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Good morning, my name is Marcella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Recipe Unlimited Corporation 2019 Fourth Quarter and Year-End Results. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Before turning the meeting over to management, please be advised that this call contains certain forward-looking statements that are based on current expectations and are subject to a number of uncertainties, risks and other factors, which may cause the actual results, performance or achievements of Recipe to be materially different. Further information identifying risks, uncertainties and assumptions can additionally be found on certain IFRS measures referred to in this call can be found in the company's management discuss and analysts and annual information form available on SEDAR. I would now like to turn the meeting over to Frank Hennessey, Chief Executive Officer of Recipe Unlimited Corporation. Mr. Hennessey, you may begin your conference.
Thank you, Marcella, and good morning, everyone. Thank you for joining today's conference call. On the call with me today is Ken Grondin, our Chief Financial Officer. In 2019, we took significant strides to improve the overall strength of our business and to deliver value for our guests, our franchisees and our shareholders. A record 109 restaurants were renovated, all menus were streamlined for an improved guest experience, while ensuring the efficient processes to improve restaurant margins. We invested in new training programs, created new digital apps; opened 43 new locations, including our first location in India; renewed over 100 franchise agreements, a new record; and completed a major share repurchase program. 2019 system sales grew to $3.5 billion, a 2.1% increase from 2018, generating significant operating EBITDA and free cash flow. 2019 free cash flow before growth CapEx, dividends and share repurchases under the company's NCIB was $155.9 million. Year-to-date, operating EBITDA improved by $1.3 million or 0.6%, to $216 million. While SRS was negative in the quarter and the year, a reflection of challenging industry conditions in 2019, we continue to invest in our business and our brands continue to make progress in improving the overall guest experience, as measured by our guest feedback systems, which we believe is a leading indicator for guest revisit intent. Fundamentally, our business generates stable and recurring earnings and free cash flow, that leaves us well positioned to take advantage of strategic opportunities for growth and explore options for enhancing shareholder returns, while at the same time, having the ability to pay down debt relatively quickly. Today, we are announcing that for the third consecutive year, we are increasing our quarterly dividend by 5%. To further strengthen system performance and profitability, at the end of 2019, we completed a thorough strategic review of 1,373 corporate, franchise and joint venture restaurant locations. This review identified locations that no longer fit with the long-term plan for the company and/or restaurants that are currently underperforming. As a result, we have made the decision to close certain locations, and we will continue to partner with franchise locations that are underperforming to help them achieve sustainable success. This may include providing financial support in the form of royalty relief or rent assistance. All in all, we expect to close or sublet 29 restaurants over the next 12 to 18 months, subject to landlord negotiations and individual franchise situations. In aggregate, sales for these 29 restaurants represent $40.7 million of 2019 System Sales. In addition, to reflect the expected impact of the restructuring of certain corporate locations and franchise lease assistance estimates, we recognized $57.2 million of asset impairment charges and an additional $6.6 million of restructuring expenses in 2019. We expect that this restructuring plan will have a positive impact on future operating EBITDA by $8.7 million versus 2019. While decisions like these are not easy, we believe that taking decisive action on these legacy locations is the proper thing to do to ensure we have an even stronger foundation from which to build going forward. In 2019, Recipe continue to make investments in support of our 4 Pillar operating model and contributed $1.6 million to renovation incentives in support of 46 franchise renovations, mainly in the Swiss Chalet and Harvey's banners. As I've said, 2019 was a record year for renovations, with 109 major renovations completed in total. The estimated System Sales impacting the downtime associated with these renovations is approximately $10 million. These renovations are expected to generate long-term SRS growth from enhanced guest experiences across all 4 pillars of operational excellence. In the fourth quarter, total System Sales decreased by $9.6 million or 1.1% to $895.8 million as a result of negative same-restaurant sales growth of 2.6%, temporary