Earnings call transcript: Jamieson Wellness Q1 2025 revenue beats forecast

Jamieson Wellness Inc. (JWEL), a company with a market capitalization of $5 million and an impressive track record of raising dividends for 8 consecutive years, reported a strong start to 2025, with its Q1 revenue surpassing forecasts. The company recorded a consolidated revenue of $146 million, a 14% increase year-over-year, beating the forecast of $142.44 million. This performance was reflected in the stock market, with shares closing at $31.63, up 0.51% or $0.16 in after-hours trading. According to InvestingPro data, the company’s financial health score is rated as "FAIR," with liquid assets exceeding short-term obligations. The company’s earnings per share (EPS) were not disclosed, but the revenue beat suggests a positive market sentiment.

Key Takeaways

• Q1 revenue exceeded forecasts by $3.56 million, marking a 14% year-over-year growth.
• The Branded and Strategic Partners segments both showed strong double-digit growth.
• Successful launch of new products in Canada, the U.S., and China contributed to performance.
• Implementation of a new SAP ERP system without operational disruptions.
• Stock price increased by 0.51% following the earnings announcement.

Company Performance

Jamieson Wellness demonstrated robust performance in Q1 2025, with significant contributions from both its Branded and Strategic Partners segments, which grew by 13.9% and 14.9%, respectively. The company’s international markets, particularly China, showed remarkable growth, with China alone growing over 50%. Online platforms and e-commerce channels also nearly doubled their performance, indicating a successful digital strategy.

Financial Highlights

• Revenue: $146 million, a 14% increase year-over-year.
• Gross Profit: Increased by $12.4 million, bringing the gross profit margin to 37.8%.
• Adjusted EBITDA: $19.1 million, a rise of 18.6% year-over-year.
• Adjusted Net Earnings: $5.9 million, an increase of $2 million from the previous year.

Earnings vs. Forecast

Jamieson Wellness beat its revenue forecast of $142.44 million by $3.56 million, achieving a 2.5% surprise. This strong performance is consistent with the company’s recent trend of exceeding market expectations, reflecting its effective growth strategies and market expansion.

Market Reaction

Following the earnings announcement, Jamieson’s stock rose by 0.51% to close at $31.63. This positive movement aligns with the company’s strong financial results and optimistic market outlook. The stock remains within its 52-week range, with a high of $38.2 and a low of $25.6, indicating stable investor confidence.

Outlook & Guidance

For Q2 2025, Jamieson Wellness forecasts consolidated revenue between $185 million and $195 million, suggesting up to a 5% growth. Adjusted EBITDA is expected to be between $32 million and $34 million, indicating up to a 7.5% increase. The company maintains its full-year guidance, anticipating continued growth in Canada and international markets while closely monitoring potential tariff impacts.

Executive Commentary

CEO Mike Pilato expressed confidence in the company’s performance, stating, "We’re very proud of our Q1 results and confident in our ability to continue to execute with excellence." CFO Chris Snowden highlighted the company’s strong financial position, noting, "We will continue to return capital through our dividend and we have obviously a very strong balance sheet and ample room to continue to invest in the business."

Risks and Challenges

• Potential tariff impacts on international operations.
• Market saturation in mature markets like Canada.
• Supply chain disruptions, although none were reported this quarter.
• Currency fluctuations affecting international revenue.
• Competitive pressures in the health and wellness sector.

Q&A

During the earnings call, analysts inquired about Jamieson’s performance in China, which was attributed to sustained investments in the region. Questions also focused on the company’s capital allocation strategy, with management emphasizing strong cash generation and a commitment to dividends and share buybacks. Analysts showed interest in the company’s digital strategy, particularly the growth in e-commerce and club channels.

Full transcript - Jamieson Wellness Inc (JWEL) Q1 2025:

Gaylene, Conference Operator: Thank you for standing by. This is the conference operator. Welcome to the Jameson Wellness Conference Call to discuss the Financial Results for the First Quarter twenty twenty five. As a reminder, all participants are in listen only mode and the conference is being recorded. Please be advised that the reproduction of this call in whole or in part is not permitted without written authorization from the company.

