Welcome to the J&J Snack Foods Fiscal 2024 Second Quarter Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To draw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Norberto Aja, Investor Relations. Please go ahead. Thank you, operator, and good morning, everyone. Thank you for joining the J&J Snack Foods Fiscal 2024 second quarter conference call. We will start in just a minute with management's comments and your questions, but before doing so, let me take a minute to read the safe harbor language. This call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. As such, all statements made on this call that do not relate to matters of historical facts should be considered forward-looking statements, including statements regarding management's plans, strategies, goals, expectations, and objectives in our anticipated financial performance. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties, and other important factors that may cause results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Risk factors and other items discussed in our annual report on Form 10-K for the year ended September 30, 2023, and other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made on this call today. As such, forward-looking statements represent management's estimates as to the date of this call, May 7, 2024. And while we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause expectations to change. In addition, we may also reference certain non-GAAP measures on the call today, including Adjusted EBITDA, Adjusted Operating Income, or Adjusted Earnings Per Share, all of which are reconciled to the nearest GAAP measure in our earnings press release, which can be found in the Investor Relations section of our website. Joining me on the call today is Dan Fachner, our Chief Executive Officer, along with Ken Plunk, our Chief Financial Officer. Following management's prepared remarks, we will go ahead and open the call for question and answers. With that, I would now like to turn the call over to Mr. Dan Fachner, J & J Snack Foods Chief Executive Officer. Dan, please go ahead. Thank you, Norberto, and good morning, everyone. We appreciate you joining us this morning to discuss J&J Snack Foods Fiscal 2024 second quarter results. We delivered record second quarter net sales of $360 million, reflecting growth across our foodservice, retail, and Frozen Beverages segment s, with year-over-year increases across most product categories. Our strong performance was driven by an amazing team of employees who are aligned in executing our strategy and committed to serving our customers and valued stakeholders. We have a wonderful business with tremendous growth opportunities ahead of us, and we continue to see that in our financial results. Our strong top-line performance, combined with gross margins exceeding 30% in the quarter, a 330 basis points improvement over last year, is a result of executing our strategy, including focused initiatives to improve profitability. This resulted in Adjusted Operating Income and Adjusted EBITDA growth of 81% and 43.1%, respectively, and a more than 90% increase in net earnings. In short, strong performance across the board. Our strategies to leverage innovation and cross-selling opportunities to expand placement of our core products and brands are delivering results. Let's take a closer look at our sales performance in the quarter. In our Foodservice segment, churros sales continued their strong growth momentum, increasing 23.7% to nearly $31 million, led by new business growth of one of the three largest QSR customers. Recent investments to add two new churro production lines have us well-positioned to capture incremental opportunities in the churro category, and we expect to continue growth throughout the year, including international opportunities as well. In addition, bakery sales increased 7.7%, driven by unit volume growth in cookies, new products, and expanded customer placements. Frozen novelty sales grew 4.2%, led by the continued growth of Dippin' Dots. Dippin' Dots sales increased 5% in the quarter, led by growth across most channels. Growth across the segment was partially offset by softness in soft pretzels and handhelds. Moving on to our Retail segment, handhelds grew 75.5%, driven by expanded placement with a major mass merchant. Frozen novelty sales increased 14%, led by growth of Dogsters and ICEE novelties, while biscuit sales increased 6%, and soft pretzel sales increased 2.7%, led by our continued expansion of SuperPretzel products, largely reflecting strong demand for our new SuperPretzel Bavarian Sticks. Frozen beverages segment also delivered healthy growth, led by a 6.9% increase in frozen beverage sales, reflecting consistent consumer trends across most customer channels. Repair and maintenance revenues also increased by 2.9%, reflecting strong maintenance call volumes. Partially offsetting this growth were relatively flat machine sales, down 0.4%, as we lap a large rollout from last year. I'd like to take a couple of minutes to highlight a few areas that support our relentless focus on driving