Gerry Shreiber - President and Chief Executive Officer Dennis Moore - Chief Financial Officer Bob Radano - Chief Operating Officer Jerry Law - SVP of Marketing Marjorie Roshkoff - In-House Counsel Dan Fachner - President, ICEE

Francesco Pellegrino - Sidoti & Company Jon Andersen - William Blair Akshay Jagdale - Jefferies Brian Rafn - Morgan Dempsey

Thank you Jason, and welcome everybody to the J&J Snack Foods’ second quarter conference call. With me today is Bob Radano, our COO; Dennis Moore, our CFO; Jerry Law, my assistant and Senior Vice President and Marjorie Roshkoff, our In-House Counsel.

We’re waiting for Teddy Shepherd who is running a little bit late, he’s our CED who will be in momentarily. Let me begin by the obligatory statement.

The forward-looking statements contained herein are subject to certain risk and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. You’re cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof.

We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Results of operations.

Net sales increased 2% for the quarter and 3% for the six-month period. For the quarter, our net earnings increased by 6% to $15.6 million or $0.83 a share from a $14.6 million or $0.78 a share a year-ago.

For the six months, our net earnings were $28.6 million, $1.52 a share, an increase of 10% from $25 million or $1.38 a share a year ago. Our EBITDA, that’s earnings before interest, taxes, depreciation and amortization for the past 12 months, was a $153.9 million, again a record.

Food service. Sales to food service customers increased 2% for the quarter, due to increased sales of Handhelds, Funnel Cakes and Soft Pretzel, which were up 4%.

Sales of frozen juices and ices and bakery products were down 1% and Churros sales down 6%. For the six months food service sales were also up 2% with increased sales of Handhelds up 31% for the six-month period and Funnel Cakes up 53%.

Sales of Soft Pretzels, Churros and frozen juices and ices were essentially flat for the six months. And Bakery sales were up 1%.

Retail super markets. Sales of products to retail supermarkets were down 6% for the quarter.

Soft Pretzel sales were down 10% for the quarter in the supermarket segment and 8% for the six months. Sales of frozen juice and Italian ices were down 6% in the quarter and 4% for the six months.

Handheld sales were down 23% for the quarter and six months respectively. ICEE and frozen beverages.

Frozen beverage and related product sales were up 6% in the quarter and 11% for the six months. Beverage related sales alone were up 6% in the quarter and 8% for the six months, with gallon sales up 6% and 8% in our base ICEE drink business in the quarter and six months.

Service revenue for others was up 8% for the quarter and 12% for six months. Consolidated, gross profit as a percentage of sales in the quarter increased, by better than 1-basis point to 29.93% from 29.75% last year and from 29.25% to 29.3% for the six months, essentially the same within margin of error.

Gross margin benefited from lower ingredient cost, more favorable product mix, increased volume in our handheld business and to a minor degree pricing. It was offset by higher cost in our frozen beverage business and approximately $1 million of spend of added cost related to the introduction of Oreo Churro and Pillsbury Mini Dessert Pies and new Philly Swirl products.

Total operating expense as a percentage of sales decreased to 19.8% from 20.1% in last year’s quarter, primarily because of lower distribution cost. For the six months the decrease was 20.5% to 20.1% primarily due to lower marketing expenses in our food service business in the first quarter.

Capital spending and cash flow. Our cash and investment securities balance decreased to $17.6 million in the quarter to $219.6 million let me repeat that.

We’re sitting on $219.6 million in cash. We continue to look for acquisitions as a use of our cash.

$97 million of our investments are in corporate bonds with a yield to maturity of 2.2%. Our capital spending was $23.8 million in the quarter as we continue to invest in plant efficiencies and growing our business.

We are presently estimating capital spending for the year to be approximately $40 million or so. A cash dividend of $0.39 a share was declared by our Board of Directors and paid on April 6, 2016.

We bought back 80,565 shares of our stock during the quarter at a cost of $8.6 million, bringing our total repurchase for the six months to 107,648 shares at a cost of $11.8 million. Commentary and other notes.

Sales of soft pretzels and food service improved this quarter as sales to restaurant chains declined marginally and improvement from the 10% declines the prior two quarters. Frozen juice bar and ICEE sales and food service were relatively flat.

Handheld sales and food service were up significantly led by sales to one customer. Churros sales were down 6%, as one customer discontinued product, discontinue to sale the product, which contributed about one-half of the decrease.

