Welcome to the J&J Snack Foods second quarter earnings conference call. My name is Sandra, and I’ll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session. Please note that this conference is being recorded. And I’ll now turn the call over to Mr. Gerry Shreiber. Mr. Schreiber, you may begin.

Good morning. And I want to thank everyone for attending J&J Snack Foods' second quarter conference call today. I’m Gerry Shreiber. With me today is Dennis Moore, our Senior Vice President and Chief Financial Officer; Vince Melchiorre, our Executive Vice President of Sales and Marketing; and Teddy Shepherd [ph] in charge of Strategic Planning. Let me begin with the obligatory statements. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. You’re cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date here. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Results of operations, net sales increased 5% for the quarter and for the six months. This represents 154 quarters of consecutive sales increases. Approximately $4.3 million or 54% for the three months and $7.4 million or 47% for the six months of the increased sales were sales of funnel cake fries to one customer, Burger King, which is carrying the product in virtually all of its domestic locations. For the quarter our net earnings increased by 24% to $9 million or $0.48 a share, from $7.2 million or $0.39 a share a year ago. For the six months our net earnings increased by 39% to $0.86 a share from $0.62 a share the year ago per. Our EBITDA for the past 12 months was $104.4 million. Food service, sales to food service customers increased 5% for the quarter and 5% for the six months. Without sales to Burger King, sales increased less than 1% in both periods. Soft pretzel sales were up 2% in the quarter and 1%…

Thank you. (Operator Instructions). The first question is from Akshay Jagdale. Please go ahead. Akshay Jagdale – KeyBanc Capital Markets: Good morning, Gerry.

Hi. How are you? Akshay Jagdale – KeyBanc Capital Markets: Good. How are you?

Good. Akshay Jagdale – KeyBanc Capital Markets: I just wanted to focus, Gerry, if I may on the growth prospects. So my first question is, were you overall happy with the topline growth this quarter?

I’m never happy with our topline growth, Akshay. So I'm somewhere between almost satisfied and anticipating more. Akshay Jagdale – KeyBanc Capital Markets: Okay. Because I know that talking to some investors, there was, I think an expectation for growth of about 6% or more, which I think you'd said on the last call or alluded to. So, I'm just trying to get a sense of, do you still believe that the company can grow sales this year, this fiscal year at 6% or above?

Well, I don't want to have to apologize for a sales growth of 5% during this kind of an economic slump. I think the question was, am I happy and we are constantly challenging ourself, and I perhaps, a 5% growth in these kind of conditions is not too shabby overall. Akshay Jagdale – KeyBanc Capital Markets: Yeah. I agree. I mean, in terms of the numbers, they came in exactly in line with what we had projected. But I believe most of the prospects or the investment thesis on this stock is for above average topline and free cash flow growth, which you’ve provided for investors over the last few years. So I was, I didn't think the 5% was bad. But I know there are some people who are expecting more. I know you expect more and I did also look at the pretzel numbers and I saw a little bit of a pick-up, which I know you mentioned in your opening remarks. So is there, are you seeing any signs of a sort of macro revival in food service or impulse-type event traffic? So is traffic in movie theaters and ballparks increasing and are you seeing evidence of that in your sales, and do you expect that to continue?

Well, let me see if I can digest that whole question. Our movie theater business has been pretty decent in the past year. And hopefully our stadium and theme park will improve over what it was last year. We’re constantly looking for ways where we can drive unit growth of soft pretzels and we have some things on the burner. I don't mean on the distant back burner, we mean on the front burner, that we think will spark sales. So we’re deeply immersed into strategic things to increase unit sales everywhere. Akshay Jagdale – KeyBanc Capital Markets: : Is that just a function of volume growth going forward? I mean, where should we expect the leverage to come from in this model because there's one argument that the earnings growth is slowing down and unless sales pick up, we’re trying figure out where that growth is going for come from, if it's not going to come from lower commodity costs?

