Earnings call transcript: Premium Brands Q1 2025 revenue beats forecast

Premium Brands Holdings Corporation (Market Cap: $4.03B) reported its Q1 2025 earnings, showcasing a notable revenue beat amid a minor EPS miss. The company achieved revenue of $1.68 billion, surpassing the forecast of $1.59 billion, while EPS came in at $0.68, slightly below the expected $0.7211. Despite the EPS miss, the stock surged 7.09% in pre-market trading, reflecting investor confidence in the company’s growth trajectory. According to InvestingPro analysis, the stock is currently trading near its Fair Value, with a P/E ratio of 19.04.

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Key Takeaways

• Revenue exceeded expectations by $90 million, reaching $1.68 billion.
• EPS fell short of forecasts by $0.0411.
• Stock price rose by 7.09%, highlighting positive market sentiment.
• Strong performance in the US bakery segment with over 30% growth.
• Ambitious revenue targets set for 2025, aiming for $7.2-$7.4 billion.

Company Performance

Premium Brands Holdings demonstrated robust performance in Q1 2025, particularly in its revenue generation, which outpaced forecasts. With an impressive gross profit margin of 55.9% and a strong current ratio of 3.68, the company’s focus on expanding its protein-based product offerings and the US bakery segment has yielded significant growth, positioning it well against industry trends that favor value-seeking consumers.

Financial Highlights

• Revenue: $1.68 billion, up from the forecasted $1.59 billion.
• Earnings per share: $0.68, below the forecast of $0.7211.
• Corporate costs are expected to run between $10-10.5 million.

Earnings vs. Forecast

Premium Brands Holdings missed its EPS target by approximately 5.7%, delivering an actual EPS of $0.68 against a forecast of $0.7211. However, the company exceeded its revenue forecast by 5.66%, reporting $1.68 billion compared to the expected $1.59 billion. This revenue beat indicates strong sales momentum and effective execution of its growth strategies.

Market Reaction

The stock price of Premium Brands Holdings increased by 7.09% following the earnings announcement, closing at $80.24. This upward movement suggests that investors are optimistic about the company’s future, driven by its revenue performance and strategic initiatives. InvestingPro’s comprehensive analysis reveals an overall Financial Health Score of "GREAT" (3.09/5), supporting the positive market sentiment. The stock is trending towards its 52-week high of $90.04, reflecting bullish market sentiment.

Outlook & Guidance

Looking ahead, Premium Brands Holdings has set ambitious revenue targets for 2025, aiming for $7.2-$7.4 billion. The company is also focusing on capacity expansion, with new facilities in Tennessee and the Greater Toronto Area expected to add $1.7 billion in capacity. Additionally, the company plans to accelerate organic growth in the latter half of the year.

Executive Commentary

CEO George Paliologo emphasized the company’s strategic positioning, stating, "We’re in the early innings in terms of our US business," highlighting growth potential in the US market. He also noted, "Demand for protein is very strong," underscoring the company’s focus on high-demand food categories. CFO Will Kalutycz added, "We expect to be a lot quicker than that [5-year capacity filling]," indicating confidence in the company’s expansion plans.

Risks and Challenges

• Potential cost pressures impacting profitability.
• Temporary financial challenges affecting interest income.
• Market softness in the convenience store channel.
• Commodity cost pressures expected to stabilize later in the year.
• Execution risk associated with capacity expansion and new product launches.

Q&A

During the earnings call, analysts inquired about the company’s US market demand and consumer trends, seeking clarity on the capacity expansion strategy and the temporary financial challenges related to Clearwater. The company addressed these concerns, emphasizing its focus on growth and innovation.

