Good morning, ladies and gentlemen. I'm here with Francis Trudeau, our Chief Financial Officer.

We appreciate your time today as we review our results for the second quarter ended June 27, 2026. Please turn to slide four.

Lassonde delivered strong gross profit growth of 16% in the second quarter, driven by effective revenue management, improved product mix, moderating input cost, and solid execution of our business strategy. Despite pressure on industry volumes, as macroeconomic uncertainty affected consumer demand, and despite cycling a strong prior-year comparison, our diversified portfolio performed well, underscoring its strength and resilience.

Now let's turn to slide five for a closer look at our operations, beginning with beverage activities. In the US, we delivered a solid performance, growing volumes and gaining share despite category volume declines across measured channels.

Despite continued softness in private label market demand, our business outperformed the category as we began regaining some of the distribution that had been temporarily affected by earlier supply constraints. We also maintained a disciplined approach to revenue management, carefully balancing input cost-related pricing actions with targeted promotional activity while remaining mindful of consumer price elasticity.

You may recall that in early 2025, our volume build-back plan delivered meaningful gains with new and existing customers. I'm pleased to report that we have since expanded volumes with several of these customers while maintaining our contractual commitments with most others.

Meanwhile, our US branded business had a solid quarter, driven by distribution gains for Apple & Eve with national retailers in the US Midwest and West. Leveraging Apple & Eve's strong reputation, we are methodically expanding the brand's reach across the United States in single-serve and juice box formats, supported by targeted investments in these platforms at our North Carolina facility.

These efforts are driving market share gains across both package formats, reinforcing Apple & Eve's strong momentum and growth potential, while aligning with consumer trends favoring convenient, on-the-go options. As for our new facility in New Jersey, the pace of construction continues to progress on schedule, with equipment installation now underway.

We remain on track to gradually begin transferring existing production activities from the current facility by late 2026 and complete this phase in the first half of 2027. Turning to slide six for Canadian beverage activities, despite cycling an exceptionally strong prior-year period that benefited from buy-Canadian sentiment, and despite mid-single-digit category volume declines, we maintained our category leadership, once again underscoring the strength of our Canadian beverage portfolio.

Our national brands continue to outpace the category, driven by solid gains in shelf-stable products and sustained momentum in single-serve formats, while chilled performance was affected by a strong prior-year comparison. Meanwhile, private label volumes were softer, primarily reflecting changes in a major customer's go-to-market strategy, as well as our targeted portfolio optimization actions, including the discontinuation of selected product lines.

Against this backdrop, and as with US activities, we remained focused, ensuring discipline in managing revenues through price and promotion practices that preserve market competitiveness while remaining responsive to shifts in consumer behavior. Finally, innovation remains an important lever for improving our product mix in both established and emerging beverage segments.

New formulations across our Del Monte and Oasis Health Break portfolios, along with new single-serve formats designed to meet consumer needs throughout the day, are improving our product mix, expanding our presence in attractive growth segments, reducing commodity exposure, and enhancing profitability. Moving on to food service on slide seven, while North American volume growth remained constrained by macroeconomic conditions affecting consumers' away-from-home dining habits, we continued to build meaningful traction with broadline distributors in the United States, primarily by expanding private label beverage offerings in different pack formats.

During the quarter, we began supplying tailored beverages to a prominent Canadian-based QSR chain, using our bag-in-a-box aseptic packaging platform. Initial results have exceeded early expectations, and we expect volumes to continue ramping up in the second half of the year.

At the same time, we remain actively engaged in negotiations and competitive bidding processes with national and regional partners across North America, and we expect to acquire several additional customers, albeit smaller in scale, over the balance of the year. Now let's turn to specialty food on slide eight.

While industry volumes were softer across most of our key product categories, with modest increases in select areas, both our Canadian and US operations delivered solid gains, led primarily by our core premium and super-premium pasta sauce category. In the US, Summer Garden increased volumes for third-party pasta sauce brands, further demonstrating its execution capabilities, while in the barbecue sauce category, G Hughes maintained its position as the number one better-for-you brand.