After the presentation, there will be an opportunity to ask questions. On the call today from management are Mike Pilato, President and Chief Executive Officer and Chris Snowden, Chief Financial Officer and Corporate Secretary. Before I turn the call over to Mr. Pallado, please note that a press release covering the company’s first quarter twenty twenty five financial results was issued this afternoon, and a copy of that press release can be found in the Investor Relations section of the company’s website. Please note that the prepared remarks, which will follow, contain forward looking statements, and management may make additional forward looking statements in response to your questions.

These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you to all risk factors contained in Jameson’s press release issued this afternoon and in filings with the Canadian Securities Administrators for a more detailed discussion of the factors that could cause actual results to differ materially from those projections and any forward looking statements. The company undertakes no obligation to publicly correct or update the forward looking statements made during the presentation to reflect future events or circumstances, except as it may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non IFRS financial measures during this teleconference. A reconciliation of these non IFRS financial measures was included with the company’s press release issued earlier today.

Also, please note that unless otherwise stated, all figures discussed today are in Canadian dollars and are occasionally rounded to the nearest million. I would now like to turn the conference over to Mr. Pallotta. Please go ahead, sir.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Thank you, Gaylene, and good afternoon, everyone. Thank you for taking the time to join us on the call today. I’ll start with an overview of our Q1 performance and key growth activities. Chris will then review the financials in detail before I conclude our prepared remarks and open the floor to questions. In the first quarter, consolidated revenue increased by 14% with growth in both of our segments and our Branded business exceeding our expectations.

We also grew adjusted EBITDA ahead of revenue in the quarter, reflecting both sustained global demand for our products and our team’s continued execution of our growth strategy. In China, our business expanded by over 50% as our brand awareness continues to grow. Our investments in demand generation drove growth in social commerce, retail and cross border channels. Our business on a key online platform in China nearly doubled in Q1 and successful Women’s Day and Chinese New Year campaigns with a top key opinion leader drove more than 1,500,000 consumer engagements in the quarter. In Canada, revenue increased by over 14% as strong consumption continued to outpace market growth led by continued growth in e commerce and club channels, while lapping lower shipments in Q1 twenty twenty four as a result of the labor disruption in this time period last year.

International revenue increased by almost 30% in the quarter, driven by increased consumption in multiple markets around women’s health and immunity campaigns and the lapping of lower shipments at the same time prior year due to the work stoppage. In The U. S, we are on track to meet our growth expectations with the Utheory brand as we continue to expand with our new e commerce partner. Growth in the quarter driven by strong double digit consumption increases was offset by the impact of a large innovation pipe fill in Q1 twenty twenty four resulting in an expected shipment decrease of 13%. UTheory innovation in 2024 was launched in the first half.

This year, new product launches are concentrated in the second half of the year, and we will see the results of that beginning in Q3. In our Strategic Partners segment, revenue increased by almost 15%. New contracts that we secured in the fourth quarter began shipping and we benefited from some timing of customer orders. It has been a busy start to 2025 at Jameson Wellness and we have no intention of slowing down. Our 2025 innovation cycle kicked off with several new gummy products launched into the Canadian market to support women’s health, digestive health and immunity.

The UTHERI GLP-one lineup still in its early days continues to grow in The U. S. Market. A new liver health product was launched in China and we secured new distribution of sleep and prenatal support products in several of our international markets. In March, we successfully launched our new ERP system, which our team has been working hard on for several years to implement.

Our new SAP System establishes a platform on which to grow our global operations, while enhancing our visibility and improving data management, driving efficiency and timely decision making. We are proud that the launch went smoothly with no disruption in manufacturing, shipments or business as our continued focus on executional excellence was on full display. Also in March, we held our first Investor Day here in Toronto. We spent the day introducing the investment community to our very strong leadership team and dove into our strategy and growth aspirations. The event was live streamed and the recording is available to view on our website at jamesonwellness.com.

Underpinning all of these projects and accomplishments is the need to ensure they are conducted in a way that is sustainable for our business and our planet. In the quarter, we released our second annual sustainability report detailing our progress towards our 02/1930 and 02/1950 sustainability targets. You can also find that on our website at jamesonwellness.com. We want to thank you for your support as we continue to deliver innovative natural health solutions and build on our foundation to drive profitable growth. Now let me turn it over to Chris to discuss our financial performance in more detail.

Chris?

