Good morning, ladies and gentlemen, and welcome to the Rogers Sugar Second Quarter 2022 Results Conference Call. After the presentation, we will conduct a question-and-answer session, which will be open only to financial analysts. Instructions will be given at that time. Please note that this call is being recorded today, May 12th, 2022 at 8:00 A.M. Eastern Time. I would now like to turn the meeting over to Mike Walton. Please go ahead, Mr. Walton.
Thank you, operator, and good morning, everyone. Joining me for today's call is Jean-Sebastien Couillard, VP of Finance and CFO. During today's call, I will review the second quarter results of 2022 and trends in our industry. Please be reminded that today's call may include forward-looking statements regarding our future operations and expectations. Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. Please also note that we may refer to some non-GAAP measures in our call. Please refer to the forward-looking disclaimers and non-GAAP measures definitions included in our public filings with the Securities Commission for more information on these items. A replay of this call will be available later today.
The replay numbers and passcodes have been provided in our press release, and an archived recording of this call is also available on our website. During this quarter, our sugar business exceeded our expectations with a record sales volume and a record EBITDA. Our strong volume growth in sugar was due largely to the recovery in our industrial and consumer retail segments as delayed orders from the first quarter of the year were filled during the second. Our maple business continues to face pressures from lower demand and inflationary price increases, along with industry-wide global shipping challenges. While we expect these financial and operating pressures to continue for the remainder of the fiscal year, we are continuing to focus on cost recovery through price increases, which will take effect over the next quarter.
We expect margins to improve once new pricing takes effect and COVID-19 volatility and supply chain-driven pressures have abated. As we move into the second half of the year, underlying demand for sugar remains strong as growth returns to pre-COVID norms. As a result of the strong demand and higher pricing we are experiencing in our sugar segment, we continue to expect improved financial performance in 2022 as compared to 2021. The strength in our sugar segment is expected to more than offset the demand in the maple segment. With a view to robust market conditions and anticipated continued momentum for sugar demand, we have increased our volume forecast for 2022 by 5,000 metric tons to 775,000 metric tons. Now I would like to comment on the impact of COVID-19 on our operations.
As we moved into the new calendar year, the Omicron variant affected our employees as it did the broader population across Canada. We continue to uphold our rigorous health and safety standards for the protection of all of our employees. Despite the highly contagious nature of this variant, our operations were not materially impacted. After more than two years of COVID, we continue to meet the evolving conditions with high safety standards. We have risen to the challenge to protect our employees to ensure our operations continue without disruption, so we can deliver essential ingredients to our customers. In the second quarter of 2022, our COVID-19 related costs lowered from the same time last year, but increased slightly from the first quarter as we dealt with the Omicron variant. Now let's turn to our second quarter results.
As I mentioned, we achieved a record adjusted EBITDA for the second quarter, driven by higher sugar sales margin and volume, partly offset by lower demand and higher costs in maple. Now let's dive a bit deeper into our sugar business. Our sugar volumes reached 196,000 metric tons in sales, an improvement of approximately 13,000 metric tons on a year-over-year increase of 7%. During the quarter, we saw growth in all three of our domestic segments, with recovery in our industrial, consumer retail contributing the largest increases, as well as healthy growth in our liquid business. Our consumer business increased by 6,000 metric tons, making up close to 50% of the volume growth in the quarter as delayed orders from the first quarter of the year were filled.
Meanwhile, our industrial segment increased by 5,500 metric tons compared to the same quarter last year. This is also due to a pickup of customer orders that were temporarily delayed in the first quarter of the year. As I mentioned last quarter, several large clients faced COVID-related staffing shortages, which limited production capacity and led to some delays. In liquid, the business grew by 1,300 metric tons from the same period last year, mainly due to higher demand from existing customers. During the second quarter, adjusted gross margin improved as a result of the positive price mix, higher sales volume, and increased byproduct contributions. Additionally, last year, unfavorable weather conditions damaged a portion of the Taber beet crop, which negatively impacted adjusted gross margin.
Due to our successful harvest this year, the absence of those conditions favorably impacted our margins in the current quarter. While freight costs are trending higher, we are continuing to fill orders and stay ahead of inflationary pressures. This is supported by our FOB seller status. Now a few words about our Taber crop. We had a successful Taber processing campaign, producing 121,000 metric tons of sugar for the current fiscal year. This is in line with our forecast. This is a 6,000 metric ton increase from last year. We are proud of the work we have done and the strategies implemented over the past two years to help mitigate against potential losses and make this year's campaign successful. Lastly, we are pleased to report that we have concluded a new five-year agreement with our Taber unionized workforce.
