Earnings call transcript: Colabor Group misses Q2 2025 earnings expectations

Colabor Group Inc. reported disappointing earnings for Q2 2025, with an earnings per share (EPS) of -0.02 USD, falling short of the forecasted 0 USD. The company’s revenue also missed expectations, coming in at 169.5 million USD against a forecast of 176 million USD. Following the announcement, Colabor’s stock price dropped by 13.68%, closing at 0.82 USD in after-hours trading, reflecting investor concerns. According to InvestingPro data, the company has seen its stock take a significant hit, with a -41% return over the past six months, though analysts remain optimistic about future growth prospects.

Key Takeaways

• Colabor Group’s EPS was -0.02 USD, missing the forecast of 0 USD.
• Revenue reached 169.5 million USD, below the anticipated 176 million USD.
• Stock price fell by 13.68% after the earnings announcement.
• The company completed the acquisition of Alimplus, expanding its market presence.
• A cybersecurity incident affected operations but is under control.

Company Performance

Colabor Group showed a 5.1% increase in consolidated sales to 169.5 million USD, driven by a 7.5% rise in revenues from distribution activities. Despite this growth, the company reported a net loss of 2.3 million USD or 2 cents per share. The acquisition of Alimplus has expanded Colabor’s footprint in Quebec, adding significant new revenue streams and operational facilities.

Financial Highlights

• Revenue: 169.5 million USD, up 5.1% year-over-year.
• Earnings per share: -0.02 USD, missing the forecasted 0 USD.
• Adjusted EBITDA: 5.4 million USD, representing a 3.2% margin.
• Cash flow from operating activities: 4.5 million USD.
• Capital expenditures: 700,000 USD in Q2, with annual CapEx expected to remain under 2 million USD.

Earnings vs. Forecast

Colabor Group’s actual EPS of -0.02 USD missed the forecast of 0 USD, resulting in a negative surprise. Revenue also fell short of expectations, with a 3.7% miss at 169.5 million USD compared to the 176 million USD forecast. This underperformance marks a deviation from the company’s historical trend of meeting or exceeding market expectations.

Market Reaction

The market reacted negatively to Colabor’s earnings miss, with the stock price dropping 13.68% in after-hours trading to 0.82 USD. This decline places the stock closer to its 52-week low of 0.7 USD, highlighting investor concerns about the company’s ability to meet future financial targets. InvestingPro analysis indicates the stock is currently overvalued, with a beta of 0.36 suggesting lower volatility compared to the market. The broader market and sector trends remained relatively stable, indicating that the reaction was specific to Colabor’s results. For deeper insights into valuation analysis and more exclusive tips, check out the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking ahead, Colabor expects margin expansion through disciplined management of product and customer mix, alongside synergies from the Alimplus acquisition. The company is focusing on deleveraging and strengthening its balance sheet, with plans for additional mergers and acquisitions. Revenue forecasts for FY2025 and FY2026 are 117.04 million USD and 131.67 million USD, respectively. InvestingPro data reveals a current gross profit margin of 12.89%, suggesting room for improvement. The platform offers 12 additional investment tips for Colabor Group, helping investors make more informed decisions about the company’s future prospects.

Executive Commentary

CEO Louis Grenet emphasized the strategic importance of the Alimplus acquisition, stating, "The scale that this acquisition creates meaningful opportunities for growth across the province." He also reassured stakeholders regarding the recent cybersecurity incident, noting, "We are actively engaging with customers and suppliers and are working towards a timely resolution."

Risks and Challenges

• Cybersecurity threats: Recent incidents highlight vulnerabilities in Colabor’s IT infrastructure.
• Macroeconomic headwinds: Challenges in the restaurant channel could impact sales.
• Integration risks: Successfully integrating Alimplus is crucial for realizing expected synergies.
• Competitive pressures: Maintaining a competitive edge in the local food service market remains a priority.