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: Thank you, Mike, good afternoon. In the first quarter, consolidated revenue increased by 14% to $146,000,000 This growth was driven by Jameson brands, which exceeded our expectations with growth of 13.9%. We also grew our strategic partners segment with an increase of 14.9%. Looking deeper into our branded revenue growth by business unit, Jameson in Canada grew by 52.1 compared with Q1 twenty twenty four driven by digital commerce outpacing the market and continued growth in domestic retail and club channels. As expected, UTheory revenue declined by 13% as strong double digit consumption growth was offset by the timing of innovation with a large pipe fill in Q1 twenty twenty four.

For comparison, Q1 twenty twenty five revenue grew by 19.3% when compared with Q1 twenty twenty three. Revenue in Canada increased by 14.3% driven by consumption and pricing growth of 11.2% and the timing impact on shipments from our Q1 twenty twenty four labor disruption. International revenue increased by 28.8% driven by growth in The Middle East and Asia contributing 18.310.5% growth from the timing due to the labor disruption in the prior year. Consolidated gross profit increased by $12,400,000 while normalized gross profit increased by $10,400,000 mainly driven by higher revenues and increased margins. Gross profit in the first quarter of the prior year included non recurring costs associated with the work stoppage previously mentioned.

Consolidated gross profit margin increased by four forty basis points to 37.8% in the quarter, while normalized consolidated gross profit margin increased by two seventy basis points. Margin improvement was primarily due to the branded volume driven efficiencies and favorable channel mix. In the Jameson brand segment, gross profit increased by $12,700,000 while normalized gross profit increased by $10,400,000 mainly driven by revenue growth and higher branded margins. Gross profit margin in the Jameson brand segment increased by five twenty basis points, while normalized gross profit margin increased by three twenty basis points to 41.7%, mainly due to volume driven efficiencies and favorable channel mix in China. In our Strategic Partners segment, gross profit margin decreased by three twenty basis points to 9.8%, while normalized gross profit margin decreased by 160 basis points, mainly impacted by customer mix.

In the quarter, selling, general and administrative expenses of $49,600,000 reflected an increase of 25.4%. Excluding the impact of specified costs, SG and A increased by $7,300,000 or 21%, mainly driven by investments in resources and marketing to grow our brands globally, most notably in China. Specified costs of $7,400,000 are mainly comprised of IT system costs and the donations to support communities impacted by the wildfires adjacent to our facility in California. Operating income in the third quarter increased by $2,100,000 driven by higher gross profit and partially offset by our investment in Resources and Brands. On a normalized basis, operating income increased by $2,800,000 and adjusted EBITDA increased by $3,000,000 or 18.6% to $19,100,000 Adjusted net earnings in the quarter was $5,900,000 or $2,000,000 higher than the prior year.

A reconciliation of adjusted EBITDA and adjusted net earnings is provided in today’s press release announcing our first quarter results. Turning to the balance sheet and cash flow. In Q1, we generated cash from operations before working capital of $4,700,000 consistent with the prior year. Cash generated from working capital increased by $38,800,000 mainly due to the timing of customer collections, partially offset by higher planned inventories. Also in the quarter, we purchased for cancellation 348,160 common shares under our NCIB program for an aggregate consideration of $10,000,000 and an average share price of $28.71 In Q1, we distributed $8,900,000 in dividends and ended the quarter with $246,100,000 in cash and equivalent available operating lines.

Based on the strength of our cash flow forecasted in the year, we have announced a dividend of $0.21 per common share or approximately $8,800,000 in aggregate. The dividend will be paid on 06/13/2025 to common shareholders of record at the close of business on 05/30/2025. Now turning to the outlook. We maintain our outlook for fiscal twenty twenty five. In the second quarter, our guidance reflects shipment growth built upon a very strong growth in the second quarter of the prior year.

In Q2, we expect the following. Revenue in the Jameson brand segment is expected to increase between 510% comparing to exceptional growth in the second quarter of twenty twenty with growth of 17.2% as a result of the order backlog from the prior year work stoppage impacting that year’s first quarter. Revenue in the Strategic Partners segment is expected to decrease between 10% and sorry between 2030% due to existing customer order timing and innovation with several new programs shifting into the third quarter. Based on the factors noted, we expect consolidated revenue of between $185,000,000 and $195,000,000 contributing growth of up to 5%. We anticipate adjusted EBITDA to range between 32,000,000 and $34,000,000 or growth of up to 7.5%.

