B&G Foods Reports Financial Results for First Quarter 2019
Business Wire 2-May-2019 4:05 PM
— Reaffirms Full Year 2019 Guidance —
B&G Foods, Inc. (NYSE:BGS) today announced financial results for the
first quarter of 2019. Financial results for the first quarter of 2019
reflect the impact of the divestiture of Pirate Brands during the fourth
quarter of 2018 and the acquisition of McCann's during the third
quarter of 2018.
First Quarter 2019 Financial Summary:
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Net sales of $412.7 million
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Base business net sales1 of $409.5 million
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Diluted earnings per share of $0.26
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Adjusted diluted earnings per share1 of $0.44
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Net income of $16.8 million
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Adjusted EBITDA1 of $75.8 million
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Long-term debt at quarter-end of $1.6 billion, a decrease of 21.9%
compared to first quarter-end 2018
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Net interest expense of $23.1 million, a decrease of 18.5% compared to
the first quarter of 2018
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Stock repurchase program update:
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From mid-March 2018 to mid-March 2019, repurchased 1,397,148
shares of common stock at an average price per share of $26.41, or
$36.9 million in the aggregate
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Program extended through mid-March 2020
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Repurchase authority reset to up to $50.0 million
Guidance Reaffirmed for Full Year Fiscal 2019
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Net sales reaffirmed at a range of $1.635 billion to $1.665 billion
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Adjusted EBITDA reaffirmed at a range of $305.0 million to $320.0
million
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Adjusted diluted earnings per share reaffirmed at a range of $1.85 to
$2.00
Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods,
stated, "In the first quarter of 2019, we generated net sales of $412.7
million, adjusted EBITDA of $75.8 million and adjusted earnings per
share of $0.44. While the sale of Pirate Brands reduced our financial
performance for the first quarter, the very attractive purchase price we
received improved our balance sheet and better positioned our company to
continue pursuing accretive acquisitions."
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1
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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 net income," "adjusted
diluted earnings per share," "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.
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"Our net sales benefited from $7.3 million in net price increases, which
included the impact of our spring 2018 list price increase, as well as
improved trade spend realization in the first quarter. We have announced
another list price increase that will go into effect later this spring
and is expected to positively impact our net sales and, together with
our cost savings initiatives, help offset the continued input cost
inflation that we expect to persist throughout the year."
Financial Results for the First Quarter of 2019
B&G Foods generated net sales of $412.7 million for the first quarter of
2019, compared to $431.7 million for the first quarter of 2018. The
decrease was primarily attributable to the Pirate Brands divestiture,
offset in part by the McCann's acquisition. Net sales of
Pirate Brands, which was sold on October 17, 2018 and therefore not part
of the Company's first quarter of 2019 results, were $21.0 million
during the first quarter of 2018. Net sales of McCann's, which
was acquired on July 16, 2018 and therefore not part of the Company's
first quarter of 2018 results, contributed $3.3 million to the Company's
net sales for the first quarter of 2019.
Base business net sales for the first quarter of 2019 increased $0.2
million to $409.5 million from $409.3 million for the first quarter of
2018. The increase was attributable to an increase in net pricing of
$7.3 million, or 1.8% of base business net sales, offset by a decrease
in unit volume for the base business of $7.1 million.
Net sales of all Green Giant products in the aggregate (including Le
Sueur) increased $6.9 million, or 5.4%, in the first quarter of
2019, as compared to the first quarter of 2018, as net sales in both
frozen and shelf stable products increased. Net sales of Green Giant
frozen increased $6.0 million, or 6.3%, for the quarter. Net sales of Green
Giant shelf stable (including Le Sueur) increased $0.9
million, or 2.8%, for the first quarter of 2019.
Net sales of New York Style increased $1.3 million, or 16.4%, and Maple
Grove Farms increased $0.9 million, or 5.5%, for the first quarter
of 2019 as compared to the first quarter of 2018. Net sales of the
Company's spices & seasonings2 increased $0.7 million, or
0.8%, for the quarter. Net sales of Back to Nature decreased $3.3
million, or 16.9%; Victoria decreased $1.4 million, or 11.2%; Cream
of Wheat decreased $1.0 million, or 5.5%; and Ortega
decreased $0.6 million, or 1.6%, for the quarter. Net sales of all other
brands in the aggregate decreased $3.3 million, or 4.1%, for the first
quarter of 2019.
