Thank you. [Foreign Language] Good morning, everyone and welcome to this call for Goodfood Market Corp.

to present our financial results for the first quarter of fiscal 2025 ended December 7. I'm joined on the call today by Neil, Goodfood's President and Chief Operating Officer; and Ross, Chief Financial Officer.

This morning, we announced our Q1 results. You can find our press release and presentation on our website and SEDAR+.

All figures in today's call are in Canadian dollars unless otherwise noted. Let's start with Slide 3.

I'm pleased to report that Q1 marked our eighth consecutive quarter of positive adjusted EBITDA. Adjusted EBITDA for the quarter reached $1.6 million representing a margin of 4.7% and an improvement of 110 basis points year-over-year.

This performance is a testament to our ability to consistently grow profitability even amid challenging macroeconomic conditions. Our focus on cash flow generation also continues to deliver results.

Adjusted free cash flow for the quarter stood at $1.9 million, making this the fifth quarter in the past eight, with positive cash flow. Importantly, this consistent cash flow generation has allowed us to maintain a net leverage ratio around the 2.5 turns mark.

Late this quarter, we also closed the Genuine Tea acquisition, the first step in our strategy of acquiring and growing a portfolio of next generation brands. The business continues to perform well, and this first acquisition has opened doors since, as we look to continue executing on our M&A growth strategy by developing a platform of profitable growing brands.

Lastly, a week ago, we announced our Bitcoin treasury investment strategy which aims to create shareholder value by strengthening our balance sheet, hedging against inflation, and the rise of food costs. Overall, with the strong foundation of financial discipline, innovative customer offerings and a road map for growth, we are equipped to navigate the current consumer spending challenges and continue strengthening our balance sheet.

On that note, Ross will now go over our financial performance in greater detail.

Thank you, John, and good morning everyone. Let's move to Slide 4 to discuss our net sales and active customer base.

On Slide 4, you will see that net sales for Q1 '25 were $34.7 million compared to $40.5 million in Q1 '24, reflecting a 14% decline year-over-year. The decrease is largely attributable to softer consumer spending, driving lower active customers and lower order rates during the quarter.

As such, active customers ended the quarter at 106,000 compared to the 124,000 in Q1 last year, though higher than the 101,000 active customers seen in the seasonal 14-week Q4 of fiscal '24. While customer activity was lower, our continued focus on engaging with our most loyal existing and most profitable new customers is showing signs of strength.

As the average order value of customers reached a record this quarter and was 7% higher than the same time last year. The strong average order value contributed to keeping net sales per active customers stable year-over-year, increasing by only -- increasing by $1 to $327 per active customer.

Turning to Slide 5 to review our profitability levels. We are pleased and proud of our team's continued hard work and discipline that have enabled the margins to continue increasing and brought consistency to our profitability as this is now our eighth consecutive quarter of positive adjusted EBITDA.

Gross profit for the quarter reached $13.7 million with a gross margin of 39.6%, up 20 basis points year-over-year. This reflects the continuous improvement mindset entrenched in our operations and our disciplined approach to cost management as fulfillment labor and shipping cost per order improved meaningfully compared to last year, enabling reinvestment in food costs and credits and incentives.

On the back of the solid gross margin, we continue to work to make the Goodfood machine leaner and reduce SG&A. This helped deliver adjusted EBITDA this quarter of $1.6 million, a 13% increase compared to the first quarter of last year.

Moving to Slide 6. Cash flow generation continues to be key in this early fiscal '25.

Cash flows from operations turned positive again after the seasonal Q4 and were $2.2 million this quarter. CFO was $1.6 million lower than the same period last year, that is largely explained by the timing of the end of the 14-week fourth quarter, which ended in early September and the 13-week first quarter ending in early December.

As profitability gained consistency, our CFO has continued to improve and remained stable. And with capital expenditures remaining relatively low given the good condition of our well-maintained assets, our adjusted free cash flow remained positive for the quarter.

The slight increase in CapEx this quarter was driven by mandated fire compliance work in a portion of our Montreal facility. We expect that work to be completed by the end of the second quarter or early in the third.

We will now move to Slide 7 which summarizes our key financial metrics this quarter. Eight consecutive quarters of positive adjusted EBITDA, which now stands at $9.3 million for the last 12 months, has required a strong cost discipline and culture shift from every employee on our team.

