Jana L. Haynes – Director-Investor Relations Jeffrey M. Ettinger – Chairman, President and Chief Executive Officer Jody H. Feragen – Executive Vice President and Chief Financial Officer.

Farha Aslam – Stephens, Inc. Kenneth B. Zaslow – BMO Capital Markets Akshay S. Jagdale – KeyBanc Capital Markets, Inc. Diane R. Geissler – CLSA Americas LLC Robert B. Moskow – Credit Suisse Securities LLC.

Good day and welcome to the Hormel Foods’ Third Quarter Earnings Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Jana Haynes, Director of Investor Relations. Please go ahead..

Thank you. Good morning. Welcome to the Hormel Foods’ conference call for the third quarter of fiscal 2014. We released our results this morning before the market opened around 6:30 A.M. Eastern Time. If you did not receive a copy of the release, you can find it on our website at www.hormelfoods.com under the Investors section.

On our call today is Jeff Ettinger, Chairman of the Board, President and Chief Executive Officer; and Jody Feragen, Executive Vice President and Chief Financial Officer. Jeff will provide a review of the operating results for the quarter. Then, Jody will provide detailed financial results for the quarter.

The line will be open for questions following Jody’s remarks. As a courtesy to the other analysts, please limit yourself to one question with one follow-up. If you have additional questions, you’re welcome to get back in the queue. The audio replay of this call will be available beginning at 11:00 A.M. Central Time today, August 21, 2014.

The dial-in number is 888-203-1112 and the access code is 2700055. The audio replay will also be posted to our website and archived for one year. Before we get started with the results of the quarter, I need to reference to the Safe Harbor statements.

Some of the comments made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed in, or implied by the statements we will be making.

Among the factors that may affect the operating results of the company are fluctuations in the costs and availability of raw materials and market conditions for finished products. Please refer to pages 32 through 38 regarding forward-looking statements and risk factors in the company’s Form 10-Q for the quarter ended April 27, 2014, for more details.

It can be accessed on our website. Now, I’ll turn the call over to Jeff..

Thank you, Jana. We announced record third quarter earnings this morning of $0.51 per share, up 21% over the last year. Operating profit increased by 23%. We also achieved record sales of $2.3 billion, an increase of 6% over the last year with a 1% volume decline.

The resiliency of our balanced business model was evidenced this quarter by our ability to deliver sales and earnings growth in a highly elevated input cost environment with three of our five segments registering profit gains. I will now take you through each segment. Our Grocery Products segment profit decreased 36% and sales were down 3%.

Pricing actions taken earlier this year on our core canned meat and microwave meal items slowed sales of these products. Record high beef, pork and chicken input costs also significantly impacted margins. The center of the store has become a more challenging environment for many food categories.

We have some franchises such as our Dinty Moore stew and Compleats microwave meals that appeared to be affected as well.

However, we have several items positioned in the center of the store that continue to grow even in this more difficult time, such as SKIPPY peanut butter, Hormel bacon toppings and the HERDEZ line of salsas and sauces within our MegaMex Foods joint venture.

We will continue to build on the momentum of the SKIPPY peanut butter brand with national advertising during the back-to-school season this fall after many years off air. Segment operating profit for the Refrigerated Foods group was up 101%.

The large increase was driven by beneficial pork operating margins, which were stronger than expected and growth of retail and foodservice value added products. Pork cutout values remained unseasonably high this summer, which more than offset record high hog costs.

At the end of the quarter, we had anticipated volatility in the Refrigerated Foods segment due to tight hog supply, but our team did an excellent job by curing hogs and managing inventories to support growth of our key franchises.

As part of the preparation for low hog availability, we’ve reduced our Fremont, Nebraska harvest operation to four days per week through most of the summer. We have recently returned to a normalized schedule. Dollar sales for Refrigerated Foods increased 12% led by retail sales of our Hormel Black Label bacon, Hormel REV Snack Wraps and LLOYD’S ribs.