Well obviously, if we can increase sales in there, we’re going to lever some of the other corresponding numbers and notwithstanding our intent of growing sales. We want to deliver on the bottom line too and we’ve been delivering on the bottom line in the double-digit pace for several quarters now and we’re hopeful that will continue. Akshay Jagdale – KeyBanc Capital Markets: Okay. Last one, on M&A, some people may argue that it's taking you longer than most to make an acquisition here. I think people have been expecting that from you and I know you’ve been trying hard. Can you just give a sense of your feel of what is going on out there in the M&A space in terms of multiples, et cetera? What's sort of keeping you on the sidelines or just a cautious outlook is what we see from you? But can you help us understand what you are seeing out there basically to try to understand the timing and what sort of assets you're looking at and what's keeping you on the sideline?

Akshay, I don't want to comment on the timing but suffice it to say that we’re looking and we look very carefully at acquisitions, but above all we want to make sure that it makes sense, it's a fit. And the only thing worse than making an acquisition or two, all right, would be to make a bad one. : To the extent there are others there, we are hopeful of completing something in the not too distant future. And so just stay tuned for that and know that the moneys that we invest are carefully plotted and the expenditures are carefully evaluated. Akshay Jagdale – KeyBanc Capital Markets: Okay. Great. Thank you. I’ll pass it off.

Thank you.

The next question is from Mitch Pinheiro. Please go ahead. Mitch Pinheiro – Janney Montgomery Scott: Hi.

Hi, Mitch. Mitch Pinheiro – Janney Montgomery Scott: Good morning. So the one surprise I think in the quarter a little bit, at least for me is the strength of your FCB business and…

Okay. It's a pleasant surprise. Mitch Pinheiro – Janney Montgomery Scott: Well, the point, yeah. And the point, generally what I've seen in the past is, if you have a strong sort of first quarter, second – first half, which is seasonally your smallest half that momentum often carries into the back half and I'm wondering if you think that's the way it's going to be this year as well?

You know, perhaps not to the same extent, but if you start out, when you get a little bit of wind behind your sails, it serves as a good fundamental. And our ICEE business has expanded their gallon business and that reverses a trend in there, and we are cautiously optimistic that that will continue. Mitch Pinheiro – Janney Montgomery Scott: But when you look at, I mean, double-digit growth, I haven't seen double-digit growth in FCB in quite a while. And it's nice to see the volume, the gallons move as well. Is this coming…

Yeah. Mitch Pinheiro – Janney Montgomery Scott: … I mean, obviously customers. But are you seeing any sort of same-store sales improvement? I mean, it's been, I know that's mirrored carbonated soft drink trends. Is it, are you seeing, continue to mirror, are you seeing it outpace and are you showing distribution gains?

Well, we are looking at all these areas and there's one particular customer, a larger customer that we did see significant sales increases to and our ICEE people and our marketing and operational people put together a – took a base program that was good and we made it better. Now, maybe with that we can follow that on a model. I don't expect our beverage group to have double-digit increases going forward in there, but it's nice to see that the sales decline which all the drink manufacturers here in North America had have been reversed by our specialty niche snacks this segment. Mitch Pinheiro – Janney Capital Markets: Last thing on frozen carbonated beverages is, obviously, your consumers love variety and FCB dispensers often have a limited number of ports for variety. Have you tinkered with the mix of product among a four or maybe eight-flavor machine to include some of the alternative beverages?

We have, Mitch. And as a matter of fact, we tinkered with some – well, tinkering is perhaps not the right word, but we've created some other flavors and matches where we have mixed up a combination of flavors. But if you look at our group of beverages, it's ICEE and then ICEE expanded and then Arctic Blast, now Slush Puppie and even this Parrot Ice is a unique flavor of a frozen beverage together with fruit pieces in it. So we are doing lots of things to massage the model and improve the business. And I for one – I am pleased with what we are doing there in increased beverage sales. Mitch Pinheiro – Janney Capital Markets: So is there any other – generally, you get pretty good leverage in FCB on the bottom line, if you get some decent volume growth. Is there anything…

Yeah. Let’s hope. Mitch Pinheiro – Janney Capital Markets: …that would change that model or change that relationship this year?