Full transcript - Premium Brands Holdings Corporation (PBH) Q1 2025:

Alan, Conference Call Moderator: Afternoon, ladies and gentlemen, and welcome to the Premium Brands Holdings Corporation First Quarter twenty twenty five Earnings Conference Call question and answer session. At this time, all lines are in listen only mode. This call is being recorded on Wednesday, 05/07/2025. Our speakers will be George Paliologo, CEO and President of Premium Brands and Will Kalutycz, CFO of Premium Brands. I would now like to turn the conference over to George Paliologo.

Please go ahead.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Thank you, Alan. Good morning, and welcome, everyone, to our twenty twenty five first quarter conference call. With me here today is our CFO, Will Kalutych. Hopefully, you had a chance to listen to our prerecorded call posted on our website this morning. We will now take your questions.

Alan, Conference Call Moderator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star one in 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 two. If you’re using a speakerphone, please lift the handset before pressing any keys.

One moment please for your first question. Your first question comes from Martin Landry of Stifel. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Hi. Good morning, George and Will. Good morning, Martin. My first question is is pertains to The US. It’s it’s a more of a macro question.

You know, I’m wondering what you’re seeing in terms of end consumer demand in The US. There’s kind of, you know, decreasing consumer confidence. We’ve seen some some QSR reporting slower traffic. I was wondering if if you’re seeing at what at retail and with with some of your clients, any sign of weakness more recently? Again, Martin, I I think it’s important to look at the food space in terms of categories.

Right? Because when you look at the entire food space, there’s a lot going on there. Definitely, demand for protein is up. I’ve looked at some statistics recently and demand for protein is very strong for the reasons that we’ve discussed in the past. You know, it’s a major, major macro trend as consumers are are maybe consuming less carbohydrates and and and and are consuming more protein.

So so that’s still continuing, and and, obviously, we’re benefiting from that. And then, you know, in in terms of consumers overall in North America, there’s no question that consumers are looking for more value. They’re still eating the same product, but they’re changing the channel that they buy from. So they’re in some cases, they’ll switch from retail to club, anyway, so these are trends that we’ve been observing in Canada for a while. You’re seeing a little bit of that in entirely in The US, you know, state by state, I’d say it differs.

But but anyway, I hope I kind of covered your your question. Okay. So so overall, not much weakness or reports so far in at at your at your at your end customers. Yeah. That’s the only thing I would qualify that on, Mark, is we we have seen a little weakness in the c store channel.

Now it’s not a big component of our business in The US at this point. It is very an area we’re looking to grow, but it it is the one area we have seen some softness consistent with the industry statistics. Again, we need to be yeah. We we need to be careful, Martin, with generalizations. Right?

Because different categories are performing differently based on the macro trends. Right? The reason we’ve had a good quarter and recorded a good quarter is because we’re focusing in the categories that that are in demand. Right? So that it’s important to understand that.

Yeah. Okay. And then just a second question, Will. You reiterated your annual guidance. It calls for revenue growth of 11 to 14% this year.

I was wondering if you could provide some color on the cadence you expect in terms of revenue growth throughout remainder of the year. Yes. So it is definitely weighted heavily to the back half, Martin. We’ve got a lot of new initiatives coming on. And it’s interesting.

A couple of quarters ago, we shared a pipeline of opportunities. In the first quarter, we realized about a hundred and 32,000,000 of that pipeline with a lot of that sort of coming on over the course of q two. So yeah. So you you should still see some growth in q two, but really the the much stronger growth being increased q three, q ’4. Which which again, Martin, will also be driven by capacity coming on board as well throughout the ecosystem.

Okay. Understood. Thank you, and best of luck. Thanks. Thank you, Martin.

Alan, Conference Call Moderator: Your next question comes from Derek Lessard of TD Cowen. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Yes. Good morning, George and Will. Glad to see you guys coming in with some good momentum into the year. Thank you, Derek. Thanks.

I just want to maybe take Martin’s question one step further and talk about your five year target. It’s going to take some healthy compound annual growth to get there. So I was just wondering, I guess, how you guys are thinking about the drivers of that growth, particularly as we kind of look out longer term and how you’re thinking about the the cadence of that. Yes. So it it it really is it goes back to George’s previous comment around capacity.

