B&G Foods, Inc.

Good day and welcome to the B&G Foods first quarter 2020 earnings call. Today's call is being recorded. You can access detailed financial information on the quarter in the company's earnings release issued today, which is available at investor relations section of bgfoods.com. Before the company begins its formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We refer you to the company's most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. The company undertakes no obligation to publicly update or revise any forward-looking statements. Whether as a result of new information, future events, or otherwise. The company will also be making references on today's call to the non-GAAP financial measures adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, and base business net sales. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Ken Romanze, the company's President and Chief Executive Officer, We'll begin the call with the opening remarks and discussion various factors that affected the company's results, selected business highlights, and its thoughts concerning the outlook for the remainder of fiscal 2020. Bruce Walker, the company's Chief Financial Officer, will then discuss the company's financial results for the first quarter as well as expectations for 2020. I would now like to turn our conference over to Ken.

Thank you. Good afternoon. Thank you all for joining us today for our first quarter earnings call. I pray this finds you and your loved ones safe, healthy, and weathering these most difficult times. We find ourselves in unprecedented and extremely volatile and uncertain times driven by the COVID-19 pandemic. But through it all, we at B&G Foods have maintained a steadfast commitment to our core values and strategic imperatives to ensure the long-term success of our company and to make B&G Foods a more valuable company. During this crisis, every single decision we make is guided by our following priorities. First and foremost, protecting the health and safety of our employees. Assuring our usual high level of quality and integrity of our products. meeting unprecedented customer and consumer demand, helping our communities, and lastly, making the right decisions and investments to ensure the long-term financial health and success of B&G Foods when we emerge from this pandemic. On today's call, I will cover three topics. First, I'll discuss the actions we're taking during this unprecedented time to service all of our stakeholders. Second, I will provide a year-to-date update on our business. And later, after Bruce's comments, I will provide perspective on our outlook for the remainder of the year. Consistent with our core values, the health and safety of our employees and the quality and safety of our products are our highest priorities. At BMG Foods, we have implemented a wide range of precautionary measures at our manufacturing facilities, and all other work locations in response to the COVID-19 pandemic. Precautionary measures that B&T Foods has taken to protect our employees, customers, suppliers, and other business partners and to maintain our ability to supply food products include the following, among many others. First, the establishment of a COVID-19 task force consisting of top company executives and senior management in Min Bay. Screening of all employees, including temperature checks, before entering our manufacturing facilities. Enhanced sanitation procedures at all of our manufacturing and other work locations. Social distancing at all manufacturing locations, including the required wearing of masks, the installation of plexiglass, safety shield barriers at spots where line workers must work in close proximity, the staggering of shift times and breaks, the restructuring of break rooms, including separating lunch tables, marking chairs for socially distant seating, and the installation of plexiglass safety shield barriers at each table to maintain proper employee separation. quarantining for at least 14 days with pay of all employees who have either been exposed to COVID-19 or who are exhibiting any symptoms of COVID-19, the notification of manufacturing employees of any COVID-19 positive tests at their location, and the quarantining for at least 14 days with pay any employee who may have had contact with the employee who tested positive. manufacturing plant shutdowns for thorough sanitation upon any COVID-19 positive test with continued pay for employees, and instituting a work-from-home policy for office workers beginning March 16th and as of this date until at least June 1st, 2020. We believe the early and aggressive actions we've taken in our facilities has helped keep our employees safe and productive with very few positive test results and no widespread infection. While employee safety is our highest priority, we are also aggressively managing our production to ensure that we can meet the unprecedented increase in demand from our customers. Our teams have been working tirelessly, producing and delivering products to help maintain the nation's food supply with minimal disruption. Our manufacturing employees have been brave and agile in responding to rapidly changing market dynamics driven by rapidly changing consumer behaviors. Our frontline employees are true heroes during this pandemic. And thanks to the tremendous effort of our employees, our ability to serve our customers has not to date been materially impacted. In fact, our customer service rate for March was strong, fulfilling more than 95% of all orders for both the month and for the last two weeks when the demand surge peaked. While that has declined with continued