— Net Sales Increased 5.4% and Base Business
Net Sales Increased 5.6% —
B&G Foods, Inc. (NYSE: BGS) today announced financial
results for the first quarter of 2022.
Summary
Q1 2022
(In millions, except per share
data)
Change vs.
Amount
Q1 2021
Net Sales
$
532.4
5.4
%
Base Business Net Sales 1
$
532.2
5.6
%
Diluted EPS 2
$
0.34
(17.1)
%
Adj. Diluted EPS 1
$
0.34
(34.6)
%
Net Income 2
$
23.7
(12.0)
%
Adj. Net Income 1
$
23.6
(30.8)
%
Adj. EBITDA 1
$
77.9
(16.2)
%
Guidance for Full Year Fiscal 2022
- Net sales increased to a range of $2.10 billion to $2.14
billion.
- Adjusted EBITDA revised to a range of $348 million to $358
million.
- Adjusted diluted earnings per share revised to a range of $1.65
to $1.75.
Commenting on the results, Casey Keller, President and Chief
Executive Officer of B&G Foods, stated, “First quarter results
delivered strong sales growth behind pricing and elevated demand.
However, inflation on key input costs was higher than expected
primarily resulting from the war in Ukraine and continued supply
disruptions, and had a significant impact on gross margins. Recent
pricing actions are expected to recover higher costs in the second
half of 2022.”
Financial Results for the First Quarter of 2022
Net sales for the first quarter of 2022 increased $27.3 million,
or 5.4%, to $532.4 million from $505.1 million for the first
quarter of 2021. The increase was primarily due to pricing
initiatives, including list price increases and trade spend
reductions, and the impact of product mix, partially offset by
volume declines primarily due to price elasticity and supply chain
challenges in the first quarter of 2022 resulting from the COVID-19
Omicron variant.
Base business net sales1 for the first quarter of 2022 increased
$28.1 million, or 5.6%, to $532.2 million from $504.1 million for
the first quarter of 2021. The increase in base business net sales
was driven by an increase in net pricing and the impact of product
mix of $36.2 million, or 7.2% of base business net sales, and the
positive impact of foreign currency of $0.1 million, partially
offset by a decrease in unit volume of $8.2 million.
Net sales of Crisco increased $21.0 million, or 36.2%; net sales
of Back to Nature increased $3.9 million, or 32.1%; net sales of
Clabber Girl increased $3.6 million, or 20.5%; net sales of Ortega
increased $3.6 million, or 9.3%; net sales of Green Giant
(including Le Sueur) increased $3.2 million, or 2.4%; net sales of
Cream of Wheat increased $2.8 million, or 15.5%; and net sales of
Maple Grove Farms increased $1.2 million, or 6.0% in the first
quarter of 2022, as compared to the first quarter of 2021. Net
sales of the Company’s spices & seasonings2 decreased $15.1
million, or 14.7%, in the first quarter of 2022, as compared to the
first quarter of 2021. The decrease was driven in part by
comparisons against a very strong first quarter of 2021 for the
Company’s spices & seasonings and supply chain challenges
during the first quarter of 2022. Compared to the first quarter of
2020, the Company’s spices & seasonings increased $14.9
million, or 20.4%. Base business net sales of all other brands in
the aggregate increased $3.9 million, or 3.7%, for the first
quarter of 2022.
Gross profit was $101.3 million for the first quarter of 2022,
or 19.0% of net sales. Gross profit was $117.8 million for the
first quarter of 2021, or 23.3% of net sales. During the first
quarter of 2022, the Company’s gross profit was negatively impacted
by higher than expected input cost inflation, including materially
increased costs for raw materials and transportation. The Company
expects input cost inflation will continue to have a significant
industry-wide impact during the remainder of fiscal 2022. The
Company is attempting to mitigate the impact of inflation on its
gross profit by locking in prices through short-term supply
contracts and advance commodities purchase agreements and by
implementing cost saving measures. The Company also announced list
price increases in 2021 and again during the first and second
quarters of 2022, and, where appropriate, has reduced trade
promotions to its customers for certain of the Company’s products.
However, increases in the prices the Company charges its customers
generally lag behind rising input costs. As such, the Company did
not fully offset the incremental costs that it faced in the first
quarter of 2022 and may not fully offset the incremental costs that
the Company is facing and expects to continue to face in the
remainder of fiscal 2022.
