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Executives

Terry McDaniel – President, CEO

Steve Weinberger – Chief Financial Officer

Analysts

Ian Corydon - B. Riley & Company, Inc

Anton Brenner - Roth Capital Partners LLC

Brad Evans - Heartland Fund

Presentation

Inventure Group Inc. (SNAK) Q3 2008 Earnings Call October 22, 2008 5:00 PM ET

Operator

Good day everyone and welcome to the Inventure Group third quarter 2008 earnings conference call. Today’s call is being recorded. Statements contained in this presentation that are rhetorical fact of forward looking statement as that term is defined in a Private Security Litigation Reform Act of 1995, because such statements include risk and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements.

Statues that may cause actual result to differ from the forward looking statements contained in the presentation and that may affect the company’s prospect in general include, but are not limited to the potential need for additional financing, acquisition related risks, significant competition, customer acceptance of existing and future products, dependence upon major customers, dependence upon existing and future licensing agreement, general risk related to the food products, industries, and such other factors as are described in the company’s filing with the securities and exchange commission.

Actual financial result for the period presented do not necessarily indicate the results that may be expected for any future period. To the Inventure Group knowledge, the information included herein is correct as of the date of this presentation and we do not undertake any obligation to business information in the future.

Joining us on the call today are Terry McDaniel, President and CEO of Inventure Group, and Steve Weinberger, Senior Vice President and CFO. At this time, I would like to turn the call over to Mr. McDaniel. Please go ahead sir.

Terry McDaniel

Okay, thank you and good afternoon. Welcome ladies and gentlemen to the Inventure Group third quarter results conference call. During the call I will provide some overall highlights for the third quarter and year-to-date as well as provide a business update. Steve Weinberger will provide more details on the financials and I will then provide a summary at the end.

We are very pleased and excited to report another strong quarter results highlighted via net income of $1.1 million which equates to $0.06 this year. This was our best third quarter performance since going public in 1996. EBITDA was $2.8 million for the quarter, an increase of $1.6 million compared to the third quarter of last year. Year-to-date EBITDA was $6.7 million which surpasses our best full year EBITDA since going public in 1996.

Our total revenue grew from $25.4 million to $29.8 million or 17.5%. Later foreign contributed 19% net revenue growth and that is an apples to apples comparison since we own later form during this quarter last year. While the SNAK business net revenue also grew double digit of 17%. The net revenues for Boulder brand was up 16%, our total healthy and natural segment which is our Boulder and Rader Farms business was up 19% and now represents 44% for the quarter of our total branded business. So, this is a significant more toward a healthy and natural segment.

Our total snack food business net revenue grew at 17% for the quarter. Poore Brothers was up 13% aided by rollout by the national drugstore chain. Additionally, continue of favorable net revenues for the BURGER KING Brand contributed $1.7 million and it is on paced to be the most successful new product introduction in the company’s history. This successes were somewhat offset by the continued slippage of the T.G.I.F. brand net revenues which declined by 6% for the quarter. This is an improvement over the first half in which the brand declined 20% and I will talk more about each of these brands later in the call.

The third quarter positive result continued the progress made in the first half. In reflect to results of the efforts we made in improving overall business performance. Diversifying our portfolio and to build a healthy, natural, and indulgent niche of snack business and continue diligence in managing cost to stay ahead of the increasing expenses with commodities and fuel. The year-to-date financial performance as measured by net income or EBITDA is much higher than any previously publicly reported earnings full year performance in earnings.

On a year-to-date basis the total net revenue is up 31%, growth profit of 46%, SG&A was down one point from 16 to 15. Operating income year-to-date is up to 216%, net income is up 367%, and EBITDA is up 127%, and again, EBITDA is up $6.7 million for nine months. It is on a record pace compared to any other year this decade. If you look back to 2005, this is a little bit of reminder of where we come. We were $1.7 million for four year two point in EBITDA, 2006, $2.9 million, 2007, $3.6 million, and this year at $6.7 million is a year-to-date has doubled what we did all of last year. And there is a reconciliation of EBITDA to net income in our earnings release filed in SEC form 8K on 1022 of Los Angeles.

