Colabor Group Inc.

Claude Gariepy - President and Chief Executive Officer Jean Francois Neault - VP and Chief Financial Officer

Mark Neville - Scotiabank Derek Lessard - TD Securities Frederic Tremblay - National Bank Financial Ben Jekic - Industrial Alliance Keith Howlett - Desjardins Securities

Good morning, everyone. And welcome to Colabor Group’s 2014 fourth quarter and year end conference call.

With me is Jean Francois Neault, Vice President and Chief Financial Officer. I will first provide general comments.

Jean-Francois will then review financial results after which we will be pleased to answer your questions. [Foreign Language] Please note that our press release was issued via the Market Wire News Service earlier this morning.

It can also be found along with our financial statements and MD&A on our website and will be on SEDAR. Colabor had a good fourth quarter performance in terms of comparable sales, which rose 2.1%.

Excluding the effect of our decision to voluntarily cease the sale of tobacco products in Ontario, comparable sales increased approximately 3%. However, results were affected by factors that delayed the achievement of our profitability objectives.

In Quebec, sales in the meat, fish and seafood categories continued to post solid growth. Meanwhile, despite a good sales volume in the Eastern Quebec and Maritime division, lower margins and higher operating cost impacted profitability.

We are taking additional measures to ensure better cost control and greater efficiency. Since January, this division is now managed by Paul Webb, who has an extensive knowledge of the food distribution business and of the Colabor network.

In Ontario, the market remains very competitive which affected sales and profitability. As mentioned in previous quarters, certain contracts were lost and the year-over-year has not yet reached a full circle.

The terms of this new business and renewed agreements carry lower margins. We are continuing to revamp our sales force in Ontario.

Our objective is to improve territorial coverage particularly in street business where margins are better. It is taking more time than anticipated, but we believe it will be rewarding once the process is completed.

I’m pleased to report on two developments that will allow us to grow sales by expanding our reach and improve asset utilization. First, we won a new five year contract to supply GACEQ, a buying group representing health care establishment in Eastern Quebec.

This contract which had been with the US based company for over a decade, is expected to add annual sales of approximately $20 million. Second, in regards to the renewal of long-term agreements with affiliated distributors at the Boucherville division, we have secured approximately 80% of the business.

Moreover, we are in discussion with another distributor representing about 10% of volume and we’re confident to reach an agreement with this distributor. In fact, only one distributor representing annual sales of roughly $30 million did not renew its supply agreement as of the second quarter of 2015.

As mentioned last quarter, affiliated distributors must remain competitive in their respective markets. Therefore, these long-term renewals will have an impact on our margins as of the second half of 2015.

However, we are confident that efficiencies and savings related to our action plan will partially mitigate this factor. At this time I invite Jean Francois to review our fourth quarter results and financial position.

Thank you, Claude. Before I begin, please note that our fiscal year-end is now on the last Saturday of the year as opposed to December 31 previously.

As a result our 2014 fiscal year had four fewer days. This reduced 2014 fourth quarter sales by $15.6 million and EBITDA by about $0.5 million compared with last year.

These amounts would be part of our 2015 first quarter results. Fourth quarter consolidated sales reached $460.1 million in 2014, up 0.8% from $456.5 million a year earlier.

This increase reflects the acquisition of Alimentation Marcotte in September as well as higher sale in the meat, fish and seafood categories. These were offset by the effect related to the change in fiscal year-end and lower sales in Ontario.

Sales in the distribution segment rose 0.6% due to the Marcotte acquisition, offset by lower activity in Ontario and the change in fiscal year end. Comparable sales decreased 2.1%.

Wholesale segment revenues increased 1.1%, factoring out wholesale revenue previously done with Marcotte. Comparable sale rose 9.7%, driven by meat, price inflation and market share gains for our Decarie meat operation.

EBITDA was $10.2 million or 2.23% of sales versus $11.8 million or 2.58% of sales last year. The year-over-year decrease reflects lower margin from new contracts and higher costs related to investment made to stimulate organic sales growth in Eastern Quebec.

These were partially offset by higher wholesale meat margin and more supplier revenue. During the fourth quarter, we recorded cost not related to current operation of $4.8 million, mainly related to the write down of our investment in Colabor investments, further provision adjustment for closed facility lease as well as severance and expense related to internal restructuring.

We also recorded a $55.7 million non-cash charge for the impairment of goodwill and intangible assets, of this amount $48.5 million is related to the Summit division and reflects historical profitability erosion and the foreseeable renewal of important contracts with more competitive terms. The balance is attributable to the Boucherville division due to lower volume and the renewal of long-term agreement with more competitive rebate.