growth, building our brands, and capturing incremental opportunities. Starting with SuperPretzel, this iconic brand is outperforming the snack category and continues to provide opportunities for growth through new product extensions or new points of sales. We are quickly expanding this brand across retail, led by the launch of Bavarian Sticks, which has become the number two seller in SuperPretzel portfolio, reaching an ACV of 25% and growing. I'm also pleased with the incremental distribution we are achieving and our marketing execution, led by promotions like the recently concluded March Madness campaign. Later in the year, we look forward to various soft pretzel launches in the club channel under the SuperPretzel, Brauhaus, and Auntie Anne's brands, as well as bringing to market our SuperPretzel Roller Grill Dog in food service. As it relates to ICEE, we continue to see healthy momentum with new client wins such as Dave & Buster's and an upcoming test with a top 10 national QSR chain. Our sales in Mexico, the amusement channel, mass merchandise retailers, and restaurants increased for the quarter, and we just wrapped up our national flavor and movie promotion with Checkers. Let's talk about Dippin' Dots. I'm pleased to confirm that we have secured full location rollouts for AMC Theatres and Cinemark Theatres, with targeting a completion by the end of the fiscal year. Once completed, Dippin' Dots will be sold in approximately 880 theater locations, continuing our strong partnership with these leading customers. We've also reached an agreement to roll out vending machines across Marcus Theatres, and I'm so proud to report we were just awarded Vendor of the Year by Marcus Theatres. This is a testament to our continued efforts in cross-selling our portfolio to our largest customers. Finally, we are making great progress on tests with a couple of major convenience customers and have a confirmed full rollout with a 162-location food service customer that we hope to have implemented later in the year. Let's talk about a few other innovation highlights. I'm so proud of our R&D team and the opportunities they are creating through new products, better packaging, and product extensions. Recent accomplishments include the launch of ¡Hola! Churros in the retail, the addition of new Dogsters Pumpkin flavor, new Dogsters Club Channel packaging, Brauhaus Bavarian packaging in food service, a new Cakables cookie brand, and the launch of SuperPretzel Soft Pretzel Buns into in-store bakery. We also recently announced the acquisition of the Thinsters brand, which provides us with strong brand and quality product to add to our cookie portfolio. Thinsters are predominantly sold in the club and retail channels, servicing existing customers of ours. We have been producing this product for the previous owner, so this will be a seamless integration and a quality brand that we can build across both retail and food service. Our team is relentlessly focused on innovation and creating new selling opportunities. From an operational perspective, there are many positives to report as we continue to execute against our initiatives to enhance overall operations and better support our growth opportunities. Starting with our supply chain strategy, we now have opened all three distribution centers: Terrell, Texas; Woolwich, New Jersey; and more recently, Glendale, Arizona. These three new RDCs are exceeding expectations and will enable us to continue driving productivity improvements in our supply chain. At this time, 81% of our sales orders are shipped from the new distribution network versus only 26% a year ago, with the average length of haul decreasing by over 40% and the on-time performance improving to 87% versus 74% a year ago. Shifting to operations, the addition of six new production lines has significantly expanded our capacity. This has enabled added efficiencies and given us the ability to meet growth opportunities across our core products such as pretzels, churros, and frozen novelties, enabling new customers and channel opportunities. Two new frozen novelty lines have added critical capacity and flexibility during the peak summer season. They are also allowing us to make similar products in different locations, leading to freight savings. The new churro line also increased capacity and provided us with the capability to meet the growth we anticipated in churros. Our two new pretzel lines in Texas and New Jersey immediately created capacity to meet market demands that we could not previously serve, while also creating growth opportunities in food service for Bavarian Pretzel Bites, retail division expansion, and in-store bakery innovation. Overall, the expanded capacity has created production efficiencies and higher output metrics through better automation, which improves product margins, decreases overtime, and provides the flexibility to meet unforecasted additional sales during peak summer business. In closing, I am pleased with our ability to post record sales while managing through an ongoing, challenging consumer environment. As I mentioned at the