Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Supremex second quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call is being recorded on Thursday, August the 10th, 2023. I would now like to turn the conference call over to Stewart Emerson, President and CEO. Please go ahead. Thank you, operator. Good morning, ladies and gentlemen. Thank you for joining us for this discussion of the financial and operating results for the second quarter ended June 30th, 2023. Our press release reporting these results was published earlier this morning. It can also be found in the Investors Section of our website at www.supremex.com, along with our MD&A and financial statements. These documents will be available on SEDAR as well. We also posted a presentation supporting this conference call on our website. Let me remind you that all figures expressed on today's call are in Canadian dollars, unless otherwise stated. I'm joined today by François Bélisle, Supremex new Chief Financial Officer. François joined us in early July and brings more than 25 years of experience as a financial executive with large, private, and public companies. We are very pleased to have him on board, as the company will benefit from his leadership skills and expertise in all matters related to business strategy, M&A, and capital management. Over to you, François. Let's turn to Slide 39 for an overview of the second quarter. Per our usual format, François will provide additional details in a few minutes, but let me take a moment to discuss our market dynamics. To be candid and direct, our results are primarily reflective of the temporary effects of three external forces and internal inefficiencies in one of the folding carton plants. From a revenue standpoint, the most material impact we experienced in Q2, as we predicted and commented on after both Q4 and Q1, were the effects of certain customers working through substantial inventories accumulated through panic or overbuying in 2022 when supply was very tight. This was felt primarily in the Envelope Segment, where seven long-term resale customers accounted for 40% of the U.S. unit decline in the Legacy Envelope business. This was purely a destocking exercise, moderately exacerbated by a soft economic environment. Second, high interest rates and high inflation have impacted our markets in two ways. First, in packaging, and I think you'll understand this, reduced availability of discretionary income for items like fragrances, cosmetics, and other health and beauty items adversely affects a core and high value-added segment in our folding carton division. Additionally, and this isn't obvious to most casual observers, high interest and inflation affects smaller charitable donations many charities like the Humane Society, the Cancer Society, Wounded Warriors, and others rely on, particularly in the US market. That is, if home budgets are being squeezed by the high cost of groceries and increased mortgage and car payments as a result of higher interest rates, they are less likely to make the small donations. This prompted major fundraisers to abandon or seriously curtail their mailing plans in Q2. Finally, on the revenue front, high and fluctuating interest rates materially dampened credit card solicitation mailers as issuers tried to ascertain what incentives made sense. Imagine being a credit card issuer trying to determine whether zero interest or 1% interest, or 3% interest, or no interest for 6 months, or whatever was viable, if it's unclear rate hikes are over or not. The cumulative effects of working through bloated inventories and reduced discretionary income took a toll on Supremex and our markets in Q2. From an internal efficiency standpoint, obviously, a reduction of volume has a negative absorption effect in all of the facilities, but the issues were compounded in Q1 and Q2 by the underperformance of operations in the relatively newly commissioned Lachine facility. It's the same people operating essentially the same equipment, albeit in a new facility, that underperformed. It was a confluence of issues, including the rush nature of the exiting the TMR location and commissioning the Lachine facility at the end of 2022, and the, "distraction" associated with the Paragraph acquisition in January and the Graf-Pak acquisition in May, and subsequent 90-day consolidation, which is now completed, spread local management a little too thin and a general malaise due to soft backlogs. The combination of temporarily reduced volumes across most business units and a primary facility that underperformed led to the tepid results. The promising news is that we see volumes trending back to some level of, "normalcy" in the second half. Resellers have started to replenish inventories. Credit card issuers and fundraisers can't and are not staying on the sidelines indefinitely. They need new clients, and they need donations. Forecasts and booking from the health and beauty segments are encouraging. In Envelope, we've been diligently reengaging with customers we couldn't serve during the tight supply period of 2022, and engaging with new