Good day, ladies and gentlemen. Welcome to the Natural Grocers First Quarter Fiscal Year 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. As a reminder, today’s call is being recorded. I’d like to turn the conference call over to Ms. Ashley MacLeod, Director of Finance and Investor Relations for Natural Grocers. Ms. MacLeod, you may begin.

Good afternoon, everyone, and thank you for joining us for the Natural Grocers by Vitamin Cottage first quarter fiscal 2015 earnings conference call. On the call with me today are Kemper Isely, our Co-President; and Sandra Buffa, our Chief Financial Officer. As a reminder, all statements made on this conference call other than statements of historical facts are forward-looking are statements. All forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks detailed in the Company’s most recently filed Forms 10-Q and Form 10-K. The Company undertakes no obligation to update forward-looking statements. Our press release is available on our Web site and a recording of this call will be available on our Web site at investors.naturalgrocers.com. Now I’ll turn the call over to our Co-President, Kemper Isely.

Thank you, Ashley. Good afternoon, everyone. We are pleased to report solid financial results this quarter and we continue to meet our outlook expectations. This is a positive start to fiscal 2015 as we prepare to celebrate our 60th anniversary of empowering health. We look forward to carrying this momentum into rest of fiscal 2015. Our increased sales and disciplined approach toward operating expenses have resulted in solid financial results which allowed us to continue our investments into growing our store base. During the quarter net sales increased 21% to 145.5 million. We continue to see encouraging trends in our comparable store sales, increasing 6.2% during the quarter on top of 10.6% increase last year. Gross profit increased to 42.3 million and we continue to see leverage in administrative expenses. Net income increased 22%, and our diluted earnings per share in the first quarter of 2015 was $0.16 compared to $0.13 last year. We are pleased with the improvements in our comparable store sales and are seeing positive results from our sales initiatives. We continue to have low double-digit growth in comparable store sales in markets without new competition and are reaching a steady state of store months with new competition. During the quarter we opened four new stores entering Nevada for the first time and expanding our geographic footprint in Colorado, Missouri and Oklahoma. Our new stores are performing in line with expectations and remain on track with our new store pipeline. We will continue to enter new states and markets and plan to open 18 new stores in fiscal 2015. Now I would turn call over to Sandra to highlight our first quarter fiscal 2015 financial results.

Thank you, Kemper. Good afternoon, everyone. We are pleased to report net sales in first quarter of fiscal 2015 increased to 21% to $145.9 million. Daily average comparable store sales increased 6.2% driven by a 3.4% increase in daily average transaction count and 2.7% increase in average transaction size. Daily average mature store sales increased to 2.8%. Gross profit during the first quarter of fiscal 2015 increased 19.5% to 42.3 million driven by positive comparable store sales and an increase in the number of new stores. Gross margin decreased 30 basis points due to increases in occupancy costs, partially offset by increases in product margin. Store expenses as a percentage of sales increased 40 basis points in the first quarter compared to the prior comparable period due to increases in depreciation and other store expenses to support store growth. The increases in store expenses were partially offset by decreases in salary-related expenses as a percentage of sales. Administrative expense as a percentage of sales decreased 30 basis points as a result of the Company’s continued ability to support sales growth without proportionate investments in overhead. Additionally during the quarter, we were pleased to accrue our pay-for-performance incentive compensation at similar levels to the comparable quarter last year. We were also able to accrue a portion of our 401(k) employer mach for calendar year 2014. Net income increased 22.0% to $3.6 million with diluted earnings per share of $0.16 in the first quarter of fiscal 2014. EBITDA increased 21.9% to 11.4 million or 7.8% in sales. We ended the first quarter with 1.9 million in cash and cash equivalents and 3.1 million outstanding on our credit facility. Now I will turn the call back to Kemper to discuss our new store growth and outlooks for fiscal 2015.

Thank you, Sandra. As I mentioned at the beginning of the call, we continue to invest in a new store growth opening four new stores in the first quarter, bringing our total count to 91 stores in 15 states. Since the end of the first quarter, we have opened one new store in Tucson, Arizona. As of today, we have signed leases for eight additional stores which are scheduled to open in fiscal 2015 for locations in Arizona, Arkansas, Colorado, Kansas, Minnesota, Oklahoma and Texas. We have good visibility on remaining five stores we plan to open in fiscal 2015. Additionally in December 7, 2014, we completed the purchase of substantially all the assets of the Natural Food Retailer in Independence, Missouri. By the end of fiscal 2015, we expect our geographic presence will cover 17 states west of the Mississippi. Our real-estate strategy supports a broad range of communities. We continue to focus on opening new stores in both new and existing locations and in both smaller, rural areas and larger metropolitan areas. Moving to our outlook, out first quarter results were in line with expectations and thus we're reaffirming our previously announced fiscal 2015 outlook. During 2015, we expect to open 18 new stores resulting on a 21% unit growth achieved daily average comparable store sales growth of 5% to 8% to deliver EBITDA margins of 7.3% to 7.5%, achieved net income margins of 2.1% to 2.3%, achieved diluted earnings per share between $0.63 and $0.66, incurred capital expenditures are between 45 million to 47 million and relocate two stores and remodeled two stores this year. We previously announced relocating three stores but the timing of the one relocation was moved to the first quarter of fiscal 2016. We anticipate cash on hand, cash generated from operations and availability under our credit facility will be sufficient to support our capital requirements. As fiscal 2015 continues we’re excited about increasing our store base and our expectations to grow our top and bottom line. We’ve seen encouraging improvements in our comp store sales and our recent new store openings have shown positive results. We continue to engage with our communities and increase awareness around our high quality standards. We believe our quality standard makes us a leader in the grocery and supplement industry, and provide our customers with valuable confidence in what we sell at everyday affordable prices. As we approach our 60th anniversary and look to opening our 100th store, we remain focused more than ever on our founding principles, which have significantly contributed to our success and will help guide us as we grow larger. Now I’d like to open the lines up for questions. Thank you.

