Thank you, and hello everyone. A press release covering the company's second quarter fiscal 2016 financial results was issued this afternoon, and a copy of that press release can be found in the Investor Relations section on the company's website.

I also want to remind everyone that management's remarks on this call may contain certain forward-looking statements including predictions, expectations, estimates or other information that might be considered forward-looking, and that actual results could differ materially from those mentioned on today's call. Any such items including our outlook for fiscal year 2016 and details relating to our future performance should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

You should not place undue reliance on these forward-looking statements, which speak only as of today, and the company undertakes no obligation to update or revise them for any new information or future events. Factors that might affect future results may not be in our control and are discussed in our filings with the SEC.

We encourage you to review these filings, including the company's Annual Report on Form 10-K and quarterly reports on Form 10-Q, for a more detailed description of these factors. Please also note that we will be referring to certain non-GAAP financial measures on today's call such as adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share that we believe may be important to investors to assess the operating performance of our business.

Reconciliations of these non-GAAP financial measures to the most closely comparable GAAP financial measures are included in our earnings release. I will now turn the call over to Mark.

Thank you, Jay and hello to everyone. We're very excited about our second quarter results and the underlying trends in our business.

Our deal flow remained very strong in the quarter and our customers continued to respond to our product offerings. As we've been saying for the past several quarters our growing size, our scale, visibility in the marketplace is giving us better access to merchandise, expanding our vendor base and building stronger direct relationships with manufacturers.

This is allowing our buyers to be even more selective and offer our customers even better bargains on great quality branded merchandise. Our stores are full of Good Stuff Cheap and our customers know a great deal when they see it.

On the sales side, comparable store sales increased 3.5% for the quarter versus a two year comp stack of 11.6%. The strength in sales continued to be broad based with the majority of our 21 departments delivering a comp increase in line or better than the company average.

Some of our best performing areas were health and beauty, food and candy, electronic accessories, housewares and pet. Our stores performed very well and we saw a consistent performance across the chain.

As we told you on our last earnings call, the quarter started out a little sluggish with cooler temperatures and a later Memorial Day holiday. However trends improved with the onset of warmer weather after Memorial Day holiday and we experienced strong sales result in June and July.

New stores continued to perform in line or above our expectations. We opened 8 new stores in the quarter, including our first store in Mississippi and the second store in Florida located in Jacksonville.

We're very excited to be in Florida and we believe this is a prime area for bargain retailing. For fiscal 2016 we continue to track on our plans to open up a total of 28 to 32 new stores.

Ollie's Army membership levels continued to grow well ahead of sales and Army members continued to significantly outspend non-members. As we told you on the last earnings call we continue the implementation of phase two of our customer loyalty management system throughout the rest of this year.

We believe this could be an effective way to communicate with our Ollie's Army members but we are sensitive to the privacy of our members and we're not looking to bombard them with emails. In summary, we feel very good about our second quarter results and our ability to continue to execute our strategy of opening new stores in contiguous and existing state strengthening our relationship with vendors, gaining better access to merchandise, leveraging our second distribution center, investing back into the business, paying down debt and generating strong returns for our shareholders.

Our deal flow remains very healthy and we have a full pipeline of new store opportunities. I know we've been telling you many of the same things over the past four quarters and we're beginning to sound like a broken record and that's just fine with us.

We're executing our strategy and doing what we told you we would do. Consistency has always been one of the hallmarks of the business and we're not about to change what has worked so well for us over the past 34 years.

With that, I'll turn the call over to John to take you through the financial results in more detail.

Thanks, Mark. And good afternoon everyone.

We had another strong quarter and we're pleased with our results. Net sales increased 16.1% to $211.3 million.

Comparable store sales increased 3.5% versus an increase of 7.8% in the second quarter of last year. The increase in comparable store sales was driven by an increase in the number of transactions.

We opened eight new stores in the quarter ending with 216 stores in 19 states versus 187 stores in 16 states last year. Our new stores continue to perform in line or above our expectations and we remain pleased with the productivity of our store base.

Gross profit increased 19.6% to $83.8 million and gross margin increased 120 basis points to 39.7%. The increase in gross margin was driven by reduced transportation and distribution center costs as a percent of net sales and a slightly higher merchandise margin.

SG&A expenses increased 16.5% to $57.7 million in the quarter and included $260,000 of transaction related expenses. The increase was primarily related to higher selling expenses from our new stores opened over the past year, increased sales volumes as well as public company expenses.

As a percent of net sales, SG&A increased 10 basis points to 27.3% in the second quarter. Pre-opening expenses were $2.0 million versus $1.9 million in the second quarter of last year.

