Lassonde Industries Inc. ($LASA)

Shareholders, employees and partners of -- ladies and gentlemen. Good evening, good afternoon. My name is Latalie Lassonde, and I'm the Executive Chair of the Board, and welcome to our Annual General Meeting of Shareholders This year, once again, we are holding a virtual meeting with simultaneous interpretation into French and English. With me today, I have Ms. Caroline Lemoine, Chief Legal Officer and Corporate Secretary; Mr. Vince Timpano, Chief Executive Officer; Mr. Eric Gem, Chief Financial Officer; and Mr. Francis Trudeau, who will become Chief Financial Officer as of May 19. Thank you for being here with us today, and thank you for your interest in our company. To present the items regarding the proceedings of our meeting, I will now turn the floor over to Ms. Caroline Lamuan, who will cover the 2 items on our agenda, which will be subject to a vote. Thank you. In accordance with the company's bylaws, Ms. Lassonde will serve as Chair of the meeting, and I will act as Secretary. Mr. Bertrand Gilli and Mr. Jenny Conclam from TSX Trust Company are serving as scrutineers and will report on the number of shareholders attending the meeting as well as the number of votes cast. As described in our management proxy circular, -- if you are a registered shareholder or a proxy holder, you may vote or ask questions during the meeting. To do so, you must have registered as such on the electronic platform using the control number included in the meeting's materials. In accordance with the company's bylaws, voting on all resolutions will take place via the Lumi virtual platform. Voting will be open for all resolutions simultaneously at the same time on the left side of your screen. Shareholders who have already sent their proxy to TSX, a Trust Company need not take any action unless they wish to change their vote. Shareholders may choose to vote on each resolution immediately or wait until the discussion at the end of the resolution is complete before voting. The scrutineers will collect the votes of shareholders or proxies once voting on the final resolution of the agenda is complete. For the question-and-answer period at the end of the meeting, shareholders and proxies registered as such may participate via the messaging feature on the electronic platform. We encourage you to submit your questions as quickly as possible before the question-and-answer period scheduled at the end of the meeting so that they can be taken on in a timely manner. Your questions and comments will be relayed to the Chair of the meeting, who will appropriately respond. We also have asked a shareholder to move and second the resolutions that will be moved and seconded during the meeting to be able to ensure the smooth conduct of the meeting. The company has used the notice and access procedure to make meeting documents available and sent a notice containing all relevant information in this regard to all shareholders during the month of April 2026. The proxy statement, notice of meeting, consolidated financial statements and auditor's report are available to shareholders on the website and are also available on the company's profile on SEDAR+. I have received the scrutineers' report on the shareholders represented at the meeting. Since the required quorum has been met, the meeting is duly constituted. I will include the comment and the contents in the meeting minutes. We will now proceed with the election of directors. I would like to ask Mr. Anthony Prud, a shareholder of the company, to make a motion regarding the election of the 9 candidates described in the management proxy circular. Thank you, Ms. Lemon. I move that Guy Belanger, Paul Baier, Luc Doyon, Nathalie Ger, Gwen C, Nathalie Lasse, Pierre-Paul Lassonde, Pierre Lessard and Guillou be elected as directors of the corporation for the coming year and until their successors are appointed or elected. Thank you, Mr. P. I hereby declare the nominations for the election of directors closed. I now invite shareholders to vote for each proposed director via electronic voting in the section on the left of your screen. The next topic on our agenda is the nomination of auditors. I would now once again like to ask Mr. Proud to make a motion on this matter. Thank you. I move that Deloitte be appointed as the company's external auditor until the next Annual General Meeting of Shareholders and that its compensation be determined by the directors. Shareholders are invited to vote via the electronic voting in the section on the left of your screen. If this has not yet been done, please complete your votes. The voting period is now closed. Based on the proxies filed and the votes tallied, I hereby declare the directors proposed at this meeting duly elected and Deloitte duly appointed as the company's auditor. A report detailing the voting results will be filed on SEDAR+ following this meeting. In addition, we will report on the election of each director in a press release. I would now like to turn the floor over to Ms. Nathalie Lassonde so that she can share her remarks and her comments regarding the company's affairs. Thank you, Caroline. In a few moments, my colleagues will review the key operational and financial highlights of the financial year 2025 and the first quarter of 2026 as well as our outlook. Before that, I would like to say a few words. Lassonde Industries posted excellent operating results in 2025. On the one hand, we achieved record sales of EUR 2.9 billion, but