Our whole-grain Funnel Cake product has been well received in schools and contributed significantly to our sales growth in this quarter and for the six months. Sales of Soft Pretzels in our retail supermarket segment were weak in the quarter and first half of the year as our Bavarian soft pretzel bread products was discontinued.

And sales to one customer were down substantially. Frozen juice and ices were down 6%, primarily related to increased trade spending to introduce new Philly Swirl products and lower sales of existing Philly Swirl products.

Handheld sales in retail supermarkets were down 25% mainly due to lower sales to one customer and increased trade spending for the introduction of Pillsbury Mini Desserts, a trio of licensed products. Overall, increased trade spending for new products including Oreo Churros was about $1 million.

In frozen beverages, gallon sales were up 6% and service revenue to others was up 12% in the quarter as this business continues to increase revenue, although earnings were down into a combination of factors including higher medical insurance cost, a bad debt write-off and higher payroll cost. Operating income in the quarter increased $1.5 million from a year-ago, a 7% increase.

Our estimated income tax rate was 35.7% this year and 36.5% last year for the quarter and 34.7% and 36.8% for the six months. We’re estimating a rate of about 35.5% in fiscal year of 2016.

We have restated our statement of earnings for our December quarter, our first quarter upon the early adoption this quarter of the new accounting guidance, which resulted in a $499,000 decrease in income tax expense in the December quarter as the treatment of income tax deductions related to the exercise of stock options has changed. We anticipate the full-year impact of this changed result and lower income tax expense of about $800,000 compared to last year, of which, $588,000 was reported in the first six months.

I thank you for your continued interest. And I would like to turn it back to the listening audience for any questions and comments.

Good morning, Gerry.

Hi Francesco.

I wanted to start out with asking you about soft pretzels at retail. It says lower sales to one customer.

Is this lower sale or is it a lost customer?

Actually, lower sales to one customer would be C&S. And it had to do with the bankruptcy of A&P and Path-Long [ph] primarily.

When we start to think maybe about where that business is going to be in the third and the fourth quarter, just given the fact that pretzel sales were down at retail 5% in the first quarter, 10% in the second quarter. So, is that increasing falloff continues if we hold everything else constant?

We hope and we’re working very hard to moderate that. So, although these stores had been closed, we’re looking for other alternatives for our retail as well as other new channels.

But when these stores closed, we’re pretty much limited to what we can do. There should be some pick-up at corresponding competitive stores but it’s not nearly enough.

Your food service operating margin looked really good this quarter. And I know you have recently been investing a lot in upgrading your manufacturing facilities.

Is the operating margin expansion and maybe the operating leverage that we’re seeing maybe a byproduct of all this capital investing that you guys have been doing?

Hope so.

Okay, that was nice and simple. The other categories in retail and food service had been increasing pretty significantly.

Is there a product in there that’s growing that we could potentially be seeing broken out in the future?

Well, we mentioned that our Funnel Cake sales have been increasing and that’s another one of our niche products that we have a major, major unusual share. And I would look for that to have perhaps continued growth and significant growth in quarters three and four.

Is it doing about like, during the quarter was it like $600,000 or $700,000?

I don’t know exactly but that number will increase exponentially during quarters three and four.

So, is it the type of thing if it increases to above maybe $1 million so we could start seeing Funnel Cakes being broken out for retail supermarkets?

No, I would…

Francesco, are you talking about retail or food service?

Well, I noticed both of them had pretty nice growth than the other. So, why don’t you tell me?

Well, in food services, primarily Funnel Cakes and in retail it’s primarily Oreo Churros.

Okay.

But in keeping with the former Funnel Cakes, we’ve made in-roads with a major chain and we would expect to see this product in 4,000 to 5,000 retailers in the next 60 to 90 days.

Okay. So, let me elaborate a little bit more.

Could we see Funnel Cakes being broken out within food services and Churros being broken out at retail?

Francesco, in the footnote, we currently list so many products. And right now they are relatively small percentage.

But we do mention them significant increases in the MD&A.

And I would look upon those products both Churros; Funnel Cakes and Oreo Churros as part of our fried foods.

Okay. That’s all from me.

Thanks again guys.

Francesco.

Hi, good morning everybody.

Good morning, Jon, how are you?

I’m good thanks. How are you?