Operation execution was excellent for the first half with an all three plans cost per pound was add or below last years cost per pound. That is despite increase cost in operating from fuel and natural gas and labor. Total Company freight cost is on budget despite dramatic increase in fuel surcharges.

Intense focus on cost results and in significant savings SG&A reduction by one point as I mentioned earlier, and internally, we have attained over $2 million in additional savings through organizational efficiencies and this is an internal project we were working on. If you recall on the last Call, we were at 1.6.

Driving cost efficiencies is important as we continue to face the increasing cost of commodities for 2009. We will continue to offset increasing cost to price increases, driving operational efficiencies, and by leveraging our asset based. Although as of late in the last month, we have seen some softening about these increases.

And now I would like to turn it over to Steve Weinberger for more detail.

Steve Weinberger

Thank you Terry and good afternoon everybody. I am going to apologize in advance; I have got a bit of a cold, so I may be a little raspy. It is my pleasure to review the third quarter financials for the Inventure Group, although line by line on the financial statements that we published this morning. Net revenue for the quarter was $29.8 million, up 17.5% versus the same period last, and as Terry said, was up almost 17%, which was the largest quarterly increase in recent memory. Key drivers through the snack division continues to be Boulder Canyon, still in doing double digit growth, Poore Brothers, which is benefiting and has benefited so far this year from acquiring a national drugstore chain, and Burger King snacks which contributed $1.7 million of revenue in quarter.

These revenue gains are partially offset by a 6% decline in the T.G.I. Friday’s business, which as you recall in the call last quarter, we are looking at a 20% decline. The good news is that all products being produced at our Bluffton facility were up 9% for the quarter. On the Rader Farms division continues to perform very well with revenue of $9.7 million, up 19.2% versus last year. On the year-to-date basis, total company net revenues were $85.2 million, up 30.6% versus last year, and remember, we acquired Rader at May of 2007. Rader contributed $29.5 million for the first nine months, up 17.5% on a stand-alone basis. Snack division contributed $55.7 million, up about 6% in the first nine months of this year compared the same period of last year.

Our gross profit it results our great story for the quarter. Gross profit for the quarter was $7.1 million, up 58% in six full percentage points versus last year. Key drivers or both divisions with the snack division having a gross profit of $4.3 million, up 67% in 6.5 percentage point versus last year. This increase was attributable to increased pound to plants, lower plant cost, as well as the impact of price increases. Rader Farm gross profit was $2.8 million for the quarter, up 47% in 5.5 percentage points versus last year, and again, the same kind of Key drivers that we saw in the snack division with a revenue increase in favorable cost in both the farm and the plant for the quarter.

SG&A expenses were up $1 million and one percentage point versus last year. We have a lot of things going on in our company as we build up on our capabilities. We are investing in sales and marketing and infrastructure at Rader Farms as well as implementing an oracle conversion, which by the way is going very well. We have also increases in broker’s commission and demo costs as we grow our business on the snack side.

However, on a year-to-date basis, our total SG&A expenses are down one full percentage point versus last year and were at 15% of sales on a year-to-date basis. Operating income for the quarter was $2.1 million, 295% in five full percentage points higher than last year, and [inaudible] to that income as Terry said, net income for the quarter was $1.1 million or $0.06 per share versus $41,000, virtually, a flat net income last year and $0.00 per share last year.

For the first nine months total net income was $2.2 million or $0.12 a share versus $0.5 million or $0.02 a share last year. This year-to-date net income increase represents the 367% versus the first nine months last year. Going to EBITDA, we have been reporting on EBITDA for the last few quarters, and this is the benchmark we used internally to track our progress. EBITDA for the quarter was $2.8 million, an increase of 134% and about five percentage points versus last year. On a year-to-date basis, total EBITDA was $6.7 million, up 120% and 3.4 percentage points versus the same period last year. And we have already surpassed, as Terry said, the highest EBITDA ever delivered for a full in the company.

