Earnings call transcript: Swiss Water's Q3 2025 revenue beats forecasts

Swiss Water Decaffeinated Coffee Inc. (SWDC) reported its Q3 2025 earnings, showcasing a significant revenue increase that surpassed forecasts. Despite a revenue beat, the company missed earnings per share (EPS) expectations, leading to a notable decline in its stock price. The company achieved a revenue of CAD 62.7 million, a 50% increase from the previous year, compared to the forecasted CAD 43.87 million. However, the EPS came in at CAD 0.02, missing the forecast of CAD 0.03. This earnings miss contributed to a 6.84% drop in Swiss Water's stock, closing at CAD 4.36 from the previous close of CAD 4.68.

Key Takeaways

• Swiss Water's Q3 2025 revenue increased by 50% year-over-year.
• EPS fell short of expectations, with a 33.33% negative surprise.
• Stock price dropped by 6.84% post-earnings announcement.
• Strong performance in specialty coffee volumes, with a 24% increase.
• Continued market volatility and supply chain disruptions due to tariffs.

Company Performance

Swiss Water Decaffeinated Coffee Inc. demonstrated robust performance in the third quarter of 2025, with a notable 50% increase in revenue compared to the same quarter last year. The company's focus on chemical-free decaffeination processes and effective inventory management contributed to a 7% rise in shipped volumes. Despite challenges in the coffee market, Swiss Water maintained its competitive position, particularly in specialty coffee, which saw a 24% volume increase.

Financial Highlights

• Revenue: CAD 62.7 million, a 50% increase year-over-year.
• Net Income: CAD 216,000, compared to a net loss of CAD 791,000 in Q3 2024.
• Adjusted EBITDA: CAD 3.3 million, a 52% increase year-over-year.
• Shipped Volumes: 7% increase compared to Q3 2024.
• Gross Profit: CAD 6.4 million, consistent with the prior year.

Earnings vs. Forecast

Swiss Water's Q3 2025 EPS of CAD 0.02 fell short of the forecasted CAD 0.03, resulting in a negative surprise of 33.33%. In contrast, the company exceeded revenue expectations, achieving CAD 62.7 million against a forecast of CAD 43.87 million, marking a 43.04% positive surprise.

Market Reaction

Following the earnings announcement, Swiss Water's stock experienced a 6.84% decline, closing at CAD 4.36. The stock's movement reflects investor concerns over the missed EPS target, despite the strong revenue performance. The decline positions the stock closer to its 52-week low of CAD 2.60, amidst broader market volatility and sector-specific challenges.

Outlook & Guidance

Looking ahead, Swiss Water expects its Q4 performance to be consistent with the previous year, while anticipating continued market volatility. The company is focused on retaining new customers, maintaining price discipline, and strengthening its balance sheet. Additionally, Swiss Water is preparing alternative coffee sourcing strategies for early 2026 to mitigate supply chain disruptions.

Executive Commentary

CEO Frank Dennis highlighted the complexity of the current coffee market, stating, "The coffee market remains very complex at the moment, but our business continues to perform well." He also addressed the impact of Brazilian coffee tariffs, noting, "We are seeing those that are trying to avoid Brazilian coffees and find alternatives."

Risks and Challenges

• Market Volatility: Ongoing fluctuations in the coffee futures market could impact pricing and supply stability.
• Supply Chain Disruptions: A 50% tariff on Brazilian coffee poses challenges to sourcing and logistics.
• Inventory Levels: Low certified coffee stocks may continue to strain supply chains and elevate market prices.
• Debt Management: Despite progress in debt reduction, maintaining financial stability remains crucial.
• Competitive Pressures: The need to innovate and differentiate in a competitive market requires ongoing investment.

Q&A

During the earnings call, analysts inquired about the impact of Brazilian coffee tariffs and the company's strategies for alternative sourcing. The discussion also explored the merits of CO2 versus water-based decaffeination processes and potential board representation considerations.

Full transcript - Swiss Water Decaffeinated Coffee Inc (SWP) Q3 2025:

Tom, Conference Call Moderator: Good afternoon. I do apologize for the delay in today's start time. There was a technical issue with our dial-in phone number that has now been resolved. Once again, thank you for your patience, and we do apologize for the delay in today's start time. Welcome to the Swiss Water Decaffeinated Coffee third quarter 2025 conference call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. Before Swiss Water Decaffeinated Coffee conference call starts, they are required to remind you that certain information in today's presentation is forward-looking in nature. Any such forward-looking information or statements are based on assumptions that they are considered reasonable at the time the information was prepared.