more importantly, our profitability increased significantly compared to the previous year. I would like to take this opportunity to warmly thank all of our employees who contributed to these excellent results. We are very lucky to have such a talented and dedicated team driven every day by the desire to offer products of exceptional quality. In light of our results, it is clear that the company is establishing itself as a key leader in key markets on both sides of the border. With more than 3,500 products available in nearly 200 formats under its own brand and under certain private label brands, Lassonde Industries has a vast and diversified portfolio, enabling it to adapt to evolving consumer demands. Thus, in 2025, the company capitalized on strong local consumer enthusiasm for purchasing Canadian products. This momentum supported by various advertising campaigns highlighting our local roots resulted in market share gains in Canada. Before concluding, I'd just like to acknowledge the contribution of 2 directors who did not stand for reelection here today. First of all, Mr. Denis Buda, who served on the Board for the 25 past years and whose commitment has left the lasting mark on the company. His recognized expertise in corporate governance, legal affairs and public policy has been a major asset to the Board, and we will miss him greatly. We also have Ms. Nathalie Pilon, a Director since 2023 and a member of the Human Resources and Compensation Committee. She did not seek right reelection. Her solid advice, particularly on strategic matters has contributed greatly to the execution of our plan in recent years. Denis and Nathalie, thank you so much for your contributions. We wish you all the best in your future endeavors. To replace them, we are pleased to welcome Nathalie Ger, Gwen Klees and Guy Hulot, 3 seasoned and accomplished leaders. Ms. Gu has held senior management positions in human resources within large corporations for the past 13 years. She is currently Vice President of Human Resources at Atkins Realis, -- we are convinced that her recognized expertise in this field will be a valuable asset to our Board. Ms. Klees was until very recently, Senior Vice President, Business Support and ESG at Ovivo. -- a lawyer by training. She has extensive experience in mergers and acquisitions, corporate social responsibility and several other aspects of corporate law. Also, a lawyer, Mr. Huo spent the first 20 years of his career at the law firm, BCF before becoming a partner of Fasken Martina Jumula in 2021. He enjoys a solid reputation and extensive expertise in mergers and acquisitions, commercial agreements and corporate law. We extend a warm welcome to them. The Board of Directors of the company is -- now consists of 9 directors, 7 of whom are independent. In conclusion, I'm very pleased with the results achieved in the last fiscal year. O am confident that we'll be able to maintain this momentum to further expand our presence in the North American agro food industry and ensure sustainability value and sustainable value creation for our shareholders. Ladies and gentlemen, thank you for your attention. I now turn the floor over to Vince Timpano for a review of our operations. Vince?

Thank you, Natalie. Hello, ladies and gentlemen. I am pleased to be with you here today. The year 2025 marks so much more than just a successful fiscal year. It is part of a strategic direction that Lassonde has been pursuing for several years. Thanks to the evolution of our portfolio, our business model and our capacities, we have become a North American player that is stronger, more diversified and a leader in the food and beverage industry. Bassond ended 2025 with solid financial results despite a challenging and constantly evolving macroeconomic environment. We recorded record sales of $2.9 billion, up nearly 13% from the previous year. And we recorded strong earnings growth, a direct result of our team's discipline and consistent execution of the that has guided our actions since its launch, anchored in 3 core pillars. First is building a growth-oriented portfolio. Our results and market share gains reflect our resilience and our commitment to maintaining a strong diversified portfolio. Over the past few years, we broadened our footprint in the Specialty Foods segment with the acquisition of Summer Garden, expanded our reach in foodservice channels and continue to earn the trust of customers and consumers coast-to-coast with Oasis and SunRpe repeatedly recognized as Canada's most trusted brands in their categories. In the U.S., we regained lost distribution with key customers, gained new ones and expanded through new platforms and private label, while Apple&ve remains in the top 5 growing brands in measured channels. Secondly, driving sustainable performance. We back this strategy with action, committing over $400 million to strengthen our network and systems from Rougemont to North Carolina to New Jersey, where we are building a state-of-the-art facility. These investments are about making Lassonde more efficient, more competitive and better positioned for the future. And third is improving our capacity to act. We refined our business model, and we strengthened leadership and sharpened commercial execution to navigate a challenging demand environment. Together, our 3-pillar strategy has helped us grow sales by almost $800 million, triple our net profit and improve shareholder value while positioning Lassonde better for the long term.

