Sam Reed – President & Chief Executive Officer Dennis Riordan – Executive Vice President & Chief Financial Officer P.I. Aquino – Investor Relations.

Alexis [Borna] – Citigroup Robert Moskow – Credit Suisse Farah Aslam – Stephens, Inc. Stephanie Benjamin – SunTrust Robinson Humphrey.

Welcome to the TreeHouse Foods Conference Call. This call is being recorded. At this time I will turn the call over to TreeHouse Foods for the reading of the Safe Harbor statement..

Good morning. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include all statements but do not relate solely to historical or current facts and can generally be identified by the use of words such as “guidance,” “may,” “should,” “could,” “expects,” “speaks to,” “anticipates,” “plans,” “believes,” “estimates,” “approximately,” “nearly,” “intends,” “predicts,” “projects,” “potential,” “promises,” or “continue,” or the negative of such terms and other comparable terminology.

These statements are only predictions.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause the company or its industry’s actual results, level of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievement expressed or implied by these forward-looking statements.

TreeHouse’s Form 10(k) for the period ending December 31, 2013, discusses some of the risk factors that could contribute to these differences. You are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made, when evaluating the information presented during this conference call.

The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any other change in events, conditions, or circumstances, on which any statement is based.

At this time I’d like to turn the call over to the Chairman, President and Chief Executive Officer of TreeHouse Foods, Mr. Sam K. Reed..

Thank you, P.I. Good morning, everyone, and welcome back to our TreeHouse. We are off to a fast start in what promises to be an outstanding year as private label entered opportunities fuel our renewed growth. We’re making great strides forward in pursuit of our strategic goals, expansive growth, operational proficiency and financial performance.

I will touch upon each of these points before Dennis provides an in-depth analysis of our business. I will later return to address our Protenergy Natural Foods acquisition in particular and the M&A marketplace in general. Once again we are pleased to report real growth in the trifecta of earnings per share, operating cash flow and sales revenue.

Led by single-serve coffee, accretive acquisitions and productivity gains, TreeHouse generated double-digit top line growth, $80 million in cash flow, and record Q1 earnings. Our retail grocery private label segment was especially robust, producing real growth of almost 6% as the traditional supermarket channel rebounded.

2014 will be a year of strategic advances at TreeHouse that will generate dividends for years to come. Our private label model has evolved in its time and events, and has changed the food & beverage marketplace.

While our basic proposition – value without compromise – remains intact, its application can no longer be limited to the Jorge private label standard of low cost manufacture of national brand equivalents and family-size packages for supermarket distribution.

This classic cornerstone must now also provide a foundation for the temporary private label of millennial consumers, billion dollar plus customer brands, alternative channels, and internet shopping.

At TreeHouse we have embraced these changes by pioneering the development of private label coffee that posted category growth of 131%, reaching an 11% unit share as of the end of Q1 as LKM revenue totaled $226 million according to syndicated data. Coffee has in effect set a new standard for private label innovation and customer brand differentiation.

The evolving marketplace also requires that we constantly, continuously adapt in order to grow. Investment in capital and resources is shifting from business drivers of the past to those of the future.

These include consumer and customer concerns for value as well as cost, variety as well as quality, health and wellness, clean labels and the environment, convenience and portability, meal assembly versus preparation, perimeter versus center of the store shopping, and internet delivery of household staples.

As a result, consumer insights, product innovation and food technology have become indispensable components of private label marketing. Low-cost production of national brand equivalents alone is no longer sufficient to dive private label growth.

At TreeHouse we will soon leverage the convenience of Protenergy Natural Foods’ carton packaging with the scale of our grocery distribution system to reinvigorate the private label soup, broth, gravy and sauces category.

Internally, the operational proficiency of Bay Valley Foods, our operating company, continues to progress across an extensive array of its go-to-market and supply chain functions. As noted earlier, our retail private label business grew almost 6% in real terms, exclusive of pricing, acquisitions, and foreign exchange.