Now typically, the third quarter would represent our highest EBITDA for the year as we begin to process our own grown berries. We expect the fourth quarter to be more aligned with the performance that we have seen in the first half of the year. Looking in our balance sheet of working capital, our line of credit sat at $9.3 million at the end of the quarter which is up about $1.8 million versus year end last year. That was used primarily to fund an increase of almost $6 million on our current assets.

At this time of year, we are at our peak use of the line as we harvest our berry crops, and purchase fresh berries that we freed ourselves to support all of our sales objectives. The line is already coming down at the beginning of Q4 and we still have plenty of availability left on that line.

And finally, on our stock buy back activity, as we mentioned in a press release about a week or so ago, we have approval to buy back $2 million of our stock. So far, we purchased small quantity and we are still looking for opportunities as they arrive. And also, we try to prioritize all of our resource requirements going forward. Terry?

Terry McDaniel

Steve thanks, and thanks for holding on today through this cause. Although I can assure you, our business is much healthier than Steve probably. But now, I would like to go in a greater detail on our two business platform, our healthy, natural line up product, which again consists of Rader Farms and Boulder, all natural brands and our indulgent niche snack brands primarily consisting of T.G.I. Friday’s, Burger King, and Poore Brothers. A Rader Farms acquisition continues to deliver multiple benefits, revenue growth continue at a double digit rate of a 136% on the total year basis, on the stand alone basis looking at their numbers from an internal standpoint. Net revenues were up 17.5% for the year. It has been a meaningful contributor to the company profitability as Steve mentioned, and we think significant SG&A leverage. And it also allowed us to move in faster into our real strategic plan of growing a category of healthy and natural foods.

We are launching our value added branded fruit and smoothie products that has been moved to January 2009, their early response is very encouraging. We received approvals from major customers including supermarket chain, some club accounts, one major mass merchandiser, and a major home delivery company. Despite the cold spring, we were able to increase the pounds of IQF individually quick frozen fruit off of our farms by 28% of the last year’s crop. Additionally, we increased the amount of outside fruit we process to our IQF tunnels and freezing margins, which also drove up some of our cash needs as we bought more local berries and there is a margin improvement in doing that.

Raspberry prices were up, Blueberry prices are down, raspberry are up due to a weak Chilean crop and blueberry prices are down because more productions coming on line. The net impact of the company should be positive considering our growing three times more raspberries than blueberries.

We did finalize the installation of our new package machine which increases our capacity and strategic growth and also provides capabilities to produce white bottom standup pouch bag, as you see when we introduced our products in January. We continue to strengthen the management team to support this growing business. On the Boulder Canyon all natural brand, our overall kettle chip business was up 24% in year-to-date net revenue. We are currently in the process of increasing our investment in packaging and kettle capacity for a good year plan to drive both improved efficiencies and meet the needs of our growing business.

The Boulder brand continues to form exceptionally well. Net revenues year-to-date were up 26%, distribution gains continue on national basis, and we introduced the new rice and bean product, and an early acceptance has been very positive among the trade. We are in the process of increasing our resources dedicated and support this healthy natural brand gross strategy by hiring an additional national sales manager focused exclusively on the Boulder business and hiring a addition marketing manager focused on both Boulder and Rader Farms brands.

Now let us turn to the indulgent niche snack brands, T.G.I.F. revenue decline is still a concern, this is a business that, as Steve pointed out, was decline of 20%. We were able take that decline down to 6%. Most of this is a result this decline with the buy end, from the four buy end in the first quarter. Increased competition to warehouse snacks and in couple of key classes at trade, C-store and vending, those channels have been hurt over the last few years, particularly, vending, when left manufacturing jobs and then the C-stores the price of gas went up people shop less from the store. In response to these declines, we are pursuing the following opportunities. First of all, we are excited that Friday’s has approved the serving in the product into the Dollar channel. This is a big change for us. We have a strong dollar business and some of our other brands, and this gives the opportunity to sell our largest warehouse brand into that channel.

And currently, we have already sold one order of $350,000 to one major Dollar store. So, we are getting some early response from this, and we are looking for more later on. In late December, we will have a robust new product introduction which will feature two new Kettle chips under the T.G.I.F. brand. Two rice and bean products and one buffalo wing flavored steak product.