Gross profit was $88.1 million for the first quarter of 2019, or 21.3%
of net sales. Excluding the negative impact of $13.1 million of
acquisition/divestiture-related and non-recurring expenses during the
first quarter of 2019, which includes expenses related to the Company's
inventory reduction plan, the Company's gross profit would have been
$101.2 million, or 24.5% of net sales, for the first quarter of 2019.
Gross profit was $103.4 million for the first quarter of 2018, or 23.9%
of net sales. Excluding the negative impact of $16.1 million of
acquisition-related and non-recurring charges during the first quarter
of 2018, which includes expenses relating to the Company's inventory
reduction plan, the Company's gross profit would have been $119.5
million, or 27.7% of net sales, for the first quarter of 2018. For the
first quarter of 2019, gross profit benefited from an increase in net
pricing of $7.3 million and was negatively impacted by the Company's
inventory reduction plan, input cost inflation (inclusive of freight,
warehousing and procurement) and product mix.
Selling, general and administrative expenses decreased $4.3 million, or
10.0%, to $38.3 million for the first quarter of 2019 from $42.6 million
for the first quarter of 2018. The decrease was composed of decreases in
consumer marketing expenses of $3.3 million, selling expenses of $1.6
million, warehousing expenses of $0.3 million and general and
administrative expenses of $0.3 million, partially offset by an increase
in acquisition/divestiture-related and non-recurring expenses of $1.2
million. Expressed as a percentage of net sales, selling, general and
administrative expenses improved by 0.6 percentage points to 9.3% for
the first quarter of 2019, compared to 9.9% for the first quarter of
2018.
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2
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Includes the spices & seasoning brands acquired in the fourth
quarter of 2016, as well as the Company's legacy spices &
seasonings brands, such as Mrs. Dash and Ac'cent.
Excludes net sales of French's® seasoning mixes, which
the Company discontinued during the third quarter of 2018.
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Net interest expense decreased $5.2 million, or 18.5%, to $23.1 million
for the first quarter of 2019 from $28.3 million in the first quarter of
2018. The decrease was primarily attributable to a reduction in
long-term debt outstanding during the first quarter of 2019 as compared
to the first quarter of 2018, primarily as a result of the use of the
net proceeds from the sale of Pirate Brands to prepay long-term debt
during the fourth quarter of 2018 and other prepayments of long-term
debt made earlier during the first and second quarters of 2018. At the
end of the first quarter of 2019, the Company had long-term debt
outstanding of $1.637 billion, compared to $2.097 billion at the end of
the first quarter of 2018, a decrease of $460.1 million, or 21.9%.
There was no loss on extinguishment of debt for the first quarter of
2019, compared to a loss on extinguishment of debt for the first quarter
of 2018 of $2.8 million, which included the write-off of deferred debt
financing costs and unamortized discount of $2.4 million and $0.4
million, respectively, relating to the repayment of $125.0 million
aggregate principal amount of the Company's tranche B term loans.
The Company's net income was $16.8 million, or $0.26 per diluted share,
for the first quarter of 2019, compared to net income of $20.5 million,
or $0.31 per diluted share, for the first quarter of 2018. The Company's
adjusted net income1 for the first quarter of 2019 was $29.1
million, or $0.44 per adjusted diluted share, compared to $36.4 million,
or $0.55 per adjusted diluted share, for the first quarter of 2018.
For the first quarter of 2019, adjusted EBITDA was $75.8 million, a
decrease of 15.2%, or $13.6 million, compared to $89.4 million for the
first quarter of 2018. Adjusted EBITDA as a percentage of net sales was
18.4% for the first quarter of 2019, compared to 20.7% in the first
quarter of 2018.
Primarily as a result of the Company's inventory reduction plan and the
divestiture of Pirate Brands, partially offset by the acquisition of McCann's,
the Company reduced inventory from $455.4 million at the end of the
first quarter of 2018 to $401.4 million at the end of the fourth quarter
of 2018, and further reduced inventory to $375.4 million at the end of
the first quarter of 2019.
