Marta Jones Turner - Executive Vice President, Corporate Relations George Deese - Chairman and CEO Allen Shiver - President Steve Kinsey - Executive Vice President and CFO

Farha Aslam - Stephens Heather Jones - BB&T Capital Markets Eric Katzman - Deutsche Bank Mitch Pinheiro - Janney Capital Markets Tim Ramey - D.A. Davidson Akshay Jagdale - KeyBanc Capital Bill Chappell - SunTrust Amit Sharma - BMO Capital Markets Ann Gurkin - Davenport

Welcome to the Third Quarter 2012 Flowers Foods Earnings Conference Call. My name is Loren, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I would now turn the call over to Marta Jones Turner, Executive Vice President of Corporate Relations. Please go ahead.

Thank you, Loren, and good morning, everyone. Our third quarter results were released and the 10-Q was filed late yesterday. Those documents are available on our webcast if you need them. During the call we will use the PowerPoint presentation and you can find that presentation on the webcast listen page. As we begin the call, I must remind you that our presentation today may include forward-looking statements about Flowers Foods performance. Although, we believe our statements to be reasonable, those statements are subject to risks and uncertainties that could cause actual results to differ materially. In addition to the matters we’ll discuss during the call, important factors relating to our business are detailed more fully in our SEC filings. Participating on our call today, we have George Deese, Chairman and Chief Executive Officer; Allen Shiver, President; and Steve Kinsey, Executive Vice President and Chief Financial Officer. Of course, we’ll open the call for your questions after our -- we completed our prepared remarks. Now, I’ll turn the call over to George Deese.

Thank you, Marta. Good morning to each of you and welcome to our third quarter conference call. We thank you for your continued interest in Flowers Foods. Before I get into my comments, let me say that we know many of you were impacted by Hurricane Sandy, and of course, this week by the big Nor’easter. I hope that you and your families came through the storm safely and that your families will soon return to some level of normalcy. Before Steve and Allen discuss their quarter -- the quarter results, I want to comment on Flowers Foods from my perspective. At Flowers, we are very serious and focusing at the long-term goal as we said in 2011. To update our performance against those goals for quarter three, we delivered sales growth of 6.2% in our 5% to 10% range. Excluding one-time charges, EBITDA margins were 11.5% and earnings per share increased 8.7%, EBITDA of course was within our 11% to 13% and it was little short of double-digit on the earnings per share same point. Another goal we said in 2011 was to have Flowers Foods’ fresh products available to 75% of U.S. population by 2016. As you know, we closed on Lepage acquisition early in the third quarter. Two weeks ago, we announced our agreement with BBU and the DOJ to acquire the Sara Lee and Earthgrains brands for bread, rolls, buns in California, and the Earthgrains brand in the Oklahoma City market. Allen will give you more details about this acquisition in his presentation. With these additions, I’m happy to report that in 2013 we will surpass our goal of reaching 75% of the U.S. population. Over the long-term our goal is to deliver double-digit earnings growth. Our earnings remain under pressure from elevated commodity costs and volume soft as consumers remain constraint due to the economy. The result has been a highly competitive promotion marketplace. Our market, our management team continuously focused on these highly elevated and volatile grain prices. We will continue to monitor our industry consolidation and participate when an acquisition can add to our strength and reward our shareholders. Even though there will always be some short-term issue, I believe Flowers Foods will achieve our long-term growth targets. From our number two position in the fresh baked foods category we have the potential to grow sales in our new markets, with acquisitions, opportunities to partner with key retail and food service customers, and grow in our core markets as we gain sales in under developed categories. We have the operational strengths, experience team and proven strategies that have allowed us to deliver in the past that gives me full confidence, that we will achieve our long-term goals in the future. Now, I will turn the mic over to Steve Kinsey for our financial performance.

Thank you, George, and good morning, everyone. Net sales increased $42 million or 6.2% in the quarter. Majority of this growth came from the Lepage acquisition, which contributed approximately 5.8% to the quarter. Core business contributed 0.4% on positive price mix offset by negative volume. The price mix improved on a strong mix performance. Overall, pricing was a challenge due to high promotional activity quarter-over-quarter. Declines in volume were driven primarily by warehouse cake, as well as volume declines in contract manufacturing. Our GAAP earnings per share were $0.22 this quarter, compared to $0.23 per share in the third quarter of last year. Excluding the impact of one-time costs related to the Lepage acquisition earnings per share were $0.25 this quarter, an increase of 8.7% over the third quarter last year. Lepage contributed just over $0.01 to the quarter excluding the one-time costs. Impacting earnings per share in the quarter was the heavy promotional activity, our interest expense related to the April 2012 public debt issuance and an increase in shares outstanding as a result of the Lepage acquisition. Operating earnings in the quarter excluding the one-time costs were up approximately 19.2% this quarter over last year’s third quarter, driven primarily by the impact of the earnings from the Lepage acquisition. Operating margin excluding one-time cost was 8% of sales compared to 7.2% in last years third quarter. Gross margin in the quarter as a percent of sales, increased 80 basis points to 46.7%, this improvement was driven by an overall production efficiency gains quarter-over-quarter, the sales mix improvement in the core business, as well as the Lepage acquisition. Lepage contributed roughly 50 basis points at the percent of sales to the improvement. These positive factors were somewhat offset by margin declines as a result of the pressure on pricing. Input costs, which we defined as ingredient, packaging and natural gas were relatively flat this quarter over last year’s third quarter, excluding the acquisition costs. SG&A expense as a percent of sales excluding one-time costs in both years were relatively flat. Now turning to cash flow, cash provided by operations was a positive $55 million in the third quarter, up approximately $27 million over last year’s third quarter. Year-to-date, cash provided by operation is $183 million, up roughly $90 million over the prior year three quarters, I’m sorry, over the prior year Q3 quarter. This improvement reflects a significant reduction between 2011 and 2012 in the use of cash required to fund hedge margins. Capital expenditures during the quarter were $20 million and we still anticipate spending approximately $75 million to $85 million for the full year 2012. We paid dividends of $22 million in the quarter and opportunistically reprocessed $12 million in company stock during the quarter to partially offset the dilutive effect of share-based compensation. The $99 million of net debt in the quarter was primarily the result of completing the Lepage acquisition. You may recall we paid down our revolver in April with proceeds from the public debt issuance. Therefore we had to make a draw on revolver to fund the final closing of the transaction during the third quarter. We are forecasting continued strong operating cash flow for 2012. Let me conclude by updating the 2012 outlook. We continued to anticipate an increase of net sales of approximately 7% to 9%, and we are tracking on the mid to high end of this range. We did time the earnings per share range and now anticipate 3.5% to 5% earnings per share growth, compared to the 3.5% to 8% previously provided. However, as we guided on the second quarter call, we are tracking on the lower end of the earnings per share range and nothing has changed with respect to those expectations. Beginning in the second quarter of this year, we began to see significant changes in the competitive environment through strong promotional activity that continued and increased in the third quarter. However, as Allen will discuss in a moment, we have initiated pricing actions in the fourth quarter. So these pricing actions will provide incremental benefit in the fourth quarter of 2012. The full benefit will not be realized until the first quarter of 2013. We are not prepared to discuss full-year 2013 guidance today. However, the pricing actions taken in the quarter are expected to cover the first half of 2013, provided there are no significant moves in our major input cost projections. Thank you for your interest and now I will turn the call over to Allen.