The slight increase was related to timing differences and new stores. Operating income in the quarter increased 30.5% to $22 million and operating margins increased 110 basis points to 10.4%.

Our effective tax rate was 36% versus 36.9% in the second quarter of last year. The decline in tax rate was primarily the result of additional tax credits realized in the quarter.

Net income increased 106.8% to $13.1 million and earnings per diluted share increased 75% to $0.21 from $0.12 last year. Excluding transaction related expenses, adjusted net income increased 65.5% to $13.3 million and adjusted earnings per diluted share increased 40% to $0.21 from $0.15 last year.

Looking at a couple of other non-GAAP metrics. EBITDA increased 28.4% to $24.6 million and adjusted EBITDA increased 27% to $28.6 million.

At the end of the second quarter we had $30.7 million in cash and no outstanding borrowings on our $100 million revolving credit facility. During the quarter we paid down $1.3 million of our term loan debt and ended the quarter with total debt of $197.7 million versus $224.5 million the same time last year.

Capital expenditures were $5.2 million in the second quarter versus $3.5 million in the same period last year. Turning to our outlook for fiscal 2016.

We are raising our full year guidance to the following: Total net sales of $880 million to $885 million, up from our previous guidance of $868 million to $878 million; comparable store sales growth of 2.5% to 3%, up from our previous guidance of 1.5% to 2.5%; the opening of 28 to 32 new stores and no planned closures which is consistent with our previous guidance; operating income of $96 million to $98 million which is up from previous guidance of $93 million to $96 million; net income per diluted share of $0.87 to $0.89, up from our previous guidance of $0.84 to $0.86 per diluted share. This assumes a full year effective tax rate of 38.2% versus our previous assumption of 38.8%.

It also assumes a diluted share count of 62.5 million shares which is unchanged from previous guidance. Excluding transaction related expenses, we expect adjusted net income per diluted share to be between $0.88 and $0.90.

This is up from our previous range of $0.85 to $0.87. Finally, capital expenditures are still expected to be $16.5 million to $17.5 million range.

As we've previously discussed, we faced our most challenging sales comparison of the year in the fourth quarter with a comparable store sales increase of 14% on a two-year stack basis. As a reminder, record warm weather in last year's fourth quarter resulted in minimal store closures and lost business.

We obviously cannot control or predict the weather but we want to remind everyone of the favorable conditions in the past two holiday quarters. Nevertheless we continue to feel very good about the underlying trends in our business.

Our deal flow remains strong and we continue to benefit from better access to merchandise, growing relationships with vendors and our increased size and scale. As always, we will remain conservative yet confident in the way we plan the business and our full year outlook.

And with that said, we would like to turn the call back over to the operator to start Q&A session.

Hi guys, it’s Anne Samuel on from Matt. Thanks for taking the question.

Could you speak the cadence of your comp within the quarter? Was the acceleration driven by improvement in the seasonal category or was it outperformance in other categories?

And then, finally, what would your comp have been excluding some of that initial seasonal softness?

Anne, this is John. I will take part of it, and let Mark finish if he wants to add to it.

With regard to the overall business, once we passed the Memorial Day holiday, the business was very very broad based, the core business worked very very well and the seasonal business picked up just fine. And we’re overall pleased with the overall performance around the entire business for the quarter.

Obviously June and July were much stronger than May. But the business worked in all categories.

Yeah, the only thing I'd add to that, Anne, is that the month prior to that we did have a pretty good acceleration of some seasonal products that we were really rocking and rolling. And then we had really lousy weather in May and that gave us a little bit of heartburn and then Memorial Day came and we rebounded very very well.

Great, thanks. And then just to follow-up on that.

Has the momentum you've seen in July continued into August? And also, can you talk about what the closability you're seeing today is?

And is there opportunity in the back half of the year, given your increased vendor relationships versus a year ago?

Yeah, I think probably it’d be sound by not making too many comments on that other than, as I have previously in previous quarters that I feel really good about the deal flow, that we've had, the deal flow that is currently happening, and I feel very good about where we're at right now.

Hi, guys. And let me add my congratulations as well.

Just to follow-up on that comment of the ability to be selective with your merchandise purchases. Mark, could you just give us an update on what that ratio of deals is that you're taking advantage of versus the number that you are turning down, and how that may end up evolving going forward?

Yeah, Brad, I don't think that's probably changed, but I think that with the magnitude of the calls that are coming in, I think that it's still -- I think we probably would have told you 8 out of 10. This is not a metric that we actually measure on a reporting basis but it's more of a heartbeat.

