Good day, everyone, and welcome to the Ingles Markets Incorporated Third Quarter 2014 Earnings Release Conference Call. Today’s call is being recorded. At this time for opening remarks and introductions, it is my pleasure to turn the call over to the Chief Financial Officer, Mr. Ron Freeman. Please go ahead.

Thank you. Good morning, and welcome to the Ingles Markets fiscal 2014 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 statements, 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 will refer to the company’s public filings, including the Form 10-K for the fiscal year ended September 28, 2013. In accordance with a 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’ll 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 later this week. Once filed, it will be available via our website as well. We’ll begin with our third quarter results. Net income totaled $13.8 million for the three months…

(Operator Instructions) Our first question will come from Damian Witkowski with Gabelli & Company. Damian Witkowski - Gabelli & Company: Just quickly, number of stores, is it 201 at the end of the quarter?

It was 203 at the end of the quarter. We did close a couple of stores right after the end of the quarter. So, currently it’s 201. Damian Witkowski - Gabelli & Company: And those stores are - you actually closed them and you won’t be reopening them or is it just closed for remodeling?

They are closed with no plans to reopen in the current location. Damian Witkowski - Gabelli & Company: And at these stores, you own the real estate on or are these stores you are leasing?

They are both owned stores. Damian Witkowski - Gabelli & Company: Can you just give me a little bit background, I mean it’s been a while since you’ve actually closed two stores in a quarter, I mean was this planned for a while? And then, what are you going to do with the real estate that remains?

They didn’t meet our ongoing plans, and so we’ve got - since we own the property, we have some redevelopment operations or options either to lease the space that we’ve vacated or to consider a sale of the entire properties. Damian Witkowski - Gabelli & Company: And do you have a preference or it’s too early to tell?

It depends upon what the numbers say, that can grab our preference. Damian Witkowski - Gabelli & Company: Where do you think you will end up at the end of the year, at the end of your fiscal year, I mean are you obviously going to open in those markets where you closed those particular stores? Are you opening a new store that’s sort of is going to replace that store, but on a better corner?

No, we’ve got a store under construction that will open right around the end of the year, maybe either just before or just afterwards, but it’s in a different location. Damian Witkowski - Gabelli & Company: So by the end of the year of around flat, 202 stores or so.

That’s correct. Damian Witkowski - Gabelli & Company: And then, just I mean the gross margin, ex-fuel, did well in the quarter and improved 20 bps, you still have, I’m assuming you are still seeing inflation, so just your thoughts on which categories are the worst, is it still meat and produce, and then, just general thoughts on passing that along to the consumer?

They seem to be getting a little bit better in meat and produce, and that’s certainly helping out. Again, I wouldn’t necessarily say that’s inflation driven. It’s really just more what’s been happening with fee costs and then the competitive environment, but we’ve been pleased with the margin increase and it’s been pretty broad based for us.

(Operator Instructions) We’ll go next to Bryan Hunt, Wells Fargo Securities.

When you look at your customer counts that were up, if you adjust it for Easter, would you still be up on customer counts?

I don’t have those figures to adjust for the Easter numbers, but typically what we see as Easter is, it’s the same number of customers, they just come in and buy a lot more.

You are exploring the gross margin there for a minute, was there any particular driver, was there efficiency benefit or mix benefit or just better alignment, lower promotions, can you kind of explore what were the drivers behind the 20 basis points increase?

We continue to get from distribution efficiencies with our new warehouse that’s been open now for a couple of years, and as we mentioned to Damian a moment or two, we’ve got a little bit of relief in the meat areas, and there have been some favorable mix changes. We’ve really been trying to hit every aspect of margin influence that we can without raising prices wherever we can, where - we just don’t want to have to do that, if we can.

It’s where that we see that your SG&A dollars remain kind of flat year-over-year. Can you talk about what was the driver behind SG&A remaining relatively flat as a percentage of sales, and whether you can continue to leverage your SG&A, you think, going forward?

It was certainly our plan to continue to leverage the SG&A. We haven’t been adding a lot of square footage over the last year, so the headcount necessary to drive that along hasn’t been there. And in the past couple of years, we’ve devoted a lot of time and effort and cost to making some improvements inside the stores, and those improvements are starting to bear out in our higher gross margin. Our insurance costs have had good experience so far in our self-insurance programs. So we’ve had a few things making contributions, but no one overriding factor there.

And then, two more questions. When I look at the stores that you all just closed, is there any way you can give us locations and were those stores profitable?

Both stores were in the metropolitan Atlanta area, but we would never talk about individual store performance, and they were old stores, smaller size, just didn’t fit into the long-term plan for us.