I'm not happy with fuel prices, but again, I've also – after 38 years in this business and experiencing lots of things, I think to some degree, our experience and expertise has been – has grown over the year and has grown over the years. So apart from fuel prices, the rest of the operational business, we think we have good wind behind our sales. Mitch Pinheiro – Janney Capital Markets: The other question on the sales side is frozen – your frozen juice treats and particularly, the weakness that maybe results from nutritional issues in schools. I thought the fact that your frozen juice treats were fruit juice sweetened and gave you an advantage. What's happening there? And what are you doing about it?

Well, two things. One, a lot of schools have adopted a no sugar at all model and we have created a whole fruit without sugar product line and we introduced it about a year and a half ago and it's done well. But that has to be offset relatively by the shortfalls that we've had with some of the school systems challenging any product in there that come fall into – quote, unquote – a snack model. We also lost – we were doing private label packing for Nestle and it was a fair amount of business. And that represented about half our loss in that category. However, we have since picked up a major private label customer that we'll start to ship to in the third and fourth quarters of this year, which will make up for some, not all of that. Mitch Pinheiro – Janney Capital Markets: After that your frozen side in the retail supermarket's done extraordinarily well. Is that – what’s driving that? Is that Whole Fruit expansion?

Its Whole Fruit, it's in pints and sticks. Whole Fruit has done well. Our Luigi's is doing well. Vince, do you want to comment on that? Vince is here.

Yes. I think I'd mention two things. Well, first, it was Whole Fruit. We continue to do well in Whole Fruit with the launch of that brand. And second, our dollar channel business is up significantly. We're doing four by four ounce cups and that business is up very nicely, so we are seeing good growth in all retail with Whole Fruit and good growth in the dollar channel. Mitch Pinheiro – Janney Capital Markets: Okay. Thank you. And then I guess lastly, so the end is over sort of for the easy commodity comps on the gross margin side. So are there any headwinds that you see, other than maybe fuel on the input side?

Well, certainly fuel. Everybody has – everybody that's been – drives around and seen fuel prices inching up. We are reasonably positioned – we are reasonably pleased with the at least near-term forecast in our major commodities. Sugar is a little bit of a concern. Chocolate is a little bit of a concern. But those are not really significant roles in our overall commodities. Mitch Pinheiro – Janney Capital Markets: So the outlook is somewhat stable? Is that a fair characterization?

I think that's fair. Mitch Pinheiro – Janney Capital Markets: Okay.

And it's certainly not – we are not going to be benefiting like we have over the past several quarters, but then again, we are not back to where we were two years ago either. Mitch Pinheiro – Janney Capital Markets: Right. Last question, just on acquisitions. When you are looking at acquisitions, are you looking at areas where you have core competencies already or a new competency, a new channel? A new type of product? Parrot Ice fits perfectly into your – into the core competencies in FCB. I was just curious whether we could expect something a little different out of J&J.

Well, we are looking – obviously, we look at core competencies and we are looking for ways to further strengthen and enhance those core competencies. I don't think you're going to see a major acquisition that is transformational. But we are looking at some things that are outside perhaps our rectangular box of control. Mitch Pinheiro – Janney Capital Markets: Okay. Thank you very much.

Thank you, Mitch.

Thank you. The next question is from Brian Rafn. Please go ahead. Brian Rafn – Morgan Dempsey Capital Management: Good morning, Gerry.

Good morning, Brian. Brian Rafn – Morgan Dempsey Capital Management: A question for you. Can you talk a little bit more about your – some of your single serve sizes of dollar store stuff? I think Vince talk a little bit about a four by four ounce cup package. Can you talk about different SKUs that are penetrating that dollar channel?