onset, I'm so proud of how the J&J team continues to execute our five core strategies: grow and protect our brands, dominate core categories, cross-sell the portfolio, invest in our future, and embrace our culture. With that, I would now like to pass the call over to Ken to review our financial performance in more detail. Ken? Thank you, Dan, and good morning, everyone. I am pleased with our ability to deliver strong results for the quarter, including the highest fiscal second quarter net sales, topping our previous record achieved last year. This, combined with growth margins over 30%, contributed to significant profit growth and profits growing faster than sales. Net sales for the quarter total $359.7 million, an increase of 6.5% versus the prior year. As Dan mentioned, top-line performance was driven primarily by higher volumes and new business performance in the quarter. Food service, our largest segment, also has increased 5.4% to $230 million, as churros continue their strong growth momentum, increasing 23.7% to over $30.8 million. Bakery and frozen novelties increased 7.7% and 4.2%, respectively, driven by unit volume growth in cookies and a 5% increase in Dippin' Dots sales. Growth across the segment was offset by a decrease in soft pretzel and handheld sales of 2.1% and 4%, respectively, driven by soft consumer trends. It is important to note that volume sales for our major handheld customer did increase for the quarter. In addition, sales of new products and added placement with new customers totaled approximately $13.7 million, driven primarily by the addition of churros to the menu of a major QSR customer. This led to a second quarter operating income of $7.9 million, an increase of 54.5% versus the prior year period, reflecting the top-line growth and improved gross margins. Moving to our retail segment, Q2 2024 retail sales totaled $52.9 million, or an increase of 14.1%, driven by handheld sales growth of 75.5% as we expanded product placement with a major mass merchant. In addition, frozen novelty sales increased 14%, led by the growth of Dogsters and ICEE novelties, as well as higher shipments as customers built inventory for the peak spring and summer seasons. Biscuit sales increased 6% in the quarter, and soft pretzel sales increased 2.7%, led by our continued expansion of SuperPretzel products in retail. We also benefited from new product innovation in this segment of approximately $2 million in the quarter. This was largely the result of the introduction of SuperPretzel Bavarian Sticks into the retail segment. This led to an operating income of $5.1 million, or an increase of $4.6 million versus the prior year period, reflecting the improved sales, product mix, and gross margin. As it relates to our third segment, frozen beverages, sales were $76.9 million and beat Q2 2023 sales by 5%, led by beverage sales growth of 6.9%, reflecting consistent consumer trends across most customer channels. Repair and maintenance revenues also increased 2.9% as we saw strong maintenance call volumes. Machine sales were relatively flat, down 0.4%, as we lapped a significant customer rollout from last year. This led to operating income of $4.9 million compared to a Q1 2023 operating income of $4.6 million, driven by sales growth and consistent gross margin performance. Our investments and initiatives over the last two years to enhance profit margins and drive efficiency across our business are proving to be successful. For the quarter, gross profit totaled $108.2 million, a 19.8% increase compared to Q2 of 2023. This led to a 330 basis point improvement in gross margin to 30.1%, favorably comparing to 26.8% in Q2 2023. We remain confident in our plans to improve profit margins and expect to achieve gross margins of 30% or better for the full year. As it relates to inflation, the overall impact has stabilized. We are now experiencing deflation in some raw materials like flour, oils, dairy, and eggs. However, this was offset by double-digit inflation in chocolates and mid-single-digit increases in sugars and sweeteners, mixes, and meats. Our procurement team is effectively managing supply and cost, and we are well positioned to respond to any impacts. Looking at expenses, total operating expenses increased $10.1 million, or 12.7%, representing 25.1% of sales for the quarter compared to 23.7% in Q2 of 2023. It is important to note that during the quarter, we incurred $2.3 million in one-time expenses, reflecting transition costs primarily related to the recent opening of our third distribution center in Glendale, Arizona. This was a planned cost of our distribution network strategy and is expected to drive meaningful cost savings once we complete the initiative. Distribution costs were 12.3% of sales in the quarter compared to 11.3% in the prior year period, driven by the previously mentioned one-time transition cost. Going forward, we expect distribution expenses to further benefit from our initiatives to improve logistics management and increase efficiency across our distribution network and supply chain. Marketing and selling expenses