Full Year Fiscal 2019 Guidance
B&G Foods reaffirmed its guidance for full year fiscal 2019. Net sales
are expected to be approximately $1.635 billion to $1.665 billion,
adjusted EBITDA is expected to be approximately $305.0 million to $320.0
million and adjusted diluted earnings per share is expected to be
approximately $1.85 to $2.00.
For fiscal 2019, net interest expense is expected to be approximately
$87.5 million to $91.5 million (including cash interest payments which
are expected to be approximately $84.0 million to $88.0 million),
depreciation expense is expected to be approximately $40.0 million,
amortization expense is expected to be approximately $18.0 million, cash
taxes, excluding the tax effects resulting from the gain on sale of
Pirate Brands, are expected to be approximately $5.0 million or less and
capital expenditures are expected to be approximately $45.0 million to
$50.0 million.
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; loss on extinguishment of debt;
acquisition/divestiture-related and non-recurring expenses, gains and
losses, including severance and other expenses relating to a workforce
reduction; the non-cash accounting impact of the Company's inventory
reduction plan; restructuring expenses; gains and losses on the sale of
assets 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.
Stock Repurchase Program
In March 2019, the Company's Board of Directors authorized an extension
of the Company's stock repurchase program from March 15, 2019 to March
15, 2020. In extending the repurchase program, the Board also reset the
repurchase authority to up to $50.0 million. Under the authorization,
the Company may purchase shares of the Company's common stock from time
to time in the open market or in privately negotiated transactions in
compliance with the applicable rules and regulations of the Securities
and Exchange Commission.
The timing and amount of stock repurchases under the program, if any,
will be at the discretion of management, and will depend on a variety of
factors, including price, available cash, general business and market
conditions and other investment opportunities. Therefore, there can be
no assurance as to the number or aggregate dollar amount of shares, if
any, that will be repurchased under the program. The Company may
discontinue the program at any time. Any shares repurchased pursuant to
the program will be retired.
Under the prior authorization, the Company repurchased and retired from
March 15, 2018 through March 15, 2019, 1,397,148 shares of common stock
at an average price per share, excluding fees and commissions, of
$26.41, or $36.9 million in the aggregate, including 407,022 shares of
common stock at an average price per share, excluding fees and
commissions, of $24.55, or $10.0 million in the aggregate, during the
first quarter of 2019. The Company currently has 65,329,666 shares of
common stock outstanding.
Conference Call
B&G Foods will hold a conference call at 4:30 p.m. ET today, May 2,
2019. The call will be webcast live and can be accessed at www.bgfoods.com/investor-relations.
The call can also be accessed live over the phone by dialing (888)
394-8218 for U.S. callers or (323) 701-0225 for international callers.
A replay of the call will be available two hours after the call and can
be accessed by dialing (844) 512-2921 for U.S. callers or (412) 317-6671
for international callers; the password is 5176039. The replay will be
available from May 2, 2019 through May 9, 2019. Investors may also
access a web-based replay of the call at www.bgfoods.com/investor-relations.
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) 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 sale of
assets), non-recurring expenses, gains and losses and the non-cash
accounting impact of the Company's inventory reduction plan) are
"non-GAAP financial measures." A non-GAAP financial measure is a
numerical measure of financial performance that excludes or includes
amounts so as to be different than the most directly comparable measure
calculated and presented in accordance with GAAP in B&G Foods'
consolidated balance sheets and related consolidated statements of
operations, comprehensive income 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 2019 and 2018, 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.
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its subsidiaries
manufacture, sell and distribute high-quality, branded shelf-stable and
frozen foods across the United States, Canada and Puerto Rico. With
B&G Foods' diverse portfolio of more than 50 brands you know and love,
including Back to Nature, B&G, B&M, Cream of Wheat,
Green Giant, Las Palmas, Le Sueur, Mama Mary's,
Maple Grove Farms, Mrs. Dash, New York Style,
Ortega, Polaner, SnackWell's, 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, adjusted
EBITDA, adjusted diluted earnings per share, cash interest payment, cash
taxes, capital expenditure, cash flow and overall expectations for
fiscal 2019, including the benefits the Company expects to
achieve from cost savings initiatives and sales price increases. 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 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; tax reform and
legislation, including the effects of the U.S. Tax Cuts and Jobs 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 successfully
implement a new enterprise resource planning (ERP) system; 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.