Vince.

Most of the SKUs that are penetrating dollar channel are multi-unit SKUs. Got to hit the price points, so they are usually smaller versions of the SKUs we sell in other channels, but they are – they tend to be multi-unit SKUs.

But the supermarkets are now putting in some single serve, too, of our…

Yeah. That’s in retail grocery…

In Retail grocery, yeah.

In retail grocery, not dollar. There is some single. Brian Rafn – Morgan Dempsey Capital Management: Okay. Okay. Are you seeing more penetration over your product line in smaller sizes available to the dollar channel? Or is it about the same type of product that's going into the dollar channel?

I'm not sure I understand that. We are seeing our business in the dollar and the economy store channel expand and grow. So for us it's been all build-upon business, it's added incremental volume.

Yeah. Brian Rafn – Morgan Dempsey Capital Management: I guess my question is, are you bringing new products in smaller sizes to the dollar channel? I guess instead of leveraging off more volume of the existing SKUs into that dollar channel.

There are more SKUs in that channel and they're SKUs that our versions of SKUs we sell in other channels. Brian Rafn – Morgan Dempsey Capital Management: Okay. Okay. What – on a standalone basis, Gerry, the Parrot Ice of Houston or whatever – how many flavors is that? And is that a brand that will stand alone? Or is that a brand that assimilates either under ICEE or Slush Puppie?

Well, it's going to be integrated into our ICEE subsidiary, but there is – there's some equity in that brand. And it's a – it has distinctive colors, it has distinctive flavors and it has a good, strong following. Now, the company had – ran upon hard times and we wound up acquiring the assets recently at a controlled bankruptcy sale. So – but we're – again, we are cautiously optimistic that this product line will add both sales and profits to us. Brian Rafn – Morgan Dempsey Capital Management: Okay. On the – you've done a tremendous job on the FCB side, the frozen beverage side, given the deterioration in carbonated soda sales over the last several years. Are you turning your new flavor launches into those machines faster? Are you introducing new combinations relative to the last few years? I'm just wondering if you are reacting a little faster than the competitors.

Well, I'm not so certain that we are reacting faster than the competitors, but we have done some flavor changes and we have done some variation of the flavor changes and mixing it up kind of maybe like a good baseball pitcher throwing off-speed pitches and curveballs and fastballs. But we've taken the horse by the reins there and we are riding it. So hopefully that ride will continue. Brian Rafn – Morgan Dempsey Capital Management: Okay. Okay. Let me ask you – and Vince kind of alluded to it. In the standard grocery store supermarket format, you are seeing more quick access, single unit deliveries for people running in for lunch or for a quick meal. Are you seeing your products being able to – versus the frozen food or the freezer case section, where you've got – if you're buying the Luigi's or Mama Tish's, you've got to buy eight or six. Are you seeing more single serve sizes being able to be sold through the supermarket channel versus your dollar store channel?

Well, we are not, but Vince is basically writing that down now, because he just showed me a – he just basically – he gave me a note that says, why not? So maybe by next quarter we will be on it. Brian Rafn – Morgan Dempsey Capital Management: Okay. Okay. Let me ask you from the standpoint of product development, Gerry. Do you see going forward – you've been great certainly at buying bankruptcies and resuscitating them, taking local brands to regional and national status. Are you seeing better – from a strategy standpoint, better product launch from buying the standalones, be it Daddy Ray's or ICEE's? Or is there more potential in the co-branding like you've done the Barks product or the MINUTE MAID lemonade sticks? Give me a sense kind of going forward if there is any difference at all.

