Good day, everyone. Welcome to the Sysco’s first quarter fiscal 2011 earnings results conference call. As a reminder, today’s call is being recorded. At this time, for opening remarks and introductions, I’d like to turn the call over to Neil Russell. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thank you for joining us for Sysco’s first quarter 2011 conference call. On today’s call you will hear from Bill DeLaney, our President and Chief Executive Officer and Chris Kreidler, our Chief Financial Officer. Before we begin, please note that statements made in the course of this presentation that state the company’s or management’s intentions, beliefs, expectations or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ in a material manner. Additional information concerning factors that could cause actual results to differ in a material manner from those in the forward-looking statements is contained in the company’s SEC filings, including but not limited to, risk factors contained in the company’s Annual Report on Form 10-K for the year ended July 3, 2010 and in the company’s press release issued earlier this morning. On the call today we will discuss certain non-GAAP financial measures. You can find the reconciliation of these non-GAAP measures to the applicable GAAP measures on our Investor Relations Web site at sysco.com. Also, all comments about earnings per share refer to diluted earnings per share unless otherwise noted. Lastly, we would like to remind that our Investor Day is scheduled for December 2. If you haven’t already registered, please do so prior to November 22. With that out of the way, I’ll turn the call over to our President and Chief Executive Officer, Bill DeLaney.

Thanks Neil, and good morning, everyone. This morning Sysco reported net earnings of $299 million for the first quarter of fiscal 2011. Our sales in the first quarter increased 7.4%, driven mainly by increased case volume and estimated food cost inflation of 3.3%. Case volume was higher across all regions in our Broadline and SYGMA segments and the year-over-year increased represented the strongest improvement since the second quarter of fiscal 2007. While the pace of the macroeconomic recovery remains sluggish and restaurant traffic patterns continue to be under pressure, recent data suggests the industry is slowly recovering. Sysco’s gradual but consistent improvement in case volume confirms this trend and we believe we are continuing to grow our market share. We are pleased with our sales growth for the quarter and I should also note that we achieved record first quarter operating income. Nevertheless operating income growth over the prior year was less than our sales increase as improved expense management was more than offset by a 46 basis point decline in gross margin percent. Several factors contributed to the decline in gross margins. Approximately 10 points of the margin decline related to a change in business mix. While both our Broadline and SYGMA businesses grew this quarter, SYGMA grew at a faster rate and since SYGMA operates a lower margin business, this mix shift impacted total margins. We do not view this as a negative outcome. As a matter of fact, we see a great deal of opportunity on the contract side of the business, both from the Broadline and SYGMA segments. The key is to strike an appropriate balance between street and contract sales growth over time. The remainder of the gross margin decline was split about evenly between two drivers. The first is a set of ongoing strategic…

Thank you, Bill, and good morning, everyone. For the first quarter, sales were $9.8 billion, or an increase of 7.4% compared to the prior year, driven mainly by case volume growth and the impact of food cost inflation which we estimate to be 3.3% for the period. In addition, acquisitions within the last 12 months increased sales by 0.6% and changes in foreign exchange rate increased sales by 0.5%. Operating income increased $9 million or 1.8% to $506 million during the quarter. While sales increased 7.4%, gross margin increased only 4.8% and operating expense increased 6%. Operating expense increased $75 million for the quarter due to three main drivers. First, salaries and related expense increased approximately $40 million, primarily from increased case volume during the quarter, including increased commissions and incentives and delivery personnel costs. Total headcount was down very slightly compared to the prior year, meaning we held our headcount levels relatively steady despite increased case volume. While total headcount is down, we’ve increased MA headcount over the last year. It typically takes one year to two years for an MA to be fully productive within the sales organization, but we consider this investment in the business to be an important one that will enhance our ability to grow sales as the industry recovers and continue to take market share. Second, as we had discussed on last quarter’s call, pension expense increased by $15 million year-over-year. Lastly, operating expense included a $14 million benefit from the impact of Corporate Owned Life Insurance or COLI, which is an unfavorable comparison to the $21 million benefit we recorded in the prior year. Net earnings for the first quarter were $299 million, declining $27 million or 8.3% compared to the prior year. Net earnings reflect a $39 million year-over-year increase in tax…

(Operator instructions) And we’ll take our first question from Ajay Jain with Hapoalim Securities.