And as far as why are we able to be more selective, I think that maybe we're able to perhaps with our scale and our visibility and we’re able to drive a little bit harder bargain and we're able to get some better deals and that's translating into better sales, because we're offering the consumer a better deal.

And then with respect to new stores, John, you mentioned that they're meeting or exceeding your goals. Could you just give us an update on Florida in particular and how some of those stores are tracking thus far?

Sure. Brad, right now currently today we have three stores in the state of Florida.

And we are pleased with the initial results in the state. As we said previously they're in line or slightly above our expectations and right now we're very excited to continue to add the stores and we hope to have six to eight stores in the state of Florida by the end of this fiscal year.

Hi good afternoon. Thanks for taking the questions.

I was wondering, it wouldn't reflect in this quarter's results but there's certainly been some discussion concerned about an increased competitive environment particularly maybe in the consumables category. Some retailers of significant size are taking some price investment.

Is that something that you guys feel that you might have to react to and if so, how does it change the negotiations you might have with some of your suppliers?

Peter, I think we've talked about this before, when we've all been together, that I think what everybody has to understand about the close-out business is that the traditional and the real retailers, what I call the real retailers they set the cornerstone and then we set the discount off of the cornerstone. So if the real retailers are reacting and lowering their prices, while we might get closer to not as big a discount in the near term, in the long term ours is strictly a reaction to what the real stores are selling it for and then we buy into that.

So what can we sell off of what we call the real stores? So we don't feel any pressure whatsoever in that regard.

Okay, that's helpful. Mark, thank you.

And maybe a question for John, very nice gross margin performance. So I was hoping you could do two things: maybe break down the impact of the distribution and transportation versus the merchandise margin, and then secondly, some retailers have talked about lower import cost benefits that are coming but maybe have not yet occurred yet, do you foresee some type of more positive improvement in the back half of the year for that dynamic?

Peter, I will take the first question with regard to the components of the benefit of the 120 basis point improvement on the overall gross margin, 30 basis points came out of the merchandise margin and 90 basis points came out of the distribution and transportation side of the business. So as we had said earlier in our last call that we expected to still see some benefits from the higher freight costs and fuel costs from 2015 in Q2.

We expect to not see such a large benefit in Q3 and Q4 of this year on a year over year basis from the distribution and transportation side of the business. And the margin side as we've always said we're shooting to get back to the 40% gross margin.

We're feeling a lot better that we're going to be able to get pretty close to the 40% gross margin in fiscal 2016 which is a little bit ahead of our expectations. But as we've always said too, we will evaluate and probably give that upside to the customer in order to continue to drive the sales volumes and the benefits to the company.

With regards to the imports on the back half of the year, there's definitely some price competition going on from the transportation side, on the import side of the business. Keep in mind, that's not a material -- material part of our business as it is for a lot of the larger other retailers out there in the marketplace.

But we do get some benefit from that and we are hoping to continue to see some slight benefit in the margins related to the import side of the business for the remainder of the year.

It’s Curtis Nagle on for Denise Chai. So just first question, curious if you guys could give some update in terms of use of cash for the rest of the year.

You guys have been maintaining a pretty nice balance for the past couple of quarters and any comments on potential debt pay down would be helpful.

Curtis, this is John. With regards to our – our cash balance is about $30.7 million at the end of the second quarter.

We will have some more usage on the cash coming down here during Q3 as we continue to build inventory for the holiday season. At this point in time I don't believe we will actually go into the revolver for the remainder of the year and we’ll actually generate a significant amount of cash right before the end of the holiday period.

With regards to our capital allocation or our fiscal policy, we're still in the process of evaluating that with the board and haven’t made any decisions on what we're going to do from a capital allocation perspective. But we hope that we’ll have more on that here in the next six months or so.

And then just a quick follow up, if you guys could give an update in terms of the Army membership numbers composition of sales and I guess how much they are out spending the average customer?

Curt, I'll take that one as well. With regards to the overall, Ollie's Army members’ activity, very very consistent.

We're now over 7 million strong in the Army, they continue to spend about 40% more than an non-Ollie’s Army member that we have, which has been consistent for a long period of time that we've been doing this program. The Ollie's Army member, as we've said before, spends close to $33 to $34 per transaction, the non- Ollie's Army member spends about $23 to $24 and our overall basket is about $29 a basket when you put everything together.

And that's been consistent for the last couple of years as well.

Hi this is John Gullies [ph] on for Dan. I just want to ask you guys a little bit more about the new store productivity.

I know that, you said that it was strong. But maybe if you would give a little bit more color on differences that you're seeing in the performance of new stores in the new markets versus new stores in existing markets?

