Good morning and afternoon, ladies and gentlemen, and welcome to the Premium Brands Holdings Corporation Second Quarter 2025 Earnings Conference Call Question and Answer Session. At this time, note that all participants are in the listen-only mode. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Wednesday, August 6th, 2025. Our speakers will be George Paleologou, CEO and President of Premium Brands Holdings Corporation, and Will Kalutycz, CFO of Premium Brands Holdings Corporation. I would like to turn the conference over to George Paleologou. Please go ahead, sir. Thank you, Sylvie. Good morning and welcome everyone to our 2025 Second Quarter Conference Call. With me here today is our CFO, Will Kalutycz. Hopefully, you've had a chance to listen to a pre-recorded call posted on our website this morning. We will now take your question. Sylvie? Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, we do ask you to please lift a handset before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Derek Lessard at TD Cowen. Please go ahead. Yeah, good morning, good afternoon, gentlemen, and congrats on a great quarter. Good morning, Derek. Thanks, Derek. I guess my first question is, how should we be thinking about the cadence of your next two quarters? I guess just in terms of your revenue and EBITDA guide, do you think it's an equal split, or does the momentum build and Q4 should be a stronger quarter? Yeah, it does build, but there's an offsetting cycle with cyclicality, so it should be pretty, you know, our expectation is pretty consistent over the next two quarters, maybe a little bit stronger in Q4 because of the momentum. Okay, maybe just, I was wondering if you guys could maybe just update us on the timing of some of the new contracts or launches that are coming through on that U.S. sales pipeline. I guess other than these six, what are the bigger programs that are coming through? Yeah, Derek, our business development pipeline is full. It's very robust. We've onboarded and launched a number of new programs in the first two quarters of the year, which has obviously driven our organic growth. We are in the process of ramping up a number of brand new facilities. Obviously, we want to execute well. We want to execute the launches well. It's not an issue for us in terms of business opportunities. It's an issue of obviously making sure that the plants are running well. As I mentioned earlier, a lot of the launches are going to be large and very lumpy. We don't have the best visibility today in terms of the exact timing, but I can tell you that we're very excited at the pipeline, at the business development pipeline. Okay, maybe one final one from me before I re-queue. Could you talk about the decision for you guys to introduce ROIC and make it part of the compensation program? Is there a timeframe for you guys getting to that 15% target? Yeah, we've been using the concept of RONA, which is a pre-tax calculation, and that dates back to when we were an income trust. We probably should have made the change sooner, but we moved to RONA or ROIC to better reflect our after-tax status. It ties closely with our internal metric or target of a 15% unlevered after-tax IRR for all capital allocation decisions. In terms of meeting that target, it's going to take a couple of years, but 2028, 2029 is when we expect to be at or exceeding that 15%. Okay, thanks everybody. Thanks, Derek. Next question will be from Martin Landry at Stifel. Please go ahead. Hi, good morning, Will and George. I would like to follow up on Derek's question to get a bit more visibility and color on your adjusted EBITDA guidance of $680 million- $700 million for the full year. It does imply a very strong back half. It looks like by my calculation, your EBITDA will need to increase by at least 18% to meet the low end of your guidance. Can you talk a little bit about some of the drivers of EBITDA growth for the back half that we can expect and that could give us a bit more visibility as you're going to achieve that pretty strong pace of growth? Yeah, it's really growth, Martin. Particularly, you know, Q3, we expect to see some continued growth with the initiatives being launched over the course of Q3, and the largest single launch in our pipeline, which will actually be one of our largest new product launches in our history, is in now early September. It is sort of loaded to the back half of the quarter. That's really going to drive a much stronger year-over-year Q4, because Q4 has historically been one of, if not our weakest quarters for seasonality reasons. A lot of these launches, a lot of this growth is in the U.S. market. It's less seasonal business, and really, that's going to be the biggest year-over-year factor driving that growth into our targeted EBITDA range. The other part, Martin, that you need to remember is that even though we've reported in-line EBITDA for the quarter, we absorbed about $15 million- $20 million in margin contraction because of high pre-inflation in chicken and beef. Plus, there were some tariffs there as well. Not that material, but there were some tariffs as well. That shows you that the earning capacity of the company on a normalized basis is much higher than what we reported, right? You have to account for that in