Hi, good morning. I just wanted to clarify a few things on the gross margin impact during the quarter. I think some of that decline I am sure is a little bit cosmetic because of the inflation impact And Bill, I think you already talked about the mix shift between SYGMA and Broadline, but as far as the strategic price investments that I think you cited in your press release, it seems at least to me a little bit unprecedented for Sysco to have to resort to discounting based on the way you guys have typically gone to market. So can you just talk about how far reaching these price investments are going to be over the rest of the year, and if you had to quantify how much of the 46 basis point decline was driven by price investments in this last quarter, is that something that you can quantify at all?

I’ve given my best shot, and we’ll see where we end up here. So to repeat, of the 46 basis point decline we think about 10 basis point of that is the business mix of SYGMA versus the Broadline. So that leaves you a little over a third of a point of margin decline. Our best estimate is about half of that is we would attribute to pretty significant inflation in those three categories. I mentioned meat, dairy and seafood, and the other half I don’t know I’d call discounting or pricing so much as what we would characterize is as what we said is strategic category initiatives. Where we see opportunities, Ajay, where we are somewhat underpenetrated and we think it’s appropriate for us to get a little more focused and get a little more finely priced in those categories. So we’ve been into this year for a few months and I would expect that to continue here over a good portion of the balance of the year, but it’s not a random type of thing. Its distinct categories and we’re doing it in different parts of the country and over time throughout the country, and again, I would expect us to maybe not in 12 months, but over a reasonable period of time see it pay back there on the sales line.

So going forward, would the gross margin implications from these category management initiatives, with the magnitude be similar to this latest quarter?

It’s actually hard to predict. I mean, there’s a lot of things that go in the gross margin, Ajay, but I would say, for this piece of the pie so to speak, I think as we said and I think as I said in the narrative, I expect the pressure to continue here for at least a couple more quarters. With that said, I think there’s other things we can manage better including the inflation part and that’s what we were alluding to in terms of our discussions with our management team. There is opportunities for us to manage this inflation environment somewhat better.

Just this one quick follow-up on the tax rate, I know there’s some variability each quarter based on stock compensation and COLI, but could you talk about what you’re assuming as far as a normalized tax rate for the rest of the year?

Obviously, a normalized rate for Sysco is probably 38%, 39%. What’s going on with the tax rate is primarily driven by the IRS settlement last year and the COLI, both last year and this year. Those are the two main drivers that’s affecting the tax rate.

But as far as what you’re modeling in internally, is 38% to 39% representative of what we should be assuming as well?

Well, that’s a normalized tax rate. I’m not really commenting about what we expect for the year, to be candid. We don’t really know what COLI is going to be for the full year. We start the year off assuming COLI is going to be flat. Obviously, it wasn’t flat in this first quarter. We got a benefit from it. We don’t really know what’s going to happen for the duration of the year. So I would say, yes, we started the year assuming 38% to 39%. We knew that we were going to have a lapping issue in the first quarter because of the things that happened in the first quarter last year.

Okay, thank you very much.

Thank you.

And we’ll take our next question from Meredith Adler with Barclays Capital.

Thanks for taking the question. I was wondering since you were kind enough to give us a sense of how much of the gross margin was due to the strategic price investments, maybe you could talk a little bit about how much of the volume, the case volume increase we saw also came from those specific categories? I think you said in your prepared remarks that you did get a good response in sales in those categories.

I’ll give it my best shot again here. I think in terms of putting that together, what we did say here is that we are seeing double digit increases in those categories where we effectively roll these initiatives out, and we’re not all the way through doing that. So it doesn’t transcend the entire book of business so to speak for the quarter, but we’re pleased with the sales growth that we are seeing. With that said there’s other categories as well that contributed to the sales growth and some of which were the same ones that had some pretty significant inflationary pressures. So its mix, I guess, so there’s not a direct correlation is the short answer.

And then I have a question about inflation. I know you said that you think that the operators could have done a better job passing it along, but maybe you could talk a little bit about the condition, I mean I am sure they all want to make money, so what the conditions might be that would be making it difficult for them to pass it along and is it fair to call that price competition?

