J M Smucker Co (SJM) 2008 Q1 法說會逐字稿

Thank you for standing by. Good morning and welcome, ladies and gentlemen, to the J.M. Smucker Company's first-quarter 2008 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.

Good morning, everyone, and welcome to the J.M. Smucker Company's first-quarter 2008 earnings conference call. I'm the Company's Chief Financial Officer, and thank you for joining us this morning.

Also on the call from the Company are Tim Smucker, Chairman and Co-CEO; Richards Smucker, President and Co-CEO; Vince Byrd, Senior Vice President Consumer Market; Steve Oakland, Vice President and General Manager Consumer Oils and Baking; Mark Smucker, Vice President International, and Paul Smucker Wagstaff, Vice President Foodservice and Beverage Markets.

After this brief introduction, I will turn the call over to Richard for opening comments. I will then review the financial results for the quarter, and Tim will provide 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. A replay is available on the website in downloadable MP3 format. If you have any follow-up questions or comments after today's call, please feel free to contact 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 Litigation Reform Act of 1995. I invite you to read the full disclosure statement concerning such forward-looking statements in the press release.

I also want to point out that the Company uses non-GAAP results for the purpose of the evaluating performance internally. Additional discussion on non-GAAP information is also detailed in our press release.

With that, I will turn the call over to Richard.

Good morning and thank you for joining us this morning. I would like to begin by summarizing key highlights for the quarter.

First, we delivered record financial results for the first quarter. Sales were up across all business areas led by our Jif, Crisco, Pillsbury and Uncrustables businesses. The acquisition of Eagle, which closed at the beginning of the quarter, added $43.5 million to sales, and non-GAAP earnings per share were up 22%.

Second, we increased our operating margin despite a cost environment that remains extremely challenging. Margin improvements were led by the divestiture of our low margin nonbranded Canadian businesses, pricing actions that offset a portion of higher raw material costs and improved Uncrustables profitability.

And finally, we continue to emphasize product development and are excited about the new products available for our seasonally strong second and third quarters, building on our good momentum.

We have solid results in our US retail segment and another good quarter from Jif as we continue to benefit from the temporary supply interruption. Uncrustables again experienced good growth as consumer demand remained strong despite price increases that were in effect for the full quarter.

Sales of the Smucker's brand were flat this quarter compared to a particularly strong quarter last year when sales of fruit spreads were up 11%. Crisco realized strong sales growth in the quarter despite a decline in value. Cost of soybean oil has reached 50-year high levels based on commodity futures. We expect significant price volatility in this category to continue.

Pillsbury experienced sales growth and share gains in the quarter. We were particularly pleased that we regained the number two position in the high margin frosting category. Our steady stream of new products and our efforts over the past several years to fill distribution gaps have provided good growth opportunities.

In addition, our ever expanding presence in the baking aisle provides many opportunities for cross-promotion and marketing.

On May 1 we closed the acquisition of Eagle and included their results in our financials for the quarter. The integration of the business is on plan, and we expect to have the integration complete by the end of the calendar year. We achieved a key integration milestone earlier this month, allowing Eagle products to be ordered, shipped and invoiced alongside other Smucker products. Milk prices continue to rise, and although we announced a price increase effective in July, we are evaluating additional pricing action.

Looking ahead, the addition of Eagle Brand to our Crisco, Pillsbury and Martha White brands in the baking aisle provides new opportunities for growth.

Our special market segments also contributed to sales growth. Foodservice experienced growth in both the traditional and schools channels. Beverage had a strong quarter, particularly in our branded business led by the R.W. Knudsen family and the Santa Cruz Organic brands.

In Canada our consumer baking and condiments businesses experienced strong growth in the quarter, more than offsetting planned rationalizations. Canada also benefited from the impact of favorable exchange rates.

With the divestiture of the nonbranded Canadian businesses, we are fully focused on our branded portfolio. We have exciting new products and are supporting our brands with several marketing initiatives, including new digital media, strong in-store activity and advertising. We have many opportunities to grow our brands and look forward to continuing to execute on our strategies.

In summary, we delivered a solid quarter and have good momentum to the start of the year.

As we look ahead, we are committed to responsibly managing our business for the long-term. We continue to support our products with marketing spending and investments and investments in new product development and expect our strategy to generate long-term profitable growth.