We also enjoyed sales growth in our foodservice business, including such items as our Hormel FIRE BRAISED Meats, Hormel Bacon 1 fully cooked bacon, and Hormel fully cooked sausage.

Segment volume was flat compared to last year driven by lower commodity sales, as we have increased internal utilization of raw materials in our value-added products along with higher pricing on key retail items to mitigate margin exposure. Our Refrigerated Foods team launched distribution of Hormel REV, A.M. Breakfast REVs this quarter.

We introduced four varieties each with flatbread, egg, cheese and breakfast meat. Jennie-O Turkey Store delivered a segment profit increase of 42%, driven by value-added sales growth, strong turkey commodity pricing and beneficial grain input costs.

The last of the flocks impacted by the harsh winter weather and elevated fuel cost, moved through our system during the quarter. Segment dollar sales rose 4% on a volume decline of 2%. High turkey commodity prices more than offset lower volumes driven by the timing of whole bird sales in the retail channel.

Sales of our value-added items experienced nice growth this quarter, led by our Jennie-O Turkey Store ground turkey items, which continued to benefit from our turkey taco advertising campaign won earlier this year. Value-added products in our foodservice and deli lines also drove sales growth.

Our Specialty Foods segment reported an operating profit decrease of 25%, and a sales decrease of 10%, largely resulting from the expiration of the agreement in July 2013, allowing Diamond Crystal Brands to sell certain sugar substitutes into foodservice trade channels.

This is the final quarter of challenging comparisons related to the expiration of this agreement. We completed the acquisition of CytoSport Holdings on August 11, 2014 and welcome the team to Hormel Foods.

We look forward to realizing the synergies between CytoSport and our existing protein-rich sports nutrition operations and applying our innovation capabilities to maximize the potential of the Muscle Milk brand in the fast-growing sports nutrition space. Our international and other segment profit increased 12% and sales grew 18%.

results were led by strong sales from our Beijing and Shanghai facilities into the foodservice channel, along with the addition of the SKIPPY business within China. exports of our SPAM family of products were impacted by high input costs, during the quarter.

as we move into the fourth quarter, we expect elevated meat input cost to continue to squeeze margins on certain of our value-added products, especially in our Grocery Products segment.

Pork operating margins will likely remain seasonably positive this fall, as hog cost began to moderate with better supply, but difficult comparisons to last year will minimize this factor for our Refrigerated Food segment in Q4.

We expect our Jennie-O Turkey Store segment to finish the year strong with value-added sales growth, continued high turkey commodity prices and beneficial grain markets. Specialty Foods has lapped the expiration of it sugar substitute contract and should return to year-over-year growth in the fourth quarter.

CytoSport results will also be included for Q4, increasing revenues for the segment, but not materially impacting earnings net of the acquisition closing cost. We look for our International & Other segment to continue to drive growth, led by our China operations and SKIPPY peanut butter export business, offset in part by high U.S.

meat input costs, impacting exports of our fresh pork and SPAM family of products in the near-term. Taking all of these significant factors into account, we are maintaining our fiscal 2014 guidance range of $2.17 to $2.27 per share.

At this time, I will turn the call over to Jody Feragen to discuss the financial information relating to the third quarter..

Thank you, Jeff. Good morning, everyone. Earnings for the third quarter of fiscal 2014 rose 21% to $138 million, or $0.51 per share, compared to $113.6 million, or $0.42 per share a year ago. Dollar sales for the third quarter totaled $2.28 billion, compared to $2.16 billion last year, a 6% increase.

Volume for the third quarter was 1.17 billion pounds, down 1% from the same period last year. Selling, general and administrative expenses in the third quarter were 6.7% of sales versus 7% last year. For the full year, we expect selling, general and administrative expenses to be about 7.1% to 7.3% of sales.

Equity in earnings of affiliates was $3.5 million in the third quarter versus $1.3 million last year. The increase is largely due to the improved performance at our MegaMex Foods joint venture. Advertising expense for the quarter was $21.1 million, compared to $22.4 million last year.

