B&G Foods, Inc. (NYSE: BGS) today announced financial
results for the first quarter of 2023.
Summary
First Quarter of 2023
(In millions, except per share
data)
Change vs.
Amount
Q1 2022
Net Sales
$
511.8
(3.9)
%
Base Business Net Sales 1
$
511.4
(1.2)
%
Diluted EPS
$
0.05
(85.3)
%
Adj. Diluted EPS 1
$
0.27
(6.9)
%
Net Income
$
3.4
(85.6)
%
Adj. Net Income 1
$
19.1
(3.9)
%
Adj. EBITDA 1
$
82.4
12.9
%
Guidance Reaffirmed for Full Year Fiscal 2023
- Net sales reaffirmed at a range of $2.13 billion to $2.17
billion.
- Adjusted EBITDA reaffirmed at a range of $310 million to $330
million.
- Adjusted diluted earnings per share reaffirmed at a range of
$0.95 to $1.15.
Commenting on the results, Casey Keller, President and Chief
Executive Officer of B&G Foods, stated, “First quarter results
demonstrated continued pricing recovery against inflationary costs,
with both adjusted gross margin and adjusted EBITDA margin
significantly above the first quarter of last year. Base business
net sales (which excludes net sales from the recently divested Back
to Nature brand) were slightly below last year’s elevated demand
from Omicron partial lockdowns, but up 3.8% on a two-year
comparison from the first quarter of 2021. We have largely executed
pricing actions to cover current inflation, and are starting to
realize some reductions in key soybean and other commodities.”
Financial Results for the First Quarter of 2023 Net sales
for the first quarter of 2023 decreased $20.6 million, or 3.9%, to
$511.8 million from $532.4 million for the first quarter of 2022.
The decrease was primarily attributable to the Back to Nature
divestiture, partially offset by the Yuma acquisition. Net sales of
Back to Nature, which the Company divested on January 3, 2023, and
therefore not part of the Company’s fiscal 2023 results, were $14.4
million during the first quarter of 2022. Net sales from the Yuma
acquisition, which was completed on May 5, 2022 and therefore not
part of the Company’s first quarter of 2022 results, contributed
$0.4 million to the Company’s net sales for the first quarter of
2023.
Base business net sales for the first quarter of 2023 decreased
$6.4 million, or 1.2%, to $511.4 million from $517.8 million for
the first quarter of 2022. The decrease in base business net sales
was driven by a decrease in unit volume of $67.5 million and the
negative impact of foreign currency of $2.1 million, largely offset
by increases in net pricing and the impact of product mix of $63.2
million, or 12.2% of base business net sales.
Net sales of the Company’s spices & seasonings2 increased
$8.4 million, or 9.6%; net sales of Clabber Girl increased $6.5
million, or 31.0%; and net sales of Maple Grove Farms increased
$0.6 million, or 2.7%, in the first quarter of 2023 as compared to
the first quarter of 2022. Net sales of Green Giant (including Le
Sueur) decreased $9.9 million, or 7.3%; net sales of Crisco
decreased $6.7 million, or 8.4%; net sales of Ortega decreased $4.2
million, or 9.7%; and net sales of Cream of Wheat decreased $0.4
million, or 1.7%, in the first quarter of 2023, as compared to the
first quarter of 2022. Base business net sales of all other brands
in the aggregate decreased $0.7 million, or 0.8%, for the first
quarter of 2023, as compared to the first quarter of 2022.
Gross profit was $114.2 million for the first quarter of 2023,
or 22.3% of net sales. Excluding the negative impact of $0.7
million of acquisition/divestiture-related expenses and
non-recurring expenses included in cost of goods sold during the
first quarter of 2023, the Company’s gross profit would have been
$114.9 million, or 22.4% of net sales. Gross profit was $101.3
million for the first quarter of 2022, or 19.0% of net sales.
Excluding the negative impact of $2.1 million of
acquisition/divestiture-related expenses and non-recurring expenses
included in cost of goods sold during the first quarter of 2022,
the Company’s gross profit would have been $103.4 million, or
19.4%.
During fiscal 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
2023. The Company has been 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 several rounds of list price increases in 2021, 2022
and during the first quarter of 2023. However, the effective date
of 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 fiscal
2022. However, during the fourth quarter of 2022, the Company began
to more fully realize the benefits of previously announced list
price increases. This trend continued during the first quarter of
2023, with the impact of previously announced list price increases
the primary driver of a recovery in gross profit, which as
described above, increased during the first quarter of 2023 as
compared to the first quarter of 2022.
