Please be advised that this conference call is being recorded. Welcome to the North West Company Inc. Fourth Quarter Results Conference Call. I would now like to turn the meeting over to Mr. Edward Kennedy, President and Chief Executive Officer. Mr. Kennedy, please go ahead.

Thank you, and welcome everyone to our Q4 end of year conference call for fiscal 2020. Joining me today from North West is, Amanda Sutton, our VP, Legal and General Counsel; John King, our Chief Financial Officer; Alex Yeo, President of our Canadian Retail Group; Dan McConnell, President of our International Retail Group and Sandy Riley is here with us, who's the Chairman of the North West Company. I'm going to start the meeting by asking Amanda to read our disclosure transcript.

Thank you, Edward. Before we begin, I remind you that certain information presented today may constitute forward-looking statements. Such statements reflect North West's current expectations, estimates, projections and assumptions. These forward-looking statements are not guarantees of future performance and are subject to certain risks, which could cause actual performance and financial results in the future to vary materially from those contemplated in the forward-looking statements. For additional information on these risks, please see North West's annual information form and its MD&A under the heading Risk Factors. Edward?

Thanks, Amanda. So, we're going to follow a format. I'm going to invite Sandy to make some remarks regarding CEO transition, which I hope that you've read and seen in our press release today. We'll stop the call there for questions and try to segment and then move on to the fourth quarter and year-end results and take that approach. So, with that Sandy, I'll turn it over to you.

Well, thank you, Edward. It's a pleasure to be on this call. I'm not normally obviously part of the analyst call, and I haven't done all of this for a while, since I was the CEO of a public company. But, I am delighted to be here. You will all have seen from the press release the information that Edward Kennedy will be retiring as CEO of The North West Company on August 1, and will be replaced by Dan McConnell, who is currently the President of our International operations based in Boca Raton. This is a very sort of interesting time in the history of the company. Edward has been the Chief Executive Officer for nearly 25-years, and that in itself is extraordinary. But when you add on top of that all that's happened in this company over those years, whether it's the expansion into International operations, the increased focus on food, the many partnerships that we forged with indigenous entities, and the growth into areas like health and transportation, it's been a remarkable process of diversification and growth. And that's been reflecting in the numbers. North West sales when Edward became CEO were just slightly under $600 million, and this year we will be in excess of $2.4 billion. The EBITDA growth has grown from nearly $60 million to over $300 million, to the nearly $1.2 billion of dividends paid out to shareholders over that time. What I find particularly remarkable is the compound annual total return for the company over that 25-year period, or 24-year period of 15.6%. It's a remarkable track record for Edward and for the company. And for that reason, it is a kind of a bittersweet moment for us on the Board, because we've all come to really value all of Edwards’s contributions, his knowledge of the company. It's going to be difficult time for us in the sense of thinking through what the company will be like without Edward, as its leader. Having said that, I know from my own experience in business that change brings opportunities. It brings opportunities to rethink how you look at a company and its operations. It gives us an opportunity for fresh eyes to look at the processes that work within a company. It gives people fresh oxygen and a chance to flex their muscles in a business setting, and gives new people a chance to make their mark. And as part of that, that process of revitalization, I am very, very pleased to announce that Dan McConnell will become the President and Chief Executive Officer of the Company on August 1st. Dan has spent 20-years with the company. He was hired originally to do various corporate development projects. But he has evolved over the years and in a number of key roles very instrumental in the acquisition of Roadtown, in the British Virgin Islands, and then heading up our international operations based in Boca Raton. We've all on the Board watched Dan evolve as a business leader, and as an executive over that 20-year period. And we all feel that his brand of enthusiasm and leadership and vision will really resonate well with the company and he's going to provide a tremendous leadership for this company in the years ahead. And so we're all really pleased and delighted that Dan is in place to take on this challenge. I want to assure all the investors that this has been a very thoughtful and long process that we've worked our way through. Edward and I started talking about his desire to retire three or four or five years ago, I guess, was our first set of a first conversation. And we've been talking about the process we should go through and what would be required. It's been part and parcel of a process at the Board of The North West Company, as we moved out longer standing board members and brought in new members to the Board, who would be able to work, to help in the selection process and work closely with the new CEO. It's been thoughtful, and it continues to be thoughtful, in the sense that we're announcing today that the change will take place. We're giving you a date August 1st. That gives us a number of months for a proper transition to take place, a full download of information on the various files that Edward continues to work on. Edward himself has agreed to be available for a number of months and years, in fact, after his retirement, to be available to help Dan in any way that Dan feels is helpful to him. I can tell you that all of us, of course, everybody in a company when a transition like this takes place has to rethink how they are going to work. And I can tell you that the Board of the company is also going through that same process of figuring how best we can support Dan going forward in his position as a new CEO. It's one thing to have the CEO that has been doing the work for 20-years, leading the company is another with a new CEO. So, we are committing ourselves to spend the time and the effort required to be as helpful to Dan, as we possibly can be. And I also have to reiterate that Edward has built a wonderful management team, very capable, all in the sweet spot of their careers in terms of their experience and their age. They worked well together. I think their performance through the pandemic this year has been nothing short of extraordinary. And all the many experiences I've had in my business, I can't think of any where I've been more proud to be associated with men and women, who have really had to deal with challenges as I have been this year with the North West company in the face of COVID, and operating in the markets that we operate in and dealing with the responsibilities that we have to those communities. And I know those men and women are going to step up behind Dan, and help him really be successful in his new role. So, we are going to miss Edward, it's going to be a period of transition. But the fundamental core strengths of this company remain. We have a very talented group of managers and key people throughout the organization. We have a very strong culture of enterprise and hard work and community care. We operate in markets that where we understand our obligations, and we have done a really good job of supporting those communities in an extraordinarily challenging time for them. And we have learned through COVID that there are more opportunities for us to build the business, and those are going to be the things that drive the development of this company over the course of the next five to 10-years. I think, I'll stop there. Edward, you may want to say a few words, or do you want to?