Selling, general and administrative expenses decreased $3.6
million, or 7.0%, to $46.8 million for the first quarter of 2022
from $50.4 million for the first quarter of 2021. The decrease was
composed of decreases in acquisition/divestiture-related and
non-recurring expenses of $4.0 million and consumer marketing
expenses of $1.5 million, partially offset by increases in selling
expenses of $1.7 million, general and administrative expenses of
$0.1 million and warehousing expenses of $0.1 million. Expressed as
a percentage of net sales, selling, general and administrative
expenses improved by 1.2 percentage points to 8.8% for the first
quarter of 2022, as compared to 10.0% for the first quarter of
2021.
During the first quarter of 2022, the Company completed the
closure and sale of its Portland, Maine manufacturing facility. The
Company recorded a gain on the sale of the Portland property, plant
and equipment of $7.1 million during the first quarter of 2022. The
positive impact during the quarter of the gain on sale was
partially offset by approximately $2.2 million of expenses incurred
during the quarter relating to the closure of the facility and the
transfer of manufacturing operations.
Net interest expense decreased $0.2 million, or 0.6%, to $26.8
million for the first quarter of 2022 from $27.0 million in the
first quarter of 2021. The decrease was primarily attributable to a
slightly lower average long-term debt outstanding during the first
quarter of 2022 as compared to the first quarter of 2021.
The Company’s net income was $23.7 million, or $0.34 per diluted
share, for the first quarter of 2022, compared to net income of
$26.9 million, or $0.41 per diluted share, for the first quarter of
2021. The Company’s adjusted net income for the first quarter of
2022 was $23.6 million, or $0.34 per adjusted diluted share,
compared to $34.1 million, or $0.52 per adjusted diluted share, for
the first quarter of 2021. The decreases in net income, diluted
earnings per share, adjusted net income and adjusted diluted
earnings per share were primarily attributable to industry-wide
input cost inflation and supply chain disruptions, partially offset
by list price increases, trade spend reductions and a net benefit
during the first quarter of $4.9 million resulting from the gain on
sale of the Portland, Maine manufacturing facility, partially
offset by expenses relating to the closure of the facility and the
transfer of manufacturing operations.
For the first quarter of 2022, adjusted EBITDA was $77.9
million, a decrease of $15.0 million, or 16.2%, compared to $92.9
million for the first quarter of 2021. The decrease in adjusted
EBITDA was primarily attributable to industry-wide input cost
inflation and supply chain disruptions, partially offset by list
price increases, trade spend reductions and a net benefit during
the first quarter of $4.9 million resulting from the gain on sale
of the Portland, Maine manufacturing facility, partially offset by
expenses relating to the closure of the facility and the transfer
of manufacturing operations. Adjusted EBITDA as a percentage of net
sales was 14.6% for the first quarter of 2022, compared to 18.4% in
the first quarter of 2021.
For the first quarter of 2022, adjusted EBITDA before COVID-19
expenses was $78.4 million, a decrease of $17.4 million, or 18.2%,
compared to $95.8 million for fiscal 2021. COVID-19 expenses were
$0.5 million and $2.9 million for the first quarter of 2022 and
first quarter 2021, respectively. Adjusted EBITDA before COVID‑19
expenses as a percentage of net sales was 14.7% for the first
quarter of 2022, compared to 19.0% in the first quarter of
2021.
Full Year Fiscal 2022 Guidance
B&G Foods increased its net sales guidance for full year
fiscal 2022 to a range of $2.10 billion to $2.14 billion. B&G
Foods revised its full year fiscal 2022 adjusted EBITDA guidance to
a range of $348 million to $358 million, and adjusted diluted
earnings per share to a range of $1.65 to $1.75.
B&G Foods continues to see strong consumer demand for its
products. The Company has also seen, and expects to continue to
see, significant cost inflation for various inputs, including
ingredients, packaging, transportation and labor attributable to a
number of factors, including the COVID-19 pandemic, the war in
Ukraine, climate and weather conditions, supply chain disruptions
(including raw material shortages) and labor shortages. The Company
has initiated various revenue enhancing activities (including list
price increases and trade spend initiatives) and cost savings
initiatives to offset these costs but there can be no assurance at
this point of the ultimate effectiveness of these activities and
initiatives. The Company’s management is not able to fully estimate
the impact COVID-19, industry-wide supply chain disruptions, cost
inflation and the Company’s cost inflation mitigation efforts will
have on the Company’s results for the remainder of fiscal 2022, and
the Company’s guidance should be read in this context. 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 policies and
recommendations remain in effect; whether, and the extent to which,
additional waves or variants 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; 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,
May 5, 2022 to discuss first quarter 2022 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
the sale of certain assets) and non-recurring expenses, gains and
losses) and “adjusted EBITDA before COVID-19 expenses” (adjusted
EBITDA as adjusted for COVID-19 expenses3) 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 the first quarter of 2022 and
2021, 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.