restaurant closures related to renovations, permanent restaurant closures offset by new openings, and growth in retail and catering sales. Year-to-date System Sales growth was primarily driven by the addition of the Keg in February of 2018, growth in the retail and catering segment from branded products sold at grocery and the addition of Marigolds and Onions in December 2018, partially offset by temporary restaurant closures relating renovations and negative SRS of 2.3%. Operating EBITDA in the fourth quarter decreased $2.8 million or 4.4% to $60.5 million compared to $63.3 million in the fourth quarter last year. Year-to-date, operating EBITDA improved by $1.3 million or 0.6% to $216 million. The increase for the year was primarily the result of improved contribution from the franchise, retail and catering and central segments, which more than offset a decrease in the corporate segment contribution, lost EBITDA from the temporary closure of restaurant streaming renovations and strategic costs incurred by Recipe related to renovation incentives paid to franchisees to assist with major renovations, again, mainly in the Swiss Chalet and Harvey's banners. Operating EBITDA margin on System Sales was 6.8% for the fourth quarter compared to 7% in 2018 and year-to-date operating EBITDA margin on System Sales was 6.2% compared to 6.3% in 2018. While franchise contribution margin improved both in the quarter and year-to-date, corporate contribution margin decreased as a result of lower system sales and taking back underperforming franchise locations. And at this time, I'm going to turn it over to Ken to review our financial results.
Thank you, Frank, and good morning, everyone. My overview will refer to our fourth quarter and full year 2019 financial statements and MD&A, both issued last night and are available on SEDAR. For the first part of the financial highlights, I will focus on Recipe's consolidated results and will finish with a summary of our segmented business performance. Total gross revenue was $327 million and $1.3 billion for the 13 and 52 weeks ended December 29, 2019, compared to $328.2 million and $1.2 billion in 2018, representing a decrease of $1.2 million or 0.4% for the quarter and an increase of $60.6 million or 5.1% for the year. The increase in the gross revenues for the year was primarily related to the addition of the Keg in February 2018 and increases in retail and catering sales that were partially offset by negative SRS. Operating income was a loss of $4.5 million in the quarter and a profit of $79.5 million year-to-date compared to profit of $26.2 million and $126.9 million last year for the same periods, representing a decrease of $30.7 million or 111.4% for the quarter, and a decrease of $47.4 million or 37.3% year-to-date. The decrease in the quarter and year-to-date was largely the result of the impairment charges taken related to the restaurant portfolio restructuring that Frank discussed previously. Excluding the net interest related to the new lease standard, fourth quarter net interest expense and other financing charges were $3.5 million compared to $2.3 million in 2018, an increase of $1.2 million. Year-to-date, net interest expense and other financing charges were $10.2 million compared to $10 million in 2018, an increase of $200,000. The increases primarily relate to the $250 million of private notes issued on May 1 at higher interest rates in our revolver, plus higher debt in the fourth quarter related to the $125 million substantial issuer bid completed in September 2019. Earnings before income taxes was a loss of $6 million in the quarter compared to $15.4 million profit in 2018 and $60.8 million profit year-to-date compared to $104.6 million profit last year. The decrease in the quarter and year-to-date is driven by the impairment charges related to the restaurant portfolio restructuring, partially offset by a $10 million contingent liability fair value adjustment. Adjusted net earnings for the quarter was $44.8 million compared to $34 million in 2018, an increase of $10.7 million. The $10.7 million increase in the quarter was driven by a $7.5 million decrease in stock-based compensation expense, a $10 million decrease in income tax expense, partially offset by a $2.8 million reduction in operating EBITDA and an increase in net interest expense and other financing charges of $3.6 million. Year-to-date, adjusted net earnings was $105.7 million compared to $104.2 million in 2018, an increase of $1.5 million. Adjusted diluted earnings per share increased to $0.77 in the fourth quarter and increase to $1.71 year-to-date compared to $0.53 and $1.63 in 2018, respectively. The increase in the quarter and year-to-date relates to improvements in adjusted net earnings and the positive impact from the lower number of subordinate voting shares outstanding as a result of shares purchased and canceled under Recipe's NCIB and SIB. Now turning to segmented results for the quarter and year-to-date. Total contribution from corporate