B&G Foods, Inc. (NYSE: BGS) today announced financial
results for the third quarter and first three quarters of 2011,
reporting strong net sales and earnings growth.
Third Quarter 2011 Financial Highlights (vs. year-ago quarter
where applicable):
- Net sales increased 6.3% to $133.0
million
- Net income increased 30.2% to $12.1
million
- Adjusted net income* increased 25.5% to
$12.4 million
- Diluted earnings per share increased
31.6% to $0.25
- Adjusted diluted earnings per share*
increased 25.0% to $0.25
- EBITDA* increased 7.7% to $31.1
million
- Fiscal 2011 EBITDA guidance increased
to a range of $127.0 million to $129.0 million
David L. Wenner, President and Chief Executive Officer of
B&G Foods, stated, “We are very pleased that the business
continued to produce strong, consistent improvement in net sales,
net income, earnings per share and EBITDA in the face of rapidly
increasing costs. We saw the beginning of the benefit from sales
price increases implemented on September 1st, but a positive sales
mix also helped maintain margins. Given the overall health of the
business and consistently strong cash generation, the Board of
Directors saw fit to increase the quarterly dividend last Tuesday
by 9.5%.”
Financial Results for the Third Quarter of 2011
Net sales for the third quarter of 2011 increased 6.3% to $133.0
million from $125.1 million for the third quarter of 2010. This
$7.9 million increase was attributable to an increase in unit
volume and pricing of $6.9 million and $0.1 million and a decrease
in coupon and slotting expenses of $0.9 million. Net sales of the
Company’s Don Pepino and Sclafani brands, which were acquired
during the fourth quarter of 2010, contributed $3.4 million to the
overall unit volume increase for the third quarter.
Gross profit for the third quarter of 2011 increased 5.8% to
$41.5 million from $39.2 million in the third quarter of 2010.
Gross profit expressed as a percentage of net sales decreased 0.1
percentage points to 31.2% for the third quarter of 2011 from 31.3%
in the third quarter of 2010. The decrease in gross profit
expressed as a percentage of net sales was primarily attributable
to an increase in commodity and distribution costs partially offset
by a sales mix shift to higher margin products. Operating income
increased 7.8% to $27.1 million for the third quarter of 2011, from
$25.1 million in the third quarter of 2010.
Net interest expense for the third quarter of 2011 decreased
$2.0 million or 19.5% to $8.3 million from $10.3 million for the
third quarter of 2010. The decrease in net interest expense for the
third quarter was primarily attributable to the termination of an
interest rate swap causing a reduction in the effective interest
rate on $130.0 million of term loan borrowings from 7.09% to 2.33%
and the elimination of the unfavorable fair market value adjustment
relating to the interest rate swap.
The Company’s reported net income under U.S. generally accepted
accounting principles (GAAP) was $12.1 million, or $0.25 per
diluted share, for the third quarter of 2011, as compared to
reported net income of $9.3 million, or $0.19 per diluted share,
for the third quarter of 2010. The Company’s adjusted net income
for the third quarter of 2011 was $12.4 million, and adjusted
diluted earnings per share was $0.25, as compared to adjusted net
income of $9.8 million and adjusted diluted earnings per share of
$0.20 for the third quarter of 2010.
For the third quarter of 2011, EBITDA increased 7.7% to $31.1
million from $28.9 million for the third quarter of 2010.
Financial Results for the First Three Quarters of
2011
Net sales for the first three quarters of 2011 increased 6.0% to
$393.9 million from $371.5 million for the first three quarters of
2010. This $22.4 million increase was attributable to an increase
in unit volume of $24.0 million, offset by a decrease in pricing of
$1.4 million and an increase in coupon expenses of $0.2 million.
Net sales of the Company’s Don Pepino and Sclafani brands, which
were acquired during the fourth quarter of 2010, contributed $10.6
million to the overall unit volume increase for the first three
quarters of 2011.
Gross profit for the first three quarters of 2011 increased 6.5%
to $128.5 million from $120.6 million in the first three quarters
of 2010. Gross profit expressed as a percentage of net sales
increased 0.1 percentage points to 32.6% in the first three
quarters of 2011 from 32.5% in the first three quarters of 2010.