terms of any projections you make. Okay. I understood. Maybe just to follow up on the last point on your price increases that you've put in place to absorb commodity increases, are you, is Q3 also impacted a little bit by that, or were you able to mitigate fully the commodity cost increases in Q3? We put through price increases, but our expectations of our margins normalizing to where they should be over the long term, Martin, is a combination of those price increases, and we do see easing of certain commodities, particularly chicken. The third factor is we do expect to see some efficiency gains, which has been consistently part of our EBITDA growth over the last couple of years. It is a combination of those factors that get our margins back to that normalized number. Having said that, Martin, there's a lot of moving parts now given the tariff noise in the U.S., not necessarily with Canada, but with obviously trade with Brazil and Australia, New Zealand, and Europe, and others, right? You have to incorporate some elements of risk there as well. Okay. Lastly, George, you talked about, you know, in the previous question, in the previous with the question with Derek, that some of the launches would be large and lumpy. Are you referring to launches of products this year, or this was more a 2026 comment? No, this year, of course, and next year as well. I was talking generally about the business development pipeline over the next couple of years. Okay, perfect. Thank you for the color. Thank you, Martin. Thank you, Martin. Next question will be from Stephen MacLeod at BMO Capital Markets. Please go ahead. Thank you. Good afternoon, guys. Hey, Steve. Hey, Will. Just wanted to follow up on a couple of things. With respect to the Q3 commentary, I just want to make sure I fully understand the commodity impacts. It sounds like you do expect to see margins normalizing, but would you expect to see gross margins in the specialty foods business actually improving year over year in Q3, or are you still under pressure just a little bit because of the time it takes to pass through those price increases? Yeah, Steve, I don't know off the top of my head the actual percentage margin Q3 over Q3 projected versus next year, but the reality is we do expect to see improvement from Q2. Okay, that's helpful. Okay, great. Maybe just thinking about the sales capacity that you have. You've talked about the $1.7 billion for what the new capacity you have in place. Can you talk a little bit about whether you've previously talked about like $700 million being highly likely for 2025? Can you just let us know if that's still the case? How much do you think you've realized by the end of Q2 of that full capacity amount? As much as we continue to recognize amounts from that pipeline, and off the top of my head, I think of that original pipeline we talked about, about $1.2 billion. I think it's about $200 million of that has been realized. The reality is the pipeline hasn't changed as we realize new things. A few projects have dropped off. New projects have come on. We look at our pipeline, and today it's still around that $1.2 billion. In terms of where it falls, in terms of likely, highly likely, and the quarters, that's always moving around, Steve, as you've seen. Yeah, this launch I mentioned earlier coming up in September. There's always little delays. There's always things that happen. Originally, it was the beginning of August. We had a piece of equipment that was delayed. It's tough to put it that refined of a bucket, but the key note is it's the pipeline that continues to be very strong and lots of exciting stuff going on. A lot of that, Steven, is driven by the three megatrends that I mentioned in my prepared remarks, which have driven the growth of Premium Brands Holdings Corporation since inception and are still driving the growth of Premium Brands Holdings Corporation, subject obviously to capacity, which we're bringing on stream as we speak with the capital investment that we've made over the last two or three years, right? We are invested in the right products, in the right plants, obviously catering to the channels that are recognizing that these megatrends are in our investing. Right. Okay, that's helpful. Just to clarify on the sales capacity, I thought in the prepared remark you talked about $1.7 billion, but Will, you just said $1.2 billion. I'm just wondering, is there a difference between those two numbers that I'm not aware of? No, no, the $1.2 million is the, those are actual initiatives, Steve, that, you know, target initiatives, X product with Y customer. The $1.7 million is something we'll grow into over the next, you know, year or two, as we develop other new opportunities. That's the available total capacity. Okay, that's great. Thank you. Maybe just finally, just on the investment income, you know, representing the Clearwater investment, you know, it's been a bit higher. The last two quarters have been higher than what we saw through the quarters in fiscal 2024. I'm just curious, is that kind of a new run rate, or is there anything else that's happening with that line item to cause it to move higher? If you saw the equity earnings number, Clearwater has had a very tough first half of the year. Now that's a positive, we