I will start with questions and then I'll talk about…

Yes. I would say this on the questions. We're not -- this is a -- if you call and ask me, or Dan, what are you going to do tomorrow, we're just going to do what we're doing right now. But this is really, I'm trying to give you a sense of the thoughtfulness of the process, the time that we've taken, and where we're going, and I'm happy to answer any questions around that part of my comments.

Operator, can you queue any questions?

Perfect. We will now take questions from the telephone lines. [Operator Instructions] And the first question is from Michael Van Aelst from TD Securities. Please go ahead. Your line is now open.

Hi, good afternoon. So, I guess, congratulations on the quarter and on the transition that's forthcoming. But, I guess I would like to just ask or just clarify that, I guess, given that this has been a long thoughtful transition, and Dan has been around for as long as he had within the company, would it be right to assume that Dan's strategic vision has already kind of been reflected in the direction of the company for the last couple of years? And so, we wouldn't expect things to change dramatically?

Well, I think you're going to have to give Dan some time to get in the seat. But yes, this is an evolution. And from the Board's perspective, we expect to build on the strengths of the company and build in the directions that we've been working with over the last five to 10-years. But businesses evolve, and this business will evolve as it has in the past.

Right. And I guess, like a lot of new CEOs coming in, like to put their stamp on it early on, or at least in the first six months. I guess what I was trying to understand is whether Dan would feel the need to do that, if you're already involved in a lot of the strategic decision making in the last couple of years?

Dan's going to speak in a second, but I would say this. He's not becoming CEO until August. One of the reasons that we have staged the process this way is to give him some time to spend time with Edward, getting a full download a debrief on all the areas that he hasn't been as intimately involved in, as he has been, for example, in the international operations. And he will undoubtedly be asked this question in his first call, I believe it will be September. And he'll have to have an answer for you at that stage.

Okay, great. Just a comment, I hope Dan is as open and thoughtful in providing his answers to our questions on the conference calls over the next few years, similar to the way Ed has been. I don't think there's too many, any CEO that I've dealt with that has spent as much time talking about the negatives as the positives in the company. And it is very helpful in understanding your story. So, appreciate that.

Thank you for that feedback. And you're echoing something that we on the Board have known for a long time that Edward looks at things square on, with both the positives and the negatives.

Thank you.

Thank you. The next question is from Mark Petrie from CIBC Capital Markets. Please go ahead. Your line is now open.

Hey, good afternoon. And I will echo Michael's congratulations to Edward on a fantastic career and ton of accomplishments. So, congratulations to you. I guess my only -- Michael covered almost all my questions, but my only other question was just with regard to a backfill plan for Dan. And then also would Dan be relocating to Winnipeg? Or is he going to be continuing to operate out of the U.S.?

Well, I'm not Dan, talk about the backfill, but that's something we've been thinking about, obviously, as part of this transition. He is coming to Winnipeg. This is a Winnipeg based company. And Dan, who is from Winnipeg, originally will be coming back to Winnipeg.

And I can maybe jump in since Dan is still reporting to me, that we worked on a backfill plan as part of the decentralized approach. We are going to move to the President structure for both CUL and AC separately, that was in the works. So we can pull the trigger on that. And we'll have individuals in those roles before Dan takes the helm in August, and at least one of those will be an internal promotion.

Okay. Thank you.

Thank you. There are no further questions registered at this time. We'll turn the meeting back over to you Mr. Kennedy.