Q&A

During the earnings call, analysts focused on the impact of the cybersecurity incident and the integration of Alimplus. Management confirmed that the new major account was secured through a competitive bid and that initial cost-saving synergies from Alimplus are included in the current EBITDA. Seasonal business improvements are anticipated to enhance margins in the upcoming quarters.

Full transcript - Colabor Group Inc. (GCL) Q2 2025:

Joel, Conference Operator: Good morning, ladies and gentlemen, and welcome to the Colabor Group Inc. Colabor Second Quarter twenty twenty five Results. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Friday, 07/25/2025.

I would now like to turn the conference over to Louis Grenet, President and CEO. Please go ahead.

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Thank you, Joel. Good morning, everyone, and welcome to Carabas Group Fiscal twenty twenty five Second Quarter Results Conference. This is Louis Grenette, President and Chief Executive Officer. Last evening, we released our earnings results for the twelve and twenty four week period ended 06/14/2025. The press release and disclosure documents can be found on our website and on sedarplus.ca.

The accompanying presentation, including statement on forward looking information and non IFRS performance measures can also be accessed online in the Investors section at calabar.com. Joining me today on the call is Yanique Blanchard, our interim EVP and chief financial officer. Yanique is an executive with over twenty five years of experience in the field of corporate finance. Welcome to our team, Yanique. Thank you, Louis and Abhi.

And I’m very happy to be able to lend a hand, and good morning, everyone. Thank you, Janik. Welcome. Before discuss key highlights on the quarter, I would like to address the recent cybersecurity incident. Early this week, on July 21, we disclosed being the subject of a cyber security incident.

We quickly hired renowned experts, and we were we’re sorry. And we are working day and night to mitigate the situation and fully restore relevant systems. At this point in time, the good news is that most of our operations are back online. As we speak, the full impact of this event is not fully known, and our ongoing work with our cyber forensic team will help shed more light on this. I am confident in our internal and external teams and how we have handled this event so far.

We are actively engaging with customers and suppliers and are working towards a a timely resolution. There is no doubt that this is an unfortunate distraction. All ends on deck to make sure that this is short lived and that we minimize the impact of cybersecurity incident. And now for a review of our key operational results in the second quarter of twenty twenty five. On June 3, less than two weeks before the end of the we finally announced the closing of Alintra’s acquisition, which includes the Toupee asset and an important six year supply agreement for the 4,000,000 cash and carry stores located in the Greater Montreal area.

This transaction represents $225,000,000 of annual sales from an attractive mix of clients. 55% are restaurants, mainly independent, 29% from retail customers, which includes the Nera supply contract, 14 are institutional, and 2% are other type of clients. This acquisition is highly strategic and it accelerates our growth plan, solidifies our position as the largest Quebec food service operator in the province and provides important revenues and operating synergies, which we discussed at length on previous calls. Since closing the acquisition on June 3, we’ve been working on aligning our teams, harmonizing processes and setting the stage for our combined company’s long term growth and value creation. The integration of Alimplus to Prey and the start of the new Mehran supplier agreement are going well and progressing as planned.

Although it took longer to close the acquisition, the quality of the asset is in line with expectations, and the revenue performance is also tracking well. Because of the acquisition and growth experience with our major accounts, second quarter consolidated revenues grew by 5.1%. This allows us to mitigate the effect of the renewal of the large institutional contract at a less favorable economic condition in the 2024 and the macroeconomic headwinds that are still affecting the restaurant channel. We are working gradually to improve this contract contribution to our overall margin. In the coming quarters, we expect to give margin expansion through disciplined management of our products and customer mix, while gradually realizing the expected revenue synergies from the acquisition.