restaurants was $19.3 million and $75 million for the 13 and 52 weeks ended December 29, 2019, compared to $21.5 million and $80.5 million in 2018, a decrease of $2.2 million or 10.2% for the quarter and a decrease of $5.5 million or 6.8% for the year. Corporate contribution dollars and rate both decreased as a result of lower sales and lower contribution rates, mostly from taking back and operating underperforming previous franchise restaurants that operate below our 10% to 15% target contribution level, partially offset by the addition of The Keg, which operates corporate restaurants within our 10% to 15% target range. Total contribution from franchise restaurants was $26.6 million in Q4 compared to $26.6 million for the same period in 2018. Year-to-date, total contribution from franchise restaurants was $105.1 million compared to $99.3 million in 2018, an increase of $5.8 million or 5.8%. An outcome of exiting underperforming franchise restaurants and from taking long-term impairment charges related to franchise location subleases is lower overall assistance to franchisees, resulting in higher franchise royalty recovery rates in the quarter and year-to-date. The effective net royalty rate for the quarter and year-to-date was 4.4% compared to 4.3% in Q4 2018 and 4.2% in fiscal 2018. In the fourth quarter, we redefined the overhead component being reported [ in chart ] in our retail and catering segment contribution to provide investors with a more meaningful picture of retail and catering segment profitability and margins that align with how we view our business internally. Certain components of our central segment contribution were previously consolidated and reported under retail and catering division and have now been moved to the central segment. We have restated prior year comparatives to align with this new reporting format, which we will be using moving forward. Retail sales reported within the retail and catering segment relate to the manufacturer and distribution of fresh, frozen and nonperishable branded and private label food products. Catering sales relate to food and beverage sales from Recipe's catering divisions, operating under the Pickle Barrel, Rose Reisman and Marigold and Onion banners. Contribution from the retail and catering division in Q4 was $13.1 million compared to $12.5 million in 2018, an increase of $600,000 or 4.8%. Year-to-date contribution from retail and catering was $36.5 million compared to $34.2 million in 2018, an increase of $2.3 million or 6.7%. Increases in the quarter and year-to-date were primarily driven by increases from sales -- of sales of branded products at groceries, increases in potpie sales and the addition of The Keg retail business in February 2018 and the Marigold and Onion catering business in December 2018. Total contribution from the retail and catering business as a percentage of sales was 14.2% in the quarter compared to 14.7% in 2018. Year-to-date, total contribution from retail and catering segment as a percentage of sales was 11.5% compared to 11.9% last year. Turning to central operations segment. Central operations segment sales consist of sales generated by Recipe's on-premise call center business, representing fees generated from delivery call ahead, web and mobile-based meal orders. Central operations segment EBITDA consists of franchise fees, property and equipment rent and vendor volume rebates reduced by central overhead costs and Keg royalties paid to The Keg royalty income fund. Central segment contribution before the net royalty expense was $5 million in the quarter compared to $6.5 million in 2018, representing a decrease of $1.5 million or 23.1%. Year-to-date central segment contribution before the net royalty expense was $13.7 million compared to $13 million in 2018, representing an increase of $700,000 or 5.4%. The year-to-date increase is primarily the result of effective cost controls and synergies from consolidating certain shared services with acquired brands. In 2019, Recipe purchased and canceled 5,952,500 subordinate voting shares for 160 million -- $160.7 million under the company's normal course issuer bid and substantial issuer bid that was completed on September 25, 2019. As of December 29, 2019, the company had 56,378,425 shares outstanding compared to 61,755,594 shares outstanding as at December 30, 2018, a net decrease of 5,377,169 shares or 8.7%, that will increase free cash flow and earnings per share on a go-forward basis by approximately 6% to 7% or free cash flow by $0.05 per share and EPS by $0.02 per share. On March 5, 2020, the company's Board of Directors declared a dividend of $0.1177 per subordinate voting shares and multiple voting share compared to $0.1121 in 2019, a 5% increase over the 2019 quarterly dividend rate. Payment of this dividend is expected to be made on April 15, 2020 to shareholders of record at the close of business on March 31, 2020. This concludes the financial commentary of the call. I'll now turn the discussion back to Frank.