Yeah, probably the color that we would like to talk about would be, we are seeing a little stronger activity in the Florida stores which are outpacing our expectations slightly. And they were good expectations and the other new stores are absolutely either meeting or exceeding but we are absolutely seeing a common denominator of strong activity in Florida.

And then maybe just one other question on the tax benefits that you had this quarter from the additional tax credits. Do you anticipate any further benefits going forward or just any guidance on how we should think about the tax rate in the coming quarters?

We’re not expecting such a large benefit -- we have a 36% effective tax rate for the quarter. We would not expect as large of a benefit going forward and we kind of alluded to that, we expect the full year effective tax rate to come in about a 38.2% versus our original guidance of 38.8%.

So we expect to see a slight reduction but not a significant as Q2.

My question is on the seasonal business. Was it necessary to take additional mark-downs?

Maybe you could talk about that the cadence of markdowns this year versus last year?

Yeah, this is Mark. No different than anything we've ever done.

They are part and parcel – would there be an item or maybe we had a little bit more, I mean certainly but there was no exception to the rule on any markdown whatsoever.

And then secondly, as it relates to some of your food business, specifically coffee, lot more concern lately about food deflation. Just curious how you think that will impact your business and your ability to continue to comp in that side of the business?

Yeah, our coffee business has been just fine. We are comping the comp, we're very very pleased.

And we offer a very very strong value for the quality of the product and we have developed an incredibly loyal following. So I'm really really pleased with our results.

Hey, it’s Mike Lehrhoff on for Scot Ciccarelli. Just wondering with the guidance it seems mostly like you're kind of carrying over from the first half performance, and with the improvement that you're seeing in deal flow, does that give you any increased visibility into the comps that kind of makes you a little more confident to the upside of the guidance range than you might have been before?

Mike, this is John. With regards to our visibility, in terms of how we buy and how we go to market, we don't have a lot of visibility into the future quarters, the way we secure our product in certain categories and they have a little bit of visibility but that's not the crux of our business.

And we're not able to really give you a real good feeling in terms of how far out we're going to be able to see and give guidance and confidence of the overall future quarters. But we can tell you and as you guys have seen over the last year and a half as our comps have been performing very well, our momentum of our business has been very strong.

We feel pretty comfortable with the trends and how things are working today and we believe we will continue to move forward in a positive fashion.

Thanks and just to follow up with regards to the phase 2 loyalty rollout. I was curious -- I know you said you don't want to bombard your customers with e-mails but I was wondering if you could provide some more details regarding the rollout and how you plan to proceed there and how long you think it will take before you start seeing some results from the comps?

Yeah, well, I'm not sure we're baking into our figures like real tangible effect on the comps next year, although we've got a long time to think about that yet. But what we are doing is testing individual communication with the Ollie's Army members so that after, if you, Michael, bought something and used your Ollie’s Army card, we will know exactly what you did that you reacted to whatever promotion or e-mail or whatever we did, we will know exactly that to be able to communicate with it.

So it's customized serialisation and we expect to really get into that testing. When I say testing the first effort which is going to be probably painful in our results and trying to get it and trying to massage everything, that will be in the November December period when we do a lot with Ollie’s Army.

Hi guys, it’s actually Stephanie on for Ed. You guys mentioned that mix topped your gross margin performance this quarter.

Can you talk about which categories did well and maybe provide some detail on how the margin for those categories compares to the company average?

Yeah, I will give you the categories and then John can give you whatever detail he can share. But the categories that led the way for us and once again keeping in mind that more than half of our departments were very very strong but health and beauty aids, housewares and candy, those were the three big drivers for us.

Stephanie, this is John. We don't normally provide too much color on our overall category margins, just we internally don't do that a lot but overall our blended margin came in a pretty favourable, as I said 30 bps better than our prior year number on the merchandise margin side.

And you talked a bit about how the size of the basket for Ollie’s Army members compares to a non-member. Can you remind us what the shopping frequency is for a member versus a non-member given that it was transaction growth that primarily drove your comps this quarter?

Sure. We're not able obviously to tell you the non-member’s frequency because we don't – we don’t actually have that information available but the Ollie’s Army member that comes into our stores, their frequency on an aggregate basis, on an annual basis is about 3.5 times.

On an annual basis our best performing members which we say shop over two times per year runs about eight times per year on a visit perspective. End of Q&A

Thank you, operator and thank you everyone for listening to our second quarter earnings call. We're pleased with our results and the underlying trends in the business and we look forward to speaking to you again on our third quarter call in early December.

Thank you very much and have a good day.