Rogers Sugar Inc Stock

Welcome to the Rogers Sugar Inc. Third Quarter Results Conference Call. [Operator Instructions]

Before we begin, 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-IFRS measures in our call. Please refer to the forward-looking disclaimers and non-IFRS 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 will also be available on our website.

I'll now turn the call over to Mike Walton, President and CEO of Rogers Sugar.

Thank you, operator, and good morning, everyone. Welcome to our third quarter call. Today, I'll take you through the key developments in both Sugar and Maple, share an update on the LEAP Project and the labor agreements we reached during the quarter, and then hand it to J.S., our Chief Financial Officer, for the detailed financials. After J.S., I'll return with our outlook for the balance of fiscal 2026 before we open the line for questions. Our investor presentation is posted on the Investors section of our website, if you would like to follow along.

Let me start by stepping back for a moment. The operating environment we are navigating has not become simpler since we last spoke. Trade policy between Canada and the United States remains in flux. Global demand for some food products is softening, and cost pressures across our operations have not abated. We are not pretending otherwise.

What we are also seeing, and what major North American grocery retailers have noted in recent weeks, is a more cautious consumer. Value-conscious shoppers, in particular, are pulling back on basket size and purchase frequency across prepared food categories. Food inflation is affecting purchasing behavior broadly. That is the environment our customers are navigating, and that is the environment we are managing through.

More recently, we have seen some easing in input costs. Raw #11 sugar prices have moderated from the elevated levels of recent years, and cocoa prices have also retreated from their highs. For our industrial customers in the confectionery sector, this is a welcome development and one that may support a gradual improvement in demand over time.

Within that macro and uncertain environment, our business is performing with the kind of stability that we have spent years building toward. Rogers Refined sets us up well for exactly this kind of setting.

Sugar remains a fundamental ingredient in a wide range of food products. Domestic demand is steady. Our domestic franchise is intact. And on the operational side, this quarter delivered 2 milestones that matter well beyond fiscal 2026, which I'll speak to shortly.

On to our results. For the third quarter of fiscal 2026, we reported adjusted net earnings of $16 million compared with $17 million in the same quarter last year. On a per share basis, adjusted net earnings were $0.13, consistent with the prior year.

Consolidated adjusted EBITDA for the quarter was $36 million. For the first 9 months of the year, adjusted EBITDA was nearly $121 million compared with $111 million over the same period last year. That year-to-date improvement reflects the continued strength of our Sugar segment through a period that has required real discipline to navigate.

In the Sugar segment, the underlying quarterly performance was essentially in line with last year, which, given the volume environment, is a result we are satisfied with. Sugar sales volume in the third quarter was approximately 188,000 metric tonnes, a decrease of approximately 3,000 metric tonnes compared to the same period last year.

The largest driver was lower liquid volume, primarily related to the loss of a large customer that closed its facility in Western Canada. Industrial volume was modestly higher, reflecting improved demand from the confectionery sector. It is good to see this important segment of our business starting to show signs of recovery. Export volume was marginally positive, a slight recovery from the suppressed levels we saw in the first half of the year.

In the Maple segment, performance was in line with the same period last year, but below our expectations. Global demand for maple syrup has softened in recent months, driven by the impact of food inflation on consumer spending. We have adjusted our full year volume expectations accordingly. As you know, we are managing Maple with commitment to cost discipline, and we aim to deliver top quality products and unparalleled customer service.

The third quarter results reflect Rogers Refined is doing exactly what it is designed to do. The framework keeps us focused on the things we can control, providing excellent service to our customers, improving production efficiency and managing costs prudently. Volume will move around. What we are building is a business that delivers consistently across variable market conditions. Today's results demonstrate that.

I want to spend a moment on 2 exciting developments from the quarter. On June 11, we reached a new 5-year collective labor agreement with the main union at our Montreal facility, running through May 2031. Reaching that agreement during an active construction program while the refinery was operating took real commitment from both sides, and I want to acknowledge that. It gives us the workforce stability we need through the LEAP commissioning period and into the years when the new capacity begins contributing.

Also, on June 26, we extended the collective agreement at our Taber sugar beet factory through March 2032. Taken together with the Vancouver agreement reached in 2024, we now have labor certainty across our production network, and we will now sharpen our focus on ensuring our operating models are efficient and effective in supporting the market. That matters as we move into fiscal 2027 and beyond.

Now let me update you on the LEAP Project. The project is moving into its final phase. Most major equipment is now installed at the Montreal plant, and we successfully tested the raw sugar melting process, one of the most significant operational steps we have taken to date.

We have also advanced the deployment of logistics infrastructure, piping and electrical assets. The focus now shifts to operational readiness and further commissioning activities. Our teams are working methodically through that process with the same planning and safety discipline that has characterized this project from the start.

LEAP remains within our expected total cost range of $280 million to $300 million, and we continue to anticipate the incremental refining capacity starting to come online in the first half of calendar 2027. That timeline is unchanged.

I want to set appropriate expectations on what LEAP will deliver in the near term. When this capacity comes into service, it will add optionality, particularly in the Ontario market. The ramp-up will be gradual. The full commercial contribution will build over time as domestic demand increases. We are building for the long term and are confident of the sustainable underlying demand for this essential product.

Now I'll hand it over to J.S. for a review of our financial performance.

Well, thank you, Mike, and good morning, everyone. I will now take you through the financial results of the third quarter and the first 9 months of fiscal 2026. For both periods, the Sugar segment has exceeded our expectations, supported by domestic demand and improved margin, while the Maple segment has delivered results below our expectations due to recent challenging market dynamics.

Adjusted net earnings for the third quarter were $16 million or $0.13 per share compared to $17 million or $0.13 per share in the same period last year. For the first 9 months of 2026, adjusted net earnings were $60 million or $0.47 per share, an improvement of $7 million or $0.06 per share compared with the first 9 months of fiscal 2025.

Consolidated adjusted EBITDA was $36 million for the quarter compared with $37 million last year for the same period. For the first 9 months of 2026, adjusted EBITDA at $121 million was $10 million higher than the same period last year.

Revenues were $294 million for the quarter compared to $320 million in the same quarter last year, a decrease of 8%, primarily driven by lower average Raw #11 prices, which had limited impact on our profitability given our hedging program. Lower volumes in both business segments also contributed to the reduction in revenues for the quarter.

Our free cash flow for the trailing 12 months came in at $90 million, a slight increase from the same period last year. That improvement was driven by higher adjusted EBITDA and lower capital expenditures in our ongoing operations, excluding the LEAP Project, partially offset by timing of income tax payments and higher interest costs. Free cash flow is how we contribute to the financing of LEAP, service our debt and fund our dividend. The recent trend is healthy and providing us with the expected flexibility.

As I'm discussing our financial results, I would like to point out that our operations and related costs have not been materially impacted thus far by the current situation in the Middle East. Our proactive hedging strategy was successful in mitigating the potential impacts on energy costs, Raw #11 price variation and transportation and logistic cost increases. Going forward, we will continue to be proactive and prudent in our approach to manage the risk related to this evolving situation.

I'm now turning to the individual business segments, starting with our Sugar segment, which drives almost 90% of our profitability thus far this year. For this segment, adjusted EBITDA was $32 million for the quarter compared with $33 million last year.

Let me walk you through the main drivers. Adjusted gross margin for the quarter was $46 million, slightly down from the same period last year. Worth noting, this segment absorbed a $3 million nonrecurring noncash pension charge for past service costs related to the collective agreement we reached in Montreal a few weeks ago.

Beyond that, higher production costs and the effect of lower sales volume contributed to the lower adjusted gross margin. Those unfavorable variances were largely offset by higher contribution from refining-related activities, reflecting a favorable pricing and mix of products sold and lower raw sugar procurement-related costs.

On a per unit basis, adjusted gross margin was $245 per metric tonne in the third quarter compared with $243 per metric tonne in the same period last year, a modest improvement, reflecting the items previously discussed, including the nonrecurring pension adjustment of $3 million.

For the first 9 months of fiscal 2026, Sugar adjusted gross margin was $146 million, an increase of $17 million compared to the same period last year. The improvement reflects higher refining contribution, lower sugar procurement costs and certain nonrecurring favorable items recognized in previous quarters, partially offset by lower volumes sold and the nonrecurring pension charge recorded in the third quarter.

Distribution costs were slightly higher in the quarter, reflecting increased shipments from Western Canada to support Eastern market demand. Administration and selling expenses were lower in the third quarter by $0.5 million compared with the same period last year as prior year severance costs were partially offset by higher compensation expense related to long-term incentive, which are based on our share price.

Now moving on to the Maple segment, where challenging market dynamics have negatively impacted financial results in 2026, especially in the third quarter as our results were below our expectations. Adjusted gross margin for the third quarter is a story of offsetting factors. Improved pricing, but lower syrup costs held adjusted gross margin essentially flat at $5.5 million despite lower volume and market-based increases in production costs. The adjusted gross margin percentage for the quarter was slightly higher than last year, but still below our expectations at 8.6%.

Adjusted EBITDA in the Maple segment for the third quarter was slightly lower than last year at approximately $4 million. For the first 9 months of 2026, adjusted EBITDA was just below $17 million, a decrease of approximately $3 million from the same period last year, reflecting the challenging market conditions discussed previously.

The focus for the remainder of fiscal 2026 is straightforward: continue to manage costs carefully, protect margin and market share and ensure we are well positioned to serve our customer and deliver quality products for both of our business segments.

Turning to our balance sheet and related liquidity position. At the end of the third quarter, we had drawn $116 million on our revolving credit facility. The total face value of convertible debentures outstanding was $173 million following the January issuance of the 9 series debentures, the proceeds of which were used to reduce the revolver balance.

We maintain a prudent and diversified funding platform of convertible debt, equity, internally generated cash flow and access to credit facilities. This strong financial position gives us the flexibility to complete the LEAP Project and execute on our strategic priorities of investing in our businesses and maintaining a consistent distribution to our shareholders.

The LEAP financing plan is working as designed. The combination of equity raise, the IQ loans, our credit facility and the free cash flow this business generates gives us the funding to see this project through to completion. Thus far, we have spent $207 million on the LEAP Project. And as Mike mentioned previously, we are maintaining our cost forecast for the project, which is ranging between $280 million and $300 million.

Regarding our liquidity, I'm glad to report that we have recently extended the term of our revolving credit facility from March 2030 to July 2031.

Finally, the Board has declared a quarterly common share dividend of $0.09 per share at its meeting yesterday, payable on or before October 21. We have paid a quarterly dividend to our shareholders without interruption for over 16 years through commodity cycles, a global pandemic and now a period of significant trade uncertainty. That consistency is something we are proud of and committed to maintaining.

With that, I will turn the call back over to Mike.

Thank you, J.S. Let me close with some thoughts on the outlook. For fiscal 2026, we expect to deliver solid overall results. The Sugar segment has performed ahead of our expectations despite this trade environment, and we have modestly raised our full year volume forecast to 745,000 metric tonnes, reflecting a moderate recovery in industrial and export demand in recent months. That said, the expected full year volume is still below that of our fiscal 2025, with most of the reduction attributable to lower margin export sales and lower liquid volumes.

On tariffs, our working assumption continues to be that current market dynamics will prevail through the end of fiscal 2026 and that there will be no significant adverse changes to CUSMA in the near term. The direct impact on our domestic business has been limited thus far. We are monitoring the situation closely, and we have the flexibility to adjust our commercial strategy if conditions shift.

I also want to note that on July 2, the Canadian International Trade Tribunal initiated an expiry review of the 2021 trade measures on imported refined sugar. The review will determine whether continued protection is warranted, and a final decision is expected by May 2027. We are engaged in that process, and we'll keep you informed as it progresses.

For the full year, in the Sugar segment, we anticipate that the Montreal refinery will continue to operate at full capacity, and we will continue to leverage our Western facilities to meet customer commitments. In Taber, the 2025 beet campaign produced approximately 103,000 metric tonnes, slightly above expectations.

We have planted approximately 24,000 acres for the 2026 campaign, which is 1,500 acres more than last year. Production and maintenance costs are expected to increase modestly, driven by market-based cost increases and annual wage adjustments. Our multiyear energy hedging program continues to mitigate the impact of natural gas price variability.

For Maple, we anticipate results in fiscal 2026 will be lower than fiscal 2025, reflecting the reduction in global demand and its impact on margins and business support costs. We are managing the business carefully, and we have the syrup and supply in place to meet customer demand.

In closing, the third quarter delivered on what Rogers Refined is designed to produce, stable, margin-focused performance even in a challenging environment alongside meaningful operational progress, 2 long-term labor agreements, a LEAP Project entering commissioning on schedule, consistent free cash flow and a dividend we have maintained without interruption. These achievements mean we are well positioned to continue delivering steady financial performance over the quarters to come.

Within this operating environment, we will increase our emphasis on the coming quarters on execution, sharpening our focus on opportunities to drive cost out of this business where possible without impacting customer experience.

Before I hand back to the operator, I want to acknowledge our teams. Managing through a complex trade environment while simultaneously working on a major facility expansion takes real commitment at every level of the organization. I am proud of the work our people are doing and grateful for the continued trust of our customers and partners.

With that, we are ready to take your questions.

[Operator Instructions] Your first question comes from Derek Lessard with TD Cowen.

It's Evan in for Derek. I had a few questions. So I guess, first on the Sugar business. Your gross margin was quite a bit better than what I was expecting, particularly considering that it included the $3 million noncash charge. It looks like volume mix had a lot to do with it. But I was wondering what was behind the $1.3 million of lower raw sugar procurement costs and if there was anything else in there besides mix that helped during the quarter.

Evan, it's J.S. here. The variance in raw sugar procurement is really -- we were able to secure some delivery from our raw sugar, which is cheaper than last year. And so that explains -- we had a couple of vessels in the quarter that came in and were cheaper for us. So that's not something that is going to be recurring.

And also, a lot of the -- when we look through the year, there was a timing of maintenance activity. So if you look at our quarter, I think we mentioned that we signed a new labor agreement. So as we were approaching -- when we were during negotiation, we didn't do as much maintenance. We did some in the previous quarter, and then we got to do some in the fourth quarter.

And then you also mentioned increased demand from the confectionery sector. Is this from existing customers? And should we be expecting industrial volumes to trend higher over the next 3 quarters because of that?

Evan, it's Mike. We are pleased with what we're seeing as some of the turnaround in that important sector in our business. The demand increase we've seen is from existing customers. And some of them are publicly traded. You can follow them as well, and they're reporting growth for the first time in a few years in that sector. And we hope that that continues. Given lower cocoa prices and lower #11 values, the combination of both makes it a little easier on the consumers at retail.

