— Net Sales Increased 12.4% for First
Quarter 2021 —
B&G Foods, Inc. (NYSE: BGS) today announced financial
results for the first quarter of 2021.
Executive Summary (vs. First Quarter of 2020 where
applicable):
- Net sales increased 12.4% to $505.1 million, driven by the
Crisco acquisition and continued strong base business net
sales
- Diluted earnings per share decreased 6.8% to $0.41
- Adjusted diluted earnings per share1 increased 13.0% to
$0.52
- Net income decreased 4.3% to $26.9 million
- Adjusted net income1 increased 16.7% to $34.1 million
- Adjusted EBITDA1 increased 15.2% to $92.9 million
- Adjusted EBITDA before COVID-19 expenses1 increased 18.5% to
$95.8 million
- Net sales guidance reaffirmed at a 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, “Overall, the
first quarter of 2021 played out much as we expected, with
substantial net sales gains for the first ten weeks of the quarter
and then tough comparisons in the last few. The last two weeks of
the first quarter of 2020 essentially saw four weeks of normal
sales volume compressed into two as COVID-driven panic buying
commenced. In total for the first quarter of 2021, we achieved
record first quarter net sales of $505.1 million, a 12.4% increase
from the first quarter of 2020. Base business net sales, which
excludes the Crisco acquisition completed last December, were
virtually flat versus first quarter 2020. U.S. base business net
sales were up 2.5% while international base business net sales –
predominantly Canada – brought overall base business net sales to a
slight negative. Despite the tough comparisons and supply chain
constraints for certain of our brands, most notably Green Giant
canned products, our net sales across our portfolio remained strong
as compared to 2019, especially in areas such as baking and spices
& seasonings. Foodservice net sales strengthened as well,
helping overall performance. Although demand for our brands remains
strong, we expect our base business net sales for the second
quarter to trend much closer to our 2019 net sales than our 2020
net sales, given the extraordinary demand in last year’s second
quarter at the height of the pandemic.”
Mr. Wenner continued, “The first quarter was our first full
quarter of ownership of the Crisco brand and we were very pleased
with its performance. At $58.1 million in net sales it is tracking
to our expectations, and margins were accretive to our overall
results. We do face temporary cost challenges with the brand, as
the cost of oils used in the products has more than doubled since
this time last year. But we view these very high levels as an
anomaly that we expect will ease over time. Meanwhile we own what
we see as an iconic brand that fits well with our portfolio of
products related to baking at home, a revitalized consumer
behavior.”
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.
Financial Results for the First Quarter of 2021
Net sales for the first quarter of 2021 increased $55.7 million,
or 12.4%, to $505.1 million from $449.4 million for the first
quarter of 2020. Net sales of Crisco, acquired on December 1, 2020,
contributed $58.1 million to the Company’s net sales for the
quarter.
Base business net sales1 for the first quarter of 2021 decreased
$2.5 million, or 0.6%, to $446.9 million from $449.4 million for
the first quarter of 2020. Base business net sales in the first
quarter of 2021 continued to benefit from very strong demand for
the Company’s products. Significant year-over-year base business
net sales gains in January and February were offset by a
year-over-year decrease in base business net sales in March due to
the extraordinary COVID-related demand for the Company’s products
and pantry loading in March 2020. Although demand remains strong
and base business net sales are expected to continue to outpace
fiscal 2019 levels, the Company expects base business net sales to
decline year-over-year in the second quarter of 2021 given the
extraordinary demand and pantry loading at the height of the
pandemic. The decrease in base business net sales for the first
quarter of 2021 reflected a decrease in unit volume of $9.8
million, partially offset by an increase in net pricing and the
impact of product mix of $6.6 million and the positive impact of
foreign currency of $0.7 million.
Net sales of the Company’s spices & seasonings2 increased
$30.0 million, or 41.2%; net sales of Maple Grove Farms increased
$2.3 million, or 12.1%; and net sales of Ortega increased $0.2
million, or 0.4%, in the first quarter of 2021, as compared to the
first quarter of 2020. Net sales of Green Giant (including Le
Sueur) decreased $25.9 million, or 16.4%; net sales of Clabber Girl
decreased $1.3 million, or 6.8%; and net sales of Cream of Wheat
decreased $0.7 million, or 4.0%, in the first quarter of 2021, as
compared to the first quarter of 2020. Net sales of all other
brands in the aggregate decreased $7.1 million, or 5.6%, for the
first quarter of 2021.
Gross profit was $117.8 million for the first quarter of 2021,
or 23.3% of net sales. Excluding the negative impact of $5.5
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 first quarter of 2021, the Company’s gross profit would have
been $123.3 million, or 24.4% of net sales. Gross profit was $104.9
million for the first quarter of 2020, or 23.3% of net sales.
Excluding the negative impact of $2.3 million of
acquisition/divestiture-related expenses and non-recurring expenses
included in cost of goods sold during the first quarter of 2020,
the Company’s gross profit would have been $107.2 million, or 23.9%
of net sales.