Selling, general and administrative expenses decreased $0.1
million, or 0.2%, to $46.7 million for the first quarter of 2023
from $46.8 million for the first quarter of 2022. The decrease was
composed of decreases in warehousing expenses of $1.7 million,
selling expenses of $1.1 million and consumer marketing expenses of
$0.1 million, largely offset by increases in general and
administrative expenses of $2.3 million and
acquisition/divestiture-related and non-recurring expenses of $0.5
million. Expressed as a percentage of net sales, selling, general
and administrative expenses increased by 0.3 percentage points to
9.1% for the first quarter of 2023, as compared to 8.8% for the
first quarter of 2022.
Net interest expense increased $12.6 million, or 47.1%, to $39.4
million for the first quarter of 2023 from $26.8 million for the
first quarter of 2022. The increase was primarily attributable to
higher interest rates on the Company’s variable rate borrowings, as
well as the accelerated amortization of deferred debt financing
costs relating to the prepayments described below, partially offset
by a reduction in average long-term debt outstanding. The reduction
in average long-term debt outstanding in the first quarter of 2023
as compared to the first quarter of 2022 resulted primarily from
the Company’s use of $50.0 million of the gross proceeds of the
Back to Nature divestiture and an additional $71.0 million of cash
on hand to make aggregate prepayments of $121.0 million principal
amount of term loans during the first quarter of 2023, partially
offset by an increase in average revolver borrowings outstanding of
approximately $77.7 million.
The Company’s net income was $3.4 million, or $0.05 per diluted
share, for the first quarter of 2023, compared to net income of
$23.7 million, or $0.34 per diluted share, for the first quarter of
2022. Net income and diluted earnings per share for the first
quarter of 2023 were negatively impacted by the net negative impact
on income tax expense of $14.7 million, or $0.21 per share,
resulting from the Back to Nature divestiture. The Company’s
adjusted net income for the first quarter of 2023 was $19.1
million, or $0.27 per adjusted diluted share, compared to adjusted
net income of $19.9 million, or $0.29 per adjusted diluted share,
for the first quarter of 2022.
For the first quarter of 2023, adjusted EBITDA was $82.4
million, an increase of $9.4 million, or 12.9%, compared to $73.0
million for the first quarter of 2022. The increase in adjusted
EBITDA was primarily attributable to the improvement in gross
profit described above. Adjusted EBITDA as a percentage of net
sales was 16.1% for the first quarter of 2023, compared to 13.7%
for the first quarter of 2022.
Full Year Fiscal 2023 Guidance B&G Foods reaffirmed
its net sales guidance for fiscal 2023 at a range of $2.13 billion
to $2.17 billion, reaffirmed its adjusted EBITDA guidance at a
range of $310 million to $330 million, and reaffirmed its adjusted
diluted earnings per share guidance at a range of $0.95 to
$1.15.
B&G Foods provides earnings guidance only on a non-GAAP
basis and does not provide a reconciliation of the Company’s
forward-looking adjusted EBITDA and adjusted diluted earnings per
share guidance to the most directly comparable GAAP financial
measures because of the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliations, including adjustments that could be made for
deferred taxes; 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); loss on extinguishment of debt;
impairment of assets held for sale; impairment of intangible
assets; non-recurring expenses, gains and losses; and other charges
reflected in the Company’s reconciliation of historic non-GAAP
financial measures, the amounts of which, based on past experience,
could be material. For additional information regarding B&G
Foods’ non-GAAP financial measures, see “About Non-GAAP Financial
Measures and Items Affecting Comparability” below.
Conference Call B&G Foods will hold a conference call
at 4:30 p.m. ET today, May 4, 2023 to discuss first quarter 2023
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, and depreciation
and amortization) and “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), loss on extinguishment of debt,
impairment of assets held for sale, and non-recurring expenses,
gains and losses) 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 and adjusted EBITDA and
a reconciliation of EBITDA and adjusted EBITDA to net income and to
net cash provided by operating activities, is included below for
the first quarter of 2023 and 2022, along with the components of
EBITDA and adjusted EBITDA. 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” and “adjusted
EBITDA,” 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, and spices &
seasonings products launched by the Company and sold under
license.
