Good day and welcome to the Swiss Water Decaffeinated Coffee Inc. conference call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Before Swiss Water Decaffeinated Coffee Inc. conference call starts, they're required to remind you that certain information in today's presentation is forward-looking in nature. Any such forward-looking information or statements are based on assumptions that they considered reasonable at the time the information was prepared. Such information involves known and unknown risks, uncertainties, and other factors outside our control that could cause actual results to differ materially from those expressed in the forward-looking information. Swiss Water Decaffeinated Coffee Inc. does not assume responsibility for the accuracy and completeness of the forward-looking information. Similarly, they do not undertake any obligation to publicly revise this forward-looking information to reflect subsequent events or circumstances except as required by law. Please refer to Swiss Water Decaffeinated Coffee, Inc. management discussion and analysis posted on SEDAR and Swiss Water's website for a full discussion regarding forward-looking statements and the risks therein. I would now like to turn the floor over to your host, Frank Dennis. Please go ahead. Thank you, Tom. Good afternoon, everyone, and thanks very much for taking the time to join us. I'm Frank Dennis, President and CEO of Swiss Water Decaffeinated Coffee Inc., and with me is Iain Carswell, our CFO. Iain and I are here today to discuss Swiss Water's financial results for the three months ended March 31, 2024. So as usual, I'll begin with a brief review of our performance, then Iain will provide more detail about our financial results before I return to tell you about our longer-term plans and expectations. We continue to see strong and growing demand for our chemical-free decaffeinated coffee offerings during the first quarter of this year. However, when comparing our quarterly results for 2024 with the same period as last year, it's important to note that the distribution of quarterly sales volumes in 2023 did not follow normal seasonality patterns. In particular, Swiss Water reported much stronger-than-normal volumes and financial results during the first quarter last year, and this was mainly due to the front-loading of customer orders in anticipation of a period of production constraint during the second and third quarters. As those of you who follow our story will recall, we decaffeinated the last bag of coffee at our legacy production facility in Burnaby, BC, in April of last year as we prepared to permanently shut down our two decaffeination lines there and vacate the site on the expiration of our lease last June. As the Burnaby assets ceased production before our new second decaffeination line at our Delta facility was fully operational, we began bridging a short period of capacity constraint stretching from April through August of last year. Anticipating the transitional constraints, our team successfully front-end loaded significant customer demand into Q1 last year before our Burnaby shutdown, enabling balanced customer service through Q3 and facilitating an acceleration of sales during Q4. A key milestone was achieved last August when production on our new Delta Line 2 [began]; soon, the line was producing decaffeinated coffee that met our high-quality expectations. The optimization of Line 2 continued through the fourth quarter last year and the first quarter of this year as we ramped up its production, and as a result, we experienced no capacity constraints during Q1 as we ran both lines in Delta on a 24/7 basis, save for a planned two-week maintenance shutdown on Line 1. With all production consolidated in Delta and both lines running smoothly and efficiently, we once again have sufficient capacity to meet our medium-term growth ambitions. Looking at first quarter sales volumes, while they were down 18% when compared to the front-loaded Q1 of 2023, they reflect the return to normal order patterns in our business. Quarterly revenue and EBITDA also are down year-over-year, again due to the volume difference. However, gross profit was up for the quarter because we are now experiencing the cost savings and general efficiencies that come from consolidation of all our production at one location. Now, before I tell you more about what we see ahead, let me turn the call over to Iain to take you through our financial results. Iain? Thanks for joining, Frank, and good afternoon to everybody. As always. I'll begin my review with volume shipped to customers during the quarter as this is the key metric that drives our financial performance. As Frank noted, the year-over-year comparison of results is skewed by the fact that many customers moved orders forward into the first quarter of 2023 in anticipation of the impending capacity constraint caused by our transition out of Burnaby prior to the full commissioning of our Delta Line 2. Taken together, volume shipped to customers in all categories were down by 18% in the quarter when compared to Q1 of 2023. Looking at volumes by customer type, shipments to roasters, those customers who roast and package coffee to sell to consumers in their own coffee shops or for home or office consumption, were down by 13%, while shipments to importers, those customers who resell our coffees to roasters where and when they need it, were down by 25% in the quarter. Looking at the roaster segment another way, specialty roaster account volumes were down by 25% in the quarter. These accounts serve the out-of-home consumer primarily in cafés and restaurants in our key geographic markets. Shipments to large commercial roasters were also down, falling by 17% compared to the exceptionally strong Q1 of 2023. Turning now to revenues, first-quarter revenue of $ 38.7 million was down by $ 10.3 million from the same period last year. As with volumes, the year-over-year drop in quarterly revenue was an expected result of the normalization of order patterns this year compared to a period of volume loading during Q1 last year. Looking at the cost side, our first-quarter