The scale that this acquisition creates meaningful opportunities for growth across the province, our commitment to supporting the local food ecosystem gives us a distinct advantage over large international food service operator in Quebec. I remain confident about the potential of this acquisition and in our prospect for continued growth and profitability. Although this has proven a difficult start to the second half of the year, we are fortunate to work with such a dedicated group of individuals who are working tirelessly to make sure that we return to normal as quick as quickly as possible. We are eager to get the cybersecurity incident behind us and reap the benefits of the Allentus acquisition along with our growing scale, which is opening the doors to new opportunities. On this, I would like to turn the call over to Janik.

Thank you, Rui. The following discussion on Catapult’s financial performance in the 2025 is supported by the presentation made available on our website. Consolidated sales were up 5.1% and amounted to 169,500,000. Revenues from our distribution activities increased by 7.5%, mainly resulting from the acquisition, which contributed to contributed 8,280,000.00. Organic growth from major client account clients, including a new major account mentioned by me, and the effect of inflation, which was 1.7% during the period.

This allowed us to mitigate the effect of a major contract renewal, which took effect in December 2024 and ongoing headwinds in the restaurant industry. Revenues from wholesale activities were down by 1.8%, and as we indicated earlier, are declining at a slower pace for a second consecutive quarter, but still affected by the restaurant industry slowdown. Consolidated adjusted EBITDA from continuing operations amounted to $5,400,000 or 3.2% margin compared to $9,700,000 or 6% margin in the second quarter of last year, in large part from the effect of lower margin associated with the contract renewal and softness in the restaurant channel. Net loss was 2,300,000 or a loss of 2¢ per share, down from net earnings of a million 7 or profit of 2¢ per share in the last in the in the second quarter of twenty twenty four. Cash flow from operating activities were 4,500,000.0 in the second quarter, down from 5,000,000 in the equivalent quarter of last year, resulting mainly from a lower adjusted EBITDA, which was mitigated by a lower utilization of working capital from timing of supplier payments.

CapEx amounted to $700,000 in the second quarter and were part of a regular basic maintenance. For the entirety of 2025, we expect our maintenance and capital expenditures to be slightly lower last year and no material spend for Alimplis. In aggregate, we expect our annual CapEx to reach no more than $2,000,000 To finance the acquisition of the assets of Alimplus and Tupre, which we paid 48,500,000.0 the company amended and restated this senior first ranking secured credit credit facility totaling 91,750,000.00, extended the maturity on its 15,000,000 subordinate debt with Davis MacKebec, and entered into a new financing agreement with the leader for new $15,000,000 highly subordinate debt. The details of which can be found in the company’s disclosure documents. This brings the company net debt to 97,300,000.0, up from 47,880,000.00 at the end of twenty twenty four.

Consequently, the leverage ratio at the end of q two stood at 4.3 times adjusted EBITDA. At the end of fiscal twenty twenty four, the company’s leverage ratio represented 2.4 times adjusted EBITDA. Over the past few years, Colabor demonstrated its ability to generate strong cash flow and meaningful meaningfully reduce debt. Looking ahead, the company remains committed to further deleveraging and strengthening its balance sheet. At the end of the quarter, total available borrowing capacity in the credit facility stood at $17,000,000 I would now like to turn the call over to the operator for a Q and A period.

Joel, Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two.

If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Kyle McPhee with Cormark Securities. Your line is now open.

Kyle McPhee, Analyst, Cormark Securities: Hi, Ron. Just the first question, just to to make it abundantly clear because some of the

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: language is is confusing in

Kyle McPhee, Analyst, Cormark Securities: the filings. But this growth from a a major account as you call it, this was a new client that you landed during the quarter. Is that correct?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Hi, Kyle. It’s Louis. Thanks for the question. Yes. It’s a chain account in Quebec.

Of course, we cannot divulge the name, but the we started to to sell with them on June 3 or fourth in the month. So only a few days twelve days, I think, in the in the q two. Yeah. And the so that’s the same day as we started with AlienPlus.

Kyle McPhee, Analyst, Cormark Securities: Got it. Okay. And and can can you help us kinda quantify the the revenue impact from this new client going forward?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: The the revenue impact, there’s a that that’s a key account, like, it’s gonna be in the around $800,000 a month of of new business with this account. So that’s what we saw so far so far. Not so far so far. Yeah. Okay.

