B&G Foods Announces First Quarter 2008 Financial Results

  
    
  
  
    
      B&G Foods, Inc. (NYSE: BGS, BGF), a manufacturer and distributor of 
      high-quality, shelf-stable foods, today announced financial results for 
      the thirteen weeks ended March 29, 2008.
    
    
      Financial Results for the First Quarter
    
    
      Net sales for the thirteen weeks ended March 29, 2008 (first quarter of 
      2008) increased $12.6 million or 12.1% to $116.3 million from $103.7 
      million for the thirteen weeks ended March 31, 2007 (first quarter of 
      2007). The Cream of Wheat acquisition accounted for $11.7 million 
      of the net sales increase offset by a decrease in net sales of $0.8 
      million relating to the termination of a temporary co-packing 
      arrangement. The remaining $1.7 million increase in our net sales 
      related to increases in unit volume. Cream of Wheat net sales for 
      January and February of the first quarter of 2008 were $9.0 million. We 
      did not own the Cream of Wheat business during January and 
      February of the first quarter of 2007. Net sales of our Cream of 
      Wheat products increased $2.7 million, or 41.1%, during March 2008 
      as compared to March 2007, primarily as a result of increases in unit 
      volume through new distribution.
    
    
      Gross profit for the first quarter of 2008 increased 6.9% to $34.9 
      million from $32.7 million in the first quarter of 2007. Gross profit 
      expressed as a percentage of net sales decreased 1.5% to 30.0% for the 
      first quarter of 2008 from 31.5% in the first quarter of 2007. The 
      decrease in gross profit expressed as a percentage of net sales was 
      primarily attributable to increased spending on trade promotions and 
      slotting and increased costs for packaging, wheat, maple syrup, 
      transportation and corn sweeteners, partially offset by the positive 
      impact of the Cream of Wheat acquisition. Operating income 
      increased 5.3% to $19.7 million for the first quarter of 2008, from 
      $18.7 million in the first quarter of 2007.
    
    
      Net income increased 8.2% to $4.4 million for the first quarter of 2008 
      compared to $4.1 million for the first quarter of 2007. Earnings per 
      share of Class A common stock was $0.12 for the first quarter of 2008. 
      During the first quarter of 2007, B&G Foods had two classes of common 
      stock outstanding, and computed earnings per share under the two class 
      method. As a result, it is not meaningful to compare earnings per share 
      for the first quarter of 2008 to the first quarter of 2007.
    
    
      For the first quarter of 2008, EBITDA (see “About 
      Non-GAAP Financial Measures” below) increased 
      10.5% to $23.4 million from $21.1 million for the first quarter of 2007.
    
    
      David L. Wenner, Chief Executive Officer of B&G Foods, stated, “The 
      Cream of Wheat business continued to perform well for us in the 
      first quarter, helping us achieve double-digit growth in net sales and 
      EBITDA. Cost increases were within the range of our expectations; our 
      March price increases should help to offset these costs as the year 
      progresses.”
    
    
      Conference Call
    
    
      B&G Foods will hold a webcast and conference call at 4:30 p.m. ET today, 
      April 30, 2008. The call will be webcast live over the Internet from the 
      Investor Relations section of B&G Foods’ 
      website at www.bgfoods.com under “Investor 
      Relations—Company Overview.” 
      Participants should follow the instructions provided on the website for 
      the download and installation of audio applications necessary to join 
      the webcast. The call can also be accessed live over the phone by 
      dialing [phone] or for international callers by dialing (913) 
      312-0400.
    
    
      A replay of the call will be available one hour after the call and can 
      be accessed by dialing [phone] or [phone] for 
      international callers. The password is 7449816. The replay will be 
      available from April 30, 2008 through May 7, 2008.
    
    
      About Non-GAAP Financial Measures
    
    
      EBITDA (net income before net interest expense, income taxes, 
      depreciation and amortization) is a “non-GAAP 
      (Generally Accepted Accounting Principles) financial measure.” 
      A non-GAAP financial measure is defined as 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 and cash flows.
    
    
      Non-GAAP financial measures should not be considered in isolation or as 
      a substitute for the most directly comparable GAAP measures. A 
      reconciliation of EBITDA with net income and net cash provided by 
      operating activities is included below for the first quarter of 2008 and 
      the first quarter of 2007, along with the components of EBITDA.
    
    
      About B&G Foods, Inc.
    
