— Net Sales Increased 18.5% and Base
Business Net Sales Increased 14.7% for Full Year 2020 —
—Net Cash Provided by Operating Activities
Increased to $281.5 Million for Full Year 2020—
B&G Foods, Inc. (NYSE: BGS) today announced financial
results for the fourth quarter and full year 2020, which include
the favorable impact of continued strong demand for the Company’s
products due to the ongoing COVID-19 pandemic and an extra
reporting week in fiscal 2020 as compared to fiscal 2019, as well
as the impact of the Crisco acquisition, which was completed on
December 1, 2020.
Fourth Quarter 2020 Financial Summary (vs. Fourth Quarter
2019 where applicable):
- Net sales increased 8.5% to $510.2 million
- Base business net sales1 increased 2.5% to $482.2 million
- Diluted earnings per share increased 18.8% to $0.19
- Adjusted diluted earnings per share1 increased 25.0% to
$0.35
- Net income increased 18.6% to $12.2 million
- Adjusted net income1 increased 28.1% to $22.8 million
- Adjusted EBITDA1 increased 5.6% to $73.3 million
- Adjusted EBITDA before COVID-19 expenses1 increased 11.7% to
$77.6 million
- Net cash provided by operating activities increased to $49.2
million from $45.2 million
- Completed the acquisition of the iconic Crisco brand on
December 1, 2020 – transition and integration is on track
Full Year 2020 Financial Summary (vs. Full Year 2019
where applicable):
- Net sales increased 18.5% to $1,967.9 million
- Base business net sales increased 14.7% to $1,904.9
million
- Diluted earnings per share increased 74.4% to $2.04
- Adjusted diluted earnings per share increased 37.8% to
$2.26
- Net income increased 72.8% to $132.0 million
- Adjusted net income increased 37.0% to $146.0 million
- Adjusted EBITDA increased 19.4% to $361.2 million
- Adjusted EBITDA before COVID-19 expenses increased 23.9% to
$374.8 million
- Net cash provided by operating activities increased to $281.5
million from $46.5 million2
________________________
1
Please see “About Non-GAAP Financial
Measures and Items Affecting Comparability” below for the
definition of the non-GAAP financial measures “adjusted diluted
earnings per share,” “adjusted net income,” “EBITDA,” “adjusted
EBITDA,” “adjusted EBITDA before COVID-19 expenses” and “base
business net sales,” as well as information concerning certain
items affecting comparability and reconciliations of the non-GAAP
terms to the most comparable GAAP financial measures.
2
Excluding the negative tax impact of the
gain on sale from the Pirate Brands divestiture, the Company’s net
cash provided by operating activities for fiscal 2019 would have
been approximately $120.4 million. See footnote (7) on page 11 of
this earnings release.
Guidance for Full Year Fiscal 2021:
- Net sales range of $2.05 billion to $2.10 billion
Commenting on the results, David L. Wenner, Interim President
and Chief Executive Officer of B&G Foods, stated, “It would be
a gross understatement to say that 2020 was a year like no other
year; COVID-19 brought an incredible amount of suffering,
inconvenience and, unfortunately, death with it. It’s humbling that
our company benefitted from such tragedy, and at the same time a
tribute to our employees, working in the midst of a pandemic, that
we were able to respond as well as we did to the increased needs of
consumers as they coped with COVID-19 and the resultant
quarantines.”
“For the year, our net sales increased 18.5% to $1.968 billion
and adjusted EBITDA increased 19.4% to $361.2 million. The
remarkable increase slowed in the fourth quarter but demand for our
products remains elevated and through the first two months of
fiscal 2021, we have had a strong start to the year.”
“In late fiscal 2020, we completed the acquisition of the iconic
Crisco brand of oils and shortening and the transition and
integration are on track. Consistent with our acquisition strategy,
the acquisition has been immediately accretive to our earnings per
share and free cash flow.”
Mr. Wenner concluded, “I’d like to thank our employees, all of
whom have made this company successful in an extremely challenging
year, and in particular to the workers who have been on the front
lines in our manufacturing facilities, distribution centers and
offices on a daily basis and also to those employees working
remotely, making sure we can supply the food that consumers need.
Without their dedicated efforts we could not have reached the
company records that we set in fiscal 2020.”
Financial Results for the Fourth Quarter of 2020
Net sales for the fourth quarter of 2020 increased $40.0
million, or 8.5%, to $510.2 million from $470.2 million for the
fourth quarter of 2019. The increase was primarily attributable to
the Crisco acquisition, net pricing and increased demand for the
Company’s products due to the COVID-19 pandemic. This was partially
offset by supply chain constraints for certain of the Company’s
products as a result of increased demand as well as inventory
building by retailers and other customers in the third quarter of
2020 in anticipation of increased COVID-19 restrictions in the
fourth quarter. The Company’s net sales benefited $28.1 million
from acquisitions, including $27.8 million from the Crisco
acquisition, which was completed on December 1, 2020.