Thank you, operator. So, we will stop for questions again after the results are discussed. I'll just start by picking up where Sandy was that, I'll talk again about North West and my career and everything that may be of interest to you or not at the annual meeting, because I got one more crack at a quarterly report. But it has been a good process, like it's been very robust. The Board has been very engaged as you'd expect. And this has been a big piece of work for me. I have a personal stake and every sense in how North West continues. And I feel the Board has really done good work here, and I'm very pleased that I'll be able to work with Dan now in next four months. Dan and I have worked together for almost 20-years. We do see, I guess, eye to eye, but I also feel like Sandy's referred to the fact that I said this morning when we talked to our senior team that, I'd like to join a company where the 30-year guy had just left, because I think it does open up new possibilities for people in terms of the roles and the scope of what they can do. And I don't center myself to be super suppressing that way, but I think it kind of comes with the territory when you've been doing something as I have for so long. I've seen a lot of stuff and it's kind of like that Farmers Insurance. But I have also felt energized or I would have stayed this long. Everything to me is fresh and vital at North West. And I'm sure Dan will see it that way. And, I feel again, lucky and I can I'll just echo Sandy, when I look at the team, they're kind of in the prime of age and experience. It is a sweet spot and North West has got a ton of energy. And I think a lot of energy was not reignited, but it was just stoked further. We're merchants with a community focus, and who wouldn't love to being a merchant with that focus in a safe way over the last year and even this one which we're headed into. And with that, maybe I'll just segue into the financial results. I'm going to turn it over to Dan first and then Alex, and I'll come back and talk about the airline. The numbers kind of speak for themselves, they are continuation of the other quarters. I think thematically we are coming into another year that's going to have a lot of uncertainty, because we can't tell when we're going to see whatever new normal looks like. That's two parts of that. When will it revert and what will revert to? We do see a lot of stimulus in communities that we serve, ex some of the Caribbean countries that don't have a stimulus like the BVI, Curaçao, St. Maarten. But the lion share of our business is in communities that do have income supports, and those will continue, and that'll continue to help drive with our merchant instincts, very good performance we believe in the first-half. We also see broader stimulus from the Biden administration and the liberal federal government, probably in the next budget that, it’s usually good news for Northern communities. The North is strategic in a lot of ways, but the indigenous population is infrastructure starved, and the native Alaskan population of rural Alaska as well. And we are already seeing early indicators that there's going to be investments in these regions. So we think it'll probably be call it a softer landing income wise for communities that we serve, as we go into the back-half of next year and then into '22. So that's a good theme. But I know you'll probably poke and prod with your questions on what are the comps going to be. They're looking okay right now as we get into another tough comp month. But we've had good good comps into it so far. But it's all about [2LY] [ph] I know other retailers are talking about that too, and how we're comping against 2LY and obviously we got a positive comp against LY, you’re way up on 2LY. It won't always be that way through the year, we're going to have negative comps in some quarters and periods, but we just don't know when and by how much. We do feel this is set up to be probably our second best year ever, but it's going to take a lot of hard work and there's still a lot of uncertainty. So, we've kind of stopped forecasting that. But we do have good plans. And I'd like to let Dan and Alex walk you through both the quarter and give you a kind of a sense of where they see the '21 unfolding in their respective businesses. With that, Dan, I'll turn it over to you.