cost of sales was $ 33.6 million, down by $ 10.5 million or 24% compared to Q1 of 2023. The decrease was primarily driven by our lower volumes and a drop in depreciation expense as well as cost savings resulting from consolidation of our operations at a single location. In the first quarter of last year, we recorded a one-time incremental depreciation expense of $ 2.1 million related to the write-down of salvageable production assets at our old Burnaby facility. There was no such charge in Q1 of this year. As to coffee futures, the NY 'C' was up from $1.74 per pound in Q1 of 2023 to $1.90 per pound in the first quarter of this year. Foreign exchange rates can also have a material impact on our profitability and cash from operations. This is because the majority of our revenues are generated in US dollars, while a significant portion of our costs are incurred and paid in Canadian funds. Our exposure to changes in the exchange rate is managed in part through derivative financial instruments. However, all other factors being equal, we benefit when the US dollar appreciates. At an average of CAD 1.35 Q1, the US dollar was unchanged from the same period in 2023. First-quarter gross profit was $ 5.1 million, an increase of $ 200,000 or 5% when compared to Q1 of 2023. The increase was largely a result of the cost savings and efficiencies generated by consolidation of operations at a single location. By closing Burnaby and bringing all production into our Delta facility, we have reduced our costs for building maintenance, utilities consumption, staffing, and transportation between locations. The positive impact of the $ 2.1 million year-over-year decrease in depreciation expense on gross profit was largely offset by the lower volumes and reduced green coffee differential margin. In addition, we continue to contend with inflationary pressures on our variable production costs, including natural gas, carbon, and labor, as well as on freight and storage costs. Looking at the expense side, first-quarter operating expenses were $ 3.7 million, up by $ 400,000 when compared to Q1 of 2023. The administrative portion of operating expenses is up by $ 100,000 due to slightly increased headcount and salaries, partially offset by savings from the consolidation of operations in Delta. The sales and marketing component of operating expenses is up by $ 300,000 or 8% for the quarter. As expected, our sales and marketing costs continue to gradually increase due to return to normal travel and trade-show activity. The timing of marketing activities also played a role in the Q1 expense. Q1 operating income of $ 1.4 million was unchanged from Q1 of last year. Turning now to net income, we reported a net loss of $ 900,000 for the quarter compared to a loss of $ 700,000 in Q1 last year. The higher net loss was driven by an increase in finance expense associated with higher interest rates on our construction loans, as well as increased mark-to-market losses on our risk management activities and the higher operating expenses I've previously discussed. These negative factors were partially offset by cost savings from the consolidation of our operations and gains on foreign exchange. First-quarter net finance costs of $ 1.8 million were up by $ 400,000 or 31% over Q1 of 2023. First-quarter adjusted EBITDA of $ 2.8 million was down by $ 2.2 million from Q1 last year. The quarterly decrease reflects the comparative drop in volumes and a reduced coffee differential. As we've noted previously, we built up inventory levels during the first quarter of 2023 to ensure that we had sufficient coffee on hand to meet customer demand during the transition from Burnaby. However, during the second half of last year, the commissioning of our second production line in Delta led to an acceleration in raw materials usage and increased shipments of finished goods. As a result, inventories closed 2023 at their lowest level since Q1 of 2021. During the first quarter of 2024, inventory levels dropped further as we consumed the last remaining coffee inventories we had built up to bridge the transition from Burnaby. This enabled us to continue reducing our debt by paying down a further $ 2.9 million in the quarter. With the construction of our new production assets now complete and fully paid for, debt reduction is a key priority and focus for Swiss Water going forward. Under the terms of our agreement with Mill Road Capital, we are scheduled to fully repay the $ 15 million debenture with warrants held by Mill Road in October of this year. As at the end of the first quarter, Swiss Water is in a strong liquidity position with $13.6 million cash on hand. Accordingly, we expect to be able to fund this obligation with Mill Road with a combination of available cash, reserves, and proceeds from operations, supplemented with drawings on our existing bank debt facilities as needed. With that, I thank you for your attention, and now I'll turn things back to Frank. Thank you, Iain. As we look ahead into the future, we remain very optimistic. We are moving forward with a diversified global customer base, new state-of-the-art production facilities, quality products, increasing brand awareness, growing demand, and a proven team. We are working hard to reduce our debt levels and are once again sharply focused on growth initiatives. Swiss Water's production activities are now fully consolidated onto one site, and we expect that this will enable us to realize further operational efficiencies through the balance of this year. Having fully optimized the production from our Delta Line 1, we are confident that we can increase the production rate of Line 2 over time. As of today, we have adequate unused capacity to service our medium-term growth ambitions. In general, trading conditions remain favorable in our key markets, and we see growing demand as ever more industry participants and coffee consumers move away from chemical decaffeination in favor of chemical-free and organic processes like ours. This positive consumer-driven trend is supported by some interesting developments on the regulatory front in the United States. In March of