Good day, ladies and gentlemen. Welcome to the John B. Sanfilippo & Son Third Quarter Fiscal 2019 Operating Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to turn the call over to Mr. Mike Valentine, Chief Financial Officer. Sir, you may begin.

Thank you, Victor. Good morning everyone, and welcome to our 2019 third quarter earnings conference call. Thank you for joining us today. On the call with me is Jeffrey Sanfilippo, our CEO and Jasper Sanfilippo, our COO. Before we start, we want to alert you that we may make some forward-looking statements today. These statements are based on our current expectations and involve certain risks and uncertainties. The factors that could negatively impact results are explained in the various SEC filings that we have made, including Forms 10-K and 10-Q. We encourage you to refer to these filings to learn more about these risks and uncertainties that are inherent in our business. Starting with the income statement. Net sales for the third quarter of fiscal 2019 declined slightly to $201.8 million, compared to net sales of $202.8 million for the third quarter of last year. The decline in net sales was attributable to a lower weighted average selling price per pound, and that was caused by a shift in sales volume from higher priced tree nuts, specifically almonds, to lower priced peanuts. The decline was largely offset by a 3% increase in sales volume, which came primarily from increased sales of private brand peanuts and trail mixes, and our consumer distribution channel. Now, taking a look at our brands. Sales volume for Fisher recipe nuts fell by 12.2%, primarily as a result of competitive pricing pressure from private label at a major customer, and as well as, the later Easter holiday this year which accounted for roughly 50% of the total volume decline for Fisher recipe nuts. 8.5% increase in sales volume of Orchard Valley Harvest produce products resulted from distribution gains for our new salad toppers line that was recently launched, and distribution gains with new customers. Fisher snack…

Thank you, Mike. Good morning, everyone. As Mike mentioned, we reported another record earnings per share for the third quarter and very proud of our entire organization for executing the strategies we developed to strengthen our financial performance across our business segments. Third quarter diluted EPS increased by 20% to $0.90 per share. That was achieved after delivering a 35.9% increase last year, which was a record at the time of $0.75 a share. This record third quarter was driven by a strong performance in our consumer distribution channel, as it was this time last year. Our Orchard Valley Harvest produce line continues to grow with new distribution and expanded volume with existing customers. Our R&D and marketing teams are working on exciting new products that will launch in the coming months. I look forward to reporting on this new portfolio on a future call. Our Oven Roasted Never Fried product portfolio is doing very well. We continue to gain new distribution and expand outside our core Midwest markets. And we continue to invest in the Oven Roast line. Our management team is consistently focused on providing value for our customers and consumers, while also providing value for our shareholders. Our cross-functional teams work hard to drive cost out of our supply chain and optimize our operations. In addition, we are always laser focused on managing our inventory positions to align selling prices with cost of materials, and our results demonstrate this commitment. As Mike mentioned, gross profit increased by $5.7 million, and our gross profit margin, as a percent of net sales, increased to 19.2% for the third quarter of fiscal 2019, compared to 16.3% for the third quarter of fiscal 2018. Now, turning to review by sales channel. Consumer channel increased by 5.2% in dollars and 8.2% in…

Okay. Thank you, Jeffrey. We will now open the call to questions. Victor, if there are questions in the queue, can you please tee up that first question.

[Operator Instructions] And our first question comes from the line of Craig Bibb from CJS Securities. You may begin.

Hi, guys. Way to blow it out in the quarter. Obviously, the Easter shift is already reversed in Q4. The retailer didn’t pass through lower prices on recipe nuts. Is that also reversed in the current quarter?

Jeff, can you take that one?

Yes. Hi, Craig. It’s Jeff. We [indiscernible] not reflected yet at retail. We were hoping after Easter holiday that we would start to see those lower retail prices reflected. and we have not seen that yet.

Okay. And then, so you had a large retailer skip the promotion. Do they cancel the promotion on inshell peanuts, or is it delayed, or like you see that coming back later in the year?

Yes, in this case, we reorganized some other promotional activity at retail. And so we expect to see partly gain some of that promotion in the coming quarter and the next two quarters. We will makeup as total amount that we saw in Q3, but they do plan on further promotions in the coming quarters.

Okay. I believe you guys started shipping to another private label snack customer this quarter. Is there more to come? I mean, you’re making progress on adding distribution on [indiscernible] branded also?

Sure. Yes. So we’re very focused on our private brand, retail partners as well. This pipeline continues to grow in the category, and so it’s important for us to be active in that space. We did pick up a couple of new private brand customers that we started shipping in the beginning of fiscal 2019. And there is at least one more that we’ll start shipping by the end of this fiscal year.

Okay. I guess the focus with Southern Style was, you had import issue into Mexico, which is sort of now resolved. Away from that, are you making progress in adding new distribution?

So, it’s a little bit slower than we anticipated, Craig. We’re very focused on grocery, expanding the scroll in Southern Style nut program into the grocery channel, which they weren’t in before. We acquired the company. A little slower than we anticipated, but we believe we’ve got the right product line in pack sizes now to start doing all that distribution. And we’re also very focused on the club channel as well, little bit slower than we anticipated, but we do have some potential wins that we hope to report in the coming quarters in the club channel.

I noticed Southern Style in airports now. Is that new or that was there when you bought it?

No, that is new. So we’ve been very focused on expanding consumer reach and getting our products into locations where consumers are buying snacks and airports are a perfect example of that. So that is new distribution, and it’s a key focus for the company.

Treehouse’s future seems to be up in the air still. I know it doesn’t make sense for you guys, that’s probably going to end up with private equity. But are there opportunities, well, influx for you guys to take more share?

Obviously, retailers are always going to want quality products and they’re going to want proper service levels. So, we’ve seen opportunities come up where they’re not getting that contractor service that they expect or should receive. So, we believe there could be further opportunities to gain some private brand distribution in retailers.

Yes, might be a little bit slow. But I didn’t realize you are doing Oven Roasted tree nuts also. Did that started at the same time as the Oven Roasted peanuts or was that added after?

It was always part of the product line, Craig. We just felt there was an opportunity to expand what is considered drive all those peanuts in the category. And so really the focus was on the tree nuts originally with Fisher Oven Roasted Never Fried. Peanuts were just a compliment to that. But definitely that’s a big factor in Fisher Oven Roast.

Right. Okay. The increase in legal fees in the quarter, just, is there anything we should care about or?

No, there’s nothing notable there. It’s just happened to be a period where we had several things just kind of clumped together.

Okay. All right. Well, great quarter. So, that’s all I got.

All right. Appreciate it, Craig. Thanks.

Thanks, Craig.

Thank you. [Operator Instructions] And, at this time, I’m showing no further questions. I would like to turn the call back to Mr. Mike Valentine for closing remarks.

Okay, thank you. Again, we would like to thank everyone on the call for your interest in JBSS. And this concludes the call for third quarter operating results for fiscal 2019.

Thank you, ladies and gentlemen for participating in today’s conference. This concludes the program and you may all disconnect. Everyone have a great day.