So, you know, first, you gotta build the capacity before you can start pursuing opportunity. The opportunities have been there for a while now, and and we hold that out, you know, earlier, you know, I think our pipeline at that point was about 1,200,000,000.0 of sales opportunities we were pursuing, and and it’s since grown. So it’s really the capacity now in place. We are now sort of working with our customers on launches and specifics around product design. And and so if you really should see that pick up over the course of ’25 and then continue to accelerate ’26.

You know, once we finish Tennessee, the Tennessee facility, which is actually now in commercial production, And then when we our GTA facility comes on in 2026, you know, from starting from the 2024 sales of about 6 and a half billion, that gives us about 1,700,000,000.0 of capacity from these new projects incremental to any other capacity that was in the system. So it’s really now leveraging that capacity, accelerating that growth. So you’re you’re gonna see some good strong growth in the back half of this year, continue to accelerate ’26. And then ’27 sort of come down a bit. But our internal organic target of that $10,000,000,000 in sales is roughly 9.2 to 9.5 and then we expect some acquisitions to figure it out.

So we are nicely on track for that. Derek, the only thing I would add to that is that, as Will said, obviously, we’re doing a lot of good things in The U. S. Market. We’re still seeing that we’re in the early innings in terms of our although that that business has grown a lot for us.

And historically, the only reason we haven’t grown more is access to capacity. And a good example of that is what happened this quarter with our specialty bakery group. Right? Basically, we’ve invested in two plants, one in Canada and one in The US. Both of them really focused on The US market, and they’re getting a lot of traction now because they have capacity.

Very helpful, and that’s that’s great color on on on that. Just so maybe just two housekeeping questions for me before I I re queue re queue. Well, more on the corporate cost. It’s fluctuated between, I guess, around $4 to $10,000,000 in recent quarters. Just whether what’s the best way to think about the corporate cost?

And then maybe on the investment income, it jumped a little bit to $15,000,000 this quarter. Just just wondering what the run rate should be. Yeah. So, you know, our our corporate costs fluctuate. You know, generally, q four is a when we adjust a lot of our bonus accrual.

So, you know, given that, you know, last year what didn’t quite meet our expectations, you saw a larger adjustment in Q4, which brought it down. And generally, our corporate run rate should be around 10 to, you know, $10.10 and a half million dollars in a normal situation. Okay. In terms of the the the bump in the interest on the the interest income, that really came up, you know, we we refer to an advance to Clearwater. We we did do a a temporary advance to them in the as early in the quarter, and that drove our interest costs up a little higher.

Okay. Thank you. Thanks, Derek.

Alan, Conference Call Moderator: Your next question comes from Kyle McPhee of Cormark Securities. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Hi, everyone. Just a little bit more hi, guys. Just a little bit more on this US organic volume growth that keeps turning on. So we can kinda annualize The US growth that’s turned on, get a picture for, you know, what a contribution would look like in 02/1926 from

Will Kalutycz, CFO, Premium Brands Holdings Corporation: a full year of all this new stuff. Can can you

George Paliologo, CEO and President, Premium Brands Holdings Corporation: maybe give us a picture for what that annualized run rate of all this new US growth turning on might look like exiting this year? You know, presumably, it’s a much bigger number than we’re at now. Yeah. We we we haven’t given guidance on 2026 at this point, Kyle. So I I I’m gonna hold off, you know, speaking to the specifics around that.

Okay. I well, is it fair to say, like, in that old pipeline project, 700,000,000 of highly likely revenue turning on? That’s, you know, that’s still very highly likely to turn on this year. Sorry. Say that again, Kyle.

You have that pipeline side of US organic volume growth program turning on. It was 700,000,000 turning on this year and highly likely stuff. Will that all be on by the end of this year? That should all be on by the end of this year. Yeah.