Well, I'll tell you what I am enthused about and that's with some of our R&D efforts which – and I've recently come back on a trip that had me coast-to-coast and I like what I see in our innovation initiatives. Some of these things take time and they take a little bit longer than what you and I would like, but I am really happy with where we're at with several new products in there that will be part of our 2011 sales initiative. Brian Rafn – Morgan Dempsey Capital Management: Okay. Get it. Our sense on – you guys have been in this business a long time. Your sense on the school, the cafeteria, this anti-sugar, anti the obesity – we've heard this. Do you get a sense that that is a bit of a fad trend? Or – we've seen certainly massive government encroachment with the Obama administration. Do you get a sense that that anti-sugar, stark nutritional is a passing fancy? Or do you think that resistance to some of your juice bars and that is here to stay?

Well, first of all, I don't know if it's a passing fancy. I am all for things – real things, not imaginary – that will make our children more healthy and less susceptible to diseases and whatnot. One way we could start is by getting them more active and increasing gymnasium. I think that we ourselves – most of our products are indeed nutritious and meet the school CN guidelines. But because of some of the heavy pressure on products that are fried or contain a lot of sugar, like sodas and ice cream, we are kind of falling in under a long shadow there. So it's impacted us. But we reformulated all of our cookies about a year ago and we are happy to say that our cookie business now has begun a recovery and we expect it to grow. We think we will be equal to these challenges with our juice bar and frozen desserts too. And pretzels have already fallen in under the "good for you" umbrella and we've just got to get more days on the school food service menu. Brian Rafn – Morgan Dempsey Capital Management: Okay. Okay. When you look at your business, you talked a little bit, Gerry, about the stadiums, the arenas, some of your movie cinema channel. Are you seeing more bundled products being able to go into that? Or – where you have a – maybe an ICEE with a movie chain but you don't have a pretzel? Or at an arena that you may have pretzels without some of the frozen carbonated beverages? Or are you at a point where you are really bringing all of the product SKUs to those different channels that you really can and it's just a matter of driving volume through?

Well. We are not at that point yet that we are bringing all of our products in there and that's one of Vince's charges and responsibilities along with a couple of other people, Jerry Law and Dan Fachner reminded of it every day. And we think there are plenty of opportunities for us to grow with those segments and do co-promotions and joint promotions, but I am not going to be happy till I go into either a movie theater or a stadium and I see ICEE's, pretzels, Churros, cookies, frozen novelties, et cetera. Brian Rafn – Morgan Dempsey Capital Management: There you go. Okay. That's right. All right. And then one final one, Gerry, what are you seeing? You've been the master of buying these – resuscitating these brands. What are you seeing as multiples of cash flow, the valuations in the market for what you're looking at?

It varies. All right. And to the extent that it's something good, we'll pay a little bit better. If something is losing money, obviously there is no multiple, but I think – and it has at least inched down from the higher multiples that were three or four years ago. Brian Rafn – Morgan Dempsey Capital Management: Okay. Are you seeing in that mix, Gerry, more bankruptcy or distressed businesses? Or is it about the same? Or as the economy turns, maybe you're seeing less of those opportunities?

That's a mixed bag too. Obviously companies that aren't doing well, that are – maybe are going out of business, we want to look at them a little bit with caution. To the extent it fits something for us, like a SLUSH PUPPIE or a Parrot Ice into ICEE, then because of our past experience and successes, we can look upon and even look at those things a little bit closer. Brian Rafn – Morgan Dempsey Capital Management: Okay. Well, you've done a hell of a job. Just keep the troops moving up the hill. It sounds good.

Thank you. Brian Rafn – Morgan Dempsey Capital Management: Thanks.

Thank you. The next question is from Robert Costello [ph].

Hello, Gerry.

Hi. How are you?

Good. Couple questions on the Burger King business. Can we expect that the current growth rate as a percent of the total is going to be indicative for the year? The meaning you had a 47% of the total, somewhere in that range of the year-end should be – that's how much of a new contribution it is to the overall total?

We have people – but we really don't know. I can ask Vince, I can ask Teddy in there and I think Mark –

But it will be a big part of it is what you are saying?

Right. And we have a number of things that we are trying to push along, inch along in there.