are expecting a much better second half of the year for Clearwater. As a result of that, we've been accruing our interest and the interest compounds. That's been a driver. As we talked about last quarter, we did have to advance them $40 million at the beginning of the year to help with their liquidity as they put a new financing structure in place. The combination of that has led to that growth in the interest rate. Lots of good things are happening in the business, though, Steve. They're very close to closing on a new financing, which will greatly address their liquidity needs through this tough part of the cycle. As I mentioned, the core business itself is starting to show solid improvement for a much better back half. Strategically, there's a lot of good things happening that we'll probably talk about next quarter. Okay, that's great. Thanks, Will. Thanks, George. Appreciate the color. Thanks, Steve. Thanks, Steve. Next question will be from Ty Collin at CIBC Word Markets. Please go ahead. Good afternoon, good morning. Thanks for the question, guys. Hi, Ty. Hi. Maybe my first one, just to follow up on a previous point. You mentioned that you're expecting one of your biggest programs or contracts of all time to turn on, I think you said, around September, and that the EBITDA guide is kind of levered to that. I'm just wondering what your level of visibility is on that timing specifically and whether there's any risk that that gets pushed further into Q3 or into Q4. Again, the business will be executed by a brand new facility, Ty, which we're currently wrapping up. We feel comfortable at this point that we'll be able to execute it. If we don't execute it in terms of a big bang type of opportunity, we will basically gradually launch it and ramp up the capacity. We're hoping that we'll ramp it up all at once. Plan B is to basically launch it gradually. Okay, got it. Thanks. I'm wondering if you could kind of provide your updated thoughts on whether there are any parts of your business that you consider non-core and might look at divesting at the right price. There's obviously been some consolidation going on in the food distribution space down south, and I'm curious if that's kind of jump-started any conversations around Premium Brands recently. Yeah, I think as Will said in his prepared remarks, Ty, we're always looking for ways to improve our liquidity, unlock value, obviously pay down debt. We're committed to getting back to 3: 1 debt to EBITDA. Obviously, growing the EBITDA will be one way of getting there as well. All I could say is that we're looking at the number of value-unlocking transactions that we will be able to use to bring down the debt as we promised we would. Great. Thanks, George. Appreciate it. Thanks, Ty. Next question will be from Luke Hannan at Canaccord Genuity. Please go ahead. Thanks. Good morning and good afternoon, everyone. Hey, Luke. Hey, thanks, guys. I wanted to ask about CAPEX. I know it's consistent with what you said in the past. Project CAPEX gradually has been coming down. I think you mentioned $108 million is what you expect over the course of the next four quarters. I'm curious, though, if we look beyond that, let's just say two or three years out, should we be expecting either on an absolute dollars or a CAPEX intensity basis, should we expect relative consistency over the next few years, or what can you share on that front? Yeah, so we look at CAPEX in three buckets. Our maintenance CAPEX, which tends to be fairly steady, around $60 million- $65 million a year. There is generally across our plant network, smaller CAPEX projects, adding a line, adding some automation, things like that. That's generally about $60 million- $65 million a year as well. That's kind of our baseline CAPEX. We have these other larger projects that tend to accelerate or increase our organic volume growth rate. That's what that $108 million we referred to in the presentation, we're left to spend on those major projects. Your question is really, are there going to be future major projects? In terms of hitting our target of $10 billion in sales by 2027, and the organic growth number in that is about $9.2 billion- $9.4 billion of sales, and there's a little bit of acquisitions to get us to the $10 billion, we'll have completed the CAPEX cycle of the major projects to get there. I can't say there won't be more projects because it'll depend on the growth profiles of our business. If they exceed the expectations of their growth profile, they run out of capacity, it will be a very positive story, but we will then be needing to invest more money in their businesses. Based on today and hitting our five-year targets for 2027, we are essentially at the end of that CAPEX cycle. Okay, thanks for that. I appreciate it. On that $9.2 billion- $9.4 billion, if there's a scenario that presents itself where there happens to be more attractive acquisition opportunities out there where perhaps maybe you'd be comfortable giving up some organic growth to go after and chase those acquisitions, is that a plausible scenario? I guess the question is, are you comfortable potentially acquiring more than what it is that was being implemented? Oh, yeah. Absolutely. Just to correct you on something, we wouldn't give up the