Well, what I said, I want to be really clear, because I see a lot of our people listening here too. I said we need to do better going forward. We are fine with the quarter, as I said it was acceptable. These are very interesting times in addition to being exciting times. So we got a situation out here where a year ago we had about 3.5 points of deflation, cases were going the wrong way. A year later we’re seeing just the opposite amount of inflation, and we’re encouraged by the case growth. If you look at it from our customer standpoint, if you go back three years we’ve been through an environment of two years of pretty significant inflation, a third year deflation, and now we’re into our fourth year here where inflation is picking up in these certain categories. So I’m not saying that we should have done better, I’m really just saying we need to do better going forward and our folks to understand that. In terms of how you manage that, essentially you manage it territory by territory, account by account, and you look at each situation and you’re always getting an eye at the operating company level, you’re always trying to strike the right balance between opportunities for growth and opportunities to more effectively, more productively service these accounts with the reality that our customers are running a business as well and we need to be sensitive to what their higher cost items are and what their key concerns are. That’s why we have 8,000 commission sales people out there, that’s why we have Presidents in all these operating companies as to make those decisions on an account by account basis, and overall from an enterprise standpoint we try to give them good guidance and feedback. And then on the contract side of the business, the inflation as we’ve talked before impacts a little different, most of the categories are contractually linked to some type of pricing mechanism, and there typically is up to a 30-day time lag from the time the products comes in to when the prices roll. So it depends on whether its street business or contract business.

And then I just have a final question, you were talking about that SYGMA business growing faster, and I just think you generally have opportunities on the contracted side. I was wondering whether the business transformation process is part of what needs to be accomplished for you to go after the contracted business more aggressively, and make sure that that brings at least a comparable financial benefit to the company because it’s obviously lower gross margin business.

Well, I think the business transformation initiative is going to help us on both sides. It will definitely help us on the street side in terms of I think our sales people having better tools to work with, as well as our customers, and over time allowing our customers to participate I think more actively in what level of service the wanted, what types of price points, the whole channel opportunity there. On the contract side, we are starting to see this already, but to your point, I think we’ll see it more as we have better data and more integrated systems. Our big opportunity on the contract side is to create a more consistent face to the customer of all Sysco’s capabilities. So when you hear us speak about more effectively integrating our capabilities we’re talking about both on the merchandising and the sales side as well as across all of our different businesses, SYGMA, FreshPoint, Meat Company, Guest Supply, all those types of things. So I think the biggest opportunity on the contract side is just from an enterprise standpoint being able to go after this business more cohesively and that’s what we are looking forward to there.

Great, thank you very much.

Thank you.

And we’ll take our next question from Mark Wiltamuth with Morgan Stanley.

Hi, good morning. On the business transformation process, when do you think we start to see some of the cost savings falling out of that because it seems like there’s probably some duplicative efforts there at the operating company level versus the parent?

As we talked about we finished the design of the business transformation process. We are going through testing, the fourth round of testing of that’s begin, and we’ll start to roll out sometime in the early part of next calendar year. We won’t actually start to see reductions in costs until we get further into the rollout process. That’s the schedule of numbers that we put up back in December at the Investor Day meeting, which we’ll update for you this December at the same time. So while we’ve outlined all the costs and the way we’ve been doing that is incremental net of benefits. You really don’t start seeing significant benefits until fiscal 2013, and in that year our current estimates again will be updated in December, but what we showed you last December was the benefits would offset the costs in 2013. So, it’d be about break even in that year, and then thereafter of course we’d see more benefits than costs.

So we’ll watch for that update on the schedule. And then on the inflation, what do think is a comfortable level of inflation to pass through, where you can get it through and it doesn’t kind of shocks the system and you don’t have problems passing through margin there?

I’ll let Chris start with that one, Mark, and…

What we’ve always talked about is small amounts in inflation are great for us, one to maybe even three points of inflation. We can handle that and our customers can handle that. When you start spiking above that it causes some problems. We typically believe we can always manage those increases effectively, but maybe they may take more time to pass through the system. What we’re commenting about this quarter is three categories. Whereas Bill said, we saw inflation combined in those three categories of close to 10%, and that’s more than we can pass through in any timely manner. So one, two, three we can handle that, our customers handle that. When you start spiking across the board or in certain categories it gets more difficult, and these particular categories are meaningful (inaudible) especially are fairly high margin categories.

The other point I think which I am sure most of you on this call understand is this challenge is not unique to our industry, and certainly not to us, there’s a lot of companies that are dealing with this growing inflation issue and the product mix right now. So we need to stay close to our customers and for that matter our suppliers and make good decisions and I believe you’ll see that we’ll do that.

