Hormel Foods Corporation (NYSE:HRL) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Akshay Jagdale – KeyBank Capital Markets: First question on Refrigerated Foods. Can you just give us a little bit more insights into the weakness? I mean, this quarter tends to be historically one where you can have some of your lower margins, but the cut-out itself wasn’t as weak as your results would imply. I think, you mentioned something about bacon. Can you just help us with what are components or maybe your cost basket went up so that we can keep track of it going forward and be aware of it what happens. So, just trying to understand what happened because it definitely surprised us and it seems to be unique relative to some of your peers.
Jeffrey M. Ettinger – Chairman, President and CEO: I mean, the weakness for Refrigerated Food was clearly the most pronounced in the earlier part of the quarter, ending up prompting us to come out with our guidance adjustment that occurred mid-quarter. At that stage, we were seeing some continued weakness in processing margins, but the bigger culprit had been the spike in some of the raw material costs, particularly bellies for bacon and trim costs for a number of our products; pepperoni and other items within the portfolio. Now, as the quarter went on, the team had an opportunity to – particularly on the bacon side, priced against with a new reality of what the cost situation is. Belly costs are still at historically very high levels, but they have moderated some from the peak, and we expect now as they kind of head out of the summer season, they should start to return to more normalized level. Overall, for Refrigerated, I mean, those are the big challenges. I mean, they wasn’t all bad for the quarter in terms of their – what we look at for their business performance. Our large foodservice group for Hormel is part of Refrigerated Foods and they really had a very fine quarter, growing sales at a solid rate and really doing a nice job introducing some other newer products, their FIRE BRAISED meats and their PECANWOOD. This half also does represent somewhat of an investment time for us with the REV brand. We’re very pleased with where we’re at with that brand. We’ve achieved the distribution goals that we had set for the team. We have the ad campaign kicking in. Our early sales also are very promising. But anytime you roll out something new on that scale, we’re not going to be bringing bottom-line contributions for that brand to the team this year, and probably even in the next year somewhat. But we’re heading in a good direction with that.
Akshay Jagdale – KeyBank Capital Markets: Just on that point, Jeff, can you help us understand sort of where you are with REV, like ACV, number of SKUs, anything you can give us? And how do we parse out that positive from your results? The volumes are obviously down, so it’s hard to tell what impact REV has had even on the revenue side. So maybe you can help us– (indiscernible) channel checks also tell us some that – the launch at least initially has been pretty encouraging. So maybe you can just give us a little bit of a sense of; one, how it’s doing and just talk about the impact it’s having already…
Jeffrey M. Ettinger – Chairman, President and CEO: Okay. In terms of ACV, we’re really in a solid shape with that. We’re in the 70% to 80% of the U.S. that has accepted the item, and most of those stores are actively scanning out there. Sometimes you’ll get an acceptance from a retailer, but in terms of their shelf reset timeframe, they just have certain windows they get those things done. So we’re still catching up on a few retailers, but we’re in a good position to support our ad campaign. In terms of number of SKUs, there are eight offered in the line. Most retailers are taking kind of six to all eights in that range. We’ll be coming out with four additional items later this fall, and heading into the winter. And in terms of just the sense of scale, we’re not – we probably won’t get into reporting item by item sales, but just to give you a sense of magnitude for the quarter, it was in the $4 million to $5 million range. So, it’s still building. Clearly, our long-term expectations for the product would be – are quite solid, but that’s about the size they’re right now.
Jody H. Feragen – EVP and CFO: I guess, Akshay, I would like to follow up on the volume comment you made about Refrigerated and their volume has really been impacted by discontinuing the feed business that we talked about last quarter. So, that’s not all just retail and foodservice volume that’s impacting the decline there.
Akshay Jagdale – KeyBank Capital Markets: Just one on SKIPPY, are the lower peanut costs already flowing through your P&L or is that still not flowing through? How are you managing sort of that lower cost that might be flowing through relative to your investments because it’s still pretty early in the stage of owning that asset? I just want to know like where you’re in terms of your planning on investing behind that brand and perhaps how that’s going initially…
Jeffrey M. Ettinger – Chairman, President and CEO: Okay. A decent amount of the lower cost would be flowing through right now, and the outlook seems favorable in terms of what we’re seeing for peanut crops going forward. In terms of investing in the brand, I think I talked about that at the last quarterly call and I think we talked about it a little bit at Investor Day, that, when we bought the brand, it was with the thought in mind of really kind of rejuvenating it with the SKIPPY consumer in the marketplace. So, one of our approaches to potentially do that in the marketplace would be to anticipate an advertising campaign. The earliest that would occur is next fiscal year. So we’ll kind of let you know probably on the next call; the November call what our outlook is in terms of advertising support. But the team is actively looking at both possibilities right now.
Hog Price Outlook
Farha Aslam – Stephens Inc.: First of all, just a continuation of Akshay’s questions regarding Refrigerated Foods. Looking out into the fourth quarter, we’ve recently seen hog prices rally a bit. So, when you look at that, is that a net positive for your Refrigerated Foods business, because you do raise 15% of your hogs internally, and can you price for the hog price increase better into the fourth quarter versus the third quarter? How should we think about that?
Jody H. Feragen – EVP and CFO: I’ll take that Farha. I would generally say that we would prefer lower hog prices than we would expect hog prices in the fourth quarter to be lower than they were in the third quarter; still probably year-over-year an increase. The live production side doesn’t really play that much into it since we take those values into our further process businesses that market…
Farha Aslam – Stephens Inc.: Then going into International, I mean that turnaround in that International business is pretty material. Do you expect that China will continue to perform, and your thoughts on that other business which is becoming pretty meaningful in your P&L?
Jeffrey M. Ettinger – Chairman, President and CEO: Yeah, Farha, I’m really quite encouraged by International. I’m – not only as we mentioned as it had all three solid quarters this year, but this will be the third consecutive year really solid both topline and bottom line growth for International. I think our strategy of focusing on the Asia base market has proven out well and so we have good solid business performance in Korea and Japan. Our partnership with San Miguel in the Philippines and then the more majority on China ventures. China, in particular, we do feel we’ve now gotten to the point where we have sufficient scale in that business that now can generate a solid profit and the team out there is looking forward to bringing SKIPPY on board, so that will be our third plant facility we’ll be running in China and we’ll kick that business well over $100 million once the SKIPPY contribution is in there, which we expect to occur in next fiscal year. So, overall, International, I would agree with your assessment that it’s become a more and more meaningful component of our overall performance and it’s one that I think we’ve articulated in the past, we have solid expectations it will grow at a faster rate than our overall Company average.