I am very proud of our employees' passion and dedication, and I would like to sincerely thank them for their exceptional contribution. Lassonde is the Canadian leader in food-based beverages and a well-established player in the United States. Backed by a diversified portfolio of national, regional and private brands, which ensure critical mass and great flexibility, we make innovation a central driver of our growth. Our multiyear innovation pipeline supports the development of new recipes, new formats and new products to meet consumers' needs at every moment of the day. Our goal is simple: to drive growth in high demand segments, such as our Oasis Post Sante and Oasis Smoothies lines while reducing our reliance on raw materials and improving our margins. In Canada, thanks to our strong competitive position, we gained market share in 2025. These gains are attributable to improved distribution, targeted marketing initiatives, the by Canadian momentum mentioned by Natalie and our ability to innovate. As for our U.S. beverage activities, we had a year marked by progress in both our private label and branded activities. Early in the year, we gained momentum in our private label business, driven by new customer wins and expanded distribution with existing customers as part of our volume build back plan. With our ability to bring more volume to market, we have the potential to capitalize on private label momentum, offering expanded value and more choices for consumers. Over the course of the year, our U.S. branded business also gathered momentum through a sharper focus on higher velocity SKUs, enabled by strategic investments in single-serve and juice box platforms at our North Carolina facility, resulting in market share growth for our Appleenat brand. Regarding our new facility in New Jersey, construction is advancing according to plan. The project continues to stay within budget and on schedule. The building has been enclosed in recent weeks, and most equipment has already been delivered to the site. We plan to begin the gradual transfer of existing production activities from the current facility in late 2026 with this phase completed in early 2027. Turning to our beverage foodservice channel. I am pleased to report a strong year with double-digit sales growth. This performance was driven by volume gains with U.S. broadline distributors and continued progress in expanding national account penetration in Canada. Regarding the deployment of our new bag-in-a-box aseptic packaging line, we are actively pursuing opportunities to broaden market adoption of this format. We have won new customers and continue to engage in negotiations and competitive bidding with large national customers and regional players across North America. We see additional growth opportunities in foodservice, which represents a significant share of consumption occasions, but accounted for only 12% of our sales in 2025. Next, let me turn to our snack business. We are proud of our position as a leading branded fruit snacks player in Canada with a portfolio of 100% fruit strips, bars and bites under our Fruit to Go and Fruit Source brands. Our growth is fueled by a combination of strong core product performance and the successful launch of new products aligned with evolving consumer trends. This supported a solid performance in 2025 and reinforced our continued relevance with consumers. Specialty Food delivered a solid year, resulting in solid sales and profit growth in our Retor business, fueled by the continued momentum of our premium glass jar pasta sauces and soups. In 2025, we completed our first full year with Summer Garden. This strategic acquisition increased our production capabilities and enhanced our portfolio in premium categories, notably by gaining access to a leading brand in the Zero Sugar segment. These assets also bolstered our long-term competitive position by supporting our strategy to produce closer to our customers. Over the course of the year, we made meaningful progress integrating our North American operations, bringing teams together, aligning processes and laying the groundwork to unlock operational efficiencies and long-term synergies. At the same time, we invested in building our brand marketing capabilities, reinforced by the appointment of Jamie Bradford as our new Chief Marketing Officer. Since her appointment, Jamie and her team have focused on sharpening the position of our brands, starting with G Hughes and develop plans to strengthen consumer awareness and support our goal in expanding distribution. To further support our ambitions, we also created a new North American Specialty Food division and appointed Jean-Philippe LeBlanc as Division President. Throughout his career in the food and beverage industry, Jean-Philippe has distinguished himself through a deep commercial expertise and operational understanding of complex business environments. He brings a proven track record of leading sizable branded private label and third-party brand portfolios and of developing high-performance teams. With these appointments, the structure of our Specialty Food division now aligns with that of our Beverage division and positions us well to capture attractive growth in this priority segment for LaSonde. We also made 2 additional key nominations to our corporate executive team. First, we welcome Min Kwanam as Chief Information Officer. With over 20 years of experience in technology strategy, digital