The increase in gross profit expressed as a percentage of net sales
was primarily attributable to a sales mix shift to higher margin
products partially offset by higher input and distribution costs
and a reduction in sales prices. Operating income increased 8.8% to
$82.5 million in the first three quarters of 2011, from $75.8
million in the first three quarters of 2010.
Net interest expense for the first three quarters of 2011
decreased $7.0 million or 22.0% to $24.9 million from $31.9 million
in the first three quarters of 2010. The decrease in net interest
expense for the first three quarters was primarily attributable to
the termination of the interest rate swap causing a reduction in
the effective interest rate on $130.0 million of term loan
borrowings from 7.09% to 2.33% and the elimination of the
unfavorable fair market value adjustment relating to the interest
rate swap.
The Company’s reported net income under U.S. GAAP was $38.0
million, or $0.78 per diluted share, for the first three quarters
of 2011, as compared to reported net income of $18.1 million, or
$0.37 per diluted share, for the first three quarters of 2010. The
Company’s adjusted net income for the first three quarters of 2011
was $38.4 million, and adjusted diluted earnings per share was
$0.79, as compared to adjusted net income of $29.6 million and
adjusted diluted earnings per share of $0.61 for the first three
quarters of 2010.
For the first three quarters of 2011, EBITDA increased 8.7% to
$94.5 million from $86.9 million for the first three quarters of
2010.
Guidance
EBITDA for fiscal 2011 is expected to be approximately $127.0
million to $129.0 million. Capital expenditures for fiscal 2011 are
expected to be approximately $11.0 million.
Increase in Quarterly Dividend Rate
On October 18, 2011, the Company announced that its Board of
Directors has increased the Company’s quarterly dividend rate from
$0.21 per share of common stock to $0.23 per share of common stock.
The first quarterly dividend at the new rate will be payable on
January 30, 2012 to shareholders of record as of December 30,
2011.
Conference Call
B&G Foods will hold a webcast and conference call at 4:30
p.m. ET today, October 25, 2011. The call will be webcast live from
B&G Foods’ website at www.bgfoods.com under “Investor
Relations—Company Overview.” The call can also be accessed live
over the phone by dialing (888) 300-2343 for U.S. callers or (719)
457-2631 for international callers.
A replay of the call will be available one hour after the call
and can be accessed by dialing (877) 870-5176 or
(858) 384-5517 for international callers; the password is
2488217. The replay will be available from October 25, 2011,
through November 5, 2011. Investors may also access a web-based
replay of the call at the Investor Relations section of B&G
Foods’ website, www.bgfoods.com.
About Non-GAAP Financial Measures and Items Affecting
Comparability
“Adjusted net income,” “adjusted diluted earnings per share” and
“EBITDA” (net income before net interest expense, income taxes,
depreciation and amortization and loss on extinguishment of debt)
are “non-GAAP financial measures.” A non-GAAP financial measure is
a numerical measure of financial performance that excludes or
includes amounts so as to be different than the most directly
comparable measure calculated and presented in accordance with GAAP
in B&G Foods’ consolidated balance sheets and related
consolidated statements of operations and cash flows. Non-GAAP
financial measures should not be considered in isolation or as a
substitute for the most directly comparable GAAP measures. The
Company’s non-GAAP financial measures may be different from
non-GAAP financial measures used by other companies.
The Company uses “adjusted net income” and “adjusted diluted
earnings per share,” which are calculated as reported net income
and reported diluted earnings per share adjusted for certain items
that affect comparability. These non-GAAP financial measures
reflect adjustments to reported net income and diluted earnings per
share to eliminate the items identified below. This information is
provided in order to allow investors to make meaningful comparisons
of the Company’s operating performance between periods and to view
the Company’s business from the same perspective as the Company’s
management. Because the Company cannot predict the timing and
amount of charges associated with unrealized gains or losses on the
Company’s interest rate swap and gains or losses on extinguishment
of debt, management does not consider these costs when evaluating
the Company’s performance or when making decisions regarding
allocation of resources.
A reconciliation of EBITDA to net income and to net cash
provided by operating activities is included below for the first
three quarters of 2011 and 2010, along with the components of
EBITDA. Also included below are reconciliations of the non-GAAP
terms adjusted net income and adjusted diluted earnings per share
to reported net income and reported diluted earnings per share.