Good morning and thank you, Steve. Before I talk about the quarter, I want to thank our team members throughout the Mid-Atlantic and Northeast for their extraordinary efforts before and following the recent storms. Our team is simply the best at serving customers everyday in marketplace, and even more so when dramatic weather occurs. As Steve pointed out, out results for the quarter showed topline strength due to our acquisitions. The pressures from a very competitive marketplace resulted in a high-level of promotional activity that impacted our bottom line. Even so, I’m optimistic about the future. Our team has begun taking pricing to address the higher costs that we’ve faced in 2013. In addition to the increased pricing, we are reducing the frequency and the debt of our promotional activity. In the quarter, our expansion markets delivered sales within our goal of 1.5% to 1% of our total sales increase. In our newest markets for fresh breads, such as Philadelphia and Pittsburgh, we are steadily growing our market presence as consumer in those areas try Nature’s Own. As expected, new products performed in line with our goal to contribute 3% to 5% to sales. Tastykake sales in Flowers’ DSD core territories continued to grow in the quarter. We see great growth potential for Tastykake in our core markets as consumer acceptance of the brand continues to grow. Since September 2011, we’ve introduced the brand in Flowers’ territories throughout the South and the Southwest. Today, Tastykake is available in 70% of ACV compared to our Nature’s Own brand, which has a 97% ACV in the South Central regions. We continued to gain space for Tastykake and we certainly have plenty of room to grow our share in the for $4 billion cake category. From an operational standpoint, our bakeries once again showed year-over-year improvements in productivity. Our team continues to focus on manufacturing efficiencies, quality improvements and sustainability initiatives. I’m so proud of our team’s achievement. It takes keen focus, hard work, constant attention to detail and the right investments in technology and support equipment. But most important, it takes an experienced team to consistently achieve these results. We continue to reap the benefits of these long-term investments. Construction of our new bread line at our Oxford Pennsylvania bakery is going according to plan. And we are scheduled to begin bread production in Oxford by late spring 2013. Let’s look at the marketplace and how our category performed. The new data reported by IRI now captures 91% of Flowers’ retail fresh bread sales, and 66% of Flowers’ retail cake sales. As you will remember, IRI now captures Wal-Mart, other mass merchandisers, dollar stores, drug stores and club stores. In the quarter, the fresh bakery category experienced a 1.4% decline in units in the South market and a 2.1% decline in units for the total U.S. Dollar sales in the category were down 1.1% in the South and 2.5% in the total U.S. We’re pleased to report that Flowers’ branded units outperformed the market. Our units were up 1.5% in the South and up 2.3% in the total U.S. Our dollar sales were up 0.7% in the South and up 1.1% in the total US. Our internal data shows that Nature’s Own soft variety brands performed even better with units up 4.9% and dollars up 4.6%. Consumers continued to see products that offer a better health and nutrition profile. Nature’s Own is always been positioned for that consumer and new items that we introduced under Nature’s Own must fit that brand profile. As we’ve told you before, Nature’s Own is the best-selling brand of loaf brand in the country, and our goal is to continue growing this brand in our core and in our new markets. Moving back to the IRI data, Flowers gained share in both dollars and units in the South, moving to, 25.9 share of dollars and 21.9 unit share. Similar increases in our market share were achieved in the total U.S., where we hold a 10.9 share of dollars and 9.7 share of units. Our total food service business, which includes DSD and Warehouse, was up 8.6% in the quarter. Food service industry projections continued to call for approximately 4% growth in 2012. We continued to be optimistic about the growth of our food service business. Although, our warehouse food service business performed well in the quarter, those higher sales were offset by lower sales in our warehouse cake business. We are keenly focused on achieving better margins for that business by exiting lower margin contract business and moving steadily to higher margin retail business. We’re also very pleased with the Lepage acquisition, which was completed at the beginning of the third quarter. Sales and earnings are tracking on plan and our integration is going smoothly. Lepage brings us new markets in the Northeast, new products, three efficient bakeries and a very, very talented team. On the news front for the quarter, we’re introducing Tastykake and Nature’s Own in the Northeast through Lepage. Tastykake helps to build in the LaPage product line. Nature’s Own as the nation’s best-selling bread brand with the healthier for you profile also complements the Lepage product line. We believe both Tastykake and Nature’s Own will be well received by consumers in the Northeast. Other news in the quarter, we’ve introduced Tastykake, Kandy Bar Kake with Hershey’s chocolate. They come in three varieties, peanut butter, made with Reese’s Peanut Butter cups, S’mores made with Hershey’s Cocoa and Peppermint made with the York Peppermint Patties. We hope you discover this new product in local stores. They really are a delicious addition to our Tastykake line up. Now, I would like to talk about the Sara Lee and Earthgrains acquisition in California and Oklahoma City. From a strategic viewpoint, this acquisition strengthens our positions. It is one of the country’s highest population states. It also enhances our position as the second largest baker in the country. You will remember that we entered Southern California with a very small presence when we acquired Holsum Phoenix in 2008. Since then, we’ve been growing our business and currently have approximately 1.7 to 1.8 market share in California. With Sara Lee and Earthgrains sales added to our existing California business, we will have an 11 to 12 share of the California market. We are acquiring $134 million in sales in California and about $1 million in the Oklahoma City area. Throughout the transaction, we will be gaining access to new customers throughout California. Adding Sara Lee and Earthgrains to our product offering in California will strengthen our product mix and give us a solid platform in which to grow. Our purchase price is $50 million for the roughly $135 million in sales. This is an asset-only purchase. We will not assume any liabilities. We are acquiring the exclusive, perpetual, and royalty-free license to the Sara Lee and Earthgrains fresh bread brands in California. That does not include bagels or English Muffins. We also have the license for the Earthgrains bread for fresh bread in Oklahoma City market. As part of the acquisitions, we also get a close bakery in Stockton, California. We plan to fund the transaction with cash on hand and existing bank facilities. We expect the transaction to be slightly accretive for 2013 earnings, excluding acquisition and start-up cost. In 2014, we expect the new business to contribute to earnings. As for the timing, the Oklahoma business will transfer to Flowers before the end of 2012. The timing for the California business is little more complicated. We expect to complete the transaction for the California brands and business in late February. On that closing date as phase 1, we will begin distributing Sara Lee and Earthgrains throughout Southern California, using our distribution model. As we expand our distribution system, we will take on part of the Northern California business by early May as phase 2 and then the remainder of the state by mid summer with our phase 3. Under the transaction, BBU will supply product for up to 18 months. Today, we are serving Southern California from our Arizona bakeries. In the future, we plan to build a new bakery to serve Southern California. For Northern California, we are evaluating our supply options for the longer term. The map shows that when the California acquisition is completed, our DSD territory will reach across the country. The Lepage acquisition sets our course for growth throughout the North East markets. Likewise, the Sara Lee acquisition in California gives the platform to build sales in the densely populated west coast. As always, our growth -- our goal is to grow sales in earnings and to improve margins. We would do that by taking and holding pricing, improving our cost structure and successfully integrating Lepage and our new California acquisitions. Thank you for your attention. I’ll now turn the program back to George.