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 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, inflation and commodity prices, and the Company’s overall
expectations for the remainder of fiscal 2023 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 Company’s substantial
leverage; the effects of rising costs for and/or decreases in
supply of 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 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 disruptions in the supply chain or
labor shortages; the impact pandemics or disease outbreaks, such as
the COVID-19 pandemic, may have on the Company’s business,
including among other things, the Company’s supply chain,
manufacturing operations or workforce and customer and consumer
demand for the Company’s products; 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, other disruption or data
leak; the Company’s ability to successfully implement the Company’s
sustainability initiatives and achieve the Company’s sustainability
goals, and changes to environmental laws and regulations; and other
factors that affect the food industry generally, including: recalls
if products become adulterated or misbranded, liability if product
consumption causes injury, ingredient disclosure and labeling laws
and regulations and the possibility that consumers could lose
confidence in the safety and quality of certain food products;
competitors’ pricing practices and promotional spending levels;
fluctuations in the level of the Company’s customers’ inventories
and credit and other business risks related to the Company’s
customers operating in a challenging economic and competitive
environment; and the risks associated with third-party suppliers
and co-packers, including the risk that any failure by one or more
of the Company’s third-party suppliers or co-packers to comply with
food safety or other laws and regulations may disrupt the Company’s
supply of raw materials or certain finished goods products or
injure the Company’s reputation. 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 1,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
35,898
$
45,442
Trade accounts receivable, net
162,441
150,019
Inventories
700,882
726,468
Assets held for sale
—
51,314
Prepaid expenses and other current
assets
32,425
37,550
Income tax receivable
5,200
8,024
Total current assets
936,846
1,018,817
Property, plant and equipment, net
311,784
317,587
Operating lease right-of-use assets
68,240
65,809
Finance lease right-of-use assets
2,626
2,891
Goodwill
619,256
619,241
Other intangible assets, net
1,782,952
1,788,157
Other assets
20,790
19,088
Deferred income taxes
9,949
10,019
Total assets
$
3,752,443
$
3,841,609
Liabilities and Stockholders’
Equity
Current liabilities:
Trade accounts payable
$
131,316
$
127,809
Accrued expenses
67,797
64,137
Current portion of operating lease
liabilities
15,664
14,616
Current portion of finance lease
liabilities
1,051
1,046
Current portion of long-term debt
—
50,000
Income tax payable
1,136
309
Dividends payable
13,720
13,617
Total current liabilities
230,684
271,534
Long-term debt, net of current portion
2,281,464
2,339,049
Deferred income taxes
302,870
288,712
Long-term operating lease liabilities, net
of current portion
52,966
51,727
Long-term finance lease liabilities, net
of current portion
1,530
1,795
Other liabilities
21,110
20,626
Total liabilities
2,890,624
2,973,443
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; 72,211,800 and 71,668,144 shares
issued and outstanding as of April 1, 2023 and December 31, 2022,
respectively
722
717
Additional paid-in capital
—
—
Accumulated other comprehensive loss
(4,189)
(9,349)
Retained earnings
865,286
876,798
Total stockholders’ equity
861,819
868,166
Total liabilities and stockholders’
equity
$
3,752,443
$
3,841,609
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Operations (In thousands,
except per share data) (Unaudited)
First Quarter Ended
April 1,
April 2,
2023
2022
Net sales
$
511,814
$
532,407
Cost of goods sold
397,578
431,119
Gross profit
114,236
101,288
Operating (income) and expenses:
Selling, general and administrative
expenses
46,729
46,840
Amortization expense
5,241
5,223
Loss (gain) on sales of assets
85
(7,099)
Operating income
62,181
56,324
Other (income) and expenses:
Interest expense, net
39,435
26,802
Other income
(921)
(1,839)
Income before income tax expense
23,667
31,361
Income tax expense
20,252
7,705
Net income
$
3,415
$
23,656
Weighted average shares outstanding:
Basic
71,779
68,630
Diluted
71,795
69,017
Earnings per share:
Basic
$
0.05
$
0.34
Diluted
$
0.05
$
0.34
Cash dividends declared per share
$
0.190
$
0.475
B&G Foods, Inc. and Subsidiaries
Items Affecting Comparability Reconciliation of Net
Income to EBITDA and Adjusted EBITDA (In thousands)
(Unaudited)
First Quarter Ended
April 1,
April 2,
2023
2022
Net income
$
3,415
$
23,656
Income tax expense
20,252
7,705
Interest expense, net
39,435
26,802
Depreciation and amortization
18,018
19,825
EBITDA(1)
81,120
77,988
Acquisition/divestiture-related and
non-recurring expenses (income)(2)
1,160
(87)
Loss (gain) on sales of assets, net of
facility closure costs(3)
85
(4,928)