New businesses generated more than $60 million in revenues as Cains Foods and Associated Brands opened new markets in premium mayonnaise, specialty tea, and the Northeast urban corridor. Legacy margins excluding recent acquisitions and foreign exchange improved as manufacturing, logistics, and procurement programs drove productivity gains.

With “simplification” as their mantra our Bay Valley team is steadily advancing along a broad front, putting TreeHouse into a competitively advantaged position to capitalize upon the excellent prospects in the private label food & beverage sector.

Dennis?.

Thanks, Sam. First, I just want to reiterate Sam’s comments regarding the overall quality of our Q1, especially in our North American retail grocery segment. One of the key measures of quality is fundamental growth. This quarter we again posted positive volume mix in our retail segment.

This represents the fourth straight quarter of volume mix growth, something very few food companies have been able to achieve. We’re also especially pleased with that growth despite the challenges that weather has played in the food away from home segment and the late timing of the Easter holiday compared to last year.

And we can also report that our sales momentum has continued into our Q2 as April’s preliminary retail sales look to be up very nicely compared to last year. This seems to indicate that our Q1 sales were affected by a late Easter. As I turn to the segments, net sales for our North American retail grocery segment grew 17.2%.

Although most of the growth was driven by acquisitions our legacy business showed very strong volume mix growth of 5.9%. Organic sales were led by our beverage category which grew by 52.1% on the strength of our growing single-serve beverage business.

This helped to offset slightly lower sales in most of our other categories, as the seasonal shift due to the late Easter holiday likely had a negative effect. As we’ve mentioned on the last couple of calls, one trend we are seeing in retail is that the traditional grocer seems to be making a comeback.

Our gross tonnage sold to this part of the retail channel increased by almost 2% compared to a 3% decline last year. In addition, we continue to see positive growth in our premium channel while both mass merchants and value customers showed a small decline.

While we sell to just about every major food retailer in the US and Canada this mix shift is generally more favorable to our business due to the greater mix of specialty products sold by the traditional and premium customers.

Retail direct operating income margins in the quarter decreased from 17.0% last year to 16.6% in 2014 primarily due to the mix of new products from our recent acquisitions. Both Cains Foods and Associated Brands have generally lower margins than our legacy businesses and this drove margins downward.

As we look towards the legacy business before acquisition, gross margins were flat year-over-year despite the headwinds of approximately $8.8 million in deferred manufacturing costs that negatively affected Q1 compared to last year. These costs represent the unfavorable manufacturing costs from Q4 2013 that were charged to inventory when incurred.

In Q1 2014 we sold that inventory, so those excess manufacturing costs from last year were added to our cost of sales in Q1. If you recall, we mentioned this situation on our earnings call in February and provided guidance for Q1 earnings that took the variance accounting into effect.

In regards to the food away from home segment, the new Cains Foods business was the primary reason for the 8.4% increase in total sales. Excluding acquisitions, our sales in this channel decreased by 2.9% as we did fall victim to the weather like most other businesses in this segment of the food industry.

Our direct operating income in this segment decreased from 13.4% last year to 10.7% this year due to three reasons. First, pickle margins were down to weather issues that resulted in lower than expected fresh cucumbers from our usual source of supply in the Southeast. We had to supplement our needs with cucumbers from other parts of the South.

Second, margins in our legacy antiseptic business were down due to manufacturing issues at our plant. These issues are resolved and should not affect our results going forward. And finally, as the new Cains business generally has lower margins than our legacy business our sales mix helped to lower the margins this quarter.

Our industrial and export business had a sales increase of 7.8% due entirely to sales from recent acquisitions. Excluding acquisitions, sales were down 5.1%. Offsetting the lower sales were improved margins resulting from our continued emphasis on higher-margin co-packed business.

Due to the nature of this business segment we look at margin dollars, not necessarily top line sales. In Q1 direct operating income grew 20.8% to $15.0 million compared to $12.5 million last year. Turning to our total TreeHouse results, our gross margins improved from 21.1% last year to 21.5% this year.