All right. How – going forward with this business with Burger King, how is it structured? Is it – is this a "after one year they review it"? Is it just on with regional franchisees? How renewable is the business going forward?

Well, it's in all stores – essentially all stores.

So all 8,000?

No. It's 6,000, domestic stores, a little bit more than that. It's doing reasonably well and as long as it continues to do reasonably well, we are hopeful and expect to stay. I think more than that, it's given us unusual expertise and experience in launching and innovation and in doing things. And we are working on things now for next year and the year after. Whether or not they're going to be this kind of success we don't know, but some of the new positions that we have in there with our R&D people, Ted Shepherd and the others in there, is just to do that very – take these projects and move them along and get them out in the marketplace.

Right. Now, this product was not a product – the actual type that you sold outside of Burger King, correct? Funnel Cake Fries? Whether it was a variety of some?

We had developed the Funnel Cake Fry from our funnel cake, which is related to our Churros, about a year, year and a half ago. And we were having some degrees of success, modest success. We had some interest from Burger King. And we put together a team that worked on it. We introduced unique things in the processing, including some coating and whatnot. And Vince Melchiorre led a team of marketing people and our R&D people. And we were able to develop the product and we launched it in December. And we are already looking at other byproducts, some of them similar, some of them different that could be other opportunities with the fast food restaurant chains.

Now, with Burger King itself, is there the possibility in the short-term of additional products? Or is it more next year, meaning the – 2011?

Can't say. We have some – 2010 for us is halfway over.

You don't expect anything short-term that's going to add to this besides what you already have on the plate?

Not with Burger King, no.

Right. Now, are you able to sell this product with other fast food operators, now? There's no exclusivity.

Given Burger King an exclusive with this particular product.

Right. How long does that last? Just a year, or is it permanent?

As long as we are in.

Right. So to sell products with other fast food, you have to come up with other products similar to that or something to get into other operators?

Process of doing.

Right. Now, do you have capacity manufacturing-wise given the amount of business that's bringing to you to add those additional – without additional costs with plant capacity?

The additional cost is your key operative word. We have 11 plants. We are good producers. We are able to add additional specialty capacity in both an East Coast and a West Coast plant here within a 90-day period. And so we have plenty of capacity, we have plenty of plants, we have plenty of room. And we have party of talented people that when challenged can add a processing line or change some things or create some new processing lines. We think we are poised to continue this kind of growth with new product opportunities.

Right. A question on the food-service side, you service Wawa with the doughnuts and you do the pretzel business, everything out of the Jersey facility to all the – and they are growing obviously pretty successfully. Is there a limit to the amount of distribution you can do out of that facility that would cost you – or limit you to service them?

We have capacity in that uptown facility in Bridgeport, New Jersey, where we could perhaps almost double our sales. So as we grow our business, we have expanded our capacity to grow our business. Convenience stores overall were hit a little bit harder by the recession, particularly as it relates to housing and construction and the electrician or the carpenter going in there in the morning and buying their doughnuts and whatnot. We are seeing some signs, albeit small signs, of a recovery in that particular segment. So we are anticipating some better sales in that segment for us going forward.

The Whole Fruit Bar business has probably been one of your best acquisitions of late that you could recall. You've mentioned the numbers and sales that you recently did versus what it cost you to buy them. There was a huge multiple difference. When you look at that success and you compare it to some of your other products, what did you learn from the Whole Fruit? Is it just that it was so underserved that it was a niche that offered you an opportunity? Or what is unique about the Whole Fruit business success that led you to that?

The products, the brands and as Dennis said, it was the right acquisition at the right time for the right price.

Right. Well, it served the health issue, the health of attractiveness. And it was – but they are a diamond in the rough, is that what you're saying?

Well, yeah. When we looked at it in two thousand – believe me, their sales were sinking quicker than Steve's head. They were just running through – down like a galley ship. And we got in there, we liked the name, we liked the products, we got our team behind it and it's done well. Again, every once in a while we have something to crow about and that was one of them.

