Welcome to the J&J Snack Foods first quarter earnings call. My name is Vanessa, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. During the Q&A session, if you have a question, please press star then one on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Norberto Aja. Mr. Aja, you may begin. Thank you, operator, and good morning, everyone. Thanks for joining the J&J Snack Foods fiscal 2022 first quarter conference call. We'll get started in just a minute with management's comments and your questions, but before doing so, let me take a minute to read the safe harbor language. This call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding management's plans, strategies, goals and objectives, anticipated financial performance, the revised supply constraints and the expected impact of COVID-19 on our business. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause our actual results of performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. As discussed in our annual report on Form 10-K for the year ended September 25, 2021, and other filings with the Securities and Exchange Commission, that our actual results could differ materially from those indicated by the forward-looking statements made on this call. Any such forward-looking statements represent management's estimates as of the date of this call, February 1st, 2022. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. In addition, we may also reference certain non-GAAP measures, including adjusted EBITDA, which is reconciled to the most comparable GAAP measure in the earnings release, which can be found in the Investor Relations section of our website at jjsnack.com. With us on the call today are Dan Fachner, Chief Executive Officer, Ken Plunk, Chief Financial Officer, Steve Every, Chief Operations Officer, Lynwood Mallard, Chief Marketing Officer. Joining remotely are Marjorie Roshkoff, our General Counsel, and James Hamill, Corporate Controller. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to Dan Fachner, J&J Snack Foods' Chief Executive Officer. Go ahead, Dan. Thank you, Norberto, and good morning, everyone. We appreciate you joining us to discuss our first quarter results, which reflect the continued strength across our businesses, driven by a healthy growth in all three of our segments. Before doing so, I'd like to take this opportunity to thank the entire J&J Snack Foods team. As always, none of our achievements would be possible without the hard work of our world-class team of employees. The dedication of this group ensures that we deliver for all of our stakeholders. I am truly grateful for their efforts and commitments. Taking a look at the results for the first quarter of fiscal 2022. We are pleased with the strong start to the year and the continuation of many of the positive trends we saw in the prior quarter. Net sales increased by 32% year-over-year to $318.5 million, and by 17% when compared to our fiscal Q1 2019. These top line results represent the highest fiscal first quarter revenue in the company's 50-year history. Our improving sales performance was led by our 54% jump in the Frozen Beverage segment, followed by a 32% increase in Food Service and 9% growth in our Retail Supermarket segment. This led to earnings of $11.1 million, or $0.58 per share, compared to $1.8 million or $0.09 per share in the first quarter of fiscal 2021. Walking through each of these three segments, let me begin with our largest group, Food Service. This segment represents over 60% of our total sales. We have strong customer relationships with snack and food businesses, leading retailers, warehouse clubs and convenience stores. Our portfolio also includes malls and shopping centers, as well as many of the most popular QSR and casual dining chain restaurants and many of the largest stadiums and sports arenas. This segment also sells into leisure and theme parks across the country and of course, just about every movie theater there is. The food service segment is a great example of what we mean when we say J&J Snack Foods is everywhere. Our food service sales grew 32% compared to the same quarter last year, and 18% above Q1 2019, and continues to reflect a healthy demand for our soft pretzels, frozen novelties, churros and handheld products across the consumer touch points. Soft pretzel sales increased 54% and frozen novelties increased 34%. Churro sales and bakery products increased 69% and 21% respectively. In addition, we are seeing growth of 5% in handhelds as this category continues to be a greater contributor. Moving to our Retail segment, revenue grew by 9% year-over-year and by 36% versus fiscal 2019. Growth was driven by a 17% rise in soft pretzel sales, helped by our increasingly popular Filled Pretzel Bites. Frozen novelties are also continuing to perform well, posting a 16% year-over-year increase. We continue to gain placements and new selling opportunities at major grocery retailers through products like Luigi's Real Italian Ice, Whole Fruit bars, Dogsters, and ICEE branded novelties. The Retail segment continues to reflect sustained consumer at-home consumption, given the increase in remote work and evolving consumer preferences. We believe these trends will continue to benefit our retail business going forward. Let's move on to the frozen beverage segment. Our business is now starting to produce results consistent with pre-COVID sales as the theater industry continues to improve and consumers enjoy travel and outdoor activities. Our sales for the quarter exceeded the same period last year by 54% and were 6% above a very strong Q1 2019. These results were led by strong