Thank you, Cheryl, and good morning, everyone. Welcome to our 2020 fourth quarter conference call.

With me here today is our CFO, Will Kalutycz. Our presentation today will follow the deck that was posted on our Web site this morning.

Hopefully, you all have had a chance to access it. For those of you that don't have it, you can access it by clicking on the link of our press release issued this morning.

On Slide 5. We're now on Slide 5, which outlines certain key highlights.

Will Kalutycz, will work you through our financial results shortly. In early 2021, we closed the acquisition of Clearwater Seafoods in a historic partnership with a coalition of Mi'kmaq First Nations.

And we'll be expanding on our seafood platform later on in the presentation. I will also be updating you on our progress at our sandwich and US protein platforms.

2020 was a difficult year for all of us. COVID-19 challenged us in ways that were unimaginable just a year ago.

But despite the challenges, we entered 2021 stronger, larger and more resilient. We're very excited about where we're at and we're very optimistic about our future prospects, as our various platforms reach or exceed the $1 billion mark.

I will now pass it to our CFO, Will Kalutycz, who will update you on our financial results for the quarter and the year. Will?

Thanks, George and good morning everyone. Before discussing our results for the quarter, I would like to caution you that to the extent we make forward-looking statements during our presentation, our forecasts and assumptions are subject to change and actual results may vary.

Please see our 2020 and fourth quarter 2020 MD&A filings, both of which can be found on the Sedar Web site www.sedar.com for details on some of the factors that could cause our actual results to differ from our current expectation. Turning to our results for the fourth quarter.

Please turn to Slide 7. And just starting with a discussion on our revenue for the quarter, total sales for the quarter were $1,056 million, that was up about $97 million or 10% from 2019, the fourth quarter of 2019.

Major drivers of our growth in the quarter were first off acquisitions, which contributed about $44.3 million to our growth. And then that was followed by the success in our protein group of our meat snack, dry cured and cooked meat strategies and in particularly the traction we were gaining in the US with our meat snack category initiatives in general and our meat sticks initiative specifically.

Also, our sandwich platform had a very good quarter, showing growth on a variety of new initiatives, as well as with legacy customers. And then finally our seafood and distribution groups also had solid performances as they leveraged recent investments in capacity, new capacity, namely our new Saco lobster processing facility and our new distribution facilities in Toronto and Quebec.

Thank you, Will. We're now on Slide 20.

As you can see, our seafood platform has grown a lot over the past 10 years, both organically and by acquisitions. Our run rate including our share of Clearwater sales is about $1.2 billion to $1.4 billion.

This positions us as a top 20 seafood companies globally and the only vertically integrated players in North America. Slide 21 demonstrates our vertical integration across the board with unparallel access to some of the best wild seafood species in the world.

We're uniquely positioned to bring seafood solutions to our customers by leveraging our ocean to plate capabilities. Slide 22.

In addition to Clearwater, as Will said, we were pleased to recently welcome the Allseas and Starboard teams to our ecosystem. We're ready to disrupt and innovate the seafoods space in North America by leveraging our access to best in class products, combined with our expertise in packaging and branding.

On Slide 22, we provide you with some examples of value added sequel products like our salmon and Tuna skewers to be launched this year, which leverage our proprietary skewing technology. Slide 23 outlines our various priority initiatives as we begin to work closer with Clearwater and its management team.

The picture show examples of value added products that will make it easier for consumers to enjoy these healthy and great tasting proteins. The seafood shares in the middle is made by our company, Global Gourmet using clams purchased from Clearwater, while the lobster grilled cheese sandwich shown on this slide will be assembled by our sandwich group.

We believe that all three products shown here in this slide will not only be popular in North America but also in Europe and Asia. The taste for seafood consumption in North America is very compelling.

Demographics and health and wellness are already driving exciting sales growth in this category. For example, in 2020, sales of frozen seafood in retail in North America were up 71%, and 59% of consumers that they see food twice a week said that they do so because they're trying to eat healthier and to boost their immune systems.