Such information involves known and unknown risks, uncertainties, and other factors outside our control that could cause actual results to differ materially from those expressed in the forward-looking information. Swiss Water Decaffeinated Coffee does not assume responsibility for the accuracy and completeness of the forward-looking information. Similarly, they do not undertake any obligation to publicly revise this forward-looking information to reflect subsequent events or circumstances except as required by law. Please refer to Swiss Water Decaffeinated Coffee's management's discussion and analysis posted on CEDAR and Swiss Water's website for a full discussion regarding forward-looking statements and the risks therein. It is now my pleasure to turn the floor over to your host, Frank Dennis, President and CEO of Swiss Water Decaffeinated Coffee. Frank, the floor is yours.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Thank you, Tom. Good afternoon, everyone, and thank you for joining us today. I'm Frank Dennis, President and CEO of Swiss Water Decaffeinated Coffee, and with me is Iain Carswell, our CFO. We are here today to discuss Swiss Water's financial results for the three and nine months ended September 30, 2025. As usual, I will begin with a brief review of our performance and operating environment. Iain will provide more details about our financial results. After that, I will share some closing thoughts before we take your questions. We delivered another solid quarter with 7% volume growth versus Q3 last year, supported by strong demand for our chemical-free decaffeinated coffee and disciplined operations. Improved profitability this quarter reflects effective pricing and cost management, some favorable foreign exchange movements, and continued focus on execution across the business.

Our approach to managing inventory continues to serve us well, enabling us to meet customer needs consistently in a market where importers are maintaining leaner inventory positions and customers are looking to us to provide immediate available coffee. That reliability has helped us reinforce long-standing relationships and establish new ones as more customers look for supply assurance. Overall, demand for our decaffeinated coffee remains strong. As a benchmark, grocery volume in the United States has declined markedly due to extremely elevated retail prices, while our volumes have grown. That outperformance reflects the quality of our coffee, strength of our customer relationships, and our ability to respond quickly to shifting market dynamics. The coffee futures market remains extremely volatile. The NYC futures market softened early in the quarter before retracing all of the losses again toward quarter end.

The market inversion continues to drive timing and further cost pressure across the industry.

Tom, Conference Call Moderator: Please stand by a moment. Once again, please stand by while I reconnect the speaker's line. Thank you for your patience. Once again, please stand by. Ladies and gentlemen, thank you for standing by. I'm going to place this call on music hold until it resumes. I am reconnecting the speaker shortly. Once again, please remain connected at this time. Today's call will resume shortly. Please stand by. Thank you once again for standing by. Passing the floor back to Frank Dennis.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Sorry, folks, a couple of technical issues today. In any case, I'll pick up where I left off, where operationally the Delta facility continues to perform well. It provides the flexibility we need to manage production efficiently through variable order timing and mix, delivering solid throughput and cost performance. As part of our risk management strategy, we continue to actively manage input cost volatility through our commodity and foreign exchange hedging programs. The NYC futures market remained inverted through the quarter, resulting in ongoing short-term EBITDA impacts as hedge positions were rolled forward. These timing differences are expected to continue while the inversion persists. Our approach remains structured and consistent with the rest of the industry as we continue to price for the cost of inversion and expect recovery through customer pricing actions over the coming months and into 2026.

Looking ahead, we expect fourth quarter performance to be broadly consistent with the same period last year. The market remains volatile, and we expect the inversion to persist into 2026, but our underlying business fundamentals are strong. Our disciplined execution and ability to meet customer needs reliably continues to differentiate us in the complex environment. As market conditions normalize, our focus will remain on retaining new customers, maintaining price discipline, and continuing to strengthen the balance sheet. Overall, for the quarter, our business continued to perform well. Operations are running efficiently, and our team continued to execute with focus and discipline. The spot inventory strategy we put in place has proven effective, allowing us to capture opportunities and maintain reliable supply in a volatile market.

The consistency of our performance, together with ongoing efforts to strengthen the balance sheet through debt reduction, demonstrates the resilience of our model and the value of our long-term customer relationships. We're confident that our approach is working and positions us well to continue delivering steady results in a complex and dynamic market. With that, I'll turn the call over to Iain to walk through the financials. Iain?