I would now like to turn the call back to Mark to have him review the financial results with you.

Thank you, Richard. Sales were up 17% for the quarter, excluding the nonbranded Canadian businesses which were divested last September. Excluding the $43 million added by the Eagle acquisition, sales were up 8% with pricing gains contributing to the increase. Growth was led by our Jif, Crisco, Pillsbury and Uncrustables brands, a strong performance in foodservice and beverage and the contribution of the acquired White Lilly brand.

Peanut butter again had a strong quarter as the temporary interruption of supply in the market continued. We estimate that this contributed approximately 5 to $7 million to sales in the quarter.

GAAP earnings per share were $0.71 this quarter and $0.50 in the first quarter of last year, including restructuring and merger and integration costs. Last year's first quarter included pretax charges of $7.1 million associated with the divested Canadian businesses.

Excluding charges in both years, earnings per share were $0.72 this quarter and $0.59 in last year's quarter, a 22% increase. Operating margin for the quarter excluding charges improved 150 basis points from 10.8% to 12.3%. The margin improvement over last year was primarily due to the divestiture of the lower margin nonbranded Canadian business, a favorable product mix, improved Uncrustables profitability and the effect of price increases.

SG&A cost as a percent of sales were up slightly as marketing and selling expenses increased at a higher rate than sales. Sales in our US retail segment were $418 million in the first quarter, up 8% compared to last year, excluding the addition of Eagle. Sales in the consumer business area were up 6% led by increases in peanut butter and Uncrustables. Sales in the oils and baking business were up 10%, excluding Eagle led by oil, baking mixes and frostings and the contribution of White Lilly.

Sales of Uncrustables across all channels increased 31% for the quarter, ahead of our expectations. The overall Uncrustables venture was again profitable in the first quarter as a result of continued progress at our Scottsdale facility, volume growth and the impact of price increases.

In the special market segment, sales were $143 million for the quarter, up 14% excluding the Canadian divestiture. Foodservice was up 21% excluding Eagle with gains in both the traditional and schools channels. Sales in beverage were up 11%, and sales in Canada were up 6%, primarily from the impact of favorable exchange rates.

Now let me conclude my remarks with comments addressing items below operating income. Interest expense was higher by $4 million, resulting from the issuance of $400 million in senior notes. A portion of these proceeds of the notes were used to repair the short-term debt used to finance the Eagle acquisition. The investment of excess proceeds, which will be used to finance other strategic and long-term business initiatives, resulted in an increase in interest income of $1.5 million.

In June we divested our industrial ingredients business in Scotland. The sale generated a pretax gain of $1.9 million and an after-tax gain of $500,000. The effective tax rate for the quarter increased to 36.1%, primarily due to the taxes associated with the divestiture of the Scotland operation and the repatriation of foreign earnings related to that operation. However, we do expect a tax rate for the full year of approximately 34.5%.

During the quarter no additional shares were repurchased. There are approximately 1.7 million shares remaining available under the board's authorization. We will continue to evaluate future actions against the authorization as appropriate.

I would now like to turn the call over to Tim.

Thank you, Mark, and good morning, everyone. We had another record quarter with solid sales growth, and once again despite significant cost increases were able to leverage our sales gains into even greater earnings growth. It all comes down to the execution of our strategy. We continue to evaluate our portfolio focusing on leading brands and generating growth through acquisitions, new products and increasing our brand's share of market.

Looking at the acquisition component of our strategy, we generated sales growth with the addition of another number one brand in the baking aisle with Eagle Brand. As we integrate their operations, we expect Eagle to also generate good earnings growth.

Also this quarter we completed an enabling acquisition with the purchase of the [Snack'n Waffles] brand. Snack'n Waffles are ready to eat frozen waffle products that do not require any syrup as the flavor is already baked into the waffle. Currently they are served primarily in schools where they will complement our Uncrustables business and allow us to participate in the growing school breakfast program. We look forward to exploring opportunities in the grocery channel as well.

Turning to the new products I mentioned of our growth strategy, we continue to develop offerings that are guided by our strategic architecture, meeting consumers needs by offering product choices that either are good and good for you, make you smile or are easy for you. We have exceeded our goals for new product introductions, and this steady stream of new products will help fuel growth over both the short and long-term.

