Greetings, and welcome to McCormick's second quarter 2009 conference call. (Operator Instructions) It is now my pleasure to introduce your host, Joyce Brooks, Vice President, Investor Relations for McCormick. Thank you, Ms. Brooks. You may begin.

Good morning to everyone joining us today by phone and webcast for a review of McCormick's second quarter financial results and outlook. We have posted a set of slides to accompany today’s call at our website, ir.mccormick.com. With me today are Alan Wilson, Chairman, President, and CEO; Gordon Stetz, Executive Vice President and CFO; and Paul Beard, Senior Vice President, Finance and Treasurer. Following our remarks, we look forward to discussing your questions. Please note that during the course of this conference call, we may make projections or other forward-looking statements and actual result could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements whether as a result of new information, future events, or other factors. In addition, information we present today, which excludes restructuring charges and credits, as well as unusual items recorded in 2008, are not GAAP measures and we present this information for comparative purposes alongside the most directly comparable GAAP measures. Reconciliations of GAAP to non-GAAP measures can be found in this morning’s press release and in the presentation slides for our call. It is now my pleasure to turn the discussion over to Gordon.

Thanks, Joyce. Good morning, everyone and welcome to this morning’s call. We are very pleased with our financial results for the second quarter of 2009. There were areas of strength throughout our business in sales growth, margin improvement, and asset management. This strength more than offset our increased investment behind our brands, as well as an unexpected bankruptcy cost. As a result, our profits were ahead of expectation for the second quarter and right in line with our full-year growth objective. I will review our financial results for the quarter and then pass it to Alan for his comments on the business and our latest outlook. We achieved second quarter earnings per share of $0.38. On a non-GAAP basis excluding restructuring charges, earnings per share in 2009 were $0.42. This was a 7.7% increase from an adjusted EPS of $0.39 in the second quarter of 2008, and is squarely within our 7% to 9% 2009 target range for EPS growth. The profit result was driven largely by sales growth, favorable gross profit margin, and operating cost reductions. Let’s take a closer look at sales and then I will discuss these other drivers. Sales for the quarter declined 0.9%, including an 8.3% unfavorable impact from currency. In local currency, we grew sales 7.4%. As indicated on slide 5, we realized 4.5% from pricing actions and the combination of volume and product mix added 2.9%. The increase in volume and mix includes a 5.4% benefit from our acquisition strategy. This was largely offset by lower sales in the Europe, Middle East and Africa -- EMEA region -- for the quarter. For the consumer segment, we reported a second quarter increase of 4.2%. In local currency, we grew consumer sales 11.6%. As indicated on slide 6, Lawry’s drove a large part of the…

Thank, Gordon and good morning to everyone on the call. Our second quarter financial results are a good indication of our ability to navigate this difficult global economy and continue to generate solid financial results. We were pleased to report a 7% increase in constant currency sales, a strong 90-basis point increase in gross profit margin, and an 8% increase in EPS on a comparable basis. While a number of factors are driving our performance, I want to highlight four this morning, beginning on slide 21. The first is Lawry’s. The acquisition of Lawry’s has been an important part of our financial performance. As Gordon indicated, our new products are on the shelves and consumers are hearing our marketing message that emphasizes the brand’s wide variety of ethnic flavors. Initial results indicate that our new marketing program is right on target. Including the new reduced sodium version, consumer unit purchases of Lawry’s season salt rose at a mid-single-digit rate for the last 13 weeks, and a high-single-digit rate for the latest four-week period when our marketing programs really kicked in. Also benefiting from new flavors in television advertising, consumer purchases of our Lawry’s marinades showed a double-digit increase in the most recent four weeks. With few incremental costs, this business is delivering the sales, margin, and profit accretion goals we set forth nearly a year ago. Another factor driving our performance that was evident again this quarter is effective cost management. Ongoing volatility in input cost is being addressed through our pass-through industrial pricing mechanisms and earlier pricing actions for our consumer businesses. Across both businesses, pricing actions added 4.5% to top line growth. We are also working hard at cost reductions throughout our business -- most noteworthy is a significant reduction in our operating costs for the past few…

(Operator Instructions) Thank you. Our first question this morning is from the line of Eric [Sarota], Consumer Edge.

Good morning, guys. Hello?

It appears we’ve lost Mr. Sarota’s line, gentlemen. Our next question is from the line of Rob Moskow with Credit Suisse.

