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8-K - 8-K - B&G Foods, Inc.a13-10313_18k.htm

Exhibit 99.1

 

 

B&G Foods Reports Strong First Quarter Net Sales and Earnings Growth

— Increases Fiscal 2013 Guidance —

 

Parsippany, N.J., April 18, 2013—B&G Foods, Inc. (NYSE: BGS) today announced financial results for the first quarter of 2013.

 

Highlights (vs. year-ago quarter where applicable):

 

·                  Net sales increased 8.8% to $171.2 million

 

·                  Net income increased 17.0% to $19.6 million

 

·                  Diluted earnings per share increased 5.7% to $0.37

 

·                  EBITDA* increased 7.2% to $45.7 million

 

·                  EBITDA guidance increased to a range of approximately $180.0 million to $184.0 million for the full year

 

David L. Wenner, President and Chief Executive Officer of B&G Foods, stated, “Our business performed very well in the first quarter, growing by 8.8% via a healthy mix of base business volume gains and acquisition growth.  The New York Style and Old London acquisition completed in October 2012 performed to expectations in both sales and earnings.  Growth in the base business came from our top two tiers of brands, which together contributed a 3.0% net sales gain for the quarter.”

 

Financial Results for the First Quarter of 2013

 

Net sales for the first quarter of 2013 increased $13.9 million, or 8.8%, to $171.2 million from $157.3 million for the first quarter of 2012.  Net sales of the New York Style and Old London brands, which B&G Foods acquired at the end of October 2012, contributed $11.3 million to the overall increase.  Net sales from our base business increased $2.6 million, or 1.6%, of which $2.5 million was attributable to a unit volume increase and $0.1 million was attributable to net price increases.

 

Gross profit for the first quarter of 2013 increased 3.5% to $58.8 million from $56.8 million in the first quarter of 2012.  Gross profit expressed as a percentage of net sales decreased 1.7 percentage points to 34.4% for the first quarter of 2013 from 36.1% in the first quarter of 2012.  The decrease in gross profit expressed as a percentage of net sales was primarily attributable to the full quarter effect of the New York Style and Old London brands accounting for 0.8 percentage points of the decrease.  Increased trade spending accounted for 0.3 percentage points of the decline, with the remainder related to a sales mix shift to lower margin products.  Operating income increased 5.4% to $40.2 million for the first quarter of 2013, from $38.2 million in the first quarter of 2012.

 

Net interest expense for the first quarter of 2013 decreased $2.2 million or 18.5% to $9.8 million from $12.0 million for the first quarter of 2012.  The decrease in net interest expense for the first quarter was

 


*           Please see “About Non-GAAP Financial Measures” below for the definition of the term EBITDA and a reconciliation of EBITDA to the most comparable GAAP financial measures.

 



 

primarily attributable to our redemption of $101.5 million principal amount of our outstanding senior notes in December 2012 and scheduled principal payments on our tranche A and tranche B term loans.

 

The Company’s reported net income under U.S. generally accepted accounting principles (GAAP) was $19.6 million, or $0.37 per diluted share, for the first quarter of 2013, as compared to reported net income of $16.8 million, or $0.35 per diluted share, for the first quarter of 2012.

 

For the first quarter of 2013, EBITDA increased 7.2% to $45.7 million from $42.6 million for the first quarter of 2012.

 

Guidance

 

B&G Foods increased its EBITDA guidance for fiscal 2013 to a range of approximately $180.0 million to $184.0 million.

 

Conference Call

 

B&G Foods will hold a conference call at 4:30 p.m. ET today, April 18, 2013.  The call will be webcast live from B&G Foods’ website at www.bgfoods.com under “Investor Relations—Company Overview.”  The call can also be accessed live over the phone by dialing (888) 299-7207 for U.S. callers or (719) 325-4855 for international callers.

 

A replay of the call will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the password is 3742986. The replay will be available from April 18, 2013, through May 2, 2013.  Investors may also access a web-based replay of the call at the Investor Relations section of B&G Foods’ website, www.bgfoods.com.

 

About Non-GAAP Financial Measures

 

“EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) is a “non-GAAP financial measure.”  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, 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.

 

Additional information regarding EBITDA, and a reconciliation of EBITDA to net income and to net cash provided by operating activities is included below for the first quarters of 2013 and 2012, along with the components of EBITDA.

 

About B&G Foods, Inc.

 

B&G Foods and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico.  Based in Parsippany, New Jersey, B&G Foods’ products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Baker’s Joy, Brer Rabbit, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril’s, Grandma’s Molasses, JJ Flats, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Sa-són, Sclafani, Sugar Twin, Trappey’s, Underwood, Vermont Maid and Wright’s.  B&G Foods also sells and distributes two branded household products, Static Guard and Kleen Guard.

 

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’ EBITDA expectations for fiscal 2013.  Such forward-

 

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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” or “plans” to be uncertain and forward-looking. 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 Form 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.

