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TreeHouse Foods (NYSE:THS)
Q1 2020 Earnings Call
May 07, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the TreeHouse Foods first-quarter 2020 conference call. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to TreeHouse Foods for the reading of the safe harbor statement. Please go ahead.

PI Aquino -- Vice President of Investor Relations

Good morning, and thanks for joining us today. Before we get started, I'd like to point out that we've posted the accompanying slides for our call today on our website at treehousefoods.com. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts and can generally be identified by the use of words such as guidance, may, should, could, expects, speaks to, anticipates, plans, believes, estimates, approximately, nearly, intends, predicts, projects, potential, promises or continue or the negative of such terms and other comparable terminology.

These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors, including COVID-19 that may cause the company or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity performance or achievement expressed or implied by these forward-looking statements. TreeHouse's Form 10-K for the period ending December 31, 2019, TreeHouse's Form 10-Q for the period ending March 31, 2020, and other filings with the SEC discuss some of the risk factors that could contribute to these differences. You are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made when evaluating the information presented during this conference call.

The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto, for any other change in events, conditions or circumstances on which any statement is based. For purposes of our discussion, our results and outlook are provided on a continuing operations basis. Which excludes the impact of the Snacks division, which was sold last August and the ready-to-eat cereal business. In addition, we've recasted the segment information to account for our February reorganization announcement from three divisions to two, meal preparation and snacking and beverages.

We've provided historical quarterly information in the tables of the press release issued this morning. I'd now like to turn the call over to our CEO and president Mr. Steven Oakland.

Steven Oakland -- President and Chief Executive Officer

Good morning, everyone, and thank you for joining us today to discuss our first-quarter results and our outlook for the remainder of the year. The world that we're living in today has changed dramatically from the last time we were together in February. So let me start by saying that I hope this finds all of you well and staying safe. This is an unprecedented time across our nation and across the globe.

We have all been touched in some way by the COVID-19 crisis. During these challenging times, I've been encouraged by the strength and resilience of the human spirit, medical professionals, emergency responders, sanitation workers, grocery workers, but also our very own manufacturing and distribution employees. Our employees are showing up to work because we recognize our business is essential, essential to helping ensure our nation's food supply. So to our more than 10,000 employees, we thank you. We are incredibly grateful.

As you've seen in our release this morning, we delivered a strong first quarter, and are reaffirming our full-year guidance. Given the changes of the past 8 weeks, I'd like to take you through how we're thinking about the year and the puts and takes. The last few times we've spoken with you, we've talked about the hard work and structural changes we've made around operational excellence and commercial excellence and the recrafting of our portfolio.

But also our work to build culture and define how we work together as an organization, as you can see on Slide 4. I believe that these things prepared us and positioned us to service the demand that began in March.

My point here is that the structural work of the past few years was important. It was important because it enabled us to harness the power and the culture of the organization to drive and deliver for our customers. That work enabled us to act swiftly and nimbly to flex our production capacity and to help our retail customers restock their shelves. Importantly, however, we've been able to do this in ways that prioritized and protected the health, safety and welfare of our employees.

As you can see on Slide 5, I'm incredibly proud of how we, as an organization, have responded to the crisis and balanced people safety with fulfilling increased demand. You'll recall that in February, which now seems like a very long time ago, we announced our move to a two-division structure, as seen on Slide 6. And that Kevin Jackson would be joining us to lead the Snacking and Beverage division. Kevin and I worked together for many years.

During those years, he has led marketing, sales and foodservice businesses of scale, and I'm delighted to have him on board. Importantly, our move to two divisions brings a step closer to aligning our organization and how we manage the categories with our customers' goals and strategies. I'm convinced it has also improved the speed at which we are responding to this crisis. Before we get into the results, I think it's important that we frame for you our exposure to the current dynamics.

On Slide 7, on the left-hand side of the chart, we provided you the IRI point-of-sale data, the categories in which we operate, both in total and for private label. The retail grocery channel for TreeHouse represents about 80% of our revenue, with IRI being indicative of about half of that. You can see that during the peak of the pantry stock up in the second and third weeks of March, private label appears to be lagging branded. This shouldn't be a surprise as consumers rushed to stock their pantries, there was simply more physical branded inventory on the shelf.

And that's because normally, about 80% to 85% of a grocer shelf is branded. Now that the retailers have restocked, the data is showing that private label is tracking closely with branded. Of the remaining 20% of our business, about half of that or 10% is foodservice. And the balance is industrial and co-manufacturing and other.

Moving to the away-from-home channel. On the right-hand side of Slide 7, we've done a bit of modeling for you to help you estimate the sensitivity of food away-from-home versus food-at-home consumption. At the top are numbers of meals consumed in each channel annually per capita. If you assume a 10% decline in the number of meals eaten outside the home, you should get about a 2.5% lift in meals eaten at home each year.

Today, we're currently tracking declines in foodservice of about 30% as one-third of restaurants have closed. And while two-thirds have stayed open, they're only open for carryout and delivery. You can see that the impact on growth of meals eaten at home is meaningful on an annual basis. Now as restaurants open, this will be dynamic.

So how has this played out in our first quarter? Slide 8 gives you a look at the first quarter for organic sales, adjusted EBITDA and EPS versus last year. If you'll remember, we've guided our first-quarter revenue down about 6% at the midpoint versus the prior year. Our January sales and February sales were tracking on our original plan. But then we're outpaced by the pandemic-related surge in March, which gets us to the 2.6% organic growth for the quarter.

This is where we began to see the impact of the efforts I spoke to earlier. We were able to respond quickly by adding shifts and production days and ran full out across nearly all of our factories, helping us support demand in March and position ourselves for April and beyond. This unprecedented level of demand presents both opportunities and challenges. Slide 9 gives you some color on these considerations.

On the positive side, we have a very traditional grocery weighted center-of-the-store portfolio, with about two-thirds of our revenue in categories located in the center-of-the-store. We have a diversified network of 36 plants in North America and two in Italy. So fixed cost leverage is driven by throughput and greater efficiency. What's less obvious, but equally important, is how our relentless focus on service has improved our customer relationships during this time.

Over the last several weeks, we've been working closely with our customers to both refill their shelves and to prioritize production of their highest velocity SKUs and communicate current finished goods inventories on a real-time basis. So simultaneously, we've been paying attention to our own supply chain to ensure that we had ample supplies of proper packaging and raw materials. Our improved customer connectivity is bringing us the benefit of clear demand signals. This has enabled us to drive efficiency and leverage.