Thanks, Ken. Delivery sales for Recipe represent about 12% of System Sales, excluding The Keg and New York Fries, who do not offer delivery. We expect the channel to grow substantially over the next several years, and we will shortly be announcing the major initiatives that only Recipe is uniquely able to offer. People's desire for convenience cannot be understated. This includes how they dine with us and how they interact with us overall. While we anticipate delivery to continue to grow, we have not lost sight on the largest channel of our business, dine-in. Our marketing initiatives are designed to drive the appropriate balance between these channels that both serves the guests and enhances restaurant margins. Our focus on our 4 pillars, particularly ambiance and service, is helping to define a differentiated experience for those who decide to enjoy us at the restaurant. In 2020, we will be launching new restaurant prototypes that will combine both technology with hospitality, including frictionless pickup and scan-and-pay in our dining rooms, no longer waiting for your bill to arrive. We will continually find ways to enhance offer -- service offerings so that we can give guests convenience, but not at the expense hospitality. Digital sales continued to grow, up 11% in 2019 versus 2018, and we've just completed the new mobile order pay app for St-Hubert that's receiving really positive guest feedback. International franchisee is getting a dedicated team, and they've already generated significant interest and expansion for some of our brands. As many of you know, we already have an international presence with New York Fries, but we expect to greatly enhance our growth in this area over the next few years. For most franchisors, their international footprint can be significantly larger than their domestic. This is our intention for brands like New York Fries, Harvey's and others. We've also added to our executive ranks. In January, Nicolle Scavuzzo joined the Recipe team as our Chief Growth Officer. Nicolle is coming to us from Four Seasons, where she was Vice President of Global Recognition and Insights. Recipe generates enormous amounts of data. Nicolle and team, amongst other initiatives, will be focused on turning those data points into actionable insights that can reward our guests and increase traffic to our restaurants. Bob Ellis is joining Ken's team in finance. Bob was most recently at Deloitte Canada in their Transaction Advisory Practice. Bob will be focused on corporate development, capital markets and banking, and he will be working with Ken and I on our portfolio management, including M&A and divestitures. Franco Tascione is our new Chief Operating Officer for our social brands, Kelsey's, Beer market, The Landing and Pubs Group. Franco was a 30-year veteran of the restaurant industry has developed a reputation as a solid performer and a great leader. He is well respected by franchisees and has done a tremendous job in leading the turnaround for Kelsey's. We will be scheduling an Investor Day following our Q1 release in May, where we will go through in much more detail our strategic plan for the company, including our 3-year financial targets. We serve over 165 million guests a year and collectively, we employ over 60,000 people. Despite the challenging same-restaurant sales year, the company still generated $216 million in operating EBITDA, up from 2018. Recipe generated $156 million of free cash flow before growth CapEx, dividends and share repurchases. While many of our competitors are retracting, we are investing. We are investing in our people, and in our infrastructure so that we will lead this industry to 2030 and beyond. With our ability to generate significant free cash, our very strong balance sheet and the actions we have announced today, we are creating an even stronger foundation from which to build. And on that note, I will turn it back over to the operator to take any questions.
[Operator Instructions] Your first question comes from the line of George Doumet from Scotiabank. Your first question comes from John Zamparo from CIBC.