Thank you, Allen and Steve for your comments. Before we open the call for your questions, I want to say that as I look at our team’s accomplishments, I’m so proud of how we have grown our geographic footprint for our fresh bake foods. In 2004, our fresh products were available to about 38% of the U.S. population through our DSD network. When we complete the Sara Lee California acquisition, more than 75% of consumers will have access to our fresh products. The broader footprint is a wonderful growth platform for decades ahead as we meet the needs of our customers and consumers and as we increase our penetration in newer markets it also allows us to grow profitably since our infrastructure in those markets is in place. Of course, our team lack product lines and distribution network as needed to support our growth. We also will continue to expand our geographic reach with future acquisitions and by expanding into new territories. Our expanding market access puts us in good position to build value for our shareholders overtime as we steadily grow our sales and earnings. Now, Loren, we will open the questions -- mike to questions.

(Operator Instructions) And our first question comes from Farha of Stephens. Please go ahead. Farha Aslam - Stephens: Hi. Good morning.

Good morning. Farha Aslam - Stephens: Hostess is having some labor issues. Have any retailers started to hedge their bets and changed order patterns and shifted towards Flowers in this period of uncertainty?

Farha, I’ll say that I wouldn’t say anything where anything is really unusual. I think some customers always have some apprehension about what’s going on the market place. And they will make their decisions as we continue to go down their road, them and the consumer about what’s going on in that market. Farha Aslam - Stephens: Okay. So no major benefits in this quarter or anticipated in fourth quarter in your guidance.

Obviously, not. Farha Aslam - Stephens: Okay. And then in terms of private label, have you seen any change in pricing and as wheat costs have gone up, do you anticipate they will take that pricing as well?

I’d say we’ve seen some spotted pricing all over the country-owned not only private label brand. As Allen mentioned in his comments, we’re certainly moving forward with that pricing structure and feel very good about where we are with that prospect. Farha Aslam - Stephens: Okay. And then just one final question, if I could. On the acquired business, do you see significant margin enhancement opportunities, just in terms of, could you give us some color on what the margins are in that business and then what are the opportunities to kind of improve them and get them to Flower’s average margin?

I’ll just make a quick comment. I’ll let Allen certainly follow up on that. He has been on the ground a lot more than I have. But what I’d say is what we’re acquiring is strictly a branded business. With the branded business, should come better margins. They will as, Steve mentioned and Allen mentioned. You will have some start-up costs and things but we’re acquiring that brand and should have certainly equal to our margins and hopefully better as we grow the business.

I will just add the California marketplace is an exciting market place. It’s very vibrant from a retail standpoint. So one of our objective is to bring our overall market share in California to our standards in the rest of the company and also from margin standpoint, we would have the same goal to bring that up to standards in the rest of the companies. So we’re excited about the opportunity on the west coast.