Iain Carswell, CFO, Swiss Water Decaffeinated Coffee: Thanks, Frank. Firstly, we continue to strengthen our balance sheet in the quarter, generating cash from operations and making further progress on debt reduction. These actions, together with improved profitability, have enhanced our financial flexibility. Working capital levels remain elevated but in line with expectations, reflecting both the value of green coffee inventories and timing of customer collections. We expect this to normalize over the next few quarters as higher seasonal sales volumes fall. Our focus remains on maintaining sufficient inventory to support demand while continuing to reduce leverage in a disciplined way. Total shipped volumes increased by 7% when compared with Q3 last year and 4% year to date. The increase in volumes was driven primarily by our strategic approach to spot inventory availability, which continues to position us to capture demand in a market where importers are holding leaner inventory levels due to ongoing NYC volatility and inversion.

Maintaining readily available product allowed us to respond quickly to customer needs and ensure steady supply. This approach, combined with strong demand from our established customers and steady throughput in our regular coffee business, supported overall volume growth during the quarter. Looking at volumes by customer type, shipments to importers, those customers who resell our coffees to roasters where and when they need it, were up 16% in the quarter, 8% year to date. Our shipments to roasters, those customers who roast and package coffee to sell to consumers and their own coffee shops or for home and office consumption, were down by 4% in the third quarter, 2% year to date. Many of our customers have moved towards a more just-in-time operating model. Looking at our customer channels another way, specialty volumes were up 24% in Q3 and 11% year to date.

These accounts serve the out-of-home consumer primarily in cafes and restaurants in our key geographic markets. Commercial volumes were down 4% in the quarter, 2% year to date. Q3 revenue was up 50% to CAD 62.7 million compared to CAD 41.2 million in Q3 2024. The primary driver of the increase in revenue for the third quarter is higher volumes and elevated coffee prices, with the NYC continuing to trade well above historical averages, which flows through our green coffee revenue. The impact was further amplified by inversion and tariff cost recovery and increased contributions from our logistics subsidiary, Seaforth. Looking at our costs, Q3 cost of sales was CAD 56.3 million or 59% year over year. The increase primarily reflects the elevated NYC, increased volumes, depreciation of the US dollar, and the ongoing impact of tariff costs associated with our sales to US customers.

These factors were partially offset by operating cost efficiencies. As for green coffee costs, at an average of $3.37 per pound in the third quarter, the NYC was up 37% from $2.46 per pound in Q3 last year. While still elevated, this reflects a modest decline from the Q2 2025 average of $3.59. Customers continue to remain cautious with inventory management in response to sustained high coffee futures and ongoing tariff uncertainty. As previously noted, ordering patterns continued to vary through the quarter. Customer mix shifted with importers increasing volumes as they rebuilt inventory positions, a change from prior periods when roasters represented a larger share of activity. This shift contributed to ongoing variability relative to historical ordering patterns.

Exchange rates between the U.S. and Canadian dollar continue to influence our reported results in cash flow, while our revenues are primarily in U.S. dollars and a meaningful portion of our costs are incurred in Canadian dollars. We also carry U.S. dollar receivables and payables on our balance sheet. This quarter, fluctuations in exchange rate led to a foreign exchange gain, largely reflecting the revaluation of those U.S. dollar balances at period end. We continue to monitor this exposure and use hedging tools where appropriate to manage our underlying risk. In Q3, the U.S. dollar averaged CAD 1.38, up from CAD 1.36 in the same period last year and consistent with the CAD 1.38 reported in Q2 of this year. This decrease of the U.S. dollar has a negative impact on our revenues when they are converted to Canadian dollars.

Q3 gross profit was $6.4 million and consistent with the prior year. Turning now to operating expenses, Q3 operating expenses increased 16% year over year to $4.2 million. Administrative expenses were up 22%, driven by a higher non-cash stock-based compensation driven by an increase in our share price during the quarter. Q3 net income is $216,000 compared to a net loss of $791,000 in Q3 2024. Aside from the factors we discussed previously, Q3's increase in non-operating or other income and expenses is driven by a $728,000 loss on risk management activities primarily related to timing of rolling hedge contracts forward in a persistently inverted NYC market. This timing difference between recognizing the cost of rolling positions and the recovery of those costs through customer invoicing resulted in incremental realized losses during the quarter.

As Frank mentioned, we continue to price for the cost of the inversion consistent with the industry practice and expect these costs to be recovered through customer collections over the coming months and into 2026. We also recorded mark-to-market adjustments reflecting commodity price fluctuations and the US dollar strength. These results are consistent with our structured approach to managing pricing volatility, mitigating risk exposure, and maintaining alignment with our supply commitments. As you may recall, during Q2, we reached an agreement with Mill Rock Capital to repurchase and cancel their outstanding warrants. As a result of that agreement and subsequent cancellation, we no longer recognize a gain or loss in the fair value of the embedded option during Q3. There was a $659,000 decrease in finance expense, largely attributable to the elimination of the interest related to the Mill Rock Debenture, which was fully repaid in Q4 2024.