Turning over to our cash flow and financial position, Colabor generated a strong cash flow from operating activities of $9.6 million during the fourth quarter of 2014, compare with a negative cash flow of $3.8 million last year. This improvement mainly reflects better working capital management.

For the year, cash flow from operating activities was positive $32.4 million in 2014 versus a negative cash flow of $9.4 million in 2013. Although we issued $27 million in subordinated debt, $12 million to acquire Marcotte and settled $12 million of purchase price balance, our cash flow allowed us to conclude 2014 with a total debt including bank borrowing and convertible debt of $194 million relatively stable from a year ago.

Moreover, as mentioned in third quarter, we reach an agreement with the Canadian Revenue Agency that resulted in low cash outflow for Colabor. Finally, the board of directors decided not to declare a dividend.

This measure will provide Colabor with greater ability to advance in its operation and growth initiative as well as to facilitate deliberately. I turn the call back to Claude.

Thank you, Jean-Francois. By renewing nearly all long-term agreements with affiliated distributors and winning several new contracts such as GACEQ, Popeyes, Lauzon, Colabor has proven the quality of its product and service offering.

However, these agreements reflect the very competitive market conditions and will carry lower margins going forward. For this reason, we must continue to improve our efficiency and reduce operating costs especially in Eastern Quebec.

Meanwhile in Ontario, as I said earlier, benefits from repositioning our sales force will take more time than anticipated given the state of the market. At this moment we believe these factors will offset synergies and efficiency gains resulting from our action plan.

As a result Colabor’s operating profitability for 2015 is expected to remain relatively stable from 2014 levels. Since market conditions are expected to remain difficult, Colabor must be proactive on the elements it can control and to build an existing strength.

For instance, we had good success in the perishable category in 2014. In both retail and food service channels we can build on this momentum by leveraging [indiscernible] great offering in new markets.

In the meat market, Lauzon has begun a turnaround in the last periods by giving important accounts and improving its gross margin. We will continue to increase our customer base, our density in markets we currently serve either organically or by acquisitions.

Acquisitions must be accretive and highly synergistic by allowing us to leverage our existing infrastructure as well as solidifying our competitive position in entering [ph] Canada. Marcotte is a very good example of its synergistic acquisition and we’re currently merging their activities in our St-Nicolas warehouse to maximize efficiency and profitability.

After six months of operation, Marcotte is in line with sales and profits expectations. We are not happy with the 2014 results and particularly with the fourth quarter.

We have already made some decisions and are ready to go further in the next weeks to make sure that these adjustments will allow us to upset the margin pressures coming from contract renewal and deliver an improved profitability in 2015. I now open up the call for questions.

Hi, good morning. Just first - oh, my god, it’s just to be clear, you’re saying flat profits for next year, so we should be thinking approximately $30 million of EBITDA, is that what you’re trying to say?

Yes, it looks like this.

Okay. Stress on that I mean again you did touch on a bit.

I guess you previously talked about potential of $5 million of profitability improving from cost reductions, I think another $7 from driving sales growth and private label. So I mean you also said you grew your meat and fish sales, where I think it should accredited to margin and so may be can you just tell us exactly or just what’s going of the business or what those offsets are that will see EBITDA essentially for next year?

Yeah remember that when we presented our plan of action, we were talking about some money to come in, in 2015 and some money to come in, in 2016. So the total of what you just said was not all in the same year.

Right.

Okay. But what I’m saying here is that we are getting new contracts with low margin.

We are renewing existing contracts with low margins particularly the one with the affiliated distributors. And we expect that in 2015, the next one that will be renewed will also be renewed with lower margins.

So the plan of action is generating the efficiencies and we saw that in our labor force for example. We saw that in our OpEx, operating expenses, but at the end of the day, we have to do more because what we’ve seen is that the market is getting tighter and everything that is same in one end has to be invested in the other end.

So as I said, we also had some issues in the Eastern Quebec in operations and that’s the reason why we have a new manager there. So everything that I just said will happen in ’15.

But in ’16 with the efficiencies that we’re planning, it should be coming in and so we expect that even if ’15 is flat, we think that it can improve over 2015 going forward, going to ’16.

So the $12 million still sounds like a reasonable target. But again, it’s a two-year plan.