Base business net sales for the fourth quarter of 2020 increased
$12.0 million, or 2.5%, to $482.2 million from $470.2 million for
the fourth quarter of 2019. The increase in base business net sales
reflected an increase in net pricing and the impact of product mix
of $11.7 million, or 2.5% of base business net sales, an increase
in unit volume of $0.2 million, and the positive impact of foreign
currency of $0.1 million.
Net sales of Cream of Wheat increased $2.7 million, or 16.1%;
net sales of Ortega increased $2.5 million, or 7.3%; net sales of
Maple Grove Farms increased $2.1 million, or 12.2%; net sales of
the Company’s spices & seasonings3 increased $2.1 million, or
2.4%; and net sales of Green Giant (including Le Sueur) increased
$0.9 million, or 0.6%, for the fourth quarter of 2020 as compared
to the fourth quarter of 2019. Net sales of Green Giant in the
fourth quarter of 2020 were negatively impacted by industry-wide
supply-chain constraints for shelf-stable vegetable products, which
caused the Company to place products on allocation with customers
to ensure continued supply throughout the year. Net sales of
Victoria decreased $0.6 million, or 4.7% for the fourth quarter of
2020 as compared to the fourth quarter of 2019, primarily as a
result of the shift of a key promotional event from the fourth
quarter of 2019 to the third quarter of 2020. Net sales of all
other brands in the aggregate increased $2.3 million, or 1.5%, for
the fourth quarter of 2020.
________________________
3
Includes the spices & seasoning brands
acquired in the fourth quarter of 2016, as well as the Company’s
legacy spices & seasonings brands, such as Dash and
Ac’cent.
Gross profit was $106.7 million for the fourth quarter of 2020,
or 20.9% of net sales. Excluding the negative impact of $2.1
million of acquisition/divestiture-related expenses, the
amortization of acquisition-related inventory fair value step-up
and non-recurring expenses included in cost of goods sold during
the fourth quarter of 2020, the Company’s gross profit would have
been $108.8 million, or 21.3% of net sales. Gross profit was $94.4
million for the fourth quarter of 2019, or 20.1% of net sales.
Excluding the negative impact of $2.6 million of
acquisition/divestiture-related expenses, the amortization of
acquisition-related inventory fair value step-up and non-recurring
expenses included in cost of goods sold during the fourth quarter
of 2019, which includes the Company’s gross profit would have been
$97.0 million, or 20.6% of net sales.
Selling, general and administrative expenses increased $14.0
million, or 31.5%, to $58.5 million for the fourth quarter of 2020
from $44.5 million for the fourth quarter of 2019. The increase was
composed of increases in consumer marketing expenses of $4.5
million, acquisition/divestiture-related and non-recurring expenses
of $3.8 million, warehousing expenses of $2.3 million, selling
expenses of $1.8 million and general and administrative expenses of
$1.6 million. Expressed as a percentage of net sales, selling,
general and administrative expenses increased by 2.0 percentage
points to 11.5% for the fourth quarter of 2020, compared to 9.5%
for the fourth quarter of 2019.
Net interest expense decreased $3.4 million, or 12.3%, to $24.3
million for the fourth quarter of 2020 from $27.7 million in the
fourth quarter of 2019. The decrease was primarily attributable to
a lower effective interest rate on our long-term debt. Net interest
expense is expected to increase in fiscal 2021, primarily as a
result of incremental borrowings the Company made in the fourth
quarter of 2020 to fund the Crisco acquisition and related fees and
expenses.
The Company’s net income was $12.2 million, or $0.19 per diluted
share, for the fourth quarter of 2020, compared to net income of
$10.3 million, or $0.16 per diluted share, for the fourth quarter
of 2019. The Company’s adjusted net income for the fourth quarter
of 2020 was $22.8 million, or $0.35 per adjusted diluted share,
compared to $17.8 million, or $0.28 per adjusted diluted share, for
the fourth quarter of 2019.
For the fourth quarter of 2020, adjusted EBITDA was $73.3
million, an increase of $3.8 million, or 5.6%, compared to $69.5
million for the fourth quarter of 2019. The increase in adjusted
EBITDA was primarily attributable to increased net sales for the
reasons described above. Adjusted EBITDA as a percentage of net
sales was 14.4% for the fourth quarter of 2020, compared to 14.8%
in the fourth quarter of 2019.
For the fourth quarter of 2020, adjusted EBITDA before COVID-19
expenses was $77.6 million, an increase of $8.1 million, or 11.7%,
compared to $69.5 million for the fourth quarter of 2019. COVID-19
expenses of $4.3 million for the fourth quarter of 2020 primarily
include temporary enhanced compensation for the Company’s
manufacturing employees, compensation the Company continues to pay
manufacturing employees while in quarantine (which is incremental
to the compensation the Company pays to the manufacturing employees
who produce the Company’s products while others are in quarantine),
and expenses relating to other precautionary health and safety
measures. Adjusted EBITDA before COVID-19 expenses as a percentage
of net sales was 15.2% for the fourth quarter of 2020, compared to
14.8% in the fourth quarter of 2019.