were 7.7% of sales versus 7.1% in the prior period, driven primarily by incremental licensing fees and promotional and marketing support on core brands and new products. Administrative expenses were 5.1% of sales in Q2 of 2024 compared to 5.3% in Q2 of 2023, driven by tight management of payroll and discretionary spending. This led to an operating income of $17.9 million, or a 75.6% increase compared to $10.2 million in Q2 of 2023. Adjusted operating income was $21.8 million, or an 81% increase compared to Q2 of 2023. After the impact of income taxes of $4.8 million compared to $2.4 million in Q2 of fiscal 2023, net earnings increased 94% to $13.3 million, resulting in reported earnings per share of $0.69 compared to $0.36 in the prior year period. Adjusted Diluted Earnings Per Share were $0.84 for the quarter compared to $0.43 in the prior year period. Adjusted EBITDA increased 43.1% to $39.3 million from $27.5 million in the prior year period, and our effective tax rate was 26.6% in the second quarter. Looking at our liquidity position, we continue to have a healthy balance sheet and overall strong liquidity position with $43.6 million in cash and approximately $17 million in debt. Our ability to improve cash flow through working capital initiatives and stronger profitability is generating more cash to pay down debt, raise dividends, and continue investing in our business. Our focus will continue to be on maintaining a healthy balance sheet and prudent leverage position, which enables us to continue investing in the growth of our business and returning value to our shareholders. In addition, we have ample availability under our revolver of approximately $198 million in additional borrowing capacity. In summary, we are executing our strategy, improving operational efficiencies and profit margins, and expanding growth opportunities across channels and customers. Our second quarter performance, together with our robust balance sheet and liquidity position, has us positioned to continue driving growth across our brand portfolio and customer channels. We are executing our strategy and remain confident in our plans to continue driving profitable growth and value to our shareholders. I would now like to turn the call over to the operator for questions and answers. Thank you. Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while I compile the Q&A roster. Our first question comes from David Schachne from William Blair. Please go ahead. Hey, congrats on next quarter, guys. This is David Schachne stepping in for John Anderson. Two quick questions for you guys. First off, can you help us quantify the savings that may be achieved with the third distribution center in Arizona that's now up and running? Good morning, David. How are you doing? Good. How are you? Good. Thanks for joining us today. Ken, I don't know if you want to look forward towards what that savings might be, but David, that third one just got into place. What we've said pretty consistently is, once we get those three distribution networks into place, we believe that we can drive the percentage of sales of distribution down into that 10% or lower range. They're just now getting into place. We haven't seen that savings yet, but we think that savings is yet to come in short order over the next six months to a year. Yeah, David, I would just add to that. You do need to look at the savings collectively as all three of those RDCs and the change we've made work together. And just to add to what Dan said, I think we have come out and said in previous meetings, the business case for this, as it's all integrated and working together, we think will save us $10 million a year in that range, give or take. We're really confident about that. And it'll be really the next quarter into Q4 next year when all this really starts to be a bit more seamless, and I think we'll start to see that% of sales come down under that 10% range that Dan mentioned. Really excited about that distribution network, though. Love what it's already performing at and how it's helping us better serve the customer. And then know that that savings is right around the corner. Great. Thank you. And then if I can slip in one other, I just wanted to know what attracted you to acquiring the Thinsters brand. I know in the prepared remarks you mentioned that you produce that anyway. But if you could just talk about any plans you have for Thinsters, whether it's new flavors, distribution, or something else that I'm not thinking of. Yeah. What really did attract us, you already mentioned it, is we make the product today, right? And love the product and enjoy the brand, right? And so had the opportunity to acquire it, it's a little bit out of what I've said that we're looking for in general. We look for something that's larger than that. But this is a product that we've been making, and if you tasted it, it's really, really good. I like the brand. I like the opportunity to be able to grow it, not just in retail, but in food service as well. And I like its clean label, honestly. There's just a lot about it, the product that I