Farha, I have one more comment also in that Sara Lee has good market share in that market. But we’re really excited about what Nature’s Own can do throughout the North, not only the South market but North market as as we go down the road. As one of the excitements, we’re seeing our footprint expand is getting Nature’s Own into the hands of more people and really display in it, merchandise and selling it to our customers and consumers on a broader platform. Farha Aslam - Stephens: Perfect. Thank you so much for your answers.

Thank you.

Thank you. And our next question comes from Heather Jones from BB&T Capital Markets. Please go ahead. Heather Jones - BB&T Capital Markets: Good morning.

Good morning, Heather. Heather Jones - BB&T Capital Markets: I just want to say this Kandy Kakes are amazing. They are phenomenal.

Thank you. I’d stayed up whole night. This could be making them in. Heather Jones - BB&T Capital Markets: For they are too phenomenal, so anyway.

Thank you. Heather Jones - BB&T Capital Markets: First on warehouse pricing, there was a big acceleration this quarter from prior quarters and you talked about declines in your warehouse cake business. So, I just wondering is that price acceleration, is that a function of mix or have you already begun to institute more aggressive price increases there?

This is Steve. When you look at the price mix in warehouse, pricing was up but there was a big mix improvement in warehouse as well. Heather Jones - BB&T Capital Markets: Okay. So, there is a timing of price increases in warehouse. Is that going to be similar to the timing in DSD?

Yeah. Heather Jones - BB&T Capital Markets: Okay. And I wanted to confirm you were talking about the phase 1, phase 2 and phase 3 and the California rollout. I want to confirm that you are only planning to use your IO model for the entire area?

Yeah. That is the fact. We are very happy with our distribution model. And we currently have our IO structure in Southern California and that is our plan moving forward. Heather Jones - BB&T Capital Markets: Okay. And my follow-up question, George, you talked about your long-term targets you were affirming those. And as we look to 2013, as Allen mentioned you are going to need further price increases and we just move to higher again in the last two or three weeks and yet we are -- we haven’t -- initially with customer fatigue here in the U.S. I’m just wondering, you talked about long-term and I’ve asked this before and just wondering when you look at 2013, I know it’s premature to give guidance. But do you believe that you are going to be able to achieve your long-term growth targets in 2013 or given this environment, you are here into that for the long-term but 2013 may fall short?

It’s too early to go out and lead them on the guidance. What I would say though, I feel better about 2013. And Allen did say we’d have some startup costs and things in California. But I feel that the marketplace has improved. I know that we’ve seen evidence of pricing to our customers as we also initiating pricing and Allen pointed out less promotion. We will agree this. There is some fatigue, but I guess I feel better back going into the year, this year, 2013 in regard to overall marketplace. I think when we have high cost like we are having, things seem to adjust. And if you look back historically, we had some of our better years when we did have higher commodity cost. Heather Jones - BB&T Capital Markets: So, you -- it is fair for me to characterize as you feel better about now going into 2013 then you did going into 2012, when wheat was falling off?

Yeah. I know I’m an optimistic person. So, I got to be careful when I say this. Always look forward to ending the year and starting the year, because you start out fresh. And with plans, we have in place, I feel very good about ‘13. Heather Jones - BB&T Capital Markets: Okay. That’s good to hear. Thank you very much.

Thank you.

Thank you. And our next question comes from Eric Katzman from Deutsche Bank. Please go ahead. Eric Katzman - Deutsche Bank: Hi. Good morning, everybody.

Good morning, Eric. Eric Katzman - Deutsche Bank: I guess a couple of questions just a first. Can you say how much the price increases going into -- in bread going into 2013?

Eric, we are looking 4% to 6% and again it depends on the area, but in general 4% to 6%. Eric Katzman - Deutsche Bank: Okay. Good morning, Allen. Thank you. And then I guess what is -- you think your acquisitions now that you’ve made. Congratulations on those. Can you just and given the Bimbo and their acquisition of Sara Lee previously and Hostess has to be losing some share. Can you just kind of frame roughly where your national share is in fresh bread and rolls and how that compares to the competition?

I will. As we talked about numerous times in the South, we’re in that. When you look at branded, we’re in that 25%, 26% neighborhood, when you add private label to it. We say we are 33% to 35%. When you look at nationally, we’re about 11%. When you add Lepage situation that has, as Allen mentioned, our low presence in California, so, we should see that go up next year. I would say that and this one I wanted to emphasize in my closing comments about the footprint and the format that we will have. Being the second baker in the nation and here in from our customers throughout that United States, we’ve tried to give that footprint where the people are. There are still a few areas to go but in main. We say that at the end of next year, we will be serving over 75% of the U.S. population. Now, what gives so much courage and confidence to me, Eric, is that we have low penetration, very low penetration in some of those near markets that we’ve entered in the past two or three years. And as we -- and each year, you get better. So as I look at -- that’s why I said, I feel like decades to come. Now, I won’t go out on four-some decades but as I think about the next decade and as we get stronger in those markets that we’re weak in. And as we grow in the categories that we’re weak in, in that core markets, it gives me complete confidence that -- and our low cost manufacturing processes, our business model from distribution standpoint, it just give us me complete confidence that with these brands with Nature’s Own and with whatever local, Flowers wheat brand we are using, it always popular. As well as Tastykake and Allen commented how that is growing in our core markets, non-core to Tasty because of one year but core to our older company and that, seeing the growth in Georgia and Alabama and Florida et cetera. Given this platform, there is absolutely no reason in my mind that we can continue to enhance our positions throughout the United States and be very successful as the number two baker in the nation. I hope that answered your question. Eric Katzman - Deutsche Bank: Does in part a just where do you see Hostess today relatively to your 11% plus and where is Bimbo?