And then just one on Maple. So the gross margin was lower than the 10.7% you had in Q2 and was lower than what I was expecting. Can you talk a bit about what drove the drop versus Q2? I know you mentioned higher production costs year-over-year. So maybe you can explain what was driving that and if we should see similar pressure in Q4?

Evan, J.S. again. We had a few unexpected. We did a bit more maintenance in the quarter, which had an impact on our margin. We're still targeting to end the year at around 10%. I think that's where we've been maintaining and that's the target we've had in the last few years.

Now it is becoming a very, very competitive market. As Mike mentioned during the call, we've seen demand going down a little bit. I'll talk going forward, I think we'll see a little bit of recovery. And that impacts the competitiveness and the ability to get pricing out of customers. And so that would explain a little bit of the reduction in margin. We are still looking at our customer portfolio, aiming at a 10% for the year.

Your next question comes from Nevan Yochim with BMO Capital Markets.

Hoping you could provide a bit more detail just on the improvement you're seeing in the export volume outlook. Is this related to underlying customer demand? And then how does ongoing CUSMA renegotiations and tariff changes play into this dynamic?

Yes. Thanks for the question. The export demand is, as you know, for us, it's always just an opportunistic volume sale for us. And it's been lumpy, to put it mildly, for the last 12 months with the tariffs on Brazil and off on Brazil and sometimes on again. And as you know, Montreal is a large Brazilian supplied refinery, although we do have other origins from time to time that allows us to take advantage of lower duty to send refined sugar into the U.S.

I want to remind folks that the refined sugar sales directly into the U.S. is a very, very small portion of our business. It's a low-margin return for us. It's less than 5% to 10% of that business on an annual basis. And so we get a little bit of opportunity, we take advantage of it if it makes sense for us economically. And then when it doesn't, it doesn't. But it's going to be lumpy through the rest of this trade environment that we're in.

And as far as CUSMA goes, we'll wait and see. As we said all along, we'll focus on what we control. It's good to see folks apparently back at the table again. But until something is sorted out, we're not going to speculate on what impact it could or may not have on our business. So far, as you know, it has had very minimal impact on the sugar business directly at all, and we're optimistic that we'll continue to navigate positively through this chaotic environment. All food manufacturers in Canada are facing the same challenges. So we're all in the same basket.

And then maybe just an update on your expectations for gross margin per metric tonne in Q4 and then as we move into 2027, the PR referenced a favorable margin outlook, and I wanted to confirm if that suggests we should expect higher year-over-year margins in Q4?

I think we're more likely to expect stable margin from where we're going, considering the current environment in our current cost structure. We are focusing -- continue to focus on cost. And so if we look at the gross margin per metric tonne, if we remove some of the onetime items that you've seen here that we've had, I think we're pretty much looking for something stable in the fourth quarter and probably through 2027.

And then just finally, on the Maple segment, when you think about the competitive environment, what exactly is it that you're seeing? Is it modestly lower pricing from peers to drive volumes? Or is there something more aggressive going on?

Yes. No, it's a competitive business. We've always said that. And there's some large players and some small players that sometimes when the volumes get out of position from one factor to another, they need to move some volume because it's expensive inventory to hold. And we just see skirmishes from time to time in certain regional markets.

Again, we supply maple in over 50 countries around the world. It's going to have different plays in different zones at different times. We're focused on profitable returns in this business and executing against our strategic plan to deliver the results. We're not going to chase volume for the sake of volume in Maple, just the same approach we take in Sugar.

[Operator Instructions] Your next question comes from Nathan Po with National Bank Capital Markets.

I want to touch on that increase in sugar volume guidance coming from the industrial and export business, especially given the new tariffs on Brazil and the tariffs on Canadian ingredients that could potentially be used in SCPs. Any commentary there?

Yes. So a complicated matter, of course, with all this CUSMA and people trying to understand what's real and not real in all these announcements we see. Only the sugar itself is subject to the Brazilian if it's shipped as refined sugar, not if it's shipped as a sugar-containing product. So the transformation from sugar to another chapter eliminates the tariff on the Brazilian, in this example, the raw ingredient side. So the tariffs are only on sugar on the Brazil side and not on the SCPs as we know the world today.

And as far as our outlook goes, as I said earlier, it's important to see, and we're delighted to see, the return to growth in some of our customers in the chocolate sector. And as I said, some of them are publicly traded. You can see that reporting growth for the first time in a couple of years. Again, contributing to that is the reduction in cocoa prices we've seen worldwide and a more stable outlook in that important ingredient for the chocolate sector and lower #11 sugar prices, which has helped create a double combo of lower cost of input ingredients.

And on the new collective labor agreements in Montreal and Taber, were there any -- was there anything unexpected relative to what you've seen in previous collective bargaining agreements that will affect 2027?

No. It's negotiations and bargaining as usual. We settle at market-based rates and programs and nothing of surprise for us in either one of those outcomes. What's good news is that we have labor stability and predictability through 2031 and 2032, which is really important as we commission LEAP and bring that important volume to market.

And on the product mix benefit in Sugar, I believe we saw $7.3 million worth this quarter. Can you just walk us through the relative margin profile of your various end markets? It was just a bit unexpected given that we saw the export volumes return to growth this quarter.

I think -- it's J.S. here, Nate. It depends on also customers. So I mean it's -- when we talk about product mix, it's also -- I mean it's also depending on the type of customers and the type of format that we're selling to customers. So a lot of it is timing, so timing of the orders coming in. So I wouldn't see that as a long-term trend happening. So to me, it's just mainly punctual.

There are no further questions at this time. I will now turn the call over to management for closing remarks.

Thank you all for joining us this morning. As a proudly Canadian company with nearly 140 years of history serving this market, we remain focused on what we have always done: running our operations well, serving our customers and building for the long term. We look forward to speaking to you again in the next quarter, and we'll have more information to share. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Good evening, ladies and gentlemen, and thank you for joining us today, Thursday, May 7, 2026, for the Rogers Sugar Inc. Second Quarter Results Conference Call. [Operator Instructions]

Before we begin, 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 non-IFRS measures in our call. Please refer to the forward-looking disclaimers and non-IFRS 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 will also be available on our website.

I'll now turn the call over to Mike Walton, President and CEO of Rogers Sugar.

Thank you, operator, and good afternoon, everyone. Thank you all for joining us today. I'll start with a summary of our second quarter results covering both the Sugar and Maple segments. I will also share an update on the LEAP project and where we stand heading into the second half of the year. J.S., our Chief Financial Officer, will then walk you through the financial details for the quarter and first 6 months of fiscal 2026, after which I will return to cover our outlook for the remainder of fiscal 2026. We will wrap up with a brief summary before opening the line for questions from the analysts. Our investor presentation is available on the Investors section of our website, if you would like to follow along.

Let me start by taking a high-level view of the operating environment for a moment. We operate in a world right now where trade policy is shifting and geopolitical actions are affecting supply chains across every industry. In that environment, both of our business segments have demonstrated their resilience over the past year. Sugar goes into the food people eat every day, and there is no effective and efficient substitute for it. We have been refining sugar in Canada for nearly 140 years. And in that time, we've seen conditions change many times over. Today, we are navigating some headwinds. Food inflation is affecting consumption, population growth is slowing, and we are starting to see some impact from the increased use of GLP-1 medications on food intake more broadly. These are not trivial factors, and we are not dismissing them. But underlying demand for our sugar and maple products is steady. It is not going away.

Sugar is a natural, fundamental and functional ingredient and is essential to the food transformation industry. As for maple products, they are a favorite of customers around the globe. What we know how to do and what we have always done is manage through changing conditions by staying close to our customers, running our operations well and keeping a tight grip on costs. Further, the company is in the best shape ever to weather the current challenging environment, having delivered a step change in profitability and cash flow generation in the past few years that enables us to invest in our business while maintaining a strong balance sheet. That is exactly what you will see reflected in our results today as we delivered strong profitability despite lower shipment volumes.

So today, I am pleased to report that Rogers Sugar delivered another quarter of strong financial performance in the second quarter of fiscal '26. We reported adjusted net income of nearly $19 million, an increase of 15% compared to the same quarter last year. This increase was driven by improved operating performance, particularly in our Sugar segment, which I will discuss shortly.

In Q2, consolidated adjusted EBITDA increased by 10% year-over-year to $38 million. For the first 6 months of the year, adjusted EBITDA is up by 15% to $85 million. These results reflect the continued strength of our Sugar segment and the disciplined execution of our teams across both businesses. Looking at the Sugar segment, adjusted EBITDA in Sugar was $33 million in the second quarter, a 21% increase over last year, including some benefits from nonrecurring and timing favorable variances. Sugar sales volume in the second quarter was approximately 175,000 metric tons, a decrease of approximately 23,000 metric tons or 12% compared to the same period last year. The volume decline was driven by a few factors. The most significant is a reduction in export volume of approximately 13,000 metric tons. The decrease in export sales was mainly related to the current trade environment, which was not favorable for sales of refined sugar of Brazilian origin in the United States. Export volumes typically carry lower margins, so the impact on our overall profitability was marginal.

Industrial volume was lower by approximately 5,000 metric tons, largely due to nonrecurring production issues at one of our large industrial customers and some softness in the confectionery sector. Liquid volume decreased by approximately 6,000 metric tons, primarily related to the loss of a large customer that closed its facility in Western Canada. As J.S. will describe in the financial section, our strong second quarter results were somewhat boosted by some favorable nonrecurring and timing items in comparison to last year. That being said, our ability to manage execution in the current challenging environment do show the stability and resilience of our business operating model. They demonstrate the effects of our strategic focus over the last several years on delivering consistent profitable results.

Now turning to our Maple business segment, where adjusted EBITDA was just under $5 million in the second quarter, a decrease of $2 million compared to the same period last year. This variance was primarily driven by higher production costs associated with the mix of products sold and the timing of expenditures in the current period compared to last year. Here, I would like to point out that the results of the second quarter for our Maple segment were aligned with our expectations. Maple volume was approximately 13 million pounds in the quarter, broadly in line with the same period last year. For the first 6 months of fiscal 2026, maple volume was 27.5 million pounds, up by almost 1 million pounds from last year, reflecting continued demand from customers all over the world.

The 2026 maple syrup crop should yield between 3.5 and 4 pounds per tap in Quebec, which is considered average for the industry. We have secured enough maple syrup to meet expected customer demand for the remainder of 2026 and the first half of fiscal '27. We stay close to our producers, ensuring we have the kind of relationship that enables us to secure supply when we need it. Sugar is a mature industry and volume growth reflects that because we have spent 4 years building a business that competes on margin and execution rather than volume. We are actually well suited to this environment. Today's results demonstrate that. What ties both businesses together is a simple philosophy. We are not managing for tonnage. We are managing for consistent, sustainable profitability, and I am satisfied that we are delivering on that commitment.

As I highlighted off the top, underpinning all of this is Rogers Refine, the strategic framework we put in place in 2024. The core idea is straightforward, consistent, sustainable, profitable growth. It deliberately aligned our focus toward disciplined execution, which means managing our cost base, running our refineries efficiently and maintaining a proactive hedging program that protects our margins from commodity and currency volatility. Sales volume is important, but our commercial approach strategy is underpinned by extracting value from our production facilities while meeting the needs of our customers. When you look at today's results, Rogers Refined is working exactly as intended.

Now let me give you an update on our LEAP expansion project in Eastern Canada. During the second quarter, we've continued to advance construction activities and the installation of new sugar refining equipment in the main expansion building at our Montreal refinery. We also continued the work related to the deployment of new logistics infrastructure, began the installation of utility-related assets and completed the new 25-kilovolt electrical connection that will support the entire Montreal refinery in the future. Finally, we have advanced the development of our commissioning plan. This is an exciting time, and I'm pleased with the way our teams and contractors continue to work together to bring this project to life while still operating our Montreal refinery without interruption.

And let me point out that the Rogers Refined framework for sustainable operations has underpinned our work plan the whole way through. That means a focus on safety for all of our people and assets. It means planning and testing every step of the way. We are using this time to train our workforce on all aspects of the new equipment and working with our suppliers and business partners to prepare to bring the new capacity into service. In fact, in less than 4 weeks, we plan to begin melting raw sugar using some of the recently installed equipment of the LEAP project. This is one of the first steps as we move toward commissioning stage of the project.

Our targeted start-up date for the first half of 2027 is unchanged as is our cost estimate of $280 million to $300 million. Having this production in our Montreal location is a vital strategic advantage. We are located near vital port and rail infrastructure and more importantly, in proximity to where our customers are locating their production facilities. We continue to be confident that this capacity growth positions us to serve the customers on a timely efficient basis over the long term.

Now I'll hand the call over to J.S. for a financial review.

Thank you, Mike, and good afternoon, everyone. If you are following along, we are on Slide 9. I will walk through the key financial results for the second quarter and the first 6 months of fiscal 2026 and then provide some additional context for the remainder of 2026.

Adjusted net earnings for the second quarter were $19 million or $0.14 per share compared to $16 million or $0.13 per share in the same period last year. For the first 6 months, adjusted net earnings were $43 million or $0.34 per share. This represents an increase of $8 million or 22% compared with the first half of fiscal 2025. The improvement in adjusted EBITDA of 10% in the second quarter and 15% in the first half of 2026 were both largely driven by stronger performance in our Sugar segment where healthy and stable sales margins also benefited from some nonrecurring and timing-related items. Revenues were $281 million compared with $338 million in the same quarter last year. For the first half of 2026, revenues came in at $579 million, roughly 14% below last year.

The largest contributor was the decrease in the raw #11 prices, which had marginal impact on our overall profitability as we mitigate commodity price risk variation through our rigorous hedging program. The decrease was also partially due to the reduction in volumes sold, as Mike mentioned earlier, reduction mainly attributable to lower margin export sales. Our free cash flow for the trailing 12 months came in at about $93 million, an increase of 11% over the same period last year. That improvement was driven by higher adjusted EBITDA and lower capital expenditures in our ongoing operations, excluding the LEAP project. Free cash flow is how we contribute to the financing of LEAP, service our debt and fund our dividend. The trend is healthy and moving in the right direction.

As I'm discussing our financial results, I would like to point out that our operations and related costs have not been materially impacted thus far by the current situation in the Middle East. Our proactive hedging strategy was successful in mitigating the potential impact on energy costs, raw #11 price variation and transportation and logistic cost increases. Going forward, we will continue to be proactive and prudent in our approach to manage the risk related to this evolving situation.

I am now turning to the individual business segments, starting with our Sugar segment, which drives about 85% of our profitability. Overall, the Sugar segment delivered strong results in the second quarter. Volume was down, but the business delivered improved adjusted EBITDA in the quarter compared to the same period last year. Sugar adjusted EBITDA was $33 million for the second quarter, an increase of $6 million compared to the same period last year. Let me walk through the moving parts. Adjusted gross margin increased by $8.5 million in the second quarter compared to the same period last year. The increase was due to higher margin earned on refining activities of $6.5 million associated mainly with the mix of products sold during the quarter.