I should also note that seafood consumption per capita in North America trailed those of other developed countries. For example, the average North American eats 16 pounds per year as compared to 25 pounds in France, 36 pounds in Norway and 39 pounds in South Korea.

We believe strongly that this gap will narrow over the next few years, and we also believe that the pandemic has accelerated this trend. Our innovation and value add efforts plan to focus on making it easier for consumers to enjoy seafood.

Our branding and innovation efforts will focus on seafood nutrition, meal ideas, transparency and sustainability while emphasizing our unique ocean to plate capabilities. We're now on Slide 24.

Our US protein platform made tremendous progress in 2020 and is well positioned for growth in the future. Slide 25.

We made great progress in diversifying our sales in categories other than Jerkey. Our meat stick sales in the US grew by 45% in 2020 to $52 million.

For 2021, we're budgeting sales of mid six in the US to exceed $100 million, driven by innovation and new launches focusing on younger Hispanic consumers under the well known Takis brand, which is under license. We also launched several authentic Germanic stick products under the newly acquired and iconic Bavarian meat brand.

The very popular and best in class Bavarian meat Landjaeger has potential to be rolled out nationally in the future. As the picture show on Slide 25, we're also excited to continue to launch Italian Charcuterie trays and cooked chicken skewers in snack format, leveraging our best in class proprietary skewing technology.

Slide 26. Our sandwich platform finished with another year of record sales despite severe demand destruction in QSR during the second quarter of 2020.

As you can see on Slide 27, the sandwich division assembles much more than sandwiches. More specifically, we're pleased to see that our investments in Charcuterie and Panino assembly are starting to gain traction in all channels.

We also invested in capacity to produce single serve meals at our Bernfield facility in Minnesota. During 2020, we launched a number of plant based breakfast sandwiches with a number of QSR customers.

Sales of these products are projected to reach $100 million in 2021. As Will mentioned earlier, we are investing in two generation three assembly lines that will combine automation with operational flexibility.

The new lines will be in operation in Q4 '21. This platform finished the year very strongly, delivering record sales for the year despite COVID related demand destruction in Q2 2020.

Slide 28. As you can see, our acquisition pipeline remains active and robust.

We expect to continue to bring more companies under the PB umbrella in the future as we execute our various growth and value creation strategies. Slide 29.

We're very proud of our progress over the past year in this very relevant and important area. As the slide shows at premium brands, we're committed to our stakeholders and not just our shareholders.

We also recognize that being good to all stakeholders is not just about managing risks but it is also good for our business. We're committed to our ESG action plan and road map and we look forward to reporting and updating you on our progress in the near future.

Back to Cheryl for the Q&A segment of the presentation. Cheryl?

I know it's early days, but I just want you to talk on how the integration is going at Clearwater. Maybe share with us the low hanging synergies, maybe quantify some of the more ambitious longer term ones that you guys plan on capturing?

George, first of all, there is no such thing as integration. This is not a situation where we are going to integrate Clearwater.

Clearwater is a great company. It is very well run, and it is world class in harvesting and processing at sea, resulting in exceptional quality products.

On Slide 23 of the presentation, I outlined the four areas that we're working with them in terms of, as you say, low hanging fruit. First of all, of course, is to leverage the PB distribution business, particularly in Canada.

This will enable us to create programs, branding and take advantage of the ocean to plate opportunities and solutions we were able to give to our customers. Secondly, we are working to develop branding and packaging formats, as I mentioned earlier, to make it easier for consumers to enjoy these amazing proteins.

Thirdly, we have a focus on value added. I gave you three examples of value added products that we are either marketing currently, developing or doing the R&D on.

And again, we're getting good traction on all of them. And thirdly, operational synergies, particularly in lobster, we have a very, very large business in lobster based in the US and obviously, we're working with Clearwater to find ways to optimize our supply chain to optimize the various opportunities that we see in the lobster space.

Again, this is not an integration play for us. Clearwater is an exceptional company.

They do what they do very, very well. And again, by combining Clearwater and the premium brand seafood assets, you've got the only vertically integrated company in this space in North America and we're excited with that.

