Operator: Good morning, ladies and gentlemen. And welcome to the Roger Sugar First Quarter 2024 Results Conference Call. After the presentation, we will conduct question-and-answer session, which will be open only to financial analyst only. Instructions will be given at that time. Please note that this call is being recorded today, February 8, 2024 at 8 AM Eastern Time.

Please be reminded that today's call may include forward-looking statements regarding future operations and expectations. Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. Please also note that there may be references to some non-GAAP measures during the call. Please refer to the forward-looking disclaimers and non-GAAP measures definitions included in the public filings with the Securities Commission for more information on these items. A replay of this call will be available later today.

The replay numbers and passcodes have been provided in the press release and an archived recording of this call will also be available on the Rogers Sugar website. I would now like to turn the meeting over to Mike Walton, President and CEO. Please go ahead, Mr. Walton.

Mike Walton: Thank you, operator, and good morning, everyone.

Thank you all for joining us today. I'll start today by discussing our solid results for the first quarter of fiscal 2024, as well as sharing more detail on our strong growth outlook for 2024, now the labor situation in Vancouver has settled. These results as well as our positive outlook demonstrate once again that the underlying sugar market dynamics and long-term demand trends continue to be very supportive for our business and that our initiatives to drive performance improvements in our Maple business continue to bear fruit. As I did last quarter, I'll discuss briefly what we are doing to position the business for long-term success by ensuring we have the right infrastructure and right model for running our plants so that we can harness those supportive market dynamics to produce consistent profitable growth over the long-term. I'll update you on our project to expand capacity in Eastern Canada and I'll discuss the labor agreement we've reached in Vancouver that enables us to get that site back to full production and in a position to meet rising future demand.

After that, I'll turn the call over to JS, our VP Finance and CFO for a deeper dive into the financials. Let's begin with our results and 2024 outlook. As always, our aim is to deliver consistent, profitable growth by concentrating our efforts on supplying the domestic market. This market has very strong fundamentals that support long-term demand for our sugar. Once again, we saw those fundamentals on display in Q1 and we expect those same positive bigger-picture trends to drive strong results throughout fiscal 2024.

We expect to build on our record performance in 2023 and deliver another year of higher consolidated revenue and adjusted EBITDA in fiscal 2024. At a high level, we generated an increase in first quarter revenue of approximately 10% year-over-year, as well as growth in gross margin and adjusted gross margin. Adjusted EBITDA declined by $2.8 million to $30.7 million due to a $3 million impact from our labor disruption at our Vancouver plant. Absent that one-time effect, we would have seen higher year-over-year adjusted EBITDA. Nonetheless, it was still one of our best quarters for adjusted EBITDA on record.

In sugar, with Vancouver operating at a reduced capacity, we saw a reduction of volume of approximately 10,000 tonnes and a lower adjusted EBITDA. Even so, we delivered significant growth in revenue and higher adjusted gross margin per ton as we benefited from stronger demand due to the underlying health of the sugar market. In Maple, we generated higher revenue driven by higher prices. Our recent investments in automation and business process improvements also continue to pay off and lower production costs that drive better gross margin. Our Maple order book remains strong and our overall execution against our strategy continues to show improved performance.

The Maple business remains a competitive space for all participants. I'll now turn to an update on what we're doing to prepare the company for a more sustainable and successful future by optimizing the business to capture the upside from those encouraging demand trends that we see in sugar. Our Eastern Canada expansion project is progressing as planned. Major equipment has been ordered. The site work is well underway in Montreal and we will soon begin in Toronto.

If you drive by our site in Montreal, you will see the construction trailer village that has been established. After many months of planning, it is great to see the site work taking place. Recall that we announced the expansion in response to our assessment that we would need a substantial increase in production capacity to meet the growth and demand for our products from food manufacturers in the years to come. We have seen our view validated as other producers have followed our lead with their own announcements of capacity increases. As a reminder, our expansion project will increase our refining capacity by approximately 20% in Eastern Canada.

We expect the new capacity will begin to come on stream in the first half of fiscal 2026, and we anticipate no issues in finding a home for the sugar we produce. The market is hungry for these products. By expanding refining and logistics capacity close to our customer base in Eastern Canada and the U.S., we will reduce our reliance on transporting sugar from our Vancouver plant. This will reduce freight costs and improve margins. It will also leave our Western capacity available to support our growth opportunities in local domestic and export markets.