increased demand, our service rates have declined to just below 90% in April. We're pleased we're doing our part to keep the nation's food supply chain strong. This would not be possible without the hard work and perseverance of our amazing team here at B&G and our valued customers who continue to serve local communities during this difficult time. We are incredibly proud of how our team has responded to this unfortunate crisis, and we've rewarded our dedicated manufacturing employees by increasing wages for hourly employees by $2 per hour from March 30th through at least May 22nd, and provided supervisors and managers with bonuses of up to $500 during that time as well. We are also very grateful for the recognition our employees are receiving from our customers who greatly appreciate the efforts our employees are doing to keep their shelves stocked. I would like to share an example of the type of feedback we've been receiving from many of our retail partners. The following are just some highlights of a recent note we received from a top customer. Quote, I just wanted to send you a note touching upon the true value your team has provided us over the past month as we work through the availability of products for the customers that shop at our stores. Your employees' over-and-above commitment to give me the most up-to-date visibility from the trenches has been awesome. The work your team has done has been best in class, unquote. At B&G Foods, we have always prided ourselves on the can-do attitude of our employees and their willingness to outwork the competition. It has been such an amazing experience to see the tremendous results our team has delivered and see these efforts recognized real time by our customers. All of these efforts generated very positive results for the first quarter. While the onset of the COVID-19 pandemic has been traumatic in its human and economic cost, the measures that we have taken as a society to combat it, particularly with regards to social distancing and staying at home, has led to a significant increase in Americans and Canadians preparing and eating their meals at home, and we expect this trend will continue at some level for an extended period of time. Our B&G Foods portfolio has been constructed to include a stable of over 50 brands with solid positions in the categories in which they compete. And while some have questioned the health of center store and even frozen vegetable brands, These are our foundation at B&G Foods and just the trusted products that consumers have turned to in a time of crisis. As you likely saw from our earnings release earlier today, we reported net sales of $449.4 million for the quarter, an increase of more than $36 million, or 8.9% compared to last year. We delivered adjusted EBITDA of $80.7 million for the quarter, an increase of nearly $5 million, or 6.5% compared to last year, despite being negatively impacted by foreign exchange to the tune of $1.9 million. We reported net cash provided by operating activities of $57.6 million, an increase of nearly 15% compared to last year. As we highlighted on our last earnings call, we initially had modest expectations for the first quarter. In January and February, we continued to work with our retail partners to execute our trade optimization strategy during the non-holiday season promotional calendar, which resulted in softer top-line performance to start the year, although it was the right thing for the business. By early March, sales were back on track, and we began to build momentum as we headed toward the Easter holiday. During the first half of March, we quickly realized that we were in a very different environment following the outbreak of the coronavirus. At that point, we immediately shifted gears and began to task our supply chain to ensure we keep our employees safe, while at the same time ramping up production to ensure that we were doing the best that we could to satisfy what would become unprecedented demand for our products. In fact, the last week of March was the strongest sales week in B&G company history with more than $65 million in net sales. We experienced strength in almost all of our brands, but especially Green Giant, Ortega, Cream of Wheat, Clabber Girl, B&M, Bear Creek, Victoria, and Underwood. Contrary to some beliefs, that consumers were only pantry loading for the long term. Consumers have been consuming a large percentage of the increased volume, driving continued strong performance throughout the month of April, with our net sales increasing more than $70 million or more than 60% ahead of last year for the four weeks ending April 25th. Now, while we don't expect to see the same level of outperformance in the second quarter and long term, Our open orders through the middle of May show similar growth as April. This outside sales performance was driven by strong retail consumption in the quarter. Consumption as reported by Nielsen Services for all of B&G Foods increased 12% for the 13 weeks ending March 28th, driven by a strong five-week March of plus 44%, and specifically driven by the last two weeks of March by plus 87 percent. In fact, for the week ending March 21st, consumption of all B&G food products more than doubled at 122 percent versus last year. Several of our brands doubled or nearly doubled their year-ago consumption for the entire month of March, including Green Giant and Le Seur canned vegetables, Clabber Girl Baking Powder, B&M Baked Beans, Underwood, Victoria, and McCann's. Total B&G Foods consumption trends have continued very strong in April, with the four weeks ending April 25th up nearly 41% versus last year. B&G Foods is largely a North