End Notes
- Please see “About Non-GAAP Financial Measures and Items
Affecting Comparability” below for the definition of the non-GAAP
financial measures “base business net sales,” “adjusted diluted
earnings per share,” “adjusted net income,” “EBITDA,” “adjusted
EBITDA” and “adjusted EBITDA before COVID-19 expenses,” as well as
information concerning certain items affecting comparability and
reconciliations of the non-GAAP terms to the most comparable GAAP
financial measures.
- 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.
- COVID-19 expenses include temporary enhanced compensation that
ended on February 15, 2021 for the Company’s manufacturing
employees, compensation the Company continued to pay manufacturing
employees while in quarantine (which was incremental to the
compensation the Company paid to the manufacturing employees who
produced the Company’s products while others were in quarantine),
and expenses relating to other precautionary health and safety
measures.
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, Bear Creek, 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’
expectations regarding net sales, adjusted EBITDA, adjusted diluted
earnings per share, consumer demand, input cost inflation, list
price increases, cost savings initiatives, the ability of the
Company to recover higher costs in the second half of 2022 through
pricing actions, and the Company’s overall expectations for the
remainder of fiscal 2022 and beyond. 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 continuing 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, and to procure ingredients, packaging and other raw
materials when needed despite disruption in the supply chain or
labor shortages, the duration of social distancing and stay-at-home
and work-from-home policies and recommendations, and whether, and
the extent to which, additional waves or variants of COVID-19 will
affect the United States and the rest of North America, and the
extent to which macroeconomic conditions resulting from the
pandemic and the pace of the subsequent recovery may impact
consumer eating and shopping habits; 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 commodities, ingredients, packaging, other raw
materials, distribution and labor; 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 Company’s ability to recruit and retain senior
management and a highly skilled and diverse workforce at the
Company’s corporate offices, manufacturing facilities and other
locations despite a very tight labor market and changing employee
expectations as to fair compensation, an inclusive and diverse
workplace, flexible working and other matters; 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
Infrastructure Investment and Jobs Act, U.S. Tax Cuts and Jobs Act
and the U.S. CARES Act, and future tax reform or legislation; 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; the Company’s ability to
successfully transition the operations of the Portland, Maine
manufacturing facility to third-party co-manufacturing facilities
and existing Company manufacturing facilities without significant
disruption in production or customer service, and the Company’s
ability to achieve anticipated productivity improvements and cost
savings; 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)
April 2,
January 1,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
41,470
$
33,690
Trade accounts receivable, net
164,190
145,281
Inventories
612,768
609,794
Assets held for sale
—
3,256
Prepaid expenses and other current
assets
40,307
38,151
Income tax receivable
1,137
4,284
Total current assets
859,872
834,456
Property, plant and equipment, net
334,187
341,471
Operating lease right-of-use assets
63,330
65,166
Goodwill
644,949
644,871
Other intangible assets, net
1,922,090
1,927,119
Other assets
7,081
6,916
Deferred income taxes
7,842
8,546
Total assets
$
3,839,351
$
3,828,545
Liabilities and Stockholders’
Equity
Current liabilities:
Trade accounts payable
$
152,309
$
129,861
Accrued expenses
47,719
66,901
Current portion of operating lease
liabilities
13,502
12,420
Income tax payable
2,093
2,557
Dividends payable
32,721
32,548
Total current liabilities
248,344
244,287
Long-term debt
2,281,195
2,267,759
Deferred income taxes
312,604
310,641
Long-term operating lease liabilities, net
of current portion
52,628
55,607
Other liabilities
30,614
29,997
Total liabilities
2,925,385
2,908,291
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; 68,885,801 and 68,521,651 shares
issued and outstanding as of April 2, 2022 and January 1, 2022,
respectively
689
685
Additional paid-in capital
—
3,547
Accumulated other comprehensive loss
(15,469)
(18,169)
Retained earnings
928,746
934,191
Total stockholders’ equity
913,966
920,254
Total liabilities and stockholders’
equity
$
3,839,351