organic growth, right? Those are niches in place. Our businesses are executing on them. We put what we feel is a very conservative acquisitions number into our five-year plan. The reality is we expect to exceed that. The answer is absolutely yes. If opportunities arise, and in George's prepared marks, our pipeline right now is incredibly robust. There are lots of interesting transactions we're looking at. I think we increased our active pipeline to about $2 billion in sales opportunities today. There are significant opportunities there. The one thing I will caveat that, Will, is we are committed to maintaining or getting to within our midterm leverage targets, that 2.5 to 3: 1 senior debt:EBITDA and the 3.5: 1, or sorry, 4.5: 1 total debt:EBITDA. We're not going to do anything that prevents us from getting within those targets. I should say, and make this very clear, our long-term target is to get our total debt:EBITDA ratio down to 3 or less. Whatever we do, we're working within those trajectories as well. Yeah, just to talk about history a little bit, Luke, as we started in Canada many years ago and started to do good things in the food space, many, many food entrepreneurs came to us to join us. Of course, we grew organically by acquisition in Canada. The same thing is happening in the U.S. We're doing a lot of amazing things in the U.S. market. We're launching some of the best-selling products in that market in different channels. We're well known. We're getting to be well known these days. Because of that, we're having a lot of discussions with many, many food entrepreneurs that would like to join Premium Brands, right? Yeah, absolutely. Will is right. We will be doing a lot of acquisitions in the U.S. in the future as we grow our different platforms. That's great. Last one here, and then I'll pass the line. Just on the Cleveland, Tennessee sandwich facility, roughly speaking, are the sales that are expected to come out of phase one and potentially future phases concentrated to any one customer, or is that relatively well diversified amongst your existing or potentially new customers? Wlell diversified, Luke. Again, we have a robust pipeline of large opportunities. We are very, very certain, I would say, that we will fill that capacity sooner than what we even budgeted ourselves. That's for future phases as well? Absolutely. Okay, great. Appreciate it. Thanks. Thanks, Luke. Thanks, Luke. Next question will be from John Zamparo at Scotiabank. Please go ahead. Thank you very much. Good morning, George and Will. Hi, John. I wanted to ask about the $1.7 billion in capacity, just to follow up on that. Is the right way to think about that, that's the capacity you have in place for facilities today, or does that include the remaining $108 million in the remaining project CAPEX over the next 12 months? Yeah, no, let me clarify a couple of things there, John. The $1.7 billion is, yes, after we complete that $100 million of projects. In particular, the big project in there is the consolidation of our Concord businesses' plants in the Greater Toronto Area. That's about $100 million of sales capacity. That's the $1.7 billion. I want to be clear, that $1.7 billion is just the incremental capacity from the new projects. There is still other capacity in the system. Not every plant was running at full capacity before we started on this CAPEX plan. There is some slack in the system in addition to that. As well as I mentioned on an earlier question, the three buckets of CAPEX, that small project CAPEX budget, a bucket of about $60 million- $65 million a year, that also provides us with an additional growth capacity. It's not limited to the $1.7 billion. There are other elements to it. Okay, that's good color. Thank you. The margins on incremental volumes on your organic volume growth this quarter, are those still hitting the, call it, the high 20% rate? Is it fair to say this quarter you saw that or above that level? In fact, if you look at our U.S. initiatives, it's much better because, you know, we've talked about this in the past. Our sandwich group has, of the three big growth platforms in the U.S., our sandwich group has the lowest contribution margins. They're sort of that 20%- 25% range. Our sandwich are, you know, 25%, 30%, even over 30% contribution margins depending on the product mix. Our bakery is 40%+. Absolutely, relative to 20%- 25%, we're far exceeding that. Okay, understood. On tariffs, George, I think you mentioned that was not a meaningful drag on margins in the quarter, but I wonder what you might expect moving forward now that tariffs are a bit more clear and are elevated for many countries, what you might expect over the back half of this year. Yeah, it's interesting when tariffs became part of the topic that the conversation was, and the focus was on exports from Canada into the U.S., which we feel we have, we've got $400 million- $500 million of product that crosses the border. We've got good strategies around that and ways to mitigate any conflicts between the U.S. and Canada. Really, what's emerging is the impact on supply chains into the U.S. for our U.S. businesses. We bring products in from Brazil, we bring products from Europe, we bring products from New Zealand. We're watching that very