performances in amusement, convenience, and restaurants as traffic returns to these outlets and as we gain new QSR and convenience customers. In the amusement channel, we continue to see strong growth in the indoor-focused venues as that business segment continues to expand. I'm also really excited to see theater sales improve steadily throughout the quarter, including a December where sales were just slightly above or below pre-COVID 2019 levels. The segment growth was once again led by our ICEE beverage lineup, which grew 113% versus the prior year and 8% above fiscal 2019. Service revenue increased 16%, the strongest first quarter in our service history, led by an acceleration in our preventative maintenance calls. Equipment sales increased 21%, driven mainly from large QSR and convenience customers. With all three of our major business lines posting strong sales growth, we remain optimistic that these positive consumer trends will continue as we move further away from the impact of the pandemic and the recent challenges the variants have brought to all of us. As was the case last quarter, our industry continues to experience unprecedented inflationary pressures and higher than expected cost increases across many facets of the business, from raw materials and ingredients to transportation, packaging, and labor. These costs escalated in the back half of the quarter with the onset of the Omicron variant, resulting in first quarter fiscal 2022 gross margins of 25%, favorably compared to 21% the prior year, but below the 28% gross margin generated in the comparable 2019 period. Like many of our competitors and customers, we are seeing double-digit levels of inflation across a number of areas. Ingredient costs increased over 10% on average compared with the same period last year. In distribution, expenses were 10.5% of sales in the quarter, compared to 9.5% the same period last year. Our organization continues to focus on specific actions to offset these short-term challenges, and we have identified a number of opportunities to reduce expenses across the business, including procurement, R&D, production, and distribution. In addition, we have four new production lines scheduled to be activated in fiscal 2022 that will leverage automation to improve efficiencies. Finally, we are also implementing additional price increases for our products across nearly all of the categories. Collectively, we expect these initiatives to improve our gross profit margins progressively over the second quarter of fiscal 2022 and really into the back half of the fiscal year. While we're being proactive and taking the necessary steps to best navigate the current inflationary environment, the work we are doing to build and evolve our brands also continues. We have over 10 iconic brands that are leaders in their respective segments, and in some cases, these brands even define the segment. There are a number of significant opportunities to leverage these brands and grow organically. Within Food Service, we are very bullish on churros and expect to launch a new branded churro product to target major Food Service customers in fiscal 2022. We are also expanding our powerful SUPERPRETZEL and Bavarian Pretzels brands with individually wrapped salted pretzels and filled pretzels. In Retail segment, we are leaning on the super brands including SUPERPRETZEL, LUIGI'S, ICEE, Dogsters to both create and grow market share through new products, flavor extensions, and improved packaging. Finally, in our Frozen Beverage segment, we remain focused on expanding our ICEE brand and have recently introduced ICEE products into QSRs and fast casual dining. As previously reported, we have seen great success on this front in places like Krystal restaurants and Golden Corral. We have a good pipeline with customers testing the ICEE product, and I am pleased to report that our customers are already seeing marked upticks in beverage consumption. As it relates to inorganic growth, we continue to be very vigilant on the front and remain disciplined in our criteria and approach. We will not do acquisitions that are not accretive to our business, overpay for assets, or buy something outside of our area of expertise. We have a long and successful track record on the acquisition front, and we intend for that to be, continue to be the case. In closing, an important aspect of our business that has shown through more than ever before during the past 18-24 months has been the resilience and power of our products and brands. The changes brought on by a pandemic have created tailwinds for many of our brands as people have sought to create moments of enjoyment, comfort, and even companionship during these unprecedented times. Challenges create opportunities for strong brands to get even stronger, and that is what I firmly believe is happening here. On the back of various initiatives I mentioned earlier in the strong demand environment we continue to experience, we are in a much stronger competitive position today. We are well-positioned to continue to drive long-term growth and shareholder value for the company. I would now like to turn the call over to Ken Plunk, CFO, to review our financial performance. Ken? Thank you, Dan, and good morning, everyone. Our fiscal 2022 first quarter results reflect the continued success of our operating strategies and the power of our unique brands, as well as increasing trends in the microeconomic environment and across the majority of the two customer segments we serve. Like Dan mentioned, they also reflect some of the challenges and headwinds we continue to experience as it relates to our supply