Okay, thank you.

Thanks Mark.

And we’ll take our next question from Greg Badishkanian with Citigroup.

Hi, guys, this is Jeff Hans actually on behalf of Greg. Following up on the strategic pricing initiatives that you guys have rolled out and as it relates to the overall environment, what are you seeing from your competitors, I guess kind of following those initiatives in those specific markets and I guess just overall, I mean is the environment still pretty competitive versus where it’s been the last few quarters?

I’d say the competitive environment is just I think it’s comparable to where it’s been, people are very still very acutely sensitized to case growth and volume growth and getting people into restaurants and their operations that type of things. So I don’t think there’s been a lot of change there. It will be hard for us to gauge any competitive reaction to this. What I would just say again is that we’re seeing some good results on our end. So that’s coming from some place and we are just pleased with what we are seeing and the only point we are trying to make today is it did impact our margin and probably will here for a couple more quarters anyway, but we think it’s an appropriate opportunity for us to take advantage of.

Just one last one I guess in terms of the trend in case volume growth into October and maybe early November, did that kind of continue at the rate you saw in your fiscal 1Q and also kind of the rate of inflation I guess in October-November as well that accelerated or just stayed constant?

We don’t typically a lot of guidance or updates in terms of the quarter, but I think I would say this to you; there has been I think favorable stand in the marketplace we tried to signal that in our comments earlier this morning. We’re encouraged with the volume growth that we’re seeing right now and at the same time, what we’re reading what we feel on our side of the business I don’t think the inflation is going to abate any time soon.

Thanks so much.

Yes.

And we’ll take our next question from Andrew Wolf with BB&T Capital Markets.

Good morning.

Hi, Andy.

I guess just a question popped in my head as you answered last question. What is prompting price competition in an improving environment, it seems counter intuitive in most industries and certainly how food service distribution as I know that has historically structured the industries as a lot, they got better, price competition eased seems counterintuitive?

While I’ll take a shot at this, if I don’t get it Andy, come back to me. We need to put this in some type of context, this industry has always been highly competitive, there is a lot of competitors out there, there is lot of different people with different business models and different agenda, there is always competition. I think maybe to your point we’re in a inflection point now and the cycle I was trying to describe earlier is, if you look at it over three year period I am no food services story, but I don’t know that we’ve ever had a three year period like this, where we had two years of lot of inflation and put lot of pressure on our customers, then you have a year of deflation. Now we’re finally starting to see some case growth and we think the industry has shown a little good signs of recovery, but there’s still a lot of sensitivity out there at the operator side and the distributor side in terms of growth and how we continue to based upon our respective businesses. So this favorable turn reminds us, let’s be clear we’re talking about may be 2% or 3% growth in our line of business. We’re not talking 7% or 8% real growth. So I think it’s still very, very competitive out there and I think people’s memories are a long right now and everyone is doing everything that he can to not just improve their business but to be prepared for any surprises that come down right here over the next six months to 12 months. So I think it’s more just a weighted impact of what we’ve been through the last two, three years.

I am going to jump in and just have one thing. I think we’ve mentioned it, but there it’s mentioning it again. Last year at this time we were reporting deflation of I think 3.4% in our number. We went from a negative 3.4% to positive 3.3% in fairly short year of time and that we’d saw that volatility causes a lot of uncomfortable out there in the market. So we’re going that it’s.

A few point, we have an opportunity managers better as I said and we’re committed to doing that.

Let me ask you specifically on this DMA, this consortium of regional. If they just want to I think the McCormick & Schmick contract from you guys was that un-priced and if so what I am trying to figure out is how deep is this price competition and is that what you would consider just kind of normal give and take and there is plenty of stuff you want or is the capacity utilization that some of the distributor might be at, it’s own inflection point where the marginal cost are de minimis as well be it kind of low end contracts, I’m just trying to understand a little more whether market dynamics are the way they are?

Yes. I think the only thing I’m going to comment on specifically as it relates to McCormick & Schmick we’re disappointed we lost the business, it was good business for us. In terms of what triggered that decision, I’m not exactly sure of probably all the above. With that said, we’re encouraged with what we’re doing right now in the contract side both in SYGMA and on the multi unit sales portion of our Broadline business here Larry Pulliam, and Kent Humphries and their team. We’ve got a lot of momentum there, we’ve made some organization moves and we’re much more focused on segments and that type of thing. We’ll talk more about it in December. We never wanted this business that’s something we’re working very hard on throughout our company to minimize those situations. But I can tell you we’re bringing on business as well and we feel very good about the direction in that area.