So, I guess, I wanted to ask first a little bit more on the comment you made Gerry about the Funnel Cakes I guess growing exponentially in the second half of the year. What is driving that, is it one customer relationship, is it multiple customer relationships and should we consider this more of a trial type of activity on the part of this customer or customers or is this more permanent business as you view it today?

Andersen, we considered a trial a year ago and perhaps six months ago when we were testing. We’ve been told that this is going to be what they say - PMI, permanent menu item.

So, and we expect to have it, we’ve been gearing up, we expect to have it in 46,000 specialty locations.

Okay. And then sticking with food service for a minute.

The performance of the Soft Pretzel business, it got better I guess in the quarter relative to the past couple of quarters. What are you seeing there, is the menu for change you talked about in the past kind of played itself out or are you adding new business there and what are your kind of expectations for soft pretzels in the restaurants going forward?

Well, we did a little bit better in the restaurants. Keep in mind, in the restaurant segment we were on a fierce tracking, increasing 15% to 18% every quarter.

And then it came to not a screaming halt but it slowed and then it declined 10% consecutive in two quarters. We think that the, we’re working on menu items and different items to regenerate that early success but we believe that menus think has slowed.

And hopefully we’ll be the beneficiary of that going forward. We still have unbelievable market share.

And again as I stated before it’s up to us to continue to grow our product presence.

Okay. And in Churros and food service, I thought you had lapped the - I guess the loss of the Taco Bell menu position.

Is this, what happened within Churros this quarter, is this another customer and are there - is there kind of an opportunity to kind of back-sell for that customer going forward?

Well, I’ll tell you what happened, Jon. Yes, we did lap the Taco Bell launch from two years ago.

And we had a major retailer that was selling the product, a retailer selling the product in their in-store bakery which translated into food service for us. And I’ll tell you who the customer was, the customer was Kroger and they discontinued it last quarter because and I won’t call it menu fatigue but because of a decision made by their bakery department.

We are working to get that reset although there is no guarantee that’s going to happen soon.

Okay. Last one from me is, Gerry, you pointed out the work chest kind of you have in terms of cash and investments on the balance sheet.

You also mentioned you’re looking for acquisitions. Is this a fertile time in terms of looking at acquisitions, is it less so?

And then also, what’s on your wish-list in terms of acquisitions? Is it same categories just kind of enhancing the existing categories, is it new categories.

What would be a really good fit for you?

Well, obviously anything that’s in our core product portfolio which would be soft pretzels, Churro, if there was another Funnel Cake producer, we’re not going to do anything Jon that is transformational. Although we are looking to spread our areas of coverage, we’ve done more in the bakery end over the past 8 to 10 years.

We’ve filled in some niches with frozen juice bars. Actually our ICEE business continues to grow in both sales and managed service for others.

So, obviously we will look to continue to feed that so to speak. But again, we’re not going to do anything transformational, there is a lot of things that we’re looking at it.

Some of them are worth a second look and some of them are we kind of hope really because the fit would not work, and some of the businesses that we’re looking into have a lot of fluff in there if you know what I mean.

Okay. Thank you.

Good luck going forward.

Welcome.

Good morning. So, just a different way of asking question about your sales growth, so I apologize if I put you in a tough spot.

But the beverage business really has been phenomenal. And since I started covering your company, certainly my view of that business has changed dramatically to be more positive.

Thank you.

Thank you.

The beverage business has been on fire and consistently so for a while. So, if you leave that out because I think that continues to be a positive standout.

The food business and everything else has really slowed right, if you look at the last I don’t know, six to seven quarters, you’re like 1% growth in everything else, there is a lot of moving parts. But clearly, as your food business is predicated on food service and we’ve seen a slowdown in organic sales growth there.

So, just give me some perspective because every time something like this happens, you guys have an internal meeting or something of this sort and you get the troops to really rally. Are we there yet?

I mean, do you sense a slowdown and are you, what are you doing to fix it? And then I have some specific questions on some products.

Your sense of timing sometimes is ingenious. We’ve just had a full week’s worth of meetings with the purpose was to review and drive forward our food products.

And to that end we have several new products that we’re launching. There has been increased emphasis on our core products.

And we’ve made a couple of cosmetic - not really cosmetic changes but we’ve reassigned and moved some responsibilities. So, I would look for and we’re certainly pushing for quicker and faster sales growth in across our food service items.