We have also introduced domestic and international markets such as Wal-Mart Mexico took the Friday’s brand in August. We are increasing short term trade investment to go after new distribution and also to take advantage of some key promotional opportunities. And we were still testing the larger side within box stores. On the Burger King brand, we have sold $4.1 million year-to-date in net revenue and $5.2 million since the introduction. Onion rings begins shipment in late July, and we have sold $300,000 of this product in Q3.

Fourth quarter new product introduction will be a product called French toast. If for those who go to Burger King, the number one breakfast item is the French toast item. And if you try this product, we were having confusion whether we should put it on snack section or the breakfast side. But, it is a very interesting product and we are looking forward to good things from that product. And as we mention in between our last call, in a press release, Burger King has been very excited about our business that extended to international markets including Mexico, South America, Latin America, Caribbean, Hong Kong, Thailand, Taiwan, and the Philippines.

We continue to seek new opportunities to leverage our Bluffton assets. As Steve mentioned we were up 9% in pounds during the third quarter about focusing on securing private label and co-pack opportunities. We begin shifting our first private labor customer all day and we have 10 approval from other two major customers. And we are also looking at some co-pack opportunities. And as mentioned earlier, Poore Brothers continues to performing well, it is up 19% year-to-date.

So, for that trend brand update and our major focus points. Now, why we feel that we were pretty excited about our results today as we said last call, two quarters, in our do not make a year, maybe three quarters do not make a year, but we are certainly in the right trend line. And we were excited about the future, because, first of all, despite the commodity issues we have just completed another outstanding quarter and proper results rule out case previous full year results the Inventure Group today is better position for growth than they have been in recent years. And our healthier platform of products is going rapidly and next year we are looking at those brands of all our branded business to deliver about 50% of our volume for next year.

We have a strong platform for growth. In a healthy natural segment we have both Boulder and Rader Farms, both growing at double digit rate, representing of the 40% of our third quarter brand revenue. On the indulgent/niche snack brand, yes Fridays is still down but we expect to continue to put effort behind that brand along with the strong growth of Burger King, private label, co-pack, and our rice and beans product, which is actually being produced at Bluffton.

We are focused on categories that are in line with consumer trends. If you look at our healthy segments, consumers continually these products and these categories, are growing at a faster rate. Additionally, in the indulgent/niche business, the all other segment which is where our Friday’s and Burger King Brands participants is growing at a much faster rate than traditional snacks of flat chips and cheese products and tortillas. Additionally, the kettle chip category is growing at a much faster pace than the category of flat chips.

We continue to improve our systems and process as Steve have mentioned, the oracle change, one thing that this year, I can tell you we know where we are going we got poor visibility, we know by brand, where we are making money and we know that on a monthly basis. With the conversion to oracle, we expect to have that same capability within our Rader Farms business.

We also, one thing that I would like for any of our associates on this call, thank them for the job they are doing. We have an unusually strong group of leaders and associates in our company. I am very proud of the job they have done, I think we are very blessed company to have the people that we have, and they are the ones who are really making these results happen. And last but not the least; we will continue to review our strategic opportunities as they arrive. I appreciate everyone today joining on the call, I am going to turn it over now to Questions and Answers.

Question and Answer Session

Operator

(Operator Instruction) Your first question comes from Ian Corydon - B. Riley & Company.

Ian Corydon - B. Riley & Company, Inc

Thanks, a couple of questions. First, starting with the Burger King line, if you can, can you provide any feedback on how the onion rings products have pulled through? And then, if you could just talk about bigger picture building the brand, with the couple of successful Burger King products out there, what kind of opportunity is it that opens up to getting to new account?

Terry McDaniel

Sure Ian, I think, first of all on the onion rings, it is a little too early since it has only been out of month or so. But, what we are hearing from the trade probably on the first channels we have been able to put the product in vending. So far, it has been a very positive response. But, I think it is too early, we have not had enough sales through to tell just how successful it is going to be.