chain and cost of goods. Revenues for the first quarter of fiscal 2022 increased by a healthy 32% to $318.5 million versus the prior year period and compares favorably versus the first quarter of fiscal 2019, with an increase of 17% in sales. Breaking revenue down, food service revenue grew 32% to $211.7 million, or 67% of our total sales. It was led by a 69% growth in churros. Bakery and soft pretzels enjoyed 21% and 54% growth respectively versus Q1 of fiscal 2021. Frozen novelties grew 34% for the quarter, and handhelds grew in mid-single digits. Retail increased over 9% to $42.7 million or 13% of total sales. Soft pretzels, frozen novelties, and dip stick sales increased 17%, 16%, and 8% respectively. Handhelds in our retail segment declined 54%, driven by proactive discontinuations of margin-dilutive products. I would like to point out that retail was lapping a 33% sales growth in last year's first quarter as consumers stayed at home. Regarding our third segment, Frozen Beverages, revenues increased 54% to $64.1 million, or 20% of total sales versus Q1 of fiscal 2021, reflecting healthy sales growth across all subsegments, including a 113% increase in beverage sales and 16% and 21% increase in maintenance and machine sales respectively. This led to a gross profit of $79.4 million, or an increase of over 58% compared to the previous year period, and a gross margin rate of 24.9%, an improvement of over 400 basis points above Q1 of fiscal 2021. As Dan pointed out, our industry continues to face historic inflationary challenges that have certainly impacted our cost and margin expectations for the quarter. As Dan discussed, we are confident in our plans to manage these headwinds as we move forward. Moving down the income statement, total operating expenses increased from $49.5 million to $64.5 million and were 20.3% of sales for the quarter. This compares favorably to the same quarter in fiscal 2021, even while distribution costs continue to escalate. Distribution expenses were 10.5% of sales compared to 9.5% of sales in fiscal 2021. Marketing expenses and administrative expenses were well managed for the quarter and below prior year. Overall, operating income improved from $0.6 million to $14.8 million for the quarter compared to the prior year. With income taxes of $4 million compared to $0.2 million in Q1 of fiscal 2021, net earnings increased by over 524% to $11.1 million, resulting in diluted earnings per share of $0.58 a share compared to $0.09 in the prior period. On an adjusted EBITDA basis, we saw an improvement of 77% to $27.5 million in Q1 of fiscal 2022 versus Q1 of fiscal 2021. Taking a look at our balance sheet and liquidity position, we are pleased that even on the back of these challenging last few quarters, that we continue to have a healthy balance sheet and overall liquidity with $283 million in cash and marketable securities and $0 debt. Our company is well positioned for continued investment and growth. In closing, our first quarter results reflect the diversification and strength of our brands and products. Financially, we are confident in our short-term plans to manage through the current environment and excited about our long-term strategies to grow sales and profits. We have an incredible portfolio of brands and products and a proven team committed to continue the growth legacy of the company. I would now like to open the call to questions. Operator? Thank you. We will now begin the question-and-answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. There will be a delay before the first question is announced. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press one, star then one on your touchtone phone. Let's see. We have some people in the queue already. Okay, this call is from Rob Dickerson, and please excuse if I'm mispronouncing your name. Please go ahead, please. Thanks so much. Good morning. Good morning, Rob. Hey, Dan. How are you? Great. I guess first question I have is just on the food service side. You know, the results are impressive. I think it's the best first quarter you've actually posted on the revenue side. I'm just curious if you could provide any more color kind of like what you think in your opinion is driving that? I mean, is that like just kind of black and white new distribution, competing a customer? What do you think? Is this kind of more consumer behavior driven just with respect to traffic in these certain channels via convenience, what have you? You know what? I think there's a little bit of all of that that you mentioned, Rob. We are excited about what food service is doing and the growth that it's having. I do think there's a little bit of pent-up demand that's going on out there. But I also think that our products are a product that people are now starting to search out. You know, what's exciting to me, probably more than anything, is I'm seeing some great growth on our core products. It's not just new things that we're introducing, but it's really some of our core products like the pretzels and the churros that are really having some strong improvement in the quarter. That's encouraging as we get deeper into the year. I really am encouraged by what we're seeing and anticipate for us to be able to continue to have growth in that category or segment. All right. Got it. Just as quickly, you know, historically your second quarter on the revenue line at least, seems to be fairly similar as well for the Q1 seasonality. Q1's pretty strong, you know. I, you know, realize you don't guide for the year, but it doesn't seem as if there would be anything kind of one-off in Q1 that wouldn't necessarily, you