Thank you, Edward, and thank you, Sandy. Good afternoon, everyone. I am deeply honored to have been appointed CEO of The North West Company for the next stage of its development, and I'm very excited about our future. During my 19-years here at The North West Company, I've had the opportunity to work not only with incredible leaders within the company, but I also had the privilege of working and creating strong relationships with community leaders throughout Northern Canada, Alaska, the Caribbean, as well as over in the South Pacific. I am stepping into some gigantic shoes, but thankfully I'm doing so alongside some very experienced and highly capable leaders and passionate North Westers. I have learned and developed under Edward for last 19-years, and I'll be working together very closely with him over the next several months to ensure a seamless transition. I look forward to speaking with you more about the future of North West Company in future meetings. Now let's get down to current business. Wrapping up our fiscal 2020, it's only fair for me to start by acknowledging and thanking our teams for the terrific job done over this past year. The pandemic was and continues to be an unprecedented event, and I'm extremely proud of how our teams are responding to the challenge. They not only embodied our core values of passion of being customer-driven, but truly took to heart our role as leaders and essential service providers for our communities. Throughout the year, our teams were steered by three guiding principles. One, the health and safety of our customers and employees. Two, maintaining dependable assortment through a strong supply chain. And three, our social responsibility to our communities. We believe that the execution of these principles uniquely positioned ourselves to capitalize on market tailwind this year, and achieve our current sales momentum. Now, from a supply side standpoint, coming into Q4, we were particularly aware of the importance of having a solid strategy on assortment and inventory flow. Leveraging strong relationships, we partnered with our vendors and carriers and set up our procurement, logistics and store teams to gear up into holiday season. We planned in advance to have several event driven promotional days, scattered throughout the holiday season months, as opposed to having single day events like Black Friday or Christmas. We also included a Cyber Week event in our CUL banner. We made sure this was executed this way with a twofold objective. A, keep enforcing health and safety standards for our staff, while offering a safe environment for our customers to shop. And B, to make sure our inventory flow processes shielded any possible disruptions in the global supply chain. From a demand side, throughout 2020, we experienced a shift in consumer spending, particularly towards one stop shopping, customer stock-ups, and more in home dining and entertainment. Mobility restrictions were also a factor, especially in Alaska, with less out of market travel that allowed customers to shop more at our stores. All this was coupled with additional income support within U.S. states and territories. In Q4, the December 2020 bills stimulus brought to our market an additional $600 per person, an extension of unemployment benefit top ups and additional temporary allotments of snap funds, commonly known as Food Stamps. Partial offsetting this were headwinds in the Caribbean, notably the BVI, St. Maarten and Curaçao, without deep government resources, which have now carried on into Q4. In these situations, we have focused on cost control, execution, our signature categories and sharper sales promotions to capture available market share. Equally, we are focused on social responsibility and the well-being of communities in need. For example, given our infrastructure and leadership position in the BVI, we recently partnered with the local government to store at our facilities the COVID-19 AstraZeneca vaccines, that we've made available for distribution in the community. To date, we have received around 32,000 vaccines for storage. All right, now let's talk about the yearly and quarterly results. For the year, international sales increased 18.2% to $734 million. Same-store sales increased 13.6% coupled with very solid performance of our reopened store in St. Thomas USVI. For the quarter, total sales increased by 10.4%. Overall, the last commercial and Cost-U-Less let our food performance partially reduced by the headwinds mentioned in some of the Caribbean markets, particularly in the BVI. Our signature category program in Cost-U-Less, and programs like our Meat Packs in Alaska continue to resonate with our customers throughout the year, and during this past holiday season. Food sales increased 17.1% for the year, and 11.5% on the same store basis. In Q4, food sales increased by 7.5%. General merchandise sales increased 31.5% in total, and 31.8% on the same store basis. In Q4, general merchandise sales increased by 35.2%. Here, the supply side strategy mentioned earlier was instrumental. It positioned us to have the most relevant assortment to capture consumer spending shifts, less travel outside communities, and government income support. In the fourth quarter, category sales were led by motorized, particularly in Alaska, as well as electronics, home furnishing and seasonal categories through our banners. Gross profit dollars for the year increased 16.4%, driven fundamentally by sales. The gross profit rate decreased since the slower performance of BVI resulted in a higher blend of Cost-U-Less sales, which are lower margin consistent with the warehouse club format. Our expenses in 2020 increased 7.7% last year, when excluding impacts of higher share based compensation cost this year, and insurance related gains in the prior year. This includes around $4 million in COVID-19-related expenses, wage premiums and a 5% bonus to non-bonus eligible frontline and support office associates. Now I want to transition and talk more about what's ahead, and how we plan to maintain some of the strong momentum and market share again. In 2021, we've entered a new phase of this pandemic. With the rollout of vaccines in the majority of our markets, we expect to see an uptick of our out of community travel, particularly in Alaska. However, social distancing measures might be staying in place for the foreseeable future, and we expect degrees of travel restriction and quarantine upon arrival. This at least until herd immunity is reached through vaccination. We continue to learn on this topic every day, and we'll continue to monitor it closely. That said, we out looked at somewhere around mid to late 2021, our tourist dependent markets will start to see positive impacts of the vaccine in terms of mobility and its resulting economic pickups. In the U.S. markets, income support will continue to flow with a third stimulus package approved by Congress mid-March, and will probably impact our markets up until the middle of our fiscal Q3. We don't believe a fourth COVID-19-related stimulus will be issued in the U.S. markets in 2021, but we do see a softer landing for U.S. states and territories based on forecasted federal infrastructure spending over the next two years. Of note, Native American tribal governments will receive $1 billion in funds over the next two years for this purpose. We do expect some headwinds of the supply chain side. We have been observing delays and cost pressures in moving freight due to the pandemic ripple effects of supply demand imbalance. This was heightened with the recent blockage incident in Suez Canal, leveraging our relationships with the broader range of vendors we sourced from 2020 to mitigate these impacts will continue to be a top priority, especially for our island markets. Similarly, inflationary pressures are also a hot topic and the headwinds, we expect to encounter this year. Rising costs of commodities, fuel and freight are at the forefront of our challenges in this up and coming here. Again, leveraging and diversifying our relationships with vendors and carriers here will be the deciding factor, on mitigating some of the more controllable price increases. We will closely monitor the market and competitors in this front. But some of those rising costs are expected to be passed on to consumers in line with what other retailers are doing. In Alaska, we expect to continue growing by expanding our footprint in new markets, adding three new stores in 2021. Our e-commerce business expansion will continue to be a focus in the area to 2021, together with additional partnerships with community support programs, like the USDA Food Box program. That's all I have for today. Thank you, and I'll turn it back to you Edward.

Okay. Thanks, Dan. Actually, I'm going to turn it to Alex now, and then we'll come back on with the NSA and opening for questions. Alex?