like. It's small. It's much smaller than what we've been looking at, but it was just a nice tuck-in for our organization. Got it. Thank you. That's all for me. Thank you, David. Thank you. One moment for our next question. Our next question comes from Todd Brooks from The Benchmark Company. Please go ahead. Hey, thanks. And congrats, everybody, on a really eye-opening quarter in what's typically one of your seasonally softer ones. So very impressive. Thank you, Todd. First question for me, and this is just to get my mind around the gross margin performance in the quarter and the normal seasonal pattern that we would see would be gross margins that were 500 basis points stronger for the second half of the year. How do we think about the improvement? I know, Ken, you're staying anchored to the 30%, but that, based on the historical seasonality, seems like a low bar to clear. So how do you want us thinking about the seasonal gross margin performance in the second half of the year? Yeah. It was an exceptional quarter, margin performance, where a lot of things, Todd, are really starting to work together. It's the mix of what we're selling. It's the efficiencies that we're gaining in our production facilities. We're doing a much better job of leveraging the capacity of each facility really across the product categories. Gross margin improved significantly year-over-year. And we finally, I think, got pricing calibrated with cost really well. So all that working together really led to one of the best second quarters in terms of margin in the last 10 or 15 years for the company. It sets us up really nicely for the full year. I certainly expect when we say 30% or better, I expect it to be the better. We go into Q3 and Q4 where I expect margins, if you remember last year, they were very strong. I expect our Q3, Q4 this year to be probably similar to a year ago because the comparability is on a different kind of scale than it was this Q2 to the last year Q2. That ought to translate into us doing potentially up to 31% of sales for the year. We can execute that. Todd, we've had a lot of conversations about what we've been doing here at the organization and really transforming the model. Gross margins is one of those areas that we're keenly focused on from sales to operations to finance. It's nice to see it really working. That's what we saw in this quarter. On a longer-term basis, Dan, with the new lines that you guys invested in last year that you're producing higher margin products on with the success with cross-selling, what, in that kind of 3-5-year horizon, is the gross margin kind of profile for this business as you guys are thinking about the longer-term vision of the operating model? Well, as we've said, we absolutely believe that we can continue to grow that margin, right? And would love to see us somewhere at some point in that mid-30s% range. I think we're doing all the right things, right? The teams are focused on efficiencies in the plant. The new lines are working. Our sales group is understanding pricing better than they ever have before. The finance teams come alongside and help shape that as well. And so we're hopeful, as we've said, that we knew we could get to 30% and what the next milestone is. I would love it to be somewhere in that mid-30s% over the next 4-5 years. Yeah. Yeah. I think, Todd, one of the keys to that will be to spread out the seasonality for Dippin' Dots. And Dan mentioned in his script a number of big wins that are coming in that business down the road, particularly in theaters. If we can spread that sales out in Q1 and Q2 of our fiscal year, then that starts to build towards even stronger gross margins on a yearly basis. That's great. And then one more, and I'll jump back in queue. Ken, you talked loosely about commodities kinds of wins and losses in the quarter, but can you talk about what the overall basket performance was in the quarter? And can you remind us, I think when we were living through the spike in sugar costs late last year, that you may have been hedged through the second quarter here. So just wondering the second quarter reality commodity-wise and then the forward outlook that you have for commodities in the back half of the year. Thank you. Yeah. I couldn't say enough positive things about what our procurement organization is doing to get ahead of some of these things. Sugar was double-digit a few months ago. It's come down. I think it's around 6-6.5% for us. But we were managed against that with contracts in place. And we are in a good position to leverage where the highest prices are in the next six months as well. So we're not locked into old prices, and we're able to react to that. So feel good about our position there. We've done a good job of locking in supply and cost on chocolate, which is probably the biggest commodity ingredient challenge for us and many others that use chocolate. The good news there is about half of that is built into contracts where we pass increases, decreases on to the customer. But we have that well managed. If you look at Q2, probably on a net basis, we were slightly