Financial Results for the Full Year Fiscal 2020
Net sales for fiscal 2020 increased $307.5 million, or 18.5%, to
$1,967.9 million from $1,660.4 million for fiscal 2019. The
increase was primarily attributable to materially increased net
sales beginning in March (as compared to prior year) resulting from
increased demand for the Company’s products due to the COVID-19
pandemic, partially offset by supply chain constraints for certain
of the Company’s products as a result of increased demand. The
Company’s net sales also benefited from acquisitions and from one
extra reporting week in fiscal 2020 (which occurred in the third
quarter) compared to fiscal 2019. Acquisitions benefited the
Company’s net sales in fiscal 2020 by $63.0 million, which
primarily includes $33.7 million of net sales from an additional
seven and one-half months of Clabber Girl net sales and $27.8
million of net sales from one month of Crisco net sales. The
Clabber Girl acquisition closed on May 15, 2019 and the Crisco
acquisition closed on December 1, 2020. The Company estimates that
the additional week in fiscal 2020 contributed approximately $35.0
million to the Company’s net sales.
Base business net sales for fiscal 2020 increased $244.5
million, or 14.7%, to $1,904.9 million from $1,660.4 million for
fiscal 2019. The increase in base business net sales reflected an
increase in unit volume of $209.8 million and an increase in net
pricing (inclusive of the impact of the Company’s 2019 list price
increases, the trade spend optimization program the Company
initiated in 2019, and a temporarily lower trade spend environment
in the industry during the first half of the year) and the impact
of product mix of $35.8 million, or 2.2% of base business net
sales, partially offset by the negative impact of foreign currency
of $1.1 million.
Net sales of Green Giant (including Le Sueur) increased $112.2
million, or 21.3%; net sales of the Company’s spices &
seasonings3 increased $30.9 million, or 9.2%; net sales of Ortega
increased $17.9 million, or 12.7%; net sales of Cream of Wheat
increased $12.9 million, or 21.6%; net sales of Victoria increased
$11.3 million, or 26.4%; and net sales of Maple Grove Farms
increased $6.1 million, or 8.7%, in fiscal 2020, as compared to
fiscal 2019. Net sales of all other brands in the aggregate
increased $53.2 million, or 11.0%, for fiscal 2020.
Gross profit was $481.7 million for fiscal 2020, or 24.5% of net
sales. Excluding the negative impact of $5.0 million of
acquisition/divestiture-related expenses, the amortization of
acquisition-related inventory fair value step-up and non-recurring
expenses included in cost of goods sold during fiscal 2020, the
Company’s gross profit would have been $486.7 million, or 24.7% of
net sales. Gross profit was $383.1 million for fiscal 2019, or
23.1% of net sales. Excluding the negative impact of $22.0 million
of acquisition/divestiture-related expenses, the amortization of
acquisition-related inventory fair value step-up and non-recurring
expenses included in cost of goods sold during fiscal 2019, which
includes expenses related to the trailing non-cash accounting
impact of the Company’s 2018 inventory reduction plan, the
Company’s gross profit would have been $405.1 million, or 24.4% of
net sales.
Selling, general and administrative expenses increased $25.5
million, or 15.8%, to $186.2 million for fiscal 2020 from $160.7
million for fiscal 2019. The increase was composed of increases in
general and administrative expenses of $10.7 million, selling
expenses of $8.2 million, consumer marketing expenses of $7.7
million and warehousing expenses of $2.0 million, partially offset
by a decrease in acquisition/divestiture-related and non-recurring
expenses of $3.1 million. Expressed as a percentage of net sales,
selling, general and administrative expenses improved by 0.2
percentage points to 9.5% for fiscal 2020, compared to 9.7% for
fiscal 2019.
Net interest expense increased $3.5 million, or 3.6%, to $101.6
million for fiscal 2020 from $98.1 million in fiscal 2019. The
increase was primarily attributable to the following factors: (1)
additional interest expense of $1.5 million resulting from one
extra week in the third quarter of 2020, (2) the accelerated
amortization of $1.1 million of deferred debt financing costs
resulting from the Company’s voluntary partial prepayment of
tranche B term loans in the third quarter of 2020, and (3) an
increase in average long-term debt outstanding during fiscal 2020
as compared to fiscal 2019. Net interest expense is expected to
increase in fiscal 2021 primarily as a result of incremental
borrowings the Company made in the fourth quarter of 2020 to fund
the Crisco acquisition and related fees and expenses.
The Company’s net income was $132.0 million, or $2.04 per
diluted share, for fiscal 2020, compared to net income of $76.4
million, or $1.17 per diluted share, for fiscal 2019. The Company’s
adjusted net income for fiscal 2020 was $146.0 million, or $2.26
per adjusted diluted share, compared to $106.6 million, or $1.64
per adjusted diluted share, for fiscal 2019.
For fiscal 2020, adjusted EBITDA was $361.2 million, an increase
of $58.7 million, or 19.4%, compared to $302.5 million for fiscal
2019. The increase in adjusted EBITDA was primarily attributable to
increased net sales for the reasons described above. Adjusted
EBITDA as a percentage of net sales was 18.4% for fiscal 2020,
compared to 18.2% in fiscal 2019.
