Good day, ladies and gentlemen, and welcome to the John B. Sanfilippo & Son, Inc. Third Quarter Fiscal 2014 Operating Results Conference Call. My name is Kim, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to your host for today, Mr. Mike Valentine, Chief Financial Officer. Please proceed.

Thank you, Kim. Good morning, everyone, and welcome to the JBSS 2014 third quarter earnings conference call. Thank you for joining us today. On the call with me today are Jeffrey Sanfilippo, our CEO; and Jasper Sanfilippo, our COO, both are traveling today and are participating by phone. Before we start, we want to alert you to the fact that we may make some forward-looking statements today. These statements are based on our current expectations, and they involve certain risks and uncertainties. The factors that could negatively impact results are explained in the various SEC filings that we’ve made, including Forms 10-K and 10-Q. We encourage you to refer to these filings to learn more about these risks and uncertainties that are inherent in our business. Starting with the income statement, net sales for the third quarter of fiscal 2014 increased to $174.3 million in comparison to net sales for the third quarter of last year of 163.8 million. The increase in net sales was attributable primarily to an 8% increase in selling prices. The increase in selling prices arose as a result of higher acquisition costs for almonds and walnuts primarily. Sales volume, which we measure in terms of pounds sold declined by less than 2%. The volume decline was driven primarily by lower availability of certain grades of walnuts that are only suitable for in-shell, which impacted our volume in our export channel, and a smaller 2013 peanut crop which contributed to the overall decline in volume, and it also led to lower sales of raw bulk peanuts to other peanut processors in our commercial ingredients channel. Those volume declines were offset in part by 4% volume increase in our consumer channel. A 50% volume increase in sales of Fisher recipe nuts, and volume increases for private brand…

Thank you, Mike. Good morning, everyone. We had a strong fiscal 2014 third quarter for the company, achieving record net sales, net income and record earnings per share. We are especially pleased with the performance of our Fisher recipe brand during the current quarter as pounds sold increased by 50% over pounds sold in the third quarter of fiscal 2013, and pound and dollar market share also increased significantly in the quarterly comparison. I want to thank our Fisher sales and marketing teams for this remarkable accomplishment, especially when we consider the later Easter holiday this year. As I’ve mentioned on previous earnings calls, in addition to building JBSS brands, our company has focused on creating value through differentiated products, packaging and consumer insights. Our strategy of leveraging our innovation and manufacturing capabilities to grow our business with key non-branded customers also allowed us to realize significant volume gains with many of our major private brand, contract manufacturing and commercial ingredient customers. I’d like to touch on a few highlights of our strategic growth plans. First, grow JBSS brands. This is our company’s third year only in the Orchard Valley Harvest brand. Since JBSS purchased the brand, our sales and marketing team overhauled the product and packaging portfolio to meet the growing demand from consumers in the produce section looking for healthy snacks. The Fisher recipe brand outperformed the category with strong volume increases in pecans, walnuts and almonds. We expanded the product portfolio this year and added larger club pack sizes. In addition, we expanded our in-store merchandizing efforts, which were very successful in gaining incremental business. Key performance measures such as distribution, velocity and volume are all growing. From looking at category brand share, excluding the club channel, Fisher is the number one recipe nut brand in the…

Okay. Thank you, Jeffrey. We will now open the call to questions. As I mentioned earlier both Jeffrey and Jasper are calling in separately. So if you have a question for either one of them, if you would be kind enough to name them in your question; that would be very helpful. Kim, can you please queue up the first question.

(Operator Instructions) Your first question comes from the line of Francesco Pellegrino line from [John B Sanfilippo] (ph). Please proceed.

Hi, guys. This is Francesco Pellegrino of Sidoti. It looks like it was a rather good quarter. I wanted to tell one thing that I noticed in the release that referred to the larger package sizes by total weight that seems to be a new staple for the product line. Going forward, do you think you will start to see larger package sizes come into the production cycle? And is this more of demand by the consumer to sort of have larger purchasing power in terms of buying in larger quantity for cost savings?

Jeffrey, can you take that question?

Sure. That’s a good question. So what we have seen is especially from grocery they are competing heavily with the club stores and club-sized packages. And so there has been an interest in offering larger sizes in grocery, in typical grocery retailers. And that’s where we have seen the growth recently. So our defensive needs to compete with club packs, but at the same time because the nut category is growing and consumption is growing. There is a value proposition as well for consumers in the grocery aisle to purchase larger sizes of packages.

If the consumer is asking for larger packages, but they are also making a transition over from nuts to different types of snack products, the downward pressure that this would have on your gross margin I would think would be considerable to a point that the consumer is willing to make less frequent purchases, but the purchases that they do make are going to be larger. So is there going to be an issue of turn over going forward in terms of inventory possibly staying on store shelves longer than anticipated?

You will see the shelf space, because obviously that the larger packs pick up more room so that the retailers will carry less units of the larger packs and they do currently have their smaller pack sizes. So I don’t anticipate bigger inventories being held by the retailer is just going to be less units, but similar amount of pounds. So we should anticipate it as a lower unit volume, but maintain our increase in the amount of pounds.