favorable in terms of inflation, deflation. As we look outward, it's really focusing in on what inflation continues to do. I think you saw the latest CPI numbers were about 3.5%. I don't know that anybody sees total inflation getting down to 2% anytime soon. Food's doing a little bit better than that, more in the 2%-2.2%. So if I had to project out, I'd probably say net-net, we may see inflation of around 2%-2.5% as we look forward. But we're in good shape where we need to be to lock in and protect ourselves. Hey, Todd, if I could just echo something that Ken said as well. Really proud of what that team is doing. Another area where we're really transforming the company, we brought in a lead for procurement about a little over a year ago, and he's just doing a tremendous job leading that group and helping us get better in ways that we needed to get better, so. Great. Thanks, both. Thank you. One moment for our next question. Our next question comes from Connor Rattigan from Consumer Edge. Please go ahead. Hey, guys. Good morning. Congrats on a great quarter. Thank you. Good morning, Connor. Thank you very much. Yeah. So, Ken, you called us an inventory build in the quarter. I guess I was just curious maybe how much of a tail or how much of a tailwind was that inventory build, and were there maybe any other one-time items like pull forwards or anything like that that drove the top line? And just thinking about that in total, I guess also with all these new business wins that you guys called out, should we maybe start thinking about the top line as maybe trending back to that pre-COVID mid-single-digit growth? Yes. Yeah. Connor, we talked about this in Q1, kind of the opposite effect, particularly in areas like frozen novelties where you're in the winter months, but a lot of dialing back of inventory. And in the second quarter, I think as people look forward to spring and summer, we saw a little bit of that being trued up, which I think benefited us. We also, like in frozen novelties, saw really nice growth in Dogsters and in ICEE novelties. Those were all benefits as well. And really, some of the work we've done, and Dan talked about this, in improving on time and in full metrics with our supply chain changes reduced some of the OTIF fees that we were paying. So that benefited that sales number as well because those were deductions that we were taking in the prior year. So it's a combination of a lot of things that are working well and worked well in the quarter. And hopefully, it's a signal for what our customers kind of see as it relates to kind of the entertainment areas and people getting out and buying in Q3 and Q4 and in the spring and summer that the outlook is that they'll see some improvement there. I mean, I know the consumer mini retailers have been a bit stretched, but I think there's some anticipation that some of that may improve. In fact, I know the outlook on travel is pretty strong based on something I read this morning. So it's a combination of many of those things that benefited us in the quarter. Okay. I'll follow up on there later. So I guess also too, sort of in the same vein, we've heard from numerous other reporters that there appears to be a widespread slowdown in food service traffic. And I know you guys called that out pretty substantially last quarter, but it was sort of noticeably absent from this quarter's commentary, I guess. What are you seeing on your end? Is traffic still down? And if not, what do you think changed? Yeah. Connor, we're certainly in an interesting environment with consumers, right? I kind of call it choppy waters or fickle customers. We had a great quarter, right? Q2 was a really strong quarter for us, and we didn't see that nearly as much as we did in Q1. But we're watching it closely. We think that, as we've said over the past three years, we have a product that is almost an experiential kind of product. And so often, you might cut back at the grocery store or in the basket, but you might still buy the group an ICEE on the way home, or you might get a churro, or you might get a pretzel as a reward or a treat, something out of the ordinary. We had a really good quarter. We're going to watch the consumer closely, we'll react to it if we see some downturn, but our teams are keenly aware. And again, I just call it kind of a little bit of a choppy waters when it comes to consumers. Got it. That makes total sense. And if I can just squeeze one more in real quick. So on the RDCs, congrats on getting all three of those up and running. That's a big, long-running accomplishment. So I noticed that you mentioned only about 80% of product is flowing through that system. I guess just wanted to check in on the remaining 20%. I guess is that just going to take maybe a little bit longer to get through? And that's kind of what the toggle is to get down to that 10% distribution margin number? Or are you guys maybe growing so fast that you kind of just need that excess capacity? Well, we need more capacity than just the 3 RDCs. We'll probably use an additional RDC when it's all said and done. Not one