That’s helpful. I think luck has a lot to do with that ingenious comment you mentioned.

I know you and I’ve seen you work, and we’ve known each other now five years or so?

Yes, maybe a little longer, but I appreciate it. Thank you.

So, just moving along, in retail, I was really surprised to see the overall, I mean, there is a lot of choppiness. But you got these two big items going into or initiatives I may say, going into retail, you did mention sliding fees.

I was expecting to see not just sliding but the positive sort of impact of that in your sales. Is it taking longer to get the Oreo Churros to on-the-shelves and to be selling or is this still on target because certainly from our modeling perspective, maybe we’re being too optimistic timing wise, but the Churro, the Oreo Churros and the Pillsbury Pies, I mean, they should be a meaningful driver of your growth.

And we just haven’t seen those numbers play through in retail overall retail sales, organic growth is down again pretty significantly this quarter. So, help me put that all into sort of perspective and when should we expect the retail segment to start to put up some significant growth?

Let’s talk about Oreo Churro. First of all, again your comment is right on.

It’s taken us longer and it’s kind of like even though the applause and the overall enthusiasm which came from everywhere was there in the beginning. It’s kind of like going to a concert, right.

The main act, it takes a long time for them to come on and there is a lot of applause. We think we’re going to see this type of sales growth in our third and fourth quarter particularly in the fourth quarter with Oreo Churros.

The Pillsbury Pies, the licensed pies is moving along at a little bit slower pace, but at the season for that generally speaking starts in the fall which should impact, affect us with our August and September channels with the grocers. But we still have a high degree of enthusiasm and confidence in both of those products.

That’s helpful. One for Dennis, I would appreciate reading the 10-Q which comes out right when you release there is a lot of good details there if I missed as always some.

But there has been more commentary and I don’t know if you have a number in your head Dennis for this, that’s surely what I’m asking is. There has been more I would say discontinuations of major items and major customers recently.

So the question really or just that’s how it seems at least this quarter and maybe last few quarters. The new product introduction number that you put out every quarter, is that net of items discontinued?

No, that’s net.

Okay. Would you say it’s accurate to say that in recent quarters the discontinuation of some relatively big products and big customers has been a bigger drag than we’ve seen historically?

It’s been - yes. I would say more of a drag recently.

Although I wouldn’t say it was significant either. But it has been more of a drag.

Okay.

And with regard to new products, we’re kind of conservative in what we report as we do come up with new products at our variations of existing products that we don’t necessarily - or that we don’t include in new products. So it’s kind of a limited understated to some extent.

Okay. And just one last one and thanks for taking all the questions.

It’s on capital allocation. Obviously you’re as always being very selective about M&A.

But I think you did at some point mention looking for larger deals rather than smaller ones in the $100 million to $300 million range. So can you please maybe talk to that?

And then I saw you spent some money on buybacks this quarter so $7 million. Can you, do you have any thoughts there, I mean, it’s good to see that you’re putting that cash to use but at the same time you still have a net cash position.

So, can you just put it into perspective how should we think of the rate at which you’re buying back your stock? And secondly just in terms of your M&A pipeline, are you likely to do a larger deal and if so, like what’s the good sort of range to think about?

Thanks.

We’ve been buying back stock probably at the same rate for past several years. And we generally, we buyback enough to cover the stock option awards that we’ve been giving out to people and management.

So that number might have ranged over the years from 140,000 up to 200,000. But there hasn’t been a, what I would call a massive buyback or a Dutch auction or anything like that.

So, I would expect that amount to stay steady. And if you look at our overall float since forever, our float has remained constant.

Akshay, I’m going to turn you back to Dennis now for the first part of your question if Dennis can remember.

Well, I thought the first part of the question I had to deal with the buyback, so I’m not.

The second part has to do with M&A but yes.

Well, we continue to look at things and we continue to look at things which are significantly bigger than some of the deals we’ve made in the past. Now, although it’s true that we haven’t made a deal in about a year.

And as far as year and half in acquiring somebody is however even more true that we’re looking at several things. And I would expect all I could say if we’ve made acquisitions in the past and it’s our plan to grow business in the future.

So I would expect us to do something that would round-off half our portfolio and our business, keep in mind of our strengths with niche products and good distribution and some of the other strengths.

Thank you. I’ll pass it on.

Good morning, Gerry.