know, hopefully repeat in Q2. Right? It kind of stages you for kind of a solid year given back half of the year seeming to be stronger given, you know, amusement park traffic, et cetera. Well, we absolutely think that. We think that, you know, Q2 has a chance of mirroring what you saw in Q1, right? Getting some really strong help as we end Q2 and into Q3 and Q4 with some of the initiatives that we're doing, regarding the cost end side of things and supply chain. We're encouraged. We're really encouraged by the year. Yeah. Rob, I'll just add one. Even with strong Q1 revenues, which we're quite proud of, I think it's good for us all to remember that Omicron and the impact of that on travel and on getting out, particularly in December, probably impacted our sales from being even bigger in the quarter. As we hopefully get beyond that, you know, we're very optimistic that the trends in Q1 and then maybe even, you know, as we get past Omicron, that that environment improves even further for us. Got it. Okay. Super. Just on the cost side, obviously, you know, costs are up, like, you know, for everyone. It sounds like things hopefully improve through Q2 given some of your initiatives in pricing. Kind of a quick two-part question. I'm curious though, like, as you think, you know, forward for the year, right? If we assume there's plenty visibility on the cost side, right? There's not a lot of volatility. You probably know what some of the pricing is, some of the initiatives. I mean, my assumption is you're probably, you know, as we exit the year, maybe it's still a little challenging to kind of get back to those pre-COVID gross margin levels. So any color on that would be great. The other kind of follow-up question is just, you know, maybe this is for you, Ken, and it might be a bit difficult to answer. I'm just curious, you know, you're talking about reducing margin dilutive, you know, products and new lines coming on, which should be more efficient, should get some operating leverage with better top line. If we kind of were to normalize the cost environment where you take the larger strategy to get through COVID, I mean, the assumption here is that gross margins should in theory be, you know, press nicely above pre-COVID. And I know you can't quantify, but just kind of, one, how are we feeling about the end of the year exit rates and then two, just kinda broadly speaking, how are we thinking about kind of, you know, gross margin in a normalized environment? All right. Let me start and then I'll let Ken add to that as well. But you're right. You know, we have some hefty goals out there for us as a company, and we've been working really hard on the business and some initiatives that we think will take hold as we get into the later half of the second quarter and then stronger in the third and even stronger in the fourth. Some long-term ones, as we've talked about with some of the distribution and the frozen plants that we're looking at across the country. We do believe that we can get back to those pre-COVID gross margin levels. We are convinced that we can get there. There are challenges in front of us and some headwinds that we're facing, like we just faced in this quarter and some that we may not see yet. If it was normalized, absolutely believe that we can get ourselves back to the margins that you had seen before. Of course, my goal would be to be better than that. Ken, do you wanna touch on that some? Yeah, Rob, I would say similar to what we said, you know, coming out of Q4 and heading into Q1, we've got to get through this period where we execute price increases. We have done that on the ICEE side. I think I could probably say if not the largest, one of the largest price increases that we've passed through as the industry has done, that work has been done and was done in January. We have very specific plans over the next 3 months to execute that on the food service side. You know, we had a number of customers that had 60, 90-day notice clauses and that sort of thing, but the plans are there. I think what I mentioned going into Q1 is we really feel like backing the Q2 and particularly into Q3 and Q4, the pricing actions, the cost actions will start to bear fruit. I expect over the, you know, the back half of the year to get back to those margins that you're used to seeing, you know, in those Q3 and Q4 periods. The other thing I would add, I mean, the team has been working exceptionally hard, and I probably said a year, and I think Dan would say the same thing, more confident in kind of the rigor behind our plans, whether that's cost reduction initiatives, that's the new lines we're implementing, that's the pricing action. There are very specific plans and timing around those, many of which are happening now, many of which will happen over the next few months. You know, I think again, continuing to look at pretty much Q2, back half, back to kind of what we expect, assuming nothing else crazy around distribution expense inflation and raw materials continues. All right. Good. Thank you so much. Pass it on. Thank you, Rob. All right. Excuse me. Our next question is from Todd Brooks from C.L. King and Associates. Hey. Morning, Todd. How you all doing? Good morning. We're doing great. How about you? I'm doing well, thanks. Couple of quick gross margin questions to follow up on Rob's line of questioning. If you go back and look at Q1, can you maybe talk about how much pressure you were seeing in gross margin pre-Omicron? Then that last month of the quarter, how much inflationary cost pressures accelerated to hit the gross margin? Well, again, we'll touch on this