And we're working -- we've worked very hard on TMOS and continuous improvement in our factories and this is helping us to fill even more of their orders. These efforts have not gone unnoticed. It's allowing TreeHouse to stand out in private label. The thank you, emails and anecdotal comments coming back from our commercial leaders, our customer service teams are simply more than positive.

In many cases, quite frankly, they're inspiring. On the other hand, there are some additional considerations that we will need to manage through. We will be continuing to prioritize the safety of our people and to balance that with our production needs. In this environment, I think it's important to recognize that our cost to serve this demand is slightly higher than if we have been able to methodically plan for the increase in production, and there'll be a number of ongoing expenses to support our safety efforts.

Foodservice is also about 10% of our revenue. We serve that channel largely through the meal preparation division with categories like pickles, salad dressings and cheese sauce. However, given the declines in food away-from-home channel, in some cases, we've idled these lines and idle these plants. As a result of restrictions on travel and social distancing, we have put on hold a number of internal initiatives that we had built into our original 2020 plan, and Bill will get into some detail on those.

We're cautiously optimistic that we'll be able to pursue a few of these when the new normal becomes clearer. But at this point, there is no assurance on when that will happen. Finally, we will continue to have a good pipeline of new business plan to launch in the second half of the year. We want to be appropriately cautious on how the retailers plans for promotion and new product support may be evolving.

As we're now in early May, while demand signals are stabilizing, they're still higher than normal. How long this continues, will in part be determined by when states begin to lift their stay-at-home orders, and how consumers respond as things start to open up and the impact of a potential recession. This when and how will be important to determining how the balance of the year unfolds. Clearly, the shape and cadence of the year has changed.

There's a great deal of uncertainty in the market with various scenarios and a wide range of potential outcomes. All of these considerations were considered, when we reaffirmed our original guidance for 2020 of adjusted EPS of $2.40 to $2.65, the midpoint of which is $2.53, a 6% increase over 2019. With that, let me now turn it over to Bill to walk you through the quarter and the details of our outlook before we open the call to Q&A. Bill?

Bill Kelley -- Executive Vice President and Chief Financial Officer

Thank you, Steve. Good morning, everyone. I hope you and your families are both safe and healthy. Overall, first-quarter results reflect three themes: number one, significant volume increases from consumer stock up in March; number two, our team's strong execution as we service the increased COVID demand; and number three, the great benefit we have achieved from the infrastructure work over the last few years.

On Slide 10, we provided our Q1 results versus guidance, and on Slide 11, our key metrics page. Net sales of $1.08 billion outperformed the top end of our guidance range by $60 million. While adjusted EPS of $0.37 beat the top end of our guidance by $0.07. Adjusted EBITDA was in line with our guidance at $98.7 million.

On Slide 11, you can see that division direct operating income declined $3.3 million compared to prior year, and division DOI margin was down 50 basis points versus the same period. On Slide 12, year-over-year adjusted EPS improved $0.04 or 12%. We have a couple of moving parts here, so let me give you some direction. Volume and mix, including absorption was $0.10 below last year.

On one hand, we have the negative gap of lost volume. That was offset in large part by March volume and absorption, but mix was negative, mostly within the meal prep business. PNOC contributed $0.12 as negative pricing was offset by lower overall logistics costs compared to last year. Operations contributed $0.02 as we've been running a number of our plants full out like broth, pasta and Magna cheese.

SG&A and tax offset each other. Slide 13 provides revenue drivers for our new segments. Organic net sales growth for the meal prep business was up 50 basis points, while snack and beverages grew by 6%, which are very good results. Total company organic net sales grew 2.6%, which exceeded our guidance.

The organic growth number excludes, for better comparability, SKU rationalization, FX and the impact of the two in-store bakery facilities, which were sold in mid-April. Back in February, we anticipated a Q1 net sales decline of about 6% at the midpoint. Primarily due to the carryover of loss distribution and pricing from 2019 that would impact the first half. This was certainly the case, though the surge in March demand more than counteracted the carryover.

Turning to Slide 14. We've added some disclosure beginning this quarter on revenue by channel. In the first quarter, our food away from home business declined by $11 million year over year. Slide 15 indicates our ongoing confidence in the strength of our balance sheet and our liquidity position.

Our business generated solid positive cash flow in Q1, which is different than our previous years. Cash flow in the first quarter is usually negative. I'll get into the implications for cash inflows and outflows for the year in a few slides. In line with our stated priorities for cash, we continue to pay down debt.

Net debt finished just under $1.9 billion for the quarter. We did take a proactive and precautionary step to draw down $100 million under our revolver. Our intent was to ensure financial flexibility in this uncertain environment and increased cash on hand. We do anticipate repayment in the near future.

As of the end of Q1, approximately $624 million of our $750 million revolver remained undrawn and available. Moving forward, we think we have appropriate financial flexibility. On Slide 16, as Steve mentioned, we are reaffirming our original guidance for the year. I want to walk you through it in a bit more detail to help you think about how the year may progress.

We are reaffirming the $4.10 to $4.4 billion in net sales this year with a couple of variables that can move you within that range. Most obvious is the food away from home weakness. At this point, it is anyone's guess as to when the country will return to some level of our new normal, but a rapid rebound is unlikely. Secondly, customer plans or private label support may move around as customers review their priorities.

That doesn't mean they won't move forward. In fact, we've seen a couple of cases where retailers have requested that their launch be pulled ahead. But we do want to be pragmatic about the potential for delays in this environment. As you are all aware, there's a great deal of uncertainty in the market, and many economists believe a recession is inevitable.

Private label has historically benefited as consumers look to spend less and have greater proclivity to buy private label. We've included a slide in the appendix to help frame how private label has seen a lift in prior recessions. Clearly, March demand was unprecedented. And although we saw continued strength in early April, more recently, we are seeing signs of moderation, while still at an elevated pace.

Should retail grocery demand continue at these levels, the likelihood is certainly higher that we can achieve the top end of our revenue guidance. However, it is still very early in the year. Moving down to P&L, we continue to believe we will deliver adjusted EBITDA of $480 million to $510 million. A couple of thoughts here.