Kyle McPhee, Analyst, Cormark Securities: And and are you their their their their main or or only supplier? Exclusive. Exclusive. Okay. And was this a competitive process and you wanna bid, or was this a less formal process that ended up with you taking this business from, you know, a competitor?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: It’s a bid. It’s okay.

Kyle McPhee, Analyst, Cormark Securities: Okay. That’s helpful. So that

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: so that’s the good news. We we can share the names. When we share the names when they want us to share the names. I understand the how it works. Yeah.

Kyle McPhee, Analyst, Cormark Securities: Yeah. Understood. Okay. And then on I mean, in your debt leverage math and your MD and A, you disclosed the trailing year EBITDA of Allianz Plus. So for the first time, it looks like it’s around 11,000,000 of EBITDA.

But there’s a footnote with that that that says that EBITDA figure captures some expected synergies. So my question is what type of synergies are built into this LTM EBITDA figure you disclosed for Allianz Plus? Is it all expected future synergies or or just some initial minor stuff like corporate costs and and back office?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: So the straight answer is that it’s and and it’s not all. So this is a rolling twelve month forecast. As I said, it’s conservative, but it reflects the cost savings mainly and the operational efficiencies. I’ll give you an example such as route optimization. So we can do that as we speak since we’re in the high season.

Okay? So I cannot so we’ll we’ll we’ll start doing that and further opportunities of efficiencies towards the the end of the year will start. So that was delayed versus our first intentions of closing the deal, but it took longer as you noticed. Got it. Okay.

So then so the so the revenue synergies, Kyle, if you remember, there’ll be some volume effect that give us more with selling across Quebec and bigger in the Western Part of Quebec where where we had very little business, and we can do cross selling of our our meat business, our seafood business of Toupe Toupe is the fruit and vegetables division that we bought from Aden Kurf that will will now be in the cell in the the Calabar distribution organization. So there’s lots of revenue synergy at the end of the day that we’ll we’ll look at. And and what what’s great with this deal is that they’re they’re long in the restaurant channels, independent restaurant channels with higher margins. So we like that. And maybe a bit of color, if you don’t mind.

So we’re very satisfied with the integration of Alien Plus so far. No no breakdown. No breakthrough. It’s as planned. And yesterday, also, the restaurant business is affected, but some headwinds there, but the it has plans.

So we’re very happy with the work work they’re doing in part in part with our health and very satisfied. It looks good.

Kyle McPhee, Analyst, Cormark Securities: Okay. Appreciate all that color. We’ll we’ll take anything you can tell us as usual. You know, one last thing on Island Plus. So with the acquisition closing in q two, you disclosed your initial purchase price allocation, and and I see that it’s a pretty small, you know, present value of lease obligations you onboarded to to your balance sheet.

Looks like maybe you onboarded truck leases, but you did not take over lease obligations of the Allianz Plus facilities. Am I interpreting these numbers correctly?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Perfect. You did not onboard the leases obligations. We have a we have a right to use the facilities. So you’re right.

Kyle McPhee, Analyst, Cormark Securities: Okay. Perfect. That’s very helpful. I’ll pass the line. Thanks thanks for the answers.

Joel, Conference Operator: Your next question comes from Michael Glenn with Raymond James. Your line is now open.

Kyle McPhee, Analyst, Cormark Securities: Hey. Good morning. So just to start, I guess, I’m just Louis, I just wanna try to understand a couple of comments. So in the you you made reference to the 17,500,000 of existing borrowing capacity on the facilities. And then in the MD and A, you indicate that you are having some discussion with your financial partners regarding some amendments to the borrowing term.

So I’m just trying to rectify those two comments. Like, you you have the capacity on the existing facility, but you’re also in the process of seeking some amendments. If you can just maybe just give a little more information on that.