some, but certainly saw pressures throughout the quarter, but it definitely peaked as you got into the later half of the quarter. Omicron, one of the things it did is affect labor. With the sales that we're experiencing and not wanting to not be able to ship everything that we can, there's some labor increases that happened towards the end of the quarter with people calling out sick and having to bring in temp labor and overtime hours and things like that, and working really hard to make sure that we're continuing to produce the products that we want to produce and get them out to our customers. So it certainly peaked throughout the quarter. Distribution was a big piece of that. Distribution was a rising cost all across the quarter. I don't know that it peaked throughout it. I think it was just a rising cost all across the quarter and continued to get worse. Ken, you wanna talk about that some? Yeah, I'll just kind of start where Dan ended on distribution. Again, some of the quickest, fastest escalation of costs that I've seen, you know, in my career. Just to give you one idea, one of our biggest line items is outbound freight. From Q4 into Q1, that continued to increase just under 20%. If you look at that level of cost increase just within 3- 4 months, plus as we got into December, it was a huge revenue month for us. Our first commitment as it relates to, you know, doing this, you know, both in the quarter and long term is continuing investing, getting our sales growth back and market share. You know, there are things that we did to ensure from a product availability standpoint we did to drive those sales. That was part of the reason why we had such a great quarter. You know, there are specific plans in place around distribution. You know, we've mentioned before we brought in a third party expert around logistics management, and they are just now starting to get engaged. They've already taken responsibility for one of our biggest, you know, warehouse and pickup locations. That will continue very quickly into Q2. You know, distribution and the escalation of those costs certainly had an impact. Then the same thing on raw materials. Yes, December, as it relates to cost of goods and margin and results, was our toughest mark in that case because of the combination of the things I mentioned and as that escalated over the quarter, as well as the labor situation that I mentioned. That's helpful. Thanks, [for answering]. Can I follow up with obviously rolling out of a strong month in December into the beginning of the year, just what's kind of the current experience as far as Omicron staffing levels? Do volumes drop enough that you're not having to chase the same magnitude of labor, so maybe not the same pressure as we're working our way through this variant? It's getting better, Todd. As you said, you know, January isn't December, however, we're still seeing nice increases year-over-year, and believe that we'll continue to do that. The labor issues that we experienced towards the end of December or in the mid-December through the end of the year aren't as challenging as they are today. However, I think it's, you know, gonna be challenging all year long to some extent. That's great. Can we kind of talk about pricing? I know it's across segments, so it's hard to just give a blanket statement on pricing, but maybe talk about where we stood on blended pricing in Q4, what you tried to put in effect over Q1, and then magnitude of what you're trying to put in over this next 60-90-day period in the food service business. Yeah. We've always tried to be sensitive when it comes to pricing to our customers and consumers, right? Probably our first go around with an increase that would have taken effect, we might have been a little bit more conservative than we should have been. We have gone back and looked at that really, really hard. We've taken pricing with the ICEE side that became effective January and probably some of our largest pricing that we've ever taken. We've gone back and done that on the food service side. You know, you've heard me talk about our new Senior Vice President of Sales on the food service or in the J&J side of our business, Bjoern Leyser, and he's on the call today. You've heard me talk about him, and he's really led the team on pricing right out of the chute. So we feel really good about where we're at with that. That will take effect end of this quarter. Some happens in this quarter, but really into this quarter and then really mainly in the third quarter. So. Again, pricing probably at a larger rate than we have taken in the past. Ken, if we use kind of Rob's construct of cost table from here, how much gross margin should you recapture on the pricing increases if they fully implement? Well, it will scale its way through the year. You know, I'm gonna kind of leave it at this. I mean, you know, the level of increase is, you know, double what we took last year. You're looking at probably on average 6%+, depending on product, customer, composition of products. You know, flour, for example, is a big commodity for us, and it's one of the ones that continues to inflate double digits. Yeah, it does vary by, you know, product, customer, et cetera. You know, we'll enjoy some of that benefit in Q2, but I would call it marginal. Somewhat improvement over Q1. The bulk of that will play out entirely in Q3 and Q4. That in combination with the cost reduction initiative that we just mentioned is gonna enable us to get back to more of that 30% gross margin range, assuming the double-digit inflationary environment doesn't continue, which at least right now we're not