Good morning. I thought it sounded like a good quarter and you managed through the U.K. situation very well. Two questions -- one is, is there going to be an ongoing higher cost of doing business in the U.K. now that you are going direct? And then second, you said you are evaluating putting more investment back into the business if you have the money to do it. How can you -- how are you going to balance that with the possibility of dropping some of the money to the bottom line? Historically you’ve kind of done a little bit of both -- you’ve kind of raised guidance and reinvested. Can you still do that in the current environment or is the current environment tougher from a consumer standpoint if you --

Let me answer the first question first about the U.K. There will be a slight increase in our operating costs by going direct. We are working through what that is and how we are going to do it but the important thing for us is servicing the customers and our teams have done a great job with that and we don’t think it will be meaningful to results. On the question around investment spending, typically we do up-spend when we have the opportunity and let some drop through the bottom line. It’s still kind of early in the year and we’ve had two small quarters behind us and so we are going to continue like I think most other companies are doing to monitor it on a near-term basis. As we see the opportunity to invest, we like the results that we had in the second quarter as we increased our investment, and we think driving the top line is extremely important. We think also that staying in front of the consumer in this kind of economy is also important, so we’ll continue to evaluate it. If there’s opportunity that some of it may drop through because the sales are better than we expect, then we’ll see that but we are not -- we don’t have any indication this early to change guidance.

Okay, so it’s really going to depend on the sales -- and can you remind me what your -- if there’s no change to your sales guidance for the year?

Nope, no change to the guidance for the year.

Okay, thanks. I’ll pass it on.

(Operator Instructions) Our next question is from the line of Chris Growe with Stifel Nicolaus.

Good morning. I just have two questions for you -- the first one was if you look at your first quarter, you had your reported sales down a little bit, they were down a little bit this quarter so I just want to get a feel for your confidence in the 2% to 3% sales growth guidance for the year. You know, in the first quarter we had a little of a unique situation with the trade de-loading. Did you see any of that continue this quarter or any signs of that sales growth picking up, if you will?

We did not see continued trade de-loading into the second quarter. I think we saw a couple of impacts going into second quarter. One is the timing of Easter, which had some impact; and the second is is we were very focused on making sure that we executed very well in North America on grilling, so I think we saw the impact of that certainly in North America. We are still kind of part of the way through the small quarters of our year. We feel good about the sales guidance we have on the table right now, that the currency will start to reverse itself and our initiatives will continue to kick in, so we feel pretty positive about where we are right now.

Okay, and just in relation to that currency comment -- you know, it did improve this quarter versus last quarter and certainly more towards the end of the quarter. Is that something that is helping your guidance or is it more helping you invest more heavily this year if you see better currency coming through?

Well, it’s a balance of items on the guidance. Certainly the base volume growth we have strong confidence in and the investment spend that worked well in the second quarter is giving us confidence on the guidance behind the base business. Currency, while yes, I agree, it’s improving relative to where it was earlier in the year, it is a volatile factor so we don’t want to count too much on the currency. Certainly it would be a help at the current levels but it’s been a volatile environment, so it’s really, really difficult to say that that’s going to be a huge help.

Yeah, one thing to keep in mind is we have a much larger impact on currency on the sales line than we do on the earnings line, and that’s been true both in the tailwind and the headwinds that we’ll see, so it doesn’t necessarily translate directly percentage to percentage.

The comparisons, obviously, we’ll still have negative comparisons on currency even at these levels in the third quarter and it would start to reverse in the fourth quarter at current levels.

Okay. If I could just ask one more quick one, and that is just in relation to the business, if you are looking at the third and fourth quarter this year, you know, again the marketing increases are primarily going into place in the second quarter and again in the third quarter. Is that -- should we expect more investment in the third quarter, that is what I’m getting at, versus the fourth quarter?

Third quarter, if you recall last year, we had a significant up-spend and our intention is to certainly be at those levels again this year, maybe slightly up. Fourth quarter, we’re expecting to have a very strong program around holiday in particular to make sure that we are [putting] the business well in this type of an environment, as Alan said.

Okay. Thank you.

(Operator Instructions) The next question is form the line of Eric Sarota of Consumer Edge.

Good morning. Can you guys hear me now?

Yes.

Yeah, sorry about that technical difficulty before. I wanted to talk a bit about, and I’m sorry if someone asked this already, I got disconnected, but I wanted to talk a bit about what the Easter impact was on the quarter on both overall and then Americas consumer volumes. Can you give us any rough estimate there?

It’s kind of hard to quantify because of the amount of moving products but we think it was somewhere around 1%, maybe a little more in our North American consumer business, a much lower impact than that on our global business. It was -- certainly we are very pleased with the results that we saw from the scanning and the take-away in North America and Easter, but it wasn’t a significant impact in the movement between first and second quarter.