Got it. Okay. And your Tennessee sandwich plant sounds like it’s all tracking as expected. We’ll be ramping up later this year.

Alan, Conference Call Moderator: Can you give us

George Paliologo, CEO and President, Premium Brands Holdings Corporation: any comments on, you know, utilization targets for all that new capacity by the, you know, end of this year, end of next year? How visible is that for you? Yeah. When we build the IRRs on these projects, we generally use a five year period for the the filling of the capacity, but we we expect to be a lot quicker than that for this first phase. First phase is about 280,000,000 in sales capacity.

And based on the pipeline of opportunities we’re looking at, you know, that that could be filled next year. Got it. Okay. That’s helpful. And then last one for me.

Now in recent quarters, you’ve been carving out the impact of a major food service channel sandwich client. It’s been a pocket of drag. Now partial offset to otherwise very impressive US organic volume growth. Can you give us any color on the impact of this client in your year over year trend for the sandwich platform? Like, what was their impact in in your US sandwich organic volume growth of 8% that you posted this quarter?

Yeah. They you know, we we had a pretty solid quarter with them. I I I would comment though it was a little off trend. We had a couple of new product launches that sort of channel fill and those sorts of elements created some additional sales. But the reality is their business is improving and we’re sort of seeing our core SKUs improving.

But but q one was a bit off trend, a bit above trend. I I wouldn’t expect to see that strong for q two. Okay. So there’s still drag with those clients, but probably diminishing drag. It’s kinda Yeah.

I I I wouldn’t I wouldn’t call it a drag, Kyle. I would say stable. I would say stable. That drag will be growing. Yeah.

Stable to growing based on their the innovation we have in the pipeline. Got it. Okay. I’ll pass the line. Thank you for calling.

Thanks, Kyle.

Alan, Conference Call Moderator: Your next question comes from Steven McLeod of BMO Capital Markets. Your line is already open.

Will Kalutycz, CFO, Premium Brands Holdings Corporation: Great. Thank you, guys. Good morning and

George Paliologo, CEO and President, Premium Brands Holdings Corporation: good afternoon from the East Coast. Hey. Hi, Stephen. Good morning. Hi.

Just a lot of great color and actually couple

Will Kalutycz, CFO, Premium Brands Holdings Corporation: of my questions have already been answered, but I just wanted to confirm one thing with respect to the the pipeline of of sales growth. You know, when you talk about that 700,000,000 highly likely, is that still on a pipeline of 1,400,000,000.0? Or did I hear correctly that, you know, you you said that that’s actually expanded from where it was before?

George Paliologo, CEO and President, Premium Brands Holdings Corporation: No. That’s the highlight, like, as I mentioned earlier, about a 30 of that 700 is now realized and and in play. But most of that that that incremental stuff is in the likely or 2026 bucket. Okay. And but how do

Will Kalutycz, CFO, Premium Brands Holdings Corporation: we think about, like, the total pipeline?

George Paliologo, CEO and President, Premium Brands Holdings Corporation: The pipeline, Steven, continues to to expand all the time because we’re working on a lot of projects with a lot of larger customers. Right? I’ve made comments before that, you know, the business will become lumpy as we get bigger and bigger in The US because, again, we’re working on a lot of major projects with very large customers. Yes.

Will Kalutycz, CFO, Premium Brands Holdings Corporation: Okay. Okay. That’s that’s great. And then maybe just turning to the PFD segment, you know, lobster continues to be a drag. You cited kind of higher prices and and and obviously, the tariff or the trade war impact of lower exports to China.

Is it fair to assume that most of that drag is from the lower exports?

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Actually, it’s the reverse. Most of it is from the higher price environment. You know, we’re finding that demand at certain price levels both in the food service and retail channel gets impacted quite dramatically. But we’re cautiously optimistic in that the new fisheries is starting. We’re expecting reasonably strong fisheries and that should help address that and and and reverse that trend through the course of q q two.