this year, the state of California considered a proposal regarding the use of methylene chloride to decaffeinate coffee. The methylene chloride process is used to decaffeinate coffee for around 70% of global decaffeinated coffee production. Methylene chloride, which has already been banned for use in paint strippers and cosmetics for five years and which has been banned for use in decaffeination in Japan for decades, is still the most common chemical method used to make decaffeinated coffee in the United States. Now, if passed into legislation as of January 1, 2027, California will require any entity that offers for sale coffee that has been decaffeinated using methylene chloride to label the final product, clearly stating that, "Methylene chloride is used in the decaffeination of this product." This is very similar to existing Canadian legislation. Furthermore, in January of this year, the U.S. Food and Drug Administration, the FDA, filed a food additive petition and a color additive petition that calls on the agency to rescind its approvals for four carcinogens in food. Methylene chloride, which is noted for its use in coffee decaffeination, is one of these chemical additives. These actions have generated significant media coverage and are clear signals of ever-growing consumer demand for greater transparency regarding the products they eat and drink. As a result, there has been meaningful media attention on decaffeination and the availability of chemical-free alternatives such as our Swiss Water Process. However, we must stress that decaffeinated coffee is a safe drink, and it provides consumers many health benefits. One must simply understand the process used to decaffeinate your coffee. Despite the potential longer-term benefits of this media attention and the potential legislation on our business, in the shorter term, there are a few market conditions that must be tracked and managed. During the first quarter, the NYC Arabica coffee futures market increased yet again very rapidly and remains elevated, though off its peak of two weeks ago. Spot availability of coffees continued to fall, and pressure on the futures market intensified in late March of this year, bolstered this time by a very tight Robusta supply reflected in the London Robusta futures market. Material increases in the NYC will have a negative effect on demand at both the trade and consumer level. The coffee roasting trade has been sitting on the sidelines in the short term to weather the market, and we expect some ongoing volatility and order patterns. Moving forward, the effect, as always, on the business will depend on the futures market moving off the highs as it has and remaining for a sustained period at generally lower levels that continue to engage roaster interest. Despite this short-term market movement, whatever challenges the future brings, I can say that Swiss Water is now much better positioned for the balance of 2024 and for the years ahead. That wraps up our comments for today. Iain and I would now be happy to answer any questions that you might have today. Thank you. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star one on your telephone keypad to join the queue. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. We do also ask that you limit yourself to one question, and should you wish to ask a follow-up, please rejoin the queue. Once again, that will be star one on your telephone keypad at this time if you wish to join the queue to ask a question. Please hold a moment while we pull for questions. The first question today is coming from Richard Ruggeley. Richard, your line is live. Please go ahead. All right. Congratulations, guys. As you pointed out, the first quarter of last year was very anomalous, so I think, obviously, the performance is really good. Yeah, I have a couple of questions, but I'll follow the lead and only ask one at a time. Yes, you mentioned there's been a lot of press on the dangers of methylene chloride, and you obviously cited the Californian situation, the FDA stepping in as well. Now, obviously, this is good news for the Swiss Water Process, and I wondered if you could comment a little on the potential you see to progress the business, particularly in the US market, on the back of this sort of sea change in the perception of chemical decaffeination. Thank you. Thanks, Richard. I appreciate that question. The answer would be absolutely. I think that there are roasters that are very pleased that they work with the Swiss Water Process at this point in time. The issue of methylene chloride has been kind of out in the marketplace for some time, and so it's not a complete surprise that Consumer Advocacy Group has finally picked up on this and is making its preference known for better understanding of food transparency. And we have already started to hear some requests, some increased requests for our product. There are alternatives. We must be aware of that. There are alternatives to methylene chloride other than the Swiss Water process, but I would say that this is pretty positive for our business going into the future and that I think that there will be many current roasters in the marketplace who will at least want to reevaluate their positioning. Regardless of whatever happens to the legislation, I think that there has been sufficient consumer engagement and awareness increased in this issue that they'll want to review their use of that product. But like I said, there are alternatives. The product is still safe. The category is still safe. It provides a lot of health benefits, but I think over time, water process, CO2 process will benefit from this. Thank you. Your next question is coming from David Tan. David, your line is live. You may go ahead. Thank you. Just a follow-up to Richard's question. If the FDA does rescind its approval for methylene chloride, would you expect? How would that progress? Would you expect an outright ban? And then could you talk more in detail about the alternatives to the chemical process, like comparing Swiss Water Process with the alternatives that you mentioned in terms of the popularity and flavor