And maybe staying on the topic of seafood. I did find it interesting that on Slide 8, you guys have looked together in advanced discussions with a pretty sizable company.

So can you maybe talk about certain areas within the seafood complex that you feel like you'd like to fill in or expand in, or maybe have a presence in?

Our perspective, George, is we look at the seafood space generally on a species basis and ultimately, we want to be in a position where we have significant market share in each area that we're in, in each species we're in. That effectively being vertically integrated, being able to develop value added branded products in conjunction with Clearwater, of course, and our partners, the Mi'kmaq First Nations.

And a good example of that is lobster, of course. And lobster, now we're by far the biggest player in North America.

I think we probably have 30%, 35% market share in that space. And so we have a similar vision with regards to some other species as well.

I understand that you guys don't want to give any guidance for '21 because of all the uncertainty around the pandemic, but it seems that there's a lot of CapEx initiatives here that we're undertaking. So I'm just wondering, is it fair to assume that maybe the organic growth for this year would be anywhere between kind of our historical 4% to 6% range and this year is 11% ex COVID?

So George, again, a lot of that CapEx that we announced, that won't start benefiting us until 2022, 2023. And in terms of this year, we've got two major headwinds going into the year.

One is COVID, the continuing impacts of COVID. Clearly, it will be a challenge in the year, first quarter, which last year in the first quarter COVID was actually a positive impact on our sales.

And then we also have the translation of our US operations. Our US operations are growing quite significantly.

And last year, we had an exchange rate of about 134 to 135. This year, we're probably looking at 127, 128.

So where those factors that play out are going to be the big determinators. Outside of them, if it had been a normal situation, yes, we would have expected sort of similar growth rates that we expected for 2020 sort of in that high single digit, low double digit range, but it's just the uncertainty around those two factors and particularly on our foodservice and the exchange that we're not at this point giving any specific guidance.

A follow-up on the Clearwater acquisition synergies. It was helpful for you to walk through some of the initiatives.

I'd like to get maybe a bit more details on the timing of the realization of these synergies. Is the majority of these synergies, are they to be realized near term or are they more longer term in nature?

I think that before I mentioned, Martin, are basically part of our long term plan. And really, as I mentioned earlier, the businesses are very complementary.

They don't overlap each other. They're very complementary.

Clearwater was basically best in class harvester of amazing wild shelf fish species and a processor at sea and then a seller of these products in container loads around the world. And we're more on the distribution and the value added side.

And again, we're excited to have access to supply, of course. Globally, there is more demand for wild seafood on supply and so access to supply is very, very important in the process of developing value added products, which I gave you some examples today.

So again, this is a long term plan. We're really excited.

We're having excellent discussions with the Clearwater management team. I hosted our first Seafood Summit.

It was a two day event, and we've identified a number of areas to work together to leverage the vertical integration that we have to provide best in class seafood products to customers and consumers. That's all we could say at this point, Martin.

Last earnings call, you talked about labor shortage being a challenge, and that it prevented you from capturing some sales opportunities. Wondering how that's evolved and if it had any impact on Q4 sales?

Yes, similar trend, Martin, as in the third quarter, I would say that as in the US, they've rolled out vaccinations. The situation with labor has become a little bit easier.

For us, I mean, we're eagerly waiting for vaccinations in Canada as well. And again, we're doing better in the US across the board with regards to managing our labor challenges.

It's part of the reason why the US part of our business had a pretty good quarter in the fourth quarter not as good in Canada. But as I said, we're anxious to get the vaccinations and get on with things.

And the only thing I'd add to that, Martin, is the fourth quarter is a slower quarter for us seasonally. So you're not pushing the production facilities as hard.

The volumes are much smaller. So that there's a natural sort of easing off on our labor requirements because of that.

So that also helped to address the issue.

And my last question was on -- wondering if you can talk about your innovation pipeline. We like numbers.

So I don't know if you can discuss the number of new SKUs that you expect to launch this year across all your platforms, and then how that would compare with previous years?

