J M Smucker Co (SJM) 2005 Q4 法說會逐字稿

Welcome, ladies and gentlemen, to the J.M. Smucker Company's fourth-quarter and fiscal year 2005 earnings conference call. At this time I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company we will open the conference up for questions and answers after the presentation. I will now turn the conference over to Mr. Mark Belgya. Please go ahead, sir.

Welcome to the Company's fourth-quarter and fiscal year 2005 earnings conference call. I am the Company's Chief Financial Officer and thank you for joining us this morning. On the call this morning from the Company are Tim Smucker, Chairman and co-CEO; Richard Smucker, President and co-CEO; Vince Byrd, Senior Vice President of our consumer market; Fred Duncan, Senior Vice President special market; Steve Oakland, Vice President and General Manager of our consumer oils and baking business; Mark Smucker, Vice President and Managing Director of our Canadian business; and Paul Smucker Wagstaff, Vice President and General Manager of our food service business.

After this brief introduction I will turn the call over to Tim for opening comments and a recap of the year. I will then review the financial results for the quarter and Richard will provide commentary on 2006 and offer closing remarks. At the conclusion of these comments we will be available to answer your questions. If you have not seen our press release, it is available on our website at Smuckers.com. If you have any follow-up questions after today's call, please feel free to contact either George Sent, our Director of Corporate Finance and Investor Relations, or me.

I would like to remind you that certain statements in this presentation and during the question-and-answer period that follows may relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995. I invite you to read the full disclosure statement concerning such forward-looking statements in our press release. I also want to point out that the Company uses non-GAAP results for the purpose of evaluating performance internally. Additional discussion on non-GAAP information is also detailed in our press release. With that I'll turn the call over to Tim.

Good morning, everyone, and thank you for joining us. Let me begin by briefly summarizing the key points for the year. First, a strong fourth quarter capped another year of record financial performance for the Smucker Company. Second, we completed the acquisition of International Multifoods and launched an aggressive plan to integrate their operations and are realizing significant synergies. Third, we completed the divestiture of several noncore businesses that did not support our North American branded retail strategy. Fourth, we made progress with our supply chain optimization project. And finally, we started up a new state-of-the-art plant in Scottsville, Kentucky which will provide capacity for the expected growth of Uncrustables.

At this time last year we were about to close the acquisition of International Multifoods. This acquisition greatly expanded our brand portfolio and added significantly to our existing market presence in the U.S. and Canada. In Canada we transitioned from a relatively small company to one of the country's major food companies with leadership in six categories. But more importantly, the acquisition supports our strategy of owning and marketing leading North American icon brands sold in the center of the store.

The integration of the Multifoods businesses continues on plan. While nearly complete, the process was a major undertaking this year as we integrated organizations and cultures, getting the right people in the right jobs, and consolidating systems, processes and locations. This was a year of change for the organizations and it is a tribute to the people involved that we were able to accomplish so much.

We also invested behind the acquired brands and expect to invest even more this year. We remain very enthusiastic about the growth opportunities for these icon brands. We have seen positive response to new products introduced last fall such as the Pillsbury ultimate desert kits. You will continue to see the results of our active product development efforts with the introduction of several new products over the coming months. You may also have seen some of the packaging changes we have made, especially with Pillsbury, capitalizing on the value of the brands. And we have only just begun to take advantage of the many cross promotional opportunities across all of our brands.

The performance of the brands acquired from Multifoods exceeded our expectations. We are pleased that for the year baking sales grew over last year's levels. Our core Smucker’s, Jif and Crisco brands all recorded solid sales growth for the year with Crisco rebounding after a competitive pricing environment last year. The strength of our brands and their growth in sales allowed us to continue to spend behind our brands while offsetting significant raw material increases and the additional costs incurred during the Scottsville plant startup.

We were still able to achieve record results for they year. The addition of Pillsbury, Martha White, Hungry Jack, Robin Hood and Bick's to our Smucker’s, Jif and Crisco brands creates a strong group of North American icon brands and are the focus of our resources. In further support of our corporate strategy we also announced and completed the divestitures of several nonstrategic businesses -- Henry Jones Foods in Australia, a Brazilian operation, the U.S. foodservice and baking operations acquired from Multifoods, and our U.S. industrial ingredients business. These divestitures were accomplished with no significant financial impact.

Our supply chain optimization project has been an important program as we look to optimize our production capacity and operating efficiencies in order to lower our overall cost base. We take a measured approach to these decisions, but realize the need to implement these programs in order to grow our margins.