customers by leveraging our strong brand to continue to gain market share. As you may infer from my earlier comments on direct mail, Royal Envelope had a weaker quarter with revenue of CAD 9.1 million. We are buoyed by renewed activity in July and August, and more robust mailing plans we have seen for the balance of 2023. The operational integration at Royal Envelope has gone well. We've extracted important synergies, and we are actively seeking opportunities to leverage our scale, capabilities, and expanded offerings to both existing and new customer relationships acquired in the acquisition. In Canada, year-to-date units in Envelope are basically flat for a couple of key reasons. Due to our market share and geographic proximity, we were able to manage the inventories of our resale customers effectively, and as a result, those customers have not had to work through over inventory situations. Given the small direct mail market in Canada, the downturn related to available discretionary spending and fluctuating interest rates that I discussed earlier, were much less dramatic. In the packaging and specialty products segment, revenue from our core pharma and food segments were strong. Sales and e-commerce business were also strong and exceeded the prior year. Activity in the retail sector was off at a level consistent with overall market data. As previously mentioned, the Health and Beauty Segment has been a challenge, but their forecast for the second half looks encouraging. Operationally, we completed the Graf-Pak operation, we completed the integration of the Graf-Pak operations into the Lachine facility within 90 days as planned. As we referenced when we concluded the transaction, this is a perfect example of a pure synergistic tuck-in that can provide benefits both on the revenue generation and cost reduction side. As I mentioned in my earlier comments, with the Paragraph acquisition in January and the Graf-Pak acquisition and integration, largely completed in May and June, coming immediately on the heels of the consolidation of the former Town of Mount Royal facility, we experienced some inefficiencies which disrupted normal flow of activities. As a result, in packaging, the combination of lower demand from certain markets and operational inefficiency, we had a sales and profitability shortfall. Having said that, the consolidation of folding carton activities at Lachine is an essential component of our packaging strategy. This facility should and will be the jewel of our packaging operation. It houses great equipment, has an optimal workflow, and has a group of employees that have proven they can deliver results. With Paragraph operations now under our wing for two quarters, the Graf-Pak closure and consolidation complete, and a growing backlog, we are confident that our experienced management team and committed employees will work through their ailments quickly. With that, I turn the call over to François for a review of the Q2 results. Thank you, Stewart. Good morning, everyone. I'm very pleased to join the Supremex, a dynamic, well-managed, and financially strong company. Please turn to Slide 40. Total revenue was up 14.6% to CAD 71.7 million, from CAD 62.5 million last year. Revenue from the Envelope Segment rose 7.3% to CAD 49.3 million. The increase reflects a CAD 9.1 million revenue contribution from the acquisition of Royal Envelope, completed last November. Revenue was favorably impacted by an average selling price increase of 33.6%, which mainly reflects more favorable customer and product mix in our U.S. operation, as well as the year-over-year effect of pricing adjustment made in 2022 to mitigate input cost inflation. Conversely, volumes decreased almost 20% as a result of lower industry demand, as Stewart mentioned. Packaging and Specialty Product Segment revenue amounted to CAD 22.4 million, up 34.7% from CAD 16.6 million last year. This increase reflects a CAD 7.8 million contribution from Paragraph, higher e-commerce-related sales, and the integration of the Graf-Pak operations in our Lachine facility. These were partially offset by the wind down of the Durabox operations in 2022, reduced demand from certain markets more closely correlated to the economic conditions, and the residual effect on sales and inefficiencies from consolidating the folding carton operations in Lachine, while integrating Paragraph and Graf-Pak. Moving on to Slide 41. Consolidated EBITDA was CAD 9.4 million in the second quarter of 2023, versus CAD 13.9 million last year, while Adjusted EBITDA amounted to CAD 9.6 million, compared to CAD 13.9 million a year ago. As a percentage of revenue, the Adjusted EBITDA margin was 13.3%, down from 22.3% last year. Envelope Segment, Adjusted EBITDA totaled CAD 9.7 million, compared to CAD 11.6 million last year. This decrease is mainly due to the effect of lower volume on the absorption of fixed costs. As a percentage of revenue, the Adjusted EBITDA margin was 19.6%, compared to 25.3% last year. In the packaging and specialty products segment, Adjusted EBITDA was CAD 1.7 million versus CAD 3.3 million last year. The