On the cost side, we have experienced a modest level of disruption related to fray plant shutdowns for deep cleaning and the sanitation. Employee safety is our No. 1 priority. So we will continue to exercise way caution as we work through these issues.

In most cases, plant closures related to sanitation have only lasted a few days. But in others, it has been longer and that can be expensive. While some of these will be onetime charges related to COVID-19, such as intensified sanitation, there are some ongoing costs to be considered. As Steve mentioned earlier, to date, we have been able to service higher demand by adding shifts and running over time.

In some cases, we've also incurred higher freight and transportation to get product delivered on time. This brings me to some opportunities that may not be fully recognized. As we do every year, we have an actionable and realistic set of productivity and expense initiatives that we built into our 2020 guidance. Some of those are supply chain-related.

I've also talked in the past about the work we need to address -- the work we need to do to address stranded costs. Because of the current environment, a number of initiatives have had to be put on hold due to heightened safety protocols and travel rations. We certainly expect to execute this work. For the delays in the timing around being able to achieve related savings is still unclear.

And third, we expect we will have a bit of an FX headwind through the balance of the year due to the weaker Canadian dollar. Because net-net, our proportion of U.S. input costs for products sold into Canada is greater than that which is made in Canada and sold into the U.S. While this has more of an impact on meal prep business than Snacks and Beverages, we estimate in total that FX is about a $4 million impact for the full year.

The bottom line is that we are reaffirming our guidance of $2.40 to $2.65 and adjusted EPS from continuing operations. With 2.53 being the midpoint. We're also maintaining free cash flow guidance of $250 million to $300 million. As I said, it's still early in the year, and we have a long way to go.

As we approach the middle of the year, we expect to have a clearer picture of how the back half of the year will shape up. Slide 17 then takes you through our thinking for the second-quarter guidance of $0.40 to $0.50 and adjusted earnings per share. We've contemplated a wide range of outcomes, including both risks and opportunities listed here and pay particular attention to the most recent takeaway trends. We are guiding the $1.05 billion to $1.09 billion in net sales, which, at the midpoint implied about 4% growth on a reported basis and about 7% growth on an organic basis.

I'd like to point out here that net sales for the two in-store bakery facilities totaled about $20 million in the second quarter of 2019. Since we completed the sale of the facilities in mid-April, we'll have a minor contribution from that business in the upcoming quarter. We are also anticipating a currency headwind in second-quarter revenue of about $5 million due to weakness in the Canadian dollar. We're guiding second-quarter adjusted EBITDA to a range of $105 million to $120 million.

Understandably, the cadence of our expectations for the year has changed since we were with you last. On Slide 18, we have updated what we first shared with you in February around the first half versus second half of 2020. Frankly, neither the carryover of lost business and pricing adjustments nor the new business wins have changed any meaningful way since that time. Here's what we layered in.

First, an expectation for higher demand based on what we know about the first quarter. Second, we built in an assumption for the balance of the year to contemplate more at-home consumption. And third, these were offset by the impact of foodservice declines. This translated into a more robust first-half top line that grows faster, a 2.5% to 3.5% and the second half that is now forecasted to be in the range of flat to down 2% on a reported basis.

Similarly, on Slide 19, we have not changed our free cash flow guidance, but the way the year unfolds has evolved. Last year in Q1, we were cash flow negative as we rebuild inventories following the holidays. This year, as you can imagine, we depleted inventory to meet customer demand. In the second quarter, we will need to continue to run hard.

In the third quarter, as we usually do, we will be building inventory ahead of our usual peak fourth quarter. This means we now expect to be cash flow negative in the second and third quarters with an even margin inflow anticipated in Q4. Before I turn it back over, I want to echo thanks to our employees. The focus, teamwork and agility I've seen says a great deal about who we are as a team.

To me, it's clear that the work we've put in over the last few years has enabled us to absorb a crisis like this one and to come out stronger on the other side. With that, let me now turn it back to Steve for his closing comments.

Steven Oakland -- President and Chief Executive Officer

Thank you, Bill. I'd like to close my remarks today by building on Bill's comments. This pandemic has created uncharted territory for all of us with lasting effects that are yet to be determined. During such uncertain time, there are a number of things I can be certain of.

First, we are emerging as a stronger, healthier TreeHouse. We are finding success through the continued focus on our strategy and our customer centric approach. The TreeHouse organization today has been built for this. Our commercial and customer service organizations are earning greater recognition with our customers.

Our two-division structure is helping us to better define strategies and to determine how to best position and optimize these businesses in the future. Importantly, our long-term strategic growth algorithm remains intact of 1% to 2% growth on the top line, greater than or equal to 10% EPS growth And $300 million of free cash flow on an annual basis. And lastly, people and talent are key to our future and to driving this organization forward. In the face of adversity, our people have shown resilience.

They're demonstrating agility. They're coming up with creative ways to implement social distancing measures. They're doing a better job, and I couldn't be prouder, so let me close in the same way that I opened my remarks today. Thank you to our more than 10,000 employees.

Thank you for all you've done. Your dedication and commitment are inspiring, and we will continue to prioritize your health, safety and welfare. Now before we turn it over to Q&A, I know that we have a focus on transparency, well, I'm sorry that we had to share with you today the first draft of our recording. But hopefully, that gives you a sense of how the process works, and we will now open the call for your questions.

Operator

[Operator instructions] So our first question is from Ken Goldman of J.P. Morgan. Please go ahead.

Ken Goldman -- J.P. Morgan -- Analyst

Hi. Thank you. And if you saw some of my first drafts of notes, you would -- it would be left everywhere. When that was happening to you guys -- it certainly had had happened, but it did provide a moment of levity for all of us, I think.

Steven Oakland -- President and Chief Executive Officer

Well, it was our first draft. I think one thing you learn -- you learn something, Ken, every day. Keep your original script closer to you. Don't really have to run your office to get your copy of your original script.

That's the only thing I learned today.

Ken Goldman -- J.P. Morgan -- Analyst

Yes. That's right. That's right.

Steven Oakland -- President and Chief Executive Officer

How can we help you?

Ken Goldman -- J.P. Morgan -- Analyst

Well, I wanted to ask -- I'm paraphrasing a little bit, but you guys mentioned something on the earnings call on the prerecorded -- on the non-prerecorded comments about that it's not being unreasonable to expect the high end of your sales guidance for the year. And again, I'm paraphrasing on that. But I wanted to get a sense of what needs to happen for you to sort of hit the high end. When you think about what happens with foodservice, what happens with food-at-home in general.

