Good afternoon, ladies and gentlemen. Welcome to DAVIDsTEA's First Quarter 2021 Earnings webcast. Today's webcast is being recorded and is in listen-only mode. Before we get started, I would like to remind you of the company's safe harbor language. This presentation includes forward-looking statements about our expectations for the performance of our business in the coming quarter and year. Each forward-looking statement contained in this presentation is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading risk factors in our Form 10-K for our fiscal year ended January 30th, 2021, filed both with the United States Securities and Exchange Commission and with the Autorité des marchés financiers, and in our quarterly report on Form 10-Q, filed today with both the United States Securities and Exchange Commission and with the Autorité des marchés financiers, and on DAVIDsTEA's website. The forward-looking statements in this discussion speak only as of today's date, and we undertake no obligation to update or revise any of these statements. If any non-IFRS measure is used on this call, a reconciliation to the most directly comparable IFRS financial measure will be detailed in our Form 10-Q. As a reminder, all dollar amounts referred to are in Canadian dollars unless otherwise indicated. I would like to turn the call over to Sarah Segal, Chief Executive Officer and Chief Brand Officer of DAVIDsTEA. Thank you, operator. Good afternoon, everyone, and thank you all for joining us. Also joining me is Frank Zitella, DAVIDsTEA's President, Chief Operating and Financial Officer. I am pleased by our results for the first quarter with another fourth consecutive quarter of positive adjusted EBITDA. Our sustained results are a clear validation of our digital-first strategy and demonstrates what has been accomplished in a very short period of time. Less than a year ago, and after a careful review of available options, the company's management and Board of Directors determined that a formal restructuring plan under the CCAA was the best option in the context of an increasingly challenging retail environment, further exacerbated by the COVID-19 pandemic. From a business perspective, the choice was clear as it provided an opportunity to overcome the challenges we faced and ensure the long-term viability of DAVIDsTEA. Unfortunately, the decision to significantly reduce our retail footprint and the subsequent restructuring of our business negatively impacted a large number of our exceptional and passionate employees. As we look back, we know that we took the right and the only decision possible that enabled a fresh start for DAVIDsTEA. Last Friday, creditor approval of our plan of arrangement marked an important milestone in this process. On behalf of management and the board, I want to thank our employees, landlords, and other creditors for their support. In the past year, we underwent a transformation that required changes to how we connect with our customers. We found new ways to engage with tea lovers and to replicate our in-store tea discovery experience across multiple digital platforms. While our operational efficiency and platforms have evolved, our vision is the same. We remain committed to being the best tea company in the world. Today, DAVIDsTEA is also a more agile organization that can rapidly align its business strategies with evolving consumer preferences. As a leading tea merchant with a strong brand, we seek to share our passion and love for tea and our unique and innovative blends with existing and new audiences. As interest and knowledge of tea grows in North America, we are excited by the significant prospects to grow our presence as we use our scale, reach, and experience to connect with a wide range of tea consumers who are attracted by the desire to make the discovery of tea fun, easy, and approachable. Our tea ranges from single-origin garden-to-cup straight Camellia sinensis loose leaf to crafted herbal signature blends. Our wellness blends of specialized in sleep and cold relief continue to innovate in this space. We also have the largest and growing selection of organic loose leaf teas in North America. Our matcha line continues to grow with many innovative flavors. Our strong brand positioning, our focus on variety, creativity, and quality, as well as the use of functional wellness ingredients, allows us to meet and exceed the needs of tea consumers and will help bolster our position in the growing tea market and in the growing health and wellness space. We plan to complete our transition to a global tea company by leveraging the strengths of our brand and reinventing the experience within and beyond our stores. Our digital-first strategy is complemented by a select number of our own flagship stores and the availability of products through other retailers, including select products available in store-in-store retail models. We continue to grow our wholesale business, expanding our presence in other retail banners in Canada. We will also continue to engage with consumers through various in-person experiential learnings, tastings, pop-up events, and social media activations, among other initiatives to complement our digital strategy. In closing, we have now laid the foundation to scale and expand our business in a borderless environment, both in North America and around the world, and we are excited about the future. Our vision is to be recognized as the most innovative tea company in the world, inspiring greater wellness and sustainability. This calls for us to have the best blends and sustainable sourcing leadership, and the most effective and creative ways of making loose leaf tea fun and accessible to all. This approach involves conversations