Interest expense for the quarter was $3.1 million, unchanged from last year. We expect interest expense to be about $12 million to $14 million for fiscal 2014. Our effective tax rate in the third quarter was 34.7%, versus 35.7% in fiscal 2013. For fiscal 2014, we expect the effective tax rate to be about 34.5%.

The basic weighted average number of shares outstanding for the third quarter was $264 million. The diluted weighted average number of shares outstanding for the third quarter was $270.4 million. We repurchased 267,000 shares of common stock during the third quarter, spending about $13 million.

we have 8.9 million shares remaining to be purchased under the current authorization in place. Depreciation and amortization for the quarter was $33.5 million, versus $31.8 million last year. We expect depreciation and amortization to be about a $130 million in fiscal 2014.

Total long-term debt at the end of the quarter was $250 million unchanged from last year. Capital expenditures for the quarter totaled $34.8 million, up $11.5 million over the last year. For fiscal 2014, we expect capital expenditures to be approximately $150 million.

As Jeff indicated, we closed on the acquisition of CytoSport Holdings using available cash and a portion of our $300 million credit revolver to fund the $450 million acquisition. We expect to repay the credit revolver by the end of fiscal 2014. At this time, I will turn the call over to the operator for the question-and-answer portion of the call.

Danny?.

Thank you. (Operator Instructions) And we’ll take our first question from Farha Aslam with Stephens, Inc..

Hi, good morning..

Hi, Farha..

Congratulations for a great quarter..

Thank you..

Thank you..

We’ve noticed a lot of variation between divisions in terms of performance and so just starting with Grocery Products those earnings were very impacted with the higher commodity cost.

How do you think that recovery goes and when do you think earnings can get back to flat year-over-year and back into growth?.

Obviously Grocery Products was the one hit hardest by the input cost environment during the quarter. We expect the fourth quarter to be still negative year-over-year, but not to the depth we’re reporting here today.

Now we’re not in a position to give 2015 guidance here, but the long-term – our long-term outlook for the Grocery division is that it should be able to drive growth. We have some excellent franchises still within that business such as all our Mexican Foods businesses as well as SKIPPY and SPAM continues to have general strength on a long-term basis.

So we’ll provide more specific guidance on the next call in terms of what 2015 will look like that we should start trending in the positive direction..

Okay. And then a question really on MegaMex, I mean earnings in that business almost tripled.

What is the trend? How should we think about that business going forward and what’s driving the improvement?.

Well, Q3 last year, I mean to be fair, we had a fairly significant hit, remember we announced in terms of the added earn out on the fresh foods component, and so in terms of comparison that that was an easier comparison if you will for the MegaMex group.

They’ve had some costs squeeze within their group as well frankly both on the Don Miguel side and in terms of the avocado based products.

Avocado costs seem to be normalizing and so and the top line is excellent in terms of the Wholly Guacamole franchise, so we’re encouraged and excited about that and the HERDEZ brand is very strong and we just continue to rack up double-digit of top line increases for the variety items sold under that authentic Mexican brand.

So overall MegaMex is a key component not only to the Grocery Products, but to the total company period on trend products, and we think that’ll continue to deliver growth for us..

Great. Thank you so much..

We’ll take our next question from Ken Zaslow with BMO Capital Markets..

Hey, good morning, everyone..

Hey, Ken..

Good morning..

So, one strategy question, Hormel has been very successful of gaining outside market shares in niche categories, that’s kind of your – over the last decade or so. You moved into SKIPPY, obviously you made a bid for Ragu. Could you think – and any of this performance you see what you are doing here, the success has been always in your niche categories.

Do you think that you are starting to move away from that and do you think that’s a good thing or bad thing? Can you talk about that and then I have a follow-up..

.

We’ve had identified that we really thought we needed to provide more on the go offerings, and so hence our innovation with REV, that was a big motivator frankly behind the MUSCLE MILK acquisition was that – people are viewing those items in many cases as meal replacements, consumed on-the-go.