And finally, we want to recognize our employees. When we review the projects we have in place -- acquisitions, divestitures, productivity programs -- on top of the day-to-day execution against our operating plans we realize that it is through their efforts that we are able to turn our opportunities into strong financial performance. I would like to now turn the call back to Mark to have him review the financial results with you.

Sales for the quarter were 492 million, up 57% compared to last year. Excluding the contribution from Multifoods and the industrial business area, which was divested, sales for the quarter increased 11%. For the year, excluding the contribution from Multifoods and in the industrial business, sales were up 5%, ahead of our 4% strategic objective. On a GAAP basis income from continuing operations was up 27%. GAAP earnings per share were $0.45 this year versus $0.42 last year and included restructuring charges and merger and integration costs that were detailed in our earnings release.

Excluding these charges income from continuing operations increased 29% with a corresponding increase in earnings per share of $0.52 to $0.58. On a comparable basis for the year income from continuing operations increased 23% with a corresponding increase in earnings per share from $2.42 to $2.60. GAAP operating income increased 40% while operating margin for the quarter was 9% compared to 10.2% last year. Excluding the non-recurring charges and the Scottsville impact, our operating margin was 13%. As expected, gross margin for the quarter declined due to the addition of the lower margin Multifoods businesses, higher raw material costs and the Scottsville startup. Over time with our integration activity and the resulting synergies we expect margins to improve.

SG&A as a percent of sales declined from 21.9% to 19.4% for the quarter and has declined throughout the year reflecting the benefit of adding the Multifoods business to our existing infrastructure. Interest expense increased due to the additional debt outstanding resulting from the acquisition, while interest income was also up as a result of improved yields and interest earned on promissory notes.

I would now like to spend a few minutes on the completion of the startup phase of our Uncrustables plant in Scottsville, Kentucky. I want to reiterate that demand for Uncrustables continues to be strong and we remain excited about the growth platform that the product offers in both the retail and school channels. We have continued to fully supply our customers. For the year sales of Uncrustables across all channels were approximately $60 million, a 20% increased over last year. We expect to have sufficient supply to meet our future forecasted demand.

In early April we completed a nine-day plant shut down. Through the startup process we identified a series of actions that needed to be taken to improve production levels. And while we made many changes throughout the year, the shutdown allowed us to more efficiently address repetitive issues. While the plant was shutdown we also took the opportunities to conduct and employee training programs and as a result production throughput continued to improve at expected levels.

To confirm what we told you last quarter, we expect production to improve throughout 2006 and for the plan to reach profitability during the fourth quarter of this fiscal year. Based on our progress, we look forward to introducing new products sometime next calendar year.

During the quarter we incurred about $7 million in startup costs and a total of 19 million for the year with the cost of this shut down a contributing factor for exceeding our spending estimate for the back half of the year. So while we expect the plant to become profitable on a production basis by the end of this fiscal year, the Uncrustables productline profitability will depend on the number of new products and the corresponding marketing spend. The most important factor is that the product is doing extremely well in the marketplace and continues to achieve high consumer acceptance.

Now let us take a look at the results of the quarter by our two business segments. Sales in our U.S. retail segment were 325 million, up 49% compared to last year with Multifoods contributing 79 million or nearly 75% of the increase. Excluding the Multifoods brand the retail business was up 13% and for the year the retail business was up 5% excluding Multifoods. In the consumer business area sales were up 23% for the quarter and 18% for the year driven by the addition of Hungry Jack, growth in the Smucker's and Jif brands and continued growth of Uncrustables. Excluding the addition of Multifoods sales were up 10% for the quarter and 6% for the year in the consumer business area. We have continued to see market share gains for both the Smucker's and Jif brands once begin achieving record levels.

In the consumer oils and baking area sales more than doubled due to the addition of the Pillsbury, Martha White and Pet brands. In our oil business Crisco sales in the fourth quarter were up over 20% compared to last year and experienced significant volume increases. This growth is evidence that our lower on-shelf pricing is having an impact along with the response to our new packaging. Crisco sales for 2005 were up over 2004 due to the brand's strong performance during the second half of the year.

In special markets sales were 166 million for the quarter, nearly doubling last year. The additions of Multifoods, primarily in Canada, contributed 75 million to the segment's overall growth. Our beverage business was up 9% and the foodservice business was up 7%. Excluding the industrial business and the contributions from Multifoods, our special market segment increased 5% for the quarter.

