Lancaster Colony Corporation

Good morning. My name is Carmen, and I'll be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Calling Corporation fiscal year 2023 third quarter conference call. Conducting today's call will be Dave Sosinski, President and CEO, and Tom Pickett, 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 would like to ask a question during this time, simply press star, then the numbers 1-1 on your telephone keypad, and questions will be taken in the order that they are received. If you would like to withdraw your question, press the star 1-1 again. Thank you. And now, to begin the conference call, here is Del Gonopsy, Vice President of Corporate Finance and Investor Relations for Lancaster Colony Corporation.

Good morning, everyone, and thank you for joining us today for Lancaster Colony's fiscal year 2023 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 no 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 Figgott, our CFO, will then provide an overview of the financial results. Dave will then share some comments regarding our current strategy and outlook. 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. I'll now turn the call over to Lancaster Colony's President and CEO, Dave Suszynski. 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 2023. In our fiscal third quarter, which ended March 31st, we were pleased to report both record sales and higher profits. Consolidated net sales increased 15.2% to 465 million, while consolidated gross profit improved 37.9% to 94.2 million. Operating income reached 29.4 million compared to an operating loss of 7.6 million last year. Prior year operating income included a restructuring and impairment charge of 22.7 million. The retail segment reported Q3 net sales of $247 million, up 16%, driven by the favorable impact of pricing actions to offset inflation and strong volume growth of 6%. The volume growth measured in pound shift was driven by the continued success of our licensing program and double-digit growth for our New York bakery frozen garlic bread products. In licensing, Buffalo Wild Wing sauces, Arby's sauces, Chick-fil-A sauces, and Olive Garden dressings all contributed to volume growth. IRI data for our fiscal third quarter showed sales gains for marquee retail brands and notable share gains for our category-leading New York Bakery and Sister Schubert brands. New York Bakery's leading share of the frozen garlic bread category grew 350 basis points to 43.5%. And Sister Schubert's leading share of the frozen dinner roll category increased 150 basis points to 53.1%. In our food service segment, net sales grew over 14% to 218 million, driven by pricing actions, volume gains for several national account customers, and higher demand for our branded food service products. In total, food service segment volume increased less than 1%. Excluding the sales of some less profitable product lines that were discontinued during the past year, food service volume was up over 4%. During Q3, we continued to experience high levels of inflation for raw materials and packaging. That said, through the benefit of our pricing actions, PNOC, or pricing net of commodities, was favorable versus the prior year. This is a continuation of the trend that began in Q1 of this year, in which we were recovering some of the negative PNOC we experienced last year. We also benefited from another quarter of sequential improvement in cost savings attributed to productivity gains. In the quarters ahead, we will maintain our focus on supply chain productivity, value engineering, and revenue management to improve our financial performance. Before I turn it over to Tom, I'd like to extend my sincere thanks to the entire Lancaster Colony team for their ongoing commitment and contributions to our improved operational and financial performance. I'll now turn the call over to Tom Piggott, our CFO, for his commentary on our third quarter results. Tom?