Okay. That’s that’s helpful. Okay. Thanks Thanks for the color, guys. Thanks so much.

Thanks, Steven. Your

Alan, Conference Call Moderator: next question comes from Ty Collin of CIBC. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Good morning, George and Will. Thanks for taking my question. It seems like some of your M and A conversations based on your slide deck have moved from the active category to early stage since last quarter. Can you maybe just provide some more context behind that? Like, that a deliberate decision given where leverage is at?

Or is that something to do with the market and the opportunities that are out there? I think what we said earlier, Kai, is that you shouldn’t pay a lot of attention to that. You should pay attention to the three categories to the to the left of the page because a lot of times, again, this is a relatively small industry. And if we report something advanced, then people kind of speculate as to who it is. We’re in a lot of robust discussions with regards to our M and A pipeline.

As we’ve indicated in in December of last year and in January, when we want to move on them, we were able to do that. And obviously, we have urgency to move on them given the tariff situation and us wanting to manage that situation and potentially minimize the impact of any potential tariffs. Right? So again, the the bottom line is that we’re in a lot of very, very good discussions with regards to m and a. Okay.

Got it. Thanks. That’s helpful. And then I just wanted to to circle back to Clearwater the advance that you made to them. Can you maybe just provide a little more color around that dynamic and and that decision?

Why why you felt that was necessary? And is this kind of a a onetime thing? Or or does that business potentially need more funding going forward? Yes. So Clearwater is, you know, their their core Canadian operations, which is, you know, the heart of the business, the most profitable part of their business.

They’re at the low point in in in the number of their species of sort of natural commodity cycles, not natural cash cycles. And and so it it it it’s it’s been an unusual low in that. Normally, these sort of are offset different species at different times, but it was kind of a a worst case scenario where almost all the species were hit at once. So that that hit their cash flows pretty hard, hit their, you know, and their their available credit is is is a function of their cash flow. So their their availability of credit is impacted by that as well.

So this is a temporary advance. We’re cautiously optimistic. We’re not only going to get this back this year, but they’ll actually consume interest payments. There’s a lot of positives happening in the Clearwater business. We are starting to see catches come back.

We’ve seen some really optimistic signs in the second quarter. And so we’re cautiously optimistic about the back half of the year. Also, the management team at Clearwater has done an incredible job identifying some underperforming assets and are looking at some strategic alternatives around those. So lots of good things happening in the business. We are at a temporary goal, but we truly do see that as temporary.

Alan, Conference Call Moderator: Your next question comes from Michael Glen of Raymond James. Line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: A lot. Well, I just want to pin you down maybe a little bit on how to think about Q2 because Q1 organic volume growth was quite good, and then you had this back half acceleration. So you indicated that you are launching some programs in q two. So is is q two somewhere in between something better than q one, but not quite as strong as the back half of the year? Is that how we think about OVGR in q two?

Yeah. Well and it’s a little tricky too. Right, Michael? Because q one is a seasonally slow quarter. So when you’re looking at percentages, things can get a little distorted.

So you shouldn’t expect to see the same percentages necessarily, but you should still continue to see some good strong growth. And the only other comment I would make is the fact that the key QSR customer we’re talking about earlier, again, we’re not expecting to see the same strong sales growth in Q2 that we saw in Q1. So I guess, it’s a reasonable good growth for the quarter, but much more heavily weighted to Q3 and Q4 as we go to our guidance for 2025 of that, you know, 7,200,000,000.0 to 7,400,000,000.0. The only other thing that I would add is that we do expect to launch some major programs with with key customers, large programs, and the timing of the launch would will play role in in terms of what we show for growth in the q two anyway, just because these programs are are very large. Yeah.