with our community, education, ingredients research, and in-house designed accessories. We want to create a future where consumers appreciate and enjoy the health and wellness benefits of tea, a beverage which may be 5,000 years old, but it's more relevant than ever as consumers increasingly seek out healthy plant-based products from brands they can trust. At DAVIDsTEA, we want to be the welcoming place for anyone on their tea journey. I will now turn the call over to Frank to discuss the status of our CCAA proceedings and latest quarterly results in more detail. Thanks, Sarah, and good afternoon, everyone. As we move to put the CCAA process behind us, we look forward to fully dedicating our time and effort toward unleashing the full value and potential of the DAVIDsTEA brand. Last Friday, we reached a significant milestone in the CCAA process and in the company's transformational journey towards a digital-first organization. We are grateful that creditors accepted management's plan of arrangement. The next step, we expect that the plan will be approved by the courts in both Canada and the U.S. within the week. As required by the plan of arrangement, and as one of the final steps in the process, we expect to provide PwC, our court-appointed monitor, with approximately CAD 18 million for distribution to creditors of DAVIDsTEA in full and final settlement of the CAD 98.4 million pre-filing creditor claims affected by the plan of arrangement. This critical step, which is expected to occur later this week, will complete the company's legal obligations under the plan of arrangement. Thereafter, we expect to have sufficient liquidity to fund our working capital requirements and to continue investing in our business. Looking ahead, a satisfying and frictionless customer experience is a key differentiator that we expect will be enhanced by investments we're making in both technology and distribution capabilities. Creating a more meaningful and personal connection with consumers and improving the speed of purchase fulfillment, we expect will continue delighting both our existing and new customers. Financially, we're pleased with the trend in our earnings, which reflect our digital transformation. We posted another quarter of positive adjusted EBITDA with continued sales momentum in e-commerce and wholesale channels. The transformational efforts to date have been driven by a very engaged management team and a supportive board, working together to share our passion and knowledge of tea with those wanting to explore the taste, health, and lifestyle elements of tea. We thank everyone for their commitment to DAVIDsTEA's transformation. Now, looking at our Q1 results. Sales decreased almost 28% from the prior year quarter to CAD 23.2 million. As you will recall, it is in this quarter last year, about halfway through, and to be exact, on March 17th, 2020, that we closed all of our 224 stores in North America in response to the COVID-19 pandemic, and only subsequently reopened 18 stores in Canada in August of 2020, subsequent to the filing for CCAA. We are comparing the performance of 18 stores in Q1 2021 with the performance of 224 stores, but for half a quarter. Sales from e-commerce and wholesale channels posted solid results. They increased by CAD 2.9 million or 17.2% to CAD 19.9 million, and represented approximately 86% of sales in Q1 compared to 53% a year ago. For the quarter, gross profit was CAD 10.8 million, down 27% from the prior year period due primarily to lower sales. As a percentage of sales, gross profit increased slightly to 46.3% for the quarter from 45.5% last year. For the quarter, SG&A decreased by CAD 12.4 million or 57.5% to CAD 9.2 million while adjusted SG&A declined by CAD 10.5 million. The decrease is explained by the closure of all stores except for 18 Canadian locations contributing to a corresponding CAD 5.1 million reduction in wages, salaries, and employee benefits. Other store-related expenses, which decreased by CAD 1.4 million, as well as a CAD 2.9 million reduction in amortization expense due to a lower right of use asset value. As a percentage of sales, adjusted SG&A decreased to 40.4% from 61.8%. The solid momentum in our e-commerce and wholesale channels, combined with the benefits of our restructuring process, generated positive adjusted EBITDA in the last four consecutive quarters. In Q1, adjusted EBITDA, which excludes the impact of stock-based compensation expense, impairment of property and equipment and right of use assets, restructuring plan activities, the wage subsidy received from the Canadian government, and costs related to the implementation and configuration of software solutions, reached CAD 2.5 million. Year-over-year, adjusted EBITDA increased by CAD 3.4 million due to the restructuring efforts resulting in the realignment of our business model, but primarily in e-commerce and wholesale distribution. As of May 1st, 2021, we had cash of CAD 31.3 million. After providing PwC with the CAD 18 million to distribute to pre-filing creditors, we expect to have sufficient liquidity to support continued innovation, meet our working capital needs, and to make the right strategic investments to grow our business as we drive toward sustained profitable growth. As we emerge from CCAA and continue to focus on growing our business in a borderless environment, leveraging both in-person and virtual experiences, our vision is to become the world's most innovative tea company, inspiring greater wellness and sustainability. We couldn't be more thrilled about that and the future for DAVIDsTEA. This concludes our remarks. Thank you for joining us today. Have a great day.
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