Okay. And then to move on to the industrial side, last quarter you cited some weakness with your food manufacturer customers. I noticed that this quarter you talked about some strength with snack seasonings customers, but could you comment more broadly about your packaged food manufacturer customers, what kind of volume and demand you’ve been seeing from them, what your visibility is going forward?

What we are seeing is I think consistent is that they are focused on more basic kinds of products. There are fewer incremental type innovations and more focused on larger innovations and so we are not seeing the level of activity but the things that they are placing their bets in fewer bigger areas. Promotional activity is more focused on value-type products, just like it is in our consumer business.

So in terms of order of magnitude and direction, was that part of the business still down? And could you give us rough sort of order of magnitude of packaged food versus restaurant customers?

Well, we don’t specifically break those out, Eric. I mean, just to reiterate, in the Americas ex-acquisition, the industrial business was down on a volume mix basis about 0.5%, so -- and to Alan’s point, there’s pockets of things that were up and pockets of things that were down. The casual dining certainly was down. We saw some strength in some of the snack food seasoning, so on balance that all resulted in a 0.5% decline in volume mix in the Americas region during the quarter.

Okay, great. I’ll pass it on. Thanks a lot.

The next question is from the line of Alton Stump with Longbow Research.

Thank you. Good morning. Just a quick question on the pricing front -- as we look out over the next two quarters, we have seen very firm pricing to date at the retail level -- no sign of any push-back. Can you just give me some color on if you think that will be the case over the next couple of quarters?

You know, it’s pretty volatile. We don’t expect major pricing changes with the exception of our industrial business where we have commodity pass-throughs. We’ve seen commodities bounce off their lows and have picked up momentum and so as we take coverage in collaboration with those customers, we’ll pass those on and so pricing will move based on the timing that we take the coverage and how commodities move, so that one is a little more volatile -- certainly not the volatility that -- we don’t expect the volatility that we saw last year. Our consumer pricing, we typically take consumer pricing one time a year. We took it early this year. We don’t expect any changes to that and unless there’s something dramatic that happens with an individual commodity and we certainly don’t see any indications of that right now.

Okay, thanks and then just one quick follow-up, on the private label side, are you seeing anything different from your competitors there or has their share still held relatively at bay?

It’s pretty stable in terms of private label as we look at it over the year. It’s grown -- private label share has grown a little bit. All other share has gone -- the all other brands category has gone down about the same amount that private label has gone up and we’ve pretty well held share.

Great. Thank you.

The next question is from Ann Gurkin of Davenport.

Good morning. I’m just wondering your opinion on whether there’s been a permanent shift to consumer behavior -- in other words, are consumers going to shift more longer term to eating at home versus going out? Is there any trend change that you expect?

I don’t expect that it’s a permanent trend to people eating at home. Certainly as the economy stays under pressure, they will continue to do that but what we’ve seen is a fair amount of restaurant closings. But I think -- I don’t think we are seeing a permanent shift away from people eating out. I think people are certainly being more selective and more value-focused and I don’t expect that trend to reverse until the economy significantly picks up but I wouldn’t expect that we are seeing a broad trend away from restaurants. I mean, I think certainly just in the last couple of months, as there’s been a little more consumer confidence, people are going out a little more so I don’t expect that it’s a permanent change.

Great. Thank you.

The next question is from the line of Mitch Pinheiro with Janney, Montgomery, Scott.

Good morning. Just on private label in the U.S., is there any difference in share gains and/or second, third-tier brand losses in the dry seasoning mix versus the core spice category?

You know, that’s -- I’m looking to see if I have that data in front of me and I am afraid that I don’t. What we’ve focused on is our dry seasoning mix has been up pretty substantially. There are, in terms of the competition in dry seasoning mix, it’s pretty much private label and McCormick and then selected private label competition in certain areas. So for instance, we have more competition on chili mix and taco than we do necessarily on a lot of the other dry seasoning mixes. What we have seen is our dry seasoning mixes, as we’ve relaunched to more natural, taking MSG out and repackaged, that our dry seasoning mixes have still double-digit momentum.

I guess broadly speaking, you have about 50% of the private label spice business?

That’s correct.

Is that about the same -- how’s that look in the dry seasoning mix private label sector?

A little lower.

Okay. In the consumer business, I was just a touch confused -- ex acquisition, ex Lawry’s, volume and mix was up 1.5% in the quarter in the Americas?

In the Americas, yes.

And you cited I think double-digit growth in dry seasoning mix and grilling but you know -- so that would mean the other spice, you know, the other business was down significantly or how -- or what am I missing?