For fiscal 2020, adjusted EBITDA before COVID-19 expenses was
$374.8 million, an increase of $72.3 million, or 23.9%, compared to
$302.5 million for fiscal 2019. COVID-19 expenses of $13.5 million
for fiscal 2020 include temporary enhanced compensation for the
Company’s manufacturing employees, compensation the Company
continues to pay manufacturing employees while in quarantine (which
is incremental to the compensation the Company pays to the
manufacturing employees who produce the Company’s products while
others are in quarantine), and expenses relating to other
precautionary health and safety measures. Adjusted EBITDA before
COVID-19 expenses as a percentage of net sales was 19.0% for fiscal
2020, compared to 18.2% in fiscal 2019.
Full Year Fiscal 2021 Guidance
For fiscal 2021, net sales will be positively impacted by an
additional eleven months of ownership of the Crisco brand, and are
expected to be approximately $2.05 billion to $2.10 billion.
B&G Foods continues to see strong consumer demand for its
products and expects to see commensurate elevated levels of net
sales throughout fiscal 2021. However, the Company’s management is
not able to fully estimate the impact COVID-19 will have on the
Company’s fiscal 2021 results and therefore is unable at this time
to provide more detailed guidance for fiscal 2021. The ultimate
impact of the COVID-19 pandemic on the Company’s business will
depend on many factors, including, among others: how long social
distancing and stay-at-home and work-from home mandates and
recommendations remain in effect; whether additional waves of
COVID-19 will affect the United States and the rest of North
America; the Company’s ability to continue to operate its
manufacturing facilities, maintain its supply chain without
material disruption, procure ingredients, packaging and other raw
materials when needed despite unprecedented demand in the food
industry; the extent to which macroeconomic conditions resulting
from the pandemic and the pace of the subsequent recovery may
impact consumer eating and shopping habits; and the extent to which
consumers continue to work remotely even after the pandemic
subsides and how that may impact consumer habits.
Conference Call
B&G Foods will hold a conference call at 4:30 p.m. ET today,
March 2, 2021 to discuss fourth quarter and full year 2020
financial results. The live audio webcast of the conference call
can be accessed at www.bgfoods.com/investor-relations. A replay of
the webcast will be available following the conference call through
the same link.
About Non-GAAP Financial Measures and Items Affecting
Comparability
“Adjusted net income” (net income adjusted for certain items
that affect comparability), “adjusted diluted earnings per share,”
(diluted earnings per share adjusted for certain items that affect
comparability), “base business net sales” (net sales without the
impact of acquisitions until the acquisitions are included in both
comparable periods and without the impact of discontinued or
divested brands), “EBITDA” (net income before net interest expense,
income taxes, depreciation and amortization and loss on
extinguishment of debt), “adjusted EBITDA” (EBITDA as adjusted for
cash and non-cash acquisition/divestiture-related expenses, gains
and losses (which may include third party fees and expenses,
integration, restructuring and consolidation expenses, amortization
of acquired inventory fair value step-up and gains and losses on
sale of assets), non-recurring expenses, gains and losses and the
non-cash accounting impact of the Company’s inventory reduction
plan) and “adjusted EBITDA before COVID-19 expenses” (adjusted
EBITDA as adjusted for COVID-19 expenses) 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 generally accepted accounting
principles in the United States (GAAP) in B&G Foods’
consolidated balance sheets and related consolidated statements of
operations, comprehensive income, changes in stockholders’ equity
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 non-GAAP financial measures to adjust for
certain items that affect comparability. 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 these items that affect comparability, management does
not consider these items when evaluating the Company’s performance
or when making decisions regarding allocation of resources.
Additional information regarding EBITDA, adjusted EBITDA and
adjusted EBITDA before COVID-19 expenses, and a reconciliation of
EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19
expenses to net income and to net cash provided by operating
activities, is included below for fourth quarter and full year 2020
and 2019, along with the components of EBITDA, adjusted EBITDA and
adjusted EBITDA before COVID-19 expenses. Also included below are
reconciliations of the non-GAAP terms adjusted net income, adjusted
diluted earnings per share and base business net sales to the most
directly comparable measure calculated and presented in accordance
with GAAP in the Company’s consolidated balance sheets and related
consolidated statements of operations, comprehensive income,
changes in stockholders’ equity and cash flows.
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its
subsidiaries manufacture, sell and distribute high-quality, branded
shelf-stable and frozen foods across the United States, Canada and
Puerto Rico. With B&G Foods’ diverse portfolio of more than 50
brands you know and love, including Back to Nature, B&G,
B&M, Cream of Wheat, Crisco, Dash, Green Giant, Las Palmas, Le
Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega,
Polaner, Spice Islands and Victoria, there’s a little something for
everyone. For more information about B&G Foods and its brands,
please visit www.bgfoods.com.