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Yeah. I understand that. I I understand. I really understand the question. And the Michael, thanks for your question, and good morning.

The it’s a timing effect. Okay? The the Aladdin sorry. The Aladdin Plus acquisition, it came in on June 3. Okay?

And high season, high peak season for our food distributor is starting at the Saint Jean Baptiste week around the June 24. Okay? So we made the acquisition. They have two big warehouses. We have three large warehouses and two smaller ones, and that’s when you beef up the inventories for the high season.

So it’s when we bought at Adelaide on June 3, so they didn’t add enough inventories and or normal inventories, and we add add normal inventories. So that’s why at the at the close of the q two, it was at 17,500,000.0. But to to operate efficiently, we have to order for five warehouses to beef up the inventories like Saint Louis to cover the the peak season of the week of the Quebec Saint Laurent Basin and the week of the the Canada Day. So that’s a a major that that’s a major change. So so we have to to be careful, and and we work closely with our financial partners, and we ask for they understand the business.

Okay? And they they’re they’re they’re they’re willing to help if needed. But, yes, we had room, and now we have less room because we had to build up those inventories. And and with the cyber attack sorry, cyber incident, we may have a little bit a small hit there also. So we’re working with our partners to help us go through this.

So this this will the leverage will come back to a normal lever over the next year for post acquisition, and it should be should be like Pierre was saying in the Pierre Blanchet was saying in the previous calls, like, we our leverage was low. It’s gonna go high and back to low. We generate generate lots of cash. So this is a temporary situation. This is not a crisis internally.

It’s a matter of operating well. And because of the delay of the transaction of other bank sorry. We had the synergies that were pushed further towards the the end of the year, beginning of next year versus being started now. So we can’t we we we we can add the the synergies that we wanted earlier. So we have to push them.

Kyle McPhee, Analyst, Cormark Securities: Okay. So just the indicate based on what you’re indicating, the third quarter will start working capital heavy. So should we expect then that leverage will tick moderately higher in the third quarter then?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: We we are in the third quarter. The from June 14, and that’s where we that’s what I was explaining. On June 3 and the second quarter, inventories were where they were supposed to be. Now with the acquisition and we the loaded the the the five big warehouses at one point in time. So that’s in q three.

Yeah.

Kyle McPhee, Analyst, Cormark Securities: Yeah. Okay. So leverage will move above 4.3 times exiting the third quarter. That’s what we should think about?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: I don’t know yet. It should be may maybe maybe a bit. Yeah. Yeah. And are you

Kyle McPhee, Analyst, Cormark Securities: able to disclose what is the covenant associated with those facilities, the leverage covenant?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: No.

Kyle McPhee, Analyst, Cormark Securities: Okay. And of the facilities, the two large and the Calibre three large, what which facilities exactly were impacted? Were all of the Calibre legacy facilities impacted by the cyber incident?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Yeah. Just the Calibor legacy. The Alenklus and Tupelier operations were not impacted. So it’s the the distribution and wholesale business and the specialty to the the lesser extent, the the specialty businesses were were impacted. It’s a good thing we had the I mean, just up and running so they can cover the some of our some of the collarbone legacy customers, you know, during the the week.

Yeah.

Kyle McPhee, Analyst, Cormark Securities: And just one more on the cyber. Were the facilities like

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: like, are you able to

Kyle McPhee, Analyst, Cormark Securities: say were they completely down for an a few days with the cyber incident, or were you able to ship some product?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: So so two answers to that, yes and no. So if you ask my IT guys, they’ll say, no. It was all affected, but we weren’t able to do manual orders. So, yes, for it took twenty four hours to to put back the the systems, the IT, the softwares in in a working conditions, but we’re helped with cyber for any expert thing saying, don’t start back yet. We need to check and verify if those the backups were contaminated or not.