During the quarter, we completed the G Hughes brand refresh internally and transitioned all packaging at the manufacturing level. While some legacy packaging remains on shelf as inventory moves through the retail network, we expect the refreshed positioning to increasingly support brand momentum in the second half of the year.

You may recall that on our previous call, we announced distribution gains for G Hughes with a mass merchant in Canada. I am pleased to report that this agreement has since been expanded, and that we have also secured distribution with a national food retailer, an important step that further broadens the brand's reach and supports our growth ambitions in Canada.

Finally, our Canadian operations delivered a solid performance, growing third-party brand volume mainly through distribution gains for pasta sauces, and to a lesser extent, share gains in the ready-to-serve soup category. I now turn the call over to Francis for a review of Q2 results.

Francis.

Thank you, Vince. Good morning, everyone.

Let's turn to slide nine. Second quarter sales totaled $738 million versus $742 million last year.

Excluding an unfavorable foreign exchange effect, sales decreased by 0.5%. This variation reflects lower sales volume, primarily within private label categories in Canada.

The decrease also results from intentional portfolio management decisions, including the discontinuation of lower margins or non-strategic product lines within our Canadian beverage business unit. These decisions accounted for approximately $8 million in sales during the quarter.

Recall that last year's second quarter was exceptionally strong due to substantial volume growth from the buy-Canadian sentiment and, to a lesser extent, the US build-back plan. On the other end, we benefited from higher US private label sales volume, the favorable impact of overall selling price adjustments in the US, and from a more favorable mix of private label sales in Canada.

Moving to slide 10, gross profit amounted to $228 million, up from $196 million a year ago. Excluding a favorable foreign exchange impact, it rose $29 million or 15%.

This increase is coming from a decrease in the cost of orange concentrates, the favorable impact of selling price adjustments, and a positive shift in the sales mix. These factors were partly offset by lower sales volume and higher PET resins cost.

SG&A expense were $157 million, up from $141 million last year, due to higher transportation cost to deliver products to clients, resulting from recent fuel surcharges, higher performance-related compensation expense, and an increase in certain administrative expenses. During the quarter, we recorded $30 million in impairment charges, including $27 million related to a customer relationship intangible asset in our US specialty food operations.

This charge follows contractual changes in one customer that will result in lower production volume and associated profits. Importantly, the impairment is specific to a customer relationship and does not reflect any deterioration in the goodwill associated with our US specialty food operations.

Vince will provide additional color on the backfill plan in the outlook section later. Excluding these charges and other items that impact comparability, please note that adjusted EBITDA increased 19% to $101 million, or 13.7% of sales, from $84 million, or 11.4% of sales, last year.

Turning to slide 11 for profit, profit attributable to corporation shareholders was $27 million, or $3.95 per share, compared to $34 million, or $5.03 per share, last year. Excluding items impacting comparability, adjusted profit attributable to the corporation shareholders reached $51 million, or $7.45 per share, up 36% from last year.

Let's turn to working capital on slide 12. At the end of Q2, the days of operating working capital ratio stood at 46 days versus 51 days three months earlier.

The sequential improvement was driven primarily by higher DPOs and, to a lesser extent, lower DIOs, while the ratio remained within our normal seasonal range. For the remaining part of 2026, we continue to expect working capital to remain within its historical range.

Now on to slide 13 for cash flows. Operating activity generated $78 million in Q2 2026 as opposed to requiring $3 million last year.

The improvement is mainly coming from a lower working capital requirement this year compared to last. CapEx totaled $38 million in Q2 2026.

As a reminder, CapEx are projected to reach up to 7% of sales in fiscal 2026, including approximately $96 million US for the New Jersey project. Turning to our financial position on slide 14, Lassonde's net debt was $451 million at the end of the second quarter, down from $474 million three months earlier.

This improvement was driven by solid operating cash flow generation, partly offset by CapEx. During the quarter, we allocated a portion of our cash flow to debt repayment, reducing borrowings by $32 million.