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’
net sales and overall expectations for fiscal 2021 and beyond, and
B&G Foods’ expectations regarding the Crisco acquisition. 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,” “assumes,”
“could,” “should,” “estimates,” “potential,” “seek,” “predict,”
“may,” “will” or “plans” and similar references to future periods
to be uncertain and forward-looking. Factors that may affect actual
results include, without limitation: the impact of the COVID-19
pandemic on the Company’s business, including, without limitation,
the ability of the Company and its supply chain partners to
continue to operate manufacturing facilities, distribution centers
and other work locations without material disruption; whether and
when the Company will be able to realize the expected financial
results and accretive effect of the Crisco acquisition, and how
customers, competitors, suppliers and employees will react to the
acquisition; the Company’s substantial leverage; the effects of
rising costs for the Company’s raw materials, packaging and
ingredients; crude oil prices and their impact on distribution,
packaging and energy costs; the Company’s ability to successfully
implement sales price increases and cost saving measures to offset
any cost increases; intense competition, changes in consumer
preferences, demand for the Company’s products and local economic
and market conditions; the Company’s continued ability to promote
brand equity successfully, to anticipate and respond to new
consumer trends, to develop new products and markets, to broaden
brand portfolios in order to compete effectively with lower priced
products and in markets that are consolidating at the retail and
manufacturing levels and to improve productivity; the risks
associated with the expansion of the Company’s business; the
Company’s possible inability to identify new acquisitions or to
integrate recent or future acquisitions or the Company’s failure to
realize anticipated revenue enhancements, cost savings or other
synergies from recent or future acquisitions; the Company’s ability
to successfully complete the integration of recent or future
acquisitions into the Company’s enterprise resource planning (ERP)
system; tax reform and legislation, including the effects of the
U.S. Tax Cuts and Jobs Act and the U.S. CARES Act; the Company’s
ability to access the credit markets and the Company’s borrowing
costs and credit ratings, which may be influenced by credit markets
generally and the credit ratings of the Company’s competitors;
unanticipated expenses, including, without limitation, litigation
or legal settlement expenses; the effects of currency movements of
the Canadian dollar and the Mexican peso as compared to the U.S.
dollar; the effects of international trade disputes, tariffs,
quotas, and other import or export restrictions on the Company’s
international procurement, sales and operations; future impairments
of the Company’s goodwill and intangible assets; the Company’s
ability to protect information systems against, or effectively
respond to, a cybersecurity incident or other disruption; the
Company’s sustainability initiatives and changes to environmental
laws and regulations; and other factors that affect the food
industry generally. 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 most recent Annual Report on Form 10-K
and in its subsequent reports on Forms 10-Q and 8-K. Investors are
cautioned not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made. 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)
January 2,
December 28,
2021
2019
Assets
Current assets:
Cash and cash equivalents
$
52,182
$
11,315
Trade accounts receivable, net
132,935
143,908
Inventories
492,804
472,187
Prepaid expenses and other current
assets
43,619
25,449
Income tax receivable
15,761
8,934
Total current assets
737,301
661,793
Property, plant and equipment, net
371,854
304,934
Operating lease right-of-use assets
32,216
38,698
Goodwill
644,747
596,391
Other intangible assets, net
1,971,326
1,615,126
Other assets
5,948
3,277
Deferred income taxes
4,178
7,371
Total assets
$
3,767,570
$
3,227,590
Liabilities and Stockholders’
Equity
Current liabilities:
Trade accounts payable
$
126,537
$
114,936
Accrued expenses
77,460
55,659
Current portion of operating lease
liabilities
11,034
9,813
Current portion of long-term debt
—
5,625
Income tax payable
101
454
Dividends payable
30,520
30,421
Total current liabilities
245,652
216,908
Long-term debt
2,334,086
1,874,158
Deferred income taxes
293,121
254,339
Long-term operating lease liabilities, net
of current portion
23,959
31,997
Other liabilities
38,875
37,646
Total liabilities
2,935,693
2,415,048
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; 64,252,859 and 64,044,649 shares
issued and outstanding as of January 2, 2021 and December 28, 2019,
respectively
643
640
Additional paid-in capital
—
—
Accumulated other comprehensive loss
(35,594
)
(31,894
)
Retained earnings
866,828
843,796
Total stockholders’ equity
831,877
812,542
Total liabilities and stockholders’
equity
$
3,767,570
$
3,227,590
B&G Foods, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(In thousands, except per
share data)
(Unaudited)
Fourth Quarter Ended
Fiscal Year Ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Net sales
$
510,241
$
470,172
$
1,967,909
$
1,660,414
Cost of goods sold
403,544
375,775
1,486,169
1,277,290
Gross profit
106,697
94,397
481,740
383,124
Operating expenses:
Selling, general and administrative
expenses
58,476
44,480
186,191
160,745