So I guess how do we think about that incrementally for 2016? I mean, is it sort of half-half and may be you see $4 or $5 million of improvement in ’16 or just any color you can give there.

You’re seeing that it’s the first time that Colabor gives a guidance for ‘15 [ph].

Right.

I don’t want to go to ’16, okay. But at least we know that the economy that we’ll generate in ’15 will compensate for the margin losses that we’ll get in ’16.

We have a plan of action that is going on and we will give you an update at each quarter, but I don’t want to go to ’16 at this moment.

Okay and I guess this is on ’15. Should we sort of think flat for both wholesale and distribution?

I’m sorry I missed your question.

Should we think sort of flat for both wholesale and distribution or is it a more significant [indiscernible] wholesale or?

It’s the general guidance, Mark.

Okay. Alright, thanks guys.

Yeah, thanks guys. May be just a follow up on Mark’s question, you just said that the action plan is generating efficiencies, but you have to do more.

Just wondering how much more room do you think you have on top of these efficiencies that you’ve already put in place?

I think that firstly we believe that the additional money that we are expecting to come in, in the business will not only come from costs. We’re seeing better sales trend as you saw in the fourth quarter and this is a [indiscernible] of this economy.

So we think that also our private label program is going exactly in line with the expectation and is planned to procure us a lot more business in 2015. So the money would come from revenues, I’m talking sales necessarily, but revenues and expenses.

So we believe that we have some room going on. We have improvements that can take place in some divisions and we are very confident that we can generate at least 2014 result, but even better going forward we’re going to see what will happen in 2015.

Okay. I’m just - I guess I’m pointing to like you guys haven’t been able to generate any - for looking at operating profit line any growth since 2009 and you’re probably hovering around two thirds below those levels, I guess.

I’m just trying to get a gauge of - or why you feel so confident that you’re going to be able to generate growth going forward?

We believe that - look at [indiscernible] that we solved in 2014. A lot of that was one time and we believe now that we can, like I said, we can stop the erosion first, that’s the first goal for 2015.

We will stop the erosion, okay. So we’re going to do everything that is needed to be done to stop the erosion and start the curve to turn around.

Okay I guess just then on –there is obviously there is two factors. The stuff that you guys can control and not control and the stuff that’s outside of your control is, I guess the competitive environment, how do you view that in your ability to stop the erosion?

I think that we are proving now by giving these new contracts that we can be competitive. On the other hand to keep this competitiveness, okay, we also need to generate efficiencies and that’s the reason why by - like I said we made some decision already during the fourth quarter that will generate some results in 2015.

And we are confident that we can seriously stop the erosion because we think that we have room to improvement particularly in the couple of divisions that I’ll not point out here publically, but we know that we have some room of improvements that can generate more money and then stabilize the EBITDA. The EBITDA percentage went down in the last year and it’s true.

But if you look also what’s going on in the food service market you would probably see that our performance has been quite in line with the industry.

Okay and I guess just one final question. I realize that the dividend policy was changed too, so that you guys declare dividends at the same time as you publish the results and I guess the investors, they appreciate stability one way or the other.

So I guess my question to you guys is how long should we expect you to be opting out from paying the dividend?

Hey, on that regard, Derek, this is Jean-Francois. So yes, you’re right.

So June 2013, June 17, we had amended our dividend policy. So it’s declared or not declared quarterly by the Board of Director and if you read the press release that decision today it’s a proactive measure to invest money to operation, highly return project and sustain growth and also to facilitate the leveraging.

So it’s the decision taken by the board practice, I’ll let you to conclude on if it’ll sustain. Again it’s a board decision as the dividend has been amended.

Okay, thanks gentlemen.

Well, thanks good morning. Just wanted to get may be an update on the renewal with Cara.

Are you in advance discussions with them or what’s the status of the negotiations there?

I think that your qualification is exact, advance negotiations and even if it’s not yet final, we’re going to see - we hope to see some conclusions in the next weeks and we are confident. The, this situation with Cara is that we’re confident to renew, but the real question is what are going to be the terms of the renewal, okay because I think that’s we’ve given Cara a superb service over the years and I think that things are going pretty good in terms of business relationship, but it isn’t finished until it’s finished.

Okay, then is it safe to say that margins on that contract would follow the same trend as recent renewals?

All the renewals with the change in the food service industry are done with more aggressive margin - I would say less margin - I don’t know what is exactly the right word, but I think that all the renewals not only Cara and Cara, it’s an industry trend at this moment and Cara is a very, very important player in the food service in Canada. So they deserve the kind of term that their size deserves.