I just wanted to get a sense a little bit about whether you're relying -- if you do hit the high end of your numbers, sort of what do you need to happen to get there, I guess.

Steven Oakland -- President and Chief Executive Officer

Sure. Sure. I would take you back to Slide 18 in our deck, OK? And that's where we show first half and second half. And there's going to be interdependency between these different bars, OK? We've got a number of new businesses.

And like Bill said in his comments, some of those have pulled forward. If the COVID-related demand is greater than what we have in there, right? There's an opportunity for that to happen. I think there's -- and God forbid, there's a scare in the fall. There's all those things that we talk about, right? So that bar is going to probably be interdependent with the foodservice bar next to it, right? If food service is greater, that will be bigger, quite frankly, we have more retail than foodservice.

So there's some interplay there that could be positive for us. If it isn't, I think the new initiatives bar, the new business bar will be bigger. So it really is so early in the year that it's hard for us to predict what's going to happen in that fall period. And how much of that innovation will be the customers' priority and how much of just keeping the shelf stock will be that customer's priority.

So those two bars are going to have some interplay. I think there's some upside there if things go well, health-wise. And then the foodservice question, right? How quickly will that rebound? Will we have a pipeline fill? Will we have all of those things? I think we've seen a few things on the news in the last week or so of some markets, but I think it's just too early for us to forecast that number. Hopefully, that's helpful.

Ken Goldman -- J.P. Morgan -- Analyst

Well, it is. But with that in mind, what was the purpose, I guess, of calling out the high end of guidance? If there's so much uncertainty, is the message just that, hey, you're guiding to somewhat arguably conservative? I just didn't quite understand why that was being highlighted if there is so much variability in the back half of the year?

Steven Oakland -- President and Chief Executive Officer

Well, I just think that we got off to such a stronger start than we thought, right? So if the back half of the year anyway normalizes, there's upside to us. But we just don't know if it will or won't. So I don't think we can project the kind of first and second quarter that we've projected and not say that there's not the potential for it to be better.

Ken Goldman -- J.P. Morgan -- Analyst

Great. That's helpful. Thank you.

Operator

The next question is from David Driscoll of DD Research. Please go ahead.

David Driscoll -- DD Research LLC -- Analyst

Great. Thank you. Good morning. I wanted to go back to this Slide 18 and kind of pick up the thread where Ken was but I want to just spend a couple more minutes on the new business bar because I believe that previously, what the expectation was, was that meals in the baked goods segments, apologies, your old segment.

Those two segments were expected to see some significant upturns in the second half of the year on new business wins. Could you just get a little bit more granular in terms of what you were expecting within those businesses? Why that second half was going to be so much better? And then what's changed? I suppose that -- I'm just trying to wrap my mind around what these retailers are going to accept from you new products or not and just a little bit more granularity as to how you're thinking about some of those important businesses.

Steven Oakland -- President and Chief Executive Officer

Sure. Sure. There were new projects won. They were both in in retail and in contract pack.

You think about plant visits, think about production trials. Those are usually things where we have the customer in the facility, right? Those things are hard to do now. Those things are happening virtually, and it's surprising how people are figuring out how to do that. So the question is can we get all of the things done, all of those items and all of those efforts done, can we get those formulas approved, can we get those labels approved, without putting a group of people in a conference room in our factory, right? So far, that's happening.

In some cases, it's happening a little slower maybe than it would normally, which is natural, right? We don't have all the people in one room. We're shipping stuff back and forth. So that's a little bit of that. Now on the other hand, that center-store business is very strong.

And so the other question I have is if the COVID bar in that chart is bigger, if the retailer is consumed with keeping their shelves filled with COVID, will they just simply postpone something to the first quarter, right? And we've not gotten that feedback yet. But they're not up against those deadlines yet. But they will be in the second quarter. So when we're back to you three months from now, we'll have a really good look at what's going to happen in the second two quarters.

I think we've projected here what we think is going to happen. That's got a little bit of put and take in both of those. But it's really too early to tell if we can get all of that done virtually or not.

David Driscoll -- DD Research LLC -- Analyst

And then just one related question. The business that you've "lost" that was expected to come out, is it, in fact, lost? Or is this COVID environment making these retailers tell you to continue to produce these things, even though technically, they were going to transition to other suppliers?

Steven Oakland -- President and Chief Executive Officer

There's a little bit of that. There's certainly a little bit of that. There's a few places where they just haven't been able to do the exact thing I was just talking about, where they've not been able to do their plant visits, their plant trials, their approvals on time. So there's been a little bit of drag in that that's been positive for us.

But I think net-net, that's all going to wash out, right? I think we'll hang on to a few things a little bit longer. We'll have a few things start a little bit slower. I'm really impressed. A couple of the big baked goods things are -- Bill mentioned there's an item or two that are probably moving even faster than we thought.

There's a few things that actually are moving pretty fast, and those were important to that big blue bar there. So we wouldn't have it as big there if we didn't feel good about it. I just think there's going to be some interplay between foodservice right? There's going to be some interplay between that and the COVID bar as well. So we need -- it's just hard to figure out right now.

Bill Kelley -- Executive Vice President and Chief Financial Officer

David, before we leave the topic -- this is Bill. I think to dimensionalize the carryover impact, we have about $100 million on loss distribution in the second half, just to put context around it -- I'm sorry, in the first quarter, to put context around it.

Steven Oakland -- President and Chief Executive Officer

Not second half. Yes.

Bill Kelley -- Executive Vice President and Chief Financial Officer

Yes. I'm sorry, in the first quarter, to put context around it.

David Driscoll -- DD Research LLC -- Analyst

OK. Thank you.

Operator

The next question is from Chris Growe of Stifel. Please go ahead.

Chris Growe -- Stifel Financial Corp. -- Analyst

Hi, good morning. 

Steven Oakland -- President and Chief Executive Officer

Good morning, Chris. 

Chris Growe -- Stifel Financial Corp. -- Analyst

I hope you guys are well, and I just had a couple of quick questions. So I did want to understand to the degree to which the first quarter benefited from fixed-cost leverage and then how your service levels sustained through the quarter, we were looking at some numbers there last year, how service level is improving. And then related to that, can you say how much the costs were, like sort of the incremental cost that maybe burdened you in the first quarter? And then how does it look in the second quarter?