American retail-oriented business, with a portfolio with distinct advantages in this current environment. These strong consumption trends are a testament to the popularity and consumer trust in our brands and their utility as consumers prepare more meals at home. However, we have experienced softness in our food service business, which represents approximately 13% of our net sales in 2019. We expect that our food service sales will remain challenged as people continue to shelter in place, and their away-from-home eating options remain limited. Some of the businesses mostly impacted by the decrease in food service sales include our spices and seasonings business, B&G Brand, Don Pepino, and Maple Grove Farms. While our overall business is trending very strong, We do recognize brand building and innovation remain critical pieces to our long-term success. And while the innovation we plan to introduce this year will be delayed somewhat due to the retailer movement of reset timing and the manufacturing focus on getting existing products to the shelf first, we plan to step up investment against our new products to ensure their success. Any loss in sales from delayed resets and other innovation delays will be more than made up in the current consumption trends of our stable of core brands like Green Giant canned and frozen vegetables, B&M, Bear Creek soup mixes, whole animal all fruit, Victoria pasta sauce, and Underwood. Our largest innovation is in Green Giant frozen vegetables where we will continue to launch that we began in the fall of 2019 with Green Giant pizza with cauliflower crust green giant veggie hash browns, green giant cauliflower gnocchi, and green giant cauliflower breadsticks, which are already in distribution in an average of 40% of the ACV and performing very well there. In addition, we are very excited about our recent FarmWise acquisition, as we expect it will add fuel to our green giant innovation pipelines as well as provide us a brand name more appropriate for the natural channel. This fall, we plan to leverage this acquisition of FarmWise by introducing green giant veggie fries in innovative new varieties, including zucchini, garlic, parmesan, cauliflower, ranch, and bacon, and broccoli and cheese, along with a totally new product called green giant veggie rings, our cauliflower-based take on onion rings. These will come in varieties such as cauliflower French onion and cauliflower three cheese and bacon. Regarding the FarmWise brand, we plan to relaunch the brand in the natural channel, plus a few current mainstream retail customers later this year as well. On the grocery side of the business, we will continue to launch a shelf-stable version of green giant rice veggies. a nutritious alternative to traditional dry rice made from 100% plant-based legumes like lentils, sweet peas, and chickpeas. Retailer acceptance of this innovation has been very good, and we expect to be in 30% of the ACV by year-end, less than anticipated due to category resets being canceled or delayed due to COVID-19, but building throughout 2021 with a targeted goal of 65% ACV. Not to be done by Green Giant, the Ortega brand is moving ahead with this introduction of cauliflower taco shells and cauliflower tortillas, as well as a line of street taco sauces. These new products have been very well received by our customers, with many of them saying it's the first real innovation they've seen in the category in quite some time. We expect to achieve an average 30% ACV distribution by year-end, also less than anticipated due to delayed category resets, but we expect this will continue to build in 2021 with a goal of 75% ACV. Another area in which we will make additional investments this year is in e-commerce. We estimate our e-commerce sales at less than 1% of our business, and although it really has taken off this past quarter, growing more than 100% on Amazon loans, We know we need to catch up to many of our competitors in this space. By the end of 2020, we plan to make significant progress in building our e-commerce capability by completing the foundational work needed on our digital imaging, content, and product data, improving our product offerings with innovation and e-commerce friendly packaging, and improved data compliance. We will combine this with a greater investment in internal resources including marketing, sales, and supply chain personnel, along with increased investments to build out our e-commerce shopper marketing program, including branded stores, banner ads, social media links, and search engine optimization, amongst other activities. Lastly, B&G Foods has long been a supporter of the communities in which we live and work, and that has only accelerated during this time of crisis. In addition to our partnership with St. Jude's Hospital, we've established relationships with Feeding America and No Kid Hungry, and they're using our electronic billboards in Times Square in New York, along with our social media channels, to help raise awareness for these very important charitable causes. In summary, B&G Foods has so far successfully managed through these very trying times by keeping focused on our highest priorities, executing the plan with which we entered the year, and then quickly exercise the adaptability and determination for which our company is known to respond to an unprecedented time in our country and our world. I am extremely proud of our employees and am confident they can continue their terrific performance going forward. I will return later to provide perspective on our path forward to our first quarter in more detail and thoughts about the remainder of the year. Bruce?