Okay. Bimbo, as I look at our -- they’re roughly 30%, 31% versus our 11%. So I’m not mistaken and that can be corrected. I think Hostess is probably in the 7% to 8% core IRI, not in core IRI numbers. Eric Katzman - Deutsche Bank: Yeah. Yeah.

Somewhere in that neighborhood.

Eric, on our fact sheet, we have that broken out and we can follow back up on what we’ve done in our presentation in the past, we can share with you. Eric Katzman - Deutsche Bank: Great. And so George, now to the extent that you are leading pricing 4% to 6%, we’ve all been kind of waiting for the industry consolidation which is why I was asking about the market share data. We’ve all been waiting for the consolidation to kind of make the playing field more rationale. And I guess, I mean, it sounds like it may be getting a little better. But, I guess, do you see George and Allen, enough like that, so your top three is close to 50%, is that enough in your view or relative to that.

I’d say -- and I’d say when you think about the top three, everybody certainly has pressures, everybody is got margin compression, as you look at it. And I think, Eric, this is already out there that people have taken some action. We are certainly in the market taking our pricing and then you look at other 50%, they’ve got the same pressures. So normally, normally, I think you will see that. Let me go back Steve Kinsey who did answer me, the latest, and just let me follow back up 11% was true. I think I said 31% on BBU it’s actually 32% and I was right on Hostess was about 7%, in fact to 6.9% last the latest recap. Eric Katzman - Deutsche Bank: Okay. All right. I appreciate it and pass it on.

Thank you, Eric.

Thank you. And our next question comes from Mitch Pinheiro from Janney Capital Markets. Please go ahead. Mitch Pinheiro - Janney Capital Markets: Hey. Good morning.

Hi, Mitch. Mitch Pinheiro - Janney Capital Markets: So with the continued volume declines in the category, I mean how do you see volumes reacting to you and Bimbo, and maybe others taking pricing higher?

Mitch, the category has continued to trend down for the last, we are looking three almost going on four years now. But at the same time, it’s still we remind each quarter that some extremely large category that’s very important to the retail operators. So in terms of the overall category, we still a very positive that this is a category that we can grow our company in by increasing our share. Their activities whether it’s the Grain Foods Foundation or other industry activities that hopefully as we’ll be putting the category in a more positive life from a consumer standpoint. But at the same time, if you look at the economics of feeding a family, the fresh bakery category offers to the consumer a lot of a very cost effective solution. So long-term, we’re very optimistic about hopefully getting the category back on a growth mode, but if that doesn’t happen, the category is large enough that we can continue to grow our company simply by taking share of this huge category. Mitch Pinheiro - Janney Capital Markets: How about pricing, are you taking pricing up on private label?

Yeah. Mitch, we are taking pricing in every part of our business. And I think you’ve seeing the commodity situation, commodities have remained high and when that happens pricing is necessary. We’re also looking as we mentioned, we’re looking very hart at reducing the debt of our promotion activity, which is also a big component of pricing. So the answer to your question would be yeah. Mitch Pinheiro - Janney Capital Markets: Looking at Tastykake, can you provide sort of any -- sort of color on the type of revenue growth Tastykake is had since you’ve acquired the business?

We’re not been specific on that, Mitch, but we’ve had growth and the biggest growth of course is coming outside of their core market, that’s where the growth really is going on. Mitch Pinheiro - Janney Capital Markets: Are you seeing, I mean given their new facility and obviously, with ample capacity, are you seeing margins in that business, commodity is aside improved?

You broke up for a minute, Mitch, will you don’t mind repeating that. Mitch Pinheiro - Janney Capital Markets: Are you seeing margins in that business, I mean specifically they have this new facility with ample capacity and the whole idea was you fill it up with volume, your margins are strong, are you seeing that happen in the Tastykake?

I was certainly, we are seeing that and I said repeatedly as we sell more in their non-core markets that helps their overall cost structure for their own market and their core market. So that is playing our like we thought it would and I feel like we’re right on track with our forecast that we had put out front before. Mitch Pinheiro - Janney Capital Markets: Okay.

And continuing to grow outside of that market and that just we’ll continue -- should in continue to enhance those margins as we fill up the plan. Mitch Pinheiro - Janney Capital Markets: Did I understand the numbers right, where your Tastykake is at 70 ACV in the South, is that right?

Yeah. That’s correct.

Yeah. Mitch Pinheiro - Janney Capital Markets: How much of that space, I mean we talked about this before. How much of that space is permanent as opposed to freestanding displays, temporary space?

Mitch, and I would say the majority of our sales growth is from space it is permanent. Of course, we had our Blue Bird brand was on the routes prior to Tastykake. So if there has been any conversion, it’s been conversion from Blue Bird to Tasty, but that conversion is at higher retails and better margins. So I would say, we’ve done a good job growing from that space and we’ve also generated a lot of excitement with our independent distributor system about having a brand like Tastykake. So that entire program is really working well. Mitch Pinheiro - Janney Capital Markets: Have you seen velocity in those retailers that maybe you’ve been in for nearly a year with Tastykake, are you seeing velocities increase or can you talk about that a bit?

Yeah. We can -- we continue -- of course, the Tastykake brand extreme the well-known in the Northeast. As we grow the awareness of the Tastykake brand in the South and the Southwest, we’re seeing the type of incremental sales go with that. So it’s encouraging, it won’t happen overnight. But we’re encouraged about the overall growth trend on Tastykake, as we’ve expanded across the company. Mitch Pinheiro - Janney Capital Markets: Okay. Thanks. Couple more questions just. Where do you stand with the Oxford, Pennsylvania plant expansion?