In addition, decrease in interest on long-term borrowings after repayments and decreasing interest rates compared to Q3 2024. Q3 adjusted EBITDA was $3.3 million, up $1.1 million or 52% year over year. In addition to the factors I mentioned affecting gross profit, fluctuations in adjusted EBITDA were driven by the previously mentioned loss on our risk management activities, which we expect to be fully recovered through customer collections and disciplined management of operating expenses over the balance of this year and early 2026. Turning now to inventories, our inventory balance increased slightly to $51.4 million in the third quarter, primarily affecting higher green coffee costs due to elevated NYC. However, this was offset by a reduction in the hedge accounting component of inventory. Inventory management remains an essential component of our strategy.

We continue to take a deliberate forward-looking approach to holding inventory in order to support anticipated customer demand to ensure delivery continuity. We continue to see renewed order activity from smaller roasters with commitments to cover previously deferred purchases due to pricing volatility. In addition, this quarter saw increased ordering from importers within our regular coffee business as the NYC moderated during the first half of the quarter before rising again toward quarter end, prompting some to replenish inventories ahead of further price movements. At quarter end, Swiss Water held $3.9 million in cash compared to $8.5 million at the end of 2024, a net working capital of $38.8 million compared with $4 million. The change in net working capital is driven primarily by the reclassification of our operating credit facility to non-current borrowings as a result of the renewal during the quarter.

We made total debt repayments of $11.9 million in Q3, made up of principal repayments on our long-term borrowings primarily related to construction of our Delta facility and on our operating credit line. This represents continued progress towards reducing interest costs and strengthening our leverage position over time. With that, I will turn the call back to Frank.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Thank you, Iain. Before we turn to questions, I'd like to share a few closing thoughts. The coffee market remains very complex at the moment, but our business continues to perform well. The strategy we've put in place is doing what it's designed to do, helping us manage volatility, support customers, and deliver consistent results in a very challenging environment. Our inventory management approach, a key component of that strategy, continues to create value by providing flexibility and reliability across the supply chain. We also maintain strong operational execution throughout the quarter and continue to build financial strength and flexibility through disciplined management. Looking ahead, we expect volatility in coffee markets to persist, but we're confident in our positioning and our ability to manage through it. The fundamentals of our business remain strong, our customer relationships are solid, and our team continues to execute with focus and discipline.

We believe we're well positioned to continue delivering stable results and to build on the progress we've made this year. With that, we'd be happy to take your questions.

Tom, Conference Call Moderator: Thank you. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press Star 1 on your telephone keypad. We do ask, if listening on speakerphone today, that you pick up your handset while asking your question to provide optimal sound quality. Once again, please press Star 1 on your telephone keypad at this time. If you wish to join the queue to ask a question, please hold a moment while we pull for questions. We have a question from Richard Rudgley from Glenbrook Capital. Richard, your line is live. Please go ahead.

Richard Rudgley, Analyst, Glenbrook Capital: Hi guys. Yes, I read in the news release, but I'm not sure if you mentioned it when you were speaking about the situation to do with the Brazilian tariffs. I just wondered if you could perhaps expand on that a bit and let us know how you think it's going to impact things overall. Thank you.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Yeah. Yeah, that's a great question, Richard. The U.S. imports maybe 15% of Brazil's output, annual output. Of course, Brazil is the largest coffee-producing nation in the world. What happens in Brazil is what happens in the futures market. They are intertwined perfectly. With a 50% tariff rate on Brazilian coffees going into the U.S., many, but not all, many roasters are essentially racing to find replacements. These would be coffees that would come from, let's say, Uganda, maybe some from Vietnam, as well as some of the Central American coffee-producing nations: Nicaragua, El Salvador, Honduras. That's certainly causing some—it's just dislocation. It's rearranging blends. It's changing supply chains quickly. Not really supply chains, just maybe suppliers or paths that coffee gets to roasters very, very quickly. There is a large group of roasters that are basically avoiding Brazilian coffee.