closely. We have flexibility to the extent that these are, we're procuring products so we can move things around and address it. Certainly, that's what we're viewing today as the biggest challenge, and our management teams are focused on managing that. Ultimately, to the extent that there are unique products that we have to procure from these other markets just because we can't procure them from the U.S., in those situations, we'll have to deal with the tariffs through price increases. It's an interesting scenario, John, because as we try to game it, let's say we know that other companies in the food segment are way more exposed than we are, right? Very likely for us, again, there'll be some impact, but it won't be material, and we have ways to basically deal with it. There are companies out there that maybe don't have the same options. Anyway, it'll be interesting how that falls. Yeah, just to sort of further clarify George's point, John, our imports into the U.S. are raw materials. You know, we import very few, if any, finished goods. It's any manufacturers that have outsourced their manufacturing offshore, those food companies are the ones that are going to have serious issues. This is pure speculation because we don't know where we're going to end up, John, right? Let's remember that. Okay, understood. One last one, and then I'll pass it on. There was a comment in your prepared remarks this morning about Premium Brands growing with customers that are less sensitive to downturns or trying to do so. I wonder if you could share some more color here. Is that referring to a certain channel, or is that an income cohort you're referring to? Just a bit more color there, please. Yeah, you know, John, overall, as you know, we manufacture premium products with clean ingredients, and we sell them to customers whose consumers basically are looking for them and are not buying them on price, right? Basically, we've done well with customers in North America that have the right type of consumer who is looking for those types of products, differentiated products that are not ultra-processed, and they're willing to pay a premium ultimately. In our view, that consumer doesn't suffer as much in a mild recession, and they don't change their eating habits in a mild recession. That's what we were trying to convey. We've seen that in the past in Canada. Okay, understood. Thank you very much. I'll pass it on. Thank you, John. Next question will be from Michael Glen at Raymond James. Please go ahead. Hey, good morning. Good morning, Michael. I'd like to maybe try and pin you guys down a bit more on the specialty foods EBITDA margins in the back half of the year. Your EBITDA margins in the front half were down about 60 basis points year over year. How much do you feel you have enough in place to grow EBITDA margins or keep them flat in Q3 on a year-over-year basis? Yeah, we don't provide quarter-to-quarter guidance on EBITDA margins, Michael. We're confident in our guidance for the year, and I think we've given the cadence of that guidance over the next two quarters. Okay. In terms of some of the pricing inflation that you're up against, like the chicken pricing, you feel it's largely behind you now. Can you comment on beef prices at all? Yeah, chicken prices have come off, which is great to see, and that's sort of in line with our expectations. As the quarter's unfolding, that's sort of looking according to plan. Beef is a greater uncertainty. We just scratch our heads with how high it can go. It just continues to be inflationary. We've seen a few signs here and there, but that's probably going to be the biggest challenge in the back half of the year. Plus, Michael, there is the uncertainty around tariffs because a lot of beef goes into the U.S. from places like Brazil, Australia, New Zealand, and Canada, of course, and others, right? There is some uncertainty with regards to beef inputs. What I'll say, again, just to add to Will's comment, is that we've been very dynamic and very proactive in terms of passing prices through to our customers. Okay. A few items. The inventory ramp that you saw during this quarter, what would be your, can you provide some idea of how we should think about inventories through the back half of the year? Yeah, it was probably about $60 million of inventory we carried over in the quarter that we, you know, most of that was excess relating to these product initiatives. Again, assuming things go according to plan, you should see a much more positive message at the end of Q3, going into Q4 around working capital. The only other thing I would add, Michael, in defense of our operating companies, is that as we mentioned earlier with regards to the tariff noise, it's a very uncertain environment. When you have an uncertain environment, the bias is always on to be sure, right? The bias is always to be conservative. There's a little bit of that in our working capital numbers. Okay. Last one for me. On the Clearwater advance from Q1, is there a, did you provide a timing for when we might see that come back? We didn't give specific timings, Michael, but we do expect with the new financing going in place and some of the other strategic initiatives that are working, we do expect to receive that in 2025. Okay. Okay, thank