Okay. And then during the call from this morning, you you did provide a three step plan to lower reducing leverage. Just on two of those, the inventory levels, are you able to indicate how much you potentially see coming out of inventory? And then number two, can you remind us of the amounts associated with the sale leaseback that you’re pursuing? Yeah.

So on the inventory that that when we tore apart our our our inventory increase for the that first quarter, you know, 40,000,000 of it was just sort of very temporary related. We had some businesses taking some major positions in beef just to hedge against inflation against and protect pricing with their customers. And then we also had a couple of product launches we’re building inventory for. So we we expect that to normalize out in q two because, you know, q two is a a big quarter for a lot of lot launch of these are these big programs with summer months coming. So 40,000,000 of it’s fairly simple.

And then there’s probably another 40,000,000 of of just work to be done to get our day sales our our day purchases and inventory back to a more normal level. Okay. And and and on the sale leaseback amount? Oh, and the sale leaseback, we’re we’re we’re preliminary estimating about 230 plus million in the sale leaseback. Again, the the plant is just sort of starting commercial production.

It just finished. And so we’re now starting the process of of the the sale leaseback transaction process. Okay. So that might be back half of the year as well. No.

We’re we’re we’re pushing to get it done in this quarter, but it could possibly get pushed to q three depending on timing. But we are pushing to get it done in q two. Okay. Thank you so much. Thanks, Michael.

Thanks, Mike.

Alan, Conference Call Moderator: Your next question comes from Ian Yu of Scotiabank. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Hi. Thanks for taking my questions. Good morning, Jay and Will. Hi. Yes.

So my first question is the press release called out no material impact from trade developments and tariffs for Q1. I know it’s early, but what have you seen quarter to date in Q2? Again, consistent with Q1, Ian, certainly lots of noise. As I’ve said earlier, our companies have been trying to plan and gain and create capacity, find capacity just in case, but but really no changes. You know, thankfully, there there hasn’t been any major tariff related disruptions in our business.

Okay. Thank you. And you caught up over 30% growth in The US bakery in the quarter. Can you say approximately what percent of capacity your bakery division operates at? We still have a lot of capacity that we’ve added, particularly in our facility in San Leandro, California.

The Canadian bakery, based on the business that they’ve lined up, you know, they’re they’re no longer looking for new business. They’re doing extremely well, getting excellent traction, great margins. And anyway, you know, probably they’re out there looking to acquire more capacity as we speak. Great. Thank you.

That’s awesome. Thanks. Great. Thanks, Ian.

Alan, Conference Call Moderator: Your next question comes from Vishal Shreedhar of National Bank. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Hi. This is Anshul in for Vishal Shreedhar. We wanted to come back on the discussion on protein in specialty foods. So PBH previously expected stability in beef jerky demand in 2025, yet the category was reported to be challenged. Should we continue to expect weakness in beef jerky through 2025?

And could you give us a sense of how big the category is for PBH? Yeah. And and when we talk about the the sensitivity, it’s mainly on The US component of our jerky business. And it’s being impacted as we talked about earlier, the c store channel softness and then as well as beef is is at absolute record highs right now. So you put those together and it is quite challenged.

It’s about, you know, the impact in the quarter was nominal. It was like, the sales are down like 2 to $3,000,000, not not very much. The key is it’s not a growing category. Overall, the category rents on a quarterly basis is probably about 40,000,000 to $50,000,000 in sales. So it’s nice, but it’s not a core part of our growth strategy.

Understood. Thank you. Okay.

Alan, Conference Call Moderator: Your next question comes from Ryland Conrad of RBC Capital Markets.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Your line is open. Hey, Ron. Hey, good morning, guys. Thanks for taking my questions. So just to start off, I believe you called out just raw material inflation as being about an 80 basis point headwind to margins in the quarter.

And then just some timing lags on mitigating that through price increases. So could you speak a bit to just your expectations around commodity input cost inflation for the year? And just whether we should see any kind of sequential improvement to that headwind as costs are are passed through? Yeah. We we expect it to continue to be a headwind in q two.