Thank you, Ken. Good afternoon, everyone. I hope that you and your families are staying safe and healthy. Before I begin, I would also like to add my own thanks to our incredible team of dedicated employees across all of B&G Foods for their hard work during this time. As Ken mentioned earlier in the call, While the onset of the coronavirus has been traumatic in its human and economic costs, the measures that we have taken as a society to combat it, particularly with regards to social distancing and staying home, have led to a significant increase in Americans preparing and eating their meals at home. And this is something that we expect to continue at some level for an extended period of time. We constructed our portfolio of brands over time to include a broad range of shelf-stable products and frozen vegetables. These are exactly the types of brands and products that consumers are gravitating to in the current environment, and we are happy to be doing our part to help feed America. Not surprisingly, given this backdrop and our portfolio of brands, we had a very strong finish to the first quarter of 2020 with outsized growth in March in terms of net sales and adjusted EBITDA. This was driven by the final two weeks of the month, which had frenzied demand for our products and coincided with the establishment of the country's social distancing policies, stay-at-home mandates, and the shutdown of large portions of the economy. We have seen this heightened demand for our products continue throughout April and into the beginning of May. In the first quarter of 2020, We reported net sales of $449.4 million, adjusted EBITDA of $80.7 million, and adjusted diluted earnings per share of 46 cents, results that are far greater than we have expected in the beginning of the year. Adjusted EBITDA as a percentage of net sales was 18% for the quarter, which is in line with our expectations for the quarter and for the year. We were negatively impacted by about $1.9 million in FX for the quarter, as well as some discrete incremental spending associated with coronavirus preparedness that I will walk through a little later on the call. Absent these costs, we would have generated a little bit more than $83 million of adjusted EBITDA and approximately 18.5% in adjusted EBITDA as a percentage of net sales. Net sales for the quarter represented an increase of $36.7 million, or 8.9% versus the year-ago period. The acquisition of Clabergirl in May of 2019 benefited the company and contributed approximately $18.7 million to the first quarter of 2020 net sales. Base business net sales, which excludes the impact of M&A, increased by $17.8 million, or 4.3%. First quarter 2020 net sales benefited by approximately $9.2 million from net pricing, inclusive of the wraparound benefit of our spring 2019 list price increase and our trade spend optimization program. These pricing benefits were complemented by approximately $8.2 million from increased volumes in our base business. As a reminder, while we are seeing a tremendous benefit from increased consumption following the onset of the coronavirus, we really only began to see these benefits in the final two weeks of the quarter. Green Giant led our performance, with net sales increasing by $22.2 million, or 16.3% in the quarter. We saw outsized growth in net sales of both our frozen and shelf-stable Green Giant products. Frozen growth was driven by our core legacy frozen bag and frozen bag-in-a-box lines, as well as our innovation products. Frozen innovation net sales growth was primarily driven by our power innovation SKUs, as well as green giant rice veggies and green giant veggie spirals. While many of our 2020 innovation launches have been delayed as a result of the turmoil that is occurring in the grocery aisles, as our retail partners are focused on keeping their largest and fastest-turning items on the shelf. Among our other large brands, Victoria was the leader and increased net sales by $1.9 million or 17.4%. New York Style had another strong quarter and net sales increased by $1 million or 11.1%. Cream of Wheat increased by $1.5 million or 8.7%. Ortega increased by $1.5 million, or 4.1%. Maple Grove Farms increased by a half a million dollars, or 3%. Net sales for our spices and seasonings business, inclusive of the business that we acquired in 2016, and our legacy brands such as Dash and Accent, were down significantly. Unlike the majority of our business, spices and seasonings has a significant food service weighting and these sales were negatively impacted by the coronavirus and the resulting shutdown of large portions of the American economy. This is the one significant area of our portfolio where we have seen a negative drag on performance, and not surprisingly, net sales were down $12.9 million, or 15%. Flabbergirl, which we acquired in mid-May 2019, also performed exceptionally well, As I mentioned earlier in the call, Collaborgirl generated $18.7 million in net sales during the first quarter. And while we didn't own the business at this point last year, and thus all of the sales are purely incremental, the business generated approximately $15 million in net sales under the prior ownership's watch during the same time period last year. I would also like to highlight our quarterly net sales performance for some of the other brands in our portfolio. B&M, which increased net sales by $1.7 million or 49%, had outstanding performance in the first quarter. Net sales of McCann's Irish Oatmeal increased by $0.7 million or 20.9% as that brand continued to build momentum since our acquisition. Others, such as Las Palmas, increased net sales by $1.1 million or 12.3%. Mama Mary increased net sales by by $0.9 