As a result, the net debt-to-adjusted EBITDA ratio was 1.22:1 at the end of the quarter, down from 1.35:1 three months earlier. All things being equal, we expect the leverage ratio to remain well below our internal maximum threshold of 3.25:1.

Finally, on slide 15, we have announced our intent to launch a normal course issuer bid to purchase for cancellation up to 200,000 common shares, representing approximately 6.5% of issued and outstanding Class A subordinate voting shares over a 12-month period. The launch of the normal course issuer bid is subject to TSX approval.

I now turn the call back to Vince for the outlook. Vince.

Thank you, Francis. Please turn to slide 16.

Looking ahead, we will remain focused on executing our strategy by strengthening the competitive position of our brands, accelerating our innovation agenda, and ensuring the readiness of our New Jersey facility. At the same time, we recognize that the macroeconomic and geopolitical environment remains challenging, with potential implications for consumer spending, input costs, and supply dynamics.

In this context, we will continue to leverage the strength, depth, and breadth of our portfolio while pursuing a balanced contribution from revenue management initiatives and volume growth. Given the current operating environment and excluding the impact of foreign exchange and any major external disruptions, we now expect 2026 sales to be slightly below last year's level.

That said, we will continue to prioritize profitable sales over volume growth for its own sake, consistent with the disciplined approach reflected on our performance so far this year. Moving to slide 17 for strategic priorities by division.

In US beverage, our focus will be on leveraging our investments in single-serve and juice box capacity to support continued growth in attractive formats, maintaining disciplined revenue management while remaining responsive to evolving consumer behaviors and price sensitivity, and completing our new facility in New Jersey, which will enhance operational efficiency and support our long-term US growth platform. As for our Canadian beverage business, our priority remains fortifying our leadership through advancing innovation-led growth initiatives, maintaining disciplined revenue management, including targeted promotional spending while continuing to invest in our brands, and strengthening execution across our core channels.

In food service, our North American team will continue to pursue growth opportunities in this attractive market. Building on the early success of our first major bag-in-a-box customer, we are encouraged by the momentum we are seeing.

Finally, in specialty food, we are focused on optimizing the integration of our North American network, refining the positioning of our branded products, and backfilling available capacity following contractual changes with one customer. On the backfill, through multi-year agreements, we have already secured replacement volume representing more than 50% of the expected 2027 shortfall, with advanced negotiations underway for an additional 25%.

This progress underscores our strong reputation in the marketplace and creates a meaningful opportunity to strengthen specialty food's position by further diversifying its customer base and product portfolio in line with our long-term objectives. Overall, our disciplined execution gives us confidence that we can successfully manage this transition and use it as a catalyst to build a stronger, more diversified specialty food platform.

Turning to slide 18 for an overview of certain cost components. Based on currently observed spot prices, we expect orange concentrate costs and, to a lesser extent, apple concentrate costs to be lower than last year.

At the same time, the situation in the Middle East is adding inflationary pressure to transportation costs as the broader logistics chain adjusts to higher operating costs and evolving market conditions, and to PET resin costs. While geopolitical developments and tariffs are beyond our control, we are focused on the levers we can manage, including reducing our commodity exposure through product mix optimization and innovation, maintaining pricing discipline, and executing targeted cost initiatives to protect margins.

As for tariffs, our network flexibility helps mitigate the impact by allowing us to optimize production and distribution flows as conditions change. However, we will continue to reassess and adapt our sourcing strategies as tariff rates on globally sourced inputs used in US-based production evolve.

In closing, on slide 19, we remain well-positioned to navigate near-term challenges while continuing to advance our long-term strategy. The NCIB reflects our confidence in Lassonde's long-term prospects and our belief that the shares are currently undervalued.