decrease reflects lower demand from sectors more closely related to the eco- economy that affect fixed cost absorption and the residual effect of inefficiencies from consolidating folding carton activities in Lachine, while integrating acquisitions. As a result, Adjusted EBITDA was 7.4% compared to 19.6% for the same period in 2022. Corporate and unallocated costs were CAD 1.8 million in the second quarter of 2023, compared to CAD 900,000 in 2022. The increase is mainly due to foreign exchange loss and an unfavorable adjustment to stock-based remuneration expenses. Turning to Slide 42. Net earnings reached CAD 2.1 million, or CAD 0.08 per share, versus CAD 7.4 million in, or CAD 0.22 per share last year. Adjusted net earnings amounted to CAD 2.2 million or CAD 0.09 per share in the second quarter of 2022, 3, versus CAD 7.4 million or CAD 0.28 per share a year ago. Moving on to cash flow on Slide 43. Despite lower profitability, net cash flows from operating activities remain solid, amounting to CAD 10 million in Q2 2023, compared to CAD 10.4 million last year, mainly due to positive cash stream from working capital. For the same reason, free cash flow held relatively steady at CAD 9.8 million in Q2 2023, compared to CAD 10.2 million a year ago. In the quarter, we used our cash flow to finance the acquisition of Graf-Pak and proceed with net repayments of CAD 3.1 million on our revolving credit facility. We also returned an aggregate of CAD 2.1 million to shareholders through dividend payments and the repurchase of 656,700 common shares. Looking at our financial position on Slide 44, total debt was reduced to CAD 78.2 million as of June 30th, 2023, from CAD 81.4 million as of March 31st, reflecting the aforementioned debt repayment. net debt, which excludes deferred financing costs and cash, stood at CAD 76.9 million. As a result, our net debt to trailing twelve-month adjusted EBITDA ratio was 1.3x as of June 30th, 2023, versus 1.2x three months earlier. At the end of the quarter, we had CAD 43 million in available liquidity under our secure, senior secure revolving credit facility of CAD 120 million, leaving us sufficient flexibility to finance our investments and operations. Finally, the board of directors declare a dividend, a quarterly dividend of CAD 0.035 per common share, payable on September 22, 2023, to shareholders of record at the close of business on September 7. I turn the call back to Stewart for the outlook. Stewart? Thank you, François. Although disappointed with the Q2 results, we remain bullish with what the future holds for Supremex as we methodically build the business for the long term. Our strategy is simple: leverage our capacity, know-how and cash flow in Envelope to fund the pivot into packaging. We are both product and geographically diversified, and we operate in two segments that we have positioned for sustainable success. In Envelope, we are the second-largest manufacturer in North America, yet our market share is only about 7%-8% in the U.S. market. After developing our brand in stock and bills and statement envelopes, we positioned ourselves as a leader in the vast U.S. direct mail market with the Royal Envelope acquisition. We now stand firmly in all three of the major segments in the Envelope market, offering a broader than ever product portfolio to meet market's demand. In packaging, paper-based solutions have market favor as CPG companies are increasingly turning to sustainable, eco-friendly packaging. In this segment, we are solidly rooted in the high value-added verticals of pharma, health and beauty, food, and e-commerce. We are very pleased with the integration progress of our three most recent acquisitions. The softness in Q2 was definitely not related to integration issues. With the seamless transition of Graf-Pak operations, our short-term priority is to leverage the now even greater potential from Lachine's impressive platform. As the adage goes, potential is a great thing to have, but a bad thing to keep. Be assured, we have added resources and refocused management's attention to Lachine with a mandate and a sense of urgency to quickly evaluate and execute on optimization initiatives and capture all available benefits. In parallel, our continued solid financial position, despite the soft quarter, allows us to consider further expanding our scope in packaging. Having reached an optimal size in Quebec, our eyes are set on new territories, either in Ontario or in the U.S. regions where we already have a presence, to continue and grow and benefit from natural synergies. With a current run rate of 70% and 30%, we are still aiming to achieve a 50/50 balance between Envelope and Packaging. That said, and in keeping with our conservative nature, while the acquired companies are performing well and in line with expectations in the current market conditions, in acquiring five locations in less than seven months, we bit off a substantial amount, and our first priority is to have all operations performing to our standards. In a nutshell, and I want to be clear on this point, the fundamentals of our two segments have not changed. We expect the current market reset and conditions to ebb later in the quarter. Our solid reputation and diversification should allow us to merge from this demand reset ahead of the market in general, and our strong management team will have the Lachine facility at stronger operating efficiency levels in Q3. Meanwhile, on the cost side, we have repeatedly proven that we can tightly manage our expenses. In closing, despite the results, I want to thank the entire Supremex team for providing superior service no matter what the market conditions are. Their talent and dedication will bring us success as we carry out the strategy. This concludes our prepared remarks. We'd now be pleased to answer any questions you may have. Operator? Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. Our first question is from Matthew Lee from Canaccord Genuity. Please go ahead. Hi, morning, guys. Just on the Envelope side here, it looks like volumes are down about 35% on an organic basis. Can you maybe just help us break down, you know, between the inflation impact on mailing and the impact of destocking, you know, how that kind of splits, and then how much of that you expect to unwind in Q3? Yeah, sure, Matt. Appreciate that. I think one thing with the Envelope business, we need to look at the six months. We had an incredible, you know, the year-to-date numbers. We had an incredible Q1 on the Envelope side that, that surprised a lot of people. You know, we signaled that the market had started to turn in, you know, late Q4 and, and into Q1. On that basis, I mean, we, we're ahead of the market decline. You know, I think it's really a temporary ebb. You know, the fundamentals of the market haven't changed. You know, for all of 2022 and the beginning of 2023, the Envelope market had a voracious appetite as the industry, and we just couldn't make enough envelopes. You know to our point earlier, the overstocking and, and as a result of panic buying, paper supply was tight, so people bought more to ensure they had enough, and this made supply even tighter and, you know, so on and so forth. Small businesses that buy their envelopes through printers, you know, weren't mailing more, and USPS didn't see a spike, yet demand was through the roof for the Envelope manufacturers. You know, I often say nobody cares about envelopes until they don't have any. It was the fear of not having any that really drove the market. I guess the most succinct, which is not my strong point, way of saying it is, you know, our situation on resale envelopes was exactly what happened in toilet paper in, in COVID. You know, at some point, people realized they weren't using more, and, you know, the supply was way more consistent than they thought it was gonna be. They just stopped buying until their linen closets were empty. Then they restocked stuff. That's, that's exactly what happened, and about as succinct as I can be on this destocking. Then the, you know, the interest in inflation, you know, like a lot of companies, a lot of industries, you know, we were, we were impacted by it. You know, we're susceptible to macroeconomic conditions, and while most people or the casual observer wouldn't naturally equate elasticity between envelopes and interest rates and inflation, you know, I hope I did a decent job explaining sort of the nuances of charitable giving and that, in my comments. I tried to provide some, some real-life examples, and the not-for-profit solicitation business is massive in the U.S. and really drives a lot of that, what we classify as direct mail. When they sneeze, the industry catches a cold, and, you know, they sneezed in Q1, as, you know, inflation sort of took hold and, you know, the residual effects through, through Q2. The envelopes used in not-for-profit solicitations are made on the exact same equipment that bills and statements are made on. If that market dries up, the manufacturers naturally turn their attention to other markets, and you've got more capacity chasing, you know, the same or less volume. That's kind of the, the dynamics of it. The three of them, the confluence of the three of them, and coming off a super hot 2022, it makes the comp a, a bugger, and, you know, you got the three things playing at once. If we didn't have destocking and we just had the economic conditions, nobody would have noticed. Nobody would have known. The combination of the macroeconomics, inflation and, and interest rates sort of squeezing direct mail and, and others, along with the destocking, it was just something that we couldn't overcome from a volume standpoint. Great. That's great color. Oh, yeah. Maybe when I think about Q3, you know, if I think Q1 volumes are up 3, Q2 volumes are down 20 in terms of reported, you know, is Q3 a double-digit decline, or is that gonna improve, you know, from the Q2 number? Yeah. I mean, I tried to provide a little bit of color with my comments, but the short answer is yes, and we have tangible evidence that it's improving. You know, going back to my toilet paper analogy, you know, as long as you continue to use it, eventually you'll