Excluding the effects of unusual items as detailed in our press release, gross margins would have been 21.8% this year compared to 22.2% last year, a drop of about 40 basis points. While on the surface this reads negatively, our Q1 results included two matters which were significant and importantly should only affect Q1.

First, average Canadian exchange rates were about $0.90 Canadian to $1.00 US. This compares to about $0.98 Canadian to the US dollar last year. This roughly 9% devaluation of the Canadian dollar caused our margins to drop by about $1.8 million compared to last year, or about 30 basis points in margin erosion on a comparative basis.

And just to be clear, I’m explaining the year-over-year change in margins due to exchange rate differences. The Canadian dollar is only slightly lower than our assumptions used for the 2014 guidance so there will be little impact to our full-year outlook.

Second, as I mentioned earlier we had negative factory variances from last year in our Q1 results. These variances lowered our Q1 margins by nearly 110 basis points and are now nearly completely finished.

Our recent factory operating performance has been very good, so expect that future quarters will not be burdened by additional carryover inefficiencies. Moving to operating expenses, they increased by 18.5% compared to our top line sales growth of 14.6%.

The increase in relative spending was due to slightly higher selling expenses as our two recent acquisitions have not been fully transitioned to our warehouse network and therefore have not realized the full advantage of centralized distribution.

In regard to the general and administrative expenses, this year our Q1 spending was 5.5% of net sales compared to 5.1% last year.

This increase is in line with our guidance and expectations for the year and represents additional investments in our corporate development activities along with additional management support in our Bay Valley Foods operating company as we prepare for another round of growth.

As we look at the non-operating parts of the income statement, interest expense for the quarter was down $1.9 million due to both slightly lower rates and lower levels of net debt outstanding.

During the quarter we tended our $400 million senior notes that bore interest at 7.75% and issued new senior notes, also with a principle amount of $400 million but at 4 7/8% interest. This will have a very positive effect on future interest expense.

As we discussed during our February call the refinancing was considered in our full year guidance for 2014 earnings. As a result of the refinancing we incurred costs to extinguish the senior notes early. These costs including the call premium totaled approximately $16.8 million.

While this is a relatively large cost, the face value of the interest savings on the refinancing will be over $11 million annually, making this a very attractive return on investment while providing us with an eight-year lock on very attractive interest rates. With regard to taxes, our effective tax rate for the quarter was 28.5%.

This rate is down from last year’s rate of 31.1% and also lower than our original guidance for the year. The lower rate was due to the settlement of a previously unrecognized tax benefit associated with our 2011 tax filings. With the closure of that tax audit these benefits were recognized in Q1 this year.

Net income in Q1 was $14.3 million compared to $23.0 million in last year’s Q1. This equates to fully diluted earnings per share of $0.38 in the quarter compared to $0.62 last year before considering unusual items.

After adjusting for the unusual items highlighted in our press release this morning, primarily the refinancing costs this year and plant closure costs last year our adjusted earnings per fully diluted share for the quarter increased 8.1% to $0.80 compared to $0.74 last year.

In regard to the outlook for the year, our Q1 earnings were very much in line with our expectations for the year. While our margins were lower to start the year, we should be able to meet our goal of 100 basis points of gross margin improvement. In addition, our quarterly tax rate should revert back to the original estimate of 33% to 34%.

Looking at external factors like input costs, we expect there will be a fair amount of movement in commodities costs – most up a bit, some down. In general, inputs have been a bit higher than what we expected at the beginning of the year.

However, we believe a combination of internal efficiencies and better preparedness due to our improved systems will help to minimize those exposures.

Looking internally, our operating costs will continue to be well managed to ensure we have the infrastructure in place to effectively manage our growth through acquisitions while maintaining the discipline in spending that private label margins require.

And finally, I did want to comment on the refinancing activities that we also announced this morning. We worked with our bank group to significantly upsize our capacity and take advantage of what is shaping up to be a very attractive M&A environment.