During the quarter the Company made no additional purchases against its authorized repurchase plan of 1 million shares and currently we have approximately 650,000 shares outstanding that may be acquired as part of this plan. With that, I would now like to turn the call over to Richard.

Good morning. As we enter the new fiscal year we are encouraged by the momentum our businesses are experiencing. Our key areas of focus remain completing the integration of the Multifoods businesses; investing behind our North American brands, this includes the acquired brands, new products and the existing base brands; continuing to refine our portfolio to meet our strategy; and completing our supply chain initiatives and developing new productivity improvement programs. We made significant progress towards integrating the Multifoods businesses this past year and we continue to execute on other initiatives relative to our brand portfolio.

Some examples include -- the opening of our new R&D center in Orrville, Ohio which will provide us with the necessary capabilities to innovate in the baking category. We expect this addition to our existing tech center to be completed by mid summer. As we mentioned last quarter, the Minneapolis headquarters will close by the end of this month. We intend to significantly increase our marketing spending again this year with a great deal of the increase related to the acquired brands. We expect to introduce a number of new products for all brands in preparation for fall bake. And we are in the process of rolling out our new distribution network.

In Canada the integration efforts have focused on laying the foundation for consistent long-term growth. Key accomplishments include -- combining two companies through a significant organizational restructuring; the implementation of a new broker sold sales model for our branded retail and foodservice businesses; and significant investment in consumer brands including three new advertising campaigns for our key Bick's, Robin Hood and Smucker's brands. With these pieces in place momentum is building for a successful 2006.

Now let me comment on our outlook for the year. We expect to see revenue growth of 6% based on the following assumptions. First, we expect to achieve our strategic annualized sales growth rate of 4% on existing business, even considering a $50 million decline in revenue as a result of exiting the industrial business. And second, we included only ten and a half months of sales for Multifoods in 2005; the additional month and a half of sales in 2006 will contribute approximately $75 million in sales. Regarding our bottom-line growth, we remain committed to increasing our earnings per share by our stated long-term goal of 8%. We feel that this mark is achievable even as we spend significantly to support our new portfolio of brands.

Let me speak to several of the factors that will impact the planned earnings growth for 2006. First, as I mentioned, we expect to significantly increase our marketing spending. We will see an increase of approximately 20% to 25% over the past year as we spend across all brands. Second, in response to continued increases in commodity, packaging and employee benefit costs, at the end of May we announced a 3% to 4% increase in price on peanut butter and fruit spreads. Third, we will realize benefits of our restructuring and supply chain programs as well as from merger and integration synergies.

Fourth, the additional 8 million shares issued for the Multifoods acquisition were included for ten and a half months in 2005 and will be included in the average for the full year in 2006. In addition for 2006, the Company is instituting a restricted stock program that will replace the employee stock option plan that we currently have. Both of these factors will have an impact of approximately $0.05 per share each. And finally, we will also have a slight increase in interest expense due to the addition of the acquisition debt for the full year. This will have an impact of approximately $0.02 per share.

Turning to cash flow, we expect capital expenditures of approximately $75 to $80 million, depreciation and amortization of 65 million, additional pension contribution of 15 million, the payoff of a $17 million tranche of long-term debt, and a dividend payout of approximately 63 million.

In closing, let me summarize the key points. First, we had a great year. Second, the integration of the Multifoods brands went extremely well. Third, our momentum is strong. And finally, we are committed to the long-term steady growth of our brands, our employees and our Company. We thank you for your time and are happy to answer any questions you may have.

(OPERATOR INSTRUCTIONS). John McMillin, Prudential.

A lot of Smucker's on this call. Just in terms of the lower tax rate, Richard, I guess the tax came in slightly below 35% and that has trended down. If I look at this as an operating tax rate, kind of off the $0.58, what was the reason for the lower tax rate and what kind of tax rate assumption are you using for '06?

John, this is Mark; I'll comment on that. A couple thoughts. In terms of the rate, we expected to see the rate -- the addition of Multifoods brought us a tax structure that allowed us to see the decrease and we have seen that throughout the year and that's the primary reason for the '05. For next year we would suggest using a rate of 36%.

But it did come down a lot in the fourth quarter -- fourth quarter versus the third quarter.

That was primarily due to just the year-end adjustment where we had to basically do the catch up for the full year impact.

Okay. So 36 is the rate to use for next year?

That is correct.