 

Contacts:

 

Investor Relations:
ICR, Inc.
Don Duffy
866-211-8151

 

Media Relations:
ICR, Inc.
Matt Lindberg
203-682-8214

 

 

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B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

 

 

 

March 30, 2013

 

December 29, 2012

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

16,146

 

$

19,219

 

Trade accounts receivable, net

 

46,816

 

43,357

 

Inventories

 

87,747

 

89,757

 

Prepaid expenses and other current assets

 

4,221

 

5,326

 

Income tax receivable

 

3,347

 

4,262

 

Deferred income taxes

 

2,079

 

2,175

 

Total current assets

 

160,356

 

164,096

 

 

 

 

 

 

 

Property, plant and equipment, net of accumulated depreciation of $103,936 and $100,625

 

103,098

 

104,746

 

Goodwill

 

267,940

 

267,940

 

Other intangibles, net

 

635,129

 

637,196

 

Other assets

 

17,152

 

17,990

 

Total assets

 

$

1,183,675

 

$

1,191,968

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Trade accounts payable

 

$

23,208

 

$

25,050

 

Accrued expenses

 

16,929

 

23,610

 

Current portion of long-term debt

 

37,937

 

40,375

 

Dividends payable

 

15,329

 

15,243

 

Total current liabilities

 

93,403

 

104,278

 

 

 

 

 

 

 

Long-term debt

 

593,175

 

597,314

 

Other liabilities

 

7,380

 

8,038

 

Deferred income taxes

 

125,897

 

121,163

 

Total liabilities

 

819,855

 

830,793

 

Commitments and contingencies

 

 

 

 

 

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; 52,858,772 and 52,560,765 shares issued and outstanding as of March 30, 2013 and December 29, 2012

 

529

 

526

 

Additional paid-in capital

 

209,775

 

226,900

 

Accumulated other comprehensive loss

 

(10,962

)

(11,095

)

Retained earnings

 

164,478

 

144,844

 

Total stockholders’ equity

 

363,820

 

361,175

 

Total liabilities and stockholders’ equity

 

$

1,183,675

 

$

1,191,968

 

 

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

 

March 30, 2013

 

March 31, 2012

 

 

 

 

 

 

 

Net sales

 

$

171,194

 

$

157,339

 

Cost of goods sold

 

112,382

 

100,514

 

Gross profit

 

58,812

 

56,825

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general and administrative expenses

 

16,508

 

16,640

 

Amortization expense

 

2,067

 

2,022

 

Operating income

 

40,237

 

38,163

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

Interest expense, net

 

9,773

 

11,989

 

Income before income tax expense

 

30,464

 

26,174

 

Income tax expense

 

10,830

 

9,396

 

Net income

 

$

19,634

 

$

16,778

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

 

52,715

 

48,039

 

Diluted

 

52,942

 

48,337

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

$

0.37

 

$

0.35

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.29

 

$

0.27

 

 

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B&G Foods, Inc. and Subsidiaries

Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating Activities

(In thousands)

(Unaudited)

 

 

 

Thirteen Weeks Ended

 

 

 

March 30, 2013

 

March 31, 2012

 

Net income

 

$

19,634

 

$

16,778

 

Income tax expense

 

10,830

 

9,396

 

Interest expense, net

 

9,773

 

11,989

 

Depreciation and amortization

 

5,420

 

4,441

 

Loss on extinguishment of debt

 

 

 

EBITDA(1)

 

45,657

 

42,604

 

Income tax expense

 

(10,830

)

(9,396

)

Interest expense, net

 

(9,773

)

(11,989

)

Deferred income taxes

 

4,742

 

4,153

 

Amortization of deferred financing costs and bond discount

 

1,175

 

1,257

 

Share-based compensation expense

 

670

 

740

 

Excess tax benefits from share-based compensation

 

(4,349

)

(8,118

)

Changes in assets and liabilities

 

(4,185

)

1,734

 

Net cash provided by operating activities

 

$

23,107

 

$

20,985

 

 


(1)                 EBITDA is a non-GAAP financial measure used by management to measure operating performance.  A non-GAAP financial measure is defined as a numerical measure of our 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 our consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.  We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt.  Management believes that it is useful to eliminate net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations.  We use EBITDA in our business operations, to among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA because we believe it is a useful indicator of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indenture contain ratios based on this measure.  As a result, internal management reports used during monthly operating reviews feature the EBITDA metric. However, management uses this metric 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 this measure as its only measure of operating performance and liquidity.

 

                                EBITDA is not a recognized term under GAAP and does not purport to be an alternative to operating income or net income as an indicator of operating performance or any other GAAP measure. EBITDA is not a complete net cash flow measure because EBITDA is a measure of liquidity that does 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 is a potential indicator of an entity’s ability to fund these cash requirements.  EBITDA is not a complete measure of an entity’s profitability because it does not include costs and expenses for depreciation and amortization, interest and related expenses, loss on extinguishment of debt and income taxes.  Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies.  However, EBITDA can still be useful in evaluating our performance against our peer companies because management believes this measure provides users with valuable insight into key components of GAAP amounts.

 

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