Again, all I could say, Martin, is that innovation is part of the PB DNA. This is something that is ingrained in our various meetings with our different teams.

As you know, we're very diversified company and we expect all of our companies to be driving innovation. Innovation is what keeps us obviously ahead of game and is what's given us traction.

And all I could say is that we've got an exciting pipeline of an amazing, exciting pipeline of innovative products. And I look forward to updating you on those.

I did mention some on our call today, and I will do so obviously on future conference calls.

And 2020 was a year where one of the impacts of COVID was an inability to do a lot of new product innovations, a lot of retailers just put things on hold, stuck to sort of core legacy listings. So there's a backlog of opportunities in our pipeline right now, and that whole process is just starting to get somewhat normalized.

So yes, like George says, it's a very full pipeline right now of things that will be coming out in 2021.

Congrats on the queue and excellent traction. I guess my first question would be the pandemic weighed but you've been very nimble, and you were able to win new business.

And I guess maybe just talk about the magnitude of that, and how much you expect to stick around? And let's say we have a second half recovery, what the delta might be just related to that, like how much do you think you can carry forward and maybe some examples, too.

Well, so you're talking about in the retail channel then, David…

Yes, I mean, you've done a lot, right? You have the school programs and things like that nature, like how much of this incremental new business that you won because of COVID might actually stick around.

I talked a little bit earlier on George's question in terms of our growth outlook. We've been very conservative in that number in the sense that when we talk about the COVID impact on our business, we do sort of net a lot of the retail growth off that we see as unusual.

So all those numbers are kind of the core long term strategies we've been pursuing, investing in. To the extent that we are able to retain some of this new business that is kind of been a result of gaining traction in certain areas from COVID, that's upside, that would be -- we're not counting on it.

We're hopeful that we can continue to keep it. It certainly created new opportunities but that would be even greater numbers than what I mentioned earlier.

And then the second one, just margins looked good in the quarter, posted and normalized. If you take into consideration for the raw materials a little bit more benign, labor, it sounds like things are easing off and you're automating a few things.

Your fixed capital and just the scale, you sort of targeted like ‘20, ‘23 of 10%. Is there kind of a road map forward in terms of what you anticipate the progression will be toward that target?

Yes. Sales deleveraging is a significant component of that expansion.

So this year, if you normalize for the impact of COVID, we would have been at about 9.1% and so not far off. And roughly to get to that 10% it's probably two thirds sales deleveraging and a third other factors.

And then for '21, you're calling for a better year, but if you strip out just M&A. What areas are you really starting to see come together overall?

I mean looks like you've invested for a number of years. If I look back on Premium Brands history, there's been a year where the gestation period where you invest, you invest, you develop new programs and then you kind of hit your stride and it goes.

And it seems to me like you're kind of in that zone again, where you've invested a lot and then you're sort of hitting your stride. Maybe sort of talk about other than M&A where are you seeing -- you're kind of hitting critical mass?

Yes. No, absolutely.

The Sandwich Group is the best example, right? We've built the Phoenix facility back at the end of 2017, early 2018.

And it's taken some time to gain traction there, but that group is just hitting it out of the park now. And you saw it in the fourth quarter, the sandwich group was a major contributor to our growth.

So that's a great example, where it's taken some time to gain traction as they've entered new channels like retail, C store and that traction is just gaining hold. The unfortunate part is in that group, it is hidden a bit by their loss of the airline business.

The airline was a nice piece of profitable substantial business for the group. But that's one example.

Another which is our GTA initiative. We built in 2018, 2019, we built that new 100,000 square foot distribution facility to expand our strategy around the foodservice, expanding our seafood distribution into other proteins using the model we used in Western Canada.

That has continued to make good progress despite its core food service business being so hard hit. So once we start seeing the foodservice element coming back, you're really going to see the traction of that investment.

Another one is our investment in the facility, our Frandon Seafood business in Québec, again, despite the impact on its core foodservice business, it has started to gain amazing traction in the retail channel, leveraging that new capacity. And then once the foodservice business comes online, you're going to see that traction accelerate.