So they were not. And we were able to restart the business progressively. So so through the IT system, normally, it starts back Tuesday Tuesday, and that happened on Sunday. Okay? So we started back manual urgent and important orders for hospitals as an example on Tuesday night, and then progressively, it’s increasing.

And by Monday, which we should Monday, Tuesday next week, we should cover a 100% of Close to a 100%. I I I don’t know, but we’re close to that already. So the ramp up is very quick.

Kyle McPhee, Analyst, Cormark Securities: Okay. Thank you. I will pass the line.

Joel, Conference Operator: Ladies and gentlemen, as a reminder, should you have a question, please press 1. Your next question comes from Siddiqui with Digital Bank Capital Markets. Your line is now open.

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Thank you. Good morning. Just wanted to ask about the large renewed contract and if you can maybe compare Q2 versus Q1 in terms of of performance and your efforts to improve margins on that contract. And maybe give us a bit of a glimpse of of what’s been done so far and what you’re working on in in coming months for for margin improvement there. Okay.

Related to the contract, as I explained in previous calls, so when you bid on a contract like that, you bid at a very low margin. So those are public bids, and we see afterwards what the competitors did and the we’re in the ballpark where we did. That’s my point. So the idea is to take the contract. At first, very, very little margins, and over time, we raise them.

Like, every month, there’s a bit of improvement. So how we do that is that we sell products that were not part of the of the deal at at a normal margin with them, and then that’s how it works. So it takes time. And but some months, it’s 60 basis points better, and another month, it’s 25 basis points better. And that’s the way that that’s the way it works.

And historically, that’s the way it was done and we saw. So second part of your question, the the back half is is always a we always have a q three, q four, a better margin than q one, q ’2 because of the low season And q one, q two, q three is a high season because of it’s a worry that it’s summer vacation and the rest the the restaurant business is increasing in that part of the year where we where we have a better margin than institutional or chain accounts as you can understand. So that’s that that it’s historically always been like that, and that’s what we see. And so far, we don’t give guidance at Calabar, but we see the general public information that we have more people taking vacation in Canada this year than than before. So that’s good for our seasonal business across the province of Quebec and where we are in the Maritimes.

And so that that this looks good. So that’s why we always project a better margin in the back half, more volume from the restaurants. Okay. And you think this this seasonal effect in q three is is stronger than the headwind you’re gonna maybe get from the the cyber incident, meaning you’re you would still expect q three to be stronger than q two on a from a margin perspective? Supposed to.

Yes. Okay. The problem is that this three three five, yes, and we the people are are there on vacation. Yeah. So these are these are the data we have and the so it looks it looks good on that.

Okay. Maybe just a last question for me. On the M and A front, you know, there’s obviously, you know, several moving pieces, and you just completed a a large transaction with Alimplus. But any thoughts on on the M and A strategy moving forward? Are you taking a pause, or are you still looking for for some targets right now?

We have a list of targets. We we we have to manage our finances and the with the roller coaster strategy, so we have to prepare for the next one. We have a list of inbound calls also for people that want to sell their business to us and part of our strat plan. We we have an aggressive strategy on the street business, the distribution business, and we have to to grow it, especially that we were not in the Eastern Part of sorry, the Western Part Of Quebec, and now we’re heading to us and the the the the leverage power we have will bring more customers there. We’re we’re not very well developed.

And on the acquisition, we’ll we’ll make it when when when we can afford another one, but we’re preparing that already. Yes. Okay. Thank you.

Joel, Conference Operator: Your next question comes from Michael Glen with Raymond James. Just

Kyle McPhee, Analyst, Cormark Securities: a few follow ons. So maybe, Louis, you spoke about gross margin in the opening remarks. Can you give some indications about how we should think about gross margin? For the past two quarters, it’s been around the 16% level. Are you able to indicate what you would hope to see through the next four quarters on gross margin?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Okay. So I can explain you the gross margin at 16% that was lower than than last year, and that’s the effect of the the institutional contract that we got back at a lower margin. So it’s simply that. Okay? So the rest of the business is healthy with the margin.