Steven Oakland -- President and Chief Executive Officer

Sure. Maybe I'll touch on the service levels. I'll let Bill touch on the cost numbers. Our service levels were remarkably strong.

Two things is the -- first that was a three-week in -- really, event, right? So you were on a lot of your existing inventory. I give our teams a lot of credit. The first couple of days of March, we do vendor-managed inventory with a number of our customers, and we were starting to see scanner data that was picking up, and we have pretty strong models, and our demand signals are pretty tight. They don't move a few points up or down very often.

We started to see those demand signals strengthen. We went to a couple of customers, some of them jumped in with us, some didn't. We started running our plants early. We were in a good inventory position to do that.

So we started running maybe the first week of March ahead of this thing, which allowed us to fill it not quite at our 98.1%, but in the high 90s for March. There's a couple of categories like pasta and dry dinners that are up in the 200% range -- or were for those days, and so you never have 200% of the product in inventory. That's just not effective. But we have a lot of capacity in pasta.

We turned those big presses on and ran really hard. I think we did a great job in the first quarter. The service was felt a little bit in April, and I think it's bouncing back now. So we had to play a little catch up the first week or two of April, and we're doing that now.

We're in much better shape today than we were the first week of April. There's a couple of categories, though, macaroni and cheese, boxes of macaroni and cheese. When you got kids home from day care and school and kids home from college, if we see the center-of-the-plate stuff, if meat continues to be a struggle. Our center-of-the-plate items like pasta will continue to be under a lot of pressure.

Bill, you want to comment on...

Bill Kelley -- Executive Vice President and Chief Financial Officer

Sure. Chris, let me talk about the cost here for a second. So let me give you an idea of the buckets, and then I'll give you some context in terms of Q1 impact and what you might think on a full-year basis. First, as Steve mentioned in his script and in his comments, the safety of our employees is the No.

1 focus for us, and we'll do a lot to maintain a healthy and positive work environment. So when you think about hard costs, such as incremental screening, temporary hourly wage increases and then funding -- we decided to fund a bank of useful hours that employees can draw from if they are ill or they cannot work or if someone at their home may be ill. So some of those costs came into Q1, and we project some of that to continue throughout the year potentially. Second, in terms of direct costs to produce, obviously, more labor over time more sanitation, the PPE stuff and obviously, incremental quality costs.

Some of those items, such as Flexiglass, ensure the right spacing in the sub assembly areas, all things are all important to us, and those are costs that we'll have incurred in Q1 and throughout the year potentially. And then lastly, we did have some onetime costs related to shutting down facilities as we address any COVID incidences. In several cases, we shut down a facility for almost 72 hours or longer. And then we perform incremental sanitation procedures before we consider reopening.

So those shutdowns have incremental costs but also stranded fixed costs such as rent, depreciation, security, lighting, etc., and those pieces. The one thing I also covered in the script is that we had several items of productivity and efficiencies we're going to get after in Q1 and 2020 that we were not able to do as we fought through the crisis. So for context, in Q1, that was all about $10 million or so in our number. All those things kind of added up.

And I won't comment on a full-year number, but it will be tens of millions of dollars that we'll have to deal with as we go forward. The other comment you asked is about the operations. You saw on the chart that the operations was positive year over year. And as Steve commented, we were very efficient, and we're leveraging all that investment we made in TMOS and Lean, and we really poured out a lot of volume and our teams really performed in an incredible way.

Chris Growe -- Stifel Financial Corp. -- Analyst

So Bill, are the costs higher in the second quarter than they were in the first quarter? I presume that's the case. And then with an operations figure, which wraps in a lot of numbers, does that incorporate all these costs? So are you net-net positive incorporating all these costs?

Bill Kelley -- Executive Vice President and Chief Financial Officer

We were net-net positive incorporating the costs. As you know, we capitalized some issues in inventory, so some of that costs will roll into Q2 for us. But the trend will continue a bit into Q2. What I'm hesitant to discuss is that I'm not sure what could come up here, right? Our guidance contemplates that we may have an issue or two, and we want to think that's a prudent way to think about it.

Chris Growe -- Stifel Financial Corp. -- Analyst

OK. Thank you very much.

Operator

The next question is from Bryan Spillane of Bank of America. Please go ahead.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Good morning, everyone. 

Steven Oakland -- President and Chief Executive Officer

Good morning, Bryan. 

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

So I guess my question is just around the foodservice business. And just given the potential sort of drag in the second half, could you remind us how big that is as a percentage of sales? But also just if we're trying to track from the outside, is your exposure more toward quick-serve restaurants or institutional channels just trying to get a sense of what the mix of that business is so that we can kind of -- as we're looking at data from the outside, if we can get a sense of whether that business is improving enough?

Steven Oakland -- President and Chief Executive Officer

You give them size. I'll give them detail.

Bill Kelley -- Executive Vice President and Chief Financial Officer

So I think we said that the food away from home about 10% of our annual revenue. So if you think about it in that way, that'll give you an idea -- way to organize it.

Steven Oakland -- President and Chief Executive Officer

Yes. And our categories are really across the whole foodservice. Our big categories are salad dressing, and those are probably in traditional restaurants, as well as B&I, those segments. We do make sauce.

And so if you think about all the nachos that weren't served at the Final Four, right? We're a big supplier to those vendors. But we also serve quick-serve restaurant in that business. And then we're in the pickle business, and so we have a large pickle business across all channels of foodservice. So those would be the three biggest categories.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

How big is quick service as a percentage of the total?

Steven Oakland -- President and Chief Executive Officer

I would suggest it's maybe 20% of it. It's not that big.

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Yeah. OK. Thank you. 

Steven Oakland -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Bryan Hunt of Wells Fargo Securities. Please go ahead.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Thank you for your time. And other analysts have touched on this, and I just want to hopefully try to reconcile it a different way. If I look at your Slide 7, the food away from home kind of transition to at-home meals, my belief is looking at these categories that you're in and the Nielsen data relative to that transition or the chart that you have, it might not stack up fairly. If I look at the Nielsen data for the last 13 weeks across the categories you participate in, and the chart you have off to the left, you're looking at a lot of double-digit growth across basically everything.

How does that reconcile the chart you have to the left on Slide 7 and the Nielsen data running at double digit to a 4% potential growth number in Q2?