You don't sell Whole Fruit in smaller cups at the supermarket. You sell them in the quart or larger sizes, if I have even – saw them. Is there any –

We just launched the sticks this past summer.

Right.

And we did well. And we are expanding (inaudible) this year and hopefully we are – we're on-track with that product. We got the right product, right nutritionally, it tastes good and the brand has a lot of equity in there. So we are right on trend with a good product and we make it well. So that's we are going to rock. We're going to…

I guess the question is, on a distribution basis beyond your normal distribution with WHOLE FRUIT, given how big that product could potentially become for you. What's the limits that you have that you might need to go outside to get it distributed even more? Meaning more points of purchase for a customer?

I think we have plenty of opportunity with the distribution system that we have today to keep building WHOLE FRUIT, as Gerry said, particularly on a stick bar business, but even on our core business with we have had nice success with some line extensions, that sales team has done a terrific job. And I think we've got lots of potential to build it with the existing distribution system.

Right. So you're not running up against the problems with WHOLE FRUIT that Coke or Pepsi would prevent you from getting into points of distribution at the vending machine – similar to what they do to try to prevent the smaller operators, when you deal with Nestle or your other competitor on the ice cream novelty side?

There is always competition, all right? And there is always distribution logic or illogic. So we have the same challenges everybody else does.

Right.

And we are just going to continue to do what we do with a can do attitude.

Right. Last question, on the – but that’s product, anything new going on there?

I'm sorry. On the what?

The – you know those ice cream pellets?

Yes. No, there's nothing. The category has not performed well. And although we continue to keep track of anything in the novelty category and that is a novelty. It had some antiquated distribution issues in there that we just didn't expand on it and we didn't think it was for us.

So what did you – what you're out of it or you are still in?

We are pretty much out of it. We're out of it.

Okay. Thanks again.

All right. Thank you.

(Operator Instructions). We have a follow-up coming from Akshay Jagdale. Please go ahead. Akshay Jagdale – KeyBanc Capital Markets: Hi, thanks for taking the follow-up. I just wanted to approach the growth issue in a different manner. I think, Mitch, brought up a good point regarding the beverage sales. If you compare how you're feeling about the business last quarter to this quarter, is it – are you more happy with where pretzel sales are? I'm just – a lot of (inaudible) there is a macro play where consumer spending is going up and traffic is increasing in certain impulse channels and that should benefit you. I'm just trying to think of what data point in you earnings points to that. And I see pretzel sales (inaudible) sign of that. But Gerry, just give us a sense of what you feel about if the macro environment is getting better and if that is playing through to your sales line and if you think it's going to continue.

I really can't say. Macro and micro I mean we continue to push our pretzel product and our other products into all of the business segments and the categories. There are some things that are happening with respect to soft pretzel innovation and soft pretzel sales that I'm pleased with, that we're overall – that we are pleased with and we're going to continue to grow these opportunities. I think that the – I think that it's notable, it's significantly notable that we have reversed what was a year decline of pretzel sales. And we're starting to inch forward – modestly inch forward. But a couple of percent growth may be the hallmark of better things to come. Akshay Jagdale – KeyBanc Capital Markets: Okay. That's helpful. And just on the Burger King initiative, I mean when I bought the product when we initiated it a few months ago, it was really pricey in my view. Have you (inaudible) had any talks with them in terms of how they are pricing it directly to the consumer? Because I feel like if they can get the price down, maybe it will be more lift. But I don't know if you guys have had those conversations.

I know that (inaudible) been discussing pricing options. Now, you bought yours where, in New York or Connecticut? Akshay Jagdale – KeyBanc Capital Markets: Yeah. In New York, I know New York is – a bit insulated anyway (inaudible).