transformation and enterprise modernization for prominent Canadian and international organizations. Min brings substantial expertise to LaSonde. In this new role, he will set the strategic direction for our systems, infrastructure, data and AI initiatives, ensure strong cybersecurity and help our teams adopt new technologies more effectively to simplify operations, improve efficiency and support sustainable growth. Beyond strategy and systems, Min's mandate is also about execution, helping our teams in value-creating ways to make Lassonde simpler, more efficient and more agile every day. Finally, Francis Trudeau joined us in March as Executive Vice President, Finance. Francis has over 25 years of experience in corporate finance, primarily within dynamic growth-oriented companies. We are confident that his leadership qualities and extensive experience in strategic planning in corporate development and in operations will enable Lon to maintain profitable growth and achieve its long-term objectives. Francis' arrival is part of a long planned transition that will culminate in his appointment as Chief Financial Officer in a few days, on May 19. Eric and Francis will continue to work together to ensure full continuity at all levels. Before turning the floor over, I would like to express my sincere gratitude to Eric. His leadership and commitment have significantly strengthened the company's financial capacity. He has been a valuable partner to me and to the entire management team in implementing our strategy, closing a key acquisition and strengthening our relationships with our partners. On behalf of the entire Lazone team, thank you very much, Eric, and we wish you all the best in the future. Ladies and gentlemen, I now turn the floor over to Eric and Francis for the presentation of our financial results. I will be back in a few minutes to discuss our outlook.

Thank you, Vince, and good day. Francis will give you a highlight of the first quarter 2026 as released last week. Please take note that most amounts have been rounded to simplify the presentation. We will also mention financial measures or ratios that are not in compliance with IFRS standards, primarily to facilitate comparability between periods. Reconciliations to IFRS measures are provided in the appendix to the presentation. As Vince mentioned, fiscal year 2025 was marked by a solid financial performance, both in terms of sales and profitabilities. Sales totaled $2.9 billion, up 12.8% from the previous year. Excluding favorable currency fluctuations and the full year contribution of Summer Garden compared to approximately 5 months in 2024, sales increased by 7.2%. This increase reflects the contribution combined of the favorable impact of selling price adjustments and growth in sales volumes and national brands, 2 factors primarily concentrated in Canada. To a lesser extent, we also benefited from a more favorable mix of Canadian private label sales and an increase in U.S. private label sales volumes. Gross margins totaled $802 million or 27.3% of sales compared to $698 million or 26.8% of sales as a year earlier. In addition to the contribution of Summer Garden, the main factors driving the increase in gross margin in monetary terms were the favorable effects of sales price adjustments, higher sales volumes and a change in the sales mix. These factors were partially offset by higher costs for certain inputs, notably orange juice as well as orange apple and pineapple concentrates, higher manufacturing costs in the U.S. and expenses related to business optimization, including accelerated depreciation of the New Jersey plant. Finally, it should be noted that fiscal 2024 was marked by start-up costs related to growth and optimization projects as well as expenses relating from a production shutdown at our North Carolina plant following a hurricane. Selling and administrative expenses rose from EUR 523 million in 2024 to EUR 575 million in 2025. Excluding Summer Garden expenses, the increase was only EUR 11 million and primarily reflects an increase in certain administrative expenses, an increase in finished goods storage costs and an unfavorable foreign exchange effect on the conversion of U.S. entities selling and administrative expenses into Canada and Canadian dollars. These increases were offset by a decrease in expenses related to the strategy of an implementation of a new system and the reduction in transportation costs for products shipped to customers. In addition, the company incurred costs in 2024 related to the acquisition of Summer Garden. Consequently, operating income for 2025 amounted to $226 million compared to $175 million in 2024, reflecting the aforementioned factors. Adjusted EBITDA increased by 25% to $344 million or 11.7% of sales compared to $276 million in 2024 or 10.6% of sales. Net income attributable to the company's shareholders reached a $150 million or $21.94 per share in 2025 compared to $114 million or $16.73 per share in the prior year. Adjusted net income per share was $22.82 in 2025, up 20% from 2024. Now let's look at our cash flows and financial position. Cash flows from operating activities reached $176 million in 2025 compared to $234 million in 2024. This change primarily reflects working capital requirements of $71 million in 2025 compared to a cash inflow of $14 million in 2024 as well as higher tax and interest payments. These factors were partially offset by higher EBITDA. At