We will begin the question-and-answer session. [Operator Instructions] First question comes from David Magee of SunTrust. Please go ahead.

The same-store number was the best in the year and looks like on a one and two year basis. If you had to sort of assess the contributing factors whether, maybe the sector picking up a bit or your initiatives like the store hours little longer or just to set down in terms of any new competition. How would you sort of assess those in terms of importance towards the comp?

I would say that first I think that our sales building initiatives have built momentum over the quarter. We started have calls with all of our managers on a weekly basis starting in August of last year, and I think that was very helpful. The increased store hours was helpful. We really didn’t have a tremendous number, I mean we still have over 50% of our store base affected by new customer but what we call new competition, so that decreased by 8% but it’s still pretty significant for the quarter. And so I would really say it has more to do with our ability to drive sales through initiatives and store hours.

Do you anticipate that the new competition factor will step down the way you thought it would last fall?

Yes, it appears to be trending that way right now. We’re estimating in this quarter that it will 36% of our store base will be facing what we call new competition, so it should be significantly lower this quarter.

The next question comes from Sean Naughton of Piper Jaffray. Please go ahead.

Let me add my congratulations on the comp momentum returning to the business, very nice to see. I think you've talked about on your last call some other things just diving into the sales initiatives a little bit further and the branding that’s going on, I know you guys are talking about. Can you just talk a little bit more about when we could see some of the things that you’re been investing in the new Web site? And then maybe some additional teams to support some in-store marketing and PR events. And just talk about those about where we are in terms of rolling those things out to help to drive top line growth?

We hired a Chief Marketing Officer for our operating company in October of last year and he has been very busy. We’ve changed the look of all of our media and the in house media so that it’s very consistent. And that’s already happened. He's hired peoples to set up new events for the new stores as they open, he is assembling the team to work at stores that we call opportunity markets, and stores that are performing as not well as we would like them to. So we’ll have a team that does events for those stores also coming up here probably by March. And the new Web site is set to go live in April of this year.

So it sounds like those are still on the horizon at this point?

It takes a good six months for some to really get their initiatives going. I think there's a lot initiatives that's been started and are moving to forward right now.

And then just one quick follow up, just on the gross margin side seems like the product margin continues to march higher. Are you noticing anything in terms of your distribution cost just from lower fuel surcharges? Is that benefiting you in any way or anything from the lower gas prices that you think is helping the business at this point?

We didn’t really see anything in the last quarter, I would expect that we’ll see some fuel surcharges drop off this quarter. So it should have a minor benefit this quarter.

The next question comes from Mark Miller of William Blair. Please go ahead.

Could you give a little bit more granularity about the comp performance by product category in the quarter?

Well, our dietary supplements’ comp at mature stores -- Sandra do you want to dive into that?

The mature stores we saw a really positive thing which is that we really had better than slightly positive I guess is the best way to say comp from the standpoint of dietary supplements. I think the really exciting piece that we had at the mature stores was, how very strong our body care comp was. So we really see that as a win and all of that we feel came out of the weekly manager calls that Kemper had been holding with the managers. And I think there was the lot of engagement there and our managers just really stepped up to drive sales at their stores in those areas from the standpoint of comp, we had some really strong comp from dietary supplements as well, probably as good as we have seen over the last year and the body care was very strong.

Body care gained market share comp lost, I mean supplements lost about 1% of market share at comp stores, the body care made up for that in actuality.

And as you look ahead with number of stores seeing competition diminishing it looks like that just quarter-on-quarter could be about 0.5 point of comp lift or more? Is it fair to think that, that kind of increase in comps can flow through or is there anything else as we think about the periods ahead beyond the things already discussed?

No I think that we will see some positive trends in comp in this quarter.

And then I have a question about the expansion to smaller rural markets versus larger metro. Kemper what are the biggest things that you are doing, in your approach to these different types of markets, whether from assortment staffing, marketing what are the different things you are doing differently?

Well it’s easier to market in a smaller rural markets than it is into a big metropolitan city. So you go into the smaller city and it's simpler to become known. So as far as marketing goes it’s a little bit easier and you still need to have location that’s prominent to what people can see in your store. In the bigger city we are really ramping up our social media presence, and I think that will help us substantially in those new markets larger cities that we go into.