Great. Thanks, Edward and Dan. First of all, I wanted to congratulate Dan, and share my excitement about working with him. What I can say is, I know we both share excitement about the growth potential of North West, especially when it comes to Northern Canada. And I look forward to supporting and partnering with him in his transition to CEO, as he fully takes on the reins from Edward. So, now I'll turn to Northern Canada. In Northern Canada, we ended the year strong with continued comps across food in general merchandise sales. Performance was driven by the same factors as earlier quarters. Travel restrictions, our strong in stock positions and everyday community offerings, coupled with continued income support from COVID-19 programs. Similar to International, these results came about not by luck but as a result of commitment, passion, and truly enterprising behavior by North West employees, from procurement marketing through the logistics and all the way through to the employees in our stores. On our last call, I'd shared our sales outlook remains largely positive going into this year. We anticipate continued travel restrictions through part of Q2, and income support through COVID-19 programs, along with Day School settlement payments. This outlook has not changed. Our comparable sales to-date, our one-year comparable sales to-date have remained positive, even against double digit increases last year in Q1. We anticipate that this will start to trend flat to negative as we start to compete against more travel and outstanding. As this trend happens, however, we still expect positive income factors to give us a soft landing, with less new versus old normal travel. Combined with how we are [ph] to get sales, we anticipate and we believe we can get CAGR increases versus 2019, well above our historical growth rates. We feel positive about we believe to get and keep sales, as COVID-19 has given significant insight and confidence into customer and market share growth opportunities. And we have been aggressively working on initiatives to hold on to as much as we can, all to increase market share gains once we're passed COVID-19. I'll talk about few of them today. Firstly, we're actively reviewing our buying and assortment plans to incorporate learnings from COVID-19, whether it be new items, new assortments, or promotional and pricing changes to retain greater market share in heavily out shopped categories pre-COVID. Secondly, we're starting to see benefits from our continued partnership with GT on food and general merchandise procurement. We do anticipate some cost benefits on the food side this year, and we have started flowing GT General Merchandise assortment to our Northern stores, which we will leverage to create new item excitement, great new opening price points and drive incremental market share and sales. Finally, we're turning our mind to pursuing new business opportunities. It is your message ever already referenced opportunities around telehealth and virtual health and tele optometry. In addition to these, I want to talk about our business to business growth. COVID-19 has opened our eyes to the significant funding that flows into communities through various government programs, and our ability to service community's needs through our business to business sales teams. We see significant momentum going into 2021, and we're now building out a plan to grow this business over the next few years. Anticipate, being able to share more details and the progress of these various initiatives in the next one to two quarters. Finally, I want to talk about pricing. On the last investor call, I mentioned that we're delaying a full roll of the pricing investment until the second-half of this year, 2021, when we had a clear read on payback and results. That continues to be the plan. For 2021, we anticipate about $4 million to $6 million investment for the full year versus pre-COVID in 2019. In the meantime, though, we are continuing with our pricing tests, so that we're ready to measure and scale once we see clear payback post-COVID-19. In summary, I'm optimistic about the outlook for Canadian retail on a two year comp basis. COVID-19 and our ability to meet the needs of the customers and communities that we serve has clearly helped us to gain market share. Just like in our U.S. markets, we expect Canadian federal infrastructure spending to be an investment and wage economy driver in the regions that we serve over the next two years. Together, these factors give us confidence, go harder, faster, leverage the enterprising behavior of our people here in North West, to retain as much of their market share once COVID-19 subsides. Many of these initiatives are now underway in Canada, and I look forward to sharing the results with you, working with Dan to shape the strategy over the next few quarters. And with that, I'll hand back over to Edward.

Okay. Thanks, Dan and Alex. So, I'll just close with some comments about the airline and other corporate developments that are COVID-enabled, and may add a bit more color on the outlook. So, the NSA had another strong quarter. There's a ripple effect on the amount of tonnage that we're moving through our stores. And in the travels through our air cargo division, we've also increased our winter road. And we'll have a big bump in our sealift left, as we look at our forecast for the year on tonnage expectations. So, high efficiency with our ATR program. We've also approved today the acquisition of a fourth ATR. It will be a wide door plane that will give us an advantage. There's only one other wide door cargo aircraft of this type in the North today. So this will help us in terms of efficiency and speed further, as well as open the door literally for more third-party revenue, especially in the resource sector and other specialty payloads that are at premium revenue rates. Offsetting this was the passenger side of the business, which is affected, of course, by reduced travel. And it gives us a real good lens into how travel is taking place or not