Steven Oakland -- President and Chief Executive Officer

So those are individual meals, right, not dollars. So when someone buys a box of pasta and those things, that may be more than one meal. So I'm not sure that loading the pantry -- the spike in pantry loading. We're seeing demand solid and above last year but really stabilized at this moment.

So I think the number of meals versus how the consumer stock their pantry are maybe two different numbers, right? We can get back in another presentation with maybe a little bit more thought on that. I'm not sure that the sales number and the number of meals number is as easy to extrapolate. Does that make sense?

Bryan Hunt -- Wells Fargo Securities -- Analyst

It does. It does. It just seems that 4% growth for the upcoming quarter seem to be pretty conservative, given some of the numbers we're seeing from other packaged food companies in the upcoming period.

Steven Oakland -- President and Chief Executive Officer

Yes. I think you need to remember that we guided it down 5% or 6%. So that's on less distribution than we had last year. So you've got to add to our first quarter.

If you're up 2.6% in the first quarter, you've got to add 6%. They're 6% -- we did that with 6% less distribution. So on an apples-to-apples basis, that's an 8.2% number, right? So we're telling you, we're up 4%. We lapped those distribution losses at the end of the second quarter and going into the third quarter.

So I think it's a much healthier position than maybe when you really put that together. So it may be more in line with what you're thinking when you look at it that way.

Bryan Hunt -- Wells Fargo Securities -- Analyst

OK. And second, again, going back to another person's question. You said there's opportunities to hit the high end of guidance. I was wondering, what's the implication for free cash if you touch that high end and could you remind us what your priorities are for free cash? And has that changed in this environment?

Bill Kelley -- Executive Vice President and Chief Financial Officer

Yes. This is Bill. I think the first point is we guided our free cash number to $250 million or $300 million. If we move around on the top-line range, we still a whole firm with that thinking.

There's going to be obviously cost to service this volume, and we have investments we need to make around employee safety and health that we've talked about. I think when you think about free cash flow, our priorities still remain the same, albeit, first and foremost, we're going to maintain flexibility and enough cash here to make sure we can weather any storm that comes our way, and we feel good about that. We continue to focus on paying down our debt. And that's where we'll stand -- we'll continue to focus on.

Obviously, our board contemplates many different scenarios. And in the future, they may decide to do indifferent in terms of reprioritization, but our focus now is planning to pay on debt and staying stable and secure through this crisis.

Bryan Hunt -- Wells Fargo Securities -- Analyst

Thank you for your time and stay healthy.

Bill Kelley -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

The next question is from Jon Anderson of William Blair. Please go ahead.

Jon Andersen -- William Blair and Company -- Analyst

Good morning everybody and hope you are well. 

Steven Oakland -- President and Chief Executive Officer

Good morning, Jon. 

Jon Andersen -- William Blair and Company -- Analyst

Good morning. One quick housekeeping question to start. Could you give us a little bit more of a description of the distribution losses and the pricing adjustments that impacted you in Q1? And when you lap those distribution and pricing adjustment headwinds as you look forward?

Steven Oakland -- President and Chief Executive Officer

Sure. Sure. The pricing was predominantly in our single-serve beverage unit. And so the units actually -- that business was down in dollars, but up nicely in units in the first quarter.

And is performing really nicely in units. We're starting to lap some of those -- I think we talked a lot about last year on calls. As those bids all were renewed, that pricing readjusted itself. And that pricing has been stable since.

But that pricing mostly and a little bit of loss, we did step away from one large piece of business there that was unprofitable, that will be through first week or so of the third quarter. So I think what we talked about is the new business wins, as you see in Slide 18, get considerably larger than any carryover churn in our number. That continues for the third and the fourth quarter and the number is pretty dramatic in the third and the fourth quarter, right? So a little bit of churn in our number is healthy, right? If we win every bit, we don't understand the pricing in the category, right? So we don't want the kind of churn you've seen from TreeHouse in the past, but we want a little bit of churn in there to make sure we're at the right number. So those things are happening.

Jon Andersen -- William Blair and Company -- Analyst

OK. And I think Bill mentioned a $100 million headwind in Q1. Is that right? And what kind of a headwind in Q2 should we expect?

Bill Kelley -- Executive Vice President and Chief Financial Officer

I mean, we said in the first half, essentially, that we would have $175 million to $200 million in the carryover impacted loss.

Steven Oakland -- President and Chief Executive Officer

Yes. So we got about half of it.

Bill Kelley -- Executive Vice President and Chief Financial Officer

About half of it will stay with us.

Jon Andersen -- William Blair and Company -- Analyst

Perfect. OK. And then one other broader question. I'm wondering how you're thinking about the possibility of consumer trial during this time.

You have more people eating at home. Participating maybe in categories that they haven't participated into the same extent recently or perhaps ever? And how is private label positioned versus national brand to benefit from that? I thought it was an interesting comment that you made that initially with the surge brands were outperforming private brands, that has subsequently kind of normalized. But again, do you think there's a trial opportunity here that can benefit private brands longer term? And is there an opportunity, as pantries are loaded and kind of some of the surge demand settles down, for private brands to outperform?

Steven Oakland -- President and Chief Executive Officer

We think there is. Quite frankly, as -- and many of us -- you saw the pictures there you've experienced it personally. People were buying any pasta that was on the shelf, right? Things were -- people were just grabbing what was there in those couple of weeks of March. So we're not paying a lot of attention strategically to the IRI or Nielsen data from those couple of weeks in March.

But we do think, going forward, it's a great time for private label. I think, unfortunately, it's pretty clear we're going to have some economic challenges, right? The amount of unemployment. So yes, we think this is going to be a great time for private label. We think a number of the hard discount -- that are almost pure-play private label retailers are better positioned than ever.

We think the large mass retailers are better positioned than ever. And then if you think about the national grocery chains, they've got multiple tiers of private label from natural and organic all the way down to opening price point. So we think the opportunity for us to gain share and build business for the future sort of begins now, right? Begins middle of the second quarter. I wouldn't suggest that the rush in March really was that.

So yes, we think it's a nice opportunity for us. I mean, we're disappointed in how this is all happening and why the demand is with us, but we're really proud of how the company, the business and our people are responding to the demand.

Jon Andersen -- William Blair and Company -- Analyst

Thanks so much.