Your second question on the Burger King brand, by bringing the second major item and onion rings, we already had the catsup in fries as our main item, plain that is kind of a planker item. With two items, we are now pursuing and investing quite a bit more to go after a broader distribution. We were actually going after some of the major supermarkets. We have been tentatively told one the largest supermarket on the country is going to take two. I do now want to announce that till I got that confirmed and we start shipping but we are trying to expand the brand and I am aware of that.

And our plans next year is to show some good growth on that brand. I will continue to look at introducing other product. We got the French toast and we have got several others selective for 2009, that we are pretty close to forming up the development.

Ian Corydon - B. Riley & Company, Inc

And then, looking at the commodity cost, I would imagine that you edible oil cost would start to come down, but I know potatoes have been pressured. Could you give a little more detail there and also did you lock in potato prices at Q1 of next year?

Steve Weinberger

Let me first address the edible oil question. I mean, yes it is coming down from its high and we buy out throughout the year. So, we are seeing some benefit now but there is no question on edible oil that will be a little bit higher going into next year versus this year and hopefully, these current trends which have occurred in the last three or four weeks will keep that pressure down on the edible oil. It has been interesting watching edible oil, when the barrel of oil was up to $140, edible oil was at its highest point and now it is down to $70 and edible oil is coming down. So, there will be some increase cost over last year on the edible oil which if this is maintained where we are at today we will come down toward the end of next year.

On the potato side, that really has not much to do with what is going on with the current economy. There was a shortage of potatoes this year. A lot of the major companies pull back on promotions and that along with the tough situation with ethanol, with farmland, people looking at the substance they can get for other crops as with pressure on the potato crop. A potato crop is up and we have contracted but the potato crop season goes from May to May. So, actually any increase in this pricing other than what we have filed on our current year contracts will not affect us to the second half of next year.

Terry McDaniel

We have locked in to all of our potatoes for all of 2009 environment, in fact early in 2010.

Ian Corydon - B. Riley & Company, Inc

Okay good.

Terry McDaniel

But the freight does have come up, no question about it but we got supply.

Ian Corydon - B. Riley & Company, Inc

And then I guess last one on Rader, could you just talk about how you can continue to grow that business through new accounts or better sell through and then if you could provide any more detail in new product. That would be great.

Terry McDaniel

Yes. I think the way we are going to continue to grow a Rader Farm business is, if you look at the total category of frozen fruit, it came down to this, it is only up 4% to 5% but the mix dairy categories were re-participate on the 14% range. So we are getting some big growth from some current customers. We are also going to taking up customers and the introduction of this new branded product in these movies should give us quite a bit of grow for next year or should help continue this kind of growth patterns for next year.

As I look at these Smoothies were introducing three Smoothie products, there are fruit and yogurt combination in a cube. Basically all you do, you pour juice and to a blender but the cubes end and you get an instant Smoothie and only people use grape juice or apple juice. And the difference in this product that is beyond the convenience and excellent taste is, it is also has the burst, for example, our strawberry-banana product will come an approaching burst. Our triple berry will come with energy burst and so we will have three different products and with guy commitments, and we are little disappoint. We would like to push it out even earlier. We had a little trouble getting our cofactors from the standpoint of having enough capacity in the beginning, estimated and we are set to go. As we go in the January, but we are getting a lot of calls and we would like to go sooner if possible.

But we expect that the smoothie product to be, we will see how the turns are. But early indication and early interest by major customers both grocery and club is a big opportunity. The other opportunity for Rader, a lot of Rader’s business is focus in 20 or so customers. There are many, many more customers out there for this brand. We just, we had our home stand information, I believe it was either Nelson or IRI that came back and in that home stand information of all the frozen brands, Rader farms had the highest loyalty of any brand, yet we are not really distributed that widely throughout the country.

So we believe the opportunity is growing up. We have added resources to do that. We are looking at in marketing dollars. We are looking at flooding to support this growth as we go in the year. We are so, we remain very bullish on the Rader farm’s business.

Ian Corydon - B. Riley & Company, Inc

Great.

Steve Weinberger

I think we do not to be like growth rates slowdown, any times then.

Ian Corydon - B. Riley & Company, Inc

Excellent. Thanks.