You know, chicken prices are continuing to rise. Pizza continue to be hit new record highs. But we are expecting some some stability in the the second half of the year, which by that point then our price increases will start catching up with the commodity and and and maybe even on the chicken side see some some again, no one knows, but the possibility of some easing of of costs. And, you know, the chicken has really been a a avian influenza story. It’s really hit The U.

S. Blocks hard. And but you are starting to see some improvement in terms of things come back. So that leads to our expectations around Q3. But so in some reason, continuing headwinds in Q2, but sort of neutral to maybe even slightly positive in Q3, Q4.

Okay. Got it. That’s helpful. And could you just provide an update on the integration of some of the recent acquisitions? I believe some of those were around getting additional capacity to offset some of the tariff exposures.

So just how are you progressing with that plan as well? Yeah. A lot a lot of work is going into coordinating the different capital investments we need to make in order to create more capacity for some of our core products. Yes, it’s going well. We’re on target.

We’re really pleased with the progress we’re making. You know, obviously, we need to introduce some best practices in those companies and and we’re in the process of doing that. And again, we’re really excited by having access to to that capacity. Okay. Thanks, Ed.

Great. Thank you. Thanks, Rob.

Alan, Conference Call Moderator: Your next question comes from Kyle McPhee of Cormark Securities. Your line is already open.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Just a couple of quick follow ups. I mean, may maybe to just wrap up the discussion around leverage. You know, when you include your sale leaseback proceeds and and these working capital dynamics, can you kinda guide us to what your hopeful total leverage target is as we do this year? You know, excluding the m and a? Yeah.

You know, we’re we’re pushing to get within our targeted range by the, you know, end of the year, but that that, you know, depending on how the EBITDA comes out and how we make out with the inventory levels, that could get pushed out to early to twenty early twenty twenty six. Okay. And presumably, mean kind of landing at the high end of of your target range Yeah. Yeah.

Yeah. Okay. Okay. And then just quickly, can you kinda quantify the the weight of, you know, your your your exports in into China? I I know it’s pretty small amount, but can you quantify Well, in terms of our core consolidated business, it’s nominal.

I I I it it it doesn’t move the needle, Kyle. You know, that the major ex exporter to China within our group would be Clearwater, which we do not consolidate. And what was their sales, George? I yeah. I would guess maybe a hundred million ish.

Yeah. About that. Got it. Okay. So the so the lobster dynamic in your PSC segment is largely North American.

So Yeah. It it it is. And and particularly over the last couple of years, our our Canadian lobster businesses are strictly North American focused. Our US business ready does some exports to China, but with the the challenges in the main fishery in recent years and some of the disputes with China, that that has really sort of become a much smaller number. Got it.

Okay. Thank you. That’s it. Your

Alan, Conference Call Moderator: next question comes from Steven McLeod of BMO Capital Markets. Your line is already open.

Will Kalutycz, CFO, Premium Brands Holdings Corporation: Thank you. Just a quick follow-up question for me. Just putting together, I guess, reading between the lines on the commodity price discussion, you is it fair to assume that you’d expect sort of ongoing margin pressures continuing in Q2, but maybe to a lesser degree?

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Yeah. No. That that that’s a fair statement, Steve. We are, you know, as we talked about in our opening comments, you know, we are putting through selling price increases, but we’re always playing catch up in these inflationary cycles. And, you know, ideally, what will happen is in q two, we catch up towards the end of the quarter and and then my earlier comment about seeing some stability or even tailwinds in the third quarter.

Alan, Conference Call Moderator: There are no further questions at this time. I would hand over the call to George Paliologo for closing remarks. Please go ahead.

George Paliologo, CEO and President, Premium Brands Holdings Corporation: Thank you, Alan. I’d like to thank everybody for attending today. Thank you.

Alan, Conference Call Moderator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, and you may now disconnect.

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