Selling, general and administrative expenses increased $10.4
million, or 26.0%, to $50.4 million for the first quarter of 2021
from $40.0 million for the first quarter of 2020. The increase was
composed of increases in warehousing expenses of $4.1 million,
consumer marketing expenses of $4.0 million,
acquisition/divestiture-related and non-recurring expenses of $1.9
million and general and administrative expenses of $1.3 million,
partially offset by a decrease in selling expenses of $0.9 million.
The increase in warehousing expenses was primarily driven by the
Crisco acquisition and customer fines related to COVID-19 shortages
and delays. Expressed as a percentage of net sales, selling,
general and administrative expenses increased by 1.1 percentage
points to 10.0% for the first quarter of 2021, compared to 8.9% for
the first quarter of 2020.
Net interest expense increased $1.0 million, or 3.6%, to $27.0
million for the first quarter of 2021 from $26.0 million in the
first quarter of 2020. The increase was primarily attributable to
an increase in average long-term debt outstanding during the first
quarter of 2021 as compared to the first quarter of 2020, 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 increase in net interest expense was
partially offset by a lower effective cost of borrowing during the
first quarter of 2021.
2
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.
The Company’s net income was $26.9 million, or $0.41 per diluted
share, for the first quarter of 2021, compared to net income of
$28.1 million, or $0.44 per diluted share, for the first quarter of
2020. Although operating income increased in the first quarter of
2021, largely driven by the Crisco acquisition, the increase was
offset by an increase in income tax expense. The Company’s net
income in the first quarter of 2020 benefited from a discrete tax
benefit of $2.3 million related to the U.S. CARES Act. The
Company’s adjusted net income for the first quarter of 2021, which
excludes, among other things, the impact of the discrete tax
benefit received in the first quarter of 2020, was $34.1 million,
or $0.52 per adjusted diluted share, compared to $29.2 million, or
$0.46 per adjusted diluted share, for the first quarter of
2020.
For the first quarter of 2021, adjusted EBITDA was $92.9
million, an increase of $12.2 million, or 15.2%, compared to $80.7
million for the first quarter of 2020. The increase in adjusted
EBITDA was primarily attributable to increased net sales, primarily
resulting from the Crisco acquisition. Adjusted EBITDA as a
percentage of net sales was 18.4% for the first quarter of 2021,
compared to 18.0% in the first quarter of 2020.
For the first quarter of 2021, adjusted EBITDA before COVID-19
expenses was $95.8 million, an increase of $15.0 million, or 18.5%,
compared to $80.8 million for fiscal 2020. COVID-19 expenses of
$2.9 million and $0.2 million for the first quarter of 2021 and the
first quarter of 2020, respectively, 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 the first quarter of 2021, compared to 18.0% in
the first quarter of 2020.
Full Year Fiscal 2021 Guidance
B&G Foods reaffirmed its net sales guidance for full year
fiscal 2021. Net sales, which will be positively impacted by a full
twelve months of ownership of the Crisco brand, 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 the remainder of fiscal 2021. The Company has also
seen and expects to continue to see cost inflation for various
inputs, including ingredients, packaging and transportation. The
Company has initiated various revenue enhancing activities 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. Because the Company’s management is not
able to fully estimate the impact COVID-19, cost inflation and the
Company’s cost inflation mitigation efforts will have on the
Company’s results for the remainder of fiscal 2021, the Company is
unable at this time to provide more detailed guidance for full year
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 policies 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,
May 11, 2021 to discuss first quarter 2021 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) and non-recurring expenses, gains and losses) 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 the first quarter of 2021 and
2020, 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, 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’
net sales and overall expectations for the second quarter and full
year fiscal 2021 and beyond, and B&G Foods’ expectations
regarding the Crisco acquisition and integration. 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)
April 3,
January 2,
2021
2021
Assets
Current assets:
Cash and cash equivalents
$
43,128
$
52,182
Trade accounts receivable, net
136,265
132,935
Inventories
497,481
492,804
Prepaid expenses and other current
assets
38,083
43,619
Income tax receivable
14,439
15,761
Total current assets
729,396
737,301
Property, plant and equipment, net
360,214
371,854
Operating lease right-of-use assets
30,909
32,216
Goodwill
644,801
644,747
Other intangible assets, net
1,965,897
1,971,326
Other assets
5,859
5,948
Deferred income taxes
4,128
4,178
Total assets
$
3,741,204
$
3,767,570
Liabilities and Stockholders’
Equity
Current liabilities:
Trade accounts payable
$
125,165
$
126,537
Accrued expenses
40,565
77,460