taking place in the North today. And I'd just make a point about this, we think about travel in the South, and by the South, I mean urban parts of the world. It's for business and leisure. The North, it is more of a highway in the sky. And so people will travel just because there's no road. So they'll use it for more pedestrian purposes. And we'll see how that recovers. The vaccine rates are very high in the North today. Alaska and Nunavut, good penetration or distribution of vaccines. But, it isn't the same in their destination cities, i.e. coming down to Winnipeg or to Thunder Bay into to Ottawa or Edmonton, for example. So, there certainly has not been any recovery, any meaningful recovery in passenger travel. We did get support in the quarter of I think it's in our numbers of $2.3 million. That was the combination of the Qs payments that have been going on all year. And then this a new program the federal government pushed into the provinces of Northern air carrier support. We didn't take up all the money that was put on the table for that program, because we didn't need it. And I'm not sure, again the money was there and that's another story. But we did need a bit of assistance we felt, it's not a lot of money, but it helps. I mean, the past airline itself would not be able to provide the level of service it does without that type of support. So we certainly appreciate it. And then like the rest of our business, we know we forecast more growth in tonnage over 2019, for sure. So the airline will have we can safely say a good year that way on the cargo side, which is 80% of the business focus. And the passenger business will really depend on how the rest of the North goes in terms of mobility. On corporate developments, I've mentioned before that we are looking at acquisitions, tuck-in acquisitions and partnerships and transportation and wholesaling in rural retailing, vertical opportunities perhaps in the Caribbean, that's been successful for us and the BVI. It's an interesting time. I mean, I read about broadly the activity in M&A. We're not doing mega sized deals, but you're looking at denominators that are maybe inflated by COVID. So everyone's got to take a deep breath here and back that out and look, as you're trying to do, and you're evaluating North West of course, and what are the new normals. And I think this is still a time to do it, if it comes around. And maybe back to the question about CEO transition, this is something that won't be disrupted by who's in the CEO seat. I mean, these kinds of acquisitions, and this kind of on strategy growth is completely aligned between Dan and myself, and we won't miss a beat. If something is underway, if something happens, the fact that one person is leaving and fading to the back and one's coming to the front, won't make a difference there. We are going to continue to be optimistic and a lot of this is, of course, about a willing buyer and seller. So, I just want to put that out there because sometimes, with North West, we do like to talk about things that could happen, so there's no surprises. And it is part of our growth mandate is to definitely do that. And Dan certainly has put on the table, new store growth in Alaska, which he would like to accelerate even more, more tuck in acquisitions there as we find them. And the last thing I'll say on the growth side, that's more organic is in telehealth. We're opening our first telehealth physical. I know that's inconsistent or oxymoron, a physical and virtual health center in Calgary [ph] shortly. It's a new concept store that I might have described before that marries up a Shoppers Drug Mart in a bit of a whole foods and a health and wellness focus. But we're also going to have a telehealth office, and tele-optometry. So these are first for us. But the basis of our telehealth is really about a platform that we can partner with indigenous health organizations to deliver into Northern Manitoba, Saskatchewan, Ontario, and counting on the billing to continue to allow for virtual physician appointments. So, we're working on the platform side and the relationship side. We'll have more to talk about there in our next quarter. And of course, that part is new, I won't give you a forecast on the impact, except that it could be material for the company if we can get our ducks in a row there. And then just to wrap up again. As I said in the beginning the tone for us is pretty positive. You heard it from Dan and Alex. We're also realistic where we do have situations in tourist dependent Caribbean Islands, and things just uncertain on how it's going to unfold. But we believe overall given and this is I know very tough one to measure. But within the Company, I mean, when you think about North West, our comps are usually okay when they're good, but they're not high-single-digit. And so the icing on the cake has always been general merchandise. And underneath it, a very strong food convenience focus, layering on the services help financial service. But what we've seen with the general merchandise piece, and I think buttress by the deal with Giant Tiger, some of the sourcing things that International has done, that we can grow this and maybe it'll become another layer on the cake and not just the icing. I do believe that's a realistic opportunity for North West, that we can grow some top-line, hold some top-line business, by basically putting more of the right merchandise in front of our shoppers, where we might not have had the same open divide dollar approach in the past. We're now targeting higher targets or sales against 2019. And being I think realistic on what we can sell and what people will buy locally, if you've got the right product and that they don't necessarily want to travel out of town for i.e. for a mattress. So, that cumulatively gives us confidence as well that we can hold share and also be held by some income tailwinds that continue into '22. Okay, I think that's a lot of talking. Appreciate the patience. And operator, we will turn the call back over to any questions.

