve that high single digit or even low double digit organic volume growth run rate, how should we think about just the margin profile? Is it fair to assume we can still expect EBITDA margin expansion next year in that segment? Assuming that QSR customer remains a bit challenged, but you can offset that by other growth in other pipelines. Just overall, holistically, do you expect margin expansion next year in the Specialty Foods group? Yeah. A simple answer is yes, Chris, again, we've talked in the past, the contribution margins on the growth coming out of those platforms are very strong, with the weakest being the sandwich group, which is the one that's struggling with that customer. So. Yes, but again, I don't want to get into specifics. We'll talk more next quarter when we release our 2025 guidance. Gotcha. Okay. My last question, maybe for Will, for you, is, you know, it looks like for this year your capital expenditures are going to be run rate around CAD 350 million for the full year. I'm just wondering if you can share with us what's the outlook for next year? Yeah, so, and I'm glad you asked that Chris, because in the presentations on Slide 17 with the CapEx, there's actually a time the forward CapEx on those projects is only CAD 160 million, not the CAD 230 million it shows in the slide. And so when you look forward, the reality that CAD 160 million remaining on our major CapEx, roughly half of that's probably in Q4 and the other half falling in 2025 and then 2025 in terms of planned CapEx, you know, the balance will be, you know, maintenance CapEx of probably in that CAD 50-60 million range and then general smaller CapEx, again around CAD 50 million a year, we tend to spend about CAD 10-15 million a quarter. So outside of any new projects, which would be incremental to our outlook, you know, that that's our look for next year. Okay, so if I add them up like it sounds like it's about CAD 200 million in total. Yeah, so the half of CAD 168 million. Yeah, yeah, yeah. 150 to 200. Yep. Okay, so that's a pretty big step down from the 350 that you guys are spending this year. Yeah, absolutely, and that's our expectation. We are coming to the end of, you know, this major capital investment cycle we've been in. Okay, very helpful. Thanks, guys. Thank you. Extras, your next question comes from Stephen MacLeod with BMO Capital Markets. Your line is now open. Thank you. Good afternoon, guys. Lots of great color so far, so thank you. Just wanted to clarify on a couple things. Just with respect to, you know, you talked about in the prepared remarks, just accelerated growth in the coming quarters, particularly in protein and, and sandwich as well. And I'm just both of those businesses, as you point out, operating below potential. Just when you put everything together with respect to your largest customer, some of the customer onboarding delays, I'm just trying to get a sense of like what's the visibility into that accelerated volume growth that you're calling out over the next several quarters? Yeah, I don't know if there's much more color we can add to what we said earlier, Steve. You know, the fact is we've got that robust pipeline, but that pipeline is based on a number of specific initiatives and we do expect the number of initiatives won or launched to accelerate over the course of 2025. But in general terms, I go back to that earlier comment. Maybe 50% of them by the middle of the year and a good portion, additional portion, in the back half of the year. The only other comment I have, Stephen, is that because of the nature of the customers. The lead time with these opportunities tends to be one to two years. So these are not new opportunities. These are opportunities that we've been working on for the last year or two, trying obviously to match the demand with the capacity coming on stream. Right. So there's long lead times in general when it comes to these type of launches. Right, okay. Okay, now that's helpful, and then maybe just looking at sort of the quarter ahead, you know, Q4, is it fair to say that Q4, you know, might look a lot like Q3? Or would you potentially expect it to be, you know, have more in the way in terms of headwinds? No. You know, again, on a year over year basis, we expect incremental improvement in Q4. As you know, some of these issues are expected to hit in Q4, these new initiatives. Okay, okay, that's great. And then just, you know, looking at the stock and it's obviously traded off and you know, when you factor in today, it's sort of down 20% over t he last three weeks. Just wondering how are you thinking about buybacks given where the stock and on valuation? We're reviewing all options, Stephen. Okay, okay, that's, that's great. Okay, thanks guys. Appreciate it. Okay, thanks, Steve. Your next question comes from John Zamparo with Scotiabank. Your line is now open. Hi, good morning, George and Will. I wanted to come back to the t opic of customer onboarding. I wonder if you could say, is that primarily from one or two customers or is it broad-based among several? Are there any internal levers you can pull to move some of these forward? Yeah, again, you know, it's easier, John, to talk about channels. Right. For example, we just did a major launch with a very large C-store customer in the U.S. We've launched our chicken bites with a very large customer in the U.S. So these launches are happening all the time. In some cases it would be a club customer. You know, again, the club channel is our biggest channel that we service in the specialty group. In some cases it's the traditional grocery retail channel. If you visit the U.S. and you visit all of these type of customers, you'll see a lot of our products. So it's happening all the time. We have a lot of things on the go. We're doing innovation sessions with all channels all the time. And anyway, it applies to all the channels. Again, if you know our products, you will find them in more and more places with more customers and more channels. Got it. Okay. A follow up on the Seafood side, I think as of last year, and this relates particularly to the international comments, I think based on last year, your percent of sales coming from international as in Asia and Europe was just around. 