you. Thanks, Michael. Next question will be from Vishal Sreedhar at National Bank. Please go ahead. Hi, thanks for taking my questions. Can you comment on the new capacity not identified in the $1.7 billion? You talked about excess capacity in existing facilities. It's a large number that seemingly gets us to the $9.2 billion- $9.4 billion. Where are the major capacity, incremental capacity coming from? What facilities will drive that delta from that $6.5 billion plus the $1.7 billion plus that residual number? Yeah, we have in our specialty foods network 60- 70 facilities, Vishal. It's really spread across them. There's no one single facility I can call out and say there's a $150 million of excess capacity. It is really widely dispersed. The reality is, George mentioned earlier the tailwinds driving many of our businesses. The reality is we've got all of our businesses that are benefiting from that on the specialty foods side. In addition to these large pipelines of opportunities, these are specific initiatives. There's just general market growth in the categories we're at, and it's really supporting that general growth. Okay. Thank you for that. With respect to that number, do we know where we are in that continuum of capturing it? I guess the $1.7 billion started in 2024. I presume some of those capacity initiatives to take up the slack in capacity or add new lines, some of that's been done, and some of that will be done through the course of the remaining years. Is there a sense, or is it also very difficult given the number of facilities to gauge that? Yeah, definitely. It's a combination of the two, Vishal. Again, that's how we are going to get to that $9.2 billion- $9.4 billion in sales through organic growth. It's that large pipeline that we built, or that large new capacity we built at $1.7 billion. Plus, it's general expansion and existing capacity throughout the network. That's your delta. That's your difference in the $1.7 billion from our sales in 2024, which were $6.4 billion. You add the $1.7 billion to that, and then that difference from that number to the $9.2 billion- $9.4 billion is that general capacity through the system, plus the incremental benefit of that $60 million- $65 million a year of spend. Yeah, and Vishal, just in terms of the capacity, just thinking aloud here, I think over the last three years, we've built about six plants, six brand new plants in the network. We've expanded a few substantially, and we've added new production lines to existing ones. Those are the three different types of capital investments we've made to increase our capacity. I'll talk to Will, and maybe on future calls, we'll give you a little more color on that, where we're at in terms of that. Thank you. That would be helpful. With respect to the timing of the large program that will start in September, George, I think you mentioned that if you're ramping up a new facility, and if it doesn't ramp according to plan, maybe you'll take it a bit slower. At what point will you know, first, did I characterize that correctly? Second, at what point will you know what speed you can go and the cadence of the ramp up? What outcome is reflected in your guidance? Is it the slower ramp-up outcome that's reflected in guidance? Yeah, no, it is a more rapid ramp-up, Vishal. What will happen is if it's a slower ramp-up, all you're going to see is, I don't think it's going to change our outlook for the year by much because the initial channel fill, as you ramp up, is the big portion of the initial sales. We're fully confident that if it's not fully ramped up by Q3, it will be in Q4. Some of those sales might get pushed into Q4, but it would not change our outlook for 2025. I see. It's a month's timing issue that you're referring to. Exactly. Exactly. Okay, thank you very much. Thanks, Vishal. Next question will be from Chris Lee at Desjardins. Please go ahead. Oh, hi, George and Will. Hope you're both doing well. Hey, Chris. Chris, just have maybe one follow-up question from me. Just going back to the US sandwich organic growth rate in the quarter, you noted that it was up slightly. You've excluded the tough year-ago comp. I'm just wondering, to the extent you can, can you provide some color of how you think that organic volume growth rate will evolve in the back half of the year as some of the new programs start to come in? In the context, if you're able to share what you're seeing from your large QSR customer, how are some of the initiatives going on right now, and what does that mean for the back half of the year for you guys? Thank you. Yeah, the sandwich group, we do expect to see much better growth in the back half of the year. Part of that is, you know, with one of our biggest customers, we continue to see steady improvement in their business and our sales to them. There is a lot of stuff in the pipeline that's starting to come to fruition, particularly with the Cleveland, Tennessee plant starting up. You should see a nice cadence in the sandwich group over Q3, Q4. Yeah, and again, just a couple of more things, Chris. You know, we're making excellent progress in terms of lining up more business in the overall coffee channel in the U.S., which is growing in the high single digits. We're probably the best