In our Maple segment, adjusted EBITDA decreased by CAD 1.7 million in the second quarter. This was largely due to lower consumer demand and increased packaging, freight, and energy costs, as well as increased recruitment, compensation, and employee benefit costs. Sales volumes decreased in the second quarter as a result of lower consumer sales, as well as timing issues caused by global shipping issues and export carrier shortages. Despite the reduction in sales volume, we have not lost any customers. The increased costs in the quarter hit us immediately, and there's often a lag in passing through these increased prices. At the end of the quarter, we began implementing an additional updated pricing strategy aimed at recouping these incremental costs as contracts came up for renewal.
While we expect financial and operating pressures to continue for the remainder of the fiscal year, we expect our updated Director of Special Situations Research Analyst pdated pricing strategy will take effect over the next few quarters and lead to improved margins from what we are seeing today. In previous quarters, we implemented wage increases to help assist with the tight labor market in Quebec. We are seeing a positive impact in terms of employee retention. However, this increase is driving higher labor costs over the same time period of last year. We are reviewing our labor plan to welcome immigrants to the upcoming fiscal year to help support our production in Quebec. Now I would like to touch on the maple crop.
Due to a lower maple production last year and a result of poor weather conditions, as well as increased industry-wide demand over the past two years, the maple strategic reserve has been heavily depleted.
As demand returns to pre-COVID levels and growth tempers, we expect the reserves should begin to replenish over the next few seasons. This will be helped by the 7 million additional taps that PPAQ has approved to supply the growing global demand for maple products. Approximately 1.5-3 million of these taps were installed this year and began to contribute to production in 2022. As of today, we are seeing good to excellent yields from the producer side, which should be sufficient to supply global demand and start rebuilding the reserve inventory. At this time, we're using several methods to source sufficient maple syrup to fulfill our orders, including broadening our syrup purchasing network and signing multiple year agreements with our producers. We remain confident in our ability to fill our contracts this fiscal year and remain positive in this segment.
Next, I would like to touch on our sugar refining capacity and expansion evaluation project that is assessing our ability to capture increased demand and future growth opportunities in sugar, particularly in Eastern Canada. As I mentioned last quarter, sugar-containing products manufactured in Canadian plants for export to the U.S. and the E.U. are driving strong demand growth in Canada, with most of that production coming from Eastern Canada. Our assessment continues to advance well, and we plan to update the market with the results of our assessment at the end of the next quarter. Director of Special Situations Research Analyst, I want to provide an update on the positive news on the Canada Border Services Agency's decision to maintain antidumping and countervailing duties on sugar imported into Canada.
The CBSA determined that antidumping duties will continue to apply to imports of dumped sugar from the U.S., Denmark, Germany, the Netherlands, and the U.K.
The CBSA also ruled the countervailing duty will continue to apply to imports of subsidized EU sugar. We welcome the CBSA's decision. Before I turn the call over to JS, I wanted to thank our employees. Our employees continue to manage our operations, the needs of our customers, and all other business-supporting relations with care and commitment throughout this volatile period. They are the reason we are able to deliver essential agreements to the critical supply chain. I continue to be inspired by their efforts and thank them for their continued hard work. Now I will turn the call over to JS, who will provide additional information on the quarterly results.
Thank you, Mike, and good morning, everyone. In the second quarter of 2022, our adjusted EBITDA was CAD 24 million, an increase of CAD 2.6 million from the same quarter last year. Higher adjusted EBITDA in the quarter was largely driven by higher adjusted gross margin in the sugar segment, partially offset by weaker results in our maple segment. For the first six months of 2022, adjusted EBITDA was CAD 50.1 million, up CAD 1.1 million from the same period last year, largely as a result of the strong performance of our sugar segment in the second quarter. For the remainder of 2022, we continue to expect that firm customer demand, improved pricing, and stable production output in our sugar segment will more than offset the current challenges we are experiencing in our maple business.