Well, in terms of the mix of the portfolio again, Mitch, the dry seasoning mix and grilling is a smaller percentage relative to say the total core portfolio, so the core items did well. The ones that were a drag, as we mentioned, were the higher end gourmet type items.

Okay. Looking at the commodity outlook for the second half, Alan I guess you indicated that there’s really nothing out there that’s sort of worrisome for you to increase prices further. Is there -- is that -- can I interpret that as basically even type of commodity exposure this year versus last year for the second half?

That’s probably a reasonable assumption and also recall, because so much of our business is done as we head into the fourth quarter, we are building -- we are starting to build holiday items as we go into the early summer, so a lot of our commodity cost is already locked in as we had in the second half of the year.

Okay, and last question -- are you seeing the trends -- you know, certainly the heightened food safety issues and combined with supplier consolidation, are you seeing any change in momentum on the industrial side relating to those two issues?

Yeah, I mean, we’re seeing certainly a lot of the major food companies who may have been more looking for price type suppliers coming and putting food safety and security much higher on the list as they are making their selection, and we are seeing the benefit of that with certain of our customers. There’s still certainly going to be the price pressures. Everybody is under the same kind of cost pressure that we have been but we are certainly seeing our food safety and security message resonate with our major customers.

Okay. All right, thank you very much.

The next question is from the line of Rob Moskow of Credit Suisse.

Thanks, just a follow-up -- Gord, do you have any interest expense guidance for the year? You paid down some debt in the second quarter -- how low can it go?

Well, we are still anticipating to be up year over year obviously because of the higher debt levels, and obviously it’s going to be a function of the short-term interest rate environment. It could -- we’ll generally put a little bit more debt on in the third quarter and then we generally pay a significant amount down and we anticipate paying a significant amount down in the fourth quarter, so the run-rate at the current level is probably about right. You know, it could tick up a bit in Q3 and then in Q4, come back down.

Okay. How accretive was Lawry’s in the quarter?

We haven’t provided that information. I mean, we’re still in line on the annualized basis with the 8% to 10% -- I mean, the $0.08 to $0.10 on an annualized basis and last year we got about $0.03 of that, so it’s roughly in line with that and there’s not a huge amount of seasonality to the business, so you can back into the math with that.

Okay. All right, well, thank you.

The next question is a follow-up question from the line of Eric Sarota with Consumer Edge.

Thanks for taking the follow-up. You guys commented earlier that, or you commented on the first quarter that there was significant retailer inventory destocking and I think you commented that it moderated, or that inventory levels were a bit more normal this quarter. Could you comment about your expectations for retailer, normal seasonal retailer inventory build as we head into the peak selling season? Do you think it’s going to be less, greater, you know, greater, less, or about the same as previous years and why?

We expect it to be pretty similar to previous years. Everybody is being cautious in managing for cash certainly but I think if you take it back to where we were at the end of last year and the beginning of this year, there was a lot more pressure on the balance sheets than there is right now. But I would expect it to be pretty much the same. You know, recall in our business, because a lot of our products are very seasonal products, so if you miss the purchase cycle for grilling in the summer, you miss it for the year. If you miss poultry seasoning, sage and turkey gravy in the holiday, you miss it for a year. You don’t miss it by a week. And retailers are very conscious of that and conscious of the profitability of spices and dry seasoning mixes in their mix. We are in the top five categories in terms of generating profit dollars for the grocery store, so it’s something that they are pretty conscious of and I don’t expect them to be very cautious in the fourth quarter. We could continue to see some quarter-to-quarter moves based on managing cash but I don’t expect it to be significant.

Okay, and then the past two years, I believe it’s been, or two years ago you accelerated some shipments of some holiday pre-packs from the fourth quarter to the third quarter. I believe it was kind of flattish last year in terms of the timing. It was the same as what it was two years. Do you -- will that practice continue again this year? Is that the new norm of sort of pre-shipping or pre-shipping to get some earlier merchandising on some of those holiday pre-packs?

Yeah, we have the same program in place that we’ve had the last two years and we expect a similar kind of impact on it. The retailers who get the products in earlier put them up earlier and sell more, and that’s the story we are continuing to help them understand and drive and it’s good for us and it’s good for the retailer. We expect it will be roughly in line with where it’s been the last couple of years.

Okay, great. Good luck. Thanks a lot.

I also wanted to correct one thing, Eric, I said earlier -- I said the Americas volume mix ex-acquisitions was down 0.5%. Including acquisitions, it was down 0.5%, so I just wanted to make that correction. That’s on the industrial side.

Thank you.

The next question is a follow-up question from the line of Chris Growe of Stifel Nicolaus.