Our 2025 guidance does not include any potential impact from tariffs imposed on trade between The United States and other countries. While we recognize the situation is constantly evolving, based on the currently announced tariff framework, we do not expect a material impact on our business or earnings guidance. As such, actual results may differ from those in this guidance due to unforeseen changes in trade policies or economic conditions. A complete discussion of our outlook for the second quarter and full year fiscal twenty twenty five as well as factors impacting our expected performance is included in the outlook section of our MD and A filed this afternoon. And with that, I will turn the call back to Mike for closing comments.

Mike?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Thank you, Chris, and thanks everyone for joining us on the call today. We’re very proud of our Q1 results and confident in our ability to continue to execute with excellence. Once again, I’d like to thank the entire Jameson Wellness team for their efforts this quarter as we continue to push forward with our purpose of inspiring better lives every day. Now we’ll turn it over to Jaylene for questions and answers. Thank you.

Gaylene, Conference Operator: Thank you. We’ll now begin the question and answer session. Our first question is from Derek Lessard with TD Cowen. Please go ahead. Mr.

Lazard, your line is open.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. Can you hear me? Yes. We can hear you, Derek. Sorry about that.

Good afternoon, everybody.

Derek Lessard, Analyst, TD Cowen: I just wanted to Mike, you talked in your prepared remarks, you said branded the branded exceeded your expectations. Now

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: was

Derek Lessard, Analyst, TD Cowen: it all branded or was it mostly China?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: No. It exceeded our expectations pretty much across the board. Would say, Utheory met our expectations. As we said in those remarks, it was right kind of where we expected it. China over exceeded our expectations and international in Canada would have been just above kind of our high end expectations.

So it was pretty widespread with UTheory meeting expectations, Derek.

Derek Lessard, Analyst, TD Cowen: Okay. And I guess I’ll still hit on like so China is substantially outpacing your full year guide now. And curious as and curious why you’re not maybe adjusting your guide? Is it just maybe out of increased conservatism given the backdrop?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. I think what’s important to remember in China is you’ve got two big windows of promotion. You have the June promotional window and the eleveneleven promotional window And I just think at this point, let’s get through the next big promotional window, which is a very material part to the business, we’ll see where that lands, and we can go from there. But with one quarter under our belt, and it’s the lower quarter lowest quarter of the year, it’s just not time to reflect anything greater than what we’ve called on the year.

Derek Lessard, Analyst, TD Cowen: Okay. Totally fair. And maybe just one more for me. Could you just maybe talk about the progress that you’re seeing from your U.S.ecom partnership?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes, it’s going very well. We’re seeing substantial consumption increase. In the prepared remarks, you heard me refer to strong double digit consumption growth in The United States over the first quarter. A good chunk of that was driven by our e commerce partnership and some of the results we’re seeing there. We’re very pleased with it.

That partner actually came into our Board of Directors meeting this week and did a full review, and we were quite impressed with where they’ve taken this business so far.

Derek Lessard, Analyst, TD Cowen: Okay. Thank you. Thank you.

Gaylene, Conference Operator: The next question is from Navin Yochan with BMO Capital Markets. Please go ahead.

Navin Yochan, Analyst, BMO Capital Markets: Hi, guys.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: How’s it going? Good.

Navin Yochan, Analyst, BMO Capital Markets: I was hoping we could start on the Jameson brand segment. Just in the domestic market, in Q2, you’re obviously lapping a strong prior year quarter that benefited from the shift in revenue due to the labor disruption. Hoping you could maybe quantify the prior year benefit you received from that shift. And then would you still expect to deliver year over year growth in the domestic market in Q2?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. I mean, had a if you go back to a year ago, we had a soft Q1 and a strong Q2 because of the work stoppage. And what’s great is when we look at our Q2 expectations, and we don’t guide by business unit on the quarter, but we do still expect some level of growth in Canada even off of that strong growth a year ago. So I think in our consolidated revenue guidance that Chris shared with you, you see a range of between 510%. Canada would be on the lower end of our expectation of growth for the quarter, but definitely still growing, and we continue to see strong consumption in Canada.

Navin Yochan, Analyst, BMO Capital Markets: Okay, great. That’s helpful. And then just still on Canada here, you talked about 11.2% in the quarter from volume and pricing. Are you able to break that down between volume as well as pricing? And then I believe last quarter you mentioned you weren’t seeing any cost inflation in the Canadian business and then didn’t intend to take price this year.

