J & J Snack Foods Corp.

Good day and thank you for standing by. Welcome to the J&J Snacks Foods fiscal 2023 fourth quarter conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Norberto Adja, Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining the J&J Snap Foods Fiscal 2023 Fourth Quarter Conference Call. We will start in just a minute with management's comments and your questions. But before doing so, let me take a minute to read the Faith Barber language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call do not relate to matters. Historical facts should be considered forward-looking statements, including statements regarding management's plans, strategies, goals, expectations, and objectives, as well as our anticipated financial performance. These statements are neither promises or guarantees that involve known and unknown risks, uncertainties, and other important factors that may cause results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Factors discussed in our annual report on Form 10-K for the year-end of September 30th, 2023, and your other filings with the Securities and Exchange Commission could cause factual results to differ materially from those indicated by the forward-looking statements made on this call today. Any such forward-looking statements represent management's estimates as to the date of this call, November 16, 2023. While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause expectations to change. In addition, We may also reference certain non-GAAP measures on the call today, including adjusted EBITDA, operating income, or earnings per share, all of which are reconciled to the nearest GAAP measures in the company's earnings press release, which can be found in the investor relations section of our website. Joining me on the call today is Dan Fashioner, our Chief Executive Officer, along with Mr. Ken Plunk, our Chief Financial Officer. Following management's prepared remarks, we will go ahead and open the call for a question and answer session. With that, I would now like to turn the call over to Mr. Dan Faschner, J&J Snacks Foods Chief Executive Officer. Please go ahead, Dan.

Thank you, Roberto, and good morning, everyone. We appreciate you joining us this morning to discuss J&J Snack Foods Fiscal 2023 Fourth Quarter and Full Year Results. J&J had a great ending to our fiscal year. We delivered record high net sales and profitability for both the three and 12 month periods with improved growth profit margins. Our results underscore the tremendous progress we are making across the organization thanks to the dedicated efforts of our employees and the positive impact of the strategic initiatives undertaken over the past two years. Our top line results marked the sixth consecutive quarter and the third consecutive year of double-digit net sales growth, totaling $443.9 million, up 10.8% for the quarter, and $1.56 billion, up 12.9% for the year, reflecting $178 million in incremental sales. More importantly, Our results were driven by continued growth across all three of our business segments on both a quarterly and a full year basis, highlighting the health of our business and consumer appeal for our products and brands. I am pleased with the success of our work to improve margins and drive profitability. Gross margin improved at 32.8% and 30.1% for the quarter and year respectively. and we lowered distribution expense as a percentage of revenue for both periods. This led to operating income and adjusted EBITDA increasing by 93% and 55.2% respectively for the fourth quarter and 77.2% and 46.3% respectively for the full year. Ken will review our financial performance in more detail in just a few minutes. As I reflect on the year, our company has never been more aligned in its vision and strategy. We ended this year with strong momentum across our business segments, guided by five core strategies, grow and protect our brand, dominate core categories, sell across the portfolio, invest in our future, and embrace our culture. We are collaborating better than ever and finding new sales opportunities across our portfolio. This strategy is aligned to our financial goals to grow sales above the market, create expense leverage, and grow profits faster than sales. I would like to highlight a few of the successes from the fourth quarter that support our strategy. Let me start with our focus on our strategies to grow our core brands and products and how we are collaborating and cross-selling across the organization. We increased our marketing investment and added new production lines to support growing opportunities with Super Pretzel. In the fourth quarter, we launched filled jalapeno knots nationwide with a major theater customer and introduced a private label Bavarian Pretzel with a major food service distributor. In retail, I am pleased to report that we gained Super Pretzel availability with Walgreens while also expanding Pretzel Dogs, with new retail customers. In addition, we launched frozen super pretzel Bavarian sticks with major grocery and mass merchant customers. Looking ahead to fiscal 2024, we are planning to launch a system-wide pretzel croissant with a strategic convenience customer. We also expect to be able to further expand frozen super pretzel products among major retailers throughout the year and have plans to add fresh baked super pretzel Bavarian sticks and buns to the in-store bakery category of several strategic customers. Moving on to our Icy brand. I'm so proud of our frozen beverage team for delivering a record quarter and year of sales and profitability. We continue to make progress growing consumption and placement of our Icy and Slush Puppy