Current portion of operating lease
liabilities
9,952
11,034
Income tax payable
1,134
101
Dividends payable
30,757
30,520
Total current liabilities
207,573
245,652
Long-term debt
2,329,994
2,334,086
Deferred income taxes
299,456
293,121
Long-term operating lease liabilities, net
of current portion
23,541
23,959
Other liabilities
40,026
38,875
Total liabilities
2,900,590
2,935,693
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; 64,752,511 and 64,252,859 shares
issued and outstanding as of April 3, 2021 and January 2, 2021,
respectively
648
643
Additional paid-in capital
—
—
Accumulated other comprehensive loss
(35,756
)
(35,594
)
Retained earnings
875,722
866,828
Total stockholders’ equity
840,614
831,877
Total liabilities and stockholders’
equity
$
3,741,204
$
3,767,570
B&G Foods, Inc. and
Subsidiaries
Consolidated Statements of
Operations
(In thousands, except per
share data)
(Unaudited)
First Quarter Ended
April 3,
March 28,
2021
2020
Net sales
$
505,134
$
449,370
Cost of goods sold
387,340
344,454
Gross profit
117,794
104,916
Operating expenses:
Selling, general and administrative
expenses
50,379
39,973
Amortization expense
5,436
4,723
Operating income
61,979
60,220
Other income and expenses:
Interest expense, net
26,969
26,039
Other income
(1,091
)
(453
)
Income before income tax expense
36,101
34,634
Income tax expense
9,223
6,542
Net income
$
26,878
$
28,092
Weighted average shares outstanding:
Basic
64,583
64,047
Diluted
65,210
64,084
Earnings per share:
Basic
$
0.42
$
0.44
Diluted
$
0.41
$
0.44
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 3,
March 28,
2021
2020
Net income
$
26,878
$
28,092
Income tax expense
9,223
6,542
Interest expense, net
26,969
26,039
Depreciation and amortization
20,291
15,534
EBITDA(1)
83,361
76,207
Acquisition/divestiture-related and
non-recurring expenses(2)
4,510
4,483
Amortization of acquisition-related
inventory step-up(3)
5,054
—
Adjusted EBITDA(1)
92,925
80,690
COVID-19 expenses(4)
2,891
150
Adjusted EBITDA before COVID-19
expenses(1)
95,816
80,840
Income tax expense
(9,223
)
(6,542
)
Interest expense, net
(26,969
)
(26,039
)
Acquisition/divestiture-related and
non-recurring expenses(2)
(4,510
)
(4,483
)
Amortization of acquisition-related
inventory step-up(3)
(5,054
)
—
Net (gain)/loss on sales and disposals of
property, plant, and equipment
(26
)
2
Deferred income taxes
6,188
14,397
Amortization of deferred debt financing
costs and bond discount/premium
1,141
898
Share-based compensation expense
723
423
Changes in assets and liabilities, net of
effects of business combinations
(29,175
)
(1,768
)
Net cash provided by operating
activities
$
26,020
$
57,578
(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
assets); and non-recurring expenses, gains and losses, including
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. 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.
(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. Acquisition/divestiture-related and non-recurring
expenses for the first quarter of 2020 of $4.5 million primarily
includes acquisition and integration expenses for the Clabber Girl
and Farmwise acquisitions, and severance and other expenses
primarily relating to a workforce reduction in fiscal 2019 and
certain cost savings initiatives.
(3)
For the first quarter of 2021,
amortization of acquisition-related inventory step-up of $5.1
million primarily relates to the purchase accounting adjustments
made to inventory acquired in the Crisco acquisition.
(4)
COVID-19 expenses of $2.9 million and $0.2
million for the first quarter of 2021 and the first quarter of
2020, 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.
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 3,
March 28,
2021
2020
Net income
$
26,878
$
28,092
Acquisition/divestiture-related and
non-recurring expenses, net of tax(1)
3,405
3,385
Tax benefit(2)
—
(2,258
)
Amortization of acquisition-related
inventory step-up, net of tax(3)
3,816
—
Adjusted net income
$
34,099
$
29,219
Adjusted diluted earnings per share
$
0.52
$
0.46
(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.
Acquisition/divestiture-related and non-recurring expenses for the
first quarter of 2020 primarily includes acquisition and
integration expenses for the Clabber Girl and Farmwise
acquisitions, and severance and other expenses primarily relating
to a workforce reduction in fiscal 2019 and certain cost savings
initiatives.
(2)
The first quarter of 2020 includes a $2.3
million tax benefit associated with the U.S. CARES Act.
(3)
For the first quarter of 2021,
amortization of acquisition-related inventory step-up of $5.1
million (or $3.8 million, net of tax) primarily 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 3,
March 28,
2021
2020
Net sales
$
505,134
$
449,370
Net sales from acquisitions(2)
(58,256
)
—
Base business net sales
$
446,878
$
449,370
(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)
Primarily reflects $58.1 million of net
sales for Crisco for the first quarter of 2021 for which there is
no comparable period of net sales during the first quarter of 2020.
The Crisco acquisition closed on December 1, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210511006133/en/
Investor Relations: ICR, Inc. Dara Dierks 866.211.8151
Media Relations: ICR, Inc. Matt Lindberg 203.682.8214
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