Okay and then following the Marcotte facility closure, can you characterize your warehouse network currently in Quebec in terms of utilization and if you feel that your footprint currently is optimal and may be the same for Ontario as well in terms of distribution centers.

Yeah, it’s an opportunity because right now Quebec City and Rimouski will be at 100% of the utilization with GACEQ contract and also with the Marcotte business being merged into the Quebec City facility. So it’s an opportunity for us because of this situation to be able to get more aggressive and to get better margins because when you are at 100% of capacity, it’s time to let go some unprofitable or less profitable customers.

So this is a very good situation that it will be created later this year. In Boucherville we still have an issue to fill this DC, this DC is underutilized, under used and the opportunity there would be if an acquisition would be available, it’s still the goal of medium term to get Boucherville at a better level of utilization.

If we go to Ontario, all the DCs are quite well used except for Ottawa. Ottawa is probably under capacity at this moment, but for the rest the network is pretty much filled, particularly with the new Popeye acquisition.

So we are in a position where we think that it’s about time now to start better manage customer list and keep our more profitable customers.

Okay, and the last question from me. Just in terms of Q1 so far, have you seen any impact from the heavy snow that we got or anything on the sales trends that you can share with us if you want?

Honestly, we prefer cold to snow storms. So last year we remember that we had a lot of snow storms and partially in Ontario.

This year it’s been extremely cold, but a lot less days where the roads were blocked or closed. There is a little exception.

Even it’s been very, very cold it’s a better weather for us except in New Brunswick and Gaspésie Peninsula where they had snow every other day, but it’s small in our business. So we expect Q1 sales to be better than last year.

That’s for sure.

Okay, thank you.

Good morning. My first question is on Eastern Quebec in the Maritimes, I was under the impression that you guys had a team there last year they were starting to generate some progress and now you have been mentioning a new manager for that region.

Why are there continued difficulties cost wise in that region and how should we be thinking about progress there in 2015?

We still believe that we can get better profitability out of this division, it’s delayed. This division sells for about $300 million, but it’s sold in a very vast territory.

We always talk about Quebec City division, but we do not sell in Quebec City. Yeah, we sell in Quebec City, but we do not sell $300 million in Quebec City.

So we cover a huge territory and the main issue that we have there is transportation cost. We drive sometime 8 to 10 hours to get to the point we’re going on North Shore, we’re going in Saguenay–Lac-Saint-Jean, New Brunswick out of Rimouski.

So transportation cost is a huge issue and so we have to really be accurate on profitability of certain customers that are extremely far in the regions. And this is my point, I just made a few minutes ago that being at 100% of capacity with the Marcotte introduction, we believe that we will have an opportunity to let go some business, some unprofitable business or less profitable business and because of these that these regions are not high density in population.

We need to do more than only food service distribution. So it’s a pretty complicated operation because we do a mix of retail and food service in the same trucks.

So it’s delayed because it needs a lot of expertise and honestly we believe that the new manager coming in, he came in from a food distributor who was covering the exact same territory in the retail. He has a lot more expertise in food distribution than the precedent one.

We think that we have the right man now in place to help us in getting the potential of this because there, okay, we are dominant in sales, a dominant player, but we need to get the right profitability from this market situation. And we believe that - yes, the new team was in place last year, but the new team has one year of expertise which is not a lot in our business.

So second year is normally better plus a new leader we believe that 2015 will be the right year.

Well, now I have to ask this.

Should say we are convinced, we do not believe we are convinced that it’s going to be a better year there.

Well, I Have to ask now with the new manager, has he had a or she a good record in the previous firm and is this person now at a stage where some new ideas were forwarded or is it still an assessment phase or where is it? Where is the whole process now?

The whole process is very active. Firstly he comes in with a lot of expertise like I said not only experience in business, general business but expertise in the distribution.

He has already made many decisions and we’re seeing the low hanging fruits coming in. I think that second quarter we’re going to see it very clearly as fast as second quarter.

So Ben in order to facilitate cost reduction, we need a density and I think Marcotte brings density, GACEQ brings density of customer in the neighborhood of Quebec, so with the new manager in I think bringing cut down would be very much [indiscernible].

Yeah, this is a very good comment. Because of the territory density is very important.

Don’t forget that we are bringing in 70 million of new business into the Quebec DC. So it will consolidate the profitability of each route and also the profit and then moreover, we’re going to have the opportunity to let go some less profitable customers.