Nonrecurring adjustment recorded in the second quarter of 2025 for $6 million, lower procurement costs for raw sugar impacting positively the inventory position at the end of the quarter for $3 million and lower costs in the current quarter for $1.5 million for maintenance. These variances were partially offset by an unfavorable variance on volumes sold of 23,500 metric tons valued at $8.7 million and largely in the lower margin category of export sales. On a per unit basis, adjusted gross margin was $268 per metric ton in the quarter compared to $194 per metric ton in the second quarter last year, an increase of $74 per metric ton. This improvement reflects a favorable mix of products sold, lower raw sugar procurement costs and lower refining costs. In addition, the second quarter performance last year was affected by some higher maintenance costs in our Montreal refinery that were nonrecurring in nature.

For the first 6 months of 2026, adjusted gross margin at $100 million was $17.5 million higher than last year, of which almost $11 million should be considered nonrecurring or timing related. The remaining increase was attributable mainly to improved pricing and favorable inventory valuation variance. The positive variance was partially offset by lower sales volume of 44,500 metric tons, largely in the lower-margin category of export sales. Finally, our administration and selling expenses were higher by $4 million, driven primarily by cash settled share-based compensation, which was higher in the second quarter of 2026 due to an increase in our share price, along with market-based increases in compensation and employee benefits.

Now moving to our Maple segment. For the second quarter of 2026, the Maple segment delivered results aligned with our expectations, although lower than the same period last year. The reduction of $2 million in adjusted EBITDA compared with last year relates primarily to mix of products sold impacting production costs, including punctual favorable timing variances benefiting the second quarter of 2025. Adjusted gross margin percentage was 10.7% compared to 13.2% in the same quarter last year, driven by those same factors of production costs and mix. For the first 6 months of 2026, adjusted EBITDA of the Maple segment was also aligned with our expectations despite being lower than last year by $2 million. The unfavorable variance for the first 6 months was directly related to the factors impacting the second quarter discussed previously.

Adjusted gross margin percentage for the first 6 months of 2026 was 10.6% compared to 12.3% in the same period last year, driven by those same factors of production costs and mix. As mentioned previously, the results of our Maple segment have been strong so far this year and aligned with our expectations. As Mike will discuss later, we anticipate overall strong results for the Maple segment in 2026, with results in the second half of the year closely aligned with the performance seen in the first 6 months, reflecting our efforts at optimizing our production assets, stabilizing our sourcing strategy and securing a reliable supply of service for our customers.

Turning to our balance sheet. In January, we issued $57.5 million of 9th Series convertible unsecured debentures maturing in January of 2033. The net proceeds were used to reduce the balance on our revolving credit facility, further strengthening our liquidity position. This issue completes our refinancing program that began with the issue of the 8 Series debentures in 2025. We maintain a prudent and diversified funding platform of convertible debt, equity, internally generated cash flow and access to credit facilities. This strong financial position gives us the flexibility to complete the LEAP project and execute on our strategic priorities of investing in our businesses and maintaining a consistent distribution to our shareholders.

On that note, our Board of Directors declared a dividend of $0.09 per share to be paid in the third quarter of fiscal 2026. We have paid our quarterly dividend to our shareholders without interruption for over 16 years through commodity cycles, a global pandemic and now a period of significant trade uncertainty. That consistency is something we are proud of and committed to maintaining.

With that, I will turn the call back over to Mike to provide a summary and outlook for 2026.

Thank you, J.S. Now looking at the remainder of the year. As we move through 2026, the business environment remains complex. Trade policy is shifting, geopolitical tensions are affecting supply chains and some of the longer-term trends I mentioned earlier are starting to show up in our numbers. We are not immune to any of that, but we have navigated difficult conditions before, and our approach is the same as it always has been, to stay close to our customers, run our operations well and manage our costs carefully. Our team remains disciplined in how we allocate capital and pursue opportunities. We are not chasing volume for its own sake. The focus is on long-term customer partnerships that generate sustainable profitability. That is the essence of Rogers Refine. On the trade front, the direct impact on our business has been limited so far. We are monitoring the situation and engaging with the relevant stakeholders. If conditions change, we will adjust. It's as simple as that.

The progress we have made over the last several years has put us in a strong position, and our focus for the remainder of 2026 is straightforward, keep executing, keep delivering, and we will focus on what we control. In the Sugar segment, we are revising our volume forecast for the fiscal 2026 from 750,000 metric tons to 735,000 metric tons, a reduction of approximately 6% compared with 2025. Most of that reduction is in export sales, where the trade environment for Brazilian origin refined sugar has reduced the volume of opportunistic sales available to us in the U.S. market. Our domestic Canadian business remains healthy, and we continue to prioritize serving those customers first. We expect the margin environment in the domestic market to remain stable, and we believe we will continue to offset the impact of lower overall volumes.

At our Taber facility, the processing of the 2025 beet campaign was completed in February. We produced 103,000 metric tons of beet sugar, slightly above our original expectation. Looking at our operating costs, we believe that our production and maintenance expenses across all 3 facilities will increase modestly, driven by market-based cost increases and annual wage adjustments. Also worth mentioning that we do not anticipate significant impact on our energy costs from the current conflict in the Middle East. As J.S. mentioned previously, our multiyear hedging program should mitigate our exposure in the short and longer-term. Administration and selling expenses will be somewhat higher, reflecting the recent increase in our share price, which flows through to our cash settled share-based compensation as well as general market increases and costs associated with the planned Canadian and international pricing review in the second half of the year. Financing costs will increase as we draw on the funding we put in place for the LEAP project.

Now looking at Maple. For Maple, we continue to expect a strong year. Our volume forecast remains 56 million pounds for fiscal 2026, representing a growth of approximately 5% over last year. That assumption reflects current global market conditions and the availability of maple syrup from producers. As I mentioned, we have secured sufficient supply to meet our customer demand through the remainder of fiscal '26 and into the first half of fiscal '27. Capital spending in total for fiscal 2026, excluding LEAP project are focused on automation projects and improved productivity, profitability and are mainly associated with the Sugar segment. We anticipated spending should be consistent with prior years at approximately $27 million. We anticipate spending $115 million in fiscal '26 on the LEAP project.

In summary, the results of the second quarter were consistent with the trajectory we have been discussing recently. We are satisfied with our current performance, showing stable profitability in a volatile macro environment, which is exactly what Rogers Refined is designed to deliver. The great focus of the last few years is showing up in the numbers, and our priorities for the second half of the year are unchanged, serve our customers well, manage costs carefully and keep the LEAP project on track for its first half of 2027 in-service date.

Before I hand it back to the operator, I want to recognize our teams, delivering solid profitability in our most historically challenging quarter while simultaneously building a major expansion of Montreal takes real commitment. Thank you to our people and to our customers and partners for the trust they continue to place in us. With that, we are ready to take your questions.

[Operator Instructions] Your first question comes from the line of Michael Van Aelst from TD Cowen.

I want to start off talking about the sugar volumes a little bit because they do stand out. And you did say that you're not chasing volume, but are you losing any contracts to competitive bids? Or is it strictly just customer closed and the trade for the most part?

Yes, Michael, thanks for the question. Your view is exactly right. The domestic market remains competitive as always, but we're not losing business in the domestic market other than the closure that was a year-over-year number that we talked about in Western Canada and then the production problems that one of our major customers had in Eastern Canada. Other than that, our business is stable. The losses are exactly in the export business. As you know, there were high tariffs on Brazilian origin sugars and refining doesn't change the origin. And therefore, the duties were prohibited to enter into the United States.

So, what's happening with all the beet sugar that you're producing? And if the exports are down and liquid sugar volumes are down, where is that volume going?

Well, the beet sugar, it goes into the mix like we do from all of our sites. And it's not specific for liquid or specific for export. The beet sugar consistently has about 20,000 tons of quota access to the United States that goes back through WTO and the last CUSMA negotiation. Other than that, beet sugar stays in the domestic market and mostly in the market where it's produced, and that business is very stable.

Okay. Is your volume -- like now you're expecting volumes to be down 6%. I think your 750 -- I seem to remember capacity is around 800 or so. Like what -- when you consider the market conditions today and the trade environment and everything like that and all the trends that you mentioned, if you had to make the decision over again, would you still think LEAP is a good return on investment at this stage?

It is absolutely the right position to take long term for this business. As you know, when we announced, we were moving 20,000 tons and more a year from Western Canada to support Eastern Canada. When you look at all the public announcements that have made in the last few months in Central Canada for new plant expansions and new capacity, absolutely, this capacity is required on the medium, long-term in Eastern Canada.

And that's good to hear. And do you -- are your customers' facilities are going to be ready? Or is the demand going to be there, do you think when you open in the first half of '27? Or is it going to be more like a very gradual ramp-up?

Yes. We've said all along, it would be a gradual ramp-up. It could be 12 to 18 months, maybe longer depending on the demand and commissioning an asset of the size that we've built in Montreal. So that's been part of our plan all along. But if you look at other major customers that we have that have been reporting publicly as well lately, yes, there's been softness in demand because of inflation and population decline and calorie consumption decline in developed countries. But everybody has got an outlook because of food inflation easing in cocoa, which is a big driver for us for SEPs to foreign markets. We see that recovering because our customers are calling it recovering. Also, the other investments that we've talked about notably since the last quarter, a big plant expansion, a customer of ours in Montreal made an announcement of a $250 million plant expansion. So, the market, despite all the headwinds and the volatility remains very interested in developing more SEP production in Canada.

Your next question comes from the line of John Zamparo from Scotiabank.

I wanted to ask about the gross margin performance in the quarter. It was up sharply year-over-year. You called out the one-time items from last year and mix is obviously a component here with the lower export sales. But I wonder if you could talk about some of the other factors that are driving your gross margin performance.

John, it's J.C. here. Yes. So, if we look at the year-over-year, last year was unusually low. And then because of the reasons we just mentioned. So, we had significant maintenance costs that were mainly onetime in nature. And then this year as we have benefited from the mix of having less exports, which are lower -- we have lower contributed margin for those. And we've also had -- we benefit from a lift on our inventory valuation because of some of the pricing that we were pricing at going in the future for this type of inventory. So, if we look at the 2 together, you could see one is unusually high. The other one is unusually low. But if you look at the -- and trying to look and going forward, I think there's probably a better proxy if we look at the last 8 quarters together.

That's helpful. On GLP-1s, I wonder what you're hearing from your larger customers in terms of how to address that or how to offset that. Is there anything you can share that would help us understand how this might evolve over the next couple of years, particularly as generics come into play?

Yes, John, it's an interesting question, and we're not going to speculate. We're following it as close as everybody else. The fact is sugar is a functional ingredient. It's not just for sweetness. It's also a functional ingredient for cooking and baking and preserving food products. So, it's -- I think it's going to be a bit of an anomaly, but we're paying attention to it like everybody else and seeing where this is going to go.

Fair enough. And then one last one, and I'll pass it on. You referenced the multiyear hedging program on energy costs. I think this is a subject on many investors' minds. I wonder if you could elaborate a bit more on that. How far ahead precisely have you hedged natural gas costs? And is it 100% through that timeline? Or is there some variability?

It's a very good question. And when all issue of the war broke in the Middle East, there's not a material impact for us. We look at it 5 years ahead. And we are in a risk management business. So, we've -- through the years, we've always tried to hedge a significant portion of our future consumption. So if you look in the next 5 years, obviously, the shorter-term is almost back to back. And then as you go longer to the third, fourth and fifth year, well, there's still a majority of our position that's hedged.

Your next question comes from the line of Frederic Tremblay from Desjardins.

I wanted to ask a couple of questions on Maple. First, we noticed that employees at one of your large Maple peers went on strike over recently, strike that lasted over a month. Just wondering if you're seeing any positive volume impact from that.

No, unfortunately, that's the environment for these kinds of things in the market these days. No impact on our business one way or another of any material way. Just a little bit of noise, as you would expect. But as far as we understand, they continue to serve their customers. And I assume, like us, we play long term, and we defend our customers and look after them in times like this.

Perfect. That's helpful. And then still in Maple there, you did point out some less favorable mix of products sold in the quarter. Is that something that was isolated to this quarter? Or is that expected to continue?

Actually, the mix of products sold, there's also -- last quarter was very favorable. So that's why the anomaly is more the second quarter last year, where this quarter, it's a bit more flat and in line with our expectations. And so -- and it was mainly in the industrial sectors where we had a greater inventory of what we call industrial syrup to serve some of those customers, and therefore, we were able to benefit. And if you recall last year, the second half of the year was a bit more difficult because servicing those customers, we had to use more expensive syrup. Now this year, it's going to be more balanced.

Your next question comes from the line of Nathan Po from National Bank Financial.

The first question I have is with the U.S. looking at new potential tariffs under Section 301 and potential for big changes to USMCA this here, can you walk us through how you're thinking about your exposure there?

Yes. 301 is interesting, and we've been paying attention to it, obviously. And Nathan, I've been around 45 years. So, I find the stuff fascinating as crazy as that sounds. But just a reminder that from a refined sugar point of view on a high tier, which is Bill 301 that's focused on, it's a very small amount of sugar, 5% to 8% of what we refine goes to the U.S. as refined sugar. So very minimal impact to us and not going to feature big in my worry list. And as far as CUSMA, look, we're not going to speculate on CUSMA. We haven't all along. We're paying attention to it. We're working with officials to make sure everybody understands the importance overall to the Canadian economy. Sugar is just about one part in food manufacturing, it's a huge implication. So, we're staying close to it, but I won't speculate on what may or may not happen coming out of CUSMA.

And with the electrical connection and sugar melting starting up in about a month, what are the major milestones you still have to hit to make sure you stay on site for the LEAP commissioning?

That's a really great moving piece. The electrical connection is a huge change. It's a big change in an asset like that, and we're glad to get that done and starting to commission as we build in order to save time and money and train our employees on it is a really clever idea the team came up with to maximize what we're doing. The next big step after the melting starts is the pan will go in. It's the biggest piece in the sugar refinery. It's not as complex as everything else we've already done, but it's kind of the big milestone where we -- the last big lift, the last big piece of gear goes in and we close up the roof and then we're now just into ticking and tying everything together and getting it ready for full commissioning.

Your next question comes from the line of Michael Van Aelst from TD Cowen.

So last quarter, when you talked about the sugar outlook, you said that you expected EBITDA to be slightly better for the year. And now you're up 15% in the first half of the year. What does that mean for the second half?

It's a good question. I think we're expecting -- there was a few things in the first half, as we mentioned, that kind of played in our favor, some timing difference and some one-times. For example, we had settlement of a sand claim in the first quarter that we had last year. I think we are expecting a more regular type of operation in the second half. I think we are maintaining our outlook that we will do slightly better than what we did before, exactly like you said. But I'm not expecting us to be 15% ahead, definitely not for the second half of the year.