And so again we are looking in most cases for leading share brands that we can drive with our marketing and hopefully operate on an efficient basis..

Okay, my follow-up question, what would limit the Turkey margins from moving up from this 17% – 16.9% or 17% level going forward, it seems like this quarter kind of as represented what the future will look like if not even better, is there something that I’m missing here?.

.

:.

So you don’t think 17% is the right level to move – am I miss understanding you?.

Well, I mean – I don’t know if you are looking for a long-term number or a short-term number, as mentioned earlier we’re not going to give 2015 number here today. But it would be fair to layout; obviously what’s going on in the marketplace as we head into 2015 could well be in a market where the commodities are little less favorable.

But I’m recognizing that the grain markets could be more favorable, and so we’ll just see what that – when we provide that guidance in November..

Okay, very helpful. Thank you..

We’ll take our next question from Akshay Jagdale with KeyBanc Capital Markets..

Good morning and congratulations on a good quarter..

Thank you, Akshay..

So, can you give us an update on REV, the AM Wraps, you are launching I guess am I correct in understanding that the difference there is you’ve added the sort of the egg component to it.

So can you talk a little bit about why now with the AM Wraps instead of overall how is REV doing relative to your expectation?.

Sure, Akshay.

So, I mean I know on past quarters I was – I provided some estimates based on some of the early tracking with the brand, we’re now in a position where we have 52 weeks of scanned data available, the sales on that basis were on $55 million on the last 52-week basis, that does not count sales into the college and university or convenience store channels, that’s a little bit more, the lion shares through the Grocery channel.

We’re very happy with those that’s one of our best ever first-year performances on our brand. We think the brand has upside in terms of its sales capabilities beyond that, even with the core items and then as you point out on top of that, we are introducing the breakfast items.

a part of it is just kind of coming out with the core line first, a part of it is making through that you have the product ready and performing the way you want, I’m actually really quite excited and pleased with the team, coming out with a year later if you contrast it for example to our complete line and it took a several years to get a breakfast offering, that was the right offering within that product line.

Right now, we’re focusing our attention on these breakfast related items on customers that already have a pretty good set of REV items. There are certain customers that really do have that in place, other certain regions of the country and certain retailers that’s still spottier, or maybe they only carry three or four or five items.

In those cases, we’re probably saying that we may not want to come right out with two or three breakfast items until you settle little more legitimately. But we do think breakfast revenue is another excellent innovation that will drive new consumption to this product line and we’ll continue to excite consumers who like the REV line..

Okay. And then just on SKIPPY, give us an update especially on the International operations you talked about it a little bit, but given what happened in the grocery segment this quarter it would be nice if you could sort of tell us if SKIPPY was impacted by any of that doesn’t seem like it.

And then more importantly, can you give us a little bit more color on the Cyto acquisition and strategically sort of longer term how that fits in and what kind of growth profile you expect from that? Thank you, and I’ll get back in queue..

Okay. SKIPPY, we’re very pleased with the domestic results for SKIPPY, on a net sales basis, lesser because of – that was a category that saw price decreases. But a volume high single-digit increase in volume still continuing to get good future activity, we’ve had some nice placements in terms of distribution sales there.

And we’re going to work on innovating within the category, our SKIPPY Singles are off to a good start, the dark chocolate natural item is doing well; also and look for more items in 2015, maybe more in the middle of the year for that. On an international basis, it’s still a little rocky to read.

I mean it was positive in the sense that we obviously now own the China plant and all the production out of that plant is now being reflected in the sales. We saw a little bit of decline in business in Canada.

And we also – in a couple of the Asian markets, we’re still on kind of a conversion mode between our ownership and the prior ownership in terms of who has got the distribution and so forth. But overall, I mean that plant is in a good position to support growth and we expect to have that be a real growth catalyst for international going forward.

On CytoSport, we were obviously very excited, last time we’re on the phone with all of you was in the middle of the quarter, when we made the announcement related to the deal, we did close on that deal recently.