And then finally, the last one I would point out is the Saco facility for the Ready Seafood Group. That's been a tremendous win this past year.

And that, again, is despite COVID. Cruise line business has historically been a big customer of their processed products and that entirely evaporated in 2020.

So lots of things that were growth drivers in 2020 despite COVID. And as that veil comes off, that hindrance comes off, you should see that continue to accelerate in 2021.

You're absolutely right in your comment, David, about we've made those investments. We're leveraging now to get the benefits, the returns, the cash flow, all that stuff going.

2020 was the year we expected that to happen, obviously, for reasons we all know. And now 2021 is in our gun site but we'll see how it flows…

Again, great question, David. And I would add to that, that another example would be our US based protein platform.

The acquisition of Abertis was transformational to that platform. It was mainly a beef jerkey company, a national beef jerkey brand and today, they’re a lot more than that.

And I gave you some numbers in terms of our growth in the stick area and charcuterie and others. And again, there's been a lot of innovation taking place there.

We found them many, many capacity solutions, some tuck in acquisitions. Again, they're evolving very nicely now and they're growing, they're accelerating their growth.

So again, the thing about Premium Brands is that we think about the long term. We don't buy a business to sell it three years from when we buy it, that's not our style.

We buy and we invest in it. And sometimes it takes three to five years for us to get to critical mass and to get the returns that we're expecting.

But there's many, many areas. Distribution is another one, David.

Again, we've invested in being the number one coast to coast protein distributor in Canada, and that takes time and effort, and we build facilities to do that. And we're just about there now.

So that's another area where we expect to see progress, particularly when foodservice comes back.

I wanted to start with the plant based space. And if I'm not mistaken, you were maybe a bit more cautious on this in the past, but it sounds like your thinking has evolved on this subject.

Just would like to get a sense of where you see this going for PBH over the next couple of years either on M&A or organic investments. And on one observation on the presentation, that $100 million you cited in plant based sales, does that include your largest customer or would that be an incremental opportunity to that?

No, that includes all of our customers, John.

And broadly, is this an area you'd like to invest in more or do you feel you have sufficient assets in place to address the plant based category?

Again, John, ultimately, we allocate capital and we make investments in areas where we think we can generate a return for our shareholders. And we understand that the plant protein space will grow.

It is a trend and it seems to be growing. There seems to be a lot of players and a lot of capital entering this space.

So we made a conscious decision not to invest in capacity to make these products. We believe that was the right thing to do, given the amount of capital that's chasing this category.

Having said that, that's not to say that we don't leverage on our expertise in certain areas and take advantage of selling and marketing opportunities, and that's what we're doing. I think if you sort of looked at the evolution of Premium Brands, we tend to be very cautious with our capital.

Once we develop this segment and let's say, we develop it to $200 million to $300 million, that's not to say that we won't be feel comfortable to go buy somebody that gives us capacity. So that's the way we view the segment at this time, John.

And then a few housekeeping questions, starting with Clearwater. I know you're booking the interest for the subordinated debt this year, but there's the one year interest holiday on a payment basis.

Does that in interest is and paid one year later every year, or do you essentially receive two years' worth of payments in 2022? Just wondering what the difference is on accounting versus cash basis for that.

Yes, it's the latter, John. It's not a holiday in the sense of forgiveness, the interest is payable.

We're just deferring it in the first year and then it becomes due in the second year. So you're right.

In the second year, we'll get two interest payments. Although, again, I think we've talked about this in the past.

We are a patient long term shareholder in Clearwater and it will depend on their ability and uses and needs of capital on how we will draw that interest payment out but ultimately, it is due in the year two.

And then what's the obligation of the Mi'kmaq First Nations group when it comes to purchasing the stake of your $450 million of subordinated debt? I get there's some variability depending on what the free cash flow is at the Clearwater level.

But is there a minimum amount they have to repurchase from you either from their licensing payments or their management fee over year?

Yes, essentially, the cash flow they're receiving from the structure of our transaction and the license fee associated with our transaction, the excess cash flow from that, they are obligated, and they want to participate in the sub debt or by the sub debt.