Operator

(Operator Instructions) Your next question comes from Anton Brenner - Roth Capital Partners.

Anton Brenner - Roth Capital Partners LLC

First of all, the large increase in SG&A expense in the third quarter both in absolute amount and in as a percent of sales, it sounded like you are projecting that level of SG&A to be at least at absolute terms to be sustained over the next several quarters.

Steve Weinberger

No, I mean that will be our highest quarter of SG&A spending that we have here. For this year, these were coming up too. We have invested some money in adding infrastructure at Rader Farms, sales and marketing in Rader Farms. We are doing an Oracle implementation. We are sort of down the finish line for our surveys at Oaxley work. So, there are a number of one-timers or projects coming to an end, if you will, in the third quarter. So, that was a little bit of a blip.

Anton Brenner - Roth Capital Partners LLC

Okay, so half way between more on spending were…

Steve Weinberger

I think if we said going forward, our trends for EBITDA and so on should more reflect the kinds of numbers we saw on the first half of the year.

Anton Brenner - Roth Capital Partners LLC

Remind me what you produce certain bluff in aside from the TGIF?

Terry McDaniel

Yes we make in bluff and we make the Burger King products, we make the [inaudible] for the bolder brand has actually made in bluff and we also make the new all of these private label came out and bluff in and some of the things that we are working on and we announced on the last call that we developed pellet technology. We are not at the product development stage that is not finalized yet but we will be making pellet snacks under various brands once we get back to bulk.

Steve Weinberger

But certainly, the Burger King product is already being made of bluffing in terms of pounds. It fixed up a lot of the shortfall we have seen from Friday's and as Terry said, we did pick up a couple of new private label accounts coming specifically out of that plan as we talked about in the last couple of quarters.

Terry McDaniel

Yes, if we have 9% in that plant…I think it is on the long term.

Steve Weinberger

Because we have been here couple of years and that is the first time we have seen that kind of growth as the bluff in plan. We are right on strategies we talked about the last couple of quarters.

Anton Brenner - Roth Capital Partners LLC

That puts your utilization in a low to mid 40s?

Terry McDaniel

Yes, it is somewhere in 40 and 45 each maybe. We do not usually measure it and frankly, we do not usually measure capacity on a sort of a quarterly basis. And I mean someone has this recently about running a plant 40%, how do you do it? And I mean you can see from our numbers we did pretty well on that plant. We do not stock it or gird the plant to full production. So, even at 40% we are running it efficiently. However, without investing a lot of capital or equipments and leveraging even some of the existing headcounts, we can leverage at that quickly and that would certainly be an improvement to all of our margins.

Steve Weinberger

And the other strategy and I think Terry mentioned is some cope backing opportunities and we are having some fairly serious discussions with a couple of sizable companies so we will see.

Anton Brenner - Roth Capital Partners LLC

For both the Burger King product line and the TGIS product line, vendors are very important maybe the most important sales channel for your and I am wondering just how we should take it more importantly have your thinking about the potential that large increases are in unemployment if that channel more harder than some others in effect to your sales. What might be offsets?

Terry McDaniel

Actually, this store is our largest channel for those clients then be in number two. There is certainly where we thought a lot about, this is tough economic times. It appears, I mean who knows but it looks like we are in a recession but one thing that happened is actually been a positive to us. Now, it may affect, Tony, vending more although we are not seeing it. We actually had our best very good quarter on vending this third quarter and I do not have those numbers in front of me but it was a very good quarter and some of the TGI Fridays products like the TGIF kettle, we had a great reception at the [Snack's] convention.

So, that particular channel and Steve is going to look up to try to find if we can find that number.

Anton Brenner - Roth Capital Partners LLC

Order vending was up 8.9%?

Terry McDaniel

Yes, so we had a very strong quarter on vending although that is total. That is not Friday's hamburger. And that is a point, Tony that a lot of people are eating that home now, that is the first thing you have seen in this kind of downturn. I think they do survey over 50% of people eating less out. The reason we do not have a large food service business, so our overall business should be favorable. I think Snack is kind of a comfort food and I will just say the food industry in general during these uncertain times is a pretty good place to be and we have got relatively in the Snacks business cheap foods, I should not say cheap, that is inexpensive foods and a comfort food and we have seen no decline or no short term or long term at this point changed in our overall business.