positioned company in the food space to take advantage of the growth of that channel. Secondly, you know, we're making very good progress in terms of doing business in the retail and club channels as well. There's a lot going on. I also want to mention that the co-packing channel for us is a great opportunity as we leverage the state-of-the-art facility in Cleveland, Tennessee. Okay, that's very helpful. Maybe another quick one for me. George, in your letter to shareholders, there were a few interesting comments. I think the other one you noted was that, and I'm just paraphrasing, if you don't see any significant improvement in the valuation of your business, you'll likely shift from focus on dividends to share buybacks. Can you elaborate on what you meant by that and the timing of it, and any parameters we can look for would be helpful? Thank you. Yeah, you know, I think as Will said, Chris, our first priority is to basically improve the balance sheet. As I mentioned earlier, we're focusing on a number of initiatives to do that. We hope to have more to announce in the coming months. We're making really good progress on that front. I think you saw some of the improvement in our balance sheet after the second quarter. Ultimately, we think that at certain levels, our shares are very undervalued relative to their infinite value. You know, obviously, we're going to be looking at buying back shares. It's a more tax-efficient way to create value for shareholders. Okay, thanks for your comments and all the best. Thanks, Chris. Thanks, Chris. Next question will be from Ryland Conrad at RBC Capital Markets. Please go ahead. Yeah, thanks very much. Good morning. Good morning, Ryland. Just on Premium Food Distribution, a nice kind of positive inflection in organic volume growth there. Can you just unpack the drivers of that performance? In the release, I think it mentioned that opportunistic inventory purchases were a contributor. Just trying to get a sense of whether that kind of mid-single-digit volume growth is sustainable going forward. Yeah, thanks for asking that question. Again, we were pleasantly surprised, of course, by the performance of our distribution group, given some of the challenges with the economies in Canada and the U.S., the well-known challenges. Having said that, I can't emphasize enough the demand we're seeing for protein, particularly premium protein. You know, we've talked about this for a long time. We think that there is an inflection point here with regards to consumer demand and consumer taste. Obviously, consumers are favoring premium protein, and we're seeing the benefit of that in our distribution business, which, as you know, mainly distributes protein across Canada and some parts of the U.S. Great, thank you. Could you remind us on the timing of the sale lease back for the GTA facility? Are there any kind of preliminary estimates on the proceeds from that? It won't be until we complete that project. The completion now is for Q2 2026, so it's a ways off. Okay, got it. Thank you. Just on Clearwater, I think you kind of alluded to it in some of your responses, but I noticed in the release that Clearwater exited the Macduff kind of land-based operation a few weeks ago. Correct me if I'm wrong, but I believe that was a bit of a drag on the business. Could you maybe just provide some color on that sale and any implications for Clearwater? Yeah, they've entered actually a number of transactions in the last few months that unlock value, reduce losses, or eliminate losses in some cases, and also free up working capital as well. Maybe Will can give you some numbers in terms of the improvement in the capital efficiency of their business model, which has really been our priority. Yeah, certainly that transaction, which happened after the quarter, we view it very positively. The benefits from a cash flow perspective, really, the majority of them will flow through future consideration, and like George says, working capital benefits. That is contributing to our expectations to see improved cash flows coming out of Clearwater to Premium Brands. Awesome. Thanks very much. Thanks, Ryland. Again, a reminder to please press star one should you have any questions. Next, we have a follow-up from Derek Lessard at TD Cowen. Just one follow-up for me, guys. In terms of the buyback versus the dividend, could you just maybe clarify, do you mean you'd be doing the buyback rather than growing the dividend? It depends how our liquidity unlocking initiatives go. Derek, I don't think the two are mutually exclusive, right? It just depends how it goes. Ultimately, it just depends on where our shares are trading, our view of the relative to intrinsic value. What we've said is that ultimately, if the balance sheet allows it, it would be more tax-efficient to buy back the shares. Okay. To that point, George, when do you think you'd be in a position to be buying back shares or anticipate? If everything goes well, hopefully sometime in 2026. Okay, thanks, everybody. Thank you. Thank you. At this time, we have no other questions registered. I would like to pass it back to George for closing remarks. I'd like to thank everybody for attending today. See you all in October. Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.