Everyone has and continues to drive efficiencies in our operations and optimization of our cost structure. Flowing from this improved profitability is also solid adjusted free cash flow, which stood at nearly $2 million for the quarter.

This cash flow provides balance sheet flexibility as evidenced by the repayment of our term loan as well as the acquisition of Genuine Tea and the recently announced Bitcoin treasury strategy. On balance, this quarter's results highlight our focus on providing more to customers with strong unit economics and building operating efficiencies to continue growing profitability.

While our active customer base has shown lower contractions, the macroeconomic environment remains challenging and organic growth elusive. However, our focus on profitability and cash flow generation has enabled us to maintain strong financial health with cash and cash equivalents of $21.3 million at the end of the quarter.

John will now provide an update on our outlook.

Thank you, Ross. Let's turn to Slide 8.

As we mentioned, 1.5 months ago during our year-end earnings call, our outlook for the year centers on delighting our customers, building on our consistent profitability and driving shareholder value creation through strategic capital allocation. Goodfood's newly created value plan continues to gain traction as it grew to 6% of all portions sold only a few weeks after launch.

In recent weeks, we expanded the recipe lineup of our value meals to offer more delicious classic recipes under $10 per serving and the high quality affordable meals are a hit with our customers. It also gives our members a great value entry point from which they can move to our higher-end recipes or purchase upsells, as evidenced by our record average order value.

On the M&A front, we announced in the late stages of the first quarter, our first acquisition, Genuine Tea. This acquisition is a critical step in our long-term strategy to grow the overall business by building a global portfolio of next generation consumer brands, allocating capital into a profitable brand with an impressive growth trajectory.

Over the past 12 months, Genuine Tea has grown its top-line at close to 30% year-over-year and January sales to-date are up close to 40%. Sarah and Dave, the Founders who continue to operate the business also demonstrated their keen focus on profitability by maintaining EBITDA margins in the mid-double digits, while achieving this growth.

During Q1, Genuine Tea celebrated two important customer wins. First, launching an assortment of tea SKUs in Longo's supermarkets in Ontario.

And second, Genuine Tea's Matcha Summer Harvest, earned the top selling spot for matcha teas on well.ca. Finally, in order to continue delivering robust growth in the foodservice segment, Genuine Tea is currently growing its sales team in Vancouver and Montreal.

Last week, we also announced a shift in our treasury strategy and have begun building a strategic Bitcoin reserve to strengthen our balance sheet and build long-term shareholder value. Beyond aligning with our long-term focus on value creation, accumulating Bitcoin protects against inflation, and rising food costs and leverages its potential as digital capital.

Economic volatility, geopolitical uncertainty and government deficits continue to erode the value of the Canadian dollar which has lost 23% of its purchasing power in the last five years and 83% over the past 50 years due to inflation. As such, Bitcoin is a better store of value given its fixed supply, while dollars are a depreciating asset and have been so for their entire history.

While the majority of our liquidity currently remains in traditional forms, we plan on using part of our excess cash flows to continue accumulating Bitcoin. In sum, as Goodfood kicks off its 11th year in business, we are excited by the future of the company.

We have now consistently demonstrated our ability to be profitable, attract and invest in next-generation businesses and build a platform that is well positioned to generate meaningful shareholder value. On that note, I will turn it over to the operator for the Q&A portion of this call.

Hi, good morning guys. My first question is on your customer count.

It's great to see that you've been able to add new customers on a sequential basis. And I'd like to see how you think about the remaining quarters this year.

Should we expect your customer count to continue to grow sequentially? Ross, you alluded to -- you made some comments that I'd like to just get a little bit more color and clarification on that.

Martin, good question. I think what we've seen in the customer count is the contractions have gone smaller.

So we're seeing more stability. I think if you think quarter-by-quarter Q2 with the holidays in the middle and ends on March break, I think we are looking at for stability.

I mean, Q3 has the possibility of showing some upside, and then Q4 usually has the seasonal patterns that we see and we saw last summer. Overall, maybe to clarify, I think we are looking for stability and -- further stability in Q2, some upside in Q3 and then Q4 similar seasonal patterns.

Okay. So is it fair to see that there is a likelihood that your customer count grows from here until fiscal year-end?

