Good day, and welcome to the Flowers Foods Incorporated twenty twenty Annual Meeting. I would now like to introduce George Deese, Non Executive Chairman of the Board of Directors. Please go ahead.
Thank you, Ian. It is my pleasure to call this meeting to order and welcome those joining us today to the first ever virtual Flowers Foods Annual Meeting of Shareholders. We appreciate your interest in Flowers. These are extraordinary times we are living in and I certainly hope you and the ones you care about are safe and will continue to be so. In addition to our President and Chief Executive Officer, Ryze McMullen, the other Flowers Food Board members joining the meeting today are Rhonda Gass, Ben Griswold, Margaret Lewis, Jim Speer, Doctor.
Melvin Steele and Marty Wood. At this time, I would like to recognize David V. Singer, former CEO of SnyderLance Inc, who has been a member of the Flowers Board of Directors since 2010. David's term as director has expired, and on behalf of the entire Board, I would like to thank him for his decade of service to the company and to its shareholders. I would also like to express our sincere appreciation for his leadership as well as his financial and operational expertise, which has proven tremendously valuable to his fellow directors, our management team and to the company's ongoing successful growth.
Also attending today's meetings are Steve Kinsey, Chief Financial Officer and Chief Accounting Officer and Stephanie Tillman, Chief Legal Counsel. Once again, thank you for joining the meeting today and your continued support. At this time, I will turn it over to Stephanie for the business portion of this meeting. Stephanie?
Thank you, George. As a reminder, the rules of conduct may be accessed by clicking on the rules of conduct link on your screen. The rules describe procedures outlined for voting and for any technical issues during the meeting. Shareholder questions that were properly submitted in advance may be addressed at the end of the meeting during the Q and A session. Also, please note that this meeting is being recorded.
However, recording the meeting or copying materials presented at the meeting, including screenshots, is prohibited. As Secretary of the company, I have submitted the following documents for this meeting. The notice of meeting, which was mailed to all shareholders of record as of the close of business on 03/19/2020. A supplemental notice regarding the change in location and time. An affidavit of the distribution of that notice, began on 04/08/2020, and a certified list of the shareholders of record as of 03/19/2020.
Broadridge Financial Solutions is the official proxy tabulator for the meeting, and Lisa Hay is the inspector of election. She has reported to me that we have a quorum. Voting today is by proxy and electronic ballot. Before we proceed, I'd like to point out that shareholders who have submitted proxies or who have previously voted do not need to vote again today. However, they may choose to do so by following the link on the webcast portal, and their vote today will supersede any previous vote.
The votes cast during this meeting will be included by the inspector of election in her final report. There are four proposals duly submitted to be voted upon. The first, the election of eight director nominees to serve for a term of one year. Second, an advisory note on executive compensation third, ratification of the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for fiscal year 2020. And fourth, a management proposal to amend the company's restated articles of incorporation and amended and restated bylaws to reduce supermajority voting requirements, including the supermajority threshold required to call a special meeting.
There are no other proposals to be presented for a vote at this meeting. If you are voting through the webcast portal, please submit your final votes now. By now, all shareholders have had a chance to vote. I now declare the polls closed. The first order of business is the election of the director nominees.
The nominating governance committee and the board of directors have nominated the following for election as directors of the company, each to serve for a term of one year: George E. Deese, Rhonda Gas, Benjamin H. Griswold IV, Margaret G. Lewis, Riles McMullen, James T. Speer, Melvin T.
Stith, and C. Martin Wood III. May we have a motion on these nominations?
Miss secretary, I move that the eight director nominees as submitted in the proxy statement be nominated for election.
Second. Will the inspector of election please report the results of the election?
Miss secretary, each director nominee has received a favorable vote of at least 175,644,842 shares, which represents 98.4% of votes cast on this proposal.
Thank you. I hereby declare that the director nominees have been duly elected. The next order of business is an advisory vote on the compensation of the company's named executives. The compensation committee and the Board of Directors evaluate both performance and compensation to ensure that the company maintains its ability to attract and retain the most qualified executives. In accordance with the Dodd Frank Act, Proposal two, this year's advisory say on pay vote gives shareholders the opportunity to express their views on the compensation of the company's named executives.