Operator

(Operator's instruction) Your last question comes from Brad Evans - Heartland Fund.

Brad Evans - Heartland Fund

I was just curious about the gross margins on the stock division side and you thoughts into the fourth quarter, what would be the puts and takes that could cause your margins to either go up and down if you look at the landscape today?

Steve Weinberger

On the stock side, I think the fourth quarter; we are get a couple of things going on that maybe a little bit different than the third quarter in terms of absolute margin. We are into a little higher potato cost in the fourth quarter on the Snak side…

Terry McDaniel

Which by the, Brad every year our best price of potatoes are the ones closest to us and as we go further in the storage, which is where we are going now that every year they will go up a little bit higher and have a little less margin fourth quarter.

Steve Weinberger

And some of the oil cost that we locked in to a little earlier, I said later last year for the fourth quarter this year will hit us little bit. So, I think the gross profit will be down but we do not forecast. It will be a little bit different than the fourth quarter than the third but not too dramatically.

Terry McDaniel

Again, what we said probably the most and total being more along the last of what you saw first and second quarter.

Brad Evans - Heartland Fund

Just on the Snak division.

Terry McDaniel

Yes.

Brad Evans - Heartland Fund

Okay, and just as far as TGI is concern, you made some nice progress in the short period of time. Is there any chance that that product line is actually up in the fourth quarter year over year?

Terry McDaniel

I would not want to make that…certainly, we got a lot of energy and effort. We are working very close with the Carlson people. They have been very helpful as getting some new products, approving those quickly, the dollar channel piece if we can get a couple of hits beyond what I have already mentioned. I think those would come more January or February time period. I do not know if any of that will fall into December but I would not want to project we would be grow on Friday's fourth quarter but I will say that we got a lot more in the queue than we have in the first three quarters of the year.

Brad Evans - Heartland Fund

So, we would hope to make continued improvement there?

Terry McDaniel

Yes, I mean certainly our goal is to make continued improvement but I would not project that we would be on the plus side in Fridays fourth quarter.

Brad Evans - Heartland Fund

Okay and Steve, could you just give us you thoughts as to where you think the balance sheet might look like at the end of the fiscal year in terms of the amount of that you have in the balance sheet?

Steve Weinberger

We were down about a million bucks on our long-term debt versus our yearend position. With the help, we peaked at our line of credit at $9.3 million in the third quarter. If you look at the directionally where we went last year, I would expect that certainly by yearend, that line will come down a fair bit. We are already three weeks in the fourth quarter and that line is already down a fair bit from where we ended up in September.

So, if you think about, it is all really related, if you think the rate of business were harvesting a millions of pounds that varies but at the same time were buying millions of pounds of primarily blueberry from other local farmers then we are out too I think more of ourselves. So, we have a very large cash outlay. The good news for me is that in the third quarter, our current assets went up $6 million and their line of credit only went up a million versus last year. So, well I do not give sort of official projections. We are expecting that line to come down a fair bit by the end of the year.

Brad Evans - Heartland Fund

So, we should have roughly the $5 million term loan, the $6.5 million mortgage and then something less than $7.5 million on the revolver at end of the year?

Steve Weinberger

I think I will hope it will be something less than $7.5 million at the end of the year.

Brad Evans - Heartland Fund

But it was the level that I think you had at the end of fiscal year.

Steve Weinberger

Yes.

Brad Evans - Heartland Fund

That is all. Nice quarter by the way.

Operator

And gentlemen, I have no further questions at this time.

Terry McDaniel

Okay, well thank you everyone and we appreciate your patience and thank you for joining in and we look forward to continuing this progress and hopefully, showing this kind of results going forward. Thanks.

Operator

And that does conclude today's conference call. Thank you for your participation. You may disconnect at this time.

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Source: Inventure Group Inc. Q3 2008 Earnings Call Transcript
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