A couple of follow-up questions that had kind of emerged, just even since we announced the deal related to the kind of this notion of all, what does Hormel bring to the party, when it comes to the Muscle Milk acquisition. So I did want to address that.

We have knowledge of manufacturing and of the category, that perhaps has been overlooked a little bit, I mean our Specialty Foods group is a less branded group, and so sometimes doesn’t get talked about quite as much, but we’ve been manufacturing both powdered and ready-to-drink protein items for over 10 years with our Century Foods business unit that’s under Specialty Foods, indeed to us.

This was a great opportunity to bring a branded catalyst for that group to build apply that knowledge, the way we do in the rest of our companies to a branded item.

We feel we’re going to be able to bring deeper sales and category management skills to the largest market for this product line, which is the food, drug and mass market where we sell so many of our other items.

And really, I mean anytime you’re bringing a product line, that’s frankly kind of a one-off product line, a single brand and bringing it to a portfolio where you have deeper relationships at least we found that we should be able to drive growth doing that, we certainly did that with Wholly Guacamole for one example and we should do that here.

We also feel our innovation track record bodes well in terms of coming up with great new items that would fit under this brand. We’re very early on; the category growth that we’re looking at is still very significant.

as we mentioned on the last call, our feeling and even the prior management were kind of conceded us, there was prior a little bit of lack of focus as they were in the sale process of the business.

and so their share has not quite kept up with all the category growth, but notwithstanding that, I mean it still grew in terms of both the ready-to-drink components, the big Muscle Milk branded presence, as well as the full protein line. And so it should be a great growth catalyst for Specialty Foods and for Hormel going forward..

Thanks a lot. that’s excellent..

Our next question comes from Diane Geissler with CLSA. Please go ahead..

Good morning..

Hi, Diane..

Congratulations on your quarter. I wanted to ask you about the outlook, which you maintained your guidance, it seems like an awfully wide range for having normally, one quarter left in the year. and I just wanted to make sure that that wasn’t sending us a signal about one area of your business team, potentially problematic.

I know the hog numbers have come down pretty significantly, but it sounds like you are finding adequate supply in the fact that you’ve reopened your plant, the one that you have curtailed those.

There is something we need to be aware of, as we move through the fourth quarter, that’s kind of giving you pause and making you keep that that wide of a range for the fourth quarter?.

So Diane, as we were sitting down this time for – at the end of our second quarter, there, we certainly did not expect the type of positive pork operating margins that we experienced in the third quarter.

So I would say that’s probably one thing that would lead us to have a somewhat wider range there going into the fourth quarter, but certainly feel more comfortable that we are in the middle range of that guidance instead of the lower end that we’ve guided to at the end of the second quarter..

Okay, all right. Well, that’s fair enough. And then I wanted to follow up on Jeff’s comments about the acquisition.

so you guys have obviously signaled that you are looking to do bigger deals, I think you’ve made sort of more aggressive comments at your Analyst Day last year after doing the SKIPPY transaction about big deals, small deals take as much time and kind of management time as little deals do, but if I heard you correctly Jody, you basically used your big pile of cash and your revolver, which will be paid out by the end of this fiscal year.

So if you kind of rate back where you started from which is significantly under our balance sheet.

So the question is really more, do you think that you could do another sizable transaction here in the near-term and then would it be a drain on the organization’s ability to kind of integrate, or do you feel like you need to give the CytoSport acquisition kind of time to get integrated before you could go out and make another sizable transaction?.

Diane, you are right. from a financial perspective, we certainly have the bandwidth to do another acquisition. And I think from organizational resource perspective, we also have the ability, especially foods might have trouble doing another one right on top of this, but we certainly would have the ability to do it from an organizational perspective.

It’s finding the right transaction that has the strategic fit that has the number one or number two brand, looking for something that is accretive to our margins and where we can really add some values. so something that has non-U.S. portion of the business is also very attractive.

So we just need to find the right set and certainly, I believe our organization is ready to step up and do that..