Looking at some examples of new products, we have extended our core consumer brands into two new categories in the grocery store and are very excited about their prospects. These products will be introduced in regional test markets.

Given our leadership in peanut butter and peanut sourcing, the introduction of Jif snack nuts is the natural extension of the Jif brand. Three varieties are available -- dry roasted peanuts, cashews, and mixed nuts.

Also in test markets this year will be Hungry Jack frozen biscuits in two varieties available in the resealable packages, meeting the needs of today's consumer. Our new Pillsbury reduced sugar cake mixes and frostings have been well-received. We will be expanding those offerings with additional varieties. We also have new brownie and cake offerings available and new varieties of our Martha White whole-grain muffins.

In support of these new products and our strong portfolio of brands, we have a lot of exciting marketing events planned for Fall Bake, many of which will be multibrand. In addition, we are launching a new Smucker's advertising campaign designed to remind consumers that the brand stands for quality that you can taste.

Like many, if not all food companies, we are still operating in a difficult cost environment. Last fiscal year we experienced significant raw material cost increases only to have them go up even higher this year. Since our year-end call in June, costs have increased even further.

Of particular note are increases for milk, soybean, soybean oil, wheat and peanuts. In response, we continue to consider price actions and other cost reduction opportunities. However, while we deal with the near-term cost impact, we remain committed to our strategy to profitably grow our brands in the long-term.

In summary then, we continue to implement our strategy. Second, we achieved record sales growth in the quarter. Third, with improved operating margins, we delivered even stronger earnings growth. And finally, we have developed a strong new product pipeline, thus our actions continue to support growth and share gains in core brands. And so we're starting the year with great momentum and look forward to a successful year.

We thank you for your time today and now are happy to answer any of your questions.

(OPERATOR INSTRUCTIONS). Christina McGlone, Deutsche Bank.

Just one housekeeping item first. Mark, when you talk about the $0.72 in the quarter, that includes about a $0.01 gain right on the sale of the Scottish business?

Yes, it is $0.5 million, so yes, it -- less than a $0.01.

Okay. I guess first thing Eagle Foods exceeded my expectations, and I'm wondering if you're seeing growth in that business, or maybe it was just an allocation among the quarter? And I guess you took a price increase -- I'm curious if distribution has grown on it and what kind of growth prospects have already occurred?

It is Steve. We took pricing, but we took pricing given the trade and given the fact that we closed May 1. Really the impact of pricing was only in the final month of the quarter. I think they had a good month. They had a good month in their branded and their nonbranded business, and price obviously had something to do with it but not a lot given the mechanics and the leadtimes you have to give the trade when you take (inaudible) like that.

So it ran about $200 million in sales. What would you expect it to grow this year on the top line?

Well, I think pricing is going to impact that dramatically. You know the average milk price over the last five years was maybe 11 or 1150. Milk is trading at $22 a hundredweight right now. So we have reflected pretty significant pricing in that. Our private-label business went up about 30%, and the rest of that business went up double digits.

Okay. And then last year advertising was down I believe about 9%, and it sounds from what you are saying with all the new products that it will be up this year, and I wanted to confirm that.

Also I wanted to just understand the pattern, if it is going to be skewed toward any particular quarter and how that relates to last year?

I think that without being specific to just advertising, as we said, marketing and selling was up for this quarter, and the marketing and the advertising follows sort of the business through the year.

So during the second and third quarter in the Fall Bake primarily is when you're going to see the largest percentage. But I would not say it is necessarily skewed. I think you will see it follow a similar format, but it is definitely up over last year I guess is the bottom line.

Okay. And then it looks like the benefit that Jif kind of garnered from the Peter Pan recall has moderated. But ConAgra is not back in the market. So was that just due to capacity constraints? And how should we think about that going forward with Peter Pan reentering this month?

Basically yes, we shipped everything that we could produce during the quarter. In terms of what is coming down the pike, as you're probably aware, there's a number of public statements by ConAgra coming back to the marketplace. And there are some very significant trade and consumer promotions that we've put into place.

But I think the bottom line is is that it will be up to the consumer to decide as to how much of that share of market will be gained or lost over the coming period. But clearly there will be some activities in the next two or three quarters.

Okay. And then last question, Mark, the year-end Accounts Receivable level was very low relative to history. And I am wondering if that had to do with the divestiture of the Canadian foodservice and industrial business or if it was some sort of onetime item securing it?