$
3,828,545
B&G Foods, Inc. and
Subsidiaries Consolidated Statements of Operations (In thousands,
except per share data) (Unaudited)
First Quarter Ended
April 2,
April 3,
2022
2021
Net sales
$
532,407
$
505,134
Cost of goods sold
431,119
387,340
Gross profit
101,288
117,794
Operating (income) and expenses:
Selling, general and administrative
expenses
46,840
50,379
Amortization expense
5,223
5,436
Gain on sales of assets
(7,099)
—
Operating income
56,324
61,979
Other income and expenses:
Interest expense, net
26,802
26,969
Other income
(1,839)
(1,091)
Income before income tax expense
31,361
36,101
Income tax expense
7,705
9,223
Net income
$
23,656
$
26,878
Weighted average shares outstanding:
Basic
68,630
64,583
Diluted
69,017
65,210
Earnings per share:
Basic
$
0.34
$
0.42
Diluted
$
0.34
$
0.41
Cash dividends declared per share
$
0.475
$
0.475
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)
First Quarter Ended
April 2,
April 3,
2022
2021
Net income
$
23,656
$
26,878
Income tax expense
7,705
9,223
Interest expense, net
26,802
26,969
Depreciation and amortization
19,825
20,291
EBITDA(1)
77,988
83,361
Acquisition/divestiture-related and
non-recurring (income) expenses(2)
(87)
4,510
Amortization of acquisition-related
inventory step-up(3)
—
5,054
Adjusted EBITDA(1)
77,901
92,925
COVID-19 expenses(4)
500
2,891
Adjusted EBITDA before COVID-19
expenses(1)
78,401
95,816
Income tax expense
(7,705)
(9,223)
Interest expense, net
(26,802)
(26,969)
Acquisition/divestiture-related and
non-recurring income (expenses)(2)
87
(4,510)
Amortization of acquisition-related
inventory step-up(3)
—
(5,054)
Gain on sales of assets
(7,113)
(26)
Deferred income taxes
2,913
6,188
Amortization of deferred debt financing
costs and bond discount/premium
1,169
1,141
Share-based compensation expense
1,090
723
Changes in assets and liabilities, net of
effects of business combinations
(16,309)
(29,175)
Net cash provided by operating
activities
$
25,231
$
26,020
(1)
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. 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
certain assets); and non-recurring expenses, gains and losses. 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 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.
(2)
Acquisition/divestiture-related and non-recurring expenses for
the first quarter of 2021 of $4.5 million primarily includes
acquisition and integration expenses for the Crisco and Clabber
Girl acquisitions, and certain cost savings initiatives.
(3)
For the first quarter of 2021, amortization of
acquisition-related inventory step-up of $5.1 million relates to
the purchase accounting adjustments made to inventory acquired in
the Crisco acquisition.
(4)
COVID-19 expenses of $0.5 million for the first quarter of 2022
and $2.9 million for the first quarter of 2021 primarily includes
temporary enhanced compensation for the Company’s manufacturing
employees that ended on February 15, 2021; compensation the Company
continued to pay manufacturing employees while in quarantine (which
was incremental to the compensation the Company paid to the
manufacturing employees who produced the Company’s products while
others were in quarantine); and expenses relating to other
precautionary health and safety measures.
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)
First Quarter Ended
April 2,
April 3,
2022
2021
Net income
$
23,656
$
26,878
Acquisition/divestiture-related and
non-recurring (income) expenses, net of tax(1)
(66)
3,405
Amortization of acquisition-related
inventory step-up, net of tax(2)
—
3,816
Adjusted net income
$
23,590
$
34,099
Adjusted diluted earnings per share
$
0.34
$
0.52
(1)
Acquisition/divestiture-related and non-recurring expenses for
the first quarter of 2021 primarily includes acquisition and
integration expenses for the Crisco and Clabber Girl acquisitions,
and certain cost savings initiatives.
(2)
For the first quarter of 2021, amortization of
acquisition-related inventory step-up of $5.1 million (or $3.8
million, net of tax) relates to the purchase accounting adjustments
made to inventory acquired in the Crisco acquisition.
B&G Foods, Inc. and
Subsidiaries Items Affecting Comparability Reconciliation of Base
Business Net Sales(1) to Net Sales (In thousands)
(Unaudited)
First Quarter Ended
April 2,
April 3,
2022
2021
Net sales
$
532,407
$
505,134
Net sales from discontinued brands(2)
(239)
(1,002)
Base business net sales
$
532,168
$
504,132
(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.
(2)
Reflects net sales of the SnackWell’s and Farmwise brands, which
are being discontinued.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505006046/en/
Investor Relations: ICR, Inc. Dara Dierks 866.211.8151 Media
Relations: ICR, Inc. Matt Lindberg 203.682.8214
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