Thanks again for taking the follow-up. I just have two quick questions for you -- I just want to be clear on last quarter there was a lot of discussion about mix in the Americas and consumer foods and if you talked about it, I missed it. Could you tell me how that looked in the quarter?

We combined the discussion with volume and mix so -- on the U.S. Americas in total volume mix ex acquisitions was up 1.5% in the quarter. We don’t separately break out volume and mix.

Didn’t you talk last quarter though about some mix challenge, you know, like a product mix hits in local business from say more dry season mix of sales?

Certainly the dollar ring of a DSM packet is less than the dollar ring of some of the, say gourmet items and that double-digit increase in the dry seasoning mix line won’t completely offset some of the declines we saw in gourmet just because of the dollar ring, so that’s factored into that volume mix number of a 1.5% increase.

Okay, and the last question I had was just on the [inaudible] consumers, there was some mention of some increased promotional items and coupons and that kind of thing. Is that -- do you count that as part of the $20 million in marketing or is that separate of that investment?

It depends on what the part of the marketing mix is. In terms of the value advertising and things that we’re doing, that will certainly be part of that increased marketing spend. To the extent that we’re doing price promotion, it would be an offset to net sales. But for the -- so it’s -- and it’s a combination of both. Certainly the media that we are funding right now in the U.K. is very much focused on value but we are also doing some price promotion to entice consumers to continue to buy our products.

Okay. Thank you.

The next question is from the line of [Jodi Joshi] of Barclays.

It’s Andrew Lazar. Just two things, I guess -- first, I’m curious, in the jump in the consumer EBIT margin in the quarter, up 200 to 300 basis points, certainly higher than we typically see in the May quarter. I assume that’s kind of primarily Lawry’s driven but I just want to make sure if there was something else going on there.

Certainly Lawry’s is a help but I don’t want to also -- we’ve had a lot of activity, as you know, through our restructuring and CCI programs on managing SG&A, so I don’t want to attribute it all to Lawry’s but certainly Lawry’s is a help to that.

Okay, and just one last one -- I guess there’s been maybe over the past couple of quarters kind of building, I don’t know, you know, chatter or interest and it seems like it has been more specific to McCormick for some reason around potential shifts or changes in your merchandising programs or shelving, you know, at various retailers, things along those lines. And I guess -- I’m surprised it hasn’t come up yet on the call and I was just wondering, are there any things around that that you can talk to just to kind of address maybe what some of those concerns have been, whether they’ve been sort of well-placed or not?

Well, again we’re not going to comment specifically on specific customers but what we are continuing to see is a lot of consumer response to our programs. We are going to see obviously different programs by different retailers around the country and we find that consumers will continue to buy our spices predominantly over others. If retailers want to generally sell what consumers want to buy and in this category, that’s McCormick. So there’s not a lot new to update. There’s obviously tons and tons of speculation around there as to what is going to happen and we just aren’t going to -- we’re not in a position to talk about that at this point but what we are seeing is consumers still want to buy McCormick spices. We are supporting it with merchandising and advertising very heavily and are well-positioned we think to hit the results that we’ve laid out.

Got it, and I assume it’s fair to say that retailers test a lot of things a lot of the time that probably never really make it, or that never rise to the level of us talking about it that often, and I assume that just continues to happen I would assume like it normally does but maybe I’m off on that.

It is and it will continue and different retailers are going to try different programs. I know we certainly see a whip-saw impact on things like retailers who institute a clean floor policy with no displays in one year, and then they find they were way out of stock in the holiday season and the next year the displays are back in the store. So there’s -- that kind of thing happens all the time from various retailers and so we are working on this on the street every day to make sure that our products are in the store and well-merchandised.

Great. Thanks for your comments.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Ms. Brooks for closing comments.

I’d just like to wrap up real fast before Joyce jumps in -- we feel like we’ve had a very solid operating results for the quarter. We had very strong performance in North America, good cost control across the whole business, and it allowed us to make a very strong investment in marketing. Obviously we’ve had some headwinds to offset with the bankruptcy in Europe and some of the overall economy that we’ve had to deal with but we feel like this was a very solid quarter. As we go through the year, we continue to look for opportunities to invest behind our brands and make sure that we are continuing to drive the strong sales results and we really thank you for your attention and support.

I’ll add my thanks as well. I just have a couple of housekeeping comments. Through July 2nd, you can access a telephone replay of today’s call by dialing 877-660-6853. The account number for the replay is 309 and the ID number is 323045. You can also listen to a replay on our website later today and if you have any further questions, please give me a call at 410-771-7244.