Operator

The next question is from Robert Moskow of Credit Suisse. Please go ahead.

Robert Moskow -- Credit Suisse -- Analyst

Thank you for the question.

Steven Oakland -- President and Chief Executive Officer

Good morning, Rob.  

Robert Moskow -- Credit Suisse -- Analyst

On Slide '18 -- I got my ruler out to try to measure these bars. And the foodservice decline that you're expecting in the back half, I mean, it looks to be like a 33% headwind to the business, but foodservice is only 10% of your business. So maybe that's not to scale. But am I measuring that right?

Steven Oakland -- President and Chief Executive Officer

I think, yes, they're not to scale. I mean, it's illustrative, obviously. But if you think if foodservice is 10% of our business, if it's down 50%, it's a 5% headwind. If it's down 30%, it's a 3% headwind.

And I think those are the questions. Is this a 2%, 3%, 4%, 5%, 6% headwind? I think we don't know that. I do think there'll be interplay with that green bar. I do think if, in fact, people stay out of restaurants and stay at home, it will drive that green bar.

So there's interplay there. They are not to scale. I think if we knew that number, we would be in a wonderful place right now, I think, right? All of us. But we're confident in the new business bar.

We understand what the carryover losses are. I think the two bars that we don't know and why we're hesitant to guide more aggressively for another quarter or so until we see it or more accurately, are those green and orange bars on the end?

Robert Moskow -- Credit Suisse -- Analyst

Yes. I mean, what I would argue is you're calling it out as a net negative that the interplay of these two that sounds overly conservative to me, but I'll put that aside.

Steven Oakland -- President and Chief Executive Officer

I hope you're right.

Robert Moskow -- Credit Suisse -- Analyst

Yes. But the new business bar, that historically has been the toughest one to predict. Customers say they're going to do something and then they don't. And I think you talked about that on the call today.

But is it fair to say that if it doesn't play out the way you think in the back half, it's probably going to get pushed into 2021 because I have to imagine every retailer is going to have to look at their merchandising set and think about how to provide more value offerings. I know you've talked about this already, but qualitatively, are retailers telling you that, that's their intention once they can kind of catch their breath with all the volume in their stores?

Steven Oakland -- President and Chief Executive Officer

Yes, I think they are. And I think they're just -- everybody's had their nose on the grindstone here, right, and specifically, the retailer. And I think they're now getting to look at the horizon a little bit, and they're saying, OK, how do we manage in a recession? What should we do? I think that's happening right now. And I think the -- and each retailer, depending on their position and the -- are they value, are they -- right? With what their positioning is, is determining how that is.

I think private label will play a key part of it if we have economic. I mean, I think it's pretty clear. We're going to have some kind of an economic slowdown event. There's all kinds of numbers on how long that's going to happen.

So it's pretty clear that private label is going to be part of that, right?

Robert Moskow -- Credit Suisse -- Analyst

OK. And I was hoping, Bill, maybe you can give us an overall number. You have the benefit of fixed cost leverage from the volume. And then you have all the extra costs related to COVID.

Net-net, are they about equal? Or is one higher than the other?

Bill Kelley -- Executive Vice President and Chief Financial Officer

We hope that it will be a bit slightly better -- equal to better. What's unknown is obviously some of the COVID expenses that could come our way that we haven't anticipated. If we have 40 plants, if we were to have any type of significant outbreak that will be costly, yes. But the efficiencies are definitely happening as well.

Steven Oakland -- President and Chief Executive Officer

One thing everybody should know on the call, we've been hyper conservative here, right? With our people safety because we think shutting down for a couple of days and cleaning and separating folks and doing the -- we do contact tracing. We do voluntary quarantines. Every time we get anybody -- and tests are coming back quicker now. We were doing that stuff without the advent of knowing if someone was positive or not.

So it was taking a week or two. We have felt that that was the better avenue than trying to start-up and rerun right away because I think our people feel better about it. They recognize we have their safety in mind. I think we can plan production better, and we're not having these mass outages that you've seen in some of the other food processors across the country.

So I think our method has been a little bit more conservative. Now we do have situations. Traditionally, literally, as we speak, the pickle crop, the cucumber crop starts to come in. It starts in Mexico goes to North Carolina then goes to Michigan.

Historically, we would have literally 100 people temporary workers, shoulder to shoulder, sorting cucumbers in our pickle factories. We're not doing that, OK? We're running that on a very, very different basis. And so that will cost us some money. That will take us some time.

That will cost us a little top line. Those things are all factored in there. So we're being very careful that we don't have the big catastrophic bump. And in doing that, we're imposing some costs on ourselves that we'll be lingering.

If we continue at the pace we are and we don't have that big bump, the cost should -- the benefits should outweigh the cost. And maybe I should have been more specific.

Robert Moskow -- Credit Suisse -- Analyst

And maybe I should've been more specific, but let's say I raised my sales guidance by 3%. Should I raise my operating profit by 3% or less than that because of the incremental cost?

Bill Kelley -- Executive Vice President and Chief Financial Officer

I think I would say less than the sales guidance, sales range.

Steven Oakland -- President and Chief Executive Officer

Yes. It's going to cost us some money to be prudent here, right? We have to put people safety first.

Robert Moskow -- Credit Suisse -- Analyst

OK. Thank you.

Operator

The next question is from Rob Dickerson of Jefferies. Please go ahead.

Rob Dickerson -- Jefferies -- Analyst

Great. Thanks so much. 

Steven Oakland -- President and Chief Executive Officer

Good morning. 

Rob Dickerson -- Jefferies -- Analyst

I just had a quick question kind of on channel dynamics. Obviously, a lot of questions have already been asked and answered. Speaking to food service and just kind of in general, how is your exposure more on the convenience store side? Number one. And then I guess I'm kind of asking that as it pertains to the ready-to-drink coffee launch, which was obviously kind of a piece of 2020.

And just are there -- we refer to foodservice and food-at-home, but anything on that launch with respect to other channels would be really helpful. And that's all I have.

Steven Oakland -- President and Chief Executive Officer

Sure. Ready-to-drink is still relatively small. I'm really proud of that team. They've actually done some virtual launches as we've -- in the last couple of weeks, right? We've got products approved that we're that were virtually done -- all done virtually.

So very proud of them. It's not a big c-store business at this moment. It's either a contract pack or traditional grocery business. So it's probably off -- that's one place that's probably postponed some effort, right? Just because of the nature of new sales calls, new capability, the customer likes to come on -- at your plant, be with you.