This should allow us to deliver stronger financial results in 2022 as compared to 2021. I would like to begin my review by pointing out some financial highlights from our sugar segment. Total sales volume in the second quarter amounted to 196,600 metric tons, almost 13,000 metric tons higher than the same quarter last year and over 16,000 metric tons higher than the first quarter of 2022. In the current quarter, we were able to make up for the delays we experienced in the first quarter and thus we recorded higher industrial, consumer, and liquid volumes. The total volume delivered to our customers for the first six months of 2022 is higher than last year by 2,400 metric tons.
Our adjusted gross margin was CAD 31.3 million in the quarter, up CAD 9.5 million from the same quarter last year. This significant improvement was due to higher sales volume, improved customer pricing, and increased byproduct net contribution. In addition, this year our beet crop was not affected by poor weather, and the quality and quantity of the beet sugar production positively impacted our financial results. The higher production costs of 2022 were mainly attributable to higher volume produced, along with annual labor cost increases and market-based price increases for goods and services used in our refining process. On a per unit basis, adjusted gross margin improved by CAD 40 per metric ton to CAD 159 per metric ton in the second quarter of 2022. This reflects the improvements mentioned above, driven by strong underlying demand and stable production process.
For 2022, our production output reflects the good performance of our beet sugar facility in Taber following two years of difficult results attributable to unforeseen weather-related events. Distribution costs increased by CAD 1.7 million in the second quarter due to higher freight costs and additional logistical costs incurred to support our supply chain. The incremental costs include market-based freight price increases, along with the financial impact of higher than expected movement of bulk sugar from the west to the east to meet customer demand. Administration and selling expenditures increased by CAD 3.6 million compared to the same quarter last year, primarily as a result of an improved share price, which led to a non-cash increase in share-based compensation expense for the second quarter. This variance was partially offset by lower COVID-19-related health and safety costs. Our outlook for the sugar segment remains strong for 2022.
At this time, given the strong customer demand we are anticipating, we are increasing our sales volume forecast for 2022 by 5,000 metric tons to 775 metric tons. The combination of higher volumes and pricing action from recent customer negotiations, along with the stability of our operations, are expected to drive improved profitability and stronger financial performance over the prior year. Let's now move our financial discussion to our maple segment. As Mike mentioned previously, the financial results of the maple segment have been challenging in the first two quarters of 2022. Adjusted EBITDA decreased by CAD 1.7 million from the same period last year as volumes were lower due to decreased demand and timing issues related to shipment delays.
In addition to lower volume sales, adjusted EBITDA was also impacted by higher packaging and energy costs, as well as higher administration and selling expenses, all of which were driven by inflationary market-based price pressures. These challenges also drove the reduction in adjusted gross margin, which at 8% was 140 basis points lower than the same period last year. Administration and selling expenses increased by CAD 0.5 million from the prior year, largely due to higher labor costs. Distribution costs increased by CAD 0.2 million, largely due to higher net freight costs related to market-based price increases. We expect these inflationary pressures, which we believe are impacting the whole maple syrup industry, to continue for the remainder of 2022.
In order to mitigate this short-term negative financial impact, we recently began implementing an updated pricing strategy to recoup these incremental costs, with new pricing expected to take effect over the next two quarters. In closing, I would like to highlight a few other related financial items. Our adjusted net earnings for the second quarter were CAD 9.1 million or CAD 0.09 per share, compared to CAD 7.8 million or CAD 0.07 per share for the comparable period last year. For the first six months of 2022, adjusted net earnings were largely unchanged at approximately CAD 20 million or CAD 0.19 per share. Free cash flow for the last twelve months were CAD 46.6 million, fairly stable compared to the same period last year. Our capital expenditures for the quarter were CAD 2.9 million lower than last year, mainly due to timing.
Once again this year, we expect to spend approximately CAD 25 million on various capital projects with approximately a quarter allocated to return on investment projects in 2022. Today, we are also announcing that the board of directors approved the payment of a CAD 0.09 per share dividend in relation with the results of the second quarter. This is consistent with the dividends paid in previous quarter for the last several years. We are anticipating maintaining our dividend payout practice for the foreseeable future. I would like to conclude by reiterating our confidence in delivering improved financial results for 2022. This is supported by the positive outlook of our sugar segment based on strong customer demand, higher margin, and stable production output from our three production facilities, which we believe will more than compensate for the current challenges we are experiencing in our maple segment.
With that, I would like to turn the call back over to the operator for questions.