Right. But I mean, if you're only slightly better for the full year, then it could mean a meaningful drop in the second half of the year, like 10%, let's call it. Is that what you're suggesting?

No, we're not suggesting that. What I'm suggesting is something more closely aligned with what we had last year as far as outlook for the rest of the year.

All right. That's helpful. And I could look back because I know you've gone through the CITT a lot of times, a number of times since I've been covering you guys. But can you just remind me what those legal costs would be and such?

Yes. We're expecting -- it's probably somewhere between $1 million and $2 million depending on the work that's going to be done this year and next year. There's a bit of a timing here. So, it's not 100% clear when everything is going to happen. So, I think some of it will hit us this year and some of it will probably be in fiscal year 2027.

Your next question comes from the line of Stephen MacLeod from BMO Capital Markets.

I hopped on a little bit late for the call, so I apologize if maybe some of my questions have been answered. But I just wanted to zero in on the very strong adjusted gross margin per metric ton in the quarter. And I was just wondering, can you -- 2 questions. What would the number have been excluding the nonrecurring adjustments? And then secondly, kind of how do you expect that strong number that you've seen now for 2 quarters to evolve for the balance back half of 2026?

That's a good question. We -- when we're looking at adjusted gross margin going forward, we think it's going to be closely aligned with what we had last year from a normalized basis. And if you look from a normalized basis in the current quarter, we probably have somewhere around like $50 of lift from some of those between $40 and $50 of lift from those either onetime or the mix, because the mix actually tend to push us at a high level because with lower exports that are carrying lower margin, and obviously, everything else takes a little bit of a boost.

Okay. That's helpful. And then maybe just turning to the Maple business. In terms of the adjusted gross margin, it was down year-over-year. And I'm just wondering if you can isolate what sort of the key drivers were there? And then similarly, do you still think that the full year gross margin in the Maple business will kind of be in that 10% to 10.5% range?

First question -- the first part of your question regarding last year. Last year, we had a second quarter that was a bit of an anomaly. And even if you're looking at the whole first half of the year, we were higher. And then we kind of went down a little bit in the second half. And the main reason was some of the mix of the product we sold, we had what we call more industrial syrup to match some of those industrial sales. And therefore -- and we used it faster than we've done in the past instead of like trying to level it throughout the year.

This year is a bit different. Our supply is a bit different, and it's going to be more -- you won't see peaks between quarters. It should be fairly stable. And going through your -- the second part of your question, margin to be between 10% and 11% is what we have achieved so far this year, and that's what we're expecting for the remainder of the year.

There are no further questions at this time. I will now turn the call over to Mr. Mike Walton. Please continue.

Thank you all for joining us today. As a 100% Canadian owned and operated sweetener company, we are proud of what this company has built over nearly 140 years, and I hope today's results give you a sense of why. We look forward to speaking with you again when we report our third quarter and wish you a good evening. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the February 5th, Rogers Sugar Inc. First Quarter 2026 Results Conference Call. [Operator Instructions] Before we begin, 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-IFRS measures in our call. Please refer to the forward-looking disclaimers and non-IFRS 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 will also be available on our website. I'll now turn the call over to Mike Walton, President and CEO of Rogers Sugar.

Thank you, operator, and good morning, everyone. Thank you all for joining us today to discuss our results for the first quarter of 2026. I'll begin by summarizing our results for the quarter with updates from both our Sugar and Maple segments.

I'll also touch on the environment and how we are navigating market developments and positioning Rogers Sugar for the months ahead, including an update on Our LEAP Project. After my remarks, J.S., our Chief Financial Officer, will provide a deeper dive into our financial performance for the first quarter. I will then come back to discuss our outlook for the remainder of 2026.

We will conclude with a summary and then open the line for questions from the analysts. As usual, we have an investor presentation accompanying this call. This presentation is available on the Investors section of our website for those who want to follow along. Our results in the first quarter underscore the power of disciplined execution and a clear strategic vision.

Despite the evolving market dynamics around trade policy and tariffs, we delivered strong earnings, advanced our LEAP project and continue to strengthen the foundation of our business. This performance reflects on our focus on operational agility, cost management and above all, an unwavering commitment to serving our customers.

At the same time, we remain mindful that the external environment is far from settled. Ongoing shifts in global trade policy and the upcoming CUSMA negotiation continue to introduce uncertainty for the Canadian economy, which ultimately could impact our industry and our markets.

While we are confident in our ability to adapt and respond as we have done for close to 140 years, we know that vigilance and flexibility will be essential in the months ahead. With the momentum we have built in recent years and the dedication of our Sugar and Maple teams, I am confident that Rogers Sugar is positioned to meet the challenges ahead and continue to lead in both of our business segments.

Now looking at the results of our first quarter, we are proud to report consolidated adjusted EBITDA of $47 million, reflecting an 18% increase year-over-year. Adjusted net earnings reached $25 million, up by 27% from last year. We generated $89 (sic) [ $89.3 million ] in free cash flow in the trailing 12 months, an increase of about 4% from last year.

Our internal cash generation supports ongoing investment in our business and consistent returns to shareholders. Although these strong first quarter results were somewhat boosted by some favorable nonrecurring and timing items in comparison to last year, they do show the stability and resilience of our business operating model.

They demonstrate the effects of our strategic focus over the last several years on delivering consistent profitable results. I am pleased with the performance from both of our business segments, which support the strong position of financial health we enjoy today. We have the people, the know-how and the resources we need to meet various challenges while moving forward with the delivery of our LEAP project.

Turning to Slide 5. Throughout the first quarter, we saw a solid performance in both our Sugar and Maple segments. Demand in our core markets remained steady with our teams adapting quickly to shifting customer needs and identifying new opportunities for growth.

Global food inflation and consumer health focus continue to influence purchasing patterns affecting global sugar demand. As a result, food and beverage producers in certain segments have adjusted their buying patterns in response to consumer behavior. Although we haven't seen a material direct impact on such changes in the Canadian market thus far, we view these changes as part of the normal cycle with overall domestic demand for sugar remaining stable over time. We are staying agile and focused, working closely with customers to support their evolving needs. Years of experience have taught us that disciplined execution, delivering quality products and strong customer service help us navigate any environment.

Our Maple segment continued to build momentum. The incremental sales volume is a good reflection of the recent increase in global demand for maple syrup and maple-related products. Our gross margin percentage has improved from the slight dip seen in the second half of 2025. The quality and availability of the previous crop, coupled with our active syrup procurement activities supported our ability to deliver reliable results.

Looking ahead, we will keep working with producers to ensure steady supply as demand is expected to continue to grow. In summary, we are beginning 2026 with a strong foundation, a clear effective strategy and confidence in our ability to create value even as market conditions continue to shift.

This quarter's results show the result of our Rogers refined model. Through ongoing improvement, focused investment and disciplined cost control, we keep our operations resilient and ready for change, including challenges from global trade shifts. Rogers Refined is reflected in our team's commitment and agility. Their dedication to our shared mission enables us to meet uncertainty head on and act on new opportunities as they arise.

Now let me update you on our LEAP expansion project in Eastern Canada. This quarter, we continued to progress on the construction activities related to the LEAP project, which is embedded in our strategy to support long-term growth and enhance our supply capabilities in Central Canada.

The construction site in Montreal remains active with significant progress on facility upgrades, electrical connections and the integration of new refining technology. Our teams and contractors are working closely to keep the project aligned with our revised schedule.

We are seeing tangible results as key infrastructure elements take shape while we are planning the commissioning process with suppliers and business partners. We continue to target a start-up date in the first half of 2027. This schedule reflects our focus on careful execution, taking into account current market conditions and our commitment to maintaining the highest standards of product quality.

In addition, we are carrying out the LEAP project with an unwavering commitment to safety. Protecting our people remains our top priority, and we are dedicated to upholding rigorous standards and best practices throughout the organization. Coordinating a major capital project alongside a plant operating at capacity is complex, but our experience and planning are enabling us to advance construction without disrupting our essential core business.

Our estimate of the cost to complete LEAP is unchanged, and we are confident that this expansion will boost our ability to serve customers more efficiently throughout Central Canada. By increasing our Eastern refining capacity, we can respond faster to demand shifts, reduce transportation requirements and strengthen our overall supply chain. Now I'll turn the call over to J.S. for a financial review.

Well, thank you, Mike, and good morning, everyone.

I will begin my financial remarks on Slide 10 with a high-level review of consolidated results before we get into the details of the 2 segments. Adjusted net earnings per share in the first quarter amounted to $0.19 compared to $0.15 in the first quarter last year.

The increase was due to a favorable variance of over $7 million in adjusted EBITDA. This increase of 18% came mainly from the Sugar segment, where our business benefited from some timing and nonrecurring items while relying on strong sales margin. Free cash flow for the trailing 12 months totaled $89 million (sic) [ $89.3 million ] consistent with the same period last year.

Overall, though, if we exclude timing differences in the payment of tax installments, free cash flow improved by over $11 million. The improvement was the result of stronger operating performance and tight control over working capital. This strong financial performance was delivered in a quarter when revenues declined year-over-year.

Revenues for the quarter were just short of $300 million, down from $331 million in the same period last year. The reduction was largely due to a lower average Raw #11 sugar price and lower sales volume in the Sugar segment, partially offset by favorable sales volumes in the Maple segment.

Although important in the overall performance of both of our business segments, revenues and associated sales volume are not the primary drivers of our strategy. Our focus remains on delivering what matters most, consistent profitability as measured by adjusted EBITDA and robust free cash flow.

Now let's take a moment to review the individual business segments, starting with our Sugar segment, which drives about 85% of our profitability.

Sales volume was 175,000 metric tonnes during the quarter, a reduction of about 21,000 tonnes from the same quarter last year with a significant portion of the reduction attributable to lower export volumes. The decrease in export sales is mainly related to the current market dynamics, which do not favor the sales of refined sugar of Brazilian origin in the U.S.

Although we are disappointed with the volume reduction, we want to point out that this sales category usually has a lower contributed margin. We also experienced a reduction in industrial sales with a nonrecurring production issue at one of our key customers. This is the same issue that impacted the last few weeks of the fourth quarter of 2025 and has since been resolved.

Overall, revenues in our Sugar segment declined by about 15% in the quarter to $226 million, reflecting the decline in volumes that we have just discussed and a drop in the price for Raw #11 sugar. That being said, our refining margin continued to be healthy and mitigated the decrease.

Despite these headwinds, we were able to report improved profitability in the quarter. Adjusted gross margin per ton rose to $304, an increase of $79 from the same period of last year. A significant portion of the increase was attributable to favorable timing variances and nonrecurring items related to procurement activities, raw sugar freight and major maintenance programs.

The positive adjusted gross margin was also supported by a higher sales margin associated with our disciplined pricing strategy. Adjusted EBITDA for the Sugar segment reached $41 million, an increase of $7 million over last year. This performance underscores our focus on protecting margin and managing through volatile market cycles.

Distribution costs increased slightly, reflecting an unexpected adjustment we made through our supply chain to meet the needs of our customers. Administration expenses were also slightly higher, mainly reflecting market-based increases in compensation and employee benefit.

Overall, the Sugar segment delivered strong results in the first quarter, setting up the foundation for the remainder of 2026. The Maple segment also delivered strong financial results in the first quarter, reflecting strong execution and healthy market demand. Revenues increased by 8% to $72 million, driven by higher sales volume as we continue to expand and take advantage of the growing global demand for this beloved sweetener.

Interest in maple syrup remains robust, supported by positive customer trends and effective supply management. Adjusted EBITDA for Maple was $5.8 million, a slight improvement over the same period of last year as we maintain our overall profitability through disciplined operations.

Sales volumes were 8% higher in the first quarter, supported by incremental demand from some of our established customers. Adjusted gross margin percentage at 10.6% was consistent with our recovery expectation and reflected the impact of consistent product mix sold during the period.

If you recall, margin dipped below 10% in the second half of 2025 as we faced challenges related to mix of products. Over the last few months, we have strengthened our sourcing strategy and are expecting a more stable adjusted gross margin percentage for our Maple segment going forward.

Looking ahead, we remain focused on supporting our producers' partners and maintaining reliable access to supply as global demand for maple syrup continues to grow. Our strong and stable performance in Maple reinforces the value of our diversified platform and positions us well to meet growing demand in this segment.

From a capital allocation standpoint, we remain disciplined. We invested in our future by allocating $25 million to capital expenditures with the bulk of that spend supporting the ongoing progress of our LEAP project.

This investment reflects our joint commitment to growth and operational excellence. We continue to support the LEAP project with a diversified funding approach. Our financing plan for the project supports the expected cost, which continues to range between $280 million and $300 million. In January, we further enhanced our financial flexibility with a successful issue of our Ninth series convertible debentures. Following the issuance of the Eighth series last year, this issue completes the refinancing of the Sixth and Seventh Series, which matured in 2024 and 2025.

This move anchors our liquidity position and ensures we have the resources to continue to fund our strategic priorities. Our balance sheet remains strong, supported by ample available credit and a robust free cash flow profile. We maintain our quarterly dividend, reflecting our ongoing commitment to consistent shareholder returns.

This approach positions us well to execute on our growth strategy while delivering value to our investors. With that, I will turn the call back over to Mike to provide a summary and outlook for 2026.

Thank you, J.S. Now looking at the remainder of the year. As 2026 progresses, we recognize that the business environment is still complex and dynamic. Within that context, I am confident in our ability to adapt, thanks to our vigilant approach and decades of experience in managing shifting market trends.

Our teams are ready to respond quickly as circumstances evolve. Central to our success is a disciplined go-to-market approach. We are selective in how we allocate resources and pursue opportunities. Our main objective continues to be developing and nurturing long-term partnerships that deliver sustainable profitability.

Our commercial team remains focused on meeting customer demand and understanding our target markets, ensuring every decision supports our long-term strategy. While tariffs and trade developments have had minimal direct impact so far, we are fully prepared to adjust course as conditions indicate.

We will move forward by fostering strong customer partnerships, being rigorous about cost control and investing strategically to safeguard our resilience and our competitiveness. The progress we have made over the last several years has led to meaningful gains in profitability and execution. Our goal for 2026 is to continue along the same path and deliver consistent solid performance.

Beginning with the Sugar segment, our current forecast for sales volume for the year is around 750,000 metric tons. This forecast is at the lower end of the range we provided at the end of the fourth quarter and represents a reduction of approximately 4% compared to 2025.

The reduction in volume is mainly impacting lower-margin export sales as the current trade conditions for Brazilian origin refined sugar are not favorable. We expect demand from our domestic customers to be stable, and we continue to prioritize domestic sales while being alert to export opportunities as market evolves.