About B&G Foods, Inc.
B&G Foods and its subsidiaries manufacture, sell and
distribute a diversified portfolio of high-quality, shelf-stable
foods across the United States, Canada and Puerto Rico. B&G
Foods’ products include hot cereals, fruit spreads, canned meats
and beans, spices, seasonings, hot sauces, wine vinegar, maple
syrup, molasses, salad dressings, Mexican-style sauces, taco shells
and kits, salsas, pickles, peppers and other specialty food
products. B&G Foods competes in the retail grocery, food
service, specialty, private label, club and mass merchandiser
channels of distribution. Based in Parsippany, New Jersey, B&G
Foods’ products are marketed under many recognized brands,
including Ac’cent, B&G, B&M, Brer Rabbit, Cream of
Rice, Cream of Wheat, Don Pepino, Emeril’s, Grandma’s Molasses,
Joan of Arc, Las Palmas,
Maple Grove Farms of Vermont, Ortega, Polaner,
Red Devil, Regina, Sa-són, Sclafani, Trappey’s, Underwood, Vermont
Maid and Wright’s.
Forward-Looking Statements
Statements in this press release that are not statements of
historical or current fact constitute “forward-looking statements.”
The forward-looking statements contained in this press release
include, without limitation, statements related to B&G Foods’
expectations regarding cash flow generation, the health of the
business, and EBITDA and capital expenditures for fiscal 2011. Such
forward-looking statements involve known and unknown risks,
uncertainties and other unknown factors that could cause the actual
results of B&G Foods to be materially different from the
historical results or from any future results expressed or implied
by such forward-looking statements. In addition to statements that
explicitly describe such risks and uncertainties readers are urged
to consider statements labeled with the terms “believes,” “belief,”
“expects,” “projects,” “intends,” “anticipates” or “plans” to be
uncertain and forward-looking. The forward-looking statements
contained herein are also subject generally to other risks and
uncertainties that are described from time to time in B&G
Foods’ filings with the Securities and Exchange Commission,
including under Item 1A, “Risk Factors” in the Company’s Annual
Report on Form 10-K for fiscal 2010 filed on March 1, 2011.
B&G Foods undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
B&G Foods, Inc. and
Subsidiaries Consolidated Balance Sheets (In
thousands, except share and per share data) (Unaudited)
Assets October 1, 2011 January 1, 2011
Current assets: Cash and cash equivalents $ 98,107 $ 98,738
Trade accounts receivable, net 33,282 34,445 Inventories 94,277
74,563 Prepaid expenses 2,129 1,715 Income tax receivable 3,136 171
Deferred income taxes 1,589 5,439 Total
current assets 232,520 215,071 Property, plant and
equipment, net of accumulated depreciation of $87,322 and $80,862
60,610
60,812
Goodwill 253,744 253,744 Other intangibles, net 327,088 332,001
Other assets 8,960 10,095 Total assets
$ 882,922 $ 871,723
Liabilities and
Stockholders’ Equity Current liabilities: Trade accounts
payable $ 28,072 $ 15,531 Accrued expenses 20,180 25,584 Interest
rate swap — 12,012 Dividends payable 10,017
8,099 Total current liabilities 58,269 61,226
Long-term debt 477,988 477,748 Other liabilities 2,083 4,232
Deferred income taxes 107,351 97,932
Total liabilities 645,691 641,138 Commitments and contingencies
Stockholders’ equity: Preferred stock, $0.01 par value per share.