First, we increased the size of our revolving credit agreement from $750 million to $900 million while maintaining slightly better terms and no changes in our interest rates. We also increased the size of the accordion feature of the revolver, which gives us access to an additional $400 million of availability at the same terms subject to approval.

And second, we entered into a three-year $700 million term loan through the [Farm] Credit System with rates that are just 25 basis points higher than our revolving credit agreement. For both the revolver and the term loan our credit covenants remain unchanged.

And just a reminder, our borrowing rates this past quarter under the revolver were just 1.38% and our leverage ratio at the end of Q1 was 2.75x debt to EBITDA.

These new facilities combined with our refinanced senior notes outstanding represent a total of $1.6 billion in available financing, of which approximately $900 million was outstanding at March 31, 2014. This gives us at least $700 million in immediate financing flexibility.

Turning now to full year earnings, we are reaffirming our previously issued guidance of full-year adjusted earnings per share of $3.50 to $3.60 before consider accretion from the recently announced Protenergy Natural Foods acquisition.

We have previously announced that the Protenergy acquisition is expected to add $0.05 to $0.07 to 2014 earnings, and $0.11 to $0.14 to calendar year 2015 earnings. The 2014 earnings are our best estimates at this time subject to the timing of the transaction close, and finalization of asset evaluation work on goodwill and amortization of intangibles.

We will confirm a final range of 2014 earnings accretion during our Q2 earnings call in August.

Sam?.

Thanks, Dennis. I’ll conclude our prepared remarks with some color commentary on the Protenergy Natural Foods acquisition and our expanded credit facility. Protenergy offers us a passageway from the old to the new in a venerable private label category found in virtually all household pantries across this land.

While steel cans remain the mainstay it is the convenience of re-sealable cartons that is changing generations-old consumption patterns. This is particularly the case with the youngest consumers, many of whom regard the can opener as an artifact of the ancient past.

The versatility of cartons makes this packaging format ideal for such a large and varied mega-category as soup, broth, sauces and gravy. The introduction of Tetra packaging has revolutionized the broth segment, reaching a 70% share as it increased consumption and eliminated waste inherent in leftover, partially used cans.

Tetra, also suitable for condensed soup, gravy, and sauces, has in turn spawned [Recart] packaging, a form that accommodates the meat, vegetables, and pasta that made ready-to-eat soups so appetizing as a hearty, one-dish meal. While cans still dominate the shelf, we expect soup and related products to follow broth’s lead.

This conversion will be led by premium customer brands that are positioned as anything but an NBE or national brand equivalent.

Grocers employing their distinctive customer brands in a private label multi-strategy will reap rewards as their consumers are presented with a good, better, best choice under different store banners and in alternative packaging formats. Premium cooking soups are the first to benefit from this new packaging format.

Once established in the soup aisle TreeHouse can then extend our customer brand offerings to other aseptic-compatible categories. Lastly, the expansion of our credit facility is part and parcel of a capital structure designed to accommodate strategic growth driven by acquisitions.

Our financial model generates the cash flow required without excessive leverage to fund a series of M&A expansions over and above our working capital and CAPEX needs. Prudent leverage fosters liquidity in times of need.

This structure also allows us to remain in or to enter the deal market quickly following the integration of either a bolt-on or a large scale acquisition. Our present opportunity and capability are to expand our product portfolio further through the strategic acquisition of private label category leaders.

Anchored by our extensive presence in traditional center of the store staples, we are well positioned to follow consumers across the grocery store in their never-ending quest for superior quality, variety, and value in customer brands.

As was the case with single-serve beverages, consumer behavior will be the strategic imperative of our expansion plans. Current conditions in the M&A deal market, our enhanced financial condition and improved performance bode well for TreeHouse in this venture. Rochelle, you may now open the lines for Q&A. .

Thank you. (Operator instructions.) And our first question, we’ll hear from David Driscoll with Citi..

Good morning, this is Alexis [Borna] in for David this morning. Just a question on your single-serve business, how is the traction going with retailers regarding ongoing wins with k-cups, particularly in light of everything going on with upcoming Keurig 2.0? I would like to hear some thoughts..