And and what screwed up sorry for my English, but what screwed up is the the fact that restaurant and she wants you to the the fact that the restaurant channel had headwinds, as you know, across Canada and The States. So that’s where we have the better margins and and and we’re our mix is not as good as it should be. So that’s how it is. And I as I just responded to Frederic, the back half is is different because of the the the seasonality, the vacation people staying in Canada, and the restaurant business business is much higher in the in q two, q three year over year. So that’s why it will come back to a reasonable a reasonable place.

Kyle McPhee, Analyst, Cormark Securities: K. Thank you. And then across all your facilities, are you able to indicate what your blended interest rate is right now across all your debt facilities?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: No. We’re not you can do the math with the with the the interest charge we have currently, but we don’t have that number, the average number to both mine.

Kyle McPhee, Analyst, Cormark Securities: Okay. Thank you.

Joel, Conference Operator: Your next question comes from Kyle McPhee with Cormark Securities. Your line is now open.

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Hey. So a quick quick follow-up. I think I

Kyle McPhee, Analyst, Cormark Securities: know the answer. We’re gonna try anyway. So, Allen Plus, you had an eleven day contribution in q two. You disclosed it was 8,800,000.0 of revenue for those eleven days. Can you tell us what EBITDA was attached to that revenue contribution?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Okay. First, it was twelve days time. And Okay. The the the EBITDA contribution was was where where where we thought it would be. So no surprises, as I said.

So a a full service margin time.

Kyle McPhee, Analyst, Cormark Securities: Okay. Yeah. Okay. And then there’s obviously still macro drag in in this key high margin restaurant channel for you. Wondering if you can offer any color on if that macro drag starting to fade at all.

I know there’s a seasonal lift, and you’ve talked about that a lot already. But at the extent of that year over year drag, that macro drag

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: in the restaurant channel, are

Kyle McPhee, Analyst, Cormark Securities: you seeing any signs of phasing into the back half of the year?

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Yeah. Exactly. Kind of the pre preseasonal effect. The full restaurant industry is behind across Canada except for the quick QSR, quick service restaurants. So people that with the remember, the effect it all came with the effect of the president of the South of Us and effect.

Okay? So so that that that’s where it’s it was hit. We saw we we see we saw in at the end of of q two, a bump up in in the restaurant business, and we saw a greater one with the seasonal. So I cannot predict how how it’s gonna be in on November 8. Okay?

But it’s encouraging. Like, we’re starting to get back preseasonal.

Kyle McPhee, Analyst, Cormark Securities: Got it. Okay. Thank you. That’s it for me.

Joel, Conference Operator: There are no further questions at this time. I will now turn the call over to Luis Fennette for closing remarks.

Louis Grenet, President and Chief Executive Officer, Colabor Group Inc.: Thanks, Joel. Thanks, Kyle, Michael, and Frederic for for your questions. Although the past week has been challenging, as you can understand, our team responded swiftly and decisively implementing the necessary measures to mitigate the impact of the cybersecurity incident. On a personal note, I’m very impressed with this. I’m confident in our ability to resolve the remaining issues in a timely and effective manner.

Our focus is to return to high levels of service and personalized service that we have been able to offer to our customers. We are now in the middle of the busy summer season, as I said. Although it remains in in in the restaurant channel, but we are entering in the second half of twenty twenty five confident and optimistic. The business acquired are performing well. Our major accounts customers are growing, and we are growing in our coveted markets.

In addition, with the ongoing tariff situation, as I was explaining, we expect more people to spend their summer vacation in Quebec and favor favor local suppliers. On the profitability front, we still have several levers to enhance margins, including optimizing our products and customer mix and growing scale. This concludes our call for the second quarter of fiscal year twenty twenty five. Thank you all for joining us. Have a great summer vacation.

Stay safe and healthy. Thank you.

Joel, Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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