Yeah. Mitch, as we mentioned in the comments, we’ll be producing bread late spring of 2013, that project is the addition of the bread line in Oxford is well underway. And fortunately, our construction project weathered the storm well and we’re on track to be producing bread, like I said end of spring of ‘13. Mitch Pinheiro - Janney Capital Markets: Okay. And last question is, I’m certainly aware -- you -- one of your competitors have testing Gluten-Free on a fresh delivery basis. And I was wondering what where you were on that and if you had any plans you could share?

Mitch, I don’t want to give away all of our new product plans. But as you know, we tested Gluten-Free about two years ago in the Atlanta market fresh delivery and discontinued the test. But quite frankly with the current consumer trends, we’re looking at it again. We don’t have any firm plans today to enter into another market test. But it is certainly a consumer trend it’s very high on the radar and we’re trying to determine the appropriate next steps. So we’re focused on Gluten-Free. Mitch Pinheiro - Janney Capital Markets: Okay. All right. Thank you very much.

Thank you, Mitch.

Thank you. And our next question comes from Tim Ramey from D.A. Davidson. Please go ahead. Tim Ramey - D.A. Davidson: Good morning. Thanks.

Good morning, Tim. Tim Ramey - D.A. Davidson: Just first question, about the transition in California, sounds like that Stockton facility closes next week. But you’ve got a supplier agreement. I mean, what I’m concerned about is what steps have you taken to preserve this sales and market share as you transition to this late in 2013 for Northern California?

Tim, Allen did say in his opening comments that we do have 18-month guaranteed supplier form BBU. And also mentioned about Southern California with possibly new plant as well as continuing to make steady the Northern part. And we of course, still have, which we’ve been supplying the south out of Phoenix and Tolleson plant. So we still have lot of options. So I know Bimbo, BBU has protected the Sara Lee brand in California. And we will expect that to continue and until we get our distribution in place and make the transition. So we feel good about it.

Tim, this -- Tim, this is Steve and we can’t discuss the specifics of the contracts. Contractually, there are some things in there to make sure the brand in the sales are protected. Tim Ramey - D.A. Davidson: Great. I think you said, Allen, that you’d be using your distribution system. And you didn’t reference in specifically any trucks or distribution assets. Is that right? It’s the only real physical asset is the Stockton facility?

And the brand as we mentioned, Tim. Tim Ramey - D.A. Davidson: Yeah. Okay. And then just in your IRI discussion, you said some things that are up but I think year-to-date, volume is up only 0.2%. So what in the DSD category wasn’t working well for you from our market share perspective?

Yeah, Tim. I wouldn’t say that anything was not working well. You start out with the category that’s trending down. I think if you look at the performance of our brands relative to competitive brands and then relative to the growth of the category, I think we performed okay. With all of the promotional activity in our feature pricing as you look at the quarter, that generates a lot of churn in a short-term churn within the category levels of each individual companies. So I don’t look at quarter’s disappointment in terms of share. I do feel like that going forward, we should expect our shares to continue to, in mature markets to continue to have some fluctuation with the category but as George mentioned earlier, the big opportunity for us is in new markets and underdeveloped markets where our share is low because we haven’t been there very long. The big opportunity is to grow our share in those new markets and which will bring the overall share number up. So I’m not disappointed. I’m encouraged. Tim Ramey - D.A. Davidson: Okay. And then just -- George, just back to your long-term targets which you reiterated as double-digit EPS growth. Very few companies in the food sector that called out that sort of a target anymore and most of them have categories that are not in kind of secular decline as we see the DSD bread system. You haven’t really been able to do that. It’s been sort of four years of right around the dollar of EPS. Sometimes, the target itself can incentivize behavior that’s maybe not constructive to long-term delivery versus delivery of goals. I certainly, saw that with Sara Lee. What are your thoughts about kind of the level of target, the achievability of the target in our category that’s not doing that well and you get to be a bigger share of it. You now have 77%, I guess, reach you said.

Yeah. Good point. Tim, what I would say last quarter, excluding one-time cost, we were at 11.4%, which is within our 11% to 13% range from the EBITDA standpoint. I would say even in the tough times during these past three or four years, we’ve been in the 11% to down to 10-ish. We’re not back to the sevens of yesteryear. So I guess, that’s what gives me courage. We’re right on the brink of getting back in that 11%. We had -- as you well know, we had 10% to 11%, we moved at 11% to 13% in 2011. So what gives that to me is no one underdeveloped and some margins in certain parts of the country is not what it will be once we get Nature’s Own and our Tasty business is up to a standard that we’re pleased with. So I guess -- it’d be easy for me to drop our goal. I don’t think it’s prudent based on where we are. In the longer pool, if we’re not successful, we would have to make some adjustments. This is a five-year goal. And as I stated just this quarter that we’re ending in spite of all the difficulties we still generated 11.4% I believe. So, that’s why it gives me courage to hang with it at this point. Tim Ramey - D.A. Davidson: Okay. Thanks.

Thank you.

Thank you. And our next question comes from Akshay Jagdale, please go ahead, from KeyBanc Capital. Akshay Jagdale - KeyBanc Capital: Good morning.

Good morning, Akshay. Akshay Jagdale - KeyBanc Capital: George, just wanted to talk about the volume trends. I mean, if you look at just your volume decline and it’s probably worst at least in my model going back five years. And I saw your presentation. Obviously, you are talking about a lot of positives and a lot of market share gains. I know a lot of the decline this quarter came from warehouse. But as a company, one of the better companies in bakery space, why isn’t that concerning to have a major volume decline. So, can you just talk about maybe get into a little more details about why it’s not something you are highlighting in your presentation because that’s something that just popped out to me as an analyst?