Well, good morning, this is Sam. I think as Dennis indicated our beverage business increased 52% in the quarter and the category of single-serve coffee, as I indicated private label reached an 11% share and year-over-year growth of 131%.

What we’re finding is that consumers and grocers across a broad array of consumer demographics and store formats are finding that this single serve phenomenon, which accounts for 5% of coffee lbs. and now 30% of coffee retail dollars is a phenomenon like very few grocers have seen.

And as a result they want to make sure that not only do they present a full array of branded products but that the branded product is complemented by the customer brands. And that’s a sector in which we continue to enjoy over a 60% share of private label; and our leadership is strengthening if anything, so it’s very healthy.

And by the way, we also announced recently again that we are expanding capacity. I believe that’s the third such announcement that we’ve made over the last year so all signs are very positive..

Okay. And I noticed in your release this morning you mentioned single-serve beverages in the away from home segment.

Is this a new channel for your guys or has that always been there, or are you kind of expanding in that channel right now?.

We’re actually expanding in that channel. So those are products that aren’t sold to retailers; those are products that are really more geared to either other companies that are doing it under a brand – or as we start to expand into the office coffee services business..

Okay, thank you..

And we’ll move on to Robert Moskow with Credit Suisse..

Hi, thank you. I was just trying to evaluate the quality of the quarter. The tax rate was much lower than we thought at 28%.

I guess the first question is did you guide to a much higher tax rate for Q1 and what was the difference? And then secondly, operating cash flow, Dennis, I don’t know if you put a number on the quarter or not and I know that’s a big part of your internal objectives, so can you talk about operating cash flow for the quarter?.

Sure. In regard to the tax rate, you’re right, Rob – we guided 33% to 34%, and as I look over our balance of the year forecast and plans we should be at that 33% to 34% rate.

What happened during the quarter is we finalized the 2011 tax audits as a matter of course and we had some positions in the tax return that we were required to reserve for, and those positions were accepted and finalized. And as a result we were able to reverse some of those contingencies if you will through taxes.

So that artificially drove down for the quarter that tax rate. So we mentioned that when we did the Protenergy earnings but it actually came in a little bit better than we thought. In regard to the second question, sorry, Rob, that was….

Operating cash flow..

Operating cash flow, that was actually quite positive as we look at it. For us, we consider EBITDA as kind of a synonym for that and it came in at just over $80 million. So operating cash flow was quite good and I think right about at where we had expected to be.

We knew we had a margin challenge in Q1 which is why we gave that guidance down because of that $8.8 million in year-over-year variance change.

All of that has run through the P&L, so as we move forward I think what you’ll see is margins going back to our expectation of 100 basis points of improvement, taxes going back to that 33% to 34% rate and basically finishing the year pretty close to where the original guidance was..

Okay, so when you look at it on the EBITDA basis it shows the kind of growth you were hoping for.

I look at things on an operating income basis which doesn’t look as good but that must be a depreciation kind of issue with the acquisitions I guess?.

Yeah, that’s there, and remember, we did guide that we would have a little bit higher expenses this year. So we’re on track with that. But really the thing that I think threw some of the people off was the timing of the variance roll-off in Q1 and that effect.

That’s 110 basis points so that was rather significant, and frankly it was good that we had the tax returns cleared and we were able to reverse some of that. So that offset those two issues, both of which were one-quarter only items and conveniently they happened at the same time. But those are behind us and we’re back to a normal running rate..

Got it, thank you..

(Operator instructions.) Next we’ll move to Farah Aslam with Stephens, Inc..

Hi, good morning. I had a question on the M&A environment that you’re seeing right now, just expand on the M&A team.

You’ve finished Protenergy but kind of looking out what interests you and what are the size of the transactions that you’re seeing?.

This is Sam. I think that the market is characterized by one, a continuation of readily available funding for deals of practically any size. And what’s different now than we’ve had in earlier periods where money was also relatively cheap is that we’re seeing more sellers come to the marketplace and in a greater variety.