That's one of the areas that's probably slowed down a little bit.

Rob Dickerson -- Jefferies -- Analyst

So when you talk about kind of that decel potential in the back half, it doesn't sound like that's a big driver almost, so there's more upside on that business but probably more as we think into '21.

Steven Oakland -- President and Chief Executive Officer

Exactly. Yes. And only because of what it takes to launch a new -- a totally new segment, right?

Rob Dickerson -- Jefferies -- Analyst

That makes complete sense. Thank you. 

Operator

The next question is from John Baumgartner of Wells Fargo. Please go ahead.

John Baumgartner -- Wells Fargo Securities -- Analyst

Thanks for the question. 

Steven Oakland -- President and Chief Executive Officer

Hi, John.

John Baumgartner -- Wells Fargo Securities -- Analyst

Steve, I wanted to dig a bit into the bidding environment because I think it's a fairly sizable chunk of your business comes up for a bit here in the first half. So is that process progressing on track with a typical seasonal patience? And then I guess in keeping with the theme of retailers, tilting in favor of larger branded companies right now over smaller companies, is it also reasonable to think that retailers are prone to tilt in favor of larger private label suppliers where maybe the focus on booking business for the next 12 months is less about just absolute pure pricing and more about the ability to serve and some of the intangibles that will maybe deemphasize the last couple of years.

Steven Oakland -- President and Chief Executive Officer

Yes. I think it's a couple of things. I think everything took pause for a little while. I think all of us put our heads down and try to get orders out the door, right? All of us were doing it everything virtually, so I give our customer service team.

We were processing record numbers of orders and record numbers of cases. And we did it virtually. We've never run that team from home, and we ran them from home. There's not another large monitor at a Best Buy in Wisconsin, right? We ran out and bought every one of them.

So that team has done a great job. I think the first couple of months of the year, the bidding process was right on track. Much of that has been put on hold. There's a few things that have gone through.

So that may be postponed in the early next year or the back half of this year. And I do think there's been a lot of focus on the size of our capacity, our capability and we've had a number of customers ask us to help in areas where maybe the business was split. We have half and somebody else has half. We may have leaned in and given a little bit more or we will be going forward.

So I think we're -- I think your assessment of the benefits of being a large vendor are probably significant in this environment.

John Baumgartner -- Wells Fargo Securities -- Analyst

Thank you. 

Operator

The last question today comes from Steve Strycula of UBS. Please go ahead.

Steve Strycula -- UBS -- Analyst

So I've got one for you, Steve, and then one follow-up question. So to just come through what I think you've been talking about throughout the call is for the first-half demand upside that we're seeing in the business. Should we expect that that's really coming from existing customer wallet, just increased velocity of products that they're putting on the shelves versus getting better repeat purchase? And I want to understand how you think about managing the supply chain and maybe booking new customer wins? Because I know you have a long lead time for quality assurance people checking your supply chain, your factories and that might be increasingly difficult in the COVID scenario. So how do we think about the timing of how that interplays with new customer wins as a function of what's happening right here right now? If that makes sense.

And then I have a follow-up.

Steven Oakland -- President and Chief Executive Officer

Sure. Well, I think you touched on why we said that the new -- the customers' priorities could shift, right? I think it's surprisingly how well they have found a way to use third party audit, they found a way to use virtual audit, they found a way -- we're obviously Fedex-ing samples, things that would normally be done in a conference room with a customer in our plant, are being done virtually. They're being done by Zoom, right? So we're finding a way to get that done. I think that's why we said that the second-half revenue might be just a tad less than what we originally guided.

But the first half was going to be so much more robust the year would be better. And I think that's where we said that would be the upside, depending on when things free up and how fast we can get those things done. I think that will happen. And to your question on will that -- is that going to cause even more lag and longer lead times? I'm not sure that's the case.

I think it's going to have -- a lot of it is going to be when people feel comfortable traveling, right? I do think having people in our plants is an important part of our selling, and we're either going to have to figure out how to do an even better job virtually or we're going to have to reopen the travel system. So we're doing both right -- we're doing the virtual thing right now. We may have to figure out how to do that even better if travel isn't an option.

Steve Strycula -- UBS -- Analyst

Understood. And then as we think about the debt profile of the company and maturity schedule, how do you think about taking advantage of a little bit of the normalization in the rate curve right now to maybe resize some debt that's a higher cost in your cap structure? And then any comments on the receivables program and how that factors into maybe your working capital and free cash flow outlook for the year?

Bill Kelley -- Executive Vice President and Chief Financial Officer

Steve, this is Bill. I think the first part is in terms of the capital markets, that market's -- obviously, we're watching everything that you're watching. We want to be opportunistic when the time is right. There's been some instability there in the high-yield market.

And then there's been some activity that's been helpful to us. But we look at those things all the time, and we'll stay prudent with it. We are still managing the AR receivable. You'll see in our Q that we today that's been effective for us, and we will continue that program.

Steve Strycula -- UBS -- Analyst

Thank you. 

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Steve Oakland for closing remarks.

Steven Oakland -- President and Chief Executive Officer

Well, again, I'd like to thank you all for being with us today. I think we're encouraged by what we see. I'm glad that all of you were able to do it and that you're all safe. We look forward to being back with you in another quarter, hopefully, we'll see a more normalized situation, and we'll be able to do that.

So with all that, please stay safe, and we look forward to talking to you personally. Take care.

Operator

[Operator signoff]

Duration: 76 minutes

Call participants:

PI Aquino -- Vice President of Investor Relations

Steven Oakland -- President and Chief Executive Officer

Bill Kelley -- Executive Vice President and Chief Financial Officer

Ken Goldman -- J.P. Morgan -- Analyst

David Driscoll -- DD Research LLC -- Analyst

Chris Growe -- Stifel Financial Corp. -- Analyst

Bryan Spillane -- Bank of America Merrill Lynch -- Analyst

Bryan Hunt -- Wells Fargo Securities -- Analyst

Jon Andersen -- William Blair and Company -- Analyst

Robert Moskow -- Credit Suisse -- Analyst

Rob Dickerson -- Jefferies -- Analyst

John Baumgartner -- Wells Fargo Securities -- Analyst

Steve Strycula -- UBS -- Analyst

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