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B&G Foods, Inc. and Subsidiaries
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Consolidated Balance Sheets
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(In thousands, except share and per share data)
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(Unaudited)
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March 30,
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December 29,
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2019
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2018
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Assets
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Current assets:
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Cash and cash equivalents
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$
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11,284
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$
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11,648
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Trade accounts receivable, net
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162,774
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151,707
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Inventories
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375,393
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401,355
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Prepaid expenses and other current assets
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21,130
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19,988
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Income tax receivable
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1,521
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1,398
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Total current assets
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572,102
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586,096
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Property, plant and equipment, net
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282,546
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282,553
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Operating lease right-of-use assets
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37,536
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—
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Goodwill
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584,435
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584,435
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Other intangibles, net
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1,591,078
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1,595,569
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Other assets
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1,136
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1,206
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Deferred income taxes
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5,350
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4,940
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Total assets
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$
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3,074,183
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$
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3,054,799
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Liabilities and Stockholders' Equity
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Current liabilities:
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Trade accounts payable
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$
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126,208
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$
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140,000
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Accrued expenses
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66,914
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55,660
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Operating lease liabilities, current portion
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9,124
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—
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Income tax payable
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33,276
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31,624
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Dividends payable
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31,016
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31,178
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Total current liabilities
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266,538
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258,462
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Long-term debt
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1,636,754
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1,635,881
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Deferred income taxes
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239,881
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235,902
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Long-term operating lease liabilities, net of current portion
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31,304
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—
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Other liabilities
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22,587
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24,505
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Total liabilities
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2,197,064
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2,154,750
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Stockholders' equity:
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Preferred stock, $0.01 par value per share. Authorized 1,000,000
shares; no shares issued or outstanding
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—
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—
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Common stock, $0.01 par value per share. Authorized 125,000,000
shares; 65,297,607 and 65,638,701 sharesissued and
outstanding as of March 30, 2019 and December 29, 2018,
respectively
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653
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656
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Additional paid-in capital
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75,001
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116,339
