Good day and welcome to the John B. Sanfilippo & Son, Inc. Third Quarter Fiscal 2023 Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Jeffrey Sanfilippo, CEO. You may begin.

Thank you. Good morning, everyone and welcome to our 2023 third quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO; and Mike Finn, our Vice President and Corporate Controller. 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 the filings to learn more about these risks and uncertainties that are inherent in our business. I am proud to report record diluted earnings per share for our third quarter and our second consecutive quarter of double-digit diluted earnings per share growth. This strong performance was mainly driven by volume growth in all three of our distribution channels, as our net sales increased by $20 million or 9.1% compared to last year's third quarter. I'm especially proud of this accomplishment, given the ongoing challenging operating and inflationary environment. Our Board of Directors met yesterday and approved $1.50 per share special dividend, reinforcing our goal of creating long-term shareholder value by returning capital to our shareholders. The dividend will be paid June 22, 2023 to stockholders of record as of June 1, 2023. As announced last quarter, we began to ship our new product line of private brand nutrition bars to mass merchandising retailer during the third quarter and anticipate shipping private brand nutrition bars to additional customers during the fourth quarter. We have received favorable feedback from our retail partners and expect to gain additional nutrition bar customers in subsequent quarters. As we look ahead to the fourth quarter and to fiscal 2024, we are focused on executing our long…

Thank you, Jeffrey. Starting with the income statement. Net sales for the third quarter of fiscal 2023 increased 9.1% to $238.5 million compared to net sales of $28.6 million for the third quarter of fiscal 2022. The increase in net sales was attributable to a 5.0% increase in sales volume, which is defined as pounds sold to customers, and a 3.9% increase in weighted average sales price per pound. The increase in the weighted average selling price was mainly attributable to the normalization of selling prices with tree nut acquisition costs, as well as higher commodity acquisition costs for peanuts and dried fruit. Sales volumes increased 2.1% in the consumer distribution channel, primarily due to a 2.1% increase in sales volume for our private brands, partially offset by a 0.6% decrease in sales volume for branded products. New private brand peanut butter business at a mass merchandising retailer and increased peanut butter distribution at a grocery store retailer were substantially offset by lost distribution with a private brand grocery customers that occurred in the fourth quarter of fiscal 2022. Excluding this lost distribution, private brand sales volume grew by 4.7%. The sales volume decrease for our branded products, which includes Fisher recipe nuts, Fisher snack nuts, Orchard Valley Harvest and Southern Style Nuts was mainly attributable to a 15.7% decrease in the sales volume of Fisher snack nuts due to decreased merchandising activity at a major customer and a seasonal rotation at a club store that did not repeat in the third quarter. This decrease was significantly offset by a 20.8% increase in sales volume of Orchard Valley Harvest due to a tightening of sales by major customers in non-food sector who delayed their orders in the previous quarter and increased promotional support at that same customer. Sales volume increased…

Great. Thanks Frank. I appreciate the financial update. I'd like to now share some category and brand results we achieved for the quarter. As always, the market information I'll be referring to is IRI reported data and for today, it is the period ending March 26, 2023. When I refer to Q3, I'm referring to 13 weeks of the quarter ending March 26. References to changes in volume or price are versus the corresponding period one year ago. We look at the category on IRI's total U.S. definition, which includes food, drug, mass, Walmart, military and other outlets, unless otherwise specified. And when we discuss pricing, we are referring to average price per pound. Breakouts of the recipe, snack and produce nut segments are based on our custom definitions developed in conjunction with IRI. And the term velocity refers to the sales per point of distribution. First, the total nut and trail mix category was flat in dollars and down 2% in pound volume in Q3. This is actually slightly better pound rates than we saw last quarter, while retail dollars slightly declined. All segments continued to decline in pound volume in Q3, while trail mix and snack nuts grew in dollars. Overall, prices across the category were up in Q3 versus the prior year 3%. Pricing has started to moderate across segments. The references prices were up 5.3% in just Q2 of this year. Now I will cover each segment in more depth, starting with recipe nuts. The Recipe Nuts segment was down 1% in dollar sales and down 3% in pound sales. This is a slightly worse dollar performance than we saw in Q2, but better pound performance. Prices of recipe nuts were up 2.1% versus last year. Price increases have moderated since the beginning of our fiscal…

Thank you. [Operator Instructions] I'm not showing any questions. I'd like to turn the call back over to Jeffrey Sanfilippo for closing remarks. : :

Thank you, Michelle. In closing, first, I want to say, I'm so proud of this organization and every person that helps support our business. It is an extraordinary quarter. It's been an extraordinary year in spite of the headwinds we face across this country. We also faced a number of challenges in the future, which include the impact of ongoing inflation in food and other input prices, rising interest rates that reduced economic growth and the potential for an economic downturn in the markets in which we operate. We also continue to experience a tightening in the labor market for those employed at our production facilities, which has led to increased labor costs. However, I am very confident in the strategic investments we have made in our people, customers and capabilities to overcome these challenges and drive future earnings growth. Our company and our team of dedicated leaders and frontline associates throughout the head -- throughout the organization remains steadfast and strong. We have always adapted quickly to overcome headwinds. And our insights, innovation, R&D, marketing and sales teams are laser-focused on consumer behavior and consumption trends to develop new products and pursue new brand opportunities, as well as pursue elevated demand with our private brand retail partners. I'm confident we have the right strategies, talent and business model to continue to grow and provide exceptional value and innovation for our customers and consumers. We appreciate your participation in the call, and thank you for your interest in our company. Have a great day.

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