Michael Lavery: Okay, great, that’s helpful. And maybe just specifically on foodservice, you’ve seen the sticky mix shifts that you raised your run rate thinking there to around $95 million, obviously you keep beating that as well. But you just had kind of given that update, any kind of revised thoughts on how to think about the level there or just obviously just a quarter where it ran ahead of that?
Jeff Zadoks: Well, we’re not ready to spike the football on the run rate being north of that, but we certainly have some optimism that the run rate could be north of that $95 million that we commented on last quarter, but we’d like to get a few more quarters under our belt. We’re absolutely encouraged by the mix shift that we saw to our precooked eggs, which helps our margin structure significantly. And then there were some things in the quarter that went against us, some things that went for us. So it certainly was a strong quarter. We don’t want to yet proclaim victory on a permanent basis, but there’s encouraging signs that that may be the case.
Michael Lavery: Okay, great. Thanks so much.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Ken Goldman from JPMorgan.
Ken Goldman: Hi, thank you. And Rob, welcome back. It’s great to hear your voice, obviously.
Robert Vitale: Thank you, Ken.
Ken Goldman: Just curious, there was a comment made about as we think about the remaining quarters that they are — I think the phrase was fairly balanced. I assume this means, perhaps wrongly, I assume this means in terms of EBITDA dollars. I just wanted to make sure I was understanding what the term fairly balanced meant in that context?
Robert Vitale: Yes, Ken, that’s correct.
Ken Goldman: Great, thank you. And then, 1Q, the EBITDA beat consensus a little less than $60 million. You raised the midpoint of guidance by $65 million [ph] or so. With the understanding that consensus is not the same as your internal expectation. I guess the question is, is it fair to say that 1Q beat your internal expectation by a similar degree, somewhere in that 60-65 range, and that you’re, as a result, not assuming the remaining three quarters are better than you previously anticipated, or am I kind of reading too much into that?
Robert Vitale: No, I think we are gaining some confidence in the balance of the year. And I think, you have to put our planning and guidance in the context of, we acquired the pet assets and I think we closed in April of last year. We’ve come out of two years, maybe three years, of considerable volatility with foodservice starting with COVID and going into avian influenza. So, we had entering our F ’24 plan a fairly considerable range of some uncertainties on margin structure, and some of these we’ve talked about even this morning. So as we get further along through the year and gain information and confidence, we’re able to give greater precision to where the actual margin structure will land. And I think, as I mentioned in my comments, we’re gaining confidence on both foodservice and pet with respect to where that margin level will land, and hence the incremental guidance.
Ken Goldman: Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Matt Smith from Stifel.
Matt Smith: Hi, good morning. I wanted to go back to the conversation around the retail environment as consumers start to reset index pricing. We’ve seen center store and broadly the entire store volumes continue to remain weak and in decline. Do you have a view of how you think volumes in your retail business will progress through fiscal ’24, either on a branded perspective or your value offerings?
Robert Vitale: Well, I think, what we try to do is develop a portfolio that will match up with consumer demands throughout different economic cycles, and we feel very good about our ability to manage volume because of the different price points we hit across the portfolio. So, as I answered with Andrew, I don’t think we have a greater crystal ball with respect to where the actual consumer demand is. What we may have is greater flexibility with respect to where they may go and the ability to pivot into different price points. So we may be a bit less volume sensitive than others.
Matt Smith: Thank you for that, Rob. I also wanted to ask, you talked about nearly unprecedented optionality for Post. One outlet for that optionality over time has been M&A. Can you talk about what you’re seeing in the funnel and if the lower rate outlook has caused valuation expectations for sellers to change?
Robert Vitale: Well, it’s interesting that the discussion around reference price for consumers is not dissimilar from the way business owners think about reference price for selling, and we’ve talked about this in the past. When rates move up dramatically, there’s an adjustment period where the sellers leave the market because they’re — they become accustomed to certain multiples. Those multiples are no longer available, so they sit on the sidelines. That occurred, but what is interesting is we’ve had such a dramatic shift in the opposite direction now, at least at the tenure level before this morning. This morning’s spiking up a bit. That we may skip the glut of deferred sellers who we’re waiting for, or we may go back to sellers expecting a higher multiple because the rates have come down.
I think we need more time to answer that. Our pipeline is always pretty active. We’re looking at deals that are both tuck-in, and of course we always have a couple of more transformative opportunities in our pipeline, but we’ve got plenty of our plate, or on our plate from an integration perspective that gives us a luxury of simply executing the plan ahead of us and not needing M&A to necessarily drive value. If M&A comes along and makes sense from a multiple and a cost-to-capital perspective, great, we’ll pursue it, but we’re certainly not needing it.
Matt Smith: Thanks, Rob. I appreciate the color. I’ll pass it on.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Carla Casella from JP Morgan.
Carla Casella: Hi, thank you. Did you respond to what you brought back in the quarter?
Matt Mainer: Carla. You were hard to hear. Could you say that again?
Carla Casella: I was wondering if you could give us any color on which bonds you bought back in the quarter. And then kind of what you think of between balancing bank debt versus bonds as you look to integrate the acquisitions. It looks like you drew some revolver in the quarter as well.
Matt Mainer: Sure. So, in terms of the re-purchase during the quarter, those were all the 2031s, Carla. We were focused on just getting the best yield retired that we could. In terms of during the quarter, that’s correct. We funded the Perfection Pet transaction with our revolver, and then I think obviously we’ve got our eye closely on capital markets and where our rates are, and we’ll look for opportunities as we think about the entire complex, but we’ll see where that takes us.
Carla Casella: Okay. And then you reported your net leverage 4.5. Can you give a sense for what that would be pro forma if you had the acquisitions for a full year for all of the acquisitions?
Matt Mainer: And that is a credit facility calculation, so it does include the pro forma contribution for pet for the four months we didn’t own the business, and for Perfection for the 11 months we didn’t own the business, so it is all in.
Carla Casella: Perfect. Thank you.
Matt Mainer: Sure.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Bill Chappell from Truist Securities.
Bill Chappell: Thanks. Good morning.
Robert Vitale: Good morning.