And just, if I look at sequential margins -- I know this is seasonality to your business -- but if I look at third-quarter margins versus the quarter you just reported, I have gross margins coming down 110 basis points and operating margins coming down 110 basis points. Is that simply the Uncrustables brand issues?

It primarily is, John. If you look at those charges, those are -- the Uncrustables are fairly consistent across the fourth quarter in terms of absolute dollars. So the first and fourth quarter the Company's margins are the lower two. So with that fixed amount of Uncrustables spend and some of the restructuring and integration costs being relatively constant dollar quarter to quarter you would expect to see the kind of decline.

And if I could just ask Vince a question. And I know when we look at Nielsen numbers we're missing the biggest customer and some other issues, but if I look at 52-week numbers for the -- for basically almost $1 billion salad and cooking oil business, your market share is down only 40 basis points, on average down 150 basis points -- and the big, big winner has been private-label that seems to have gotten a 200 basis point increase in dollar share and even a bigger increase in unit share. Can you just -- I know I see some 12 week improvement, but it just doesn't look like this 12% Crisco fourth quarter sales increase is any kind of sustaining trend or indicative of the trends you've seen in the fiscal year?

Hi, John, Steve Oakland. No problem, I'll comment on that. I think we saw a period through last year where we had significant gaps between the brands, especially Crisco and private-label. And our retail customers decided not to pass through the high oil prices that we had through the fall bake period. That was driven by a couple of the -- the extreme value retailers drove those prices down, held them low and private-label did very well during that period.

As you mentioned, the recent 12-week and the more recent numbers suggest more normal -- what I would call normal gaps between brands and private-label and we're seeing those numbers improve not as much as we would like. And that's where areas of innovation -- things like our drain back bottle and the things that we're doing innovation wise we think are the key and we think the category has lacked that, frankly. And until we can step that up we need to differentiate from private-label and that's what we're trying to do.

Last question and I won't use anybody's name because I'll probably get it wrong. But just in terms of seasonality or any kind of volatility in this earnings growth pattern that's expected to hit 8% for this year, Tim, would you expect any back-end loaded, front-end loaded, any kind of quarterly guidance you can give us -- or Mark?

It's going to be pretty normal. There shouldn't be anything unusual this year versus other years.

Thank you, Richard.

George Askew, Legg Mason.

Good morning and congratulations. Just a couple of questions on IMC to begin with. What was the organic growth for the Multifoods businesses, if you can look at it that way, for the quarter, for the year? I know that you don't have great comparisons for the year ago time when you didn't own the business, but can you give us a sense of that? You indicated they were up.

Steve Oakland again. I'll speak to the Pillsbury brand. Two things, organic growth versus new item growth, these are categories where new items drive growth. And if you look at items in the IRI data for less than a year represent maybe a little more than they would in our other businesses. So things like all the dessert kits, new flavors, our whipped frosting, those generated growth and then we attrit items out. We replace items. So having said all that, Pillsbury grew 3% in tonnage last year. So we're very pleased with that in a category as competitive as that was a year ago.

Okay, good. On the cost-savings side, is the Company -- what kind of synergies or cost-savings did you see for the year out of the IMC synergies? And are you interested in revising upward your $40 to $60 million rate that you've provided in the past?

In terms of the range of synergies, we still feel comfortable with that $40 to $60 million. And as we expected, we realized about a third of that during the fiscal year. Of course, most of that was reinvested back against the brands. And I think as we have fairly consistently stated, we would expect to see that synergy come into the Company about one-third per year through the end of fiscal 2007.

Okay, good. On Uncrustables, you mentioned new products -- I think, Mark, your phrase was sometime in 2000 --.

Sometime the Next calendar year.

Next calendar year, that was it. I think last quarter I heard the word "early" in 2006. Is there a change there or -- I was thinking we'd see some new products basically very early 2006 and I wonder if there's a change in timing of new products with Uncrustables?

George, this is Vince. No, there's no change basically. We're ready to go and it's not a significant change. It will be probably sometime during the fourth quarter. You just have to take into account once the retailers get through the fall bake season and the timing of frozen foods month, etc. So hopefully there will be something in the fourth quarter.

Okay, good. And then last question, just looking at fruit supplies, harvests, can you give us a little bit of an update there? I know we're in Strawberry picking season I believe in much of the country. A little bit of an update of what you're seeing there, please?

Tim Smucker So far it's good. This is Tim. We are in the middle -- actually near the end of Strawberry. Supply is good and prices are reasonable. And at this point we don't see any indications of any other problems for the year in terms of supply. Fruit starts coming in in the next month really.