Thank you. In order to ask a question, please press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press the pound key. Please note that we'll only take questions from analysts. Our first question is from George Doumet with Scotiabank. Your line is open.
Yeah, guys, good morning. Congrats on a good quarter.
Good morning.
I'd like to get started on the sugar business. Can you maybe quantify the gross margin impact from the better production fees compared to last year? Number one. Number two, I think you might have answered on this last call, but would you expect by-product contributions to run at about CAD 1.5 million per quarter for the next couple of quarters?
Yeah, George, JS here. Well, it's a bit difficult just to put a number on the improvement. I think from production standpoint, we did about 6,000 metric tons more than we did last year out of our Taber facility. I would probably use that number as the improved productivity from our Taber facility. As for your second portion of the question in relation to the by-product revenue, we wouldn't expect that in every quarter going forward. I think what we've seen is, and mainly in the first two quarters of the year, most of this product has already been processed and a lot of it has already been sold.
We're not expecting this to continue for the next two quarters. I mean, it might be a little bit left over, but and maybe some with the early harvest that we are expecting out of Taber in late in the year. But the positive impact versus last year is pretty much all realized.
Okay. That's helpful. Thanks. Shifting gears to the maple syrup business. When you first acquired that business, I think the expectations were kind of mid to high single digit volume growth. That slowed down as we went through the pandemic that re-accelerated. Maybe a two-part question there as well. Can you maybe talk a little bit about where you think the medium-term outlook is for that business in terms of growth? Second part is, I mean, would you expect at all to what magnitude would you expect a demand, maybe a volume response from the higher pricing at all over the next little bit?
Hey, George, thanks for that question. Medium-term growth, you're right, and we've been saying that last couple of quarters. We expect to return to pre-COVID norms. When we acquired this business, it was running on about a 5.5 CAGR. We saw two years with COVID at, you know, near 20% or 21%, which we are drifting back now to what we'd see as traditional growth around 5%. That's in our plans. We expected that. It is resetting like everything else is coming out of COVID. Your second question, George, was?
I'm just worried about, I mean, we're obviously pushing on our price in that business. I'm wondering if you're seeing at all or you expect to see a negative volume response from the end user.
Yeah. That's. We looked at that before as well and when we looked at inflation in the first year when we bought the business, what would happen. We did not experience that when prices went up in maple syrup. You know, ultimately, we would think there's more stickiness, so to speak, in the segment because over the last two years of COVID, there's been more consumption in trial, and some of that will stick more with consumers. They're looking for the healthy alternative sweeteners, and we think we'll have more stickiness that'll insulate us from high price erosion in the nutshell.
Okay. Just one last one maybe for JS. On working capital, obviously there's a lot of the supply chain you have to manage is an inflationary backdrop. Can you talk a little bit about how you would expect working capital this year to kinda trend, compared to maybe what we've seen in the past?
Yeah. There's a bit of pressure on working capital, and it comes a little bit from the sugar side, for example, where you have higher price of sugar than we had in prior year. I'm not expecting this to make a significant impact. I mean, our credit facilities are, you know, fairly well aligned. I don't see us. If I look at the level of our covenants, we're still pretty much at the same level than we were in the past. It is putting a bit of pressure, but on the other hand, we're also managing the situation fairly closely, on the other side and ability to collect from our customers.
All right. Thanks, guys. I'll pass on the line.
Thanks.
The next question is from Michael Van Aelst with TD Securities. Your line is open.
Hi, good morning. Michael here.
Good morning.
Wanted to follow up on a few things. Stock-based comp is a big number again. Can you give us an idea of what it was actually how much it increased year-over-year? Is that just due to the share price or is there other or are you also awarding more?
Well, the increase from last year is about CAD 2 million on a quarter-to-quarter basis, Michael. It's really related to the share price. There hasn't been any change in the plan versus what we've disclosed in the past in our management circular. The difference is the stock price has rallied. I would say, you know, if you look at when I started about 18 months ago, the stock price around CAD 4.75. It's now, you know, been going above CAD 6 for a while. As you probably know, when you evaluate those things from an accounting standpoint, it's based on models, you know, arithmetic models or we use a Monte Carlo model to do that. The more you do simulation on those, the more.
With the higher stock price, it just gets higher results in the future. That accounts for some of it. The other portion of it impacts in the first two quarter of the year is that the retirement of our CEO from an accounting standpoint, we have to take those future charges immediately as John Holliday has left the organization.
