Good day, and thank you for standing by. Welcome to the John B. Sanfilippo & Son, Inc. Fourth Quarter and Full Year 2023 Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeffrey Sanfilippo, CEO. Please go ahead.

Thank you, Abigail. Good morning, everyone, and welcome to our 2023 fourth quarter earnings conference call. Thank you for joining us. On the call with me today is Frank Pellegrino, our CFO. We may make some forward-looking statements today. These statements are based on our current expectations and they 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'm pleased to report our strong financial performance in fiscal 2023 as we navigated through a challenging operating environment and elevated levels of inflation and delivered a record diluted earnings per share for the fiscal year. This is the fifth consecutive year JBSS has delivered record year-end earnings. These results validate the actions taken during the last 12 months to respond to the numerous headwinds we faced and is a testament to the hard work across the organization to execute our strategies. We raised our annual dividend by 6.7% to $0.80 per share and supplemented our annual dividend with a special dividend of $1.20 per share, both of which will be paid on September 13, 2023. This strong performance would not be possible without our talented team members whose conviction, agility and determination are unrivaled. JBSS also achieved an important milestone towards our goal of diversifying our product offerings during the second half of the fiscal year. We launched a new product line of private brand nutrition bars and sold over $4.2 million of this bar product to a number of our key retail partners. Our nutrition bars have been well received by our retail partners and their customers who enjoy…

Thank you, Jeffrey. Starting with the income statement. The 2022 fourth quarter and fiscal year contained an additional week compared to the same period in our current fiscal 2023. Net sales for the fourth quarter of fiscal 2023 decreased 9.1% to $234.2 million compared to net sales of $257.7 million for the fourth quarter of fiscal 2022. The decrease in net sales was mainly due to a 9% decrease in sales volume, which we define as pounds sold to customers. Excluding the estimated impact of the extra week, net sales decreased approximately 2.1%. Sales volume decreased in all three distribution channels in the current fourth quarter. Sales volumes decreased 6.9% in the Consumer Distribution Channel, primarily due to a 4.7% decrease in sales volume for our private brands and a 15.4% decrease in sales volume for our branded products. Excluding the estimated impact of the extra week, sales volume in the Consumer Distribution Channel increased by 0.3%. The sales volume decrease in private brand sales was mainly driven by the extra week, which was partially offset by new peanut butter and nutrition bar business at a mass merchandising retailer. Excluding the estimated impact of the extra week, private brand sales volume grew by approximately 2.6%. The sales volume decrease for our branded products, which includes Fisher recipes nuts, Fisher snack nuts, Orchard Valley Harvest and Southern Style Nuts, was mainly attributable to a 29.1% decrease in the sales volume of Fisher snack nuts due to decreased promotional activity at two major customers. Sales volume for Southern Style Nuts decreased 26.5%, predominantly due to reduced promotional activity at a current club store customer and the sales volume associating with the extra week. Excluding the impact of the extra week, branded sales volume decreased by 8.9%. Sales volume decreased 9.8% in the…

Thank you, Frank. For the financial update, I'll now share some category and brand results with you for the quarter. As always, the market information I'll be referring to is IRi reported data, and for today, it is for the period ending June 18, 2023. When I refer to Q4, I'm referring to 13 weeks of the quarter ending June 18, 2023. 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, 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. The total nut and trail mix category was down 1% in dollars and down 2% in pound volume in Q4. This is consistent with the rates we saw last quarter. Overall, price increases across the category continue to moderate with price per pound up 1.6% in Q4 versus the prior year. For reference, prices were up 3% in Q3. Now we'll cover each segment in more depth, starting with recipe nuts. The recipe nut segment was down 3% in dollar sales and up 2% in pound sales. This is a slightly worse dollar performance than we saw in Q3 by better pound performance. Prices of recipe nuts were down 4.5% versus last year, driven by Walmart price declines. Our Fisher brand had another successful quarter, growing 15% in dollars and 12% in pounds. Fisher's performance resulted in growing dollar share by 2.5 points and remains the branded leader. Fisher's performance was driven primarily by increased distribution…

[Operator Instructions] Our first question comes from Daniel Ambrefe with UBS.

I've got -- my first one, you mentioned acquisition opportunities kind of in the beginning of the call. I was wondering if you're looking more at the branded or private label side of your business, what size you'd be looking at? And how do you see valuations, how your pipeline is right now? And how large a deal would you do given how clean your balance sheet is?

Thanks for questions. This is Frank. Our M&A strategy is twofold. We're always looking at brands within bar, crisp snack, healthy snacking category, relatively smaller brands where we could bring those brands into our distribution channels and really accelerate the sales volume. And we're also looking at capabilities, increasing our capabilities in-house. So we have a two-pronged strategy, and we're always looking at opportunities to satisfy here one of those two strategies.

Okay. Great. And you mentioned competitive pressures primarily in club and also in peanuts. And I was just wondering if you could give a little bit more maybe commentary on that? Do you see that continuing in Q1? How long do those competitive pressures usually last? And anything you can give in terms of context going forward would be helpful?

Sure. Good question, Daniel. Yes, we've -- actually in the last year, we've seen increased spending by the largest snack brand for nuts in the snack category. So they just continue to that extremely heavily. I made the comment in the call about the reduction in the valuation for the peanut category and a lot of that is attributed to just their aggressive trade spend and price point reductions. And so at some point, it becomes unprofitable to try to match some of those price points. And so we're just monitoring that situation. And we're investing in other areas in the snack category to try to increase volume and increase growth. But definitely, there's been some competitive activity with that brand, one of the major brands in the snack nut category. As far as the club channel, there's just so much always competition in the club channel. We think we've got some really good differentiated products that we've launched recently. We've got a couple of wins with our Orchard Valley Harvest salad toppers, which is exciting for the company. And the club channel is a great opportunity. It's a huge volume, a huge snack category. And so we just need to make sure that we're focused on putting the right product there that's profitable with the right price point for the club consumer.

[Operator Instructions] I'm showing no further questions at this time. I would like to turn the call back to Jeffrey Sanfilippo for closing remarks.

Thanks, Abigail. Thank you, everyone, for your participation on the call and your interest in JBSS and appreciate your time. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.