And then last one from me. Did you see any impact from ASF in Q4, and is there any anticipated impact for 2021?

When we talked Q4 last year, that was the big cloud on the horizon that was causing us concern. And it really hasn't been the issue that we were concerned about for 2020.

In terms of Q4, we did have some pork and beef commodity challenges, but they were North American based. They were problems with labor in these big facilities and their inability to value add products to the specifications that we require.

So that was creating some inflation. So no, ASF was not much of a factor.

Maybe a little bit on beef as a substitute protein because China has been importing more beef. 2020 ASF is still out there.

It's still an unknown but China has done an incredible job in growing their production levels, and they're much more sophisticated in how they manage their hog production. So we don't expect it to be, but it's still a factor out there.

Lots of great color on the call so far and certainly in the slide deck. But I just had a few follow up questions that I wanted to ask about.

You talked a lot about sort of your five strategic initiatives and gave some great color on the slides. Each sort of on its way or at $1 billion plus.

I know you gave a little bit of color on the seafood platform. Can you just give a little bit of color around where you are at in terms of sales for some of the other platforms when you think about those five strategic initiatives?

Well, again, we mentioned five, Stephen, our Canadian protein platform is already there, above $1 billion in sales is all value added, by the way. Then, of course, we have sandwiches.

And we expect our sandwich group, again, we call it the sandwich group, but it's really our assembly group. And if I shown on the slide, we're making a lot of progress in assembling other products other than just sandwiches.

So we expect that platform to reach that level in 2021. And our distribution business in Canada that exceeds $1 billion now across the board, it includes our seafood distribution companies and our other protein distribution companies.

And that platform continues to grow. We spoke about our US protein business, which is about halfway there, I would say.

It includes three main businesses, , Hempler's and Isernio's, all based in Washington state, but with a national reach in terms of marketing programs and brands. And again, we're getting exceptional traction there.

And again, our Seafood Group, as I mentioned earlier, in terms of -- if you take our Seafood Group and you add our share of the Clearwater revenues were about $1.2 billion to $1.4 billion in revenue.

And I know you stopped short of giving 2021 guidance and understand you've already given some color on the outlook. But can you just talk a little bit about how you expect kind of the cadence of growth in 2021, with Q1 being a difficult comp and then Q2 being less so being easier comp?

And then how you think the back half of the year might evolve with foodservice and things like that opening back up?

So our working assumption, Steve, is Q1 sort of is a continuation of the Q4 trend. We do expect to continue to show year over year sales growth, given a lot of the stuff happening, particularly in our Specialty Foods Group.

And then certainly an acceleration of growth in Q2 just from the normalization from COVID. We do also expect a slow opening over the quarter to as vaccinations are executed on, and you see some reopening of the economy.

Q3, we continue to expect some COVID impact again, even lesser than from Q2. And our expectation is by Q4, we should be in a fairly normalized environment with the one major exception being airlines.

We don't see a recovery from that until well into 2022, possibly 2023.

And then maybe just finally, with respect to a couple of modeling questions. Can you give a little bit of color around your expected tax rate for the year?

And then with these most recent acquisitions that you did, Starboard and distribution Cote-Nord, could you give a little bit of color around -- I think you gave revenues in the MD&A, but maybe a little bit of color around margins. And I assume both of those businesses will sit in the distribution business.

Is that right?

Yes. So in terms of tax rates, no major changes at this point from what we've given in our prior guidance.

Off the top of my head, I think it was 27% to 29%, something around that range. So we should continue to be within that range.

There's so many moving parts in that, Steve. And depending on where the income falls in which jurisdiction because we have quite a wide range of tax rates, but that should be a fair assumption going forward.

In terms of the margins on the recent acquisitions, both Allseas and Starboard are typical seafood type margins in line or maybe a little bit higher than our premium food distribution margins, and Cote-Nord is exactly the same as well.

Same as PFD or same as…

Yes, PFD. They're all PFD acquisitions.