That's a good segue into the big news, which is that we've reached an agreement with the public and private workers of Canada Local 8 in Vancouver. That agreement was ratified last week. As we said throughout, we wanted a deal that worked for both the company and for employees and allowed us to serve customer needs and meet growing customer demand. We were also committed to finding a deal that provided fair wages, benefits and working conditions. We believe we've done that.

You'll recall that our objective was to be able to run Vancouver in a manner that better enables us to meet the long-term volume needs of the market. This five year agreement puts us in a better position to accomplish that. We have reached an agreement that gives us multiple levers to pull to raise production. While we have not moved to fully continuous operation, this is a meaningful step in that direction enables us to better support rising demand. We anticipate we'll be ramping up production over the next few days and we back to full production late next week, which is excellent news for our customers.

We are mindful that the strike was difficult for some of our customers. We acknowledge that and we apologize for that. On behalf of the entire organization, I want to thank each and every one of our team members across Canada, who came through for our customers during the disruption and I'd like to recognize the effort of management team members, who put in time and effort to get the sugar out the door when it was needed. Just as importantly, we look forward to welcoming our hourly employees in Vancouver back to the site as we ramp up operations as quickly and safely as possible. Looking ahead, as I said, we anticipate another year of growth.

Following a strong performance in 2023, including our highest sugar volume, consolidated revenue and adjusted EBITDA results to date, we expect this positive trend to continue. We anticipate delivering higher consolidated revenue and adjusted EBITDA in 2024. We expect the continued strength and demand for sugar to support organic growth for our Sugar business segment throughout 2024. We'll have Vancouver back online and Montreal and Taber are running well. Considering the recently ended labor strike in Vancouver and its impact on the volume delivered to customers, we expect our initial outlook to decrease by 10,000 metric tonnes to 790,000 metric tonnes for the year.

In terms of Taber, we are further along in the processing of sugar beets than when we last spoke. We anticipate the crop will deliver a volume of beet sugar commensurate with our expectations. In Maple, we continue to expect improved results in 2024, thanks to stronger pricing and cost reductions flowing from the automation and business processes we've introduced. But we need a good maple crop to replenish the industry stockpiles that have been drawn down. We'll know more in April about how this year's maple crop looks, once we see what mother nature has in store for us this spring.

So I have more to say about that on our Q2 call. The takeaway is that the outlook for our business in the near-term and the long-term is strong. We continue to benefit from the favorable market conditions that drove us to record adjusted EBITDA in each of the last two years. Our focus on harnessing those market conditions, making improvements to our business and supporting our customers is delivering the consistent profitable growth that we strive for. And with that, I'll turn it over to JS.

Jean-

Sébastien Couillard: Thank you, Mike, and good morning, everyone. Consolidated revenues for the first quarter were $289 million, a 10% increase from the same period last year. Revenues in sugar were up 12% despite lower volume caused from the labor disruption in Vancouver. The favorable variance was due to the increase in Raw number 11 sugar commodity price and higher contribution from sugar refining activities from recently negotiated agreements. Revenues in Maple were up 5% mainly from higher pricing, reflecting the recently negotiated price increases associated with the inflationary pressures we have seen over the last few quarters.

Consolidated adjusted EBITDA for the first quarter was $30.7 million, down $2.8 million or 8% from the prior year quarter. The Sugar segment adjusted EBITDA was $4.7 million lower than prior year and reflects the unfavorable impact of the Vancouver labor disruption estimated at $3 million for the quarter. The Maple segment adjusted EBITDA was higher than last year by $1.9 million, reflecting the improved contribution margin from higher pricing and continuous improvement initiatives. Consolidated adjusted net earnings were $12.6 million or $0.12 per share, as compared to $15.4 million or $0.15 per share in the first quarter of last year. Free cash flow for the trailing 12-months was $44.3 million lower than the same period last year, as we saw the effect of higher borrowing costs and higher plant related capital expenditure.

Our liquidity and cash generation continue to support our dividend distribution policy aimed at providing a stable return to our shareholders. In connection with the solid results of the first quarter, the Board of Directors approved a payment of a dividend of $0.09 per share representing a payout ratio of payment of a dividend of $0.09 per share, representing a payout ratio of 75%. This is consistent with the level of quarterly dividends paid for the last several years. Let's now review the financial highlights of the Sugar segment. Sales volume was down by approximately 5% in the quarter mainly due to the disruption in Vancouver.