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Accumulated other comprehensive loss
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(21,882
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)
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(23,502
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)
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Retained earnings
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823,347
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806,556
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Total stockholders' equity
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877,119
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900,049
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Total liabilities and stockholders' equity
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$
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3,074,183
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$
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3,054,799
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B&G Foods, Inc. and Subsidiaries
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Consolidated Statements of Operations
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(In thousands, except per share data)
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(Unaudited)
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First Quarter Ended
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March 30,
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March 31,
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2019
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2018
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Net sales
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$
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412,734
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$
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431,729
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Cost of goods sold
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|
|
|
|
|
|
324,655
|
|
|
|
|
|
|
328,373
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
88,079
|
|
|
|
|
|
|
103,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
38,297
|
|
|
|
|
|
|
42,568
|
|
|
Amortization expense
|
|
|
|
|
|
|
|
|
|
|
|
4,491
|
|
|
|
|
|
|
4,609
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
|
|
45,291
|
|
|
|
|
|
|
56,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
23,074
|
|
|
|
|
|
|
28,306
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,778
|
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
(258
|
)
|
|
|
|
|
|
(2,054
|
)
|
|
Income before income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
22,475
|
|
|
|
|
|
|
27,149
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
5,684
|
|
|
|
|
|
|
6,602
|
|
|
Net income
|
|
|
|
|
|
|
|
$
|
|
|
|
16,791
|
|
|
$
|
|
|
|
20,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
65,587
|
|
|
|
|
|
|
66,518
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
65,617
|
|
|
|
|
|
|
66,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
$
|
|
|
|
0.26
|
|
|
$
|
|
|
|
0.31
|
|
|
Diluted
|
|
|
|
|
|
|
|
$
|
|
|
|
0.26
|
|
|
$
|
|
|
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
|
|
|
|
|
|
$
|
|
|
|
0.475
|
|
|
$
|
|
|
|
0.465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc. and Subsidiaries
|
|
Items Affecting Comparability
|
|
Reconciliation of EBITDA and Adjusted EBITDA to Net Income and to
Net Cash Provided by Operating Activities
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
March 30,
|
|
March 31,
|
|
|
|
2019
|
|
2018
|
|
Net income
|
|
$
|
16,791
|
|
|
$
|
20,547
|
|
|
Income tax expense
|
|
|
5,684
|
|
|
|
6,602
|
|
|
Interest expense, net
|
|
|
23,074
|
|
|
|
28,306
|
|
|
Depreciation and amortization
|
|
|
13,863
|
|
|
|
13,064
|
|
|
Loss on extinguishment of debt(1)
|
|
|
—
|
|
|
|
2,778
|
|
|
EBITDA(2)
|
|
|
59,412
|
|
|
|
71,297
|
|
|
Acquisition/divestiture-related and non-recurring expenses(3)
|
|
|
3,696
|
|
|
|
3,269
|
|
|
Inventory reduction plan impact(4)
|
|
|
12,722
|
|
|
|
14,850
|
|
|
Adjusted EBITDA(2)
|
|
|
75,830
|
|
|
|
89,416
|
|
|
Income tax expense
|
|
|
(5,684
|
)
|
|
|
(6,602
|
)
|
|
Interest expense, net
|
|
|
(23,074
|
)
|
|
|
(28,306
|
)
|
|
Acquisition/divestiture-related and non-recurring expenses(3)
|
|
|
(3,696
|
)
|
|
|
(3,269
|
)
|
|
Inventory reduction plan impact(4)
|
|
|
(12,722
|
)
|
|
|
(14,850
|
)
|
|
Write-off of property, plant and equipment
|
|
|
1
|
|
|
|
21
|
|
|
Deferred income taxes
|
|
|
3,575
|
|
|
|
4,821
|
|
|
Amortization of deferred financing costs and bond discount
|
|
|
873
|
|
|
|
1,545
|
|
|
Share-based compensation expense
|
|
|
580
|
|
|
|
838
|
|
|
Changes in assets and liabilities, net of effects of business
combinations
|
|
|
14,661
|
|
|
|
30,130
|
|
|
Net cash provided by operating activities
|
|
$
|
50,344
|
|
|
$
|
73,744
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
|
(1)
|
|
Loss on extinguishment of debt for the first quarter of 2018
included the write-off of deferred debt financing costs and
unamortized discount of $2.4 million and $0.4 million, respectively,
relating to the prepayment of outstanding borrowings under the
Company's tranche B term loans.
|
|
|
|
|
|
(2)
|
|
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 United States in the Company's
consolidated balance sheets and related consolidated statements of
operations, comprehensive income, changes in stockholders' equity
and cash flows. The Company defines EBITDA as net income before net
interest expense, income taxes, depreciation and amortization and
loss on extinguishment of debt (see (1) above). The Company defines
adjusted EBITDA as EBITDA adjusted for cash and non-cash
acquisition/divestiture-related expenses, gains and losses (which
may include third party fees and expenses, integration,
restructuring and consolidation expenses, amortization of acquired
inventory fair value step-up, and gains and losses on the sale of
assets); non-recurring expenses, gains and losses, including
severance and other expenses relating to a workforce reduction; and
the non-cash accounting impact of the Company's inventory reduction
plan. 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 two 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.
|
|
|
|
|
|
(3)
|
|
Acquisition/divestiture-related and non-recurring expenses for the
first quarter of 2019 of $3.7 million primarily include
divestiture expenses for the Pirate Brands sale and severance and
other expenses relating to a workforce reduction.
Acquisition/divestiture-related and non-recurring expenses for the
first quarter of 2018 of $3.3 million primarily included
acquisition and integration expenses for the Green Giant,
spices & seasonings, Victoria and Back to Nature
acquisitions.