have to start to rebuy. That's, you know, something, you know, unless something has fundamentally changed, you'll start buying at the same rate, at the same rate with the same cadence. You know, we have no evidence that the small business that buys 5,000 envelopes from their local printers have changed their mailing patterns, and as a result, the printers have to continue to buy from the resellers, and the resellers will have to start to, to buy from us. You know, we expect the resellers to start work to, to reorder as they work through their inventories. And in fact, the backlogs for stock envelopes have improved considerably. And, and anecdotally, just last night, the Senior VP responsible for envelopes at our largest U.S. customer sent an email to myself and Joe Baglione, who's the President of the Envelope Division. And the subject line simply said: Replenishment orders are coming tomorrow. You know, he knows we've been anxious, and it's really hurt us. I was with him three weeks ago and, and said: "You know, we dedicate a sizable portion of our capacity to you. You were clamoring for more all of 2022. We delivered more to you in all of 2022 and into the beginning of 2023. You want us there for you when the industry bounces back. What are we supposed to do when you, when you bought less than 50% in the first half of the year while you destocked?" You know, it was a rhetorical question because I knew he couldn't really do anything about it. Anyway, we were buoyed just last night, literally last night, replenishment stock orders are coming today or tomorrow, sorry, meaning today. On the direct mail side, you know, as I said in my comments, you know, not-for-profits and credit card solicitations, you know, they just can't stay out of the mail forever. Mail is a proven, effective m-mode to, you know, attract new customers and attract donations. It's the heartbeat of their revenue streams, and they have overheads. I mean, there is, is evidence that they're sort of awakening from a three-to-four-month slumber. You know, again, anecdotally, on the direct mail side, our largest customer went from 20 million units a month, roughly, for about three years, 20 million a month, to just over half of that in Q2. In July, we produced 27 million for them, and the mailing plan for August is 25 million. It doesn't mean we're out of it, but the signs are all there. It's positive. The market just can't stay, y ou know, market didn't drop 25%, fundamentally for overnight. As I said, it really hurts when you get destocking and the macroeconomic conditions in the same quarter. I hope that helps, but. Yeah, that's great color. All right, I'll pass the line. Thanks, Matt. The next question is from Ahmad Shaath with Beacon Securities. Please go ahead. Good morning, Stewart and team. I guess maybe switching gears on the packaging side, maybe give us a little bit of a color of how the demand environment is looking there, what can you attribute the relative weakness in the quarter? Had there not been any integration issues or challenges in Lachine? Yeah. Hi, Ahmad. I don't want to jump ahead on the question, but I do think it's important, and maybe I'm splitting hairs a little bit here. I, I would like to distinguish between integration and commissioning. They're two different things. It's Royal, Paragraph, Graf-Pak to a lesser extent. You know, they were affected by the macroeconomic conditions, but becoming part of Supremex wasn't any of the challenges that they faced. The acquisition, I mean, the synergies we pulled out of Royal in, you know, just three or four months, has been incredible. It's hard to see on the EBITDA line because of all of the other things that are, are going on, but that integration has gone fantastic. Then, you know, Paragraph, you know, we've, we've moved some orders around. We've taken advantage of more efficient equipment. You know, the people have been, have been good. You know, there's a lot that goes into buying a CAD 30 million two-facility operation, and, and that, that created some distraction for the management team on the packaging side. The integrations themselves are going well. What's bumpy has, has been way bumpier than sort of I expected, and I think that it should have been, is the, you know, just this commissioning of the new facility. You know, on the demand side, in packaging, everything I talked about on the Envelope side is virtually the same in packaging. The destocking t o a lower degree, but we do have customers that are overstocked. Either they bought too much or their sales have slowed, so they're taking it less. We do a lot of, you know, make and ship, and we have no visibility on what the customers, how their inventory is depleting, and they just replenish later, a month later, two months later, or at a lower quantity. The order intake slowed in that regard. We do a lot of vendor management for, for customers as well, and this will maybe talk about what happened in the quarter, but more importantly, what the future looks like. You know, we have forecasts. We plan around those forecasts. We get approvals to produce