And they're all sort of a little bit above the average for the group. They're all kind of got niches in their business that give them a one step up.

So they're a bit higher than the PFD business is what you're saying?

Yes.

I'm just a little bit of a follow up on some of that color you gave on how you think the year is going to unfold. So in Q4, you hypothesized that maybe that's going to look more normalized next year.

And so the way to think about it, we take like kind of your normal expectation for organic growth and then we add the amount of sales that you lost due to COVID on top, or are there capacity constraints or other reasons why you wouldn't gain back the sales loss in this current Q4 that you printed plus the normal run rate of the economy or your business?

No, it should be the former, Vishal. Again, when you go back to that chart that showed the normalization of the growth rates, the reality is that was all just -- that's lost foodservice business primarily.

And so we expect that to come back and then by Q4 to be above that as the traction of these different initiatives come into play.

And just switching gears here, there were media reports that there was an outbreak in some of the your facilities, I think, particularly in Toronto, which led to temporary closures. Just wondering how material are the impact of these closures, and are those all behind us at this current moment?

So the major one -- again, it was a terrible situation. It's been addressed.

We thank goodness, the facilities are back up and running and the outbreaks have been dealt with. In terms of the impact, though, not much of an impact -- impacted our Belmont business, which is a burger business.

And 80% of their sales are in the summer months. So minimal impact on them because of the timing of the outbreak relative to the seasonality of the business.

And then the other one was on our Concord business. And although not as seasonal, it was a sort of a similar factor as well as they were able to access sister company capacity.

So again, not a material factor.

And with respect to the Clearwater acquisition, just on the deferred interest, when you defer, does that not show up as a benefit on the P&L or do I record that in the P&L and just record…

Yes, it will be in the P&L. So we will be creating, starting in the first quarter, a new segment, we'll be calling it investment income.

And so that will include the interest and management fees from Clearwater as well as we've always had some interest income from noncontrolled income interest that have been netted in the corporate expense. So we'll move that into that.

So that will be recognized and it will be segregated in that segment.

So it will be recognized even though it's deferred and in the P&L and then in the cash flow statement, we'll get kind of double up in the following year, that's the way it works out?

Correct.

And maybe just lastly, if you can give us some thoughts on the acquisition market. You've obviously provided us some color on that.

But in terms of the quality of the deals that you're being shown? And if there's any changes that COVID has precipitated on that front?

Yes, Vishal, no changes, really. Again, the type of acquisitions we look for are generally in the pipeline for a long time.

There's a lot of conversations that take place between us and the owners. And I would say that the activity is normal for us.

We look at a lot of opportunities. We'll probably get to look at possibly a daily week, but we kind of tend to buying companies that we know that we've built a relationship with over the years.

And when the sellers decide to sell then they come to us. We've shown you the schedule, of course, and it shows that there's a lot going on and a lot in our pipeline.

We've got an extensive M&A group here at corporate and they're extremely busy right now.

I guess most of my questions have been answered. The one I do have is, I was wondering if there's any difference between profitability or the margin profile between foodservice and retail channels?

Well, it depends, Derek. If you look at -- you have to look within the segment and the type of products they're selling.

So if you're looking in our Premium Food distribution segment and you're looking at our foodservice businesses that have pivoted from their traditional fine dining customers to the retail segment, that's definitely lower-margin business. As I think it was David asked earlier, hopefully, we do hope to keep some of that business post the pandemic on the basis that it still provides critical mass to their distribution network.

So it's profitable business, but it's definitely lower margin business. But if you compare that retail business or their foodservice business with the retail business and our Specialty Foods business then no, that's a higher margin business by all means.

But then there also are other costs associated with that business is in terms of marketing and those types of costs.

So net-net in most businesses is that you end up a little bit more ahead than you would in foodservice or QSR?

Well, net-net if you look at it on a global basis, really, our Specialty Food segment is primarily focused on retail and our Premium Foods distribution segment mainly focused on foodservice as a really rough gauge. And you can compare the EBITDA margins in those two segments.

And maybe just one last one. Obviously, 2020 was pretty big year for you or huge year in terms of M&A.