I know a lot going on in 2019. Maybe you could talk about how 2020 has begun so far since you have such a meaningful presence on full service restaurants. You guys are really on the front lines of consumer behavior and in the current environment. So just what can you say about changes, if any, that you've seen in the consumer behavior or consumer traffic since the start of the year?
John, yes. As you know, we don't give guidance. I mean, I think in this situation, I think what we can say is that we're encouraged to the start of the year. Obviously, the press that's gone on over the last couple of weeks, we're watching that very closely. We can't exactly point to any tangible evidence of any material change out there. And so again, we're encouraged by the start of the year, but obviously, we're watching events very closely.
Okay. And one of the theories on consumer behavior is that if consumers are less inclined to visit restaurants, eating at home would likely benefit. So I guess, what are your thoughts on that? And if you do see increased demand from your retail channel, are you able to ramp up production of that facility?
Yes. I mean, listen, we're well positioned to handle any kind of major changes in any of our channels. We're well established, obviously, in delivery right across the country. Our plants have lots of capacity. So again, we're -- we feel pretty confident. We're in a strong position. We're able to handle really anything that comes along at us. I mean, obviously, a lot of negative press isn't good for anyone out there. But we feel good about where we sit.
Okay. And maybe we can move to labor and food cost for 2020. What are your expectations here? Some of your peers talked about low- to mid-single digits on the food side. Labor, obviously, differs by region. But just your comments on each of those and what we should expect here would be helpful.
Yes, we're not expecting any material change on our food or labor costs. I mean you do have some markets where minimum wage is kind of -- again, well it began again in Québec in May. But again, St-Hubert is obviously our #1 brand there, and they've been able to respond pretty well in holding margins and growing same -- sharing positive Same Restaurant Sales despite annual minimum wage increases. COGS, I mean we've got a pretty strong team there. We did -- we were facing a little pickup in some supply chain, not from issues with China, it's really more around the rail blockades, but that's solved itself. So again, we're -- our job is to kind of try to hold the line on COGS, and therefore, not have to take any type of material pricing, particularly anything on inflation.
Okay. And then last one for me, and then I'll requeue. What's the current expectation for CapEx in 2020? It sounds like you've got a decent amount of projects going on, but I'm assuming most of those are funded by franchisees. But if there is any thoughts on consumers to be more hesitant, have you considered either reducing CapEx, maybe pausing some development or some renovations?
Yes. So again, we're watching everything very, very closely. And the plan for this year was around $45 million in CapEx. But as -- if we need to adjust for any particular reason, we would. Again, we're just kind of monitoring it day by day, just like everyone else.
Your next question comes from the line of Sabahat Khan from RBC.
On the review that you took on your banners, I guess, do you feel you're in a much better place or relatively better place with regards to kind of your network? Like do you expect less store closures as a result? Kind of, what was a thought process behind that? And where do you feel your network is right now?
Yes, I think we'll be happy to say we feel free good. I mean, again, many of these restaurants will -- you're talking about 29 restaurants that really would close over the next 12 to 18 months. But I think we feel pretty good about where we're sitting at. We constantly are looking at all our brands in the overall portfolio and do they fit. And again, this is -- as you guys have heard me say this before, but this is a company that has a history of mergers and acquisitions and divestitures. And we're not shy about -- in some of our brands, if we don't feel that there's a future fit for us and there may be a better parent, then we wouldn't be opposed to looking to sell some brands. But the restaurants that we have, after kind of doing this thorough review, we went pretty deep. I'd say we're fairly aggressive and feel good about the actions that we've taken.
Yes, Saba, it's Ken. I will add that the identified closures that came out of the review were ones we just feel that fit our long-term plan. There will be other closures. It come up on kind of natural scheduled lease expiries that will be replaced or moved or repositioned in those particular markets. But that's the continuous portfolio management, quality of sales program that we've been on. But that's just part of managing network.