Adjusted EBITDA(1)
$
82,365
$
72,973
B&G Foods, Inc. and Subsidiaries
Items Affecting Comparability Reconciliation of Net Cash
Provided by Operating Activities to EBITDA and Adjusted EBITDA
(In thousands) (Unaudited)
First Quarter Ended
April 1,
April 2,
2023
2022
Net cash provided by operating
activities
$
69,527
$
25,231
Income tax expense
20,252
7,705
Interest expense, net
39,435
26,802
(Loss) gain on sales of assets(3)
(93)
7,113
Deferred income taxes
(15,019)
(2,913)
Amortization of deferred debt financing
costs and bond discount/premium
(3,648)
(1,169)
Share-based compensation expense
(927)
(1,090)
Changes in assets and liabilities, net of
effects of business combinations
(28,407)
16,309
EBITDA(1)
81,120
77,988
Acquisition/divestiture-related and
non-recurring expenses (income)(2)
1,160
(87)
Loss (gain) on sales of assets, net of
facility closure costs(3)
85
(4,928)
Adjusted EBITDA(1)
$
82,365
$
72,973
B&G Foods, Inc. and Subsidiaries
Items Affecting Comparability Reconciliation of Net
Income to Adjusted Net Income and Adjusted Diluted Earnings per
Share (In thousands, except per share data)
(Unaudited)
Thirteen Weeks Ended
April 1,
April 2,
2023
2022
Net income
$
3,415
$
23,656
Acquisition/divestiture-related and
non-recurring expenses (income)(2)
1,160
(87)
Loss (gain) on sales of assets, net of
facility closure costs(3)
85
(4,928)
Tax adjustment(4)
14,736
—
Tax effects of non-GAAP adjustments(5)
(305)
1,229
Adjusted net income
$
19,091
$
19,870
Adjusted diluted earnings per share
$
0.27
$
0.29
___________________________________
(1)
EBITDA and adjusted EBITDA 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, and
depreciation and amortization. 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); loss on extinguishment of debt; impairment of
assets held for sale; impairment of intangible assets; and
non-recurring expenses, gains and losses.
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 and adjusted EBITDA 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 and adjusted EBITDA 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 and adjusted EBITDA 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 and adjusted EBITDA 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 and adjusted EBITDA are
not complete net cash flow measures because EBITDA and adjusted
EBITDA 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 and adjusted EBITDA
are potential indicators of an entity’s ability to fund these cash
requirements. EBITDA and adjusted EBITDA 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 and adjusted EBITDA may not be comparable to other similarly
titled measures of other companies. However, EBITDA and adjusted
EBITDA 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 2023 of $1.2
million (or $0.9 million, net of tax), primarily includes
acquisition and integration expenses for the acquisition of the
frozen vegetable manufacturing operations of Growers Express, LLC,
which was completed on May 5, 2022 (which the Company refers to as
the “Yuma acquisition”) and the Crisco acquisition, and
divestiture-related expenses for the Back to Nature
divestiture.
(3)
During the first quarter of 2023, the
Company completed the Back to Nature divestiture and recorded a
loss on the sale of $0.1 million. 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, resulting in a net benefit of $4.9 million (or $3.7
million, net of tax) from the gain on sale.
(4)
As a result of the Back to Nature
divestiture, the Company incurred a capital loss for tax purposes,
for which the Company recorded a deferred tax asset during the
first quarter of 2023. A valuation allowance has been recorded
against this deferred tax asset, which negatively impacted the
Company’s first quarter of 2023 income tax expense by $14.7
million, or $0.21 per share.
(5)
Represents the tax effects of the non-GAAP
adjustments listed above, assuming a tax rate of 24.5%.
B&G Foods, Inc. and Subsidiaries
Items Affecting Comparability Reconciliation of Net Sales
to Base Business Net Sales(1) (In thousands)
(Unaudited)
First Quarter Ended
April 1,
April 2,
2023
2022
Net sales
$
511,814
$
532,407
Net sales from acquisitions(2)
(427)
—
Net sales from discontinued or divested
brands(3)
30
(14,640)
Base business net sales
$
511,417
$
517,767
__________________________
(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 from the Yuma
acquisition, for which there is no comparable period of net sales
during the first quarter of 2022. The Yuma acquisition was
completed on May 5, 2022.
(3)
For the first quarter of 2022, reflects
net sales of the Back to Nature brand, which was sold on January 3,
2023, and net sales of the SnackWell’s and Farmwise brands, which
have been discontinued. For the first quarter of 2023, reflects a
net credit paid to customers relating to the discontinued
brands.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504006013/en/
Investor Relations: ICR, Inc. Dara Dierks 866.211.8151
Media Relations: ICR, Inc. Matt Lindberg 203.682.8214
B and G Foods (NYSE:BGS)
Historical Stock Chart
From May 2024 to Jun 2024
B and G Foods (NYSE:BGS)
Historical Stock Chart
From Jun 2023 to Jun 2024