Good morning Brian and Dennis is sitting across the room and waving good morning too.

How you doing Dennis?

Good Brian, thank you.

Give me a sense, Gerry you talked a little bit, you got a really kind of cost conscious Google customer at retail and supermarkets. Is that at all drive product reformulations or new flavorings, is the product cycle you talked about tired menus or stale menus, when you look on the grocery side, what the frugal customers, to be excited more, give me a sense if this is bringing any change in kind of the lifecycle of product?

If we’re talking about groceries, there is a common denominator that excites them from coast to coast, from buyer to buyer, from store to store. And that is then kind of like sliding on one that gets them excited.

Then the hard labor comes into play, getting the product in there, pulling against the consumer. Keep in mind we have several niches that we enjoy today and we want to keep expanding those niches and develop other products that would be sub-niches of niches.

It’s not something that we can crow about yet but we keep trying in there to grow that supermarket business.

Okay. Give me a sense Gerry as you look in that supermarket side, kind of the battle between national brands and private label.

Has there been more demand from grocers to have you guys formulate private label product for them or has it been about the same?

No comment on that because Jerry is responsible for our marketing and R&D. I’ll let him comment.

But there has been some increase degree that we have been developing products for people like Craft and others.

But we’re still a mixed bag co-packed business is different than private label. But on the private label side, it continues to be a mixed bag as retailers change their directions as they make up their minds as whether going to a branded option or a private label option, it’s really, there is no real rhyme.

I would say two or three years ago you saw a definitive increase in private label, but now you see some retailers going back to branded items as well.

Okay.

There is no certain pattern either. I mean, in all honesty, we have been blind-sided by some of these shifts where our customers and I won’t mention the change all right, but there has been a driving message to knock this off and come in and be this price.

And then two or three years later right, without warning and without a lot of explanation that there is a shift. Fortunately for us, it’s not a, it’s a nice piece of business for us and we do it well but it’s not a big percentage of our overall business.

Okay. In the year you guys have done really well in the beverage area.

When you look at SLUSH PUPPIE or PARROT ICE as a contribution versus ICEE. I’m assuming ICEE is still a big 900-pound gorilla.

How are some of those niches like PARROT ICE and SLUSH PUPPIE performing?

Well, since Dan is on the call, SLUSH PUPPIE continues to perform well, as a matter of fact there was a variation of net that we’re putting in, a bunch of products. But PARROT ICE has taken a backseat but Dan, why don’t you comment on the growth of our ICEE business and the expected growth for the future.

Yes, Brian. ICEE is really the driver in the beverage side of things.

Both SLUSH PUPPIE and PARROT ICE continue to grow but at moderate rates. The SLUSH PUPPIE, we have some really good things coming up through the remainder of the year.

And on the PARROT ICE side, we use that more for our higher end maybe the smoothie end or the adult beverages. Both of those have done well for us and we’ll continue to put emphasis behind them.

Brian, if you look back at it, it’s like we put together an overall game plan strategy, we bought ICEE in the west, develop the product line to compete against the other developers called Arctic Blast, filled it out with the SLUSH PUPPIE. One of SLUSH PUPPIE products called Mix-it-Up we’re now expanding across our business.

So, it’s kind of like putting together a good broad team in there and you get to your starting 9 or 10 in there and then you’re adding to your depth and you’re adding to position strength. So ICEE continues to grow both in sales, revenue and overall profits.

And we have a good team in place.

Let me ask you, you’ve borrowed a little bit of my next question. ICEE, and certainly in this sort of part in the soda area, there has been this rage with kids about blending flavors.

You guys do that in ICEE. Can you do that blending of flavors with like a SLUSH PUPPIE?

That’s an underhand softball for you.

Yes, we absolutely do Brian. With SLUSH PUPPIE, we use the Mix-it-Up label and we use a neutral product or lemonade product and then actually if you remember the traditional SLUSH PUPPIE style machines you squirt in syrups.

And so we really encourage what it’s called a Mix-it-Up around the SLUSH PUPPIE. In addition to that, on the ICEE side, we’re releasing a new machine this year, single-barrel ICEE type machine that shoots flavor shots and do a neutral base or a lemonade base or even a white cherry base to give it a true feel like that.

And that is exactly why we’ve done that. There is a real trend out there right now especially among the millennial age group to make it their way.