Can I just ask a – sorry expected to follow up to that comment, that’s sort of accretive to your margin, but you’re talking about accretive to your margins are on the whole, or just within the segment in which year?.

We look generally….

Making acquisition..

The first step is segment, but with the ability to become accretive to the overall Hormel margins..

Okay. All right, great. Thank you..

Our next question is from Robert Moskow with Credit Suisse. Please go ahead, sir. Your line is open..

Hi, thank you. I guess two questions.

One is, everyone thought that the PED virus was going to have a negative impact, eventually on packing margins, and it really hasn’t, are we thinking now that there is not going to be any negative impact on those processing margins? And then secondly, Grocery margins, I get it that the protein inflation flowed through here and hurt the margin, but I guess there’s a little surprise that SKIPPY didn’t stabilize the business enough to kind of keep them from going into single-digit.

Our SKIPPY’s margins lower than the margins in the rest of Grocery, and is that also an impact for why margins are lower?.

Well, I think I’ll take the first part of your question regarding the pork margins. I think what the unexpected on result that we saw in the third quarter was that demands continue to hold up to cut out value. So we’ve really had anticipated the hog prices to rise like they did. But then the final portions also seem to be supported by that.

We are looking to continue to see that positive thread, but we are up against some pretty positive thread from the fourth quarter of last year. So don’t expect that to have a significant impact on the Refrigerated Foods segment in the fourth quarter..

So on the Grocery side, SKIPPY’s margins should be accretive ultimately for the Grocery Products group and are currently.

that being said, I mean probably, the highest profitability element of the Grocery Products portfolio is the canned meat area, and that’s the area where we clearly saw the biggest squeeze during the quarter, brought in part by the prior price increase that we’ve taken based on just kind of long-term increases in the raw materials.

and then when you add to it despite from PED in terms of the input cost on hog. I mean that really hurt their ability ultimately that deliver margin.

So that’s what needed to cover, that’s what, to the earlier question, I mean we’ll start seeing some recovery in that Q4, but not all of it and we have some of the inventories already put up with higher cost and so forth, but heading in the future we do expect that to normalize..

And, Jeff, what is going to cause it to normalize? Do you need the protein prices to fall, because it sounds like you already to pricing earlier in the year? Do you have to take it again, or are you waiting for the protein to fall?.

That’s well, I mean I guess waiting for that in the sense that we didn’t feel, we’ll show it, or we are in a very good position to take second pricing based off of a spike.

if these inputs have become the new norm, we always do it and have to reevaluate that, but a lot of these input costs are already down, also really significantly even in the last couple of weeks.

So I mean we do think that’s what PED cost, it didn’t end up hurting the processing margins, but it did end up driving very significant increases in inputs that we didn’t still think we could price against, and we don’t hopefully involve and we don’t feel we’ll have to, because we do think those are going to come back to a more normal level..

Just a last question, one of the concerns I hear a lot from investors about the process food industry in general is that people are paying more and more attention to help in wellness, and especially, in the meals part of the store like convenient meals.

And I mean I will take the view that Dinty Moore, and chili and SPAM are kind of our own niche businesses, but microwavable meals like shelf-stable microwavable meals, I think are – could be just off trend.

Do you have any view on the long-term for Compleats and what your strategy for investment there is?.

So I mean we had obviously, enjoyed very significant growth in the Compleats line during the 2000 decade almost right to the end of it.

and then clearly, the product line has stagnated somewhat since then, one effort to try to attract new consumers and restore growth had been the notion of kind of going after the more health oriented consumer or a looking for higher end items and hence the introduction of our blue and green labeled subcomponents are complete. No.

I think, we’ve conceded here in recent calls that really doesn’t seem to be working.

I mean the consumer that really enjoys these types of items is looking for more of a basic meat , potato casserole type item, value is a very important element to this franchise and so as you kind of add more bills and vessels in cost to product that that doesn’t seem to resonate well with the consumer.

