Lancaster Colony Corporation

be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation fiscal year 2021 third quarter conference call. Conducting today's call will be Dave Sosinski, President and CEO, and Tom Piggott, CFO. All lines have been placed on mute to prevent any background noise. After the speakers have completed their prepared remarks, there will be a question and answer period. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad, and questions will be taken in order that they are received. If you'd like to withdraw your question, press the pound key. Thank you. And now to begin the conference call, here's Dale Gunopcik, Vice President of Investor Relations and the Treasurer for Lancaster Colony Corporation. Please go ahead, sir.

Thank you, Casey. Good morning, everyone, and thank you for joining us today for Lancaster Colony's fiscal year 2021 third quarter conference call. Our discussion this morning may include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, and the company undertakes an obligation to update these statements based upon subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. Also note that the audio replay of this call will be archived and available at our company's website, LancasterColony.com, later this afternoon. For today's call, Dave Szczesinski, our President and CEO, will begin with a business update and highlights for the quarter. Tom Piggott, our CFO, will then provide an overview of the financial results. Dave will then share some comments regarding our current outlook and strategy. At the conclusion of our prepared remarks, we'll be happy to respond to any of your questions. Once again, we appreciate your participation this morning, and I'll turn the call over to Lancaster Colony's President and CEO, Dave Sosinski. Dave?

Thanks, Dale, and good morning, everyone. It's a pleasure to be here with you today as we review our third quarter results for fiscal year 2021. I'd like to begin by extending a sincere thank you to the entire Lancaster Colony team for all their contributions and hard work during this past quarter. The record sales and strong financial results are a testament to our team's ability to adapt and deliver despite the challenges posed by the impacts of COVID-19. Throughout the pandemic, we've remained steadfast that our mission is fixed. First, to provide for the health, safety, and welfare of our teammates. and second, to ensure that we continue to play our role in our country's vital food supply chain. In our fiscal third quarter ended March 31st, consolidated net sales grew 11.2%, to a third quarter record $357 million. Net sales in our retail segment grew 17.1%, while net sales in our food service segment advanced 4.6%. Excluding Omni Baking, consolidated net sales increased 13%, and food service net sales grew 8.4%. Retail net sales benefited from higher demand as the impact of the pandemic drove increased at-home food consumption. Our licensing program continued to grow, and we advanced in our efforts to attract and retain new customers for our core brands. The growth was led by Chick-fil-A sauces, Olive Garden dressings, and Buffalo Wild Wing sauces. These products, which we sell under exclusive license agreements, accounted for nearly 13 percentage points of growth in our retail segment during our fiscal third quarter. Chick-fil-A sauces alone accounted for about 8 percentage points of growth in our retail segment. Our regional rollout of Chick-fil-A sauces into the retail channel continued as planned during the quarter as we further expanded distribution into the southeastern and south central United States, adding 11 more states from Texas to the mid-Atlantic. Per IRI data, the velocity, buy rates, and repeat rates for Chick-fil-A sauces continue to meet or exceed our expectations, and we remain very excited about the opportunities that lie ahead. With respect to our own brands, IRI data shows that we grew sale and increased market share in several of our key retail categories during the quarter. Sales of Marzetti refrigerated salad dressings grew 9% and added 40 basis points of market share. New York bakery frozen garlic bread grew 10.7% and gained 290 basis points of market share. Sister Schubert's frozen dinner rolls increased 7.6% and gained 10 basis points of market share. These results demonstrate the positive impact of our digital marketing programs that we have put in place to attract and retain new users. As we emerge from the pandemic and our retail segment begins to lamp the demand surges attributed to greater at-home consumption, we believe our portfolio of retail product offerings has us well positioned for continued growth. In our food service segment, sales to national account QSR and pizza chain customers remained a source of strength, representing over 60% of our total food service sales in the third quarter. NPD CREST data and our firsthand observations suggest that the increasing number of vaccinations and the economic stimulus programs are driving much higher demand for restaurants. Encouragingly, this includes strong growth for many of the casual dining concepts in our mix of national account customers as well. The base business for the QSR concepts we supply continues to be robust, and we are seeing a notable uptick in their limited-time offer menu offerings. Our top-tier culinary team and the collaborative approach we take with our customers to develop new menu items remains a key component of the growth and success of our food service segment. Despite the higher manufacturing costs related to the impacts of COVID-19, our third quarter gross profit grew 17.7% to $90.6 million. This was driven by double-digit sales growth and a more favorable sales mix. As with prior quarters, we continue to follow protocols and guidelines provided by government health authorities. We also continue to make the necessary investments to promote safe operations at all of our plants and distribution centers. I'll now turn the call over to Tom Piggott, our CFO, for his commentary on our third quarter financial results.