And do you think the consumer is able to understand the increase in price that is going to be passed on to and then just based up on they are going to be getting a larger quantity product that they are going to have to pay up for, but on a per unit basis it’s going to be less.

Yes. So you will need to have smart consumers. They look at that per ounce cost when they are looking at the shelf tags. So they have very, very understanding of what that dynamic looks like from a price standpoint for them. We do not calculate paying up although that higher price for the total package, because it will sit in their cabinet maybe longer. But they are very aware of what that per ounce unit cost is.

For the transition of our two larger packages should not necessarily be flawless, but the consumer understands the thinking behind strategic move instead of smaller snack sizes in terms of the 100 calories bags that we have been seeing coming on to the market. It seems that this is a different approach, but the consumer has to sort of control their own consumption pattern.

Correct.

All right, interesting.

Yeah, and those two has both options as well as opportunities for the smaller packs, but really the new larger size club packs are relatively new for the grocery category.

All right. And just one last thing, I noticed the Fisher Nut Exactly, I know that the product is in its early infancy stages. It has been on the market for four weeks. Any feedbacks that you are getting from retailer chains in terms of the type of penetration it’s been able to (indiscernible) by the consumer?

Right now we are just getting consumer feedbacks and it’s fairly too early to answer that question at this point. We are just -- obviously from the feedback we have heard from consumers as we have done in [fast] (ph) markets, and in-store monitoring of the sales.

And you go into any threshold that you are looking for this line to establish over the next quarter, next half year and next year for the company to significantly start investing into growing out this product line?

Yeah. Again, it’s really new. What we are just getting as far as how it’s doing in markets, we will have more on that in future calls. But at this point it’s still too early to talk about it.

All right. Thank you, guys.

Thanks.

Thank you.

(Operator Instructions) Your next question comes from the line of Bruce [Winter] (ph). Please proceed.

Yes, thank you. How is your plan of increasing your international business particularly in Asia coming along?

Well, we’re still in the process of building the infrastructure in China. We had, like I mentioned on the call a strong Chinese New Year (indiscernible) get packed that we created for the market. And so, it’s really initial stages of building the distribution. We are happy with the current distribution we have. We have got good strong distributors in a couple of key markets in China, but again it’s just the initial phases of building that from there. We have also done some focus groups in market and looked at some new pack styles and different products for the Chinese consumer. So it is taking some time to build the distribution, but we think we are on the right course and have a good infrastructure now to start adding to that volume.

It sounds good. About six months ago, I asked you what are the factors out of your control that are going to affect your results this year and there were competitive conditions in nut supply. I guess nut supply you’ve covered, what about the competitive conditions?

Obviously it’s extremely competitive market like most industries are. We have got the big branded players that are investing in the category. We have got tighter brand competitors as well. They are investing, but we -- I think we have done a great job managing our pricing, managing our prices in margins in the category, but still something we have no complete control with what our competitors do.

Okay, thank you.

Thank you.

Your next question comes from the line of Ron Strauss from Pekin Singer. Please proceed. Ron Strauss – Pekin Singer: Gentlemen, I take my hat off to you. As you know, I’ve following your company for a long time, all the headwinds are vanished and you’ve got nothing but tailwinds it seems except for your raw material costs. And I take my hat off to you. You manage this business quite well. And let me ask a question if I could, did I hear you say that you are number one in recipe nuts now?

We are. If you exclude the plugs channel, we are the number one brand at peanuts now. Ron Strauss – Pekin Singer: Is that for a four-week period or 16-week period or …

(Indiscernible) I believe it’s a 16-week period run. I think within the last couple of months we’ve achieved that. Ron Strauss – Pekin Singer: That’s great. I wonder if you could elaborate on the incentive compensation reduction that occurred in the quarter.

Mike, do you want to cover that?

Can we disclose too much? Ron Strauss – Pekin Singer: No, not so much came out, but why? If you want to disclose, it will be not that fine.

Well, actually I think it is in the queue. This is Mike, Ron. As you know we are an EBA company and the way EBA based incentive plans are designed, it’s based on improvement, and we have to achieve a certain minimum amount of improvement which goes to stockholders and then anything we do over that then goes to the participants in the plant. This year we have accrued a smaller amount for bonus expense, pretty significantly small amount than we did last year, but also keep in mind that in the last two years we far exceeded our 1 X targets in respect to improvements. So I just want to be clear, we’re still -- I believe we’re going to pay a bonus to our employees this year, but it won’t be where it was over the last two years. Ron Strauss – Pekin Singer: Okay. Good. That’s all I had. Thank you very much.

Okay. Thanks, Ron.

Thanks, Ron.

(Operator Instructions) Okay. Ladies and gentlemen, this concludes our question-and-answer session. I’ll now turn the call back to Mr. Michael Valentine.

Okay. Thanks, Kim. Again, thank you everyone for your interest in JBSS, and this concludes the call for our third quarter 2014 operating results.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.