off of their forecasts before we go to press, and they started to cut back on the call-off quantities in Q1. We ship just in time. We know in real time what's happening and have some visibility, and we could see what was coming in some of those segments. You know, like Envelope, we're seeing the same dynamics. Customers are coming out of slumbers, they're becoming more bullish for Q3 and Q4. You know, the relationship between overstocking and in the Health and Beauty Segment, our products are purchased with, you know, our customers' products that we serve, are purchased with discretionary dollars. Our largest, well, second largest customer, I guess now, in the health and beauty side, and I think you know who it is. Our main product with them is professional hair salon products that go to professional hair salons. Now you got CAD 8 butter, and you got CAD 6 milk, and you got your mortgage rate is going up. I think people are waiting longer before they go back to the professional salon. Instead of monthly, maybe they're going every six weeks, or instead of every couple of months, they go quarterly. We're just, we're just a bit of a victim of that, and we, we didn't have enough time to sort of reconstitute, or to develop enough new business to backfill that. Those customers expect us to be there when things swing back. We didn't have enough absorption in the plant, and, you know, labor is, is another problem. Again, you know, we all know how tough labor is, and customers expect us to be able to turn on the tap when they want us to. Our shareholders expect us to be able to drive revenue, and we need labor to make those products. We get a dip in demand, and we generally bring orders forward, you know, from inventory and, and produce to inventory, but our warehouses are full. You know, we kept people employed and, and maintain productivity and, and get absorption, but our warehouses were full, and we just, we did maintenance, and we forced vacations, but there was very little relief for the P&L in the quarter. Again, we believe it's temporary, and, and we're reengaging and talking to customers, but in Q2, we just didn't have enough levers to pull to overcome destocking and sort of a general slowing economy for, you know, discretionary items. Does that help? No, that's, that's a great color, Stuart. Is it fair to say, from what I was just from your comments, looking into Q3, Q4, the second half of the year, the, the dynamic in the packaging is similar to what, what we've heard from you earlier on the, on the Envelope side, or are customers still more gun-shy in terms of orders for the second half? So our backlog in Lachine is extremely strong right now for August and into September. A month or two doesn't make a quarter or a trend. Yeah, we're seeing more activity. We know that those vendor-managed inventories, the forecasts are stronger for Q3 and Q4 than they were in Q1 and Q2. You know, the aggregate effect of that is should be helpful. You know, just triggering ahead to that, you know, looking at the inefficiencies in the, in the Lachine facility, I mean, as I said, it's not really integration, it's move-related, and it's no one thing. It's been a bit of a confluence of things. You know, it's generally the same people running the same equipment, and, you know, they'll get there. We took management, you know, to other facilities and to evaluate equipment and spread them, spread them pretty thin. It just, the combination of weak backlogs, new environment, equipment, you know, not running quite as efficiently as it, as it was. We know from experience that whether you move a, a machine halfway around the globe or you move it 6 km, it's gonna take time before it functions like it did in the previous facility, whether it's the same people running it or not, and that's exactly what we're experiencing. We sort of see every day that it's better, and we've now hired people at Paragraph that allows the sort of a local management team to spend more time in the Lachine facility and, you know, being there to help troubleshoot issues or to make decisions, or frankly, push the guys a little bit harder. I mean, it's not hard to imagine that, you know, backlogs are weak, taking a little bit longer to set up every job. It's kind of human nature, and it requires management, you know, to be Johnny on the spot and to be pushing that, and they just, they weren't there. That's very helpful, Stuart. Thanks again for the clarity. I'll jump back in the queue. Thanks, Ahmad. Once again, if you have a question, please press star, then one. This concludes the question and answer session. I'd like to turn the conference back over to Stewart Emerson for any closing remarks. Great. Thank you very much, operator, and thank you to everybody that's on the call this morning. We really appreciate your interest in Supremex. While we were disappointed with the quarter, you know, we're still very bullish on, you know, where we are, what we are, and we look forward to speaking to you at our next quarterly call. Thank you very much. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.