There are others who have blends that are very reliant on a particular profile. These would be large direct-to-consumer organizations that have prepared brewed coffee that they want to keep that profile exactly the same. They are taking that Brazilian coffee and they are pricing for it. We are seeing those that are trying to avoid Brazilian coffees and find alternatives. There are those that are saying, "Boy, I mean, we have got a customer franchise here that is built on a particular profile. We are just going to have to price for it." We saw significant increases in the data that we watch for US grocery in terms of overall pricing per pound, which increased very rapidly. A lot of that was tariffs and, in particular, Brazil through Q3, although it was still the NYC as well that is driving pricing around the world.

Net, what's happening is that Brazilian coffee is now flowing off to places like China or places like Russia. They're picking up what could be potentially cheaper Brazilian coffee. Certainly, more Brazilian coffee is coming to Canada for roasting here. It's just yet another dynamic that's happening in the marketplace. We're changing the coffees that we are going to put in position to supply the US into next year right away. Starting kind of January-February, we'll be getting probably more Central American coffees in place to supply kind of those that are avoiding Brazilian coffee. Like I said, there are others that are just saying, "Nope, we have to take it. We're going to keep it. We have a profile that's important for the consumer, and we'll just price for it." There's the dynamic, basically, Richard.

Richard Rudgley, Analyst, Glenbrook Capital: Thanks. Just to follow up, I'm just wondering because sometimes, as you know, these tariffs get reversed quite swiftly. Would that just cause logistical problems for you as you say you're rearranging the early part of the year to get coffee from elsewhere? What if things are reversed in the interim? And then just a sort of follow-up question on future pricing. From my understanding, and obviously you know better, it seems like the concerns about the Vietnam crop, it looks like the weather damage was minimal. That shouldn't be something that's going to affect the price in a negative way by pushing it higher.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Yeah, that's right. We're putting on reasonably light coverage as an alternative to Brazil going into the first couple of months of the year. We'll kind of see how that goes because you're absolutely right. The Brazil 50% number could change next week, could change over the weekend, who knows? However, we do know that if that number does change, there will be a significant swift response in the NYC futures market down. It would be a wonderful thing, really, if that tariff was to be changed. Yeah, I mean, there is, like I said, a lot of tariff arbitrage going on. There are those that are trying to find coffees from non-tariff markets. Mexico, for example, has no tariff on its coffee. Amazingly, of course, the crop is sold out.

I think that we're just going to continue to see a very elevated C, certainly with the Brazil tariffs in place and with a thing we do not talk very much about, which is certified stocks, which are at record lows. Certified stocks essentially support the entire market. Until we start seeing certified stocks come to about 1 million bags, we are going to remain in an inverted elevated market. Yeah, complex.

Richard Rudgley, Analyst, Glenbrook Capital: Okay. That's all my questions. Thank you.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Thanks, Richard.

Tom, Conference Call Moderator: Thank you. This is a reminder, if you wish to join the queue to ask a question, you may press Star 1 at this time. Once again, it is Star 1. Your next question is coming from Grover Wickersham from Glenbrook. Grover, your line is live. Please go ahead.

Grover Wickersham, Analyst, Glenbrook Capital: Yes. First, guys, we do not do this on purpose to give you guys the impression that a lot of people are listening. I hope there are at least a few who are listening who are not Richard and Grover. First of all, congratulations. I think this is a really great quarter. I think there was an awful lot of suspense waiting to see how you guys did under the tariffs. It is a relief that you did extraordinarily well. I think you should be congratulated for that. I also think that getting up from underneath the commitment to the warrants on Mill Rock was also a real milestone for the quarter, which obviously is something that we were trying to encourage. Just a couple of comments. As you know, we think the stock is really undervalued.

We'd really like to see you do more to cultivate a market in the United States. Maybe even at some point, that would open up enough capital that you could avoid the tariffs completely by possibly having a facility in the Pacific Northwest or somewhere convenient to Vancouver. In discussing the company, I do get questions from time to time about the CO2 method. I'm wondering, I know you've talked to me about that before, but could you perhaps give some more color on what you see as being the competitive nature of CO2 processing, I know from a cost standpoint and also possibly from a consumer and regulatory acceptance standpoint?

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Sure. Yeah. If you want to focus specifically on CO2, we can definitely do that, Grover. CO2 is essentially coming from one source only on a third-party basis out of Bremen, Germany. It's a plant that's been producing CO2 for many, many years with an expansion probably about 10 years ago. CO2 is a method that is good quality. Pricing is kind of similar to where we are at. We've seen that overall kind of chemical-free pricing is balancing in around kind of a specific band or range, which is overall, I think, good. The product itself is essentially limited in that the capital cost of CO2 expansion is significantly higher than any other chemical-free method. There is a more limited lifetime of the plant due to the fact that they are using supercritical or just subcritical pressures, which are very, very high pressures.