The reduction in volume produced out of our Vancouver facility was partially offset by the support of our Taber and Montreal facility. Overall, the volume reduction related to the labor disruption was estimated at 10,000 metric tonnes. Adjusted gross margin decreased by $1.4 million in the quarter, mainly from the lower volume sold. However, on a per unit basis, adjusted gross margin increased by approximately $4 per metric tonne to a $199 per metric tonne, as a result of higher margin on recently negotiated agreements. This reflects the strong market dynamics of the Sugar segment.

Distribution costs increased by $1 million from the prior year period, as we move more sugar between facilities to support customers across Canada. Administration and selling expenses were up by $2.7 million compared to the same period last year. This is mainly due to the fact that in the first quarter of 2023, we saw a non-recurring and non-cash reduction and share-based compensation expense related to the price of performance share units for senior management. Adjusted EBITDA in the Sugar segment was $26 million, down by $4.7 million from the same quarter last year. The unfavorable variance was mainly due to lower adjusted gross margin, higher administration and selling expenses and higher distribution costs.

As we mentioned earlier, our first quarter results include the net impact of the strike estimated at $3 million. These results also reflect the increase of $2.7 million in administrative costs from the non-recurring and non-cash of the PSUs accrual variation. If we normalize for those two items, our financial results for the Sugar segment compare favorably to last year. We believe our strong first quarter financial results are a good reflection of the positive outlook we have for the Sugar segment for the remainder of 2024. Now, let's turn our attention to the financial results of the Maple segment.

Building on a strong 2023 finish, the first quarter provided for improved adjusted EBITDA as compared to same period last year for Maple. Adjusted EBITDA at $4.7 million was higher by $1.9 million. The incremental profitability of the Maple segment was directly related to recent actions taken to improve the gross margin as sales remain stable at around 12 million pounds for the quarter. The positive pricing trend continued in the first quarter as overall pricing improved by 5%, reflecting the recent inflationary pressures seen on the market. Operating costs have decreased from recently intimated automation and continuous improvement initiatives.

For the first quarter, the adjusted gross margin was 10.7% compared to 7.7% from the same quarter last year. We believe this level of gross margin is sustainable for the rest of 2024 and should support the recovery of our Maple business segment going forward. That being said, we remain cautious as the global Maple sector remains volatile and subject to external challenges such as inflationary pressures impacting purchasing habits from customers and availability of supply. The PPAQ reserve is at its lowest level in many years and the maple syrup production of the upcoming crop will likely play a key role in the overall performance of the maple market. Before I conclude, I would like to make a few comments on the financing of our expansion project in Eastern Canada and our available liquidity.

As mentioned previously, the construction of our project has begun, and is moving forward as planned. Our financing plan still includes a combination of debt and equity or equity life instruments including the support of $65 million in loans from the Quebec government. In November, we also increased the availability amount under our revolving credit facility by $75 million to $340 million building more flexibility to accommodate increases in working capital and for the Eastern Canada expansion project. At the end of the first quarter, the amount outstanding under our credit facility was $165 million aligned with the balance outstanding at the same period last year. The revolving credit facility has been used to finance the early stage of the expansion project.

Thus far approximately $20 million has been spent in connection with the project. As the project advances, we will continue to evaluate our financing options and assess the opportune time to access the capital market and complete our financing plan. What's important is that we are in no rush and that we are well-positioned to access the market at the opportune time. We will provide updates as things evolve. In conclusion, I want to emphasis that we are very satisfied with our first quarter financial results and are confident in the ability of our business to continue to show consistent profitable growth.

Our Sugar segment performed well despite a strike in Vancouver and we believe with the labor disruption now behind us, we will be able to fully benefit from the strength of the Canadian sugar market going forward. Our Maple segment financial results have improved significantly over the last two quarters, showing that Maple is on a positive path. Overall, we anticipate delivering higher revenues and higher adjusted EBITDA for both of our business segments in 2024 as compared to 2023, supporting our business strategy to serve our customers and create value for our shareholders. With that, I would like to turn the call back over to the operator for questions.

Operator: [Operator Instructions] Your first question comes from George Doumet with Scotiabank.

George Doumet: For the impact of the strike in Q2, should we expect same level just adjusting for the number of days? And can you maybe reconcile your comments just on the higher EBITDA for sugar for this year versus the lower kind of tonnage sugar, how we expect that to play out?
Jean-

Sébastien Couillard: Absolutely, George. I'll start with the strike. $3 million I think roughly about $1 million a month is what the going rate meters, a couple of things especially as we readjust our purchase of raw sugars. But I think it will be a fair assumption to use in the second quarter an extra month probably of strike in the modeling going forward for adjusted EBITDA. And second part of your question on the sugar, the optimism that we're showing in sugar, it's mainly based on the market right now.