Our beet harvest at Taber was completed in November, and we are now in the late stages of processing the beets with expected completion by the end of this month. We anticipate the 2025 crop to deliver approximately 100,000 metric tons of beet sugar, consistent with our earlier expectation. Across all our facilities, production and maintenance costs will edge slightly higher this year, driven by market-based cost increases, annual wage increases from employees.

We are committed to managing our costs responsibly to maintain our production assets and ensure reliable operations. Distribution costs are expected to increase slightly as we continue to transfer sugar between refineries to meet customer demand, pending the completion of our LEAP project.

Administration and selling expenses are expected to increase slightly in 2026 compared to 2025, reflecting general market increases and incremental costs associated with the planned review of the Canadian International Trade Tribunal scheduled for the second half of 2026.

Interest costs will be somewhat higher as we access the funding we have put in place to complete our LEAP project. For Maple, we anticipate another strong year in 2026, continuing the steady growth over the past few years. We expect sales volumes to reach 56 million pounds, an increase of 5% from last year, driven by ongoing strength in global demand. Thanks to a favorable maple crop in 2025, we have been able to meet the expected demand for maple products through most of 2026.

We expect to meet any excess volume requirements with [ syrup ] from the 2026 crop. Both segments reflect our best view of current market trends, but we recognize market dynamics can change rapidly, and we're ready to adjust as needed. On the CapEx front, we plan to allocate approximately $27 million across our core businesses this year, excluding LEAP-related spending.

LEAP will continue to be our major initiative for 2026 as we press forward with construction and installation of new refining and logistics capacity. Balancing this project with day-to-day operations is challenging but essential to ensure uninterrupted service to our customers.

In summary, we started 2026 on a strong note, continuing to build on our momentum in profitable and sustainable growth. Over the past 4 years, we have transformed Rogers Sugar, and our recent results reflect the impact of that evolution. Our focus remains unchanged, maintaining strong partnerships with our customers, prioritizing safety and continuous improvement, managing cash carefully and driving progress on the LEAP project to support our market.

These efforts are anchored by our strong balance sheet and financial discipline, which give us the resilience and flexibility to meet the market demands and create long-term value for our shareholders. In closing, I want to recognize our teams at every site for their dedication and commitment to excellence.

Your focus on customer service and workplace safety is vital to our continued success. I also extend my thanks to our customers and business partners for their trust and support as we move forward together. I'll now ask the operator to open the line for questions from the analysts.

[Operator Instructions] Your first question comes from Michael Van Aelst with TD Securities.

I want to start on the sugar side on the volumes. So the customer that had their own issues, did any of that flow into Q2? And is the lost volume something that you expect to be recaptured or are those lost sales by the customers, so you won't be able to recapture that?

Yes, Michael, the -- so first part answer to your question is, no, the problem didn't go into Q2. It lagged into Q1 only. And they are back in production now and resolve their issues. And as far as making up the volume, these kinds of plants are running at capacity. So not likely, although who knows, they could pick up something from one of their other sites that we would be able to supply in new supply and new demand. But we expect it to pick those volumes up across other pieces in the market. Market gives you lots of opportunities and puts and takes through the year, as you know, and that's why we're still staying in our range of the $750.

Okay. And then you talked about improved average pricing. How much of that was just from mix like exports falling versus price increases that actually helped the margin?

Mike, it's Jess here. It's a combination of both. I think the reduction in export had some impact on it, but we also have seen some continued strong pricing in the market. And so probably half and half.

Okay. Okay. And then so if I look at the gross margin differences because there's some pretty severe nonrecurring items this quarter. So the timing of the production and recovery costs, is that -- was that just pushed into Q2, and so we should just reverse that in Q2?

Yes. So a portion of the timing is going to be in Q2. For example, the shutdown, which is our annual shutdown happened in the first week of Q2 instead of the last week of Q1. And so that will be move into the next quarter. And so the rest of those nonrecurring, obviously, that's not going to change.

Okay. So yes, exactly. So the $8 million should come in Q2?

No, not all of it. So a portion of it, I would say half of it will come into Q2. The $8 million is made of nonrecurring and timing. So I'd say 50% of it is nonrecurring. The rest is onetime.

Okay. All right. And then the supply chain issues on the sugar distribution side, was that tied to this customer? Or is there some -- was there something different?

No, it was something different. So we had some issues, and we had customers that had to go pick up at a different location. And obviously, when this happened, we are compensating customers for.

So can you explain what those issues were and how they were resolved?

Yes. We had some technical issue with some of our railcars. And so what we would end up happening is we had customers supposed to pick up in Toronto that came in pick up in Montreal. That has been resolved. We fixed those railcars.

Your next question comes from John Zamparo with Scotiabank.

I wanted to ask about the volume guide on the sugar side, the reduction to the lower end of the previous guide. Is that primarily from the decline you saw in Q1, whether that's export specific or related to that one customer you referenced? Or is there something related to Qs [ two through four ] that's influencing that guide change?

A bit of both, John. The export business, as we've reported in the past on a direct sugar basis is less than 10% of our total volume. And so anything that we were producing at that time that was a Brazilian origin didn't cross into the U.S. because of the new tariff.

So some of it -- most of it was in the first quarter and our customer event was in the first quarter. And in Q2, there'll be less impact based on those export contracts because we've already repositioned them.

Okay. Understood. And export challenges aside, you said you now expect domestic sales growth to be stable against the prior guide of growing modestly. So again, is that related purely to Q1? Or is there anything incremental to that?

No, it's just a stable outlook long term for the rest of the year. It's consistent with what we're seeing globally across all markets, whether it be in Europe, Brazil, United States or Mexico. It's -- we've seen the cycle, the commodity cycle in sugar and it's just slightly lower coming in the forward months.

Okay. And there was a comment about lower confectionery demand in Q1 due to timing. Can you add some more color there?

Yes. We had -- we saw all of us for the last 18 months or maybe 24 months, the spike in cocoa prices globally and the impact of that inflation in unit costs in those products. And so we saw pricing -- a lag in the pricing coming through to retailers. And so that started showing up late in '25 and into Q1, and it started to reduce sales input at the retail side for those products.

Right. Okay. Understood. And then last one, and I'll get back in the queue afterwards. The $4.5 million in nonrecurring gains, J.S, you referenced penalties received in pricing adjustments. Can you elaborate on that?

Yes. So we got some -- last year, we had some contamination, for example, on some of the vessels, it's been necessarily something that happened to different sugar refiners and sugar coming from Brazil. So we got compensated for that. So this thing happened in '25, obviously, increased somehow our production costs, and we got compensated in the first quarter. So that's part of the onetime. And on the freight, it's market pricing adjustment for freight.

Okay. So just to clarify, there was $8 million from the last question, $8 million in total cost, half of that was onetime, half of that was timing and then the $4.5 million, that's the gains, that's purely onetime. I got that right?

Yes, that's good, that's a fair comment.

Your next question comes from Stephen MacLeod with BMO Capital Markets.

I just wanted to circle around. I was going to ask about nonrecurring, it sounds like we've already figured that out. Just with respect to like putting the kind of the moving parts together around the timing and gross margin per metric tonne potentially shifting into fiscal Q2.

Would you still expect kind of on a full year basis, sort of a stable adjusted gross margin per metric tonne outlook?

The short answer is yes. I think we are -- we've seen some slight improvement in adjusted gross margin and a lot of it is related to the mix of the products that we're going to sell. So if you're removing some of the export sales that are usually carrying lower margin, and the rest, you will -- your per metric tonne should increase.

So last year, we did $224. Obviously, the $304 is a bit of an outlier in the first quarter. So -- but we're still -- overall, we're expecting to do better than last year on an adjusted gross margin per metric tonne basis, and that's mainly because of the mix of what we're going to sell.

Right. Okay. Okay. And then just turning to the Maple segment. Would you also expect kind of that margin to be sort of stable year-over-year? Are you still kind of expecting margins to be in that kind of 8% range on adjusted EBITDA?

Well. Yes, on adjusted EBITDA, yes, sorry. So our adjusted gross margin is at just about 10% right now. So between 10% and 11% is usually our target. And usually, it translates to around an 8% EBITDA margin. That's our forecast for the rest of the year.

Okay. That's great. And then maybe just finally, just ahead of the CUSMA negotiations. I guess, is there a way to get a sense of sort of how you're feeling about those negotiations heading into the process? Just wondering if you can get any color there.

Yes. Sure, Stephen. It's a murky piece of ground for everybody in North America, I think, these days. As we've said all along, we've been around for 140 years, and we've seen these kinds of trade disputes come and go. Fact of the matter is the U.S. market is a deficit market on sugar production. It has to import sugar or sugar-containing products.

And the manufactured goods that we're talking about are very complex production lines and production systems, and it would take a long time to make any meaningful shifts to move plants out of Canada as an example, as some people fear. We don't see any meaningful change there. And we're optimistic that seeing the impacts of these kinds of moves -- immediate impact on inflation and consumers and especially in U.S. or Canadian markets, that probably would temper any massive disruption. But that's an opinion of one.

We'll see how it goes. We'll remain focused on it. We'll remain in the background advocating for what's right for the long term for our industry and hope that calmer has prevailed in the end.

[Operator Instructions] Your next question comes from Nathan Po with National Bank.

Congrats on the quarter. So on the LEAP project, it's mentioned in the presentation that start-up is going to be in line with expected demand growth. Should we be inferring that there is other customer capacity aiming to be ramped up around that time as well or new customer wins are over the horizon? Or is that just a general comment?

Well, it's a bit of both. We've seen pretty steady growth in the refined sugar and SCP production in Canada over several years. And so that was the impetus for doing LEAP to begin with. And we expect to see that growth as return once we come out of the higher inflation cocoa market, which we've already seen happen and cocoa prices are down substantially.

So we expect that growth to continue. And as you know, there's been many public announcements, several of them in Ontario-based area of new manufacturing capacity coming into Canada from foreign jurisdictions, and those plants have yet to start construction.

So we're pretty optimistic based on what we know and what we've heard our major customers are doing on the long term and sugar containing product manufacturing in Canada.

All right. That's great color. And regarding the volumes and the onetime adjustments heading into Q2. How does this affect your working capital seasonality in 2026?

We're not expecting any major impact on our working capital. So our -- if you look at some of the big impact on our working capital is always a level of inventory that we're carrying, especially on the raw sugar side. And we have adjusted our -- we've adjusted the delivery of our vessels to mirror the volume of sugar that we're expecting to sell.

Your next question comes from Frederic Tremblay with [ Desjardins ].

Just maybe one clarification on the sugar volume outlook. That outlook implies a 4% year-over-year annual decline. Q1 was down 11%. I'm just -- maybe it would be helpful to get a bit of color on sort of the pace of improvement on year-over-year trends there and maybe the key drivers of that.

I know, Mike, you mentioned those export volumes being repositioned maybe starting in Q2. So if you could just maybe provide a bit more color to help us understand how that's going to evolve over the year to get to that full year guidance that you've provided?

Yes, Fred, there's a lot of moving pieces, as you can imagine. If we all just look back, it's only been 370 days, I think, since we entered this new world of trade chaos. And we've navigated amazing through this with constant pivots and adjusting to what our plans are.

We put a plan together now to finish the balance of the year that delivers this range that we've put together on the volume. Some of that includes the swapping of some cargoes so that we'll swap out a Brazilian origin for a non-Brazilian origin so that allows us to continue to produce some products and deliver our contracted volumes.

So as I said, there's many things going on as we've proved over the last 4 years, this is a group that knows how to pivot and maximize the opportunities and take advantage where we can.

Your next question comes from Michael Van Aelst with TD Securities.

So just circling back on Sugar. So you talked about lower volumes for the year and slightly higher gross margins, but then also some inflationary pressures in distribution and min. So do you -- I think last quarter, you said you expected sugar EBITDA to be roughly stable this year. Is that something you still expect?

I think we might slightly be better than what we did last year, and that's because some of the onetime that we received in the first quarter will actually stick. So if you look at the results of the first quarter, yes, there are timing issues, but there's also some nonrecurring impacts that are going to stick on our results for the year.

So I think we should expect a slight improvement based on the Q1. I think for the remainder of the year, I think it would be aligned to what we were initially expecting.

Okay. And then on the maple side, you touched on -- you commented that you've changed your maple sourcing, and that's going to help stabilize gross margins. Can you explain what you did and so -- and how that's going to keep your margins a little more stable going forward?

Yes. So Michael, we haven't changed our sourcing. We've doubled down on our activity and making sure we hold syrup. Like many of our competitors, we bought inventory that was available through the PPAQ reserve. And so we hold that to ensure we cover our sales. And we're in the season now where we're all meeting with producers and we're making sure that the producers know that we're a well-capitalized company, and we're available to take the syrup as the crop comes off.

And so just continuing like we do on every other sector of our business, building relationships with growers, whether they beet or cane growers in Brazil and Central America. So -- we're just applying our good disciplined approach to long-term business partnerships and making sure that people know who we are.

[Operator Instructions] Your next question comes from John Zamparo with Scotiabank.

Mike, I think in your prepared remarks, you referenced that you're seeking out new opportunities for growth. And I wonder if you can unpack that a bit. I presume you're always trying to do that, but I wonder if there was anything that led you to make that comment in this quarter.

Yes, sure. We -- it seems to be what everybody is talking about in Canada these days, John. And so -- but we've been doing it. The Maple business is distributed in over 50 countries. So this is not new for us. We've been in the Maple business over 7 years, and we're looking at those strong relationships and partnerships we've developed in those other countries and seeing where we can leverage it against other things.

As a great example, we just had our commercial team and some others in Dubai on a trade mission and attending the Dubai Food Conference. So we're not going to sit on our laurels and wait for markets to come and correct themselves on our doorstep. We're going to theirs like we always have and we'll continue to do.

Okay. I appreciate that example. And I wanted to ask about pricing. You said that was contributing to some top line growth in the quarter. I wonder what level of resistance or how you'd characterize the resistance you're seeing to inflation, even if it's driven by commodities, there's a good amount of pushback from consumers. There's a good amount of talk in the media about this. I wonder how those conversations go on passing through commodity-driven pricing.

Yes. We're very fortunate in one major respect is that commodity # 11s are down to 4-year lows. And because, as I said earlier in the call, we've got a slowdown globally on demand and a strengthening production side. So we're going to see lower commodity levels going forward, which really helps negate the food inflation that has anything to do with sugar.

And we've seen cocoa prices come down dramatically in the last 6 months and more recently in the last 2 or 3 months, more correction. So on the food inflation items that impact specifically sugar-containing products and the high sugar content goods like we like to be in, we're seeing things improving rapidly on the cost side.

Okay. And then last one on the major maintenance that fell into FQ2, 2 parts to this. Is that the typical amount? Is it annually about $8 million? And does that change once LEAP is completed?