How much was that?
I would say it accounts for about half of the variance.
When that's on the admin and general?
Yes.
CAD half million, or was it up.
Half.
-3.6.
Half of the CAD 2 million for the slide, sure.
Oh, half of the CAD 2 million. Okay.
Yeah.
All right. When you look at, you guided towards a 25%-30% increase in admin and selling for the year. How much of that is because of stock-based comp? And then what are you assuming for a share price when you make that calculation?
Well, we're assuming it's a simulation that is using historical information. I'd say if you look at our accrual base right now, we're probably somewhere close to where the stock price is right now. That's, you know, our current expectation going forward. Most of it, if you look at our accruals, almost all of it is based on the impact of, you know, share-based compensation. There's another portion that is based on overall compensation for market adjustment, mainly for management employees.
Okay. All right. Just to get the distribution out of the way, I think you said a 10%-15% increase. If I understood you correctly earlier, it's not so much on exports, it's more on shipping product from west to east?
In the freight costs, yeah, that's exactly right, Michael.
Okay.
Sorry.
Sorry, that's because the demand is stronger in the east and that's what you're looking to try and offset by increasing capacity in your Montreal facility?
That would be a fair assumption. I mean, if you look at the variance in our freight and distribution costs, I would say that half of it is related to the demand that we have to move from out west to bring to out east to serve our customer, and the other half is the market. I think, you know, no need to hide the fact that the freight market has been quite difficult.
Right. Most of your products are sold FOB, except for your exports, correct? It's just the increased volume going from west to east and then the increased pricing on that plus the exports.
Yeah. We've always kind of moved a little bit of sugar from West to the East, and we're moving more this year, and the cost to move it is actually.
Right. Okay. The sugar business was strong. I wanna ask about the maple side because, you know, I read a lot of articles saying how strong the demand is for maple. You know, and some of your competitors have been bought up, or tied up with others, you know, based on that outlook for strong growth. Yet, you know, we're kind of seeing that weakness the last couple of quarters in your volumes year-over-year. When you're talking about resetting to a 5% CAGR on growth, are you saying that we're gonna give back, you're giving back some of the maple volume that you got the last few years, and you're going to get like a three-year CAGR of 5% historically?
Yeah. No, Michael, the consumption itself is gonna reduce. We're not giving up any share. We're still keeping our share and our same customers. It's just the consumption of people going back to work and returning back to normal life. They're not home for two years, and we're not gonna see, it'd be impossible to see continued growth we saw during COVID, 20%. Our assumption is we'll continue to drift back towards what was traditional pre-COVID to 5.5%. It might be slightly higher, but that's kind of how we're setting our expectations.
Okay. Basically a reset to what would have been the trend line, so lower volumes this year and then continue to grow from there.
That's correct.
Okay. For the full year, you guided to higher profits, overall sugar strength offset by the weakness in maple. When you gave guidance at the start of the year, when you were talking about that improvement, you had pointed out over CAD 10 million of kind of excess or unusual costs that wouldn't recur in fiscal 2022. So when you talk about improvement in earnings, does it. You know, would you also be improving earnings if we backed out those unusual costs from last year?
You know, we actually really don't give, you know, guidance on earnings that precise. I would say, you know, without trying to dip into what we discussed earlier, I would say that we had the CAD 10 million last year. There's also some one-time this year. We talked earlier, Michael, about the share-based compensation we didn't have last year. If you combine the, you know, the two together, I think you'd get to a number fairly close to where we're expecting earnings to land in this year.
Well, I'm not sure if it's clear the way I explained it, but.
Yeah, no, I think that's fair. Okay. Thanks very much. I'll get back in queue. Thanks.
Thanks, Blair. The next question is from Zachary Evershed with National Bank Financial. Your line is open.
Hey, guys. Thanks for taking my questions. I'm just calling in for Andrew here. We've looked at some data, and we've seen kind of the dynamics with higher ethanol fuel and lower conversion to high fructose corn syrup. Just wondering what you guys are seeing on your end, and if that's driving anything on the sugar side.
No, I don't see any correlation to that in our business at all. I mean, we're actually in New York this week at NY Sugar Week and been meeting with the trade side. There's an abundant supply of raw sugar in the market. We see raw sugar supplies continuing to be well serviced and strong enough for what's going on in the market. There's very little correlation left in our business to high fructose corn syrup, 'cause most of those conversions took place in the last couple years.