million, or 12.8%, and Underwood increased net sales by $0.7 million, or 13.2%. Gross profit was $104.9 million for the first quarter of 2020, or 23.3% of net sales, excluding the negative impact of approximately $2.3 million of acquisition, divestiture-related, and non-recurring expenses during the first quarter of 2020, gross profit would have been $107.2 million, or 23.9% of net sales. Gross profit was $88.1 million for the first quarter of 2019, or 21.3% of net sales. Excluding the negative impact of $13.1 million of acquisition, divestiture-related and non-recurring expenses during the first quarter of 2019, gross profit would have been $101.2 million, or 24.5% of net sales. Selling general and administrative expenses were $40 million in the first quarter of 2020, or 8.9% of the quarter's net sales, up slightly in dollar terms, but a decrease as a percentage of net sales. Selling general and administrative expenses were $38.3 million in the prior year quarter, which was 9.3% of net sales, or an improvement of almost 50 basis points. The dollar increase was composed of increases in selling expenses of $2 million and general administrative expenses of $1.7 million, partially offset by a decrease in M&A and non-recurring expenses of $1.2 million, consumer marketing of a half a million dollars, and warehousing expense of $0.3 million. We generated $80.7 million in adjusted EBITDA in the first quarter of 2020, compared to $75.8 million in the prior year period. The increase of $4.9 million in adjusted EBITDA represents our second consecutive quarterly increase in adjusted EBITDA, which follows our finally lapping the one-year anniversary of the divestiture of Pirate Brands in the fourth quarter of last year. Adjusted EBITDA as a percentage of net sales was 18% for the first quarter of 2020, which is consistent with our performance last year and our expectations for full year 2020. While we are seeing unprecedented growth in net sales and representative increases in adjusted EBITDA, we haven't necessarily seen an outsized increase in margins from the incremental sales driven by some of the incremental costs associated with the coronavirus. For example, we have engaged in precautionary screenings for factory workers, enhanced cleaning of our facilities, and we are paying additional compensation for our factory workers. Additionally, we had an increase of nearly $2 million related to transactional losses related to FX during the quarter, which helped to depress our profits. Absent these charges, we would have delivered a little bit more than $83 million in adjusted EBITDA and approximately 18.5% and adjusted EBITDA as a percentage of net sales. While we expect elevated costs associated with operating in the age of the coronavirus throughout the rest of the year, we also expect operating leverage of our increased net sales on our corporate structure and enhanced utilization in our factories to largely offset these costs. Net interest expense was $26 million in the first quarter of 2020. an increase of almost $3 million that was largely expected over the prior year period. Net interest was negatively impacted during the quarter, primarily due to incremental borrowing used to fund our acquisition of Clavergirl, as well as our share repurchases last year and the higher cost of debt associated with last year's refinancing of our four and five-eighth notes. Additionally, we have also drawn on our revolver and we were sitting on more than $125 million in cash at the end of the quarter as a precautionary measure, which, while the right decision to take for the company, has involved an increase in our interest expense. Separately, we do expect to see some benefits in the back half of the year as a result of lower interest rates, which should help create favorable results for us with regards to our term loan that carries a rate of LIBOR plus 250 basis points. As a reminder, LIBOR was at approximately 2.2% when we placed our term loan last year, compared to approximately 1% today, or 120 basis points cheaper. We generated $0.46 in adjusted diluted earnings per share in the first quarter of 2020, compared to $0.44 in adjusted diluted earnings per share in the prior year period, benefiting from improved operating performance, a lower effective tax rate, and a reduction in our share count. Cash generation was strong for the first quarter of 2020, as expected, with $57.6 million in net cash provided by operating activities versus $50.3 million in the first quarter of 2019. The unprecedented demand for our products in the final two weeks of the quarter led to a greater than expected decrease in inventories, with inventories decreasing from $472.2 million at the end of fiscal 2019 to $399.2 million at the end of the first quarter. This benefit was offset in part with an increase in accounts receivable, particularly for those sales at the very end of the quarter, to $200.6 million from $143.9 million at the end of fiscal 2019 and compared to $162.8 million at the end of the first quarter of 2019. Finally, it should come as no surprise to longtime followers of B&G Foods that our management team and our Board of Directors remained committed to our longstanding dividend policy. And during the first quarter, on February 24, 2020, our Board of Directors declared B&G Foods' 62nd consecutive quarterly dividend in the amount of $0.475 per share. Now I would like to touch on our expectations for fiscal 2020. As you know, the guidance that we issued a little more than two months ago, on February 25th, called for net sales to be in the range of $1.66 to $1.68 billion, adjusted EBITDA to be in the range of 302.5 to 312.5 million, and adjusted diluted earnings per