expecting that. Okay, great. If I can ask one more and I'll turn back to queue. Obviously great revenue performance and relatively flat sequentially, which we don't typically see December quarter versus September quarter. Maybe if we can parse the strengths between, again, kind of maybe brand discovery versus new introductions. Secondly, if we can talk just about the recovery in the theater business. Across the course of the quarter and what kind of the forward outlook for that business is, given the release schedule? Thanks. Well, really proud of all three segments. All three of them had a good increase in sales across the board. I think I mentioned this to you already. Most of that increase is coming from our core products, and that's really encouraging to see. We're seeing our pretzels increase. We're seeing churros increase. We're seeing our frozen novelties in the retail side increase, and we're seeing increased distribution in all of those channels. The frozen beverage side, it was great to see the theater business come back, and it really came charging back in December. A lot of times, that's really based on the movies that are being released and the timing of those movies. We had a great one released in December, and we saw that immediate jump across the whole channel. Really encouraging to see, in the midst of Omicron continuing to grow in December, when the theaters released a good movie, the people were out there to see it, and so encouraged by that. That's what I would tell you about the theater business going forward, for the rest of this year. As we have the right movies released, we'll see a nice return to that business again. Pretty similar to what I've said to you in the past, I think by the end of the year, we could be in that 85% range of what it was in 2019. Our business particularly might be greater than that because of their reduction in their SKUs and their places. We sell more per location than we used to sell in 2019. We may be at a higher level than that. Encouraged, I would just say this. I'm encouraged by the theater business that when there's a good movie released, people are willing to go see it in the midst of the pandemic even. Okay, great. That's a big deal, Todd. In my view, again, we mentioned December was just a hair under FY 2019. To me, that's even more encouraging than probably 2 or 4 months ago, because when you see the product there, you see the right kind of movies in the theaters, the consumers are coming back. That's really encouraging as we look to more of those kinds of movies coming out, Top Gun: Maverick, The Batman. I think there's a lot of product built up in inventory, so that's encouraging. That's great. Thanks. I appreciate that. Thanks, Todd. Okay. Our next question comes from Ryan Bell. Go ahead, please. Good morning, Ryan. Morning. Just had a question sort of about the impacts with elevated COVID cases at the end of calendar 2021 and through the beginning of this year. Just trying to understand if you had any sort of quantification about, you know, what that impact might have been on the businesses and then, you know, seeing potentially relief from that as we're getting, you know, testing over Omicron. You know, again, I don't know if you can identify you know a percentage or a number there, but what I would tell you, Ryan, is the biggest impact we had of the COVID cases was on the labor side of our business. We continued to have strong sales all the way through the quarter and all the way through December, so it wasn't as affected at the customer consumer level. Where we really saw the impact is in the labor shortages and what we needed to do to cover for those labor shortages, both on the snack food side of the business, the J&J side, and on the ICEE side with our many service technicians out in the field and some of them suffering from the variants and having to cover that with overtime or additional labor. Okay, thanks. That's helpful. I think when you're talking about some of the pricing that's been taken so far this year, I know you had mentioned this, but it was that it's about or at least 6% so far this year. Does that not include some of the food service pricing? No. Let me try to clear that up a little bit. One point that Dan made was the price increases we took last year. You know, in hindsight, we probably should have been more aggressive. You know, those are probably on average 3%-4%. Call it price increases that we've taken at ICEE already and the one that we are in the process of taking on the food service, retail, J&J side of things will be, call it double that. You know, again, the specifics are different based on customer and product and that sort of thing, but kind of just speaking averages. That's the magnitude of not just us, like everybody in the industry is having to look at as costs have gone up double digits. That's why we keep emphasizing as we get through that, you know, in this quarter, along with the other things that we're doing, we feel really good about one, we have the sales where we want it and we're growing it. We've got great programs, new innovation. You know, the margins back up, we feel really confident about the back half of the year. Thanks. That's helpful. Structurally, you know, retail supermarket business is in a lot better place than it was in calendar 2019. How much of a base can the increased eating will hold going forward, and where do you see maybe opportunities, you know, to hold that base or expand a little bit more? We're encouraged by retail. We feel like we got some really good things going on in that group. We've got some great products, some good