Authorized 1,000,000 shares; no shares issued or outstanding — —
Common stock, $0.01 par value per share. Authorized 125,000,000
shares; 47,700,132 and 47,639,924 shares issued and outstanding as
of October 1, 2011 and January 1, 2011 477 476 Additional paid-in
capital 169,556 201,770 Accumulated other comprehensive loss (6,131
) (7,002 ) Retained earnings 73,329 35,341
Total stockholders’ equity 237,231
230,585 Total liabilities and stockholders’ equity $ 882,922
$ 871,723
B&G Foods, Inc. and
Subsidiaries Consolidated Statements of Operations
(In thousands, except per share data) (Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
October 1, October 2, October 1,
October 2, 2011 2010 2011 2010
Net sales $ 133,010 $ 125,144 $ 393,868 $ 371,471 Cost of
goods sold 91,560 85,960 265,382
250,861 Gross profit 41,450 39,184 128,486 120,610 Operating
expenses: Selling, general and administrative expenses 12,725
12,435 41,069 39,950 Amortization expense 1,637 1,613
4,913 4,838 Operating income 27,088 25,136 82,504
75,822 Other expenses: Interest expense, net 8,323 10,335
24,854 31,855 Loss on extinguishment of debt — —
— 15,224 Income before income tax expense 18,765
14,801 57,650 28,743 Income tax expense 6,681 5,519
19,662 10,642 Net income $ 12,084 $ 9,282
37,988 18,101 Weighted average shares outstanding:
Basic 47,822 47,636 47,903 47,563 Diluted 48,479 48,601 48,574
48,349 Earnings per share: Basic $ 0.25 $ 0.19 $ 0.79 $ 0.38
Diluted $ 0.25 $ 0.19 $ 0.78 $ 0.37 Cash dividends declared
per share $ 0.21 $ 0.17 $ 0.63 $ 0.51
B&G Foods, Inc. and Subsidiaries
Reconciliation of EBITDA to Net Income and to Net Cash Provided
by Operating Activities (In thousands)
(Unaudited) Thirteen Weeks Ended
Thirty-nine Weeks Ended October 1, October
2, October 1, October 2, 2011
2010 2011 2010 Net income $ 12,084 $
9,282 $ 37,988 $ 18,101 Income tax expense 6,681 5,519 19,662
10,642 Interest expense, net(1) 8,323 10,335 24,854 31,855
Depreciation and amortization 4,038 3,761 11,964 11,118 Loss on
extinguishment of debt(2) — — —
15,224 EBITDA(3) 31,126 28,897 94,468 86,940
Income tax expense (6,681 ) (5,519 ) (19,662 ) (10,642 ) Interest
expense, net (8,323 ) (10,335 ) (24,854 ) (31,855 ) Deferred income
taxes 2,527 2,825 12,647 5,584 Amortization of deferred financing
costs and bond discount 500 500 1,500 1,515 Unrealized loss on
interest rate swap — 471 — 1,820 Realized gain on interest rate
swap — — (612 ) — Reclassification to net interest expense for
interest rate swap 423 423 1,270 1,270 Share-based compensation
expense 825 943 2,697 2,413 Excess tax benefits from share-based
compensation — — (1,117 ) (330 ) Changes in assets and liabilities
(7,285 ) (559 ) (27,044 ) 4,426
Net cash provided by operating activities $ 13,112 $ 17,646
$ 39,293 $ 61,141
(1) Net interest expense in the first three quarters of 2011
includes a benefit relating to the realized gain on an interest
rate swap, and in the third quarter and first three quarters of
2011, a charge for the reclassification of the amount recorded in
accumulated other comprehensive loss related to the swap. Net
interest expense in third quarter and first three quarters of 2010
includes a charge relating to the unrealized loss on the interest
rate swap and a charge for the reclassification of the amount
recorded in accumulated other comprehensive loss related to the
swap. See B&G Foods’ Quarterly Report on Form 10-Q filed
with the SEC on October 25, 2011 for additional details.
(2) During the first three quarters of 2011, we did not
extinguish any debt. Loss on extinguishment of debt for the first
three quarters of 2010 includes costs relating to our repurchase of
senior notes and senior subordinated notes during the first quarter
of 2010, including the repurchase premium and the write-off of
deferred debt financing costs. See our Quarterly Report on Form
10-Q filed with the SEC on October 25, 2011 for additional
details.
(3) EBITDA is a non-GAAP financial measure used by management to
measure operating performance. A non-GAAP financial measure is
defined as a numerical measure of our financial performance that
excludes or includes amounts so as to be different than the most
directly comparable measure calculated and presented in accordance
with GAAP in our consolidated balance sheets and related
consolidated statements of operations, changes in stockholders’
equity and comprehensive income, and cash flows. We define EBITDA
as net income before net interest expense, income taxes,
depreciation and amortization and loss on extinguishment of debt.