brands in amusement, mass merchandisers, and restaurants. Also, the theater industry continues to gain momentum, and our Mexico team delivered another stellar quarter and year. As we look forward, our team is rolling out a self-serve program to a major club store customer in early fiscal 2024, and we continue to have positive momentum with tests in QSR and family entertainment channels. Turning to Hola Churros, we are really pleased with the success of this brand in its first year. Sales grew over 23% for the year and 8% for the fourth quarter. With the production capacity we added this year, we have a strong pipeline of growth opportunities. This quarter, we convinced the retail rollout of Ola Brand Churros in the Northeast with several regional grocery retailers. We also successfully completed a market test with a major QSR sandwich chain for churros that will begin to roll out system-wide in early calendar 2024. The best example of how we are executing product development and leveraging cross-selling opportunities is in Dippin' Dots. You may recall, we closed the acquisition of Dippin' Dots in June 2022. In the first year under J&J's ownership, the brand achieved all-time record high sales and profitability, growing over 13% and 80% respectively. We are bringing new flavors to the market, like the recently launched Icy Cherry and Blue Raz Iced Flavor, the best new flavor launch in Dippin' Dots history. And we are looking forward to next year's launch of a new cookie dough offering called Prosetti Dough, Our rollout to Regal Theaters is almost complete and we are adding test locations for two other major theater chains and expect to continue building our presence in the theater channel in 2024. Also, we are testing a vending program in amusement parks, clubs, theaters, and entertainment venues and have an in-store freezer test with a major convenience store. We also remain laser focused on improving our go-to-market strategies, including finding added cross-selling opportunities, securing new client wins, and entering and growing in new geographic markets. We are excited about the opportunities ahead of us in the international markets, such as Mexico. We have recently added an international business development leader to identify opportunities to expand key products and brands like Super Pretzel, Hola Churros, and Dippin' Dots into new markets. Our product portfolio extends across over a dozen product categories from soft pretzels, churros, and handhelds to bakery goods, dog treats, Italian ice, and frozen beverages. We also sell into more than a dozen distinct venues, including school cafeterias, theaters, amusement parks, airports, stadiums, and supermarkets, as well as restaurants and convenience stores. Our team is aligned and focused on driving plans to leverage our portfolio of products to add growth across our many channels and customers. As we've discussed for the last couple of years, one of our core strategies is to build capability and invest in our future. Let me begin with our warehousing network. I am pleased to report that we now have two new regional distribution centers open, one in Texas and the other in New Jersey. We are on track to open the third RDC in Arizona in early calendar 2024. The three RDCs will be used to store and distribute most of our products as we decrease our points of distribution from over 30 to less than 10. This will include added freezer storage capacity for Dippin' Dots, which is really the key to our growth plans for that brand. It will also result in improved customer service and lower distribution costs. We expect this initiative to provide at least $10 million in annual cost savings as we ramp up over the next two years. As you know, we are partnered with NFI over a year ago to manage our logistics and transportation network and are seeing efficiency improvements that are lowering shipping handling, and storage costs. NFI now manages all of our transportation network, improving truck capacity and routing, and enhancing customer service. We are also just beginning to leverage the six recently added state-of-the-art production lines as we add production capacity to our core products, such as pretzels, churros, and frozen novelties. And not only do these lines provide more capacity, They are creating production efficiencies and higher output metrics through better automation. Transitioning to M&A, we continue to be highly disciplined in our approach. We evaluate opportunities that complement our brand portfolio and business model and that offer attractive shareholder returns. Financially, we have the resources and the balance sheet to invest in growth when opportunities align. In summary, Our momentum is strong and we are aligned on a strategy that positions us well for contingent success in fiscal 2024 and beyond. I am so proud of the J&J teams and their relentless focus on satisfying the consumer every time they enjoy one of our products. Our focus on cross-selling is opening up new opportunities and channels, which creates new selling opportunities across our portfolio. The diverse nature of our business along with the power of our brands and the affordable price point of our product, is something that we are confident will continue to serve us well. We believe this momentum, together with improved operational efficiencies, positioned J&J to deliver long-term value to our employees, partners, and shareholders. Our success is anchored by a winning culture, and I want to thank our J&J employees for their efforts to deliver a record, 2023 year. With that, I would now like to pass the call over to Ken to review our financial performance in more detail. Ken?