And the last thing, we aren’t using pricing to win business and share, is it more getting actually new customers or is it more expanding into new lines with existing customers and kind of getting to sometimes in this industry, if you win customers and then margins kind of normalize?

It’s a little bit of both. I don’t know that I can break that down for you. Certainly the most profitable sale we can make is in incremental sale with an existing customer. So I think there is plenty of opportunity there, it’s also an opportunity to put our best foot forward with prospects. I think it’s both.

The last thing, as I must missed this on the SAP; could you give us the impact, the earnings impact?

We didn’t comment about it because it was not a material change quarter-over-quarter and our guidance has not changed from the 10-K.

Okay, thank you.

Thank you, Andrew.

And we’ll take our next question from John Ivankoe with JPMorgan.

Great, thank you. Actually it’s just a follow-up on my previous question. Over the last couple of years, your case volume has significantly exceeded that of restaurant traffic as I understand it is reported by the chains, and so the question is, where has your sales growth come from, has it come from sales to existing accounts or as you just mentioned lower margin sales to new accounts, what do you anticipate that mix in general going forward and do you have a good sense for your existing accounts, how your share has changed over the past couple of years, and is there like a medium term target we could possible think about?

Is that it?

Yes, it’s really one question.

John, it’s similar to Andy’s, I mean, I think it’s I’m going to need you come back I think but essentially it’s coming from both. I mean, we certainly want to participate in the growth of our existing customers, we are everyday out there trying to improve our share of wallet with those folks, and we do believe we’ve been able to do that. Now that’s hard to quantify, and hard to sometime say with a straight face when the industry has been in decline for a year to two years. But we certainly think that we’ve taken, improved our share of wallet, and taken share for that matter in all segments. So I think what’s helped us a little bit in the overall numbers relative to the restaurant numbers is about 30% of our business or a little bit more than that, 35% I guess, is non-restaurant business. So we continue to do well in the institutional side of things and that’s certainly been a buffer for us through these difficult times. But our approach and our model hasn’t changed. We want to grow with our current customers. We want to help them grow, but as we’ve talked before, and we’ll talk in more in December, there is plenty of opportunity for us both on the street side as well as the contract side of this business to bring on new business. The last piece of this and the part that we continue to focus on even more is to protect the business that we have and ensure those customers have been very well to us over the years.

Okay, understood, thanks for the color.

And we’ll take our next question from Bob Summers with Susquehanna.

Hey, good morning. I’m just trying to get my arms around the variable labor component of the model a little bit and understand, and I appreciate this is a big picture look, but why an $84 million increase in gross profit dollars drives about a $40 million increase in salaries and related items, so I guess on the surface that seems a rather aggressive path?

Well, I’ll start, but I think Chris got some more specifics on this still, but essentially what we try to explain is, just in general you’ve got some incentive increases there at the management side. Bob, we here just talked about productivity improvements, we’re pleased, and we continue to be pleased with what we’re seeing on the operational side of the business as well as on the admin side now. But one thing we have done and we talked about this, and we’ll continue to do is we have more aggressively invested in our sales force here over the last six months or so and those numbers are beginning to populate themselves both in terms of the numbers of MAs on the street as well as trainee. So that does translate into higher commissions with the sales growth and into higher fixed investment on the selling payroll side as we try to get back on track in terms of our headcount in sales. Without being real specific here, I am just trying to bifurcate that for you in terms of we’re pleased with what we’re seeing operationally on the admin side in terms of productivity, but we are investing in sales folks, and have been over the three to six months. Chris, do you wanted to?

I think you actually have the numbers, I mean, obviously, we started with a gross margin number that was lower than we would have liked, and then the payout came out of that lower number. It comes back to leverage and you’re specifically focusing on the labor side of the equation, I think that’s the answer.

And then second, can you just talk a little bit about Sysco brand sales? If I am looking at this table that you have in the back properly, did the penetration rate go down?

Yes, that’s a trend that we’ve seen now for the better part of two years. So our brand sales are off, and as we’ve been talking we’re concerned about that to a point. Obviously you need to sell customers what it is that they need and they want, but we do have some opportunities there and internally we are doing a lot of work in that area, and I think you’ll see some progress there, but it takes a while to move the needle on that, but we are very focused on that. But again we need to approach that in a way that works for the customer base and that’s the balancing act that we’re dealing with at this point.