that we own, but one that we use down in the Florida market. But we still have some that we need to shut down. Trying to get that fine-tuned is one of those things that we're working on right now. The team's done a tremendous job. And you can see it in our numbers almost across the board. But we will continue to shut down some of those other 3PLs over the next 3-6 months. Yeah. But Connor, just a reminder, even with this new structure, there'll still be maybe 6-8 facilities that we'll use to move product in and out, whether it's a 3PL regionally located. So it's not necessarily just going from where we were, just 3. There'll still be a few other facilities as well. But that 80% will probably build a little bit higher as we move forward also. Got it. Thank you so much for the call. I appreciate it. Thank you. Thank you. One moment for our next question. Our next question comes from Andrew Wolf from CL King. Please go ahead. Thank you. Hey, good morning and congratulations also on everything. Thank you very much, Andrew. Good morning to you. Quite impressive, as everyone's been pointing out. I wanted to ask a revisit on the gross margin. Could you tell us either if it's gross price, how much price was in there, or net of mix? I don't know how you guys communicate about that. But you did, I think, in the release callout, price and mix listed it first, which often means it was the biggest contributor. So I'd just like to get a sense of that versus maybe volume. Yeah. Well, let me see if I can answer that in a few ways. One, I want to be clear. Each of the three segments had positive volume growth. So units were up in all three of the business areas. Pricing that we've been taking, with the exception of the pricing we take every January with IC, and I think we took one in January with Dippin' Dots, the other pricing is more surgical. So we're having to do a few surgical things with chocolates. We've done some with sugars, but nothing wholesale. So when you think about margin for the quarter, I don't really have it kind of broken out, Andrew, where I could say this much is priced as much as this. I can just tell you that when we kind of walk through it, it's a combination of really all of the above. The new business we have in churros is driving really good margins for us. We've really done a lot to improve the production efficiencies in our bakery facilities. That is improving margins on bakery items. Some of the automation we've put in is also starting to drive benefits in that way. So we're just finally getting to the point where these initiatives we've had, whether it's procurement, whether it's operations, whether it's margin management and sales and how we manage mix and the products we grow, that is all really working nicely together to get us to the margins that we reported this quarter. Got it. Thanks for that callout. It's very helpful. I just wanted to ask on, I guess, Subway. It looks like they started. Announced it sort of mid to late January, and at least from my observation, started advertising pretty heavy later in the quarter. How should we think about the just kind of because you gave us a number for Subway, how that run rate can is that understated as a run rate, or do you think there was a bunch of trial and maybe how should we think about the $6 million or so in sales you called out going forward? Right. It's a great new piece of business for us, Andrew, for sure. I think they're still dialing in on what that means even to them. The positioning of where we're at with that churro is great. There's three tiers to the foot-long pricing, and we're at the bottom tier of that. And we've been able to, because of kind of foreseeing the need in churros and the new lines that we've had, we've been able to keep them in stock where a couple of the other areas struggled with that, which might even turn out to be an opportunity for us in some ways. So I think they're still dialing in on it. I don't know that we have an exact number that we'd be able to guide you with with that particular customer, but we love the positioning and believe that we have some opportunities with them internationally even. Okay. I understand the sensitivity. Thank you for that callout as well. Yeah, I guess that's it for me. Congrats again, and thank you very much. Thank you. Thank you, Andrew. Thank you. One moment before our next question. Our next question comes from Rob Dickerson from Jefferies. Please go ahead. Great. Thanks so much. Dan, you said a lot today. Business is doing great. So congrats, like everyone else has said. I guess the question I have, you kind of make these comments about portfolio positioning and kind of an indulgent treat that, frankly, a lot of your products are still affordable as was brought up before, right? A lot of companies talking about some pressure in food service or restaurants, etc. But at the same time, you're saying there are a lot of new business wins, right? Subway comes up. I've heard you say that in the prepared remarks. Handhelds, frankly, growth was off the charts because of the new mass merchant business. Dave & Buster's, you've spoken to before. Dippin' Dots sounds like it has a nice little runway even through the back half of this year. So I'm just curious. Would you characterize this as, yeah, demand broadly in the market could be a little softer in different parts, but given our product portfolio and these new business wins, that clearly we're doing better? And then also, I'm curious, as you talk to the retailers, are the retailers saying, "Yeah, we really haven't seen this softness in your business. So absolutely, we're going to blast that out in all our C stores." I'm just kind of trying to navigate kind of why it's doing better and then also combine it kind of with this new business upside potential. Well, I do think you hit it on the nose there, Rob. Good morning. Thanks for the call. I do think you hit it on the nose, though. Our business is diversified enough that, one, we are an indulgent, and we're a treat and a reward. And so I don't think we get as impacted as some of the things that are more staples that people are cutting back on. And I love what our team is doing with innovation and new products that we're releasing that are selling really well. And then kind of the third leg to that is the sales team bringing new opportunities to the business, which is something that we've been driving on. It's really part of the strategy that we have been laying out over the last three years or so. And it's really come into play. I talked about cross-selling several times and even got the questions, "Can you really make that happen?" Because it's not easy to make happen, but it is happening here at J&J. We're seeing the sales team really work with one another to be able to bring new products into the customers that we deal with today. And they're working really hard at it. I'm proud of the sales team. I'm proud of the marketing team and the way that they've brought innovation. And I think we have the fortunate thing of having products that are indulgent treats, that are experiential, and all of those are working together. The consumer is a concern. Ken and I aren't sitting here being naive that it's soft out there in some ways. But that's not an excuse for us not growing sales. And that's what you would hear within our organization. We're going to continue to drive other areas, even if it is soft out there. All right. Super. And then I guess just a follow-up question kind of around the demand landscape. You are entering or, let's say, almost entered kind of what we normally consider your best part of the year. Some of the amusement parks have already opened. It seems like movie traffic maybe is a little bit still light. So kind of where we sit today, I guess, as you got through April, and I ask the same question almost every year this time of year, would you say that kind of demand landscape, as you kind of think forward the next few months with respect to amusement parks and the other seasonal dynamics of the business, seems to be fairly sound, pretty good? Yeah. I think we're positioned really well. Of course, you get into these six months, and weather plays a big part in it. So if the weather gods can shine on us, and I mean that shine on us, have that sun out there and keep people to the parks, the amusement park industry is forecasting a pretty good season. The movie industry, we hadn't talked about a little bit. It has been soft. And that strike did affect the movie industry, and they're expecting kind of a softer year overall, down 15% or so. But it builds as you get to the later half of the year as new movies start to be released. We're kind of in that lull time right now. But we expect that to come back more in the fourth quarter or first quarter of our fiscal 2025. But we're investing in that group. We're investing in the movie industry because we saw before the strike, when you have the right movies in place, people are willing to come back out to the movies like the Barbenheimer effect last year. And so we're seeing some good growth there with our Dippin' Dots brand. But I think we're in good position as we go into the core summer months. All right. Lovely. I'll pass it on. Thanks so much. Thank you, Robin. Thanks, Rob. Thank you. I am showing no further questions at this time. I will now turn it over to Dan Fachner for closing remarks. Great. Thank you very much. I appreciate that. I appreciate everybody's questions today. Looking ahead, we remain focused on executing our strategy, including maximizing every sale and new business opportunities to further grow our core brands while investing in our capabilities and resources to improve our overall operations. While we are closely monitoring consumer and inflationary trends, we expect to build momentum through the second half of fiscal 2024 and remain excited about the many opportunities ahead of us to deliver long-term value to our employees, partners, and shareholders. In the interim, should you have any questions or wish to speak to us, please contact our investor relations firm, JCIR, at 212-835-8500. Thank you very much. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.