Although the vote is advisory and will not be binding, the board values the opinions of the company's shareholders and will take into account the outcome of the vote when considering executive compensation arrangements. May we have a motion regarding the advisory vote on the compensation of the company's named executives?
Ms. Secretary, I move that the compensation of the company's named executives as disclosed in the proxy statement be approved.
Second. Will the Inspector of Election please report the results of the advisory vote?
Miss secretary, the proposal to approve the compensation of the company's named executives has received a favorable vote of 172,728,063 shares, which represents 97.2% of the votes cast on this proposal.
Thank you. I hereby declare that the compensation of the company's named executive officers is approved. The next order of business is the ratification of the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending on 01/02/2021. The Audit Committee and the Board of Directors have appointed PricewaterhouseCoopers, and the Board recommends that this appointment be ratified. May we have a motion regarding the ratification of the appointment of the company's independent registered public accountants?
Mr. Secretary, I move that the appointment of PricewaterhouseCoopers be ratified.
Second. Will the inspector of election please report the results of the vote?
Ms. Secretary, the proposal to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the 2020 fiscal year has received a favorable vote of 191,971,610 shares, which represents 97.2% of the votes cast on this proposal.
Thank you. I hereby declare that the appointment of PricewaterhouseCoopers has been ratified. The final order of business is the management proposal to amend the company's restated articles of incorporation and amended and restated bylaws to reduce supermajority vote requirements, including the supermajority threshold required to call a special meeting. The full text of this proposal is set forth in the proxy statement. The Board of Directors recommends that the management proposal be approved.
May we have a motion on the management proposal?
Miss secretary, I move that the management proposal be approved.
Second. Will the inspector of election please report the results of the vote?
Miss secretary, the proposal to amend the company's restated articles of incorporation and amended and restated bylaws to reduce super majority vote requirements, including super majority thresholds required to call a special meeting, has received a favorable vote of 175,174,289 shares, which represents 82.8% of the company's outstanding shares.
Thank you. I hereby declare that the management proposal is approved. This concludes the business portion of the meeting. I'll now turn the meeting back over to our President and Chief Executive Officer, Ross McMullen.
Thank you, Stephanie. Good afternoon, everyone. On behalf of Flowers, I do want to express my hope that you and your family and the ones you care about are staying safe and managing as best you can. These are certainly challenging times for everyone and we've all had to pretty much adjust every aspect of our lives both at home and at work. Our collective thoughts and prayers are with all of those who have been affected by this disease including members of our own Flowers family.
While 2019 seems like a distant memory at this point, did want to make a few brief comments around what we accomplished last year. First of all, in 2019, we celebrated our one hundred year anniversary, a huge milestone for any company, especially one like ours with such humble beginnings. We made progress toward our long term annual financial goals in 2019. Those goals were to grow revenues 2% to 4% and earnings per share at 8% to 10%. In fact, sales for the year increased 4.4% and we began to see evidence that our margin improvement efforts are paying off.
Our market share and competitive position have never been stronger, validating the effectiveness of our brand strategies and investments. Consumers are responding well to the new products added to our Dave's Killer Bread, Canyon Bakehouse and Nature's Own lines, which contributed to an almost 6% increase in branded retail sales in 2019. We remain hyper focused on making our brands even more powerful. To improve operations, we're executing on a number of key initiatives to enhance profitability, including portfolio and supply chain optimization, the reinvigoration and investment in our cake business and optimizing our foodservice business. We also remain committed to addressing the margin headwinds we faced in 2019, specifically higher labor cost and reduced manufacturing efficiencies.
Now turning to the current environment we face. As we've worked to manage through this crisis, we remain committed to three key priorities. First and foremost, obviously, it's imperative that we maintain a safe workplace and support our employees in every way that we can. Second, it's crucial that we fulfill our obligation as a key part of the nation's food supply. And third, we are committed to continuing to support the communities that we serve.