the end of 2025, our operating working capital stood at 43 days, which remained within historical range. The increase from 38 followed an exceptionally low year. We had net increases of $241 million in revolving operating credit facilities in 2024, primarily to finance the acquisition of Summer Garden. Investing activities required $207 million in 2025 compared to $441 million last year, which included $225 million in the acquisition of Summer Garden. The main cash outflows in 2025 related to acquisitions, intangible and intangible assets, which totaled $187 million compared to $116 million in 2024. For 2026, we anticipate that these acquisitions could reach up to 7% of our sales, including approximately $96 million related to American U.S. related to the construction of the plant in New Jersey. This project will enable us to optimize our production costs in the strategic market in the Northeastern United States. Over and above this investment, we expect that sustainability investments, including nominal growth components should stabilize at approximately 2% and 3% of sales. All additional and significant growth projects will be disclosed as they are approved by the Board of Directors in accordance with the company's standard disclosure practices. Net debt stood at $489 million at the end of 2025 compared to $449 million a year earlier. However, driven by strong growth in our profitability, the net debt to adjusted EBITDA ratio was 1.4x at the end of 2025 compared to 1.6x at the end of 2024. Despite completing an acquisition in 2024 and implementing major capital projects, our balance sheet, therefore, remains strong, allowing us both to maintain significant financial resilience and to continue investing with discipline in strategic initiatives that hold promise for the future. Before concluding, I'd like to take a moment to express my sincere gratitude. After 12 years at Lasson, including 5 as Chief Financial Officer, I would like to thank the Lasson family, our shareholders, the Board of Directors and my colleagues for the trust that they have placed in me by entrusting me with the financial management of the organization. I'd also like to say a few words about my successor, Francis, who will take on my role in a few days. I've had the opportunity to work with him over the past few months very closely, and the transition is going very smoothly. Francis is a competent leader with excellent judgment and a strong track record in financial analysis. And I'm convinced that he will be able to continue prudent financial management in the best interest of shareholders and in line with principles and values that have been guiding the organization for so many years. It's been a privilege to serve the company in this role and to contribute to its long-term success. I remain fully confident that Lassonde strategy, leadership and future is good in his hands. I will turn the floor over to Francis for the first quarter 2026 results. Thank you, Eric, and good afternoon, ladies and gentlemen. I'm thrilled to be here this afternoon and to join such a leading Quebec company. Thank you to the Lassonde family, Vince and Eric for their trust in me. I'm also very grateful, Eric, for the rigorous transition process that has allowed me to appreciate what tremendous work has been accomplished over the past few years. So thank you for that. Let's now turn over to the results for the first quarter 2026. Sales reached $664 million, down from $700 million in the first quarter of 2025. Excluding the adverse impact of exchange rates, sales decreased by 2.5% -- this decline was driven by a drop in sales volumes of private label products, offset by the positive impact of the selling price adjustments and a more favorable mix of Canadian sales. Beyond these factors, let us recall that in early 2025, the launch of the -- by Canadian movement had resulted in strong demand for our products, while in the United States, we had experienced a sharp increase linked to our volume recovery program. Now regarding gross margin, we recorded an increase of $5 million, bringing it to $188 million compared to $183 million in the first quarter of 2025 despite the decline in sales explained earlier. Excluding the adverse currency effect, the increase was $13 million and is attributable to the impact of our selling price adjustment strategies, a favorable sales mix and lower costs for orange concentrate. It must be noted that these factors were offset by higher costs for apple and pineapple concentrates as well as certain processing costs. When it comes to adjusted EBITDA, it reached $80 million, up 12% from the prior year. Expressed as a percentage of sales, it stood at 12%, which is an increase of 180 basis points compared to the prior year. Net income attributable to shareholders amounted to $37 million or $5.38 per share compared to $25 million or $3.60 per share in the prior year. Finally, adjusted net income per share was $5.36 compared to $4 last year. Regarding our financial position, an increase in cash flows from operating activities led to a reduction in our debt. Consequently, the net debt to adjusted EBITDA ratio improved slightly to hit 1.35 at the end of the quarter. That is much under our maximum threshold of 3.25x, which we have set as an internal target. That's the end of my section. Thank you very much for your attention. I will now turn the floor back over to Vince for our outlook. Thank you, Francis. 2025.