Do you still incur that level of maintenance expense? Or does that decline once LEAP is done?

Yes, John, this is J.S here. So $8 million is not all related to maintenance. So there's a portion of it, I'd say, probably 50% is related to that. And our maintenance program is spent throughout the year. What we didn't spend in the first quarter was what we have -- we have one major shutdown every year, and that didn't get spent and a portion of that amount didn't get spent in the first quarter, and it got spent early in the second quarter.

So we're not seeing Obviously, when need comes along, you will continue to have the same type of maintenance program on the current facility. And obviously, we'll have incremental maintenance because the new assets will have to be maintained.

And so we will see some incremental maintenance that should be commensurate with the amount of volume that we are going to -- that we're going to push through the system.

There are no further questions at this time. I will now turn the call over to Mike Walton for closing remarks.

Well, thank you all for joining us today, and thank you for your continued interest in Rogers Sugar. Of course, Rogers Sugar is the only 100% Canadian owned and operated sweetener company in Canada, and we look forward to seeing you in Q2. Have a good day.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Hello, and welcome to the Annual Meeting of Shareholders of Rogers Sugar Inc. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the corporation that you first obtain all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions]

It is now my pleasure to turn today's meeting over to the Chairman of the Board of Directors, Mr. Dallas Ross. Mr. Ross, the floor is yours.

Thank you. Good afternoon, ladies and gentlemen. I'm Dallas Ross, Chair of the Board. It's my pleasure to welcome you to the Annual Meeting of the Shareholders of Rogers Sugar Inc.

As we have done over the last few years, we are holding our Annual Shareholders Meeting in a virtual format. Our main objective is to ensure that all shareholders have the same opportunity to participate in the meeting and vote regardless of their geographic location.

The meeting will be conducted in 3 parts. First will be the formal business of the meeting, following which our President and CEO will deliver remarks. And after such remarks, there will be a question-and-answer session.

Before we begin with the formal portion of the meeting, I will provide some comments on voting and questions at today's meeting. As a reminder, only registered shareholders and duly appointed proxy holders can vote or ask questions. Voting can only be done through our virtual voting platform. If you are a registered shareholder or proxy holder and wish to vote, click the voting icon at the top of the webcast page. Voting can be completed at any time from now until the end of the formal business of the meeting. If you've already voted in advance of the meeting and do not wish to change your vote, you do not need to vote again during the meeting. For those who have not yet voted, we encourage you to vote now.

Questions can also only be submitted through our voting platform. If you are a registered shareholder or proxy holder and wish to ask a question, click the question icon at the top of the voting platform page, type in your question in the text box at the bottom of the page and messaging screen and then click the send button. If your question relates to a specific motion, please start your question by identifying the motion so we can address your question at the appropriate time of the meeting. We will save all questions that do not identify which motion they relate to for the general question-and-answer session at the end of the meeting. We will receive the questions and read them out in order for everyone to be aware of the question being addressed.

If we have a number of questions that are of the same or similar nature, we will consolidate them so as to avoid duplication. We'll endeavor to address all general questions. However, please note that due to time constraints, we may not be able to do so. If you have questions, we encourage you to submit them now. Questions can be submitted throughout the meeting.

Finally, we would like to remind you that our answers to your questions and our CEO's remarks may contain forward-looking information. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties discussed more fully in our public disclosure filings.

I will now call the meeting to order. Pursuant to the corporation's bylaws, I will act as Chair of this meeting. Jean-Sebastien Couillard will act as Secretary and representatives of Computershare, our transfer agent, will act as scrutineers. To ensure that the meeting covers all the business for which it was convened within a reasonable period of time, we have prearranged with a number of persons attending this afternoon to move and second certain resolutions. This procedure is not an attempt to discourage participation, but a way to expedite proceedings.

Notice of this meeting and related materials were provided to shareholders and to all Board members and the auditors in compliance with applicable securities and corporate requirements as well as posted on SEDAR. The Secretary will append the declaration to the minutes of this meeting. The scrutineers' report shows that a quorum is present. Notice having been provided in accordance with the corporation's bylaws and a quorum being present, I declare that this meeting is duly constituted for the transaction of business.

First item of business is to receive the financial statements and the auditor's report for the financial year ended September 27, 2025. A copy of the 2025 annual report, which contains the audited consolidated financial statements and the auditor's report has been provided with the notice of this meeting and the 2025 circular as well as posted on SEDAR. As no vote is required to be conducted in respect to the financial statements, we will respond to any related questions during the question-and-answer session.

Election of directors. The next item, there are 6 directors will be elected at this meeting, and the corporation has proposed 6 nominees. Each proposed nominee's biography is included in the notice of this meeting. Therefore, I will now entertain a motion nominating such individuals for election as directors of the corporation.

Michael Heskin, thank you for moving that the following individuals be elected as members of the Board of Directors: Dallas Ross, Gary Collins, Daniel Lafrance, Eric Morisset, Shelley Potts and Stephanie Wilkes. Seconded by Rod Kirwan. Thank you. Are there any other shareholders wishing to make nominations for election as directors?

Thank you. I declare the nominations closed. The Secretary, can you please advise if any questions specific to this motion were submitted?

No questions specific to this motion were submitted.

Thank you. We will now proceed with the vote. Please record your vote now, remembering that if you have already voted in advance and do not wish to change your vote, no further action is required.

The next item of business is the election of 2 directors of Lantic, which the corporation is entitled to nominate as holder of all of the common shares of Lantic. The corporation has proposed 2 nominees. Each proposed nominee's biography is included in the notice of this meeting. Therefore, I will now entertain a motion nominating such individuals for appointment as the corporation's nominees to the Board of Lantic.

Mr. Michael Heskin has moved that the following individuals be appointed as nominees to the Board of Directors of Lantic. Dallas Ross and Daniel Lafrance. Seconded by Rod Kirwan. Are there any other shareholders wishing to make nominations for appointment as corporation nominees to the Board of Lantic?

Thank you. I declare the nominations closed. Can the secretary please advise if any questions specific to the motion were submitted?

No questions specific to this motion were submitted.

Thank you. We will now proceed with the vote. Please record your vote now, remembering that if you've already voted in advance and do not wish to change your vote, no further action is required.

May I now have a motion to appoint the auditors. Mr. Heskin has moved that KPMG LLP be appointed auditors for Rogers Sugar Inc. to hold office until the next annual meeting or until their successors are duly appointed and that the Board of Directors of Rogers Sugar Inc. be authorized to fix the auditor's remuneration. Been seconded by Dean Bergmame. Thank you.

Can the secretary please advise if any questions specific to this motion were submitted?

No questions specific to this motion were submitted.

Thank you. We'll now proceed with the vote. Please record your vote now, remembering if you've already voted and do not wish to change your vote, no further action is required.

The next item of business is the adoption, if thought advisable, of the nonbinding advisory say-on-pay resolution on the Board's approach to executive compensation decisions as disclosed in the corporation's 2025 circular. As mentioned in the 2025 circular, the say-on-pay is meant to facilitate accountability for compensation decisions by giving shareholders a formal platform to share their views through an annual nonbinding advisory vote.

I will now entertain a motion for the adoption of such resolution. Mr. Heskin has moved the following resolution be adopted. Be it resolved on an advisory basis and not to diminish the role and responsibilities of the Board that the shareholders accept the approach to executive compensation disclosed in the corporation circular delivered in advance of the 2026 Annual Meeting of Shareholders. Being seconded by Mr. Bergmame. Thank you, Dean.

Can the Secretary please advise if any questions specific to this motion were submitted?

No questions specific to this motion were submitted.

Thank you. We will now proceed with the vote. Please record your vote now, again, remembering that if you voted in advance, do not wish to change your vote, no action required.

I would now ask our CEO, Mike Walton, to provide an overview of our corporation's business since the beginning of the last fiscal year.

Thank you, Dallas. Now that the formal part of our meeting has concluded, I'll take you through a short presentation outlining our business and our vision, our accomplishments in 2025 and our outlook and priorities for 2026. First, let me remind you of the standard cautions around forward-looking statements. Please take a moment to read this advisory before we move on.

Now I'll begin with a brief overview of our business. We are the only 100% Canadian owned and operated sweetener company in Canada. We are listed on the TSX and trade as Rogers Sugar. We are also the largest publicly traded sugar company in Canada. We operate at Lantic. We sell sugar across Canada and in key American markets under both the Rogers and Lantic brands. We are also proud owners of the largest maple syrup bottling business in the world, which was rebranded in 2025 as Lantic Maple.

Our objective is to generate consistent, profitable and sustainable growth by optimizing our businesses to take advantage of favorable demand trends in sugar and to drive stronger margins and performance in maple. Here is where we work. This slide shows the sites where we make, package and ship our sweeteners, including the only sugar beet facility in Canada at our Taber, Alberta location. Having sugar refineries across Canada means we are close to our customers and can get the sugar to them when they need it.

Our vision is to create value for everyone connected to Rogers Sugar. We're focused on making this a great company to work for, invest in and partner with. We do this by making top-quality sweeteners and by prioritizing service to customers, a topic we will discuss further in this presentation.

Let's take a closer look at our business and what makes us an attractive investment. Our team manages Rogers Sugar with a long-term outlook, aiming for consistent, profitable, sustainable growth. As of 2025, this approach has delivered 4 consecutive years of record financial performance. As the largest publicly traded sweetener company in Canada, we offer exposure to 2 robust market segments, the strong North American sugar market, where Canada is a key supplier and the growing worldwide demand for maple products.

Our company has been around for nearly 140 years. Sugar is the foundation of our business, accounting for roughly 80% of our revenue. Sugar is a core ingredient in many foods that people enjoy every day. While demand for sugar may fluctuate over the short term with the impact of inflation and the overall health of the economy, the underlying demand is sustainable over the long term. There is no real substitute for sugar. It's a natural product and does more than add sweetness. It contributes to the texture, appearance and flavor of food. Our customers trust us to deliver sugar with the quality and quantity they need when they need it.

We are also the world's leading distributor of maple syrup, another natural sweetener that is growing in popularity. We are proud to meet that demand and share this essentially Canadian product with families all over the world. The Rogers Refined framework guides us how we optimize and grow both segments, leveraging favorable demand trends and operational discipline to deliver solid returns to shareholders, including a steady quarterly dividend of $0.09 per share.

Let me remind you of our Rogers Refined framework. We introduced Rogers Refined in 2024. It is our road map for how we operate to build Rogers into a better company and a better investment. The pillars of Rogers Refined are: modernizing and optimizing and growing in sugar, driving profitability in Maple, maintaining a strong balance sheet and advancing our ESG program. We made significant progress in each of these areas in 2025.

2025 was another great year for us. Although the path to achievement was not smooth, we navigated global trade changes, commodity price volatility and regulatory uncertainty. We met those challenges by staying focused on what matters most, delivering for our customers and creating value for our shareholders while maintaining a safe work environment for our employees. Through disciplined execution, we managed to steer through these challenges with minimal disruption.

Financial highlights for the year include revenue of $1.3 billion, up by 12% from 2023, adjusted EBITDA of $150 million, a 6% increase. adjusted net earnings up 9% to $73 million. Free cash flow higher by 42% to $104 million. Beyond the strong financials, we made significant progress in the construction phase of our LEAP project, our Eastern expansion initiative. We secured the financing needed to maintain a strong balance sheet while considering the needs of our day-to-day operations, the LEAP project and the maturity of some of our financing instruments.

In terms of sustainability, we advanced our ESG initiatives, including an updated materiality assessment to ensure that we are focusing our resources on initiatives that matter to our stakeholders. This includes responsible sourcing, supplier risk assessment and community engagement. Following our year-end, we published our first integrated annual and ESG report, and I encourage all of you to review it. Our ability to deliver such strong financial results in the face of the global market challenges seen in 2025 speaks to the strength of our business fundamentals, the effectiveness of our strategy and the commitment of our people. As of February 3, our company is in a strong position with a market capitalization of almost $800 million and a dividend yield of about 6%.

Looking at our business segments, both our sugar and maple businesses delivered strong results in fiscal '25. Demand remains solid in our markets, and our teams adapted quickly to shifts in customer demand and seize available growth opportunities. While revenue is an important performance indicator, what we manage for is profitability, and I'm pleased with the contributions of both segments and our record $150 million in adjusted EBITDA.

Sugar volumes rose nearly 4% over last year, though they were slightly below our expectations at the start of the year, we benefited from labor continuity at our Vancouver refinery, while our export volumes were affected by uncertainty around trade policy. The market is still feeling the effects of inflation that we began to see in 2024 with food manufacturers adjusting to higher ingredient costs leading to some softness in demand. Even so, the need for refined sugar remains steady, and we continue to focus on operational agility to support our customers through changing conditions.

Our focus is on steady, profitable, sustainable growth, not just volume. Over the last 5 years, our Sugar segment has delivered compound annual growth of 12%. That revenue growth has translated into improved margins and earnings. Adjusted EBITDA increased by 4% last year to $129 million, and our operating margin reached $224 per metric ton, consistent with our strong performance in 2024. We're proud of our continued progress in the Sugar segment, serving customers where and when they need us. We're well positioned for the next phase of growth.

Let me update you on our progress with our LEAP project in 2025. One of the year's major milestones has been advancing our LEAP project, a cornerstone of our long-term growth strategy and key to meeting increasing demand for refined sugar across Canada. Construction in Montreal is moving forward with new contractors on site working on building upgrades and installing state-of-the-art refining equipment. Managing such a large construction effort while keeping production close to full capacity takes detailed coordination and strong focus on safety for our employees, contractors and the facility. Safety remains our top priority and the discipline applying on LEAP will help strengthen safe, reliable operations throughout Rogers Sugar.

Our projected cost for LEAP remains between $280 million and $300 million. We are confident this expansion will create lasting value for food manufacturers in Central Canada and beyond. Central Canada is where most of the demand growth is happening. So expanding capacity here lets us meet local needs and reduce the cost to bring sugar from our Western facilities. As mentioned earlier, we are in the strongest financial position we've ever been in. That financial health supports our plans for growth and modernization through LEAP and future projects.

Our Maple segment maintained its positive momentum, posting a 14% increase in sales volume as we reach more customers, both established and new. Consumers around the world are increasingly appreciating the unique qualities of pure maple syrup. Strong crop quality and availability were key to expanding our market reach and delivering reliable results. Looking ahead, we will keep supporting producers and ensuring stable supply as global interest in maple syrup continues to rise.

We're improving profitability in Maple through investments in process upgrades and automation. In 2025, we maintained an adjusted gross margin above 10% for the second year in a row, aligned with our expectations and reported record adjusted EBITDA of $21 million. Strong results from both sugar and maple contribute to our fourth consecutive year of record consolidated adjusted EBITDA. This also led to higher free cash flow, more than $100 million for the year. This strong cash flow affords us the flexibility to move ahead with LEAP while supporting regular dividends and a strong balance sheet, key elements of our Rogers refined framework.