As far as our team goes, it's incredibly difficult to adequately describe just how proud I am to serve them. Across the company from operations to sales, distribution, head office and support staff, our team's performance has been flat out amazing. And I firmly believe that our success during the quarter reflects the collective loyalty, commitment, and passion of our team. Our core values of service, integrity, and character have always been and always will be our guiding light. And those values served us well as we navigated previously unchartered waters.
I'm especially grateful for the hard work, dedication, and personal sacrifices of our frontline workers. And last month, we distributed incremental bonuses to our heroes to recognize their extraordinary efforts. Our top priority is ensuring the health and safety of our team. And in the early days of this crisis, we established a pandemic steering committee and task force, each led by senior Flowers executives. We've carefully followed the guidance from health authorities and we've instituted a number of safeguards for the protection of our employees, including enhanced sanitation, wellness and temperature screenings, travel restrictions, company provided masks, remote work and of course social distancing.
We've also enhanced our benefit programs, which are enabling our employees affected by coronavirus to care for themselves and their families. We take very seriously our responsibility to help feed America, and we have an enormous responsibility to ensure our products are readily available to our consumers. Because our bakeries are strategically located around the country and close to the markets they serve, we were able to supply the market despite the unprecedented increase in retail demand. During the height of the accelerated buying in March, we streamlined our product assortment just like we do in advance of a hurricane, but in this case, we did it virtually nationwide. That allowed us to maximize production by focusing on longer runs of our best selling items.
Furthermore, we were able to reallocate some of our foodservice production to support the growth in the retail channel. Our production teams did an amazing job keeping up with the changing marketplace and ensuring our customers and consumers had the products they needed. And our independent distributor partners played a key role and continue to serve faithfully their markets despite the personal risk. Finally, we have a deep connection to the many communities we serve and as always, we're supporting them during this challenging time. That includes donations of food and supplies from our bakeries throughout the country to their local food banks, hospitals and first responders.
In addition, we made the decision to donate a portion of the funds budgeted for this year's annual meeting to Second Harvest of South Georgia in conjunction with Feeding America. Flowers is a Feeding America mission partner donating more than $10,000,000 worth of baked goods last year, And this most recent gift enables the provision of approximately 450,000 meals for the hungry right here in South Georgia. Before I turn the call over to Steve Kinsey, I'd like to announce that the Flowers Foods Board of Directors has declared a quarterly dividend of $0.20 per share, which is an increase of 5.3% over the same quarter last year. This is the seventy first consecutive quarterly dividend paid by the company and is payable on 06/19/2020 to shareholders of record on 06/05/2020. And this action increases the annualized dividend rate to $0.80 per share from $0.76 per share at this time last year.
The Board and management team remain confident in the company's strategic priorities and its ability to generate consistent results over time, including in this uncertain environment. We'll continue to allocate cash flow with a focus on maximizing return on invested capital and growing shareholder value. Now I'd like to ask Steve Kinsey, our Chief Financial Officer, to give a brief financial review. Steve?
Thank you, Ryals, good afternoon, everyone. Before we get started, I must remind you that our presentation today may include forward looking statements about our company's performance and other matters such as the impact of the COVID-nineteen pandemic. Although we believe the statements to be reasonable, they are subject to risks and uncertainties that could cause actual results to differ materially. In addition to matters we will discuss during the presentation, important factors relating to Flowers Foods business are detailed fully in our SEC filings. Finally, in addition to our financial results as reported under GAAP, we will also discuss results that have been adjusted for certain items affecting comparability.
The reconciliations of these adjusted amounts to our reported results can be found in the Investor Center on flowersfoods.com. I'd like to echo Ryals' comments and express my sincere thanks to the entire Flowers team whose efforts during this difficult time have been outstanding. As I am sure most of you are aware, we reported our results for the first quarter twenty twenty last week. In the first quarter, we generated record sales and earnings and delivered a second consecutive quarter of adjusted EBITDA margin improvement. As shelter in place orders went into effect in March and consumers began eating more meals at home, demand for our products accelerated.