Okay and my last question is, so basically the way I understand you are - generally the competitive nature of the business and the new contracts are fueling this kind of low margin environment, which will then offset through cost cuts and new sales. Now, when they zero in on new sales, are you thinking more focus on Quebec or Ontario or fifty-fifty?

At this moment sales growth is coming more from Quebec. We hope that we can bring in more sales also in Ontario, but I would say that first quarter what we’ve seen up to now is that we are growing in Quebec and we have stopped going back in Ontario.

And is it just a question of adding bodies to Ontario or something else?

The market is different, remember that we are four major food distributors in Ontario and so getting more business is visible, but it’s longer time.

Okay, thank you.

Yes, I had a question on the inventory level. The inventory seems to have gone up quite a bit, I’m just wondering what the reason for that is?

You have also Keith, to take into account that cut addition. If you compare year-over-year and that accounts for $4 million, if you read the financial statement you’ll find that figures.

So that’s one explanation. Overall the inventory have been managed pretty good.

And so there’s also a timing issue that would be three days that we lost in the Q4 and that we gained in Q1. So at this moment if I would give you my inventory, it would be a very significant amount than what it is in this P&L statement.

So also in Ontario, we’re part of a buying group which does an annual show. This annual show this year was delayed a month, so contrary to 2014, in December we still had a lot of goods coming from this show that we had bought to get all the rebates that comes with that kind of show.

So it’s a matter of timing because inventory are really under controlled and it’s a matter - the picture was done at the wrong time, but you’re going to see in the Q1that we’ll be back at the normal level.

You can also factor inflation for our beef operation in Décarie year-over-year, so that has had an impact as well.

Then I had a question on your banking agreement, it mentions in the notes that in certain circumstances you must meet a ratio and that you did meet that ratio. Can you just speak to what the circumstances are and what the ratio is?

The ratio is in a fixed cover charge ratio, so its cash EBITDA last 12 months, less CapEx and dividend divided by cash interest and principal payment on debt. So we have to respect that on certain circumstance because as you see with the ABL, Asset-Based Lending, that’s the only one ratio and you have to respect that ratio only if you are under certain amount of excess availability.

But anyhow we supplied a ratio calculation and we complied with every period, so it’s basically a fixed cover charge ratio on your interest.

And in fact can I add something on that. We want to be very clear, we didn’t miss any bank ratio and the dividend decision is not related to any kind of request coming from the bank.

It’s a proactive decision coming from the board.

And then just on the fuel cost, are you seeing some saving that goes to you from lower diesel fuel or?

Yes, it’s part of the few good news that we have in Q1, but it took a lot of time for the diesel to follow the gas charge. The gas came down - [indiscernible] than the diesel, but at the end of the fourth quarter and moreover in the first quarter we see a real difference.

Also, I think about something, we are - in many of our contracts, we have the opportunity to have a, what we call in our term, a fuel up charge. So when the fuel goes up, okay, we do not have it at 100%, I would say that we have it at approximately 40% or 50%.

But when it goes down, we also have only 50% of the benefit because fuel up charge works in both ways. So there is a kind of a protection insurance against the extreme changes in the fuel, but we’ve seen very serious gain in the first quarter and as I said it’s tied at [ph] more mid-November.

But until mid-November, if you look at what was the diesel price, it didn’t come down as much as we experience as consumer when we go to the gas station.

And I just had a question on the, when you mentioned the Eastern Quebec region had $300 million of sales roughly, is that with the Marcotte and the new contract or is?

It’s without Marcotte, but with the new contract.

And then just when it comes to Marcotte, you mentioned that you’re sharing Trois-Rivières distribution center and maintaining sales and delivery and people in that region. What do you anticipate the annualized savings are from combining the distribution centers?

Keith, we have not publicized our synergies on that, but typically we have announced number of headcount reduction that ranges over 30 on an annualized basis. I guess this would be your best way to estimate savings there.

Yeah, plus obviously the lease for the - the fixed cost of this facility.

I was wondering that, is the lease expired or?

No, we had one year lease agreement with the vendor when we acquired Marcotte.

So it was planned, everything was planned in the acquisition. That’s the reason why we had only a one year lease.

So we’ll not have to do any kind of write-off like we’ve done in the past according to past acquisitions.

Just so I make sure, is it about 30 fulltime equivalents?

Yeah.

Thank you. And then just in terms of the Lauzon meat business, the food service side of it, is that business achieve breakeven or is it about breakeven or how is it doing?

