[Call Starts Abruptly] Welcome to our fiscal 2023 second quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO; Jasper Sanfilippo, our COO. We’ll 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 have 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. First, let me start out by performance. During the second quarter, net sales increased over $21 million or 8.3% compared to last year's second quarter, and we delivered strong bottom line growth as our diluted EPS increased 26.5% to a $1.45 per share. Our strong quarterly performance resulted from numerous, continuous improvement initiatives, a focus on reducing our operating costs, reduced discretionary spending and selling price alignment efforts initiated last fiscal year as a response to inflationary cost increases. We continue to see strong demand for our products, especially from our private brand customers in our consumer channel. Our sales volume grew over 3% in the consumer channel, excluding the one-time loss of a private brand grocery customer, compared to the overall decline in the snack nut category. During the quarter we continued to execute against our Long-Range Plan. First, we paid a $1.00 per share special dividend, reinforcing our goal of creating long-term shareholder value by returning capital to our shareholders. Second, we completed the acquisition of the Just the Cheese brand, which is part of our strategic initiative to further diversify our product offerings. We are excited to add Just the Cheese to our branded portfolio as it complements…

Thank you, Jeffrey. Starting with the income statement, net sales for second quarter of fiscal 2023 increased 8.3% to $274.3 million, compared net sales of $253.2 million for the second quarter of fiscal 2022. The increase in net sales was due to a 12.7% increase in the weighted average sales price per pound, partially offset by a 3.8% decrease in sales volume, which is defined as pound sold to customers. Sales volume for peanuts and all major tree nuts, except pecans, declined in the current second quarter. The increase in weighted average selling price partially resulted from higher commodity acquisition costs for pecans, cashews, peanuts and dried fruit. Sales volume decreased 2% in the consumer distribution channel, primarily due to a 5% decrease in sales volume for our branded products, which include Fisher recipe nuts, Fisher snack nuts, Orchard Valley Harvest, and Southern Style Nuts. The sales volume decreased for our branded products was mainly attributable to 24.1% decrease in the sales volume of Fisher snack nuts due to competitor pricing pressures at two grocery store retailers and lost distribution at another grocery store retailer. The overall sales volume decreased in the consumer distribution channel was partially offset by a 0.7% increase in sales volume for private brand sales. New private brand peanut butter business, a mass merchandising retailer, and increased seasonal distribution at our mass merchandiser retailer or substantially offset by loss distribution with a private brand grocery customer that occurred in the fourth quarter of fiscal 2022. Sales volume decreased 7.7% in the commercial ingredients channel due to a 38.9% decrease in sales volume of bulk products to other food manufacturers as a result of reduced consumption from softened consumer spending. This decrease was partially offset by a 2.9% increase in sales volume to food service customers due…

Great, thanks Frank. So I’ll share some category and brand results with you for the quarter. As always, the market information I'll be referring to is IRi reported data, and for today, it is the period ending January 1, 2023. When I refer to Q2, I'm referring to 13 weeks of the quarter ending January 1. References to changes in volume or price are versus the corresponding period one year ago. We look at the category on IRi’s total U.S. definition, which includes food, drug, mass, Walmart, military, and other outlets unless otherwise specified. And when we discuss pricing, we are referring to the average price per pound. Breakouts of the recipe, snack and produce segments are based on our custom definitions developed in conjunction with IRi. And the term velocity refers to the sales per point of distribution. First, the total nut and trial mix category was up 1% in dollars and down 4% in pound volume in Q2, this is the same pound rate we saw last quarter. While retail dollars showed slight improvement, all segments continued to decline in pound volume in Q2 while trail mix, recipe and snack nuts grew in dollar sales. Overall, prices across the category were up in Q2 versus the prior year by 5.3% with almost all nut types increasing. Now I will cover each segment in more depth. Starting with recipe nuts. The Recipe Nut segment was up 4% in dollar sales and down 7% in pound sales. This is slightly better dollar performance than we saw in Q1. Prices of recipe nuts were up 11.3% versus last year, the largest pricing increase of any segment. Our Fisher brand had a successful holiday season and grew 19% in dollars and 9% in pounds. Fisher’s performance resulted in growing dollar share by…

Thank you. [Operator Instructions] First question, please. It comes from the line of [indiscernible] with UBS. Please proceed.

Hi. Yes. Hi, good morning, Jeffrey and Frank. And good job in a challenging couple years here. You’ve done a great job. I know you haven’t had a few question in the past couple quarters, so just wanted to kind of throw my head in the ring here and talk a little bit about capital allocation and how you view it. I know you guys have been very consistent with paying special dividends. Just in the context of the Hormel acquisition of Planters about 3.4x sales. And I know your branded products are only about a quarter of your sales. But it just seems like the market isn’t giving you enough credit maybe for that part of the portfolio or for your private label portfolio. And I want to know what you’ve thought about that in the context of capital allocation, potentially share purchases.

So thanks for the question. Over the last quite a few years, we’ve really been investing in building our brand portfolio. We realize that we’ve got much stronger margins in our brands. We have much more control over what we do with the brands, where we launch, what we launch. And so capital allocation is extremely important as far as continuing to invest in our brands. I touched on the relaunch and transformation of our Orchard Valley Harvest brand, which is just hitting the market literally this week. And so we see the branded portfolio is extremely important. We’ve talked about how private brand is the biggest piece of our business today. It is still like very critical component of our success, and we believe we are really strong value partners with our key retail partners that we work with. But definitely brands as a part of our investment in the future. And we see a lot of opportunities. We see a lot of white space within our brand portfolio to continue to grow them and really build stronger equity in our brands, which in turn, as we can build a stronger brand portfolio as a percent of our total sales. I think we’ll get the improvement in some of our returns and investments.

And as far as your question about share buybacks, we prefer special dividends as a way to return capital to our shareholders, mainly due to our daily trading volume is pretty low. So we think the more shares out there, it’s probably better for our trading volume and for our share price. And we believe declaring dividends and paying special dividends is a beneficial way to return capital.

Great. That makes sense. And good luck in the future.

Thank you.

Thank you.

Thank you. [Operator Instructions] All right. I don’t see any further questions in the queue. I will turn the conference back to our CEO, Jeffrey Sanfilippo for his closing remarks.

Great. I want to thank everyone for their interest in JBSS. This concludes our fiscal 2023 Q2 call. Thank you for your interest in the company and have a great day.

And with that, we conclude today’s conference call. Thank you for participating. And you may now disconnect.