Amortization expense
4,914
4,722
19,111
18,543
Operating income
43,307
45,195
276,438
203,836
Other income and expenses:
Interest expense, net
24,316
27,721
101,634
98,126
Loss on extinguishment of debt
—
1,177
—
1,177
Other income
(702
)
(317
)
(2,558
)
(1,159
)
Income before income tax expense
19,693
16,614
177,362
105,692
Income tax expense
7,521
6,355
45,374
29,303
Net income
$
12,172
$
10,259
$
131,988
$
76,389
Weighted average shares outstanding:
Basic
64,253
64,045
64,163
65,013
Diluted
64,927
64,045
64,557
65,039
Earnings per share:
Basic
$
0.19
$
0.16
$
2.06
$
1.17
Diluted
$
0.19
$
0.16
$
2.04
$
1.17
Cash dividends declared per share
$
0.475
$
0.475
$
1.900
$
1.900
B&G Foods, Inc. and
Subsidiaries
Items Affecting
Comparability
Reconciliation of EBITDA,
Adjusted EBITDA and Adjusted EBITDA Before COVID-19 Expenses to Net
Income and to Net Cash Provided by Operating Activities
(In thousands)
(Unaudited)
Fourth Quarter Ended
Fiscal Year Ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Net income
$
12,172
$
10,259
$
131,988
$
76,389
Income tax expense
7,521
6,355
45,374
29,303
Interest expense, net
24,316
27,721
101,634
98,126
Depreciation and amortization
17,193
15,192
63,701
58,734
Loss on extinguishment of debt(1)
—
1,177
—
1,177
EBITDA(2)
61,202
60,704
342,697
263,729
Acquisition/divestiture-related and
non-recurring expenses(3)
10,824
8,780
17,227
21,519
Inventory reduction plan impact(4)
—
—
—
16,382
Amortization of acquisition-related
inventory step-up(5)
1,323
—
1,323
891
Adjusted EBITDA(2)
73,349
69,484
361,247
302,521
COVID-19 expenses(6)
4,296
—
13,521
—
Adjusted EBITDA before COVID-19
expenses(2)
77,645
69,484
374,768
302,521
Income tax expense
(7,521
)
(6,355
)
(45,374
)
(29,303
)
Interest expense, net
(24,316
)
(27,721
)
(101,634
)
(98,126
)
Acquisition/divestiture-related and
non-recurring expenses(3)
(10,824
)
(8,780
)
(17,227
)
(21,519
)
Inventory reduction plan impact(4)
—
—
—
(16,382
)
Amortization of acquisition-related
inventory step-up(5)
(1,323
)
—
(1,323
)
(891
)
Net (gain)/loss on sales and disposals of
property, plant and equipment
11
8
(50
)
97
Deferred income taxes
22,745
4,793
42,613
20,415
Amortization of deferred debt financing
costs and bond discount/premium
927
893
4,691
3,511
Share-based compensation expense
3,557
(369
)
10,618
2,594
Changes in assets and liabilities, net of
effects of business combinations
(7,431
)
13,222
27,916
(116,413
)
Net cash provided by operating
activities(7)
$
49,174
$
45,175
$
281,477
$
46,504
(1)
Loss on extinguishment of debt for the
fourth quarter and fiscal 2019 includes the write-off of deferred
debt financing costs of $1.2 million relating to the redemption of
all outstanding borrowings under the Company’s 4.625% senior notes
due 2021.
(2)
EBITDA, adjusted EBITDA and adjusted
EBITDA before COVID-19 expenses are non-GAAP financial measures
used by management to measure operating performance. A non-GAAP
financial measure is defined as a numerical measure of the
Company’s financial performance that excludes or includes amounts
so as to be different from the most directly comparable measure
calculated and presented in accordance with GAAP in the Company’s
consolidated balance sheets and related consolidated statements of
operations, comprehensive income, changes in stockholders’ equity
and cash flows. The Company defines EBITDA as net income before net
interest expense, income taxes, depreciation and amortization and
loss on extinguishment of debt (see (1) above). The Company defines
adjusted EBITDA as EBITDA adjusted for cash and non-cash
acquisition/divestiture-related expenses, gains and losses (which
may include third party fees and expenses, integration,
restructuring and consolidation expenses, amortization of acquired
inventory fair value step-up, and gains and losses on the sale of
assets); non-recurring expenses, gains and losses, including
distribution restructuring expenses, severance and other expenses
relating to the separation of the Company’s former chief executive
officer in fiscal 2020 and a workforce reduction in fiscal 2019;
and the non-cash accounting impact of the Company’s inventory
reduction plan. The Company defines adjusted EBITDA before COVID-19
expenses as adjusted EBITDA adjusted for COVID-19 expenses.
Management believes that it is useful to
eliminate these items because it allows management to focus on what
it deems to be a more reliable indicator of ongoing operating
performance and the Company’s ability to generate cash flow from
operations. The Company uses EBITDA, adjusted EBITDA and adjusted
EBITDA before COVID-19 expenses in the Company’s business
operations to, among other things, evaluate the Company’s operating
performance, develop budgets and measure the Company’s performance
against those budgets, determine employee bonuses and evaluate the
Company’s cash flows in terms of cash needs. The Company also
presents EBITDA, adjusted EBITDA and adjusted EBITDA before
COVID-19 expenses because the Company believes they are useful
indicators of the Company’s historical debt capacity and ability to
service debt and because covenants in the Company’s credit
agreement and the Company’s senior notes indentures contain ratios
based on these measures. As a result, reports used by internal
management during monthly operating reviews feature the EBITDA,
adjusted EBITDA and adjusted EBITDA before COVID-19 expenses
metrics. However, management uses these metrics 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 these
measures as its only measures of operating performance and
liquidity.