Your next question comes from Scott Van Winkle of Cannacord Genuity. Please go ahead.

I also offer my congratulations, very job on the quarter. It looks like the new stores contributed kind of more incrementally than we've have seen in prior quarters. Is that the stores are larger and more productive or is that maybe a phenomenon from the acquired unit during the quarter?

The acquisitions helped, but it was only in sales for some days of the quarter, so it definitely wasn’t the entire contribution. We had some significant contributions from some of our new stores that have opened, I mean they've opened really well and it’s been helpful.

So when we think about the commentary around higher depreciation, higher occupancy store cost on new opening. Should we simply think that maybe the next unit you open are generally the incremental units are little more productive maybe than they were a couple of years ago at opening? But they obviously have a little higher cost to operate than they were a couple of years ago with opening?

It really depends on the store, but our goal of course is to have higher productivity at the beginning. So I think that we are working on that goal with our new marketing efforts. They are headed by our new Chief Marketing Officer.

The next question comes from Joe Edelstein of Stephens. Please go ahead.

I've got a question just on your geographic exposure. Did you see any pressure or difference as you look across the chain for your sales trends, particularly your stores in Texas given the state's exposure on the oil and gas side and it there has been any change to that market specifically would be interested in that.

No, I think Texas is performing how we expected it to. I mean some of our -- Texas is pretty diversified state and we have a lot of stores in Dallas and Austin as well as some of other smaller cities have a big [oral] presence. And these stores in Texas are doing quite well, we are happy with that, haven’t seen really any slowdown in that so far.

And earlier you had mentioned the strength coming out of that Body Care segment, as you think about the Natural Grocers brand and really what it stands for. What opportunities do you have to extend that brand really into some other categories? I know you do carry some household products but maybe there is expansions, things that you can start moving into to further the brand. I’d be curious on your thoughts there?

We really think that we have an opportunity in the dairy section to extend the brand because of pasture-based dairy standards. I think we’ll have some exciting products in that, that area coming out in private label pretty soon.

The next question comes from Rupesh Parikh of Oppenheimer. Please go ahead.

So I wanted to touch dive a little deeper into your traffic during the quarter. We saw a nice pickup to 3% plus versus about 1% last quarter. What do you feel are the key drivers behind that traffic pickup?

For the quarter?

Yes.

We did some tweaking to our health hotline that started in that quarter. And I think that may have contributed to the pickup. We increased the number pages in the health hotline and increased editorial in it, and I think that was very really helpful to drive traffic this quarter.

And then in terms of sales trajectory, were comp trends fairly stable during the quarter or did they picked up? As the momentum continued post December.

December was the best month for comp sales this quarter, so they were definitely good. We’re not through January yet, so it’s too early to really say how January sales are going to be.

Maybe just one last question, just in terms of gas prices I know there is a question earlier, do you feel that you’re seeing, that you're seeing any benefit from consumers -- from lower gas prices from a consumer perspective?

I think that any time consumers put money in their pockets from the savings and not happen to spend so much on gas it’s helpful for our business.

And we have a follow-up from David Magee from SunTrust. Please go ahead.

Just a quick follow-up. Kemper, last quarter you said that inflation was relatively tame, are you still seeing that trend right now?

Yes, it’s still fairly tame; the only thing that we’ve already seen like I said last quarter the real uptick in prices on as compared to a year ago the notch other than that, everything else is still in a pretty good state.

And we have a question from Mitch Pinheiro of Imperial Capital. Please go ahead.

So just a question on the product margin. What else drove the improvement there? Is there anything in particular, is it a body care influence help or were there particular categories that were helpful in the quarter?

Both body care and supplements were helpful.

Any other subcategories?

The category was pretty helpful.

And with these sort of -- so we anticipate these kinds of trend heading in subsequent quarters or where there -- is it a trend or was it more of one-time issue?

Well we intend to keep it a trend.

And then in the body care side, I saw in your stores and I saw in your new sort of in-store merchandizing and more attention to body care. Is that being driven by -- are there new products that are improving sort of the whole proposition or is it really you just deciding to merchandize better?

Well, I think what it is that we have these phone calls and we talk about what's successful in our stores. And we are rolling out those successes at our stores and body care had some particular items that were particularly successful, we rolled out at stores to the quarter and the trend is continuing. So we’re getting in a collective knowledge of our 91 stores together and looking at trends from the ground rather than just from numerical standpoint out of purchasing and getting a lot of volumes from the stores regards to what is successful at a store level.

And sort of less follow-up there. But are there other potential or future body cares improvement kind of stories in other areas, anything that seems to be working that might be promising down the road here?

Well we’re always trying to find the next category item that is helpful to us and like I said getting 91 heads together is better than just having a couple heads together to using that collective knowledge to improve you results is better.

This concludes our question-and-answer session. I would like to turn the conference back over to Kemper Isely for any closing remarks.

Thanks everybody for being on the call today. Have a very pleasant afternoon. Good bye.