With our strong balance sheet and disciplined approach to capital allocation, we view share repurchases as a compelling investment in the business and an effective way to create value for our shareholders. With a diversified portfolio of leading brands, deep customer relationships built in part on our proven ability to help them grow and strengthen their own brands, and disciplined execution by our dedicated teams, we will continue investing in the capabilities that will drive sustainable and profitable growth in the North American food and beverage market.

This concludes our prepared remarks. We are now pleased to answer your questions.

Hi, good morning, Vince and Francis. Congrats on your results.

My first question focuses on your gross margin. It expanded by 440 bps, a huge expansion on a year-over-year basis.

I was wondering if you could provide us with a bridge and quantify the main buckets that explains this strong expansion.

Sure. Hi, Martin.

The main story of the quarter is commodity costs. I would say the significant part of the increase is related to commodities, so that would be the largest component.

The second component would be price. However, what we see on price that is less of an impact versus the previous quarters, where price year-over-year was driving a significant part of the margin improvement.

That's been less of a story, but still a positive story in terms of margin. The third one is really mix, and what we're doing in terms of the mix and with our innovation and working with clients on better mix.

That would be the third main component. That would be the three main components.

I would say the bridge from division standpoint, Martin, everyone contributed to the positive impact of year-over-year, quarter-over-quarter.

That's helpful. Maybe continuing on the commodity costs, looking at the price of orange juice concentrate, it continues to decline this year.

I was wondering, what is the proportion of your needs that are hedged for '26? To what extent can you benefit from this continued decline?

We've take, I would say, aggressive position on hedging considering what we've seen the last few months. I don't have the percentage of hedging in front of me, Martin, but we're well protected right now.

I would say most of our hedgings positions are ending towards the end of this year.

Okay. Sorry, I'm all on gross margin today, but it is one of those days.

The broader question is that gross margin level, is it sustainable or you feel like there are other pressures that may bring it down sequentially in Q3 and Q4? Just trying to assess a little bit what is the level of sustainability of that gross margin.

That's obviously a great question. I just want to, before answering your question, to basically reiterate our position on margins.

We always focus on profit dollars and not profit margin. That's been our approach in the last few years and that's what we gonna prioritize.

This being said, you see our margins, and they are probably on the high side versus what we've shown in the last few quarters and last few years. We're happy with this.

We still see improvements in our network, pockets of improvement in terms of cost, and frankly some of that has been reflected in the current margins. However, as we've disclosed a bit everywhere, it's a very volatile environment right now.

We see a lot of pressure right now on freight, transportation. There's the input cost also situation that we're following carefully.

In terms of sustainability, we don't know. We'll work to keep it for sure, but that's something right now that is very, very volatile.

Difficult for me to answer that one.

Martin, I'll just add in terms of the volatility that we continue to see on items outside of orange concentrate, just as an example. We talked about transportation costs, there's fuel component that's tied to that.

In addition, when you consider the Middle East and the impact on fuel and the fact that we buy plastic, PET resin is also impacted. That sort of the counterbalancing, as far as concentrate and orange, which is a portion of our commodities, offset by some of the volatility that we continue to see and feel pressure.

Again, we started really feeling quarter two towards the tail end.

Okay. Thank you for the color, that's helpful, and best of luck.

Thank

you,

Martin.

Yes, good morning, and thanks for taking my question. I'll follow a little bit differently from Martin's line of questioning, but still on the profit.

You've moved your outlook a little bit to slightly below 2025, but your first half profitability from a dollar growth perspective looks like you're up 16% in the first half on adjusted EBITDA versus last year. Do you see that top line eroding all that first half growth, and for the full year, you would see your adjusted EBITDA down based on the top-line pressure?

Or is there buckets of savings that you think would help manage that growth in the back half of the year?

That's a tough one, Ahmed, because, as I said, we're on a low side on commodity, and the pressure we're facing on external environment is difficult to quantify right now. There's also elements like negotiation of USMCA that in the next few weeks we'll follow carefully.

Right now, we're still protected. For me to answer about what's going to be the impact of the lower sales in the guidance versus historically is very difficult right now.

Excluding tariffs, but that's the caveat.