Last year you may recall cost did go up in fruit significantly and it hasn't come down this year but it's stabilized.

Okay, great. Well again, congratulations and thank you.

Christina McGlone, Deutsche Bank.

I guess I'm trying to reconcile just the swing factors for next year with the 8% growth comment. Richard, you gave a lot of information today, but I'm thinking about just all of the various cost savings that there are. Looking at it we'll have lower year-over-year Uncrustables costs, we should have -- when you had announced the restructuring initiative back in the March of '03 you talked about cost savings ramping up in '06, there should be incremental IMC savings, and then you recently announced the closure of Salinas and then the revamping of the distribution network, so there should be savings there.

So all in I calculate about $0.31 of incremental cost savings. And then you gave us some $0.05 per share for extra shares and for the restricted stock, but it still seems that the 8% growth, given all the help that you have, is pretty conservative unless I'm just -- unless it's being eaten up in marketing. So maybe can you comment on that for me?

Christina, this is Mark. Certainly the increase that Richard made in his comments about our marketing spend next year being up 20%, are addressing a lot of the cost savings. I would comment on your cost savings, I think you're fairly right on in terms of expectations of what we said and what we're realizing, but we are significantly continuing to invest behind both the IMC brands as well as our previous Smucker brands. And I think that's probably where a good bit of those savings are being filed back.

So when do you anticipate seeing -- kind of being at a steady run rate in marketing and seeing margins expand and maybe growth accelerating a bit?

I think over time we think our margins are going to expand, but it's going to be kind of like the half a percent a year type of a range. It's not going to be one lump sum at any one time. Because if we do have a little extra money we do want to spend it across these brands and build them over for the long-term. So we still think a long-term growth rate of 8% and actually hitting that number is something that we can achieve and will achieve.

Okay. And then in terms of the price increase on fruit spreads and peanut butter, has it gone -- what's the acceptance been and has competition followed?

It has gone through, if that's your question. It was announced on May 23rd and I really can't comment about whether there's any competitive following at this point.

Have you seen any -- it's early, but any impact on volumes or do you anticipate that?

No, have not seen any impact on volumes.

Okay. And then I guess last question. The CapEx guidance seemed a little bit higher than I was expecting. Do you have an additional plan in there or project in there?

No, Christina, there's no additional -- what we will see typically is a little bit of spending against the next fiscal year depending on the timing. So we've just increased it a little bit to recognize that. But there's no additional major projects beyond what we've talked about in the past.

Okay, thank you.

Mark Chekanow, Sidoti.

Let's talk a little bit on Uncrustables. You talked about the good demand you're seeing in retail and in the food service. I'm just curious what you expect in terms of competition. I know you were in the news a lot with the patents and everything and I wouldn't expect really much competition at retail to go up against your brand. But there was a trade show in Chicago for the school food service industry and there seemed to be a number of people out there with very similar products to Uncrustables marketing in school food service where they might be a little more price sensitive.

So can you talk about kind of expected competition in that channel? How you're going to price or if you think your brand can carry you at all or I guess even if you foresaw other people coming in with an Uncrustables type product?

This is Paul Wagstaff. The answer to your question is we have seen some competitors, they've been in the marketplace for the last two or three years, and our brand has carried us very, very well in the school market center and we don't anticipate any major issues with our sales growth based on the competition that we see. Again, our brand has done very well with the school systems that we're and we're confident it will continue.

I'm curious; on the production side you guys have had a lot of excess startup costs. Are you aware of -- are the competitors feeling the same issues as they try to ramp up production or what kind of plans or who's sourcing this? Just curious -- are other people experiencing other types of production costs?

Tim Smucker We're not really familiar with some of the competition in terms of what they may or may not be experiencing. Our thinking is that they certainly don't have the level of state-of-the-art facility that we have and so I would doubt that they're in fact incurring similar costs to what we did.

Okay. And then also, you talked some about the new product launches for -- coming in the next calendar year. Were you talking mostly about Pillsbury or are we also now looking at leveraging the Hungry Jack brand and seeing where you guys can take that?

This is Vince. I would comment that it's across every one of our brands. Again, we have a stated objective of 1% of our growth coming from new products. We've actually exceeded that in the last couple of years. And we see no reason why we shouldn't accomplish that this next year across all brands.

Okay, thank you.

Ann Gurkin, Davenport Investment.

I was wondering if you could comment a little bit on the success of the cross promotion, I think it was Pillsbury and Crisco? And then have you planned any more of those cross promotional activities in the fall bake season this year?