1% or so. Is that still roughly the case? You haven't seen any abnormal growth in t hat business or exposure to those regions, in particular China? It's definitely growing. Our international business is growing from a small base. So there'll be like for this year, I think we'll grow substantially from a percentage point of view, but it's still relatively small. But again, big market, big opportunities there over the long term. Okay, understood. Just one more on the M&A side. It seems like you have this long-term pipeline available. I wonder if you consider pausing or d eferring some of those deals based on your prioritization of leverage and given you may not wish to effectively pay in e quity, given where the stock is compared to historical levels. Well, one thing I will say about the acquisitions that we've talked about for the fourth quarter, John, is that they will be neutral to our balance sheet, are actually better than our current ratio. So they'll actually be slightly helpful to our balance sheet. We've been very careful to make sure that we're not burdening ourselves with or hurting the balance sheet with these transactions. And the fact is liquidity has never been our issue. It's just been managing the leverage ratios. And so these transactions are actually going to be helpful to that process. In general terms, John, these type of acquisitions provide us with incremental capacity which we know we can fill basically relatively quickly as we continue to launch our products into the U.S. market. Really for us, it speeds up. Our access to capacity And corresponding. So you've got a situation, John, where it's positive to our immediate balance sheet and then like George says, through 2025 as we execute on leveraging some of, because these are largely capacity plays in a unique part of the food industry, you know, that's going to help accelerate the deleveraging of our balance sheet. All right, understood. Appreciate the color. I'll leave it there. Thank you. Thanks, Sean. Your next question comes from Derek Lessard with TD Cowen. Your line is now open. Just a few follow-ups for me on the sale-leaseback. You did note that you're in the process of completing two of them, I think. Will, if I'm not mistaken, you mentioned in the past that you had about CAD 400 million. So are we to expect more sale-leasebacks going forward? Yes. So it's actually only one sale-leaseback. We're currently finalizing at this point. The other transaction was the sale of a vacant piece of land that was an outright sale, no lease associated with it. And so, and yes, for 2025 we still intend to do two more transactions. You know this transaction that the sale-leaseback, the sale is for about CAD 60 million, CAD 68 million U.S. and for next year we're planning on another roughly CAD 250-300 million in proceeds from sale-leasebacks. Two more transactions. Okay. And one final one for me just on your working capital. How should we be thinking about that in Q4 and maybe 2025? Yeah, working capital, we've seen them make two steps forward, one step back. You know our working capital, we're still working on getting it down. You know the issue is there always seems to be something new coming up. So this quarter our inventory levels are a little higher than we expect or plan. Just because there were some good operations, opportunity buys in an imported beef that we could bring in under bond as well as our sandwich plant is making some product modifications. One of our larger sandwich plants and so it ramped up a bunch of finished goods prior to making that change. And so that, so we seem to be hitting these bumps in the road. But you know, we still are working on making incremental progress on a year over year basis of getting our days purchase and inventory down. Okay, that's fair. Thanks everybody. Thanks Derek. Ladies and gentlemen, as a reminder, should you have a question, please press *1. Your next question comes from Kyle McPhee with Cormark Securities. Your line is now open. Just a follow-up on the leverage. Do you guys plan to revisit your total leverage target going forward after the deleveraging cycle starting to get into in 2025 or four times total leverage always kind of be the ceiling for your comfort range as you look at investment opportunities? And as part of this, maybe can you speak to the refinancing plan for the convert due early next year? Yeah. So our intention is over time to morph to just our senior debt EBITDA range being our total debt EBITDA range excluding the convertible debentures. So you know, longer term our total debt EBITDA range is two and a half going to be two and a half to three. That's kind of our longer term target Kyle. You know but currently we have the extra debt for our convertible debentures. In terms of the debenture coming up next April, our intention is just to use our senior credit facilities to pay that off. Got it. Okay, maybe I'll squeeze in one last quick one. Are you guys considering more asset sales to trigger more of a stepwise change down for your balance sheet leverage? You know, maybe asset sales bigger than the vacant land deal you announced this quarter? The only specific initiatives in place at this point are the two sale-leasebacks I mentioned earlier. So that's, you know, like I said, that's CAD 250 million-CAD 300 million in proceeds. Okay, thank you. No further questions at this time. I will now turn the call over to George for closing remarks. Yeah, I just would like to thank everybody for attending today. Thank you very much. Ladies and gentlemen. This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.