Good day, and welcome to the Ingles Markets, Incorporated Third Quarter Conference Call. Today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the Chief Financial Officer, Mr. Ron Freeman. Please go ahead sir.

Thank you. Good morning. Welcome Ingles Markets fiscal 2013 third quarter conference call. With me today are Robert Ingle II, CEO and Chairman, Jim Lanning, President and Tom Outlaw, Vice President of Sales. Statements made on this call include forward-looking statements as defined by and subject to the Safe Harbors created by Federal Securities laws. Words such as expect, anticipate, intend, plan, likely, goal, seek, believe and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed on this call. Ingles Markets, Incorporated does not undertake and declines any obligation to update publicly any forward-looking statement whether as a result of new information, future events or otherwise. For a description of factors that could cause actual results to differ materially from that anticipated by forward-looking statements, you are referred to the company’s public filings including the Form 10-K for the fiscal year ended September 29, 2012. In accordance with the longstanding company policy and in recognition of the extremely competitive nature of our industry, this call will not address individual competitors or Ingles Marketing strategies other than what is included in the company’s public filings. This morning I will provide you with a summary of our third quarter and nine month results followed by additional comments. After that, we will be pleased to take your questions. Our press release was issued this morning and is available on our website at www.ingles-markets.com. We expect to file our 10-Q for the quarter next week. Once filed, it will be available via our website as well. We will begin with our third quarter results. Third quarter 2013 net sales rose to $931.9 million compared…

(Operator Instructions) And we’ll take our first question from Damian Witkowski from Gabelli & Company. Damian Witkowski - Gabelli & Company: Good morning.

Good morning, Damian. Damian Witkowski - Gabelli & Company: You said you saw strength in certain categories that not really helped your gross margin here on the products side. Can you talk about which categories in particular and kind of trying to give us the sense of what does that mean, is the consumer continues feeling better and are you still seeing that?

Well, I think the consumer is felling better and that is reflected in greater purchases of some higher margin products and we’ll certainly hope that trend continues. Damian Witkowski - Gabelli & Company: No, as you – so is it produce, is it prepared meals, I mean is there other categories in particular that are jumping out?

Yeah, certainly the perishable categories carry a higher gross profit than the non-perishable categories too and that’s where we are seeing a little bit bigger growth, you’re right. Damian Witkowski - Gabelli & Company: And as a gasoline prices, I know we’ve talked about this for years now, but I think at different points in time and the economy consumers reacted differently to higher gas prices, is this time a little different, I mean as gasoline prices climb are you seeing anything different is the consumer sort of now saying well, this is normal and I’m not really going to spend less or cut back on my spending and what I buy?

I think people have gotten used to volatility in gas prices and they don’t necessarily change their behavior because of changes in gas prices. Damian Witkowski - Gabelli & Company: And then can I think just switch to the competition side, I know you won’t comment on anyone competitor, but just A, want to get your sense competition overall is it status quo sort of rationale, I mean, it’s always a competitive business, but is it rationale or are you seeing anyone or anything sort of changing there. And then longer term I guess with Kroger now entering your territories, do you think that A, once they complete the purchase of Harris Teeter if they are the eventual winner. These things they are going to try to expand within your territories, try to – they usually go into if – when they go into the new territory to try to build out around it and do you think this will either discourage or encourage others to come into the area?

We are going to back to what you first said we never talk about individual competitors. That said, the competitive landscape right now is somewhat as it has been recently. All the names of other people that you mentioned were already competing with them and some of our marketplace and our focus is going to be what we do with our stores and how we want to improve our business and grow our sales and profits that’s where our focus has always been and that’s where it’s going to continue. Damian Witkowski - Gabelli & Company: And do you have the incremental interest expense in the quarter from the distribution center loan, bond or?

I don’t have that information at my fingertips, no. Damian Witkowski - Gabelli & Company: Thanks Ron.

You’re welcome Damian.

We will now take our next question from Bryan Hunt of Wells Fargo Securities.

Good morning, Ron, this is Kevin McClure standing in for Bryan. I want to just follow on Damian’s question about the gross margins, highest gross margins in almost three years and trying to get a sense, can you may be delineate for us how much of that margin improvement was related to the mix shifts that you referenced versus say the generic drugs in your pharmacies versus the operating efficiencies at the DC?

Yeah, we don’t provide that type of granularity in any of our public filings in discussing our gross margins, but every factor you mentioned certainly helps that.

Got it, okay. And do you think you mentioned that the consumer is feeling better. Do you believe that you could eventually restore margins to previous session levels in the 24%, 25% range?

I will hate to speculate on that because there are so many factors involved in that beyond consumer sentiment, certainly we’d like to had that happen, but I don’t feel qualified to make that assumption.

Fair enough. And can you provide us an update on the Mills River store that opened, I know it just opened, so maybe premature. But how is it performing so far relative to your expectations and how the sales tracking relative to some of your other stores?

It’s a beautiful store, it’s exceeding our expectations and we are very, very pleased with it.