Excluding tariffs, that's very difficult to answer. When you compare ourselves versus market, I think we're happy with the margins level.

However, as I said, we're on the good side on commodity, and what the impact is gonna have should there be some changes on the margin in the later half of the year is difficult to quantify right now.

That's fair. Then just switching on to the charge related to the customer relationship, can you perhaps give us a bit more color around the revenue/EBITDA contribution that came with that, and what caused that kind of contractual change?

Is this a trend in the market that's happening or should we expect this to reoccur at some point with other US specialty food customers?

No. It's definitely not a trend in the market, and it does not affect in anything in terms of our positivity versus that segment of the market and the food category.

Basically, what happened is when we acquired this Summer Garden, we had a significant concentration with one client. Basically, we knew that this agreement would be at one point rediscussed, and we were kind of exclusivity position.

What happened is some additional capacity were added in the market, and basically the client decided to diversify their risk while continuing our relationship with us. We signed a three-year agreement with that customer, we still are having a discussion with them.

However, the volume has decreased in a significant portion, and that materially affected the amount of that we had in our books, and we had to record an impairment. Nothing in terms of not we're doing business with the client, nothing in terms of our level of optimism in that category.

As Vince mentioned, it also is going to provide us an opportunity to diversify, and already 50% of the volume has been backfilled. We're working on the rest, and the impact will come in the future quarter, and we're working on this right now.

I think the team is doing a good job, but we see that also as being stronger by being more diversified.

Okay. Just one last follow-up for me, the backfill volumes that you've secured, how do they compare with the lost customer business that you lost there?

We're not talking margins by client, Ahmed. We're backfilling the volumes, and it's going to depend of all kinds of situation, in terms of productivity and mix and type of business we're going to backfill, but we're not providing details on that.

Thank you. I'll pass the line.

Thanks. Good morning, everyone.

I wanted to, if we can, maybe just get a a sense of the bridge between the prior sales guidance that you had and then now what you have in there with it being slightly below 2025 levels. What what is the biggest driver of that change?

Is it just general category softness? Is it in relation to the specialty foods and the changes with the contract there?

Is it more related to the the change in the Canadian, I think it was mentioned in the deck there's a change in in a customer's go-to-market strategy? I guess I'm just trying to figure out the bridge and and basically what maybe we can expect as it relates to 2027 as well.

In terms of what we could expect for 2027, we're currently working on budget and next year and we'll provide that later. It's going to come soon, Luke.

In terms of the bridge, what we've seen, basically I would categorize that in three buckets. First one, on our side, as we announced, we've discontinued some product lines, and I would say the baby food, the frozen in glass discontinuation, while was not contributing to profit, was contributing to volume and sales.

I would say about a third of the delta is coming from that decision that we've made. The second bucket, I would say, is specific elements that happened in the market with one of our main customer, which changed their go-to-market and promotional strategy, that combined also with last year during the buy-Canadian, one supplier that had supply chain issue that we benefited from that.

Those, I would say, specific element being the second category. The third one, I would say, is category-related, as well as, I would say, softness of the buy-Canadian year-over-year.

That would be, I would say, the three buckets of reasons why the bridge between the 3 billion and the lower amount that we announced. I don't know, Vince, anything to add there?

No. It was well said.

Okay. Great.

Then for my follow-up here, and then I'll pass the line, I wanted to ask about capital allocation. You had announced the buyback alongside your results, and you can correct me if I'm wrong, but I believe it's the first time within four years that you have done that.

If we were to go back four years ago, there was good reason for that as well for you discontinuing it because you were focusing on Project Eagle and fixing up the US business. The balance sheet seems relatively clean today.

You had mentioned that the shares are undervalued. I believe they've been in and around the same valuation, though, for the last few years as well.

I guess the main question that I'm asking here is what now has changed that's making you go forward with the buyback? Is it just purely that there's more float in general out there and so it's a little bit easier to execute on that?

Maybe secondly, on that, how do we think about going forward? Will it be a regular part of returning capital to shareholders or do you just see particular opportunity in the shares from here?