Looking ahead to 2026, we continue to face a dynamic and uncertain market environment. However, I am confident in our ability to adapt by staying alert to changing conditions and responding quickly. A key aspect of our approach is managing sales strategically to achieve the best possible economic results. We're disciplined in how we allocate volume, targeting the most promising opportunities and prioritizing sustainable profitability or simply increasing revenue. While tariffs and trade policies have had limited impact so far, we're ready to respond if this situation evolves.

Our plan remains clear: maintain a strong customer relationship, keep costs under control and invest for the long term to ensure we stay resilient and competitive. Following a strong year in 2025, we expect consistent performance in 2026. We'll remain engaged with stakeholders as trade discussions develop. Sugar profitability is expected to remain stable with continued strong performance in maple. We are on track to achieve the next significant milestones in the LEAP project. The Rogers Refined framework continues to guide our growth strategy. Our strong balance sheet is supported by solid financial outcomes, a robust financing plan for LEAP and healthy free cash flow.

We will meet these objectives by focusing on the following priorities: advance our safety program to provide a safe, healthy working environment for our employees, focus on excellence in serving our customers, move forward on our LEAP project to build our production and logistics capabilities for the longer term, build on momentum from demand growth in our Maple segment and advance our ESG initiatives. We are in a great business with solid underlying demand, a distinguished operating history, and we are in the best financial shape ever.

Thank you again for joining us today, and I look forward to speaking with you at our next AGM. Now our team and I are happy to take your questions.

No questions. I think from the Secretary has indicated there are no questions. So thank you for your report, Mike, very thorough report. There being no further matters to vote upon, we will proceed with announcing the results of the meeting. Mr. Secretary, do you have the preliminary results of the voting?

Yes, Mr. Chair. I have received confirmation from the scrutineer that each of the motions passed, including the election of each of the nominees for director.

Thank you. Thank you, Mr. Secretary. I declare each of the resolutions considered at today's meeting as carried. The exact number of votes cast in respect of each matter will be filed on SEDAR and press released in due course. Are there any questions? Please send any questions now. We'll take a 1-minute break to receive questions. It doesn't appear any questions have come in, Mr. Secretary?

No, Mr. Chair.

Okay. Thank you. As that concludes the formal business agenda of the meeting, I declare the meeting now terminated. Thank you.

This concludes the meeting. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Rogers Sugar Inc., Fourth Quarter 2025 Results Conference Call. [Operator Instructions] Before we begin, 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-IFRS measures in our call, please refer to the forward-looking disclaimers and non-IFRS 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 our archived recording of this call will be available on our website. I'll now turn the call over to Mike Walton, President and CEO of Rogers Sugar.

Thank you, operator, and good morning, everyone. Thank you all for joining us today to discuss our fourth quarter and full year 2025 results. I'll begin today's call with an overview of our performance for the quarter and the year, including key highlights from both our Sugar and Maple segments. I'll also provide an update on market conditions and how we are managing through ongoing volatility, particularly regarding trade and tariffs. Next, I'll discuss the progress we've made on our LEAP project which is central to our business strategy in Eastern Canada.

And I'll touch on our continued commitment to operational excellence, disciplined capital allocation and our ESG priorities. After my remarks, I'll turn the call over to J.S. Couillard, our Chief Financial Officer, who will review our financial results in greater detail, walk through our segment performance and provide additional context of our outlook for 2026. We'll conclude with a summary and then open the line for questions from the analysts. As usual, we have an investor presentation accompanying this call. This presentation is available on the Investors section of our website if you want to follow along.

This past year, we put our business and our Rogers refined strategy to the test. I'm pleased to say the results we are reporting today demonstrate clearly that we delivered great success. We faced challenges on multiple fronts. Global trade shifts, commodity price swings and regulatory uncertainty, but we stayed focused on what matters most, delivering for our customers, creating value for our shareholders while maintaining a safe work environment for our employees. By emphasizing operational excellence, supply chain agility and disciplined execution, we managed to steer through these challenges with minimal disruption.

This marks the fourth consecutive year of increased profitability for our business, a direct result of the Rogers refined journey. We are proud to report record results again in 2025, with adjusted EBITDA surpassing $150 million for the first time in our history. Both our Sugar and Maple segments were key drivers of this progress, and I want to recognize the team's consistent execution year after year. Our adjusted net earnings for fiscal 2025 exceeded $72 million, which is 9% higher than last year and more than double what it was 5 years ago. We are delighted with where the business stands today when it comes to profitability as well as the strength of our financial position and cash flow generation.

This is a strong foundation for the future of our business as we move forward on the delivery of our LEAP project. We believe the completion of the LEAP project will mark the beginning of the next step change in our future profitability. These results are even more meaningful considering the hurdles we overcame along the way. Our team navigated a port strike in Montreal, the threat of a nationwide rail strike, equipment breakdowns at our Montreal refinery and ongoing pressure and uncertainty from U.S. trade policy.

Our ability to deliver these financial results and execution outcomes in the face of these kinds of headwinds speaks to the strength of our business fundamentals, the effectiveness of our strategy and the commitment of our people. Turning to our results. Both our Sugar and Maple segments continued to perform well throughout the fiscal 2025. We saw healthy demand in our core markets with our teams responding quickly to changing customer needs and capitalizing on growth opportunities. Volume in our Sugar segment, although lower than anticipated increased by nearly 4% in 2025 compared to last year. The sugar market continues to reflect the impact of inflation on purchasing patterns with some softness in demand as food manufacturers adjust to higher prices for ingredients across the board.

Despite these pressures, underlying demand for refined sugar remains stable, and we continue to prioritize in our operations to support our customers through these market cycles. Our Maple business continued its upward trajectory with a 14% increase in sales volume as we expanded our presence with both existing and new customers. Around the world, consumers are discovering this unique goodness of this all-natural sweetener. The quality and availability of the crop were important factors in our ability to expand our market presence and deliver consistent results in Maple.

Looking forward, we remain focused on supporting producers and maintain reliable access to supply as global demand for maple syrup continues to grow. Our strong cash generation continues to support both strategic investments and consistent shareholder returns.

We also made meaningful progress on our ESG commitments further embedding sustainability and community engagement into our business. In summary, we are entering 2026 with a solid foundation, a clear and proven growth strategy and confidence in our ability to deliver value even as the external environment continues to evolve. Our ability to deliver these results is a testament to the strength of our Rogers refined operating model. We have continued to modernize and invest in our operations, manage cost effectively and prioritize customer needs particularly as we work through market cycles and trade-related uncertainties. Rogers refined speaks to the way we operate every day. Our teams know what's expected and they deliver.

In this culture of accountability and innovation that gives us the confidence to navigate uncertainty and capitalize on new opportunities. Now turning to our Eastern sugar expansion project. A key highlight this year has been the progress of our LEAP project. This expansion is central to our long-term growth strategy, positioning us to meet rising demand for refined sugar across Canada. Construction activities in Montreal are advancing. There are a lot of new contractors on site working on the refurbishment of the building and the installation of new refining equipment given our temporary outlook for softer market demand in the near term and our desire to proceed as prudently and safely as possible, we made the decision to extend our expected in-service date for LEAP to the first half of calendar 2027.

This decision affords us some additional time to execute on this complex undertaking while better aligning our in-service date with market demand trends. Executing this major construction project while maintaining production at near full capacity requires careful coordination to ensure the safety of employees, contractors and the facility itself. We are executing LEAP with a strong focus on safety. Safety must be our top priority and the rigor and learnings from LEAP will be applied across the organization to further strengthen safe, reliable operations at every site. Our estimate of the cost to complete LEAP Project is unchanged at $280 million to $300 million.

We remain confident in the long-term value this expansion will deliver for food manufacturers in Central Canada and beyond. And I'd highlight that we continue to see food manufacturers advance their plans to add capacity in Canada with a notable ribbon cutting on the new chocolate factory in Ontario in mid-November. As a reminder, Central Canada is where we see the bulk of the demand growth. So by expanding capacity in the region, we can serve that demand locally and reduce shipping costs that come from having to bring sugar east from our Vancouver and Taber sites. And as I said earlier, we are in the best financial condition in our history. Our financial strength enables us to fulfill our ambition for growth and modernization through the LEAP project and through future initiatives. Now I'll turn the call over to J.S. for a discussion on our financials.

Well, thank you, Mike, and good morning, everyone. I will now begin my financial overview of the fourth quarter and the 2025 fiscal year. While volume and revenues are always important, our primary focus continues to be on profitability, especially adjusted EBITDA and free cash flow, which we believe are the most important measures of the performance of our business. For the fourth quarter, adjusted EBITDA grew to $39.5 million, up from $38.3 million last year. For the full year, we delivered more than $150 million in adjusted EBITDA an increase of nearly 6% over 2024 and the highest performance in our history.

Free cash flow also improved significantly in 2025 at $90 million compared to $73 million in 2024 after excluding a $14 million timing difference on income tax payments. This represents an improvement of 23%. This free cash flow gives us the flexibility to invest in our business, fund our key growth projects and return value to shareholders, all while maintaining a healthy balance sheet. Our consolidated revenues for the fourth quarter came in at $323 million, down about 3% from last year. The main reason for that decline was lower average price for Raw #11 sugar and lower sales volumes in the Sugar segment. As a reminder, raw sugar prices for us are mostly passed to customers through our hedging process and as a result, have no material impact on profitability.

The decline in sugar revenues was partially offset by higher revenues in our Maple segment. On a full year basis, revenues were up by nearly 7% to $1.3 billion which really speaks to the resilience of our business and the ability of our teams to deliver growth even in a year with plenty of moving parts. Despite the fluctuation in the top line, our team delivered where it mattered most, profitability and cash flow. This underscores the importance of our focus on consistent profitable and sustainable growth. Now let's have a look at the individual business segments. Starting with sugar. The story this quarter is all about adaptability and margin discipline. Sugar sales volume for the fourth quarter at 196,000 metric tons was lower than expected, down by 4% from last year.

The reduction was associated with nonrecurring production issues from one of our industrial customers and lower liquid volume from the loss of 2 customers in Western Canada during the past year. Despite the lower sales volume, our focus on maintaining strong profitability allowed us to exceed our adjusted EBITDA target at $35.1 million, up 3% from last year. For the full year, adjusted EBITDA for the Sugar segment reached $129 million, a 4% increase from 2024 and a record for our business. Over the last year, we have seen a lower growth rate in sales volume and related margin for industrial customers. We see this as cyclical and are attributing to softer market conditions to grower food inflation from higher costs of other ingredients impacting overall demand, such as cocoa. That being said, our team has been able to pivot and take advantage of business opportunities across markets to protect margins.

We are still confident that the sugar economics of the North American market are aligned with our business strategy. On the cost side, we have seen our production costs returning to normal in the second half of 2025 after some nonrecurring maintenance challenges in Montreal in the first half of the year. We've also seen an increase in our distribution costs, especially in the first half of the year as we made adjustments within our supply chain to meet the needs of our customers. Finally, the increase in our administration costs for the year was mainly due to severance costs incurred in the third quarter and higher share-based compensation expense related to a higher share price in the later part of the year. Our adjusted gross margin per metric ton was $237 in the fourth quarter, higher than last year by $20 for the full year.

Adjusted gross margin per metric ton at $224 was slightly higher than last year's amount of $222. On the Maple side, we are seeing the benefit from improved global market demand, supported by a strong harvest and proactive supply management. Maple revenues in the fourth quarter were $64 million, up by 6% year-over-year from higher volumes sold. In the full year of 2025, total Maple revenues were $263 million, a 13% increase as sales volume reached a record of 53.4 million pounds. The higher sales volume supported our expected profitability growth. For the fourth quarter, adjusted EBITDA for the Maple segment was $4.4 million, up by 8% from last year.

For the full year, the Maple segment delivered a record adjusted EBITDA of $21.3 million, $3.3 million higher than last year. Over the last 3 years, profitability of the Maple segment has improved by more than 60%. The gross margin of our Maple segment, aligned with expectations for the full year at 10.4%. However, we saw a lower margin during the second half of 2025 due to an unfavorable mix of products and customers. We see this situation as temporary and going forward, we are anticipating overall gross margin to be slightly above our target of 10%. For the full year, Lantic Maple contributed 20% of our consolidated revenues and 14% of our consolidated adjusted EBITDA.

The combination of volume growth and disciplined operational management meant we capture more margin for every sales, underscoring Maple's growing contribution to our overall profitability. We believe our Maple business is well positioned to take advantage of the favorable global market dynamics going forward. I want to pause here and tell you that we are really pleased with the results of both business segments and their contribution to our record profitability in 2025. We are also pleased with our overall bottom line results. Adjusted net earnings for the year came in at nearly $73 million, up by 9% from last year.

On a per share basis, adjusted net earnings per share was $0.57 for the full year, slightly higher than last year, even after the 20% increase in share outstanding from the LEAP-related equity issue done in March 2024. On the investment front, capital expenditures totaled $95 million for the year, with the majority about $75 million, allocating to advancing the LEAP project. We remain disciplined in our approach to capital allocation balancing the need to fund strategic growth initiatives with the importance of maintaining a strong balance sheet. Our funding plan for the LEAP project remains robust as we are drawing on a well-balanced mix of sources including internally generated cash flow, the equity proceeds from last year's share issuance, our revolving credit facility and government-backed loans from Investissement Quebec.

We continue to keep a close watch on financial market conditions as we evaluate our future funding requirements. Thanks to our strong balance sheet and solid cash flow, we are well positioned to move quickly and strategically when opportunities align with our business objectives. We are proud to deliver steady, reliable returns even as we invest for future growth. Our strong financial performance allowed us to continue rewarding our shareholders. We maintain our quarterly dividend at $0.09 per share, returning a total of $46 million to shareholders through the year. For 2025, we provided a dividend yield of about 6% to our shareholders. The strong financial results also caused a favorable decline in our payout ratio to approximately 64% compared to 67% in 2024 and 85% in 2023, allowing us to use the excess cash to maintain our strong balance sheet. With that, I'll turn the call back over to Mike to provide a summary and outlook for 2026.

Thank you, J.S. As we look ahead to 2026, the outlook is still challenging with changing market conditions. That being said, I believe we are well positioned to navigate whatever comes our way by closely monitoring conditions and adjusting quickly as needed. A core part of our execution is actively managing our sales to ensure we're always positioned for the most economically advantageous outcomes. This means being disciplined about where and how we allocate volume, focusing on the right opportunities and making sure we're not just chasing top line growth but driving consistent and sustainable profitability. Although tariffs and trade policy have so far only had a limited effect on our business and that of our customers, we remain prepared to act swiftly should conditions shift.