Management believes that it is useful to eliminate net interest
expense, income taxes, depreciation and amortization and loss on
extinguishment of debt because it allows management to focus on
what it deems to be a more reliable indicator of ongoing operating
performance and our ability to generate cash flow from operations.
We use EBITDA in our business operations, among other things, to
evaluate our operating performance, develop budgets and measure our
performance against those budgets, determine employee bonuses and
evaluate our cash flows in terms of cash needs. We also present
EBITDA because we believe it is a useful indicator of our
historical debt capacity and ability to service debt and because
covenants in our credit facility and our senior notes indenture
contain ratios based on this measure. As a result, internal
management reports used during monthly operating reviews feature
the EBITDA metric. However, management uses this metric in
conjunction with traditional GAAP operating performance and
liquidity measures as part of its overall assessment of company
performance and liquidity and therefore does not place undue
reliance on this measure as its only measure of operating
performance and liquidity.
EBITDA is not a recognized term under GAAP and does not purport
to be an alternative to operating income or net income as an
indicator of operating performance or any other GAAP measure.
EBITDA is not a complete net cash flow measure because EBITDA is a
measure of liquidity that does not include reductions for cash
payments for an entity’s obligation to service its debt, fund its
working capital, capital expenditures and acquisitions and pay its
income taxes and dividends. Rather, EBITDA is a potential indicator
of an entity’s ability to fund these cash requirements. EBITDA is
not a complete measure of an entity’s profitability because it does
not include costs and expenses for depreciation and amortization,
interest and related expenses, loss on extinguishment of debt and
income taxes. Because not all companies use identical calculations,
this presentation of EBITDA may not be comparable to other
similarly titled measures of other companies. However, EBITDA can
still be useful in evaluating our performance against our peer
companies because management believes this measure provides users
with valuable insight into key components of GAAP amounts.
B&G Foods, Inc. and Subsidiaries
Items Affecting Comparability — Reconciliation of Adjusted
Information to GAAP Information (In thousands)
(Unaudited) Thirteen Weeks Ended
Thirty-nine Weeks Ended October 1, October
2, October 1, October 2, 2011
2010 2011 2010 Reported net income $ 12,084 $
9,282 $ 37,988 $ 18,101 Loss on extinguishment of debt, net of
tax(1) — — — 9,591
Non-cash adjustments on interest rate
swap, net of tax(2)
270
563
420
1,947
Adjusted net income $ 12,354 $ 9,845 $ 38,408 $ 29,639 Adjusted
diluted earnings per share $ 0.25 $ 0.20 $ 0.79 $ 0.61
(1) During the first three quarters of 2011, B&G Foods did
not extinguish any debt. Loss on extinguishment of debt for the
first three quarters of 2010 includes costs relating to the
Company’s repurchase and redemption of $69.5 million aggregate
principal amount of senior subordinated notes and $240.0 million
aggregate principal amount of senior notes during the first quarter
of 2010. See B&G Foods’ Quarterly Report on Form 10-Q
filed with the SEC on October 25, 2011 for additional details.
(2) The first three quarters of 2011 includes a realized gain on
an interest rate swap and in the third quarter and first three
quarters of 2011, a charge for the reclassification of the amount
recorded in accumulated other comprehensive loss to interest
expense. The third quarter and first three quarters of 2010
includes an unrealized loss on an interest rate swap and a charge
for the reclassification of the amount recorded in accumulated
other comprehensive loss to interest expense. See B&G Foods’
Quarterly Report on Form 10-Q filed with the SEC on October
25, 2011 for additional details.
* Please see “About Non-GAAP Financial Measures and Items
Affecting Comparability” below for definitions of the terms
adjusted net income, adjusted diluted earnings per share and
EBITDA, as well as information concerning certain items affecting
comparability and reconciliations of the non-GAAP terms adjusted
net income, adjusted diluted earnings per share and EBITDA to the
most comparable GAAP financial measures.
B and G Foods (NYSE:BGS)
Historical Stock Chart
From May 2024 to Jun 2024
B and G Foods (NYSE:BGS)
Historical Stock Chart
From Jun 2023 to Jun 2024