introduction to even some newer products. We feel like we can hold on to where we're at today and potentially grow that. We have some good new distribution happening with one of the largest mass merchandisers out there with our frozen novelty group and the Dogsters specifically. We're really excited about what's happening in retail and don't expect that to dip its nose anytime soon. Just the last one for me. me. In terms of capital allocation, obviously your balance sheet is pretty strong. You know, is there anything you're thinking about in terms of, you know, strategies for deploying some of that capital? I don't know if you've talked about this before, but is there potentially, you know, a leverage range you'd be thinking about, if, you know, potential acquisitions come into play? Well, you know, we are fortunate to have a really strong balance sheet, and we've worked really hard to have that type of thing. We wanna continue to be vigilant in the way that we look at it. We've looked at all aspects of what to do with that cash, but probably our biggest interest is some type of acquisition out there, and we've been really active on that front, Ken and I, over the last 3 months or so. We feel like we're storing up some pretty good opportunities and hope that that would be the area that we would be able to use that cash. Ken, do you wanna touch on that at all? Yeah. The other thing, Ryan, you're seeing, you'll see it even on the financials this quarter, is we're investing even more, you know, in our plants, you know, and that's. We mentioned four new lines coming in. Those lines are all focused on core product areas, whether it's frozen novelties, churros, pretzels, and those will improve efficiencies, innovation. There's three other lines coming in, you know, in Q1, Q2 of next year. That pipeline of things that we need to do to get better and get more, you know, more automated, we're investing in. We're using money for that. Dan mentioned, you know, we're very aggressive in looking at the acquisition opportunities. I think that's just a matter of time. Yeah, we're maintaining cash for that. In terms of leverage, I don't know if I'd throw a specific number out, but we have, you know, we have clear support, you know, from the board that depending on the opportunity, if we need to go leverage the balance sheet a bit, you know, we can go do that. Great. Thanks so much. That's it from me. Thank you, Ryan. Okay. Give me a minute here. I have this name in line. This call is from Robert Costello. Go ahead, please. Hello. Morning, Robert. Hi. I have a question. A number of years ago, Jerry outlined where he thought the best growth opportunities percentage was in food service. With your expansion of your product lines that you mentioned on CapEx, is that continuing? Can you be a little more specific on what you think, where you're reinvesting the money for the future growth is coming from? What areas of the company? Yeah, Robert, when we're talking about food service, as I mentioned earlier, we're seeing great growth in our core products. Core products meaning the pretzels, the churros, and the frozen novelties. We're looking at lines of expansion right now, we're looking at the opportunity of being able to expand our production on that core. I still believe to this day, if that was Jerry's answer in the past, with pretzels and churros and frozen novelties, if that's how he answered it before, I would tell you, I still believe today that that's our biggest opportunity for growth right now. Right. With the CapEx budget, is there any change that you're anticipating with inflation versus the beginning of the year versus now and your costs and what it's gonna cost you to expand a product line? Or is it pretty much the same as you anticipated? There's some slight inflation in that. Most of the ones that we've approved, we locked in on the pricing for those lines. I'm sure there'll be some inflation that will go along with the lines as we start to put them in. The other thing, Robert, to keep in mind is, you know, we've mentioned this before, you know, we have a capital committee, and so each of these investments go through rigorous reviews, strategic fit, operational, and then financial modeling. Within each of those, you know, we don't make these decisions unless we believe very strongly that they're gonna drive, you know, accretive returns. So that level of rigor is behind a lot of these decisions, as well as investing, you know, putting the lines in the right places, which are really focused, you know, primarily on our core products. All right. Two quick questions. On the churros, you mentioned new product lines. Could you be more specific? Is it a new product category, or how are you anticipating doing this? We're seeing great growth today in the churro business. That's one of the areas that we're gonna continue to look at potential new lines to be able to keep up with that and maybe even some regional production, I'll call it, so that we're not shipping things across the country, that we're making them in the spots where we're selling them. We're seeing some great growth when it comes to churros and good demand out there with customers. Last question. Your cash, with interest rates slightly rising over the year, where is the cash invested specifically? Well, most of it is in very liquid, you know, cash money markets. You know, there's still some bonds that are older that most of those are maturing, you know. Like most every other company, given where rates were, you know, over the last year to 18 months, you know, we've been waiting to see what the market does. Now, you