And then on the impairment charge of $47.6 million that you took, are you able to break that out, just if there's any major components? Like was it in any specific brands? Or was it a region where you took that? Anything you can share on that amount?
Saba, it's Ken. I'm not going to provide that level of detail. You'll see from the financial statements, it's -- the nature of those impairments is a combination of impairing fixed assets or right-of-use assets related to corporate locations when we did our, again, very aggressive value testing on those locations. And second, impairing, call it, lease receivables related to sublease situations with franchisees, where we feel there could be risk of collecting less than the full lease rate. That's really the 2 categories of impairments that we took, kind of split between the 2 of them. We really looked at all brands, all regions, and we're very site-specific in our assessments of where we needed to take those impairments. And I would say it covered the full portfolio. Frank, anything to add?
No, I think that's right.
Okay. And then I know you mentioned there might be initiative coming, not trying to get you to disclose it. But a while back, there was some discussion about testing eyesight mirrors ghost kitchen. Is that something you ended up doing given how much delivery is going for you and your, I guess, the breadth of your brands, is that something you've tested? Is that something you're looking to pursue just amidst an environment where order delivery looks like it's becoming a big part of your sales?
Yes. I mean, listen, yes, I mean we have -- we've stayed in this area for quite some time. And again, I keep to remind people that we've been in delivery in a couple of our brands, Swiss Chalet, St-Hubert for decades. So we have a pretty good knowledge of what it can be and the challenges associated with really executing a delivery program well. So I think -- we always felt we're kind of uniquely positioned to be -- to really take advantage of this area. And so yes, in the next few weeks, you'll hear some further announcements from us in this regard, just not 100% prepared to go there today.
All right. Great. And then just one last one for me on the balance sheet. It looks like it's in a good place. Just came out the SIB. What are your, I guess, thoughts on capital allocation? You see more return of capital. Are you keeping an eye for M&A? Any thoughts there.
Yes, Saba, it's Ken. Yes, balance sheet is healthy, finished the year at 2.2x debt-to-EBITDA. We're always positioned for growth and growth opportunities. So M&A is always on our radar, enhancing shareholder returns. We've increased the dividend by 5%. So we continue to have a balanced approach on both growth and shareholder value. And until those right growth M&A opportunities come up, we'll continue -- we'll pay down our debt and be ready for the next one.
Your next question comes from the line of Peter Sklar from BMO.
It's Emily Foo for Peter Sklar. First of all, just going back to the strategic review. For the 29 corporate stores that will be closing in the next 12 to 18 months, is there a concentration of brands or in geography in those 29? Or is it all spread across the network?
It's pretty much spread across. There's no particular one brand or its majority, it's really spread across. I remind people, we got 1,375 restaurants. So you don't like to see any restaurant ever have to close, but it does happen over time for lots of various reasons. And so as regards to those place will, particular 29 -- again, as we did and looked at each and every mode of implications out there, we had to make decisions that we made, but it was widely spread across our brands.
Okay, great. And for the financial support that you may be providing to franchise fees and royalty or rent release, as of now, like how would you compare it to your historical level? And given the last few weeks of negative developments in the macro, what would be your capacity to assist your franchisees?
Yes. Emily, it's Ken. The -- tough to compare to historical because each -- but we've always provided -- we have a history of providing support to our franchisees, and it can take the form of royalty support. But they don't pay full royalties or wait until they get -- until their sales grow into being able to pay full royalties. And then in some more challenging situations, we can do -- we have provided rent support with our franchisees. Now our view on this restructuring and the impairment analysis that we did was really looking at a detailed review of the franchisees, gross rent-to-sales relationship and our understanding of those operating models and trying to project where we may have to help those franchisees where their sales aren't strong enough yet. We have the capacity to handle that, as we talked about our EBITDA and our cash flow and our free cash flow. And -- but these situations are ones that we will be evaluating on a case-by-case basis, and nothing is going to be starting right away coming out of this review.