We are seeing continued strength in the market and some of the recent agreements that we have signed with customers are providing for improved margins. And so in the first quarter, we were about $4 per metric tonne better than last year. I think, when we look at this, we will be probably above that for the rest of the year.

George Doumet: Just shifting over the Maple segment, also some optimism there. Is it fair to assume that you will expect kind of gross margins to add kind of march up to 12% range, similar to what we had in Q4, kind of as the year goes by? Is that a fair assumption as well?
Jean-

Sébastien Couillard: I think -- it's two quarters in a row of strong results for Maple.

I think Q4 had a couple of year-end adjustments that pushed us a little bit around to 12%. We are at 10.3% in the first quarter. I think I said 10.7% in the script, but it was actually 10.3%, so I'm correcting that. All that being said, I think we are in double-digits margin and we haven't been there in a few quarters. So we're happy.

I think we're taking it as it comes in Maple. The crop is going to actually play a significant impact. I think as you might have seen in some of the newspapers across Canada that the level of reserve of maple syrup is quite low right now and that will determine a little bit on the -- that will have an impact on pricing going forward and availability of supply. To summarize, I think we're quite happy with the 10.3% margin in the first quarter. We think this will continue.

Maple is on the right path, but we remain cautious.

George Doumet: And just one last one for me, it looks like you guys guided for $7 million for the Montreal expansion budget to be deployed this year. I'm just curious what's the biggest constraint to deploying maybe a quicker amount of CapEx this year than the $70 million with -- what's kind of holding it back there?
Jean-

Sébastien Couillard: If you look at the project, it's aligned with what, I mean, initially, I think we had thought it would probably be around 95% I think that was the first guidance we gave. It's mainly about the timing where some of those equipment will arrive. And so it hasn't changed the schedule of the project, which we believe will come in line around half of 2026-- first half of 2026.

But some of those big piece of equipment that have been ordered, they might arrive a bit later, not later to be installed, but when you take possession and then the amount of deposit you put on those piece of equipment that's what has actually moved the cash flow. But it hasn't really impact the timing of the in service days for the project.

Operator: Your next question comes from Michael Van Aelst with TD. Michael

Van Aelst: Just to finish up on George's question there. You have allocated or secured $75 million more for the expansion from your line of credit -- credit facility.

Have you made any progress in determining where the rest of the funding is going to come from?
Jean-

Sébastien Couillard: It's a good question, Michael. We've been -- when we announced the project, we were targeting a 50/50 equity instrument versus debt. We are still align with this expectation. Line of credit, a lot of it is a bit of on timing. We were going to increase line of credit to concerning strike we were holding obviously on going to market to make sure we had a resolution out of our Vancouver labor disruption.

So we wanted to create a bit more flexibility, and there's also some timing on when we're going to draw on the IQ Loans and albeit this loan is secured. For us, we wanted just to build potential cushion if for some reason we needed to wait a little bit going into the – specially going into the equity market. But overall, we're still looking at around a 50/50 split between the debt instrument and equity or equity like instrument for the project. Michael

Van Aelst: And then good to see that the Vancouver strike has been resolved. But you have made some comments on increasing production out of Vancouver, but how do you do that? What gives you the ability to do that, given that you didn't get that continuous production option?

Mike Walton: Michael, it's Mike.

I'll take that question and good morning. What's really critical after a long protracted negotiation, we went into this trying to increase capacity other than Vancouver site to support the growth in the market that was objective. How we got there was starting position was continuous shifts. But what's really important in the end, the parties work together on solutions to enhance production and the new agreement provides mechanisms to that effect including the possibility to go to a 24x7 operation. It’s -- we achieved our objectives, just done in a different way.

Michael

Van Aelst: What percentage increase can you get out of Vancouver? And where would that volume end up? Would that stay domestic and should be shipped east or would that go to west for exports?
Jean-

Sébastien Couillard: It's a good question. I think depending on the levers and also it's going to be related to the opportunities on the sales out west. We think we can get probably somewhere between 10% and 20% incremental capacity out of Vancouver facility going forward.

Mike Walton: Michael, we're going to continue on with part of this agreement as we're going to do some investments in the plant to help debottleneck certain areas because simply turning it on and asking to do 50% more isn't an instant on. With this new agreement, it will allow us to make those kinds of decisions and investments.