I parked a car in New York one time for a couple days and when they gave me the bill, I told them to keep the car. So comparing pricing in New York to pricing perhaps in Des Moines, Iowa are two significant. But it was what about $1.99 in New York or $2? Akshay Jagdale – KeyBanc Capital Markets: No. Actually, it was above – significantly above $2. I think it was at – 2.40 range.

2.40. Well, it's about $1.79, $1.89 elsewhere. And it's a – it's – is it dollar store price? No, but it's a dessert in a breakfast segment at fast foods and that's what they're looking for. We are able to fill a little niche there. And we want to grow the niche. And sure long-term, I'm sure they're going to be sensitive to their guests their consumer profile on pricing. And again, we are good producers and we've got capacity in there. So we are going to be able to work with our customers there. Akshay Jagdale – KeyBanc Capital Markets: Okay. On the last one, remind me again about how the – how exclusive that is to Burger King? And when can you – or when will you maybe expand that to other customers such as Burger King?

Actually, it is – as long as the product remains in national distribution, then Burger King does have an exclusive with the fast food restaurants. Akshay Jagdale – KeyBanc Capital Markets: Okay. All right. Great. Thank you.

Thank you, Akshay.

Thank you. The next question is from Brian Rafn. Please go ahead with your question. Brian Rafn – Morgan Dempsey Capital Management: Yeah, Gerry. Anything – you didn't touch on what's going on with the PRETZELFILS?

It's part of our retail sales. And those sales overall were up. Some of the PRETZELFIL varieties are doing better than others. The cheese varieties are doing really well. Vince has been leading an effort to reformulate the pizza product, because with his South Philly Italian background and our declining sales. We think we can – but again, innovation is going to be spreading its wings throughout our whole company. Brian Rafn – Morgan Dempsey Capital Management: Is that PRETZELFIL, Gerry, is that specifically a supermarket product? Or is that something you can bring to restaurants or stadiums or other channels?

Right now PRETZELFILS by its brand is a supermarket item. We have stuffed pretzels that are being sold in some of the other venues. And as a matter of fact – and I can't say what it is, but there is a photography shoot going on today for some pretzel products in there that maybe you can look out the next couple of months and you may see some things out in the field. Brian Rafn – Morgan Dempsey Capital Management: Okay. And then on the Parrot-Ice Houston acquisition, what's the distribution channel on it? Is that a dispensing system like ICEE? Or is it like SLUSH PUPPIE, where you're taking it out to Little League parks?

Well, it's in convenience stores and through some other channels. It has a unique piece of equipment and a unique set of merchandising banners on there. But it's a little bit – the equipment is less expensive than an ICEE drink machine. And it has real fruit pieces in there. It's primarily being sold in the Southwest, but it goes all the way up into the Michigan Peninsula and whatnot in there. And we think it's a neat, nice addition to our beverage group. Brian Rafn – Morgan Dempsey Capital Management: Okay. So you're saying it's – what would be your geographic distribution coverage across the U.S.? Is it Southwest up through the Great Plains into the Midwest? And can you go east and west from there? Or is it – kind of how can you expand out geographically?

Well, that would be accurate. We are in the Southwest and up into the Great Plains in there. But if you take a look at the map and you spread your arms up to the main portions of Maine down to the Florida's, out to the California's, we are looking that we can expand this into our ICEE branches and our SLUSH PUPPIE distributors across the country. Brian Rafn – Morgan Dempsey Capital Management: Okay. And then one final one, Gerry. The new healthcare bill is that – from a strategy cost standpoint, does that affect at all your cost structure relative to employee benefits?

Well, it's really unknown. We've been fairly liberal in our – and fairly caring in our health provisions to our employees. So it will have less of an impact on us. But it's too soon to know. Brian Rafn – Morgan Dempsey Capital Management: Okay. Thanks, guys. Keep up the good work.

We have no further questions at this time.

Well, I want to thank everybody for attending the call. And I hope that to have an opportunity to address you all again next quarter with hopefully equally as good results. Thank you.