Okay, great. Thanks. Just moving to the maple segment here. I think you mentioned in your press release the lower volumes were partially attributable to timing issues related to shipping. Just wondering, like, has that subsided in this quarter? Are you gonna be able to, like, make up those volumes? Is it just a timing related issue?
Yeah, a lot of it is timing, Stephen. As everybody knows, the global freight market is very difficult, very volatile, very hard to predict. You know, as we said, we spent more money on freight. We've absorbed costs. There's a cost for a short supply. Even though customers, you know, may have their own freight arrangements, we had a lot of goods sitting that where customers couldn't get freight. We arranged more freight than we would've planned and spent more costs on that to do that, to get goods to the customers, so that the shelves would be stocked, so to speak. The global freight market, you know, maple is largely an export product. The global freight market continues to be volatile.
We're taking as many measures, and we continue to battle it on a daily basis with the team. We have a sophisticated freight team that comes from sugar side and the maple side, working together to find solutions in advance to the problems as they come. We've got the right team on the task, and I'm confident that things will get stronger and better for the maple supply side on freight going forward and supplying our customers.
Okay. Sticking with maple, I guess on the pricing, is there anything else that when you say, you know, new pricing strategies, is there anything else than just higher pricing that can be implemented? Or is there any other approach?
Yeah, you know, we've got very robust modern facilities. Our production costs are, you know, world-class competitive. It's a freight issue and cost of goods of components and packaging and those are the costs that we need to pass through to customers and that and that's what we are going to be focused on.
Okay, perfect. Just a couple more here. You mentioned in your opening remarks targeting immigration labor. Just to clarify, is that new immigrants coming in or is that the temporary international recruitment? I think just to clarify one more time, I think you were just relating that to the maple side of the business. Is that also being seen on the sugar side?
Yeah. Thank you. No, the immigration strategy is for our maple business to Quebec-based plants. We started this well over a year ago as a way of shoring up the labor force. That's been a project that's been undergoing for a while. These will be more permanent, not a temporary immigrant employee base. We expect them to be here in the fall and help support the teams in the production of maple products.
Perfect. Thanks. Yeah, just one last one here. Just wondering what you guys are seeing on the competition side of things for maple. I think there was a transaction recently in the industry, yeah, I just wanted to get your thoughts.
Yeah. As I said in previous quarter, the maple business remains very competitive. I don't see that changing overnight in any way, shape, or form, and we're here for the long haul. It's just like we've been in the business, in the sugar business for 135 years. We expect to be in the maple business for a while as well.
Okay, thanks. That's all my questions.
Again, please press star one if you'd like to ask a question. The next question is from Stephen MacLeod with BMO Capital Markets. Your line is open.
Thank you. Good morning, guys.
Morning, Stephen.
I apologize. Morning, morning. I apologize I jumped on a little bit late. But I just wanted to ask about the adjusted gross margin per metric ton in the sugar business. You know, it's quite robust, and I'm just curious when you think about how that factors into your outlook, you know, is it fair to say that your expectation would be for the strength to continue, which would offset some of the pressures you're seeing on the distribution and in the selling side?
I think it'd be fair to say that, you know, we had some significant improvement in margins, especially in some of our sales margin, that is driving a lot of the better performance on our adjusted EBIT per metric ton. The one thing, the only caveat I would put on that, Steven, is that there's also seasonality. I would look at, you know, I wouldn't take that number and say, "Well, we'll replicate that for the next two quarters." I think we need to also consider the seasonality in our business. If you were to look at this number and then adjust it for in Q3 and Q4 for the seasonality factor as we've had historically, I think you'd be fairly well on.
Right. Okay, great. Just secondly, on the industrial side, you know, you've seen in the past some sugar containing product manufacturing coming back into Canada. Are you still seeing that sort of tail end positively impacting that specific segment going forward?
Yeah, Stephen, we've reported on that, and that was in my comments as well. That segment continues to grow and Canada continues to benefit from those assets expanding and growing in Canada and bringing more food manufacturing jobs to Canada and production.
Okay. That's great. Well, thanks, guys. Appreciate it.
Okay, thanks.
We have no further questions at this time. I'll turn it back to the presenters for any closing remarks.
Thank you, operator, and we'll see everybody again next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.