I know of instances in front of us now where there are families and private owners considering putting their businesses up for sale. There are private equity groups that are looking to monetize long-term holdings and importantly establish the basis for raising new funds.

And there are also large-scale strategics that are considering reorganization moves that would cast off things that are no longer in the center of their wheelhouse.

And we have the capability and the good fortune to be able to simultaneously scan these matters across not only an array of different sizes and things that require different methods of financing, but importantly across a wide array of beverages and foods.

With regard to our strategy I would say that there’s a subtle change that has been transpiring over the last several years, and in my notes I’ve talked about really consumer behavior leading us to single-serve beverages.

And in the beginning we were much more interested in industrial or [MITE] and large-scale opportunities that would just generate operating synergies. And what we’ve seen of late is that having established that base it’s more fertile for us now to look at categories with superior long-term growth. And that’s been the other change.

In summary I think that 2014 is going to be a very fine year. It’ll certainly be the best since 2010 and it may for us, and it may be for the totality of the food market the best year since 2007..

Great, and then just one quick follow-up on that.

In terms of the center of the store versus the periphery, your interest between the two or are you considering frozen by any chance?.

I would say the primary thing we’re considering is to find ways that we can leverage that foundation or build upon it in center of the store.

We will continue to look there because of the great synergies and economies of scale, but more and more what we’ve got to look at is changes either in packaging formats – and that’s the case with Protenergy; and/or movements toward health and wellness.

And in that latter regard more of our innovation activity, more of our research and development is currently being positioned to deal with health and wellness concerns and related either health or consumer trends.

With regard to the periphery, I think that all other things being equal what one would prefer to do is stay in an ambient distribution mode for the obvious reasons.

But we’ve already moved into refrigerated with the addition of Naturally Fresh and we found out that a different temperature state in a product category where we are the product category leaders, such as pourable salad dressings, really offers us a new venue for growth and a different consumer segment – in this case refrigerated dressings.

And that allows you to change the nature of your discussions with your grocery customers. And we’ll always be looking at that. We’ll follow the consumers, whether it’s one temperature state or another..

Okay, thank you so much..

And we’ll move on to Stephanie Benjamin with SunTrust..

Hi, this is Stephanie on for Bill Chappell. I just have a quick question. You mentioned that input prices you’re expecting to increase, and I think we’re all kind of seeing that particularly in coffee.

Do you think you will be taking pricing to kind of account for that going forward?.

Yeah, we’ll take each situation as it comes up. We entered the year with hedges as we always do, so I think we’re in reasonably good shape and we’ll take a look at it on a commodity-by-commodity basis. At this point we have not really done anything of significance in the pricing in the coffee world, and we’ll see how the market works..

Okay, and then just a quick housekeeping question.

Do you have an idea of what your interest expense and tax rate will be for the rest of the year post the refinancing?.

Yeah, our original estimate was to be at about $42 million in interest expense. Hopefully it will come in slightly lower than that – that was based on our original guidance before acquisitions.

And the reason that we could be slightly better is that we managed to get a 4 7/8% interest rate on the high-yield notes, and our original thought was that was going to be closer to a 5.0%, maybe just slightly over 5.0%.

So a slight bit of savings there, but with the Protenergy acquisition that was not part of that guidance, that’ll obviously raise our debt a little bit. On the tax rate, I really think we are going to head back to that 33% to 34% for Q2 through Q4, so I think if you’re modeling forward I’d go back to that number.

It really was more of an aberration this quarter in terms of the tax adjustment that was made that brought the rate down..

Okay, well thank you very much..

And at this time there are no further questions. I would like to turn the call back over to Mr. Sam Reed for any additional or closing remarks..

Thanks again, everybody. We always appreciate your interest, especially this time only a few weeks after the Protenergy Natural Foods announcement. By the way, we’ve scheduled investor visits to ten cities this year and Dennis and I both look forward to seeing many of you in person as the year progresses.

Until then we are TreeHouse, growing strong, standing tall..

And that will conclude today’s call. We thank you for your participation..