Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Carla Casella – JPMorgan
Carla Casella – JPMorgan
One clarification, on your bank side did you say how much was available under your revolver at the end of the quarter?
Richard Wolford
No I didn’t, we have a $450 million revolver. We had approximately $300 million in usage.
Carla Casella – JPMorgan
And there’s no letters of credit?
Richard Wolford
And we have about $75 million in letters of credit. So we have more then ample cushion.
Carla Casella – JPMorgan
And that was your seasonal peak, so it should start coming down from that?
Richard Wolford
Exactly.
Carla Casella – JPMorgan
On the term loan that we repaid with StarKist proceeds, was that pro rata between the term loan A and B?
Richard Wolford
Yes.
Carla Casella – JPMorgan
How much of your business right now is private label and do you see that percentage changing?
Richard Wolford
We have a little bit less then 10% of our business is private label and we do not really anticipate that changing greatly. We are not aggressively pursuing that business. We have specific arrangements with specific customers that are more of a partnership-base driven private label business and the focus of our company really is against branded strategy and branded growth.
We divested, we made this decision I guess three years ago when we elected to divest our private label [soup] business and focus the company on branded growth and correspondingly that’s one reason why we centralized our marketing organization, built it stronger, and moved our pet out here to California and have a new CMO leadership structure that I think is driving some of this branded growth that we’re seeing.
Operator
Your next question comes from the line of Tim Ramey – D.A. Davidson
Tim Ramey – D.A. Davidson
I was wondering if you could tell us a little bit more about the increased commitment to marketing. You talked about it in percentage terms but is this trade spending? Is this consumer directed advertising, is it merchandising? What exactly are we looking at here?
Richard Wolford
No its not trade spending. As we announced at the beginning of this year we have substantially changed our commitment to supporting our brands this year and the increase year-over-year is a consumer spend. When we look at the back half you’ll see substantially higher spending then in the first half. That reflects (a) the fact that we now have our organization together in one location and leadership in place that’s able to provide I think much more effective control of our spending.
- To read the full transcript on Seeking Alpha, click here »