And so we’re trying to satisfy that.

And yes, I got two of those guys. So yes, that seems to be a big rage.

Yes, it is.

Let me ask you guys, you’re back on the grocery store side. You guys have over the years have done some pretty nice co-branding with Barq’s and Minute Maid and that.

How is that business and not just your brands it’s kind of co-brand? And then maybe also - I’ve also noticed some J&J stuff licensed in the candy area.

So, maybe can you talk a little bit about co-branding and then maybe licensing?

I’ll answer this Brian, and we got to give some other people chance. The ICEE licensing which really Dan and his group developed a few years ago has gone from nothing to now, it generates close to $1 million a year in revenue.

So we’re watching that growth both with pride and conviction and it gives us a chance to expand on other licensing. Our Minute Maid sales have been solid.

The Barq’s, even though that was a good product and Root Beer together with dairy has not done well. And we need to take a look at that again.

Good talking to you.

Okay. I’ll get back in line.

Thanks.

That was very short line Gerry.

Okay.

Dennis, little bit on ingredients, eggs, butter, sugar, flour, you guys like think had an opening count in about the trajectory was some of your raw materials were little cheaper. You got any kind of trajectory going forward how you see that?

Good morning. Some of our ingredients continue to be on lower on year ago but we’re beginning to see some of that are starting to go the other way.

So, we may see some leveling-off of that as we move forward.

Any chance stands out as far as ingredients from an inflation standpoint sugar versus shortening versus eggs or is that a mixed bag?

It’s a mixed bag.

Okay. You talked CapEx stage about $40 million expansions, can you give me a little flavor relative to maybe the plants you might be putting it in or is it in assembly line or manufacturing versus say freezers or warehousing, kind of where you’re putting that CapEx?

Well, some of that CapEx went to this big opportunity that we’re having on both the Funnel Cake and on some of the newer products. But we’re constantly refreshing plants and looking to be more efficient.

And so, we will continue to put our emphasis on that regarding a nice team of engineers who are familiar with our plants. And we want to be able to spread that knowledge and that talent around the 16 plants that we have.

Okay. M&A Gerry, your area of expertise, you’re probably one of the best if not the best in the package food area.

When you look at acquisitions Gerry, have you, you bought J&J for $72,000 back in 1971.

I thought I paid too much too.

If you look at going forward, would you see your sense of your target market is maybe less than the bankruptcy or restructuring area or is that still a viable area for you guys?

Well, we’re not looking per-say at that. And we’re not necessarily looking for things that are broken and we could fix up, even though we’re very good at it.

We’re looking at solid companies that had anywhere it’s from $50 million to $150 million in sales in there that we could add our personal strengths and compliment what they’re doing and perhaps learn some things too. So, if along the way we run across something and they’re small that I’d like to say that’s in the way that has potential, yes, we’ll pick it up and then we’ll bring it in.

But if we’re going to make, we - I am looking to make more solid acquisitions together with a management staff on the other side to join our family. The years had been good to us, we went public in ‘86, that’s 30 years ago.

And we’ve grown every quarter. We have no debt.

We have a small float. We’re sitting on good cash reserves.

We started paying a dividend 10 years ago and now I’m proud to say we’ve done it for 40 straight quarters. So, all these things are what we call our mutual base quoting Dan’s words.

We’re going to build on that with added little diamonds whether they’re diamonds we find in the rough and polish or existing businesses.

Let me ask you, when you’re looking you mentioned kind of you do $150 million. When you’re looking at growing concern, good solid businesses, what generally is your success, is it that you bring those distribution in new markets?

Are you adding new flavoring? You find that it’s the manufacturing efficiency side.

How do you end up, where is kind of that secret that you could?

Yes, yes and yes. Generally speaking, if we’re looking at something that we think as star power, we want to know what we can do to further enhance that.

Okay. And one final question Gerry, multiples of EBITDA, pricing, what is your sense, how expensive strategic buyers versus financial guidance, what are you seeing?

Well, we would be the strategic buyer for some reason or the other the private equity groups and of course the money is cheap which probably influences them. But multiples are up there although they’re not running away like they were a couple of years ago.

Okay. All right, keep it up.

Thanks so much.

Thank you, Brian.

Thank you. I want to thank everybody for joining us today.

And we look forward to you participating in our next quarter’s conference call. Thank you.

And goodbye.

Thank you Jason.