Thank you. [Operator Instructions] The first question is from Michael Van Aelst from TD Securities. Please go ahead. Your line is now open. Q - Michael Van Aelst: Thank you. So, first question is in the press release you've talked about enhanced customer and community relations that will enable new partnership opportunities in a post-pandemic environment. Can you elaborate as to what you're talking about in this? A - Edward Kennedy: Sure. I want to give Dan and Alex a bit of the answer here. Dan, perhaps you could start. I mean, there was the Food Box program. And then Alex can talk about our B2B, and I think that will address it. A - Dan McConnell: Okay. So, as part of our approach to COVID, basically, as you recall and from my discussions with you. It was really the health and safety of the supply chain optimization, and then reach out to community. In our reach out to community, we started unfolding different needs within the kind of government sector, whether it be the USDA contracts that we've now been awarded, and it's really getting food out to underserviced communities fresh food. We're now in the business of distributing boxes of produce and meat to communities that weren't able to get this before. So, this was really as a nature of, there was some CARES money, that they wanted to be able to be effective and efficient with it. And be given our infrastructure, we were the only ones in Alaska, for example, that were able to kind of deliver this product to all the different recipients in the different communities throughout rural Alaska effectively. So, that's one example. And I think, probably I'll pass it over to Alex to probably talk about some of his B2B examples, all under the same kind of tone. A - Alex Yeo: Thanks, Dan. Building on Dan's example, so what we've seen during COVID is that we've developed -- we built to service communities needs on different kinds of business to business requirements, as a result, increased funding increased needs from the community. So examples would be -- and so that's been a huge sales driver for us. And what we found is that we have a value proposition that's really strong, because, again, because of an integrated logistics in our ability to pick and pack rates. So the ability to package a product, do all the work and get it there to communities that need it in record time in the format impaction, one that's been really a big driver for us. And we've seen repeat business, improve community relations, as well as, I would say a much a new customers and new types of SKUs that we've never really serviced before. So, it's given us a lot of confidence, that this is something we could build on and maintain going forward and tap into almost a different stream of income in the communities that we serve. Q - Michael Van Aelst: What type of SKUs are we talking about? A - Edward Kennedy: What type of SKUs we are talking about? A - Alex Yeo: So traditionally -- sorry. Go ahead, Edward, do you want me to answer that? A - Edward Kennedy: Yes, sorry. A - Alex Yeo: Yes. So, traditionally, we've seen we've generally been servicing more food, more big ticket furniture, big ticket items. But what we found now is that we've really diversified, like we in recent orders, we've diversified other kinds of GM products. School supplies, things like motorized parts. So, a much wider variety of different kinds of SKUs that we service and that we have in the past. A - Dan McConnell: I can actually jump in there as well, Alex. If you can believe it, while PPE is the obvious. We started getting into masks, cleaning equipment, but we actually, even because of our infrastructure, and we understand how to get things into remote locations, we delivered 75 hospital beds up to some of our communities throughout rural Alaska. So, there was really no stoppage. Whatever we could use our infrastructure for to support our communities, we took it. So that's an example. Not that I think we're going to be getting into that, provide a distributor of hospital beds in the future, but at least our community members who have capital spending budgets that did have needs and might not have the outreach that we do, given the type of business we have. We've created these partnerships, where they come to us and ask us to source some of these different items that we can get. A - Edward Kennedy: So, put in context, I guess, between both groups. I mean, we went from doing a few million dollars in these areas. There's a lot of local contract B2B done by store managers, but to put our arms around bigger contracts. And some of this is COVID-enabled, some of it is the stimulus enabled. Alaska has a billion dollars allocated tribal governments by the Biden administration, over the next two years it's going to be spent on. It's kind of a communal consumer purchase. They could buy fridges for all the all the houses. They can be doing a furniture mega buy. It could be institutional like for a senior's home. It could be buying out in the land harvesting equipment for indigenous hunters and trappers. So, all these things have been spent in the past. Some we've gotten, but we really haven't systematically gone after. Now we're building actually a contract sales group to do it. And top-line, we could hit $50 million in 2021 from the low-millions. The delta was very large in '20, and we could probably double it again in '21, now that we understand how it works. A lot of relationships, back to the initial question about community. And at the state level, having C-level folks now in the state of Alaska is making those connections. We would have never gotten the USDA contracts, which are multimillion dollar contracts into this year without that. And so, it seems to be a good circle, one of those virtuous circles or flywheels that we can get going, and we'll see where it leads. Q - Michael Van Aelst: Okay, great. And then your COVID costs were a little higher than I expected in the quarter. Can you give us an idea of where you think they're going to be going forward? A - Edward Kennedy: Well, I mean, when you are talking about the COVID costs, we didn't decide to do some things at year-end that might have bumped it up. Like we paid a bonus to I'd say non-bonus eligible, but hourly paid staff, non-store staff. Will we do that again in 2021? I wouldn't want to say no, but I'd say that that was very unusual. The store ones there were some retroactive stores things done as well, which are the true things up there. So, I think if that's what you're talking about and if we go forward and look at the situation, the guideline we've used internally is where there's been community spread and really at risk or more stressful working conditions, we've put it in place. But to give you some context there, I think right now we don't have it in place anywhere internationally. And in how many communities in Canada, Alex, would we have it in place right now? A - Alex Yeo: About 10 to 20 on average during the quarter. A - Edward Kennedy: So, it's going to ramp down significantly in 2021, and supplies will also ramp down because we’ve got an overhang of stock up PPE for our staff. I can't give you more guidance on that, except that the numbers are going to come down quite a bit. It's a positive variance, I guess, if you want to call it that in our expense forecast for 2021. Q - Michael Van Aelst: And then finally, on the insurance costs. You called it out as a higher cost in Q4, but you didn't mention it in Q3. So, I'm wondering if this is a new cost. And if so, do we expect it's going to continue to rise during 2021? A - Dan McConnell: I think, Michael, there's a bit of a catch up there in terms of how the timing of our policy renewals. So, that would be the factor that I think in my mind tipped. I'm mentioning Q4 versus Q3, our insurance costs have trended up, I would say probably the last three years, certainly to hurricane claims and some fire insurance claims and so on. We do expect that those increases to moderate as we get into 2021. I say expect, because it's a very difficult insurance market. And so, as our policies renew, we'll see how that plays out going forward. Q - Michael Van Aelst: All right. Thank you.