Okay. And as far your 2014 store development plans, have you set a number of stores that you intend to open yet in 2014, I know you said – you sent us the CapEx guidance, but how many stores are baked into that?

We are still finalizing that just because the time period is so lengthy in developing a new store, we’ll hope to have some additional guidance on that by the time the 10-Q comes out, but we are comfortable maintaining our annual CapEx range that we’ve disclosed and we’ll try to provide more detail on that later on.

Got it. Last question for us, I don’t think you shared this in the past but I was curious, can you provide what the average cost is for a small scale remodel?

No, we don’t disclose that level of information.

Got it. Thank you for your time.

Sure, thank you.

We’ll take our next question from William Reuter from Bank of America/Merrill Lynch. William Reuter - Bank of America/Merrill Lynch: Good morning.

Good morning. William Reuter - Bank of America/Merrill Lynch: I was wondering kind of off the heels of that last question, if you can talk about how your recent small remodels have been performing whether they’ve been in line or better than you would have expected?

Well, the number of them that we’ve done that the expectations that we have can vary a little bit, but it’s a good program and we are going to continue to do this because we’ve been pleased with the result so far and we still got more stores we would like to execute that program on. William Reuter - Bank of America/Merrill Lynch: Okay, do you or have you ever provided what the payback period is on those investment dollars that you don’t disclose?

No, we have not. William Reuter - Bank of America/Merrill Lynch: Okay. Is there any plans that currently you guys pay quarterly dividends any plans to change that and do a one-time dividend such like you did at the end of ’11?

Well. the one that we did at the end of ’11 was primarily driven by the upcoming changes in the tax treatment of dividends. So, unless something weird happens again to the tax laws, I don’t see any changes in our current dividend policy. William Reuter - Bank of America/Merrill Lynch: Okay and then lastly I know you guys have a – you in sourced your production of ice and I was curious whether you guys had given thought to selling this at this point to other retailers or supermarkets?

We had the capacity to do that by design, our primary goal is to make sure our stores have enough ice, but we do have the capacity to do that and we’ve actually done a little bit of that in the past. William Reuter - Bank of America/Merrill Lynch: Okay, alright, thank you very much.

You’re welcome.

We’ll now take a follow-up question from Damian Witkowski of Gabelli & Company. Damian Witkowski - Gabelli & Company: Hi, Ron, just going back to the remodels, I mean, if you look at our 204 stores, I mean typically when we do a remodel how long does it last?

How long is it takes to do? Damian Witkowski - Gabelli & Company: No, I mean so if we do a remodel is it, are you good for the next 5, 10 years, I mean what was typical, how many years dos it usually size for?

Damian I can’t say on that because it depends upon the store and also it depends upon the market around the store. Damian Witkowski - Gabelli & Company: Okay.

One of the great things about this program and one of the great ways that we try to approach our CapEx is we can change very, very quickly. So, circumstances change in effective market then we will react to that. Damian Witkowski - Gabelli & Company: Can you give us an example where you maybe did some a remodel, a small remodel in the last five years and then you had a competitor open up that and you needed to do something I mean can you just talk about maybe what that something was and really just that?

Well, that circumstances certainly happen but I can’t go into much details to exactly how we reacted, but we did. Damian Witkowski - Gabelli & Company: Okay. And then sort of total debt that you paid off I know the fully loaded $575 million to $675 million outstanding it was about 9.5% cost. But for the rest combined what’s the – what was the average cost of that debt that you retired?

Well the other debt that we retired was what we had outstanding on the line of credit and based on the various borrowing options that line of credit cost us somewhere around 4% this year. Damian Witkowski - Gabelli & Company: Okay, okay, okay. And then just rental income it continues to decrease is it that you are strategically sort of renting few of these properties you maybe remodel them or something like that or what causing that?

Well, we’ve always had a policy to weigh or if we believe that some tenant space might need to be used for a store expansion then we will manage the tenant space that way. So, and we also want to make sure that we don’t have any buyer that competes with on the tenant space. So, in the cases that you mentioned and especially since the economy is getting a little bit better that’s one of those things it could happen in that circumstances. Damian Witkowski - Gabelli & Company: And I don’t think you disclosed these numbers but I’m just curious if you look at gasoline and milk and both of those categories, I know gasoline gallons you said were up – pennies per gallon from both categories?

I don’t have that information handywith me right now there. There hasn’t been huge change in either one of those, but certainly gas and milk are always two very competitive products and that’s no different. This quarter then it’s been in flat quarter. Damian Witkowski - Gabelli & Company: Alright, thanks again, Ron.

Thank you, Damian.

(Operator Instructions) And we have no further questions in the queue. I’d now like to turn the conference back over to your host for any additional or closing remarks.

Well, thank you. We appreciate everyone joining us today. And we look forward to speaking with you next in December where we will talk about full year fiscal 2013 results. Have a great day. Thank you.

This does conclude today’s conference call. Thank you all for your participation.