No, in ’14 we still had the serious losses and it is one of the division on which we count for bringing in more money for ’15. And up to now after the couple of periods in 2015, it goes exactly in line with our expectations.

So we think that probably that - we could breakeven in the last part of the year being like last quarter, but we need to ramp up the sales there because we bought the facility which was really under used and at the same time then acquisition, they had lost also 15% of sales. So we started from there, but we are gaining every week new customers and it’s coming in pretty nicely.

So we believe that in ’15 it will not be a breakeven, but if you take the last months of the ’15, could be breakeven. And after that also, when we assess Lauzon division, we always also assess what it has bring to our other divisions.

For example, in Eastern Quebec, we sold many millions of Lauzon products this year, so this is also additional margins and dollars for the Quebec City division and the same in Ontario. And if you look at our financial statements, look at what is the growth in internal sales, okay and you’re going to see that it shows you how more and more the Décarie, Lauzon and Boucherville are a great tool for the distribution segment.

So look at the internal sales, you’re going to see that there is a strong growth. So this means that more and more these tools are used to help us to be very competitive and also different in the market place.

And then I was wondering if you could speak to your Norref, it was going to - now, that has the federal certification, it was going to begin to look at the Ottawa market. I was just wondering how that is going?

We got into Ottawa market this year and we just got a retail contract in the Ottawa market. So it’s coming - we started only I would say, we got the final approval federal in July or June or something like that and so since then we have acquired many new contracts.

So the Ottawa market right now is really a market that we will develop and not only will, we are right now in the market place and with this new retail contract, it’s going to provide us with more flexibility to attack the food service because we’re going to have some goods in our track. So then it’s going to be the right timing to get more food service customers out there and up to now we’re very optimistic about this Ottawa market.

And also in 2014, we have been growing a lot in Quebec and Eastern Quebec with Norref.

And in terms of the Ottawa DC, I guess Norref products don’t touch that DC, but perhaps other parts of the products?

Yeah, Lauzon products are going through the Summit DCs, but Norref being a very specialized product right now is not. It’s delivered by Norref trucks.

It doesn’t mean that it will stay like this forever, but at this moment we wanted to not miss our introduction into this important market. We believe that we build a very good business in Ottawa, I’d say [indiscernible] city.

Everything is in place for the fish consumption there. So we didn’t want to miss the introduction, but that’s one point we’re going to look for the better efficiencies.

For the meat it’s different, it’s easier to do and it’s going through the broad line distribution. So in Quebec City for example, it goes to Quebec City and in Ontario it goes through Summit DCs.

And just in terms of value added products for distribution, are you able - if I recall the Summit has a kitchen and people try to design new products, do you see much room there to begin to add more value added in terms of custom products or new products or servicing advice to customers?

I would say that the last thing you said is the right one. We don’t see really developing products, but better advices and particularly in the health care, okay.

We need to be getting better at developing all kind of nutritional software’s and so this is an opportunity for us to improve because it’s important for health care. It’s also important in the - for example, if you go to a kind of a school and things and cafeterias that are serving schools and - education and health I should say.

But at the end of the day when you go for the commercial business, it is pretty much a price business. You need to be very competitive in pricing, you need to be extremely good at logistics and this is the key to get these contracts.

Yeah, Lauzon and Norref would have a greater ability to come with value added products and Lauzon are looking at ways to differentiate, instead of competing on price on regular SKU as well as Norref, they look at packaging and stuff like that.

Yeah, these two facilities, Norref and Lauzon is a point of differentiation for us and its good businesses and its growing and this is where we can differentiate our offering.

And just in terms of benchmarking, I know the industry is mostly private, but are you able in any way to sort of benchmark your cost per case or your efficiency versus the other players in the industry?

Yes, but we benchmark against the US figures. We don’t have Canadian figures to be benchmarked against, but we get a lot of figures coming from distribution associations in the - out of the border and this is what we use when we want to assess our progression.

And I can tell you something that in Ontario, we are very, very competitive in terms of logistics. When we compare our numbers with any distributors in North America, we are perfectly competitive and it’s also based on the fact that we are expert in servicing the chains.

This is what we need to build at the other end of our network and that’s the reason why we need to be better at logistic in Eastern Quebec. But we compare ourselves on a regular basis against these US food distributors.

Okay, thanks very much.

Thank you, operator; and ladies and gentlemen, thank you for participating. I want to invite you to our annual meeting of shareholders to be held on April 29th at our head office in Boucherville.

We hope to see you there and have a good day.