Thank you. The next question is from Mark Petrie from CIBC Capital Markets. Please go ahead. Your line is now open. Q - Mark Petrie: Yes. Good afternoon again. Just to clarify on the B2B opportunity, so these are products that you're not just -- this isn't just a sort of a supply chain shipping opportunity, but you're also not taking inventory on these or you're taking inventory, but you don't have standing inventory on these products. You're basically getting an order and then and going and sourcing them. Do I have that right? A - Edward Kennedy: Yes. I mean, as we get better at this, I think there's some B2B that we actually would put up ahead of time, and see if when I wrote in my favor those long plastic tables that you see, that's a top seller and Cost-U-Less. We do sell it in the North, but we could sell more. We probably ship those ahead of time and take a forward buy. But the rest of what you're talking about is our contracts that are RFP or to relationships. We just find out about them and they may not be fully tendered, but they've got to be shipped buyer. Q - Mark Petrie: Okay, thanks. And then I wanted to just ask and hoping you can kind of elaborate on some of the opportunities you see in your assortment to capture a greater share of wallet in Northern Canada, not B2B but in the consumer business. Is that mostly in big ticket or I don't know any commentary you can provide would be great? A - Edward Kennedy: I'm going to turn it to Alex, and I'll set up a bit, Alex, that maybe it might be a good way to circle back to the price investing in food. And some of the things that we've learned from seeing whether there's been hyper sales growth in certain items and categories, what that told us about opportunities and we could give some of those examples. Alex? A - Alex Yeo: Yes. So, I'll give you more color. The story is a bit different food versus GM. And in food, what we've really discovered is, as Edward has mentioned, the full market share we're losing to out shopping on the different modes. So winter road, for example, we've seen beverage sales increase a lot this year, because winter roads are no longer open or not open. And so that told us there was a lot more market share to be grabbed through in beverages, for example. So, what that then tees up is, we want to be more aggressive either into the promotional leverage on the pricing investment to really go after the market share, we're losing some of those out shop category. So, with food, it's a lot more around pricing promotions, a little bit around assortment. The general merchandise, I think, just by sheer nature of trying to meet demand, we've number one built new programs and new sourcing partnerships, and also gone after new items at different price points that we never had the courage to do in the past, and we've seen great traction and great sell through. We mentioned mattresses, but we've also built gone to new programs in hardware, new items in gaming, electronics. So, it's not just big ticket, it's really we've seen significant lift and traction in new items and new subcategories and assortments across a broad range of general merchandise products. And nice things that's really coming well together with GT, because GT now gives us this great new merchandise we can layer in, along with our other categories that go after assortment opportunity. So, in summary, I would say with food, it's about going after out shopping, pricing promotion, logo of assortment. In general merchandise it's about the confidence to really build and go after new categories and programs more aggressively, because now we've got confidence that we'll be able to do it and hold on to that market share. A - Sandy Riley: Okay. Operator, next question? Q - Mark Petrie: Sorry. I was just on mute. Do you mind if I keep going? A - Sandy Riley: Yes, go ahead. Go ahead, Mark. Q - Mark Petrie: Okay. Yes, sorry about that. I was on mute. Just to follow-up on the general merchandise specifically. I think you've in the past had strategies to sort of broaden the assortment and try to sort of attract different opportunities that you've seen. This one clearly is different, because it's sort of catalyzed by the pandemic. But are there sort of learnings from some of those past experiences and previous initiatives that you might shape or change your approach this time around? A - Edward Kennedy: Maybe I'll wait in a little bit, because I've been through a lot of those cycles. Although, Alex and Dan can both answer. You stopped our line with income. Customers that we serve are lower income, and there's a necessity, a little bit of impulse, but a necessity aspect to what they buy. And some of these big ticket items that we refer to may sound like discretionary, but really, it's about replenishment of household inventory of couches and TVs, and even boats and motors that are used, or ATVs, for everyday livelihood. So, there's tremendous demand for that, when you look at the inventory, the personal household infrastructure in the North. So, it's got to be tied to income. If there's a wage economy, like happens with construction projects, and that's why we're kind of bullish on this news of both federal governments, U.S. and Canada. Because we know where that goes, it goes into spending in our store if we've got the product. So that's the first lesson learned, I mean, you can only promote so much sales. Now, having said that, there's also credit capacity. And I think there's a similarity here too, if there's one that I can think of in urban markets, we all know people have kind of taken care of their personal balance sheets more over the last year. And in the North, it's not so much becoming net savers, but they're not as the same level of borrowing and they open the buy open to borrow they've got is much is available. So, we've talked about this too, and whether that happens in the back-half of this year in '22. We do have that offer in sort of our toolkit, which is credit. And we think that both ways, both from wage economy, income transfer, and then financing that is supported by clean personal balance sheets that we can put product in front of our customers that they can afford to buy and they want to buy. So, that's huge. And what I'm talking about here is very granular by region, by community, although some of the income influxes that we're seeing are going to be broad. The other key lesson for us is there is a saturation. I hate to use that word, John only use it. He is our CFO. He is thinking about open to buy and how many more snow machines can you sell kind of thing. So, we do look at per capita. I mean, we're selling into small communities so we know how many people live there, and how many snow machines are bought and how many would probably be needed to bought the next year. So, there's a bit of that as well. And the final learning we have, which is more on the up side to really get aggressive is to look at where we're getting high, high per capita penetration. It could be Maxus, could be something like trampolines. It doesn't sound very -- it's an up and down business. But we sell a lot of trampolines in communities, say 100, and in the same size community we might sell four. That's not good. I mean, we should be selling 100 in all communities. Our analysis of when we started to see these kind of sales increases and we look at patterns and the way people buy and shop, all things being equal, then we kind of start to triangulate or close those gaps. But we also are -- I'm encouraging open to buy on, I'll use the Maxus in the trampolines, because I don’t think we’re going to go along in those. If we had to carry some over to the next season, there's no tech obsolescence. Our terms might go down a bit, but we'd have the product in stock to sell. We've got to be more careful on fashion inside. With GT, I mean they do a lot of that. They do trend and they do treasure hunt. We'll be looking for their best sellers to offset that risk. So, we know that part. They're small. The flip side is, because they're small communities, apart from Cost-U-Less, you can't just knock it and let it fly. There's only so many communities, if you get it wrong, you can't efficiently mark it down. So, we do -- I think we have a long lesson there learned that we're not going to take risk to chase sales. But I can't say it better than I think Alex and Dan already have that we do have a lot of confidence based on what we know will sell from what people bought in the last year and continue to buy into '21. Q - Mark Petrie: That's great. Appreciate all the comments. Thanks.

Thank you. There are no further questions registered at this time, I'll turn the meeting back over to Mr. Kennedy. End of Q&A:

Okay. Thanks, operator, and thanks to everyone on the call and everyone at the North West end. For the last time, I'll say see you on the next conference call, because that will be the last time I am on the conference call. It'll be our annual meeting. So, do we do a conference call after the annual meeting?

Yes.

We do. Of course, we do. In my dotage, I'm forgetting this. Anyways, we look forward to reporting on another very interesting year for those in our sector, of course how's it all going to turn out and Q1 will give us another big window into how we're doing. And we look forward to talking about it then. Thanks very much.

Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your participation.