Right. Agreed, but if I were to think of is there intending gross margin drag associated with that change, I’m just trying to think through another component of the gross margin?

There can be, but it tends to get woven into the other factors, the other two factors I was talking about. So I can’t tell you that I can call it out specifically, but certainly over time I think it’s clear that when we are able to sell Sysco branded items that that does translate to more leverage on the earnings line.

Okay, great, thank you.

And we’ll take our next question from John Heinbockel with Guggenheim.

Bill, so couple of things. If you think about managing the inflation part better, is that just kind of a willingness to pass through more and more quickly or is it something different in terms of how you buy source, get product into the warehouse, which are the two, or is it all of those.

Look, I know some little bit like a buffer, it’s a little at the latter and a lot of the former I think so. There is always opportunities as we work with our suppliers to make sure that we’re controlling our cost and we do a good job with that, and we certainly worked very hard on that. The flip side of this is I think we are signaling to you in terms of where we’re at and what we need to do is really more about focus I think. We’ve got the best people in the industry out there, we’ve got great presence, we’ve got 8,000 sales people, they’ve great GSMs working with them. So, it’s essentially what I was talking about earlier, which is looking at each customer, each territory, each operating company and just making good decisions and striking the right balance for, in terms of what the customers keeping new jar and what we need and how that translates into moving boxes versus price versus cost efficiency. So I’m going to just leave that focus internally, where we think we can do better than what we have and expect that we will over time.

Have you seen, as the inflation dampened yet particularly where we’ve had the 10% inflation or you haven’t seen that yet?

No, I can’t say that we have seen that, we’re seeing pretty good growth in some of those categories.

On the selective price investments, so you’ve got double digit case volume improvement. Does that exceed the amount of price reduction or similar to it or how does that compare?

You need more than just double digit to make that working in the short-term. So what you heard me say John was that I think there is opportunities out there for us, but it may take more than a year to get the full payback on that type of initiative.

So it sounds like the investment is in excess of the double digit case volume and you’re hoping to mature into whatever the price investment was?

Let me try to be clear here. What I’m saying is, we see opportunities in these particular categories, we’re making some investment in it. We’re rolling it out in different parts of the country at different time. There is somewhat of a cascading effect here and it’s not a six month payback, that’s what I’m trying to say.

Do you expect to get a lift where you’re making those price reductions get a lift not just in those categories, but strategically important in terms of lifting the customers total purchases with you or you haven’t really built that into…

Excellent point and that’s all part of it. That’s why we used the word strategic here which is some of that opportunity is to solidify relationships with customers and grow not just on those items but within that category and ideally cost categories. So that’s exactly what we’re trying to do here.

Final question. The three cycles you’ve done on the rolling out the enterprise and package, what have you learnt, is there anything that jumps out negatively or positively that might have been different than you thought?

We’ve learnt; its lot of hard work. We got people working lot of hours down here and there is lot of complexity a lot of detail to it, and we are staying the course, we’re doing everything we can to minimize the surprises once we go to the first part out here.

All right, thanks.

(Operator instructions) And we’ll take our next question from Bob Cummins with Wellington Shields.

Thank you and good morning, everybody. I wonder if you could give us a broad overview on the state of the restaurant industry in general now, are we in an early stage of recovery, are the operator still complaining, is the business still down. Where are we going, are we in up trended as yet?

There is a part of me that wants to say yes. Certainly the signs we’ve seen since late summer Bob are encouraging. Some reports are coming out and data, both in terms of what the restaurants are seeing in terms of their volume and getting folks into their businesses as well as the sentiment, we’re seeing the psychology pick up a little bit and the optimism pick up ever so slightly, but everything helps here. I think we are beginning to see some things that we’ll hopefully lead to more positive growth for the industry. With that said, I think what we’re also continuing to see is the strongest operators are doing the best, as it is in our situation and the distribution side. It’s definitely better than it was a year ago and we believe it’s certainly better than it was maybe six months ago. It’s still somewhat tenuous, but if you are good operator out there today I think overall you’re starting to see some good signs.

Great, that’s very helpful.

With that being our last question that concludes today’s conference. Thank you for your participation.