EBITDA, adjusted EBITDA and adjusted
EBITDA before COVID-19 expenses are not recognized terms under GAAP
and do not purport to be alternatives to operating income, net
income or any other GAAP measure as an indicator of operating
performance. EBITDA, adjusted EBITDA and adjusted EBITDA before
COVID-19 expenses are not complete net cash flow measures because
EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19
expenses are measures of liquidity that do 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, adjusted EBITDA
and adjusted EBITDA before COVID-19 expenses are two potential
indicators of an entity’s ability to fund these cash requirements.
EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19
expenses are not complete measures of an entity’s profitability
because they do not include certain costs and expenses and gains
and losses described above. Because not all companies use identical
calculations, this presentation of EBITDA, adjusted EBITDA and
adjusted EBITDA before COVID-19 expenses may not be comparable to
other similarly titled measures of other companies. However,
EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19
expenses can still be useful in evaluating the Company’s
performance against the Company’s peer companies because management
believes these measures provide users with valuable insight into
key components of GAAP amounts.
(3)
Acquisition/divestiture-related and
non-recurring expenses for the fourth quarter and fiscal 2020 of
$10.8 million and $17.2 million, respectively, primarily includes
$6.0 million and $10.5 million, respectively, of acquisition and
integration expenses for the Crisco, Farmwise and Clabber Girl
acquisitions, and $4.8 million and $6.7 million, respectively, of
severance and other separation expenses primarily relating to the
separation of the Company’s former chief executive officer in
fiscal 2020 and a workforce reduction in fiscal 2019 and other
non-recurring expenses. Acquisition/divestiture-related and
non-recurring expenses for the fourth quarter and fiscal 2019 of
$8.8 million and $21.5 million, respectively, primarily includes
acquisition and integration expenses for the Clabber Girl
acquisition, transition expenses for the Pirate Brands sale, and
severance and other expenses primarily relating to a workforce
reduction in fiscal 2019.
(4)
Inventory reduction plan impact relates to
the Company’s 2018 inventory reduction plan. For fiscal 2019,
inventory reduction plan impact of $16.4 million includes the
trailing non-cash accounting impact of the underutilization of the
Company’s manufacturing facilities in 2018 as the Company reduced
inventory during the implementation of the inventory reduction
plan.
(5)
For the fourth quarter and fiscal 2020,
amortization of acquisition-related inventory step-up of $1.3
million primarily relates to the purchase accounting adjustments
made to inventory acquired in the Crisco acquisition. For fiscal
2019, amortization of acquisition-related inventory step-up of $0.9
million relates to the purchase accounting adjustments made to
inventory acquired in the Clabber Girl acquisition.
(6)
COVID-19 expenses for the fourth quarter
and fiscal 2020 of $4.3 million and $13.5 million, respectively,
primarily include temporary enhanced compensation for the Company’s
manufacturing employees; compensation the Company continues to pay
manufacturing employees while in quarantine (which is incremental
to the compensation the Company pays to the manufacturing employees
who produce the Company’s products while others are in quarantine);
and expenses relating to other precautionary health and safety
measures.
(7)
The Company’s divestiture of Pirate Brands
during the fourth quarter of 2018 resulted in a gain on sale during
2018 of approximately $176.4 million. The gain on sale negatively
impacted the Company’s income taxes for 2019 by approximately $73.9
million, which includes cash tax payments the Company made during
the second quarter of 2019 of $44.7 million and a cash tax benefit
the Company otherwise would have expected to receive of
approximately $29.2 million. Excluding the negative tax impact of
the gain on sale, the Company’s net cash provided by operating
activities for fiscal 2019 would have been approximately $120.4
million.
B&G Foods, Inc. and
Subsidiaries
Items Affecting
Comparability
Reconciliation of Adjusted Net
Income and Adjusted Diluted Earnings per Share to Net
Income
(In thousands, except per
share data)
(Unaudited)
Fourth Quarter Ended
Fiscal Year Ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Net income
$
12,172
$
10,259
$
131,988
$
76,389
Loss on extinguishment of debt, net of
tax(1)
—
889
—
889
Acquisition/divestiture-related and
non-recurring expenses, net of tax(2)
8,172
6,629
13,006
16,247
Inventory reduction plan impact, net of
tax(3)
—
—
—
12,368
Amortization of acquisition-related
inventory step-up, net of tax(4)
999
—
999
673
Accelerated amortization of deferred debt
financing costs(5)
—
—
808
—
Tax benefit(6)
—
—
(2,258
)
—
Tax true-ups(7)
1,432
—
1,432
—
Adjusted net income
$
22,775
$
17,777
$
145,975
$
106,566
Adjusted diluted earnings per share
$
0.35
$
0.28
$
2.26
$
1.64
(1)
Loss on extinguishment of debt for the
fourth quarter and fiscal 2019 includes the write-off of deferred
debt financing costs and unamortized discount of $1.2 million (or
$0.9 million, net of tax) relating to the redemption of all
outstanding borrowings under the Company’s 4.625% senior notes due
2021.