So we do believe we can get kind of go back to the basics and get this product line stabilized whether it’s going to be a big growth catalyst for grocery products anymore.

I mean at this point, I guess we’re not seeing that, but we think between Mexican Foods, SKIPPY, and some of the other items grocery should be able to meet their growth objectives using those items, but I think your overall take is correct.

My understanding know when it comes to single-serve meals that especially even if you look in the frozen segment which has also suffered. Even the health and wellness oriented items and frozen aren’t doing all that well.

So I do think it maybe a combination of – where consumers are looking for items, but also just kind of shear economic and who is getting hit the worst from that..

That would make – I would agree with you that frozen isn't doing well either in that area. But I was focusing on your shelf-stable part of it because that’s really where you play. Totally make sense. Thank you..

(Operator Instructions) We’ll take our next question from Akshay Jagdale with KeyBanc Capital Markets..

Thanks for taking the follow-up. The first one is for Jody. Can you talk a little bit about the corporate expense line item this quarter? It was significantly higher than the run rate that we've seen in the past.

Does that include charges for the Cyto deal?.

Not really those will get in our fourth quarter and we’ll show up in the Specialty Foods segment lines. General corporate expenses really impacted this quarter by some employee related costs, as well as the write-off of a bad debt. Those will be the two biggest things, so we’ll see the transaction cost in the next quarter..

How much of that would be sort of one-time like the bad debt write-off seems unusual, right? I mean would you say first of all – sorry?.

That was about $4 million..

Okay..

It would hopefully be a one-time thing Akshay..

Yes. And, just going back to the PED virus from my recollection and just talking to others in the industry I mean this quarter was the quarter where you expected the most impact on supply. It doesn’t seem like it translated into any volume declines in Refrigerated Foods.

Can you help us with how many hogs you process? I mean we’re thinking the industry would see 6% to 7% lower hog supplies.

Does that just not materialize or can you give us a sense of what’s happening there with supply?.

I think you can get a follow-up with Jana on the specifics with the industry numbers, but the amount of hogs being processed has increased week-over-week. The trouble is we’re looking at some significant numbers from last year, so the year-over-year comparisons are still going to be down probably until the October timeframe.

We – our team has just indicated, has done a super job of making sure that we have had the supply and we are now back up to normalized operations, a lot of the hog numbers that we’re down were being offset by higher rates as well.

So impact of the total industry isn’t down as much as I think people originally anticipated, certainly helped by a summer that’s been much cooler than normal and that allowed the hogs to put on the extra weight ..

Okay. and just one last one on the guidance range being as wide as it is, first, does it include these charges that you expect, or the Cyto deal, and if you can give us the order of magnitude that will be helpful and then just secondly, I mean you cited our margins that has been a main reason for your conservative approach there.

What I can tell I mean margins so far have held pretty steady relative to the quarter you just reported.

So is there something else that we should be thinking off when we are looking at that $0.10 range, which is unusual?.

Okay. the first comment regarding the titles for the expenses, as we indicated on the call, when we announced the transactions, we would expect that any income from that operation would be – would offset the transaction costs. so those should be a net neutral in the Specialty Foods segment.

Pork margins are being maintained at the levels that we saw in the third quarter to-date, but there has been a lot of volatility. the comparison that Jeff talked about was to fourth quarter last year, and they were unusually strong in our fourth quarter last year.

so that year-over-year comparison for the fourth quarter won’t be as beneficial to Refrigerated Foods as it was in the third quarter..

Okay, great. I’ll pass it on. Thank you..

(Operator Instructions) At this time, it appears there are no further questions in our queue. I’d like to turn the conference back over to Jeff Ettinger for any closing additional remarks..

Well, thank you. We are pleased to have achieved another record quarter, leveraging our balanced model to deliver consistent earnings growth. Our team will continue to deliver relevant, innovative and high-quality foods to meet the needs of our consumers and to drive long-term growth for our shareholders. Thank you for joining us today..

As a reminder, this does conclude today’s session. We appreciate everyone’s participation..