know, as the rates come back up, we're evaluating that option of investment along with using that money for capital, using that money for dividends, using that money for acquisitions. Right. You don't have it in bond funds right now. Is that the case? You have it just in cash and interest bonds? The majority of it is in cash and very short-term liquid. You know, there's only probably, you know, I don't know, $20 million-$30 million that's in, you know, corporate bonds that we've had for a number of years that most of those, I think, are maturing probably in the next 12 months. All right. Thank you. Thank you, Robert. Okay. We have Todd Brooks again. Did you have another question? I sure did. Okay. Go ahead. Thank you. Just wanted to follow up and see if we're to the point where some of these efficiency opportunities are clear enough that you can start to manifest the total savings from efficiency efforts that the company's targeting, or are there any bigger projects in here where you can maybe size the targeted savings so that we can look at these possible steps against what could be some persistent inflationary pressures? Yeah, Todd. You know, just to reiterate what I said a little bit ago, the one thing that gives me more confidence than I've ever had in these calls is these plans are very specific. I mean, they're you know, our operations watching leaders have done a great job of really you know, putting very concrete things together, and they're laid out by months. They're laid out by quarter. So you know, there's a lot of realness to that. You know, we've mentioned before in the areas of distribution on an annualized basis, Todd, once we move our logistics management to this third party and you know, leverage their capabilities, technology, you know, there's a conservative $4 million benefit there, and that's an annualized number. As you look at, you know, like procurement, you know, we've got a number of initiatives in place there that once those start to bear fruit, you know, we think there's, you know, low single-digit millions opportunities over the next few quarters. There's some work we gotta go do to tie it together, but those just give you some high-level numbers. The plans are specific, you know, in terms of ownership, in terms of estimates, in terms of timing. We're just really getting that going in terms of, you know, launching those and initiating those. Todd, I'll just add to that. You know, we're focused on distribution. We're focused on procurement, R&D, production, even regional production as I talked about earlier, and pricing and really encouraged by what we think that is out there in those efficiencies side. As the year progresses, we feel really comfortable with that. That's great. Just a final one from me, since you have Lynwood available on the call, I'd love to get your thoughts on the brands being a more recent arrival to J&J and thoughts on looking at this portfolio and the ability to really extend these brands to start to drive a little bit more of a new product or a product extension engine to help enhance the revenue growth rate over time. Thanks. Todd, that's a great question. Lynwood's sitting right here next to me and anxious to be a part of this. Lynwood, I'll turn it over to you. Hi, Todd. Thank you for getting me involved. I appreciate it. We have a lot of confidence in these brands and our core brands, and the ability to stretch these brands into some new spaces, starting with ICEE and its ability to extend further into food service to stretch and innovate in novelty. For novelty continues to be a promising overall category. We have a lot of confidence in SUPERPRETZEL and just the inherent strength of that brand across channels, both food service, as well as retail. We see the innovation opportunity in retail to continue to be a positive space for us in our pretzel bites, followed up by pretzel knots later in the year. When you get into our novelty brands, we have brands like Whole Fruit, which has just tons of upside, fantastic brand, big distribution upside. Dan mentioned Dogsters. With Dogsters, we're seeing green shoots as we speak with brand new distribution with some of our largest customers. Honestly, I think the upside on Dogsters in the blooming pet industry space is just enormous. The last I'll call out is Luigi's, where we have leadership in the Italian ice category. There's a lot left to do with Luigi's, and it's not just about expansion. It's about growing into new spaces like a natural place for Luigi's is gelato. So we have a lot of confidence. That's just a few top line thoughts. I'll leave it there. Dan, anything to. Yeah, you can just touch on gelato a little bit more if you want to. We haven't mentioned that yet. Now's a good time to introduce that. Yeah, it's a fantastic product. I can tell you. It's just a natural fit. It's a real, genuine Italian gelato consistent with that brand's positioning. We'll be launching three flavors as early as next month in March. We're very excited about that. I'm very hungry listening to it, so I can't wait to get my hands on it. It is a good snack. Yeah. Yeah, I do. Thank you. Thank you all for the time, and I appreciate it. Thank you, Todd. Really appreciate the questions. Okay. At this time, there are no more questions in the queue. Great. Well, thank you everyone for joining us on the call today. We appreciate your interest and continued support and look forward to updating you on our progress during our second quarter call. Thank you very much and look forward to speaking with you soon. Have a great afternoon. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.