Welcome, everyone, to our 2026 third quarter conference call. With me here today is Will Kalutycz, our CFO, and the newest member of our team, George Doumet, who has taken on the role of Chief Investor Relations Officer. George was a sell-side analyst for a long time and has been following Premium Brands since we were an income trust back in 2007. We're delighted to have George on board, and I can honestly say that he has already made a positive impact in the way we communicate with our various stakeholders. Our third quarter results reflect solid progress on three priorities central to our long-term strategy: growing net free cash flow, reducing debt leverage, and optimizing our portfolio to focus on highest return growth opportunities.
While there was a temporary dip in our organic volume growth rate in the quarter, which I will discuss later, we did make significant progress in positioning our company as a key supplier to retail, club, and food service customers across North America. During the quarter, our ability to offer large national customers in the U.S. with unique and innovative premium branded and premium private label solutions, combined with the unparalleled state-of-the-art capacity we built over the past four years, enabled us to secure almost CAD 170 million in new business. While this success reinforces our confidence in our growth strategies, it unfortunately did come very late in the quarter, and for this reason, had no major impact on the quarter.
I want to emphasize that this new business is based on providing our customers with the right long-term product solutions they're looking for and is both sustainable and defensible for the long term. We will always manage Premium Brands for the long term and will never compromise true value creation for short-term results. Our long-term capital allocation strategy has always been guided by the major consumer trends that are shaping the North American food industry, particularly protein, premiumization, and convenience. Our conviction in these trends has shaped our acquisitions and investments over the past 25 years and continues to be validated by the demand we're seeing across our businesses. The emergence of premium private label as a significant growth category is driving a lot of momentum in the U.S. market.
Consumers are increasingly focused on health, nutrition, and protein intake, while retailers are responding with differentiated high-quality products under their own brands. This plays directly to our strengths in innovation, specialized manufacturing, and customer partnership-based relationships. While traditional food categories face shifting consumer preferences, demand continues to grow across many of our core businesses, including premium sandwiches, cooked protein, skewers, meat sticks, kettle products, and artisan bakery. These are precisely the categories we spent decades building our capabilities and our capacities around. The remainder of my presentation will follow the deck that was posted on our website this afternoon. You can also access it by clicking on the link on our Q3 press release. We're now on slide four. We delivered record sales, EBITDA, and adjusted earnings per share, along with the highest steady state free cash flow and net free cash flow per share in our history.
While U.S. organic volume growth moderated to 2.5% from 10.7% last quarter, the slowdown was largely anticipated. Our U.S. protein initiatives continue to perform well, growing approximately 14%, offset by an 8% decline in Custom Culinary Solutions, primarily in sandwiches. The sandwich impact reflected softer QSR and convenience store traffic, the timing of product promotions, and delayed customer launches. In Canada, volumes were relatively flat as growth in retail was offset by softer food service demand. What was not expected in the quarter was our Stampede business being impacted by softer demand, with some key food service customers driven by reduced foot traffic and lower average spends. This, combined with a delay in realizing savings from new imported beef procurement initiatives, explains both our sales and adjusted EBITDA misses for the quarter.
Looking ahead, our business development pipeline, including Stampede's, has never been stronger, and we expect U.S. organic volume growth to return to double digits in 2027. Furthermore, Stampede has now finalized its new imported beef procurement initiatives, which will begin generating significant cost savings starting in January. Despite the temporary dip in our organic volume growth rate in the quarter, we did continue to make significant progress in strengthening our key free cash flow metrics, resulting in an improved balance sheet, a stronger financial position, and record liquidity by the end of the quarter. We generated over CAD 195 million of net free cash flow, while our debt-to-EBITDA ratio declined to 3.6x from 3.8x last quarter and 4.3x at the beginning of the year.
We're also continuing to generate proceeds from our non-core assets and investment monetization initiatives, with the sale of our equity investment in a U.S.-based bake good business subsequent to the quarter. To date, we have generated approximately CAD 250 million in proceeds from our monetization initiatives, and we're on track to achieving our billion-dollar-plus proceeds target. Record free cash flow and the accelerated monetization of our non-core assets and investments are providing greater flexibility to return capital to our shareholders. Our recently announced NCIB, targeting the repurchase and cancellation of approximately one million shares, is already underway, and we intend to increase buybacks as cash flow grows and further monetizations are completed. We remain highly confident in our long-term growth prospects and believe that our current valuations, repurchasing our own shares represents one of the most attractive uses of our capital.
Looking further out, we remain on track to exceed our five-year targets of CAD 10 billion in sales and CAD 1 billion in EBITDA by the end of 2027. Albeit, as we monetize certain non-core assets and investments, we may need to adjust these targets to reflect earnings being sold. Before passing the presentation over to Will, I would like to feature one of our premium protein platforms, namely Concord Premium Meats. This is on slide 6 to 11. Concord's brand new state-of-the-art facility in the Greater Toronto Area is nearing completion and will become operational in Q1 2027. Three smaller plants will be consolidated into this facility, resulting in immediate overhead and operating cost savings while doubling Concord's capacity in certain product categories.