That one had something to do. I would say that if you look at our year-end balance, which if I remember right was around $125 million or so, I think if you would look to a maybe 10% increase, that would probably be a normalized run-rate for a year-end balance (multiple speakers) considering the new business and price increase and so forth.

So your days receivable will still be lower relative to history?

Yes.

Eric Serotta, Merrill Lynch. (OPERATOR INSTRUCTIONS). Farha Aslam, Stephens Inc.

With the run-up in milk prices, do you anticipate the Eagle Family Foods acquisition to -- I believe it was supposed to be neutral for fiscal '08. Is that still anticipated to be on plan?

We think so. You know obviously we saw this. We could not take action until we actually owned the business. A little bit of our inventory evaluation at the beginning of the year beat the GAAP rules on how you handle those things with a transition hit us a little. So we started the business with a little higher value of inventory maybe than you would normally in a run-rate. But we still feel like we got the right pricing in, and we may have to take some more pricing. But our goal would be to meet that plan for the milk business this year.

Okay. Could you just talk a little bit more about pricing overall in your business in the quarter? Could you break down sales overall for the entire Company in terms of pricing, volume and mix that you achieved in the quarter?

We will broadbrush that for you. I would say that if you would strip out the Eagle acquisition, we were up 8% as a company top-line. More than half of that would be price-related, and then there was a little bit of mix behind that, and then we had a little bit of favorable exchange rate. But the majority or at least in excess of 50% was primarily the pricing effect.

And volume would be pretty much flat or was volume --?

Volume was probably up somewhere 1% to 2% roughly. So it kind of breaks down 4% to 5% pricing, 1% to 2% volume, with a 1% mix and something less than 1% per pound foreign exchange.

Right. And could you just remind us what caused food spreads to be so strong in the last year's quarter? Was it the sugar free introductions?

It was a number of things. There were a number of new product introductions, and there was some promotional timing. But it was just a very, very strong quarter last year. So if you strip -- if you look over the two-year period, we're actually still up. But we are obviously -- with price increases we took this year in May, that will -- we knew that that would affect the volume. But we do anticipate some of that coming back in the second quarter.

I think also it was the first-time that we ever had advertising for both brands. That certainly -- it is hard to measure advertising, but I think that certainly had an impact.

And so going forward for the second half of the year, you would expect volume and sales to be up in your fruit business?

We sure hope so.

And then Jif, just following on some of Christina's questions, are you seeing them get back their full shelf space, or have you been able -- have you had to give up any shelf space to them going into the back to school season?

We have not. Again, I think it is public information that they are coming out with a limited number of SKUs. We are now getting into production of some of the SKUs that we had put on hold so that we could produce as much as the higher volume items. But no, we're not losing any shelf space at this point.

And you have been able to kind of pull back on some of the promotional support that you have been giving that brand over the last few months. I don't expect you to give competitive information, but kind of how are you approaching the return of this competitor back into the market?

Well, without getting into specifics, it is true that we have called some of the trade support. But we have actually increased the consumer support to support the brand both in the first and the second quarters. But very honestly we're not going to deal the brand down to the levels that are in the marketplace because we don't think that is good for the category.

And in terms of this kind of economic downturn, do you expect consumers to react to a low price point, or how do you anticipate them to focus on the brand versus the price point?

Well, again it is difficult to say, but it will ultimately be up to the consumer. In some cases in history consumers have short memories. In other cases, they don't. And so time will only tell how much of that total share that they will be able to regain.

But I think also just over the long-term, the brand building we have had with that brand is not just advertising. It is the time-in and time-out of the quality that that product receives. I think we also (inaudible) long-terms that the consumer really recognizes the difference, and there is a significant product difference we think. And we trust and have over the years trusted consumers to make those decisions wisely.

And near-term -- so near-term you might see some fluctuations in terms of volume and some switching, but longer-term you remain confident about the Jif brand? And is that built into your model as you go forward?

Definitely.

Okay. And when you look at your oils business, you guys commented a bit on the volatility in the market for soybean oil. Historically you had your soybean oil kind of early for the Fall Bake. So are you pretty secure with your pricing and margins for the Fall Bake, and it is more an Easter timing issue that we need to be concerned with?

