Good morning. My name is Patrick, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation fiscal year 2014 third quarter conference call. Conducting today's call will be Jay Gerlach, Lancaster Colony Chairman and CEO; and John Boylan, Vice President, Treasurer and CFO. (Operator Instructions) And now to begin today's conference call, here is Dale Ganobsik, Director of Investor Relations for Lancaster Colony Corporation.

Thank you, Patrick. Good morning everyone and thank you for joining us today for Lancaster Colony's fiscal 2014 third quarter conference call. Let me begin by reminding everyone that our discussion this morning may include forward-looking statements, which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially and the company undertakes no obligation to update these statements based upon subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. With that said, I'll now turn the call over to Lancaster Colony's Chairman and CEO, Jay Gerlach. Jay?

Good morning and thank you for joining us. This year's third quarter is our first to reflect our candle operations as discontinued, and I'll let John comment later on the impact from that divesture. We are pleased to be able to focus our time and resources on our food business. All of my following comments will relate to our business without candles. The quarter saw sales decrease a bit over 2%, with retail channel net sales declining over 8% and foodservice channel sales increasing 4.5%. The result was a retail sales mix of 48%, down from about 51% last year. The primary contributors to this decline included Easter shipments shifting to the fourth quarter from the third last year, a sluggish January and February in both channels likely affected by weather conditions, particularly softness in retail frozen bread and paid inventory management by key customers. Our foodservice channel business came back strongly in March, which helped sales to create challenging service conditions that resulted in increased operational cost and premium freight cost. The decline in retail channel sales and mix coupled with these higher operating costs and lower foodservice pricing of about $3 million, more than offset our input cost savings of about $5 million and resulted in operating income declining 6%. Earnings per share form continuing operations totaled $0.69 versus $0.76 for the year-ago period, again with candles removed from both periods. Retail sell-through data in the late March, which slightly reflects at least some distortion due to Easter timing, shows us outperforming in all of our key categories. However, our produce dip and both frozen bread categories showed declines versus last year. New product introductions at the end of March included the following: New York brand, whole grain Texas toast, New York brand soft pull-apart Garlic Rolls, Reames brand, Presto Pasta, Mamma Bella brand non-GMO Garlic Toast and Marzetti Baked Croutons, including our new crispy onion salad toppings. While there was very little shipment of these new items in the quarter, we look forward to getting them on the shelf in the fourth quarter. Let me now ask John to make a few comments.

Thank you, Jay, and good morning. Let me start by noting, as Jay alluded to, that with the January 2014 sale of our candle operations, we no longer have the glassware and candle segment included in the results of our continuing operations reported in our financial statements. As is typical in these circumstances, we would classify all of the corresponding results of the past glassware and candles operations to the discontinued operation section of our income statement. Relative to the balance sheet information contained within this morning's release, please note that current and non-current assets and current liabilities associated with the discontinued operations as of last June 30, have been grouped within separate line items. This presentation should allow for a clearer comparison, if you will, of the balance sheet amounts related to the ongoing continuing food operations. I also want to point out that we have furnished today some historic quarterly financial statement information for fiscals 2014 and 2013 that reflect the effect of the discontinued operations. You can find this data in this morning's filing of our Form 8-K, and we hope this information helps in rebasing of your modeling for future periods. Let's now begin our review of several major balance sheet components, as of March 31, 2014. First, our accounts receivable at March 31 totaled $61,756,000. Somewhat similar to last year, the March level was approximately $5 million above that of the prior June total, mostly reflecting the relative strength of sales toward the end of this March's quarter compared to the quarter ending last June. As influence by the Easter timing, weaker year-over-year March sales led to receivables decreasing by about $7 million from the year ago March total. Turning to inventories. The consolidated March 31, 2014, totaled about $68 million was flat to the…

Thank you, John. As we begin the fourth quarter, we're happy to have the benefit of Easter to help start things off. While sell-in was good, we remain cautious whether the sell-through was up to our customers' expectations, which could impact reorders as we move through May and June. Food service demand following the strong March is back to more normal levels. We are pleased to have a number of new products hitting stores this quarter, but are mindful that those introductions come with added investment and promotional cost including slotting fees and added consumer promotions. We should see continued input cost benefit year-over-year, but we'll also see continued impact from lower food service pricing. Our dressing plants are running at a high rate of utilization in advance of the additional capacity we have coming on screen late in the first half of next fiscal year. These current operating conditions tend to lead the inefficiencies as we utilize more over time and transfer product more often between plants. Acquisitions continue to be of interest to us and it seems deal flow has increased a bit. We continue to look primarily for branded opportunities that have a track record of growth. We look for capital investment for the year to approach $15 million with our dressing capacity expansion being the biggest project. We continue to have approximately 1.5 million shares authorized for repurchase, which we consider opportunistically. We are anxious to see our recent product introductions perform over the coming months with additional introductions planned for late summer. While the consumer still seems cautious, we would hope our slowly improving economy may benefit both retail and foodservice channel sales over time. Patrick, we are ready to take questions.