I think there is definitely some possibility that in the third quarter, it grows. I think this is active customers.

So these are customers that placed an order during the quarter. I think during the fourth quarter, people tend to travel more, spend more time outside in patios and cottages.

So I think the amount of customers placing an order usually goes down. But I think if you look at the overall average for the year, I think there is a possibility that it grows versus where it is currently.

Okay. Cool.

You -- Jonathan, you alluded to the Canadian dollar weakening. It is weakening quite rapidly.

Would you guys be able to remind us what's the portion of your cost of goods sold that you purchased in USD?

Hi, Martin, thanks for the question. I think, obviously, with the U.S.

dollars being the reserve currency around the world, everything kind of gets priced into it. So a large portion of our purchases are affected by the U.S.

dollar, whether it's cost of gas, right, the logistics that we're running across the country, the cost of raw materials going into feed for a lot of the animals and proteins that we sell and base ingredients for all the other recipes. So overall, the dollar purchases are kind of definitely sub-50%, very, very small, but the effect kind of comes across the whole business on a weekly basis.

Okay. And so then the question is, like how much of a headwind is currency in your COGS.

How are you -- I mean you seem to be able to pass it on to customers, but help me understand a little bit how you're hedging that fluctuation.

Yes, it's a good question. I think there's always a little bit of a lag and a lot of the stuff that we buy is contracted.

So we'll make sure that we are negotiating with suppliers and working with them to try to minimize any kind of short and medium-term impacts. On the other side, as you know, from following us for many years, we have the ability to kind of design menus around price inflation.

So we are planning menus anywhere from 4 weeks to 12 weeks out. Those prices of the inputs are constantly changing, which we can play with the ingredients themselves or the quantity.

So we think we can protect our gross margin pretty well over the coming quarters despite some of those headwinds. And as we look for more efficiencies, as Ross mentioned, buying great businesses like Genuine Tea and others that we have in the pipeline will also help us have some economies of scale and some of the delivery patterns, some of the fulfillment stuff that we're doing.

So we think overall the margin can maintain a lot of strength. And we also see a little bit of upside in the C&I piece as well.

Q2 is always a little bit more aggressive in terms of the start of the year and the customer acquisitions in January and February. But overall, we think where we're at in AOV and discipline on the discounting strategy will lead to margin protection, if not expansion.

Okay. And maybe just a last question around all this global trade.

Are you monitoring potential retaliation by the Canadian government to U.S. tariffs and could tariffs on U.S.

imports into Canada have an impact on your business?

Definitely monitoring it very closely. I think we saw some initial lists of the first wave of plan, the second wave of plan and third wave of plan that gave us an idea of where the tariffs on imports would come from the U.S.

I think we have some ability to go around that from products that are available from other places in the world, and we do try to stay as local as possible. I think the impact is going to be that we're not going to be the only ones doing that.

So even if we don't use goods coming from the U.S., it will still create some pricing challenges in some of our inputs even if they come from other places. So definitely something we're monitoring.

And we have some ability to diversify our sourcing to try to compensate as much as we can for that. There are going to be limits to how much we can do that given we'll likely see some price increases even on non-U.S.

goods should the tariffs go through, that's the first condition.

Yeah. Okay.

Perfect. Thank you.

That’s it from me. Good luck guys.

Thank you good morning. Wanted to start with the Bitcoin treasury strategy.

Just a clarification on that, I guess. So you're starting with $1 million in an ETF there.

Just wanted to maybe get a sense of if there's a maximum Bitcoin exposure that's been approved by the Board? Or I guess, how much above the current $1 million, you'd be comfortable putting towards that Bitcoin accumulation strategy.

Yeah, good morning. Happy to chat about that.

So we started discussing the Bitcoin strategy, I would say, about eight months ago. And some of the conversations that we were having were -- we were looking at yields on GICs coming down right, interest rates coming down on our cash.

And we started doing some work around how can we actually protect the value of our cash balance that, as we mentioned in the prepared remarks, has declined by almost a quarter in the past five years. And so as we were looking at a number of different alternatives, we started studying Bitcoin in great detail.

I’d say, about half of the Goodfood Board personally held Bitcoin already in the past and many members of our leadership team have been active in the Bitcoin ecosystem since -- going all the way back to 2015. So we've been quite familiar with the space.