Obviously we start shipping Fall Bake as early as September to some customers. So that product has to be in the pipeline to meet those demands. But we have seen 50 or higher on soybean oil. It was limit down yesterday. So you have just got tremendous volatility. Managing that will be the key to the price point and I think the volume.

We have taken three price increases on Crisco in 12 months, and that is not good for categories, just the mechanics of that going through there. So we would hope to see that settle down over the next year or so, but it has just been a difficult environment and we have been very transparent. We think we have protected our margins and the category's margins over time, and it has hurt our volume at the top line. But we think that is the right strategy long-term.

So that has hurt your volume already or volume going into Fall Bake?

Well, no, I just think over time, those price increases there is no question we tend to lead on those. If your competitors follow after some period in that interim, it affects your volume. So I think that has been historically what has happened.

And the three price increases, I'm sorry it is over what time period?

Over the last 12 months.

12 months? And what is the total increase of those three?

You know, those are by item and those are compounded, but they have been in the 5% or 6% range each.

Okay. That is helpful. And then my final question and I will pass it on, your foodservice business was exceptionally strong in this quarter. Is it driven by higher volumes in Uncrustables? Could you just share with us what caused the strength?

This is Paul Wagstaff. We did have a very strong quarter. Half of that growth was driven by the acquisition of Eagle and White Lilly, which contributed nicely to our quarter sales growth. The other portion of it was Uncrustables, which was also up nicely for foodservice about 25%. And then finally, in our core business, we did have strong peanut broader peanut butter PC portion control sales, and that also contributed nicely.

Ann Gurkin, Davenport.

If I could just circle back to your comments regarding pricing. I apologize if I missed what categories you are targeting to perhaps raise prices in?

I think the comments were pretty much with the -- raw material increases we are seeing are crossing the Company. So I think in every area we're looking we spoke specifically to milk, to oil, to peanuts and to wheat and also in the beverage area. So I would suspect that all the general managers will be looking at pricing.

And are the potential price increases in the range of what you have taken over the past 12 months? The magnitude of the price increases?

We actually just don't know. It really depends upon each individual commodity. I would hope it would not be as large a percentage, but we don't know that yet.

Okay. And regarding Fall Bake, are we going to see I guess bundling of brands of promotions? Are you going to run that kind of strategy again?

Certainly. We have found that there is a lot of leverage, especially with just the mechanics of the promotion for the retailer, and we have had a nice multibrand event a couple of years in a row. Eagle Brand we think we can actually fit into some of that this year, even though we just closed. So that has been very effective and very efficient for both us and the trade.

(OPERATOR INSTRUCTIONS). Jon Andersen, William Blair.

Congratulations on a nice quarter. A little clarification on the gross margin improvement in the quarter. Is there a way you can help us understand the relative contribution of the divestitures of the Canadian nonbranded businesses versus mix, versus Uncrustables relative to that overall gross margin improvement in the quarter?

Consistent with what I think you have seen in the last two quarters, the majority of gross profit improvement does come from the divestiture. I think as we have talked in the past, that business was basically a cost plus. So the margins, the gross margins were particularly low. So I would say that by and large was the majority. I would say the Uncrustables profitability probably also contributed sort of second in line. And then the mix is a little more difficult, but I would probably place that third in terms of order.

I think we can also say, though, that Eagle added a lot of sales in the quarter. But because we did not have the pricing impact until the last month, Eagle added very little to the bottom line in the first quarter, and if it would add what we would normally expect, our margins would have been even higher.

Well, there's a lot of duplicate overhead on the Eagle business with transition. I think we have said it will be modestly accretive, but that probably won't happen until much later in the year.

Fair enough. And then a kind of follow-up question on that. With respect to the kind of operational integration of Eagle, can you just give us an update on where that is, and are we still on track for I think it had been previously communicated about $9 million of pre-tax cost savings by fiscal 2009?

Yes, actually our team is on or ahead of plan on that. We have done a great job so far. One of the key synergies for our customer was to get it on one invoice, and that happened 8/1. We would hope that the rest of the administrative changes happened by the end of this calendar year. So we're on track for both system and customer base.

Great. Congratulations and keep up the good work.

Christina McGlone, Deutsche Bank.

I forgot to say thank you for the segment data, the profitability data. That was very helpful. I guess I wanted to know when the capacity will be fully up and running, the new capacity or the expansion for peanut butter? Are we -- are you almost done with that expansion?