We entered 2026 from a position of strength. We remain focused on executing our strategy and driving profitable, sustainable growth while staying mindful of a challenging macroeconomic environment and its potential impact on supply dynamics and consumer spending. In this context, we will continue to leverage our portfolio, innovate and actively balance pricing and promotions to drive volume. Excluding foreign exchange impacts and barring any significant external disruption, we expect to reach our goal of $3 billion in sales by 2026, while staying focused on profitability and cash generation. For U.S. Beverages, our priorities will be on leveraging capacity ramp-ups for our single-serve and juice box lines, maintaining pricing discipline while being responsive to shifts in consumer behavior and completing our new facility to improve efficiency. As for our Canadian beverage business, our priority remains fortifying our leadership through innovation-led growth initiatives, continuing our focus on effective revenue management strategies, which includes targeted promotion spending while simultaneously investing in brand-building activities and strengthening our execution in core channels. Our North American foodservice team will continue its expansion push in this key market, including through our bag-in-a-box initiative. In Specialty Food, our priorities are to achieve profitable growth by optimizing the integration of our North American network and accelerating brand development and growth, notably through a strategic relaunch of our GiHu's brand in the zero sugar category. In the current environment, several key cost factors will require ongoing monitoring, particularly commodities, transportation and packaging inputs. On commodities, conditions are improving versus last year, but we remain cautious and disciplined in our approach. While the commodity environment is showing signs of improvement, vigilant monitoring of evolving consumer habits and demand elasticity across categories remains essential. To mitigate these effects, we will continue to bring innovation to market, underscoring the pivotal role of our new marketing leadership in our beverage and Specialty Food divisions. The current situation in the Middle East also raised our focus on carefully managing transportation, PET resin cost and potential rippling effect throughout the supply chain. Geopolitics and trade remain sources of uncertainty. We are planning for continued volatility and running scenarios and building mitigation plans across sourcing, pricing and cross-border flows. In this dynamic environment, Lassonde will remain, as always, agile and responsive. Before concluding, I'd like to take a moment to reflect on what we've accomplished in recent years. We strengthened our portfolio, rolled out a new operating model, invested in our production network and core systems and added key leaders to our organization. These collective efforts led to sustained sales and profit growth, something we can all be proud of. With this said, while we remain focused on executing our current plan, we are also turning our eye to a new phase, one that will be focused on positioning Lassonde for its next growth stage.

Building on our past successes, this plan will enable us to refine our ambitions, clarify our portfolio priorities and strengthen the discipline of our capital allocation. These elements will have a single objective to ensure long-term value creation for our shareholders. I will keep you informed of the implementation and progress of this new plan. In closing, we expect to deliver another strong performance in 2026. thanks to the strength of our product portfolio, Lassonde is well positioned to create sustainable long-term value. On behalf of the entire management team, thank you to our employees, our partners, our Board of Directors and above all, to you, our shareholders, for your continued trust. This concludes our presentation. We are now ready to answer your questions. I would now like to answer questions, but there doesn't seem to be questions. So I thank you. I am told that we have no questions. So because the question period has ended, I declare this meeting adjourned. I invite Anthony , a shareholder, to move a motion to adjourn the meeting. Thank you, Vad. I propose to adjourn the meeting. Thank you, Mr. P. I hereby adjourn the meeting. Thank you for joining us today.