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

Welcome to Post Holdings' Q1 2014 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 11:45 a.m. Eastern Time. The dial in number is (800) 585-8367 and enter PIN number 33249552. [Operator Instructions] It is now my pleasure to turn the floor over to Brad Harper, Investor Relations for Post Holdings, for introductions.

Thank you, and good morning. Welcome to the Post Holdings conference call where we will discuss results for the first quarter of fiscal 2014. 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. 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. And with that, I will turn the call over to Terry.

Good morning, and thank you for joining us today on our earnings call. We'll review the status of our business for our fiscal year '14 first quarter ended December 31, 2013. Additionally, we'll highlight the recent acquisitions that are transforming Post Holdings from a low-growth single-category participant to a more diverse consumer products enterprise competing in categories with more dynamic growth prospects. I'm pleased to announce that our first quarter recorded 25.4% growth with consolidated net sales hitting $297 million. The Post RTE cereal business recorded net sales of $236.9 million, flat compared to last year's first quarter. This result was against a tough comparable year-ago quarter that was aided by a very significant new product pipeline in December 2012. The category, as measured by Nielsen, remains challenged, experiencing dollar consumption declines of 3.9% for the same quarter. Post's $60.1 million of net sales growth was split $37.2 million and $23.2 million between Premier Nutrition and Attune Foods, respectively, as both businesses enjoyed strong first quarter performances, which I'll touch on later. The Post Foods RTE cereal business continued to show market share progress, as well as outpacing the category, and delivered the strongest year-over-year share increase in 2 years. Dollar market share for the 13-week period ended December 28, 2013, increased 0.3 points to 10.6%, building upon the positive share performance from the prior 13-week period. Pounds and package shares were also up 0.3 and 0.4, respectively. We continue to be pleased by the breadth of share improvement across the Post cereal portfolio, with most brands showing share stabilization or growth versus the same period a year ago. This is a significant reversal of the broad scale of multi-year declines of the past. Now let's take a look at some of the individual brand performance. Honey Bunches of Oats,…

Thanks, Terry. This morning, I'd like to give you an overview of the quarter and then revisit our M&A strategy, with particular emphasis on providing some details around our announcement earlier this week. Starting with the quarter, as Terry mentioned, net sales were $297 million, up 61 -- $60.1 million from last year. The increase was entirely derived from acquisitions. As opposed to this segment, net sales were flat at $236.9 million. Note again that this flat result was against a category dollar decline of 3.9%. Pound volume for Post Foods increased 4% but was offset by a 4% decline in average net selling price. Ton volume increases were driven by Great Grains and Post Raisin Bran. Additionally, we experienced growth in revenue from private label and co-manufacturing agreements. Net sales for the Attune Foods segment were $23.2 million for the first quarter, up 17.8% versus the prior year pre-acquisition quarter. Attune Foods continues to perform in line with our expectations. Turning to our Active Nutrition segment. Q1 is the first quarter to reflect a full quarter of Premier Nutrition results. This segment contributed net sales of $37.2 million, up 34.8% compared to the prior year pre-acquisition quarter. Consolidated gross profit was $114.5 million, up $8.8 million from the prior year. To reconcile, the increase is comprised of $17.5 million in acquired gross profit, partially offset by $2.7 million of accelerated depreciation related to the Modesto plant closure and negative price mix in the Post Foods segment. More precisely, if the impact of Modesto in acquisitions are excluded, first quarter gross profit was $99.7 million and gross margin was 42.1% on net sales excluding those acquisitions. As I mentioned, the margin decline of approximately 250 basis points largely results from the impact of product mix and lower average net selling…

Thank you for the joining today's conference call. You may now disconnect your lines at this time.