And lastly, when I look at kind of your portfolio of properties, how many real estate locations do you have for future development at this time?

I had to go look at our last Q or last K. I think we’ve got maybe nine undeveloped sites out there. I could be off by one or two on that, but it’s in last year’s 10-K.

At this time, we have one question remaining in queue, so I’d like to give the audience another reminder (Operator Instructions) We’ll go to William Reuter with Bank of America Merrill Lynch.

You talked in your prepared remarks about fuel margins that were a little bit lower on a year-over-year basis, and you talked about promotions. I guess, was this more due to competitive activity or just an effort to drive traffic at your stores, if you can talk a little bit about why that resulted?

And then, you mentioned that you’ve seen a little bit of relief on the meat side, can you talk about in terms of your average ticket being up, I guess, 1.8%, how much of that would have been due to inflation?

No. Again, every major part of the product lines reacted a little bit differently, again I’d say we got some more positive benefits on the meat department than we did in other areas, but it’s not a correct assumption to say, we had 1.5% inflation and our ticket is up 1.8%, it’s just not that direct of a correlation for us.

And I guess one last one from me. I don’t know if you guys have mentioned how many remodels you are planning on doing as part of your CapEx budget, and how much your average remodel cost at this point?

We haven’t spoken in very precise terms on either of those, but we are in our third year of going through and looking at our store base, and as economic conditions have dictated, we’ve gotten a lot of benefit from doing relatively modest, from a cost standpoint, improvements with inside our stores, don’t involve any additional square feet that completely changes the look and the way the stores marketed, and it’s been a great program for us.

I think -- I guess what percentage of your stores do you anticipate, I guess, doing work on over the next year or alternatively do you have any data point you can give us in terms of what percentage of your stores have been touched within the last five years or 10 years, anything like that?

Probably 80% of the store base has been touched in the last three years, so we’re kind of coming to the end of the program because the other 20% of the stores are pretty much new stores that we’ve built over the last five to 10 years or so. So, we are substantially through that project. We still have a few more we wish to do. But again we’re much closer to the end of that process than we are at the beginning of it.

And then, I guess -- do you anticipate that when you are completed with this program, your CapEx would go down, or do you think you would ramp up new store growth or are there other IT projects you think at that point that would take some of your CapEx dollars?

Our long-term CapEx projections are staying in that $100 million, $140 million range. I do think you’ll see a shift in the way those dollars are spent moving from those smaller remodels to a large number of stores to where we do have more new stores on the drawing board right now that we want to execute over the next couple of years, so there will be a shift in how those dollars are spent.

And we’ll take a follow-up question from Damian Witkowski. Damian Witkowski - Gabelli & Company: Just wanted to follow up on the two stores that you did close, I mean do you have many of those that, as you described, that are smaller and don’t meet your criteria, still remaining in your store count?

We look at every store performance every month, and as conditions change, as our priorities change and where we want to spend our CapEx money and how we want to fund that, we look at it every quarter. So these were two that we just decided that it was in our long-term best interest to exit from a store standpoint, again they are older stores, smaller stores, and I guess, if you had to look to the very short term future, we certainly have one that’s about to open and we may close one another one around the same time. Damian Witkowski - Gabelli & Company: As you focus more on opening new stores versus remodeling new stores, will these be just more of fill-in in near current markets or are you looking at new territories in a contiguous phase?

We’re always looking. It’s a combination of new stores within our existing territory, new location and new buildings in some markets where we already are. Damian Witkowski - Gabelli & Company: You haven’t really on a macro level ever said sort of okay, we are in six days, we have 200-plus stores, we think that what we are doing and how we approach the market, there is x amount of more opportunity for new stores in the current stage and maybe contiguous stage based on our distribution centers’ ability to handle that volume.

We’re very happy with the broad market area where we are right now, but again we’re always looking for opportunities for new locations within the existing territory, and we’ve always got our eyes out. We’ve got a number of locations identified but when and in what order we’ll work on those really just depends upon conditions as they happen. Damian Witkowski - Gabelli & Company: On the fuel side, how many of your stores are actually - forgive me how many have a prompt in front of them?

Give me one second, I can find that out for you. We’ve been adding some station, just got to flip a couple of pages. Damian Witkowski - Gabelli & Company: It’s about half I think and I guess that number, that’s growing.

At the end of the quarter, we had 78 fuel centers.

And Mr. Freeman, there appears to be no further questions in queue, so I’d like to turn the call back over to you for any additional or closing remarks.

Thank you very much. We appreciate everyone joining this morning. And we will be back to you in December to report on our entire fiscal 2014 results. So we hope everyone has a good day.

Thank you. That will conclude our call for today. Thank you all for your participation. You may now disconnect.