It is in process. It is a long-term process. We're looking at some very short-term actions, which are in place as we speak, and then there are some longer term activities that will take several months to put into place. So I will say it is across the board.

So would you consider yourself still capacity constrained or that has eased up?

No, we're still capacity constrained.

Okay. And then in terms of Uncrustables, are we at a good run-rate now, or should we expect profitability to continue to increase, or are there new product launches planned where we will see profitability come back a bit?

This is Paul. From an Uncrustables operations standpoint, we're in very good shape. I would think we could see some modest increase of the overall effectiveness of the facility. We are looking at new product launches, which could impact our overall margins in that business. Again, overall the demand remains very strong for the business.

I guess I would say that on the core business, the core peanut butter and jelly, we will expect that those margins to continue to improve. But as we have said that is clearly a platform for us in future growth. And, as Paul indicated, it will be driven by the new product launches and the market support behind it.

Can you please remind me when it turned profitable last year?

Fourth quarter.

Farha Aslam, Stephens Inc.

Continuing on Uncrustables, could you tell us what your growth rate for Uncrustables is anticipated to be in fiscal '08 total?

Paul here. Our growth rate is going to be in the high-teens, and that should continue for the remainder of the year.

And that includes both foodservice and retail?

That is correct.

And that is in volume or sales?

That is in sales.

That is in sales. And you now have three varieties of Uncrustables out?

We actually have more than that. We have peanut butter and jelly, we have peanut butter only and grilled cheese. (multiple speakers) -- and peanut butter and honey.

But those two are only run in two test markets, and they are being expanded, and we're looking at additional varieties potentially by the end of the fiscal year.

Okay. And so the two initial ones are in national ACV now?

Yes, definitely so. The strawberry and grape.

And then the grilled cheese and the peanut butter and honey are -- in what ACV are they?

They are very modest. They are probably around 25% or something in that neighborhood.

Well, the grilled cheese, the grilled cheese is what roughly?

It is actually under 50%.

Okay. But then the other two, which is plain peanut butter (multiple speakers) and then peanut butter and honey --

Yes and those would be in about the 25% range.

So the last two are in the 25% range.

Okay, and then when you look at -- how pleased are you with those tests?

We're very pleased with them.

So you would be looking to expand the ACV of those?

Yes, we would.

And then, in addition, you are going to add new varieties that you would be putting into test market later this year?

We hope to. Again, it is going to be -- it will determine -- we're really sorting out the capacity based upon the pricing actions that we took earlier this year. So it will determine -- and the continued improvement of Scottsdale. But yes, we're looking at some other new varieties to keep the pipeline full.

And when you look at your capacity utilization at Scottsdale, where is it now?

We're actually in good shape. We have plenty of capacity for the next few years.

Okay. But in terms of where you wanted to be in terms of operations of that plant, are you operating where you like it to be now? Because it has been sort of two years since that plant has opened now.

We are operating very close to where we want to be, and again we're making improvements, so we will get there.

Okay. And then longer-term, you had anticipated this product to have margins equal to or ahead of your US retail business.

No, the original objectives would be right around corporate average.

Corporate average? And when would you think longer-term you would get there?

Well, again I think it is going to be somewhat dependent upon the amount of new products. It is always in that pipeline. But we are very close to getting to that already on the peanut butter and the jelly component. So those can get to those margins, and then the future profitability will be determined based on the amount of new product introductions and the support.

And would you be willing to share with us kind of in terms of the sales how much peanut butter in the core kind of peanut butter and jelly business is of the total portfolio of Uncrustables?

This is Mark. We would not. We're not going to get into really any category level detail. We like to see Uncrustables just like our other categories sort of in the aggregate.

At this time there are no further questions. I would like to turn the call back over to Tim Smucker for any additional or closing comments.

Well, thank you very much for your interest, and we really appreciate the support, and I just want to take the opportunity to thank the team. Clearly the team we feel is an outstanding team, and we obviously thank our consumers for their continued support. Have a great day.

Thank you, sir. 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 area code 719-457-0820 with a passcode of 4871503, or by accessing the website for downloadable MP3 format.

This concludes our conference call for today. Thank you for your participation, and have a good day. All parties may now disconnect.