Brad Harper Terence E. Block - President, Chief Operating Officer and Director Robert V. Vitale - Chief Financial Officer

Welcome to Post Holdings Fourth Quarter 2013 Earnings Conference Call and Webcast. Hosting the call today from Post is Terry Block, President and Chief Operating Officer; and Rob Vitale, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 7:30 p.m. Eastern Time. The dial-in number is (800) 585-8367 and enter PIN number 10262969. [Operator Instructions] It is now my pleasure to turn the floor over to Brad Harper, Investor Relations for Post Holdings, for introduction. You may begin.

Thank you, and good afternoon. Welcome to the Post Holdings conference call, where we will discuss results for the fourth quarter and our 2013 fiscal year. With me today are Terry Block, our President and COO; and Rob Vitale, our CFO. We will not be taking questions after our prepared remarks today. The press release that supports these remarks is posted on our website at www.postholdings.com (sic) [www.postfoods.com] . Before we continue, I would like to remind you that this call will contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties, which should be carefully considered by investors, as actual results could differ materially from these forward-looking statements. For more information regarding these risks and uncertainties, please visit the SEC Filings page in the Investor Relations section of our website. These statements speak only as of the date of this call and management undertakes no obligation to update or revise these statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. As a reminder, this call is being recorded for audio replay. And finally, this call will discuss certain non-GAAP measures. For a reconciliation of non-GAAP measures to the nearest GAAP measure, see our press release posted on our website. With that, I will turn the call over to Terry.

Good afternoon, and thank you for joining us today on our earnings call. We'll review the status of our business for the fourth quarter and for the fiscal year ended September 30, 2013. The past 12 months witnessed the continued transformation of Post from a low-growth, single-category participant to a more diversified consumer products enterprise, with a product portfolio that is allowing us to gain participation in retail channels and categories, exhibiting more dynamic growth. The transformation has had 3 main areas of concentration: center store shelf-stable, active nutrition and private label, with some of the areas also providing access to new customers and channels for Post. There are also areas where Post has broad organizational knowledge and experience and has acquired talented management teams. The acquisition of both Attune Foods and the Hearthside's Golden Temple granola business provided entry into the natural specialty channels, where natural and organic cereals are experiencing high single-digit growth. The combination gives Post access to an attractive base of brands and retail customers. Attune Foods will be cash-accretive in fiscal 2014. The Premier Nutrition acquisition represents a threefold opportunity, granting Post first access to the double-digit growth of the sports nutrition and weight-loss category. Second, its first out-of-the-bowl eating experience was the premier line of shakes and bars, serving as meal replacement substitutes that can be easily consumed on-the-go. And third, a platform from which to initiate roll-up opportunity, as the industry seeks to consolidate. Additionally, Premier increases Post's knowledge of the science of protein, which is gaining broader acceptance in food and can play a leadership role in helping to address the obesity problems confronting consumers, as they seek healthier habits and lifestyles. Through Premier, and more broadly, Post is already building upon that protein opportunity. Premier Nutrition will also be cash-accretive in…

Thanks, Terry. I'd like to first expand on our consolidated net sales figures that Terry highlighted. Starting with the fourth quarter, consolidated net sales were $291.7 million, an increase of $44.5 million for the quarter. This includes $37.8 million from acquisitions. Post Foods segment net sales were $253.9 million, up 2.7% or $6.7 million over last year. The improvement resulted from a 3.4% increase in pound volume, slightly offset by a 0.7% decline in average net selling prices. Pound volume increases were driven by Post Raisin Bran, private label and co-manufacturing agreements. Q4 was the first full quarter for the expanded Attune Foods segment. Net sales, including intersegment sales for the quarter, were $24.2 million. For reference, net sales were up 17.5% compared to the year-ago pre-acquisition quarter. Lastly, our Premier Nutrition acquisition closed on September 1. As Terry mentioned, it currently comprises our active nutrition segment. This segment contributed net sales of $13.9 million to the quarter. Fourth quarter gross profit was $112.5 million, up $2.4 million from the prior year. This includes $11.1 million in gross profit from acquisitions, which is partially offset by $4.8 million of accelerated depreciation related to the Modesto plant closure. Excluding the impacts of Modesto and acquisitions, fourth quarter gross profit was $106.2 million, a gross margin of 41.8% on net sales, excluding acquisitions. Gross margin is down approximately 270 basis points compared to the prior year, largely resulting from the impact of product mix on both manufacturing costs and average net selling prices. As expected, we continued to see higher commodity costs for grains compared to the prior year. However, for the fourth quarter, these increases were offset by lower costs for sugar and nuts. Manufacturing fixed cost absorption is consistent with prior year. SG&A increased $7.5 million to $79.2 million for…

Thank you. This concludes today's conference call. You may now disconnect.