Just how are you -- I know you said the pipeline is busy, is full and everyone is working hard on deals. But I was just wondering how you're thinking about it in terms of strategicness?

And is 2021 more of an integration year for you guys or is it full steam ahead?

Again, Derek, it depends on the platform. I think in the case of seafood, of course, we're very busy with with the large deal we've done and a couple of other deals we've announced recently.

And again, we look forward to extracting and optimizing the vertically integrated platform that we've created. So probably, you shouldn't be expecting massive transactions in the seafood space.

There will be some tuck-in, there will be some add-ons, et cetera. But in general terms, we're going to be working on optimizing the vertically integrated entity that we created.

With regards to the other platforms, they all have their own plans, they all have their own expansion initiatives organically and by acquisition. So don't be surprised if we make an acquisition in one of the other platforms.

That's relatively on the bigger side.

And actually, maybe one final one from me. Thanks for that, George.

In terms of capacity in the sandwich business. Are you guys bumping up against any -- given the growth, are you bumping up against any capacity constraints?

It depends on the items, again, we refer to it as a sandwich division or sandwich platform, Derek, for legacy reasons. I would say on the sandwich side, we're probably about three years away from needing to add another facility to the group based on how we project our sales to grow.

Again, we've built capacity. And again, we're in good shape, and we're getting more out of the new lines or more productivity as the new automated lines that we're investing in as we told you guys today.

With regards to some of the other products that we make, we might have to add capacity in those in the future.

Just a quick follow-up on the question earlier around Clearwater and the rolling of the interest payment. I guess with this new segment where you will be reflecting the interest and the management fee.

Is there any addition to corporate overhead or anything, or is it just flow through on an annualized basis of $52 million a year and then obviously, cash coming in the year after?

No, it's the latter, Saba. It's just the interest and management fees.

And then just looking ahead, there's a couple of questions on the sandwich you said earlier, but now as you think about demand ramping up, I guess, what are you hearing from both the retail as well as the foodservice, like foodservice, I mean the restaurant customers on that? Are you seeing sort of a sequential pickup in demand as you're planning for the next year?

And also, is there any difference between the restaurant channel versus your initiatives in retail for that platform in terms of the demand that you're seeing?

Can you please repeat the question you broke up, and I couldn't hear it, Saba.

So just on the sandwiches platform, just in terms of your conversations you're having with your retail and restaurant customers. Is there any difference in the recovery you're seeing across the channels?

And how are you generally seeing the demand set up for '21 as the foodservice and just eating out improved as a channel?

In regards to sandwiches, the demand is very, very strong. So what we're being told from our customers in general is that we will need to allocate the more capacity for 2021.

And a lot of it, Sabahat, is driven by the fact that a lot of QSR is doing really well in their drive thrus. And when a consumer basically goes to a drive thru, he's more likely to purchase a handheld sandwich.

And that’s kind of benefited the sales in that category to all of our QSR customers. Again, I don't know when things are going to open up, but the consumer that goes through a drive thru tends to be more likely to buy a handheld sandwich, breakfast sandwich, let's say, and coffee than the consumer that walks in the store.

So that's driving a lot of growth in that segment.

And I know you don't talk about specific customers, but if we just look at your restaurant customers or quick service customers for sandwiches, what would you say demand is directionally as we exit 2020 relative to a year ago, are we closer to normalization or are you expecting a big recovery through this year to get that back to run rate levels?

Again, Sabahat, it really depends on the customer, let's say, we have a customer that has a lot of downtown stores, they're not doing that well, for the reasons that you know, of course. If we've got a customer that that has a lot of stores in Suburbia and no stores downtown, they're doing extremely well.

It just depends on the geography and the location. It's a very different world today than we know.

And a lot of it is driven by some of the trends and events that you already know. So generally, they've got airport deals, they're very slow for reasons that we know.

They've got downtown stores, they're not doing well. But suburbia and cottage country are doing amazing, and it's just things that are logical.

I'd like to thank everybody for attending today. Back to you, Cheryl.