Concord, which joined the PB ecosystem in 2018 with CAD 200 million in sales, now has run rate sales of over CAD 800 million with plants in both Canada and the U.S. Its best-in-class senior management team also oversees a portfolio of other PB companies with overall combined sales of approximately CAD 1.4 billion, including Concord. In conclusion, and looking forward from where we're at today, our priorities are very simple. We're relentlessly pursuing new sustainable business opportunities that will help us improve and optimize capacity utilization, free cash flow generation, and the strengthening of our balance sheet, and disciplined capital allocation, including portfolio optimization, combined with aggressive share buybacks. I will now pass the presentation to our CFO, Will Kalutycz, who will update you on our financial results for the quarter. Will?
Thank you, George, and good afternoon, everyone. Before I begin, I'd like to remind you that some of today's comments may constitute forward-looking information, and actual results may differ materially from our expectations. Please refer to our MD&A for the 13 and 52 weeks ended December 27, 2025, and our other public disclosures for a discussion of the relevant risks and uncertainties. I'll cover our financial results, profitability, outlook, and free cash flow. Starting with revenue, our third quarter revenue from continuing operations was CAD 2.38 billion, an increase of 22% year-over-year. Acquisitions contributed CAD 349.6 million. Organic volume growth added CAD 20.6 million. Selling price increases contributed CAD 50.5 million, and foreign exchange contributed CAD 8.4 million. In terms of organic volume growth, our specialty food segment delivered 1.3% growth in the quarter, including 2.5% growth from its major U.S. sales initiatives.
While these numbers are below our historical levels, much of the moderation was anticipated, as George mentioned earlier, and our sales pipeline remains very strong, including almost CAD 170 million of confirmed new product initiatives launching over the next two quarters. Our Premium Food Distribution segment's organic volume growth rate came in at 0.5%, which was also lower than historic levels due to a more challenging foodservice environment. On profitability, our adjusted EBITDA increased by 22% to CAD 213 million, with an adjusted EBITDA margin of 9%, which is in line with last year. Growth was driven by acquisitions, organic volume gains, and the benefit of previously implemented selling price increases, partially offset by higher raw material and general costs and overheads associated with newly commissioned production capacity.
Stampede, while generating almost 15% year-over-year growth in the quarter, faced some challenges, as George called out earlier, resulting in its adjusted EBITDA being approximately CAD 12 million below our internal plan. The largest portion of this miss related to delays in projected cost savings from its new imported beef procurement initiatives, which we expect to start seeing in Q1 of next year. Our adjusted earnings per share from continuing operations increased by 8% to CAD 1.38, compared with CAD 1.28 last year. The increase primarily reflected higher adjusted EBITDA, partially offset by increased depreciation, lease, and interest costs associated with our recent capacity investments. As our investment cycle winds down, we expect improving asset utilization rates to translate to an acceleration in the growth of our adjusted EPS. Restructuring costs for the quarter totaled CAD 9.5 million, increasing sequentially from Q2.
The increase was driven by costs associated with two new sandwich initiatives launched by our Raybern's business and some startup challenges relating to our Concord business's transfer of certain production between plants. These initiatives are part of our ongoing efforts to optimize our manufacturing network and support future growth. Looking forward, we expect these costs to return to a downward trend in the fourth quarter. Moving to our annual outlook, we are maintaining our 2026 revenue guidance of CAD 9.1 billion-CAD 9.3 billion and adjusted EBITDA guidance of CAD 840 million-CAD 870 million, as we see benefits from moderating beef and other proteins in the fourth quarter, offsetting some of the softness in this quarter. Free cash flow was a strong highlight in Q3. Our steady state free cash flow measures cash generation before investments in future growth.
Following several years of higher interest and lease costs associated with our major investment cycle, we reached an important inflection point in 2025 as our new production capacity began contributing more meaningfully to our earnings. The improving trend in our steady state free cash flow is now becoming evident in our net free cash flow, which accounts for working capital investments, startup and restructuring costs, and project capital expenditures as we come to the end of the major investment cycle in new production capacity that we embarked on four years ago. Correspondingly, after four years of negative net free cash flow, we generated CAD 68 million in the second quarter, followed by CAD 196 million this quarter. Importantly, we believe this recent inflection in our net free cash flow represents a structural improvement in our cash-generating capabilities, positioning us to reduce leverage and improve returns on invested capital.
As George mentioned earlier, we have made significant progress this year in reducing our total debt EBITDA leverage from 4.3x at the beginning of the year to 3.6x , and remain confident that we will achieve our target of three times or better in 2027. Furthermore, our objective is not simply to reach that level, but to maintain a sustainable balance sheet that provides us flexibility to pursue attractive growth opportunities, and when appropriate, share buybacks. In terms of the normal course issuer bid we put in place subsequent to the quarter, we repurchased and canceled only 10,100 shares because of trading blackouts. Looking forward, we expect to be much more active on this front. To conclude, Q3 represents another step in our financial transition as we're making tangible progress in cash generation, deleveraging, and improving our returns on capital. That concludes our presentation.
Please join us on our Q&A conference call today at 2:30 P.M. Vancouver time or 4:30 P.M. Toronto time. Thank you.