I would say a couple of things. And I’ll let Allen follow-up and Steve on the volume component. I would say there is always moving parts in any given time of quarter. I would remind us all that we’ve been in full years of pretty tough circumstances in the United States. We’ve also been pretty compressed in the baking industry. So volume has been tough. In spite of that, we’re still standing and I feel good about our position. Also we talked about, we’re trying to improve those margins. So there is -- at times, we might give up in some business, some customer that we don’t have the margins that we expect and that does affect volumes at certain times. But all-in-all, I feel like we’ve performed real well in the past four years given all the circumstances in the world. We’re always concerned when we’re not moving more volume. We’ve not created our team for -- volumes have been flat to down. We still have been able to achieve pretty respectable results. We’re 100% pleased, maybe not on the final result, but given the circumstances, I’m saying, we’ve been pretty well pleased with it. Steve -- Allen, do you have any follow-up on the volume question?

Akshay, just looking back as a reminder the category as far as units were down 2.1%, total U.S. Our Flowers branded growth was up 2.3% for the quarter. And as I mentioned, if you look your internal data in our Nature’s Own brand we really had a good quarter of 4.9% in units and 4.6% in dollars. So we can always do better, but I think if you look at our core business, it was pretty good quarter in terms of volume. I did mentioned in our warehouse food service business we are showing improvement and we’ve got work to do in our warehouse cake business to not only address volume, but really to address margins as well. And we are working very hard on our warehouse cake business. So, overall, I think you have to look at all the different components of volume and overall it was a pretty good quarter relative to other category. Akshay Jagdale - KeyBanc Capital: And where do you stand with the warehouse cake business? I mean we’ve been in this sort of stage that you mentioned. I thought that we had stabilized incomes of margin and volume, but it looks like we took another stepdown? Is that a fair assessment? I mean, can you help me understand where we are with it? I mean, couple of years ago you added some lines, your volumes are doing really well then we got this cost increase, which didn’t go through. Volumes started to decline. It seem to have had stabilized, but this quarter seem like it worsen. But just give me a little bit more perspective on where you are on the warehouse business?

Before I talk about warehouse cake, I think looking at it from a marketing standpoint, the Tastykake example shows that consumers are willing to pay a higher price for cake products that are more unique and have really a point of difference and that learning s really spilling over to our warehouse cake business. We are looking not only at volumes, we are also looking at, how can we develop new items that can generate a higher price point and also better margins? We are also looking at the categories in which we sell warehouse cake and we are really focused. Rather than being focused on, we’ll say co-packing or private label, we are focused on, how can we generate additional sales in warehouse cake with the Mrs. Freshley’s brand? We currently are rolling out kind of an enhancement to Mrs. Freshley, co-branding with Cinnabon. Again, looking at how can we generate more revenue and also better margins. So we are not at the point that we are seeing results in warehouse cake, but I feel like we have a good plan and that, we are headed in the right direction. And our warehouse cake is benefiting from some of the marketing learnings that we are observing from Tastykake. Akshay Jagdale - KeyBanc Capital: That’s helpful. And just George, just one, I guess for anyone, but mainly George. Gaining share profitably in this category in light of the weakness on the volume side overall, high commodity cost and sort of overcapacity and the industry has been challenging, right? Would you agree that you haven’t been able to gain share in your core business profitably? So that’s the first question. Second, how can you, going forward feel confident that you’re going to be able to do that? I mean, what do we need to look for as an inflection point to see, okay, fine in this industry the profit pool in the industry is actually starting to expand again?

Well, I’ll go back to our customer base. Our customers want us to grow, want us to be in a bigger footprint. I feel like we will continue to get assistance from them that will help us grow. I feel like we have the brand that helps us grow. Nature’s Own and Tastykake has a wonderful position in the marketplace, quite opposite from one another, of course. But those brands do contribute a lot to the company and we feel like it will continue to grow as it did this past quarter in a very difficult environment. So, I look at that. Also the baking industry in general and say, there will be continued tough markets. But we have been able to display over time that with our business model, with our brands, with our people, that we can get the job done. And I said in my sort of wrap up, I have full confidence that we can do it in the future. Can I point you to one specific place? The point back to our people, our efficiency, our know-how, our workability, our passion for the business is all there to make this a successful venture going forward as has been in the past. So, I look back at the history of the company. There’s always been some times we’ve flat lined, but it didn’t flat line forever. Things and events happened that put us on another plateau, and I’m using history as a sort of a guide. But more than just past, is understanding the marketplace and what these brands can contribute as we grow the marketplace and as the marketplace in competitive landscape shrinks some more, I feel very comfortable with it. Akshay Jagdale - KeyBanc Capital: And just one last one for, Steve, on inflation. Are you still at the 6% to 9% for 2012? Is that still the right number and given your comments on pricing, 4% to 6%, looks like inflation in ‘13 might be similar range?

Yeah. Actually when you look at 2012, the 6% to 9% guidance is still there. And as we have said on the last call, we’re on the lower end of that range. And then looking out into ‘13, the forecast would be low to mid digit increase, which is kind of in line with the pricing. Akshay Jagdale - KeyBanc Capital: Low to mid-single digit you mean, right?

Yeah. Akshay Jagdale - KeyBanc Capital: Okay. Great. Thank you. I’ll pass it on.

Thank you, Akshay. Akshay Jagdale - KeyBanc Capital: Yeah.

Thank you. And our next question comes from Bill Chappell from SunTrust. Please go ahead. Bill Chappell - SunTrust: Good morning.

Good morning, Bill. Bill Chappell - SunTrust: Just a few questions on the Sara Lee acquisition. Just want to make sure my math is right, if it’s similar EBITDA margins and $135 million revenue base. You paid about 3.5 times EBITDA for the business and with your financing that would make it about $0.05 accretive on a full year basis. Does that sound right?