Our strategy is straightforward, maintain close relationships with our customers, exercise disciplined cost management and invest with a long-term perspective to ensure we remain resilient and competitive. Our recent quarterly results marked a significant improvement in our profitability and operational execution compared to previous years, a level we believe is durable and repeatable. Our focus for 2026 is to continue delivering steady financial results. Let me start with the Sugar segment. We expect demand and pricing to remain strong in the coming year. Our forecast for 2026 sales volume is between 750,000 and 770,000 metric tons, a slight decrease from last year. This forecast reflects some ongoing uncertainty in export markets and softer demand from a handful of industrial customers dealing with higher costs for other ingredients.

Domestic sales continue to be robust, and we'll prioritize serving those customers while remaining alert to select export opportunities. At Taber, our beet harvest this season was in line with expectations, thanks to stable acreage and normal growing conditions. We're currently processing the crop and anticipate wrapping up by the end of February. Production and maintenance costs will edge slightly higher this year, driven by market factors and a commitment to maintaining reliable operations. In Maple, we anticipate another year of healthy growth, building on recent momentum. We're projecting volume to increase by up to 3% in 2026, supported by sustained demand from current customers and new business in international markets.

Our outlook assumes favorable crop yields and continued access to supply. Both segments reflect our best view of current market trends, but we recognize that market dynamics can change rapidly and we're ready to adjust as needed. On the investment front, we plan to allocate about $27 million across our core business this year, excluding LEAP-related spending. LEAP will continue to be a major initiative in 2026 as we press forward with the construction and installation of new refining and logistics capacity. Balancing this project with day-to-day operations is challenging, but essential to ensuring uninterrupted service for our customers. As J.S. mentioned, our capital spending is well aligned with our funding plan.

To sum up, we've delivered yet another successful year in keeping with our focus on consistent, profitable, sustainable growth. As I have stated previously, we are a very different company now with a 4-year track record to prove it. Our priorities are clear: stay close to our customers, uphold our commitment to safety and continuous improvement, manage costs to remain competitive and advance the LEAP project to support future growth. Underpinning all of this is our solid balance sheet and prudent financial approach, which provides us the stability and flexibility that will help us meet the needs of our customers and deliver value to shareholders over the long term. In closing, I want to express my gratitude to our teams across all our locations. Your commitment to customer service, hard work and dedication to a safe work environment are paramount to our success. And finally, I would like to thank our customers, business partners for their ongoing confidence in us. I will now ask the operator to open the line for questions from the analysts.

[Operator Instructions] Your first question comes from Michael Van Aelst with TD Cowen.

And good results today. But I'd like to talk to you a little bit about your outlook to start with. You mentioned refined sugar demand was stable in Canada and increasing globally. But you're forecasting lower volumes. Is that an operational concern? Or is this like why would your -- why do you expect your volumes to be down the next year if demand is stable?

Mike. Good to hear from you. Yes, what we're seeing in the lower demand outlook is export sales. Those are always lower margin opportunistic sales. And with some of the trade and tariff dynamics, and as everybody knows the tariff on Brazilian sugar is about 1 example, that has stemmed our appetite for export sales until things change.

Okay. So when you look at your -- the LEAP project and you see the increased capacity coming on, obviously, this is allowing you to delay or slow down the progress of this, but this is the third time that you've delayed it, I think, in the last year or so for a total of I, think it's 15 months now, if my math is right. So what -- at the start of the project, you said that you had customers lined up for the increased capacity. What are these customers doing -- going to do to fill that their facilities during -- in the interim while you complete the expansion of the facility and do you still expect the demand to be there once this facility ramps?

Yes. All great questions, Michael. And so this is only our second delay of the project. And we look at the economic conditions in the market and the supply and demand of our customers, both internationally and domestically, and we make decisions on the fly as we get smarter with the needs. And what we decided to do is we could have kept -- one of the options certainly was to keep the original time line. But that just would add more cost because it's more over time, more labor. And given the opportunity to just stick on pace with the cost side and just extended time we've decided to take that option, given the softness and some softness in the domestic market short term.

That, we believe, will recover. I mean it's -- you're seeing it in every sector in Canada. It doesn't matter if you're making cars or aluminum widgets or sugar-containing products. So investments have slowed, but they're still going to be there in the long term. The growth will return. We're quite confident in that. We've met with major customers around the globe in the last few weeks, and their commitment long term is still in place to invest in this market. We did see 1 ribbon cutting a couple of weeks ago as an example of that. And as you know, there's been other public announcements of additional capacity coming on over the next couple of years. Those are a little slower than what we saw a couple of years ago as when those would start up, but they're still committed to coming to the Canadian market. So it gives us our confidence long term.

And as far as needing to supply the market for -- because there is still -- as we do know, we're still running near capacity city in the East. That's where the growth is in the Canadian market is in the East. We still have untapped capacity in our Western operations so we can pull sugar into the East, if needed.

Okay. All right. And then with lower volumes in -- on the sugar side this year, I'm assuming mix is going to improve if your exports are down and your industrial is down.

That's correct.

Okay. So overall, for sugar, did I hear you expect stable in fiscal '26 from a profit standpoint?

Yes, Mike, it's J.S. here. So we're expecting our results on the Sugar segment to be very stable right now. So the business, the volume that we are not going to have this year is exports volume and allow us to focus more on the domestic market and the margin is usually higher, obviously, on the domestic market.

Okay. And then on the Maple side, yes, a much stronger volumes than we expected. And I think that you guys were guiding to for the fourth quarter. Was all of that export business? And is that why the unit revenue was down year-over-year?

Yes. No. As you know, Michael, in the Maple business, we export over 50 countries in the world. So we're -- it's an export business for us. We have a strong domestic presence, but it's largely an export business for us. And conversely, it's why we diversified our EBITDA strategy when we bought into the Maple business, conversely, to sugar and other commodities and cocoa and whatnot, shrinkflation and consumer inflation has not impacted Maple globally. And it's still growing more than what we would expect in more than any other food commodity. And so we're benefiting from that growth as the consumers turn to that luxury item and that natural sweetener of choice in some countries, and we're benefiting on that ride.

And we -- as you know, over the past few years, we've right-sized that business. We've invested in that business. We've got a lot of automation, and we're well positioned to manage that growth as it continues to come to us.

Okay. So can you just explain help us understand the gross margin -- the weaker gross margin in the second half of this year and what's going to get back over 10% going forward?

Mike, it's J.S. here. So what we've experienced in the second half of the year is what we would call it an unfavorable product and customer mix. So some of these -- the incremental volume we have to use some syrup that was a little bit more expensive to do the type of product that we were doing hence the reduction in margin. And so we've actually aligned our purchase for next year to be able to have to meet the need of the customer. So I'll give you an example. If you have what I would call it industrial grade products and you have to use higher-quality syrup to fulfill the orders because you have more orders than you were anticipating.

You're still making money, but we're not making as much as we would anticipate. So we've actually aligned our supply chain to be able to have more of those type of products to supply our customers for next year. That's why we're confident that -- and we've seen it over in the first period of the year, and we have a forecast for next year that we are going back above the 10% and I would also say that in some cases, in some of those products, offering demand in the maple syrup is actually the demand is strong, and we've been able to pass some of those price increase to customers.

Okay. So bottom line is the grade of -- you've aligned your supply, the grade of your supply to the customer demand.

Yes, that's a good way to put it. Exactly Mike.

The spike in demand created some timing for us. It's a good kind of problem.

Your next question comes from John Zamparo with Scotiabank.

I wanted to follow up on LEAP and the move to mid-2027, I'm not quite clear, I hope you can add a bit more color here. What developed over the last few months to make you want to move the expected completion date? Was it something related to the construction. We know it's a very complex project. Or was it related to demand and what you're seeing from customers?

Yes First of all -- John, yes, it is a complex project. And the extra engineering work that's going on, on site and then aligning with the construction work following engineering is critical for the safety of the site. It's an old building, 140 years old and there's a lot of work and a lot of tie-ins to be done, and we're doing this while we have a plant running right beside it with our employees working alongside the contractors. So in the interest of safety of the employees, safety of the site and the consistency of our production and no interruptions in melt in which anecdotally, we've had less than 9 hours of interruption in the plant over almost 2 years. So good coordination, good outcome and it's the right focus to deliver a safe, reliable project at the end and a little short-term softness in volume tariff related and export related as it gives us a window to use the extra time.

Okay. That's helpful. And then maybe we can move to the sugar volumes outlook, specifically on cost inflation and cocoa prices, I wonder how you think about these because they've come down pretty sharply, but it's still extremely elevated versus years ago. So I wonder what you're seeing from your customers who have exposure to that commodity. In particular, those who have manufacturing facilities in Canada, but ultimately export to the U.S.

Yes. Thanks, John. Great observation. That's one benefit of me being around here 45 years. This is not my first cycle like this. I've lived through these spikes in commodities and supply and demand. We're seeing it's not just inflation, it's shrinkflation, too. So if you look at units of -- let's just use an example of a chocolate bar of any type. They've reduced them in size so it reduces pounds, but not units and sales. And so it takes consumers a little while to come back and manufacturers time to come back and increase the size of those bars, we've all seen it over our lifetimes.

But a lot of things are -- when we go through these cycles, a lot of things aligned that support the change, and as you referred, cocoa prices are down substantially. Sugar prices, #11 sugar prices, which if you manufacture in Canada, you get a benefit from are at a 5-year low. We just come off of a 5-year low in the last 2 months, and that was the benefit of foreign exchange. It just makes calendar the right place if you're going to invest and continue to participate in the SCP market for on a North American basis. So those things kind of help turn that curve.

It will take a little longer because just like anybody else, our customers' customers have bought in inventory and that higher-priced inventory based on higher commodity costs has to get flushed through the system. And it will take some time. But in the past, it's always come back. So I have confidence it will as well.

Understood. A couple more. I wanted to clarify some comments on Eastern Canada from the MD&A. I think you'd said expected growth in F '26 is coming from the East, but it also referenced or the outlook also referenced lower-than-expected demand from that region. I wonder if you could add a bit more color there.

John, it's J.S.. What we have seen is that the rates of growth that we have noticed over the last few years, we're not expecting the same growth rate that we've had so we're expecting a more stable growth rate may be coming back to what used to be in the 1% to 2% rate on an annual basis versus what we have seen over the last 2 years, which was a significant growth in this market. It's still the strongest part of the market. Obviously, in Canada, most of the food transformation business is in the Montreal down to Southwestern Ontario Corridor. So we're still well positioned for that. But we're not expecting the growth to be as strong as it was in the last 2 years.

Right. Okay. Understood. And then lastly, on Maple, I guess it's a follow-up to the prior question. volumes and demand continue to thrive on this product, and it seems like there's just complete inelasticity from consumers. I wonder what you attribute that to internally. Is there something structural? Is it just customer preference for this product? I wonder how you think about that.

It's a great product. People love it. The more people try it, the more they stick to it. It's just simply a great product. And we've done a lot of work. We've got probably one of the best teams in the industry that's connected globally to the customers and consumers and trends. And we're probably at the front of that line, capitalizing on those growth opportunities and trend commitments that we're seeing across the sector. So it's execution and it's opportunity. It's always a success, right?

Your next question comes from Nevan Yochim with BMO Capital Markets.

I just wanted to start on sugar volumes in Q4, the decline you referenced from a large industrial customer in Montreal. Are you able to quantify that impact it had on Q4? And then is that fully isolated to fiscal 2025?

Yes. Thank you, Nevan. Yes, it was 1 customer largely in Eastern Canada that had an operational issue and it impacted us by less than 4,000 tons or about 4,000 tons. It was isolated. It was -- and it has already returned to normal production.

Okay. Great. And then just to put a bit of a finer point on the volume outlook for 2026. Can you confirm, is the full decline expected to come from exports to the U.S. And then can you just frame the economics of exporting to the U.S. today based on current tariff rates, which I believe were recently reduced for imports coming from Brazil?

Yes. Nevan, so first point clarification, the sugar was not included in the reduction of tariffs to the United States from Brazil. So there's still a full tariff rate on Brazilian sugar, which, of course, Montreal uses raw sugar from Brazil so it excludes us on participating in exports to the U.S. out of Montreal. Most of the reduction you've seen is in the export segment. And of course, the tariffs change, and we have unutilized capacity that we have in place somewhere else. We'll jump right back in there. We've always done that over the years.

And then if you look at some of the other softness of some liquid volume predominantly in Western Canada with a couple of shifts in customers that one that has left the market altogether and one's gone back to another sweetener.

Okay. Got it. And just lastly for me on sugar margins into 2026. Can you frame about how you're thinking about the year as we see the lower margin exports decline, could that potentially lead to a year-over-year increase in the gross margin per metric ton.

That's a good question. I think on a unit basis, we can -- it might lead to a slight increase. However, the market is fairly stable right now on the domestic side. And so we also have to consider the impact on our cost. So overall, we think we're going to have a flat to slight increase on sugar margin next year.

Your next question comes from Zachary Evershed with National Bank.

So you guys mentioned the start-up was delayed about 6 months to keep over time and cost down and CapEx guidance was maintained. Do you think there's going to be any effect of the increased complexity and the delayed start-up reflected in your OpEx costs on the income statement instead?

No, not at all.

And then in Maple, your EBITDA margins are getting closer and closer to your gross margins. Can you walk us through those efficiency gains and whether there's anything more to get incrementally there?

Well, the margin in the second half of the year, we've seen a slight decrease. We mentioned a little bit earlier, Zach. And the reason being having to use some higher grade syrup to fulfill some more of industrials, I think that will -- it actually has resorted itself in 2026. And from our point of view right now, our maple from an operational standpoint and cost point of view, we're fairly much optimal. And so we're expecting this trend to continue.

Then last one for me. What types of incremental financing are top of your list right now? And what are you watching in capital markets that could prompt you to pull the trigger?

Well, it's a good question. A few things we're watching. Obviously, we had about $150 million of converts that we paid back last year. And then we are -- what we're looking at right now is we refinanced about $115 million of that. So we are looking at different options going forward. So we're going to pace that with the pace of spending of our LEAP Project. So if we go out, it's not too much to finance our LEAP Project, but more about replacing some of the convertible debentures that we had paid back in 2025. Bear in mind that because we did the equity issue so we had a bit more cash than we had initially anticipated, that's why we have not gone out in the market. So we'll look at rates -- we'll look at market conditions. I think what you've seen in our package is that we are going to file our prospectus very soon. So our prospectus will allow us to quickly access the market if we see an opportunity.

There are no further questions at this time. I will now turn the call over to Mike Walton for closing remarks.

Thank you, everybody, for your interest in Rogers Sugar, and we look forward to seeing you at the next quarter. Hope you have a great safe holiday season.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.