And I think the -- to Martin's comments, some of the devaluation in the Canadian dollar has been caused by relative currency fluctuations, right the Canadian dollar devaluing versus the U.S. dollar, for example.

And part of the weakness in the Canadian dollar has been caused in absolute terms, right, like due to fiscal deficits, we've seen over the past 10 years, CAD1 trillion that have been printed on a base of originally CAD1.5 trillion in 2015. So the combination of the money printing and the inflation is really what we're talking about in terms of the devaluation of the Canadian dollar.

And as we see over the first few years of Bitcoin, there was an adoption from mostly individuals. Now we are seeing corporations like Goodfood adopting Bitcoin.

We're one of the first now 70 companies publicly listed around the world to be holding Bitcoin on their balance sheet. And so for us, the intent is to invest our excess cash flow into Bitcoin to create shareholder value.

And I think the simplest way for us to express our position is, we have the option to be holding Canadian dollars, which is an asset that loses value year after year versus Bitcoin, which has a fixed supply and is thereby an appreciating asset year after year, as more adoption occurs. And so our intent is going to be to the continue accumulating Bitcoin from the cash flow of our operating businesses and continue growing our Bitcoin on the balance sheet.

Okay. That's helpful.

And just maybe to close the loop on that, how does the Bitcoin strategy sort of co-exist with your acquisition strategy as well as upcoming debenture maturities? How do you think about Bitcoin in the context of those other capital allocation priorities?

Yes. So certainly, one of the key conversations that we are having at the Board level is a capital allocation discussion around how do we invest, how does the next dollar get invested at the highest use and best capital allocation.

So as we look at our options in front of us, at any given time, we could invest more within our meals business, we can invest within Genuine Tea now that's been growing at a really great clip and double-digit profitability as we talked about. We can invest in other M&A opportunities and we can invest in Bitcoin.

So I’d say, at a Board level, our conversation is really around capital allocation. And at any given moment in time based on the big conditions that exist in all of those different opportunities, that's how we're making the decision of where to invest the next dollar.

I think certainly on the Bitcoin side, what we want to make clear is we don't have any intent to sell the Bitcoin in the short-term. We are not trying to trade the Bitcoin where were they thinking about accumulation on our balance sheet, and that's the same long-term vision that we're taking with our M&A strategy as well.

We don't have any short-term intent to flip the businesses that we buy. And I think that's really attractive to the entrepreneurs that we're in discussions with to sell their businesses.

And frankly, I think the combination of fast-growing cash flow-positive acquisitions that can feed into the Bitcoin acquisition strategy, I think the combination of those two things together is something that's really interesting in terms of platform to be building.

Yes, maybe to add to that Fred. I think what's driving the strategy is really capital allocation based on return profile in the long term.

And part of that return profile is the ability of one to feed into the other. So I think we are just allocating cash flow generated existing cash to what we think will generate the most long-term shareholder value.

Okay. Very clear.

And maybe lastly, just on Genuine Tea, I know it's early and my understanding that it's fairly decentralized. But has there been any sort of early learnings that you've gotten from that acquisition that you could apply for future acquisitions?

Maybe logistically or just generally since owning that stake, is there anything that ticks out to you as being potentially helpful for future M&A activity?

Certainly. I think the -- one of the -- so it's only been about two months of ownership.

So as you mentioned, it's early days. But I think one of the really exciting pieces about the business is the omnichannel strategy that the founders have been able to implement over the past few years.

I think the strength of the brand and the ability for the brand to meet customers where they are, whether it is within cafes, hotels, grocery stores, online, there's a lot -- we're really seeing the power of that strategy. So I think our focus in terms of next-generation brands is to make sure that we're continuing to find businesses that have proven out the sustainability and the growth of their brand in multiple channels.

And as it relates to Genuine Tea, they also have a small portion of their sales, call it, about 10% of sales that are currently in the U.S. And I think that small piece of U.S.

business is something that on the one side, we're certainly concerned about the tariffs that we talked about and how that could potentially impact the U.S. sales, but on the flip side, we also see a lot of opportunity within the U.S.

market for growth of the brand and sales. And so I think that's something else that we're actively thinking about and considering in our next deals.

Thanks for joining us on this call. We look forward to speaking with you again at our next call.