Yeah. Bill, once we get passed the start-up in 2013 and move beyond that in 2014, I would say your estimate is in line. Bill Chappell - SunTrust: Okay. Great. And then just trying to understand the health of that business. I mean, I guess, the Sara Lee Bimbo deal was closed almost a year ago and so, and you can make a case Sara Lee didn’t have firm management on it before then. And you’re not going to actually close or really have your hands on it for another six months. So, I guess, what gives you comfortable that the operating business will continue to move forward or there won’t be a big transition period? And maybe you can give kind of an update on what sales trends have been there over the past 12 months?

What I would say is, we have in our contract some provisions that we feel like the brand has been taken care of. I feel like there are things in place that would prevent any erosion of that brand. There will be some consequences. So, I don’t -- it’s not to our competitor’s advantage to also let that brand go down because it could affect their thought on rest of the part of the nation. So, I don’t know, I don’t expect to see then just take all consciousness of this brand. We have some -- we’ve seen some slippage there, as we’ve seen all over the United States, not on their brand, bread in general, let’s say, it’s been pretty well in keeping with the trends of the industry. Bill Chappell - SunTrust: Okay.

Bill, this is Allen, I would just comment, the Sara Lee brand in California is a very strong brand, especially in the white bread segment, which is still a very significant pieces of business in California. And the other point is that, if you look at the different phases, a significant portion of these sales comes in Phase 1, which is in that that in the February period. So that also gives us comfort that, we’ll have control over the sales, the majority of the sales relatively quickly. Bill Chappell - SunTrust: Okay. Thanks. And then just last one, maybe understanding kind of now that you are at 75% coverage of the U.S. Does your look in terms of buy versus bill change in terms of filling in some of the gaps, I mean, I know, so the acquisitions are -- opportunities are pretty lumpy when they bounce up. But I mean, it seems like from here now it makes more sense just to devote your cash towards your share repurchase or dividends or other things?

I won’t say I disagree with you. Yeah, I think, I do agree to a certain extent we always continue to monitor. And I said, and I made a point in making that in my comments say we’re still interested in acquisitions as long as it strengthened us more importantly part of their shareholder. So I’d preface that in that comment. If acquisitions we’ve always layer that this way, if it helps us operationally, more important we find the financial arrangement to have an acquisition and as to that we are not shareholder, then we look and go forward. I would say this put us at a different level and now covering say 5% of the U.S. market. It was in great position as we go forward versus acquisitions or as we build our brands or build greenfield plants to just puts us that much stronger in whatever we are doing. Bill Chappell - SunTrust: Great. Thank you.

Thank you.

Thank you. And our next question comes from Amit Sharma from BMO Capital Markets. Please go ahead. Amit Sharma - BMO Capital Markets: Hi. Good morning, everyone.

Good morning. Amit Sharma - BMO Capital Markets: Steve just wanted to ask about the promotional activity or maybe Allen. Are other competitors following you in reducing the depth and frequency promotions or have you seen indication that they are going to follow you?

It’s a different story from one market to the next, but I would say in general, we are seeing the category move upward both everyday pricing and a slight reduction in promotional activity, but again it’s very much of a market by market situation. Amit Sharma - BMO Capital Markets: And in promotional -- high promotional environment still continues to be a zero sum gain, you are not really seeing overall lift in volumes across the entire category, are you?

No. I think we’ve said in the past, this is the category is wealthy and elastic. So a lot of pricing churn simply moves volume temporarily. I think the key here is develop products that have the quality and new items that have consumer interest where you’re building long-term brand loyalty. And but we have said the category is inelastic and excessive pricing just simply create short-term churn. Amit Sharma - BMO Capital Markets: Got it. And then finally, in California, the South -- the new bakery in South California, you should be expect that to be around $50 million to $60 million of CapEx or is it going to be more?

Investment.

Yeah. We are early in the planning… Amit Sharma - BMO Capital Markets: Investment, sorry.

We’re early in the planning stage and I’m really not in position to disclose that at this point. Amit Sharma - BMO Capital Markets: Okay. Great. That’s all I have. Thank you.

Thank you.

And our last question comes from Ann Gurkin from Davenport. Please go ahead. Ann Gurkin - Davenport: Thank you for taking the question.

Sure, Ann. Ann Gurkin - Davenport: I wanted to just circle back on the wholesale business, warehouse business and the lower volume? And can you help me think how -- I should position that volume as we look out over the next 12 months, is any of that business you are walking away from because it’s not meeting targets or can you help me understand that a little bit?

Yeah. Ann, I did mention earlier that we’re focused on improving margins in our warehouse cake business. There were several situations where we did part ways with some business, but I think the focus on warehouse cake as I mentioned earlier is developing points of difference with our Mrs. Freshley’s brand to overtime generate a higher ring. At the same time, we’re seeing some positive points growing in the retail grocery channel with for our Mrs. Freshley’s in the warehouse side. So I don’t think it will be a dramatic turnaround as we look at the quarters ahead. But I do feel like we have solid plan to improve not only our margins but with time the sales number as well. Ann Gurkin - Davenport: Okay. Great. And then with respect to Lepage it was very impressive to see that contribution in the quarter? Is that integration proceeding as expected and contribution in line with expectations?

Yeah. We’re excited about Lepage. We’re right on track from an integration standpoint. The team is doing a wonderful job and everything is very positive with Lepage. I think if you look at the past week or so dealing with the storm, not only the Lepage group, but also looking at our Philadelphia group and the whole team in the Northeast, really came together as one company to take care of the marketplace and we’re getting a lot of positive comments from our retail customers about how the team performed. So we’re very excited about Lepage. Ann Gurkin - Davenport: Right. That’s great. Thank you very much.

Thank you, Ann. Lorraine, I think you said that was the last question. So, we’ll take that…

Yeah.

… that’s it, that’s great.

Mr. Deese, do you have any final remarks at this time.

I just want to thank everyone for joining us today and hope you continue to get straightened out with the weather and the events in the Northeast, and look forward for our next call. Thank you so much.

Thank you. And thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.