This is Steve Oakland; I can comment on that. Our first couple of promotions for Easter allowed us to leverage not just the regular Pillsbury business but the ingredient business -- flour, Pet milk -- items that on their own probably don't have the scale to promote. Those were successful and actually we have some promotions planned this fall that leverage all of the Company's brands. So we're taking it another step further.

Tim Smucker I would say that there's probably very few promotions that are -- that stand alone as a brand by themselves that whether it be Smucker's and Jif or Pillsbury and Crisco or Hungry Jack and Smucker, on and on. Virtually every promotion has a joint -- is joint branded.

All right, thank you.

Chuck Cerankosky, Key McDonald.

Looking at the Uncrustables business, you break out the startup costs. I want to understand, if we're looking at a P&L of the Uncrustables business and took out the start up costs, would we still see an unprofitable operation at this point?

Yes, that is correct, Chuck.

What does that do to the simple volumes you're operating at or the spending behind the brands to do what you need to expand distribution?

A lot of it has to do with marketing spend. And we're still spending across the brand to support it and will be for quite some time, especially as we roll out new products.

I think the point, too, that we made earlier that if you sort of break down the profitability of Uncrustables you have to look at the Scottsville plant and we've said that by the end of this fiscal year we would expect that to be on a breakeven basis. And then the rest really is driven by just the new products and the spending behind those respective products.

Do you see the spend behind the new product introductions and that -- call it the frozen sandwich categories, are those going to be higher per SKU of introduction than what's going in the center of store?

Tim Smucker I don't know that they're necessarily higher. They probably are if we just look at them on a stand-alone basis because of -- you have limited SKUs to apply those costs against. But I don't know that they're necessarily that much higher than center of store. They do tend to run a little bit, but we're pretty disciplined about the amount that we feel is needed to spend against them. And now that we're -- I guess the point is we're developing a little bit of critical mass here. It won't be as difficult as it may have been initially when we first introduced the product.

Alright. Thank you very much.

Karen LaMark (ph), Merrill Lynch.

Going back to the Uncrustables, you indicated that you expect to have the supply to meet the demand for presumably fiscal 2006. Can you give us any color on where that demand is coming from, whether it's retail or school and whether it's new accounts or comps and maybe quantify your expectations for sales growth year-over-year? Thanks.

It is really 50-50. It is about half in consumer and half in the food service channels that we are experiencing our growth and expecting it to come from those areas.

Is it new accounts or mostly comps?

In retail it is a combination because on the peanut butter and jelly side we have very good distribution, it is like 90% ATB (ph) and so that will be to discontinued growth with the distribution we have. In the case of cheese and we've talked about that before, it will be a combination of distribution and growing the share or the sales in existing markets.

In food service it is really coming from some new customers as well as growing our current customers that we have.

Okay. Are you willing to quantify what you expect sales to be for fiscal '06?

No, not at this time.

Can we expect maybe the same rate of change, the 20% range or is that too aggressive?

We think it will be double-digit.

Great, thanks.

Alton Stump, Longbow Research.

Just wondered if you could break out what the fourth-quarter sales performance was for the Uncrustables brand and then also for Jif and your fruit spreads business?

I don't know that we give that level of detail, but I think we can say for spreads in total for the fourth quarter it was around 4% to 5% and Uncrustables; again, it was pretty much in keeping with the growth rate that we gave earlier.

Okay. And then just one more question beyond that. I was curious in terms of your long-term 4% organic sales growth guidance, and you talked a lot about on the call -- about various new product ideas or that you'll spend a lot more money on your products. Is it safe to say that we'll probably see the contribution from new products, which I guess is more percent longer term -- that it probably will be more than that in fiscal year '06?

Well it probably will be just for -- one of the things that drives the baking aisle is new product introductions. And so since that's now a larger part of our business it probably will be slightly higher.

Okay. And then also, did you mention what the growth of your Jif brand was in 4Q or can you give any detail on that?

I just referenced it as spreads.

Okay. Thanks, guys.

Gentlemen, I will now turn the conference back to you to conclude.

Thank you very much for your time and interest and your support. We wish you a great day and a great summer. We'll get back to you at the end of the next quarter.

Ladies and gentlemen, if you wish to access the rebroadcast after this live call you may do so by dialing 1-888-203-1112 or 1-719-457-0820 with a pass code of 904-2640. This concludes our conference call for today. Thank you all for participating and have a nice day. All parties may now disconnect.