Okay. Now shifting to the retail and catering. Do you have a sense of your product pipeline in the retail space? Or this is really growing segments of your business? And just wondering what the product pipeline is for 2020.
Yes, we have -- Richard Scofield is our Group President, runs restaurant and the retail side. And they just kind of completed another exercise of kind of -- so filling out what that pipeline could look like as far as new products go. But the other aspect to that is that we typically -- obviously, we're in something like 1,100 grocery stores in Canada. So we can grow with new products, but we can also grow in new geographies. We are -- from where our plants are located in Québec, we're within a 5-hour drive of one of the largest markets in the United States. So if that some of the products that we currently have, we think, may be an opportunity, and we're kind of exploring that as well. So they feel good about -- that they've got the pipeline to be able to continue to grow with new products, but also new geographies.
[Operator Instructions] Your next question comes from the line of George Doumet from Scotiabank.
I think I might have been cut off earlier on. I just wanted to talk a little bit about -- I think you had mentioned there was an aim to convert 23 stores to franchise. Can you maybe give us an update on how that's progressing?
George, it's Ken. Yes, that's -- it's continuous, George. In some of those cases, we need to build up the sales profitability before they're ready to be franchised. So it is progressing, and we generally, every quarter, we report the number of corporate to franchise conversions. And then we also have others that we may take back. So we're continuing down that path, and we're really looking at the same 12 to 18 months to try to get those converted.
Okay. And on average, would you quantify the magnitude of the SRS lift for those 109 renovated locations? And do you guys expect to renovate the same number for 2020?
We're probably not going to be at the -- that was a record number of renovations. We're going to do a substantial amount. I'm always hesitant to give a number, I would think it could fill in my head is, we're likely to give a number out there. But it will be substantial compared to our history. But it may not be to the level that it was last year. Listen, you continue -- we feel good about the results of the renovated stores. And renovations are always tricky when it comes to SRS as well because you have to compare it against the do nothing. And do nothing in restaurants is not a good scenario because eventually, this continues to track down and down. So they're getting the lift for the most part that we'd like, we always like to see more. But we're going to continue to be as aggressive in renovating as we possibly can and continually work on the margins so that we're getting the right return on that increase.
Okay. Great. And on -- just a follow-up on your retail -- the answer to your retail question. You guys are currently at 1,100 grocery stores in Canada. What's the aspiration, Frank, that maybe in 2 to 3 years, where do you kind of see that -- those number of doors to go to?
Yes. I think you have to look at nontraditional, too, in grocery, right? So there's -- food is everywhere now. I think if you look at convenience stores as well, the whole grab-and-go section, that's -- Canada is very underdeveloped in that compared to the U.S. So whether or not that's going into the shoppers and the farmer freeze or into the petro cans and grab-and-go for come and get a pop pie or -- so there's definitely other opportunities to greatly expand the number of units that we're in outside of traditional bricks-and-mortar grocery stores.
Okay. Great. And just one last one. I guess given the recent decline in the share price, was there a valuations is to reach levels or you couldn't -- are you make it pretty tough for us to do accretive M&A.? So just wondering how you see that. And is the expectation that we could also see pretty -- valuations of some of the private companies out there or potential targets come down as well? Just wondering where your thoughts are on that.
I think the -- well, first off, this is -- it's interesting days that we're living in. My short answer to the whole M&A thing is that we are constantly going to be looking for opportunities that are -- that fit with our strategic goals versus just being opportunistic. We want a portfolio of brands that are complementary to each other. And we'll continue to look at things. There may be opportunities out there or brands that we would like to have and maybe the conditions help bring them to market. But we will continue to be patient, and particularly in the final brand.
There are no further questions at this time. I'll turn the call back over to the presenters.
Okay. Well, thank you, everyone, for joining us today, and we will talk to you again at the -- for our Q1 release. Thank you, everyone.
This concludes today's conference call. You may now disconnect.