So over time, some of it shorter than longer, we'll see that new capacity ramp up. Michael

Van Aelst: On the Maple side, you talked about the low, I guess, reserves in Quebec. What do we look for in the harvest or what do we look for in the weather to see if there's going to be a good harvest because like right now we're having a pretty warm winter other than a few weeks in Quebec?

Mike Walton: Yes, Michael. I wish I had the answer to that question and if you talk to every producer that's producing sap, they'll all give you a different outcome. And so, we're mindful of that.

We'll have to see. We can't predict. We'll see what mother nature does. You have to remember that in the last few years, PPAQ has expanded the number of tops in production. And so we've got more tops pulling more sap now.

And so the industry has broadened. And PPAQ also put price increases into the producers in the last two years. So pricing is there for the producers and I think that will incent the work to be done to get the sap that the market should need. Mother nature will decide in the end how much that is, but we remain optimistic as the best we can right now, but planning out various scenarios to deal with the market. Michael

Van Aelst: I think in your outlook statement, one, you said you expect higher revenues and EBITDA in Maple, but you also commented about some pressures to start the year, is that reflected in Q1 or is that going to be do we expect more pressures in Q2 before some of these price increases kick in?
Jean-

Sébastien Couillard: I think it's reflected in Q1, Mike.

What we've seen on pricing, we have about a 5% pricing increase in the first quarter and I think this will continue. We've had those there might be a little bit more room there as well you and going forward, however, I think the limitation on Maple is on volume right now. We are still expecting around between 43 million and 45 million pounds, which is aligned with last year where we did about I think 43.2 million or something like that. And so, if there is for some reason there was a bigger crop and there was more syrup available there might be some business opportunities. I think the market is still fairly volatile and linked to inflation and so that's why we're being a little bit careful, but from a pricing standpoint, a lot the price increase has gone through.

But as contracts are being renewed, we obviously pricing those at market. There could still be a little bit of upside there for the rest of the year.

Mike Walton: And Michael, if I can add to that as we've said many times before. Maple syrup is a luxury product and we're sitting in a high inflationary market for food. And so we saw consumption globally across the entire industry dropped for the last 20 months, just starting to see a bit of a recovery and now we have another round of price increases coming through.

It'll continue I believe the dampen overall consumer demand that's why we're going to keep our numbers in the same room as we had last year and be cautiously optimistic that the pricing from the producers will hold. Michael

Van Aelst: Final question. You talked about your interest rates and your energy costs, the inflation in those areas being mitigated by hedging this year. I am wondering how far out that hedging goes and do we expect to see a meaningful increase in some of these costs as they roll off?
Jean-

Sébastien Couillard: It's a very good question. If we look at our financial, we have some hedgings that are going up to June 2025 on most of the outstanding portion of our revolving credit facility.

We are starting to monitor how we're going to put probably more hedging/risk management strategy in place going forward and especially in light of the need for Leap and some of the potential money-funding activities that we're going to do. I think, we're all looking at where interest rates are going to go. I think if you'd asked me that question couple of quarters ago, I'll a little bit nervous and probably look at the longer-term of the curve. It seems to start to coming down nicely so I think we will be starting to be more proactive and looking and establishing hedges to mitigate those potential costs in the future for interest rate. For natural gas, we're monitoring natural gas, we go up to approximately 2029 in some of our hedging strategies, and we have hedges in place that are fairly predictable and will keep our cost to a level that for us is acceptable and shouldn't have a material impact on our financial going forward.

Operator: Your next question comes from Zachary Evershed with National Bank Financial.

Zachary Evershed: Congrats on the quarter. With the major equipment ordered and site work started in Montreal, how much risk do you see of the budget still going over as costs escalate? What are the major milestones remaining?

Mike Walton: That's a very good question. I think the key here in this project and I think this is how we approach it. We had spent a huge amount of time at the beginning establishing looking at detail engineering with our business partners in there.

And so there are risk and especially we're beginning the demolition part and it is an old building. There is no hiding behind that. However, I think we believe we've done huge amount of work in designing and making sure that we will stay within the envelope that we're providing, which is around $200 million for the capacity increase. I think -- but we also have to remember is that, this envelope also includes the logistic plan for Toronto and a lot of logistic even in Montreal, where we're increasing the capacity especially for rail loading in Montreal. A lot of people are looking at our, well, this seems expensive for the capacity putting there, but there's a huge amount of logistics associated with this project that is going into our Toronto distribution center, but also within the Montreal plant that will also benefit the current business that we have the current production we have.