The pressure vessels do have a lifetime. CO2 basically is capped out at the number that it is at right now. That plant is sold out and kind of remains that way. They have a good base of customers that are loyal and that use the product. We are not really seeing growth there. We are probably seeing maybe in some of the other processes or methods, competitors.

Grover Wickersham, Analyst, Glenbrook Capital: Right. Okay. In terms of competition, do you see that as a competition going forward?

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Yeah. I mean, CO2 is always a competitor. I think other water processes are probably more on a growth trajectory than CO2. We've got a caffeine water process out of Germany that is on the market in the past few years. They have done well in that kind of part of the world, Europe primarily, maybe some Eastern U.S., but Europe is their focus market. That is probably more where our attention is focused on, is how we remain competitive in a market that honestly was much more methylene chloride dominated. Although methylene chloride has not left the marketplace at all, we are seeing expansion in kind of the chemical-free/natural marketplace for sure.

Grover Wickersham, Analyst, Glenbrook Capital: Yeah. I mean, I think hopefully, especially with the FDA under the current management, hopefully in the States. I also do not understand why it has not become an issue in California, but hopefully there is going to be more awareness and maybe a regulatory intervention, at least in terms of labeling so that people out in the community understand the difference. If I could, just one other—I do not know if it is a question or an observation, but as you know, we have got probably one share less than 10%, or we are close to 10% of the company. I mean, I do not know exactly where we are, but we buy when the stock—we see the opportunity to buy, we always add. I noticed that Properly, I believe they filed a notification that they are over 12%.

I do not—I'm not sure exactly what, maybe you guys know exactly what percentage they are, but I seem to recall 12%. I would just say that between them and us, we're well into the 20%. I think if we were a group, we would be large shareholders. Frankly, with you and Frank, with two of you guys, we would probably be well over 30%. I would just suggest that it might be a good time to look at the constituency of the board. It might be a good time for Mill Rock to continue riding off into the sunset, so to speak, and possibly have new—have representation. We would be quite happy to see somebody from Properly in Calgary, have one of them, Mark, or one of the other guys involved with that, join the board.

I would think they would represent all the shareholders. I'm sure they'd—I would feel represented by them. I just encourage that as something when you get around to thinking about the board, something you guys should possibly throw in our two cents' worth on that subject. No, nothing against the former Mill Rock fellows on the board. I don't know. I think there's one or two. I apologize for not having all the details. Having shareholders that have some skin in the game would certainly, when you're talking to those kind of percentages, that would seem to be appropriate. Anyway, I don't know if you—that may not be something you guys can comment on. I'm just saying that we would request that that be something you consider when it comes time to nominate board members.

Tom, Conference Call Moderator: Yeah. Fair enough, Grover. Point well taken. I think that Mill Rock still has an ownership position. And to be fair, the folks that have served or are serving on our board have added value. I mean, I've had good input from them. However, we also understand your point. I think our chair also understands that and absolutely will be given consideration for sure, recognizing kind of your view in terms of representation.

Grover Wickersham, Analyst, Glenbrook Capital: Yeah. Yeah. I mean, I do not know if you have met with them. We had a chance to talk to Mark, who is part of that group, and had a few conversations with him. Also, as you probably are aware, we are on Salt Spring Island. It seems like that is kind of like Baja, Canada, and it attracts a lot of Calgary Albertans that prefer the weather. We know of them, Mark and his investors. We know of them through other friends on Salt Spring Island, and they have a really good reputation.

Tom, Conference Call Moderator: Yeah. No, they do for sure.

Grover Wickersham, Analyst, Glenbrook Capital: I know it's vergence on any of the other board members, with the exception of not being a huge amount of love lost with Mill Rock. No offense. We're actually moderate offense intended.

Tom, Conference Call Moderator: All right. Thank you very much, Grover.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Thanks, Grover.

Tom, Conference Call Moderator: Yeah. We'll take that into consideration. Thanks very much. Are there any other questions today? There are no further questions in queue at this time. I would like to pass the floor back to management for closing remarks.

Frank Dennis, President and CEO, Swiss Water Decaffeinated Coffee: Thanks, Tom.

Tom, Conference Call Moderator: If there are no further questions, we will conclude today's call. Thank you very much for joining us. Have a great weekend. Thank you. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you once again for your participation.

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