|
|
|
|
|
|
(4)
|
|
For the first quarter of 2019, inventory reduction plan impact of
$12.7 million includes the underutilization of the Company's
manufacturing facilities as the Company reduced inventory during the
implementation of an inventory reduction plan. For the first quarter
of 2018, the inventory reduction plan impact of $14.9 million
included fixed manufacturing, warehouse and other corporate overhead
costs associated with inventory purchased and converted into
finished goods in fiscal 2017 and sold in the first quarter of 2018
as part of the Company's inventory reduction plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
March 30,
|
|
March 31,
|
|
|
|
2019
|
|
2018
|
|
Net income
|
|
$
|
|
|
16,791
|
|
$
|
|
|
20,547
|
|
Loss on extinguishment of debt, net of tax(1)
|
|
|
|
|
—
|
|
|
|
|
2,102
|
|
Acquisition/divestiture-related and non-recurring expenses, net of
tax(2)
|
|
|
|
|
2,761
|
|
|
|
|
2,474
|
|
Inventory reduction plan impact, net of tax(3)
|
|
|
|
|
9,505
|
|
|
|
|
11,238
|
|
Adjusted net income
|
|
$
|
|
|
29,057
|
|
$
|
|
|
36,361
|
|
Adjusted diluted earnings per share
|
|
$
|
|
|
0.44
|
|
$
|
|
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
|
(1)
|
|
Loss on extinguishment of debt for the first quarter of 2018
included the write-off of deferred debt financing costs and
unamortized discount of $1.8 million, net of tax, and $0.3 million,
net of tax, respectively, relating to the prepayment of outstanding
borrowings under the Company's tranche B term loans.
|
|
|
|
|
|
(2)
|
|
Acquisition/divestiture-related and non-recurring expenses for the
first quarter of 2019 primarily include divestiture expenses for
the Pirate Brands sale and severance and other expenses relating
to a workforce reduction. Acquisition/divestiture-related and
non-recurring expenses for the first quarter of 2018 primarily
included acquisition and integration expenses for the Green
Giant, spices & seasonings, Victoria and Back to
Nature acquisitions.
|
|
|
|
|
|
(3)
|
|
For the first quarter of 2019, inventory reduction plan impact of
$12.7 million (or $9.5 million net of taxes) includes the
underutilization of the Company's manufacturing facilities as the
Company reduced inventory during the implementation of an inventory
reduction plan. For the first quarter of 2018, the inventory
reduction plan impact of $14.9 million (or $11.2 million net of
taxes) included fixed manufacturing, warehouse and other corporate
overhead costs associated with inventory purchased and converted
into finished goods in fiscal 2017 and sold in the first quarter of
2018 as part of the Company's inventory reduction plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc. and Subsidiaries
|
|
Items Affecting Comparability
|
|
Reconciliation of Base Business Net Sales to Net Sales
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Ended
|
|
|
|
|
|
|
|
|
|
|
March 30,
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Net sales
|
|
|
|
|
|
|
|
|
$
|
|
|
|
412,734
|
|
|
$
|
|
|
|
431,729
|
|
|
Net sales from acquisitions(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,269
|
)
|
|
|
|
|
|
—
|
|
|
Net sales of non-branded IQF bulk rice products(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(578
|
)
|
|
Net sales from divested and discontinued brands(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(21,828
|
)
|
|
Base business net sales(4)
|
|
|
|
|
|
|
|
|
$
|
|
|
|
409,465
|
|
|
$
|
|
|
|
409,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
|
(1)
|
|
Reflects net sales for McCann's for the first quarter of
2019. McCann's was acquired on July 16, 2018.
|
|
|
|
|
|
(2)
|
|
Reflects net sales of the Company's non-branded individually quick
frozen (IQF) bulk rice products, which is a product line the
Company acquired as part of the Green Giant acquisition,
and which the Company is excluding from net sales for the purposes
of calculating base business net sales because the Company does
not consider the non-branded IQF bulk rice products to be part of
its core business or material. The Company discontinued the sale
of non-branded IQF bulk rice products during the fourth quarter of
2018.
|
|
|
|
|
|
(3)
|
|
Reflects net sales of Pirate Brands and French's®
seasoning mixes. The Company completed the divestiture of Pirate
Brands on October 17, 2018. The Company discontinued the sale of
French's products during the third quarter of 2018 following the
expiration of a licensing agreement.
|
|
|
|
|
|
(4)
|
|
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 at least one full quarter of net
sales from such acquisitions are included in both comparable
periods, (2) net sales of discontinued or divested brands and (3)
net sales of the Company's IQF bulk rice products, see footnote 2
above. The portion of current period net sales attributable to
recent acquisitions for which there is not at least one full quarter
of net sales 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 last
day of the quarter in which the first anniversary of the date of
acquisition occurs, and the period from the date of acquisition to
the end of the quarter in which the acquisition occurred. For
discontinued or divested brands, the entire amount of net sales is
excluded from each fiscal period being compared. Management has
included this financial measure because 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.
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190502005876/en/