Zachary Evershed: That's good color. Thank you. You mentioned that there were conflicting opinions among growers for the impact of a warm winter on Maple production. Is there historical context around that it could go either way?

Mike Walton: No, not really. You talk to farmers in any agriculture crop anywhere in the country, they all have different opinions and that's just standard way it goes.

We look at five year average on top production and we estimate what the five year average is and we benchmark our production based on that and then see how the crop goes. Some regions will be different than others depending on how the weather performs and we'll watch and wait and see.

Operator: Your next question comes from Frederic Tremblay with Desjardins.

Frederic Tremblay: Just trying to think maybe beyond the current reserve situation and inflation in Maple. I was curious to get your views on, what type of volume growth in Maple industry and maybe your Maple business could achieve under, let's say, a normal market condition if such a thing exists.

Do you have any views on sort of a more normalized environment, what growth there could look like?

Mike Walton: In our business, we have coming out of COVID when we had the two back-to-back year spikes in global demand, we've produced as much as 51 million pounds in our existing platform. We've got lots of room for growth and still not running all sites at 24x7. And as also we've reported previously, we've spent some money in automation and business process improvements that are making our plants more efficient and more productive. We have lots of room for growth and as the market expands and consumption continues to grow, then we'll be there to feed that.

Frederic Tremblay: Yes, it's actually a good segue into my next question.

I was actually curious as to what your production capacity would be now in terms of Maple following your recent automation investments. From your answer, I gather you don't see a need for significant CapEx investments like we're seeing in sugar for your Maple business in the coming years?

Mike Walton: That's correct. Fred, as I said, we hit 51 and we weren't even touching into what we had for fully installed capacity. We've got lots of room within existing assets.

Operator: [Operator Instructions] Your next question comes from Nevan Yochim with BMO Capital Markets.

Nevan Yochim: I was hoping you could go back to Vancouver. Just wondering, if this new collective agreement and then potentially the higher production would change your expectations for importing refined white for the rest of the year?

Mike Walton: Yes. That is ultimately the objective is to get to -- as I've said in previous calls, our preference is to source all the sugar we need for the market from our existing facilities produced by our own employees and we'll be working hard to get towards that. As Vancouver ramps up and the Taber crop finishes then we'll reassess as we do every quarter of what our needs are for imports. Our objective is to supply the customers and the growing demand in Canada and if imports are required, we'll do that until we get all the production we need from our plants.

Nevan Yochim: Okay, understood. And then are you able to quantify, what you guys would be importing today? And then what would be baked into your guidance in terms of refined white for the rest of the year?
Jean-

Sébastien Couillard: I think in the past we've said between 10,000 and 20,000 is what we've been building on an annual basis. I think looking at the impact of the strike, it will still take a few weeks to ramp up and go back to capacity. We still have that. However, I think, with the guidance we have there and the result of the first quarter, which I think I mentioned earlier was $4 per metric tonne better.

Obviously, as we are moving away from importing refined sugar, this contribution is better. Even transporting sugar from Vancouver to the East is still a better solution for us than importing and better for two reasons. Obviously, they're financially better, but also we have a -- what I would say, a greater control on production, SKUs, quality and so on. It requires less effort, not less effort, but it's quite different type of effort from our side to make sure that we deliver the same quality of sugar to our customers.

Mike Walton: If I can add to that, one thing we've seen firsthand and we put boots on the ground in the countries at origin where we're importing sugar from.

It's not an easy gig with global supply chain logistics being as challenging and unreliable as they are on container freight. And so fortunately, we're able to store and use the product that we're importing within our plant system, but it's not optimal. It comes with its challenges.

Nevan Yochim: That's helpful. And then, just back to sugar, I think you touched on it briefly, but benchmark prices have been quite volatile recently.

Just hoping you can talk about whether this has had any impact on your negotiation with customers? And then, any commentary you can provide around expectations for pricing for the remainder of the year.

Mike Walton: Yes. We can continue to compete in the Canadian market and support our customers in their growth and obviously with the amount of sugar production -- sugar food production that's demand sugar that has been growing in Canada for a number of years. We're still in the right zone to support that growth and continued increases in production and plant capacity from our customers in Canada. The U.S.

market and European markets are very high priced sugar markets, especially in the last few years and we don't see that going away. Increases in food manufacturing in Canada taking advantages of the Canadian market both from sugar point of view and a business point of view, I think will continue to happen.

Operator: There are no further questions at this time. Please proceed. A -

Mike Walton: Thank you, everybody.

We'll speak to you next quarter.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.