So if you could just give an update there as well?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. So the way to think about it is pricing would have driven kind of mid to high single digits of that growth number of I think it was plus 11 that we quoted and low single digits on units. Great. Sorry, what was the second part of

: the question, Noam? Cost.

Derek Lessard, Analyst, TD Cowen: Oh, cost.

Navin Yochan, Analyst, BMO Capital Markets: Yes. Just thinking about pricing for the rest of the year.

: Yes. I mean there’s

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: been no real difference or increase in cost that we see. Typically, we lock in cost for a longer time frame, usually twelve twenty four months on most key ingredients, not all, but most. We haven’t seen any material increases in costs from our last quarter that would lead to any pricing in this year that we see right now. As we always say though subject to change if we were to ever to see an increase that would have a material impact, we would take pricing and we would protect our margins as we always have.

Navin Yochan, Analyst, BMO Capital Markets: Great. Thanks for the details.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: No problem. Thank you.

Gaylene, Conference Operator: The next question is from Ryland Conrad with RBC. Please go ahead.

Ryland Conrad, Analyst, RBC: Hey, good afternoon guys. Thanks for taking my questions. Just to start off, curious how your discussions with U. S. Customers and strategic partners are going.

I know you previously walked through some of the potential offsets or mitigating actions for potential tariff exposure there. So just any updates on progress there as well?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. Mean based on the current tariff framework that’s been announced, there is no impact on that business at this time. Based on the announcement of tariffs being tariffs not impacting and that falls under Kuzma, we’ve been now in a situation where the risk on strategic partners is not currently relevant. However, as Chris talked about in his prepared remarks, it is ever evolving and ever changing as we all know. So we’ll continue to keep an eye on that.

And if things were to change, we’ll make sure we communicate with how we’re feeling at that time.

: Okay,

Ryland Conrad, Analyst, RBC: great. And I know last quarter you mentioned you hadn’t seen any kind of indications of trade down activity. So just wondering if you’ve seen any kind of changes to consumer behavior in The U. S. Or Canada, just given the elevated macro uncertainty?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: We have not. I would say, though, based on consistency of, I’d say, probably the last eight to ten quarters we’ve been talking about this, maybe twelve quarters. We haven’t seen a trade down, but we continue to see channels like e commerce and club outpace traditional channels across all of our markets, to be honest. And I do believe that is a continued focus on the consumer to look for places where they can drive value or find value. I’d say the same holds true for the discount channels of a grocer, same type of trend that we’re seeing.

Ryland Conrad, Analyst, RBC: Got it. Thanks.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: You’re welcome.

Gaylene, Conference Operator: The next question is from Justin Keywood with Stifel GMP. Please go ahead.

: Good afternoon. Thanks for taking my call. So just on the Canada branded growth, wondering if you’re seeing any market share gains with the Buy Canada trend and if that showed up in Q1 or if you anticipate that to be impactful in Q2 and going forward?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: It’s hard to say where the growth is coming from, Justin. I definitely think there’s probably some tailwind there. I would remind people though that a lot of our category is made in Canada. I mean the top two players in country are both Canadian. Private label is all obviously Canadian brands that are owned by the retailers as well.

So I think you’re seeing some a little bit of lift maybe in the consumption growth, but I don’t think it’s anything material or anything that will be sustainable for the long term here in our category.

: And then cash generation was really strong in Q1, where typically, I think it’s a muted cash generation quarter, correct me if I’m wrong. Was there anything unique to account for that? And how should we look at working capital use for the remainder of the year?

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: We continue to be on track for our guide of cash from operations on a full year basis. You’ll see a shift in the timing of cash flow this year where with just a couple of specific customers had extended terms. Those terms have been changed and we’re looking for an accelerated collection of cash, which has impacted Q1 specifically, but will not impact the company significantly going forward. So we would expect cash use in working capital in Q2 and Q3 as we build for the busiest the busier Q4 and then a drawdown in inventory and another generation of cash in Q4.

: Understood. And that leads me to my final question just on capital allocation 10,000,000 used for share buybacks, which I think is relatively high compared to historically. How should we be looking at capital allocation and use of cash as far as share buybacks, dividends or potential M and A?