profile, whatever, the pros and cons? Thank you. I'll try to do a quick summary. Thank you, David, for that question. I think if the FDA bans for all uses, I'm not sure whether that would apply to chemical decaffeination that would come from outside of the United States. There is no decaffeination that happens in the United States, basically, for all intents and purposes. The vast majority comes from Europe. And so the future for methylene chloride, I think, is a bit of a question mark. I don't know how roasters will view the outcome of this. But like I said, there are alternatives, and I think it's important that roasters evaluate those. Yes, there is the Swiss Water Process. We're an organically certified process that decaffeinates coffee, and we've been developing our internal intellectual property for 30-some-odd years to create extremely high-quality coffee that tracks very well with the origin profile of coffees that we bring into our facility. I would also say the same for Supercritical CO2, which is another great alternative. There are several plants around the world that do provide CO2, and it's a chemical-free alternative. It's also organically certified and provides a very, very good alternative. There are some others that are in the water space that are different levels of quality, and the pricing reflects that. But the roaster does have alternatives, and I think that's important for us to all recognize that we want to maintain the health of the entire category. That's important to us, and the health of that category means having options and means having roasters be able to make positive decisions that work for their business. Thank you. Your next question is coming from Grover Wickersham. Grover, your line is live. Please go ahead. Yeah. Hi. I guess congratulations also on the quarter. I kind of have a question and a half, just sort of a follow-up to the last question, which is, what is the cost profile on supercritical CO2 versus the cost profile on water or on methylene chloride? But my question, really, I noticed I mean, it was the stock really sold off today. We used the opportunity to yeah, it was an opportunity to add to our position. I think that I mean, just looking at just eyeballing the earnings report quickly, it seems that perhaps people didn't look closely at the fact that the impact of depreciation and my question is really about my main question is really about that. And I suppose I could find this out by studying the footnotes in the 10-K. But Iain, I'm just wondering if you could comment on the depreciation account. I'm assuming that's none of that's most of that is equipment, I would assume, and if not, all of it. I'm wondering how fast that's going to be coming off the P&L. I mean, how fast are you going to see that number declining? Yeah. So to answer your first question, Grover, yes, the depreciation that was booked in Q1 of this year was all to do with equipment. I mean, that is being depreciated over a 25-year period, and so it's going to be fairly stable for the foreseeable future. I see. I see. Yeah, because in the States, it's something equipment-based would tend to be a relatively it wouldn't be a 25-year schedule. That would be typically just for real estate, and even then, that's long for real estate. So that's a bit of a difference between what I'm used to seeing for equipment, but great. Well, thank you. I think it's the nature, just as a follow-up to that. I mean, it's obviously the nature of the equipment that we've just completed manufacturing over a multi-year period. And obviously, they're in line with the assets that we would have had in our old facility, and we have a good gauge on the lifetime of those assets. So that's why it's maybe slightly longer than you would expect to see in other companies. Thank you. And as a reminder, if you wish to join the queue at this time, you may press star one on your telephone keypad. Once again, that'll be star one on your keypad at this time if you wish to join the queue. And we have a follow-up question coming from Richard Ruggeley. Richard, your line is live. Please go ahead. All right. This is probably directed to Iain Carswell. I just wondered, as you said in your release and your presentation today, that you're on target to pay off the Mill Road debenture on time in October. And I wondered if you could hazard the guesstimate of what percentage of that do you think will come from cash at hand or the cash reserves you'll generate up to that date. And then just as sort of adjunct question, could you just update me on the shares outstanding if there's been any change? Thank you. Sure. Well, the cash balance at the end of Q1 was $ 13.6 million, our liability to Mill Road. The debenture value is $ 15 million, so we're in a pretty healthy cash position right now. Obviously, some of that $ 13.6 million, we utilize on a day-to-day basis in terms of running our business. So yeah, we still have a little bit more cash to accumulate, but I fully expect that we'll be able to bridge that over the next couple of quarters as we run up to that repayment date. But certainly, I'm comfortable with the fact that we closed Q1 with $ 13.6 million in the bank, which is great. And that's an additional $ 2.6 million versus where we were at the end of December. So over the last three months, we've accumulated an additional $ 2.6 million in that account. So that's good. In terms of the number of shares outstanding, there's been no material change following the end of the quarter. You will notice that there's a subsequent event at the end of our accounts, which is a small number of shares that were issued or vested to our employees following the end of the quarter. But it's not a material number versus approximately 9.5 million shares currently issued. Okay. Thank you. There are no further questions in queue at this time. I would now like to turn the call back to management for closing remarks. Thank you very much, Tom. Well, that wraps up all of our comments for today. Iain and I would now be happy to let you go, and thank you very much for joining us. Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.