(2)
Acquisition/divestiture-related and
non-recurring expenses for the fourth quarter and fiscal 2020
primarily includes acquisition and integration expenses for the
Crisco, Farmwise and Clabber Girl acquisitions, and severance and
other separation expenses primarily relating to the separation of
the Company’s former chief executive officer in fiscal 2020 and a
workforce reduction in fiscal 2019 and other non-recurring
expenses. Acquisition/divestiture-related and non-recurring
expenses for the fourth quarter and fiscal 2019 primarily includes
acquisition and integration expenses for the Clabber Girl
acquisition, transition expenses for the Pirate Brands sale, and
severance and other expenses primarily relating to a workforce
reduction in fiscal 2019.
(3)
Inventory reduction plan impact relates to
the Company’s 2018 inventory reduction plan. For fiscal 2019,
inventory reduction plan impact of $16.4 million (or $12.4 million,
net of tax) includes the trailing non-cash accounting impact of the
underutilization of the Company’s manufacturing facilities in 2018
as the Company reduced inventory during the implementation of the
inventory reduction plan.
(4)
For the fourth quarter and fiscal 2020,
amortization of acquisition-related inventory step-up of $1.3
million (or $1.0 million, net of tax) primarily relates to the
purchase accounting adjustments made to inventory acquired in the
Crisco acquisition. For fiscal 2019, amortization of
acquisition-related inventory step-up of $0.9 million (or $0.7
million, net of tax) relates to the purchase accounting adjustments
made to inventory acquired in the Clabber Girl acquisition.
(5)
Interest expense for fiscal 2020 includes
the accelerated amortization of deferred debt financing costs of
$1.1 million (or $0.8 million, net of tax), resulting from the
Company’s voluntary partial prepayment of tranche B term loans.
(6)
Fiscal 2020 includes a $2.3 million tax
benefit associated with the U.S. CARES Act, which was recorded
during the first quarter of 2020.
(7)
Tax true-ups for the fourth quarter and
fiscal 2020 reflects $0.9 million of non-deductible compensation
expenses related to the separation of our former chief executive
officer in fiscal 2020 and $0.5 million for the impact of enacted
state rate changes and other tax adjustments.
B&G Foods, Inc. and
Subsidiaries
Items Affecting
Comparability
Reconciliation of Base
Business Net Sales(1) to Net Sales
(In thousands)
(Unaudited)
Fourth Quarter Ended
Fiscal Year Ended
January 2,
December 28,
January 2,
December 28,
2021
2019
2021
2019
Net sales
$
510,241
$
470,172
$
1,967,909
$
1,660,414
Net sales from acquisitions(2)
(28,091)
—
(62,997)
—
Base business net sales
$
482,150
$
470,172
$
1,904,912
$
1,660,414
(1)
Base business net sales is a non-GAAP
financial measure used by management to measure operating
performance. The Company defines base business net sales as the
Company’s net sales excluding (1) the net sales of acquisitions
until the net sales from such acquisitions are included in both
comparable periods and (2) net sales of discontinued or divested
brands. The portion of current period net sales attributable to
recent acquisitions for which there is no corresponding period in
the comparable period of the prior year is excluded. For each
acquisition, the excluded period starts at the beginning of the
most recent fiscal period being compared and ends on the first
anniversary of the acquisition date. For discontinued or divested
brands, the entire amount of net sales is excluded from each fiscal
period being compared. The Company has included this financial
measure because management believes it provides useful and
comparable trend information regarding the results of the Company’s
business without the effect of the timing of acquisitions and the
effect of discontinued or divested brands.
The definition of base business net sales
set forth above, as it relates to acquisitions, was modified during
the third quarter of 2019 from the definition the Company had most
recently used. Under the Company’s most recent prior definition of
base business net sales, for each acquisition, the excluded period
started at the beginning of the most recent fiscal period being
compared and ended on the last day of the quarter in which the
first anniversary of the date of acquisition occurred. The Company
believes that it is more useful to measure base business net sales
on a partial quarter basis based upon the actual period of
comparable ownership instead of adjusting for an entire
quarter.
(2)
For the fourth quarter of 2020, primarily
includes $27.8 million of net sales from one month of Crisco net
sales. For fiscal 2020, primarily includes $33.7 million of net
sales from an additional seven and one-half months of Clabber Girl
net sales and $27.8 million of net sales from one month of Crisco
net sales. The Clabber Girl acquisition closed on May 15, 2019 and
the Crisco acquisition closed on December 1, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210302006094/en/
Investor Relations: ICR, Inc. Dara Dierks 866.211.8151
Media Relations: ICR, Inc. Matt Lindberg 203.682.8214
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