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: Yes. So we’re going to continue to invest in our stock as the price remains competitive and well below historic trading ranges from a multiple perspective. You’ll see that share buyback continue into the second quarter. Beyond that, we’ll assess it on a quarter by quarter basis. We will continue to return capital through our dividend and we have obviously a very strong balance sheet and ample room to continue to invest in the business and grow the business where we see fit.

: Great. Thank you very much.

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: Thanks Justin.

Gaylene, Conference Operator: The next question is from Zachary Evershed with National Bank Financial. Please go ahead.

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: Good evening, everyone. Congrats on the quarter.

Derek Lessard, Analyst, TD Cowen: Thanks, Zach. Thanks, Zach.

Zachary Evershed, Analyst, National Bank Financial: I wanted to hammer on that China outperformance. Was this more of a one time hit you got in advertising strategy? Or is this a repeatable pattern that you’ve invested in?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Well, we’re starting like I referred in my remarks about an increase in brand awareness. We have not put in a one time hit in Q1 of an increase in demand generation. It all now has been moderated to last year’s increase and then demand generation investment the year is more at the level or just below the level of revenue growth that we expect. We believe that we’re starting and it’s the early days, but really to see some of that brand awareness come through in a way that is repeatable and a way that is building loyalty. It’s really hard to measure it at this point.

It’s really hard to measure data in a country like China that is extremely fragmented. I you talk about e commerce in a country like Canada or The United States, you’re talking about one or two platforms that are very measurable. When you’re talking about China, you’re talking about dozens of platforms that we’re interacting with, and it’s really hard to get really detailed data on them and put it together. But we do feel really good about Q1. We do feel really good about the baseline business that’s building there.

We do believe we’re really starting to see some of the benefits of the investment we made in 2024 continuing into 2025.

Zachary Evershed, Analyst, National Bank Financial: Makes sense. Thanks. And then that similar question on the uptick in gross margins from the favorable mix shift, also something that you foresee going forward?

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: I think that was more a result of year on year factors. We still hold true to our guide of approximately 150 basis points of margin growth in totality for the company full year.

Zachary Evershed, Analyst, National Bank Financial: Thank you. I’ll re queue.

Derek Lessard, Analyst, TD Cowen: Thanks Zach.

Gaylene, Conference Operator: The next question is from Tanya Armstrong with Canaccord Genuity. Please go ahead.

Tanya Armstrong, Analyst, Canaccord Genuity: Hey, congrats guys on the phenomenal quarter. Just one for me here on China. In your prepared remarks, you mentioned something about a doubling of business on a key online channel. Can you talk to how material that one channel is to the overall China strategy and what drove that doubling?

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Yes. It is one of our top three platforms, I would say that. As I talked about a few minutes ago, we participate in a couple of dozen or more platforms, but it is one of our top platforms. I think it kind of plays into Zach’s question, which is, it is a platform that is one of the more traditional e commerce platforms and doesn’t grow based on key opinion leader investment. So it’s numbers like that in a platform like that that start to show us that the baselines are improving, the repeats seem to be coming in and that we’re building a sustainable brand in sorry, in China based on the investments that we’ve made to drive trial over time.

Tanya Armstrong, Analyst, Canaccord Genuity: That’s great. Thanks so much, Mike. Thanks, guys.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: You’re welcome. We

Gaylene, Conference Operator: have a follow-up from Zachary Evershed with National Bank Financial. Please go ahead.

Zachary Evershed, Analyst, National Bank Financial: Hey, thanks, guys. Just a quick one on the ERP implementation. Do you think IT system implementation costs will normalize now or are there still a couple of quarters of post implementation start up costs?

Chris Snowden, Chief Financial Officer and Corporate Secretary, Jameson Wellness: So we will have additional costs in Q2 as we drive continued efficiency through the system and then we move on to our U. S. Business. So you’ll see a leveling down of those investments throughout the year and then you’ll see a step up as we move back to focus on implementing the same system in our U. S.

U. Theory business.

Zachary Evershed, Analyst, National Bank Financial: Got you. Thanks. I’ll turn

: it over.

Mike Pilato, President and Chief Executive Officer, Jameson Wellness: Thanks, Seth. Thank you.

Gaylene, Conference Operator: This concludes the question and answer session and today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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