Due to the excellent execution by the entire Flowers team, we gained market share and grew our sales by 6.8%, an $86,000,000 increase compared to last year's first quarter. GAAP diluted EPS for the quarter was a loss of $03 per share. The loss was driven by a one time $0.41 non cash charge related to the termination of a defined benefit pension plan. As previously disclosed, this was part of our pension risk mitigation strategy, which has helped to significantly reduce our exposure to changes in pension liabilities. Excluding this charge and the other items affecting comparability, adjusted diluted EPS in the quarter was $0.41 per share, up $09 compared to the prior year quarter.
These strong results also drove a $10,000,000 increase in operating cash flow. Our financial position is also strong. At quarter end, net debt to trailing twelve month adjusted EBITDA stood at approximately 1.8 times, down from two times at 2019 year end. Given the significant impact on global financial markets because of the COVID-nineteen outbreak, out of an abundance of caution and to ensure liquidity in this uncertain environment, During the quarter, the company drew an incremental $200,000,000 on our credit facility. At quarter end, we had approximately $520,000,000 of available liquidity.
All told, we have been pleased with how the business has performed in this uncertain environment and we continue to see opportunities to grow shareholder value. Now turning to our outlook for the rest of 2020. As we think about the year going forward, like most companies, we are navigating an uncertain business environment. In putting together our outlook, we balanced our outside's first quarter results against potential scenarios that can play out over the rest of the year. Based on our analysis of the most likely scenarios, we are forecasting sales growth in the range of 2% to 4%.
This includes the fifty third week, which is expected to contribute approximately 1.5% to the top line. We are forecasting adjusted EPS to be in the range of $1 to $1.08 per share, which includes the impact of the COVID-nineteen pandemic. As I said, there are a wide range of outcomes, some of which could result in sales and adjusted EPS outside of the ranges we are providing today. We expect continued strong free cash flow generation and our capital allocation priorities and philosophy remain consistent with our focus on maximizing return on invested capital and growing shareholder value. Thank you again for your interest in Flowers Foods.
And now I'll turn the call back to Ryals.
Thank you, Steve. As I've consistently reminded our team here, while it was vitally important that we manage well through the crisis, it's equally important that we manage well as we come out of the crisis. And that's why we must keep one eye focused on the future and not lose sight of our four strategic pillars focusing on our brands, prioritizing improved margin, pursuing smart M and A and developing our team. Our brands are strong and they are driving growth. Our margins have now improved for two consecutive quarters and we expect our supply chain and portfolio optimization program to propel further improvement going forward.
Our recent acquisitions continued to generate very strong results and we're actively pursuing similar acquisitions to help drive growth in the future. And finally, our dedicated and talented team is performing exceptionally well under difficult circumstances and they have adjusted nicely to remote working using a variety of technologies to stay connected with each other and the business. In this period of height, our business is well positioned to thrive and we can capitalize on opportunities as they present themselves. Flowers has long known that its most valuable asset is the team and one of our key strategic priorities is to support and develop our team members. The goals and initiatives we've put in place require capable and incentivized workforce.
We've increased frontline supervisor training, launched a new career path explorer, increased accountability, and have better aligned incentives to job responsibilities. We've also welcomed new team team members who bring fresh perspectives and creative solutions to the challenges we face. I'm confident we're on the right track to achieve our goals and I'm encouraged by the progress we're making. The underlying fundamentals of the business are strong. Flowers has leading brands with impressive growth potential in an industry with a long history of stable demand in different economic environments.
Our ample cash flow enables us to support a consistent dividend, maintain a strong financial position, opportunistically repurchase shares and drive growth organically and through M and A. And most important, we have the right team to achieve our long term financial objectives. I want to thank the thousands of Flowers team members who give us their best every day. Facing the uncertainty and challenges of the COVID-nineteen pandemic, our team has proven that they can take their obligation to the nation's food supply seriously and they perform their jobs with heart and professionalism in spite of potential personal risk. So for that, both I and our board are deeply grateful.
I'd also like to thank you, our shareholders, for your continued support. We're proud of the progress we made in 2019, so far in 2020, and we are optimistic about what lies ahead. So I want to thank you all for joining today's meeting. I hope everyone has a wonderful Memorial Day weekend. The annual meeting is now adjourned.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.