Last two years been very CapEx-intensive, and also absorbing the acquisition of Summer Garden. We see now it's a good timing the next 12 months, the level of CapEx, the finalization of the New Jersey project.

We see it's good timing. As you've seen, our leverage is pretty very low, conservative.

We are able to do this buyback as well as it doesn't compromise any ability to also do any other type of projects, M&A or other.

Okay. To be clear on that last point, you're doing the buyback, and then there's no change on the M&A front, you're still looking potentially for acquisitions?

It's always been part of our historical strategy, and if there's some occasion, we would definitely consider.

Got it. Thanks, I'll pass the line.

Thanks. Good morning.

Wondering if you could comment on the evolution of demand and volumes through Q2 and into July, any month-over-month trends in demand in beverage worth highlighting as we think about the demand baseline for Q3?

That's a good question, Frederic, it's Vince. What we're seeing from a category perspective is still price-led in both Canada and the United States.

The United States is still more price-led than you're seeing in Canada. I think dollars were up about 2.5%, category volume was down about 4.5 to 4.7%, the category in Canada was down about 3.5%.

All that to say the dynamics really haven't changed that much quarter-over-quarter. You continue to see a price-led environment, softening on the price portion of it.

You continue to see category softness on both sides of the border. That's what we continue to see.

I wouldn't say anything significantly has shifted in that regard from a category perspective. As we take a look, we see that holding for a period of time.

What you are seeing is, from a consumer perspective, this concern about affordability. When we take a look at the data in terms of what's driving some of the category dynamics, and this is true both in Canada and the United States, is units per trip are down.

Clearly what consumers are doing are being more mindful of the dollars they have and how do they stretch those dollars out. I would say that's a phenomenon that you're seeing both in Canada and the United States.

The second thing that we're watching a little more closely, and Francis had commented on it, was the dynamic between brand and private label. Because in most respects what you would assume in an environment where there's an affordability concern that, that the category benefit, our category benefit from a private label perspective, but what you are seeing is some custom dynamic customer dynamics that are influencing pricing, and the price gap between brand and promo has contracted, in particular when brands are promoting.

We're continuing to watch that. The last thing that I'm going to say is, in particular when you look in the US and you look at the economy, high-end consumers are still buying.

They're buying and they're buying at a premium level. Who is being impacted is the lower-income consumer, where you're seeing them actually buy less units per trip.

All of that to say, it's still a little bit uncertain in terms of does the trend just continue? I do I believe that'll continue for a period of time through the year.

I don't know that anything's going will change on that front. I don't know that the declines are going to accelerate, but it's something that we're watching closely.

Right,

that's helpful. Thanks for that color, Vince.

For my follow-up, just on the contractual change in US specialty food, just a couple clarifications there. You mentioned diversification, is the 50% volume replacement, has it been secured with one or more customers?

Then what's your level of confidence that you can get to 100% replacement volume in a timely manner?

It's through multiple customers, and we are very confident to fill that very quickly. In a few months we've been able to backfill rapidly and we're very confident to get there very quickly.

Just to clarify, when does that take effect, meaning is there transient volume or revenue and EBITDA headwind in 2026 from this or you have some time to get to that full replacement of volumes, I'd say by early 2027? How about the timing on all this?

Timing in terms of volume is Q3, Q4 next year. In terms of pricing, we've seen impact this year.

Just to clarify, it's Q3, Q4... Oh, yeah,

I said next year, it's fiscal 2026.

Okay. Anyway to quantify the net revenue impact from this in the near term?

Is this a significant customer

from

Summer Garden?

It's not significant for Summer Garden, and the backfill work we're doing right now is it's too early to assess, but we're very confident that it would not be material impact.

Great. Thanks for taking our questions.

I'll leave it there.

Thank you.

Thank you, operator. Thank you for joining us this morning.

We look forward to speaking with you again at our next quarterly call. Have a great day, have a great weekend, everyone.