share to be in the range of $1.60 to $1.80. Based on our results through today, we expect to materially exceed that guidance for 2020. We also believe that improving P&L results will drive increased cash flows and help us to accelerate the deleveraging of our balance sheet. However, the ultimate impact of the coronavirus on our business will depend on many factors, including, among others, the duration of social distancing and stay-at-home mandates and whether a second or third wave of coronavirus will affect the United States and the rest of North America. Our company's ability to continue to operate our manufacturing facilities and maintain our supply chain without material disruption, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating habits. At this time, we are unable to fully estimate the impact of the coronavirus we'll have on our company's second quarter, third quarter, and full-year fiscal 2020 results, and therefore we are unable at this time to provide guidance for the remainder of 2020. We do, however, expect our performance to be strong for the remainder of the year. We had our strongest finish to the quarter ever, and that momentum has continued into the second quarter with April net sales through the week ending April 25th increasing by more than $70 million, or more than 60%, as compared to last year. And we expect continued outperformance. Early indications suggest that net sales in May will also be quite robust and materially larger than net sales in May of 2019. We have continued to generate substantial cash from these incremental net sales as we work our way through the second quarter, and our cash position has increased from approximately $127 million at the end of the first quarter to approximately $200 million today. even after taking into account the $30 million quarterly dividend payment we made last week. That being said, and based on everything that we know right now, we assume that our outperformance may have peaked as stay-at-home restrictions are starting to lessen and markets are starting to reopen in certain parts of the country. We don't know the pace as to which consumers will begin to return to eating some of their meals away from home, but we expect the hyper-growth and net sales we are seeing today to moderate over time as stay-at-home restrictions and work-from-home policies evolve. However, based on our experience with previous economic crises and downturns, we expect to see modest growth continue with a meaningful and lasting shift from away-from-home consumption to at-home consumption that will persist for some time after the economy reopens. Due to the likely economic downturn, that is broadly anticipated at this point. We also expect to see this shift benefit B&G Foods, given our heavy portfolio weighting towards U.S. and Canadian traditional retail grocery. Also, we have a portfolio of great-tasting, high-quality branded foods. One of the key focuses has been to support our brands and our retail partners, leveraging our supply chain and logistics expertise to keep our products on the shelves and maintain historical fill rates as best we can, demonstrating to our customers our importance as long-term partners. While this is of utmost importance, we have also been focused on our end users and improving their consumer experience. We have seen tremendous demand from long-term consumers of our products. We are also seeing new consumers and increased trial during this period of heavy consumption, and we believe this will translate into increased demand over time. We certainly believe that we will come out of the coronavirus period better positioned to grow our business, reduce leverage, and generate value for our shareholders. On the other side of the coin, we do have some factors that could limit our performance. We are currently selling everything we can produce for most of our brands. Our factories are running full steam ahead, as are those of our co-packing partners. We are also working with our suppliers, particularly with regards to our seasonal pack, that supports Green Giant so that we can really lean in from a production standpoint and satisfy all of this demand. And as Ken mentioned earlier, thanks in part to the precautionary measures we have taken and the cooperation of our manufacturing and other employees in adhering to those policies, together we have been able to help flatten the curve and keep each other safe. And we have been blessed with limited disruptions to date to our supply chain, both in terms of manufacturing and distribution. and more importantly, very few coronavirus tests. We do expect to continue to invest in our manufacturing facilities and our dedicated manufacturing employees at this very difficult time. And we also expect to reinvest some of our incremental proceeds in additional consumer marketing and an acceleration of our e-commerce readiness efforts. So, while we do not know how long this unprecedented increased demand for our products will last And while there are risks associated with operating in this unprecedented environment that could cap our upside performance, and while we also plan to make incremental investments in brand building and e-commerce preparedness that we will look to fund with our anticipated incremental cash flows, we do believe that we will materially exceed the guidance that we provided to you just two months ago. We look forward to providing in the coming months additional insight as to our plans and expectations for the remainder of the year, as we get a better understanding of the extent to which the coronavirus resulting societal changes will impact our full year results. I would now like to turn the call back over to Ken.