(Operator Instructions) Your first question comes from the line of Michael Halen, Sidoti & Company.

In the release it was mentioned that significant introductory cost associated with the new products were going to be incurred in the fourth quarter. So are you putting more marketing spend behind this launch compared to what you've done in the past, and if so, why?

Probably, a little bit more, Mike, plus the fact that it's been several quarters since we've had any material new product introduction. So we did want to be sure to highlight that. So yes, there is the typical trades slotting expense that comes with getting new product on the store shelf. We are trying to move a little faster than we may have in the past to get that on store shelves. And trying to be sure we've got the appropriate trading consumer support as well behind those introductions. So yes it is a bit more than what we've done in the past.

And can you please give us some color on the mix shift in the quarter?

Well, I think again the big factor there was Easter moving from the third to fourth quarter, and that in general I think there's some soft retail channel demand throughout the quarter in foodservice. Well, starting off a little bit soft, came back strongly in the March, so that did move the mix shift more significantly than we might had anticipated or typically seen in our third quarter.

Your next question comes from Phil Terpolilli, Longbow Research.

Just few questions here. I guess first thing, I think you mentioned there was about $3 million impact from foodservice pricing being down, just wanted to confirm that. And then in the press release you had the freight and operational downtime cost, you had cited. Can you just kind of help us quantify maybe the magnitude of that either on a dollar percentage basis, just to kind of try to strip that out of our model?

We would estimate that the freight and overtime cost roughly in a range of a $1 million to $2 million, Phil. And yes, the foodservice pricing decline was just about right at $3 million in the quarter.

So these freight issues that should go away for the fourth quarter in theory, correct? Or are you still seeing an impact from that?

Yes, it should go down noticeably. I wouldn't say it will be gone completely, but yes, down noticeably.

And then just from kind of a modeling aspect, just trying to make sense of this going forward. So your Easter timing, I think we said before, it's about $4 million to $5 million. Just trying to understand if you have any visibility on the new product front? It sounds like you shipped a little bit in, but not much in this quarter. Now, do you have a sense of next quarter what the potential benefit from that could be, now that you're going to have it fully in the marketplace, a lot of these new products?

Phil, it's still a little hard to estimate the impact of that as it relates to the exact timing. Certain customers will be bringing that in. We don't expect a lot of selling of that still even in the fourth quarter. And particularly maybe relative to the promotional spend and the slotting, that will be going on around, that it will probably be later in the quarter as well, so not a lot of net benefit, if any from the new product. So we'll hopefully see more development, more opportunity as we move into the first quarter in fiscal '15.

And those products you mentioned at the start of the call, what we have on the new product front, is that pretty much what's out there now or is there more products on the way that you're planning to launch over the next six months?

We do have more coming later in the summer, August is our timeframe for another round of new introductions, but we're not in a position yet to talk specifically about what those are.

I mean is it fair to say that this is probably the more significant portion of the launch for the next six months, the products we see now?

I don't know that I would say much more, maybe a little bit, but I think they're both important launches for us.

And then just last question, if I could. Just on the input cost side, it seems like from what we see, maybe costs are turning around here a little bit the wrong way, but just kind of wanted to get your take on what you've seen in the marketplace, what the potential impact could be for fiscal '15?

I think at least going through the fourth quarter we see savings probably in the ballpark of what we saw this quarter. But moving into '15, early '15, we see some savings continuing, I think both our crystal ball gets a little fuzzier after the first quarter or two of '15, plus the fact that we've obviously got lower cost comparisons as the year rolls on. So probably savings early in the year, maybe getting flat to potentially maybe even a little bit of uptick depending on how markets perform as we go into the latter part of the year.

Our next question comes from Jason Rogers, Great Lakes Review.

Given the cash now over $200 million, I was wondering if you could discuss the potential for acquisitions as well as share repurchases.

Well, those continue to be, acquisitions is still at the top of our list of how we'd like to allocate our capital and we continue to explore opportunities. At the same time, Jason, given the fact that we've got a lot of cash and the cost of debt, should we get to that point is pretty low. We're still mindful of values and potential returns on acquisition opportunities we're looking at. So we are interested, but we're still a little bit careful I think on putting any kind of premium values that we might see in the marketplace today. Share repurchases, as you know we've done opportunistically over a lot of years, continue to evaluate that on a routine basis. But as you've seen we've not repurchased many shares at all this year, but definitely we're interested if we feel the opportunity is right.

And what was the cash flow from operations for the quarter or the nine months?

Jason, at this point we're not prepared to disclose that. I think we'll have the 10-Q filed in the coming days and that will be the best source for that information.

There are no further questions. We will turn the call back to Mr. Gerlach for any concluding remark.

Well, again, thank you for joining us this morning. We'll look forward to talking to you again late in August with our fourth quarter and fiscal '14 results.

And this does conclude today's conference call. All lines may disconnect at this time. Thank your for joining.