    
      B&G Foods and its subsidiaries manufacture, sell and distribute a 
      diverse portfolio of high-quality, shelf-stable foods across the United 
      States, Canada and Puerto Rico. B&G Foods’ 
      products include hot cereals, fruit spreads, canned meats and beans, 
      spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, 
      molasses, salad dressings, Mexican-style sauces, taco shells and kits, 
      salsas, pickles, peppers and other specialty food products. B&G Foods 
      competes in the retail grocery, food service, specialty, private label, 
      club and mass merchandiser channels of distribution. Based in 
      Parsippany, New Jersey, B&G Foods’ 
      products are marketed under many recognized brands, including Ac’cent, 
      B&G, B&M, Brer Rabbit, Cream of Rice, Cream of Wheat, Emeril’s, 
      Grandma’s Molasses, Joan of Arc, Las Palmas, 
      Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina, Sa-són, 
      Trappey’s, Underwood, Vermont Maid and 
      Wright’s.
    
    
      Forward-Looking Statements
    
    
      Statements in this press release that are not statements of 
      historical or current fact constitute “forward-looking 
      statements.” 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,” “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 our Annual Report on Form 10-K for fiscal 2007 filed on March 6, 2008. 
      We undertake 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
          
        
      
      
        
          
            (Dollars in thousands, except per share data)
          
        
      
      
        
          
            (Unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
          Assets
        
        
        
        
          March 29, 2008
        
        
        
        
          December 29, 2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
        
        
      
      
        
           
        
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          33,326
        
        
        
        
        
        
          $
        
        
          36,606
        
        
        
      
      
        
        
        
          Trade accounts receivable, net
        
        
        
        
        
        
          35,161
        
        
        
        
        
        
        
        
          42,362
        
        
        
      
      
        
        
        
          Inventories
        
        
        
        
        
        
          95,137
        
        
        
        
        
        
        
        
          93,181
        
        
        
      
      
        
        
        
          Prepaid expenses
        
        
        
        
        
        
          2,551
        
        
        
        
        
        
        
        
          3,556
        
        
        
      
      
        
        
        
          Income tax receivable
        
        
        
        
        
        
          56
        
        
        
        
        
        
        
        
          569
        
        
        
      
      
        
        
        
          Deferred income taxes
        
        
        
        
           
        
        
          648
        
        
           
        
        
        
        
           
        
        
          648
        
        
           
        
      
      
        
        
        
          Total current assets
        
        
        
        
        
        
          166,879
        
        
        
        
        
        
        
        
          176,922
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Property, plant and equipment, net of accumulated
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          depreciation of $57,714 and $55,679
        
        
        
        
        
        
          53,983
        
        
        
        
        
        
        
        
          49,658
        
        
        
      
      
        
          Goodwill
        
        
        
        
        
        
          253,353
        
        
        
        
        
        
        
        
          253,353
        
        
        
      
      
        
          Trademarks
        
        
        
        
        
        
          227,220
        
        
        
        
        
        
        
        
          227,220
        
        
        
      
      
        
          Customer relationship intangibles, net
        
        
        
        
        
        
          121,155
        
        
        
        
        
        
        
        
          122,768
        
        
        
      
      
        
          Net deferred debt issuance costs and other assets
        
        
        
        
           
        
        
          16,621
        
        
           
        
        
        
        
           
        
        
          17,669
        
        
           
        
      
      
        
        
        
          Total assets
        
        
        
        
          $
        
        
          839,211
        
        
           
        
        
        
        
          $
        
        
          847,590
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Liabilities and Stockholders’ Equity
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Trade accounts payable
        
        
        
        
          $
        
        
          25,706
        
        
        
        
        
        
          $
        
        
          32,126
        
        
        
      
      
        
        
        
          Accrued expenses
        
        
        
        
        
        
          20,741
        
        
        
        
        
        
        
        
          21,894
        
        
        
      
      
        
        
        
          Dividends payable
        
        
        
        
           
        
        
          7,797
        
        
           
        
        
        
        
           
        
        
          7,797
        
        
           
        
      
      
        
        
        
          Total current liabilities
        
        
        
        
        
        
          54,244
        
        
        
        
        
        
        
        
          61,817
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Long-term debt
        
        
        
        
        
        
          535,800
        
        
        
        
        
        
        
        
          535,800
        
        
        
      
      
        
          Other liabilities
        
        
        
        
        
        
          12,312
        
        
        
        
        
        
        
        
          6,376
        
        
        
      
      
        
          Deferred income taxes
        
        
        
        
           
        
        
          69,057
        
        
           
        
        
        
        
           
        
        
          68,962
        
        
           
        
      
      
        
          Total liabilities
        
        
        
        
        
        
          671,413
        
        
        
        
        
        
        
        
          672,955
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders’ equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Preferred stock, $0.01 par value per share.
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Authorized 1,000,000 shares; no shares issued or
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          outstanding
        
        
        
        
        
        
          --
        
        
        
        
        
        
        
        
          --
        
        
        
      
      
        
          Class A common stock, $0.01 par value per share.
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Authorized 100,000,000 shares; 36,778,988 shares
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          issued and outstanding
        
        
        
        
        
        
          368
        
        
        
        
        
        
        
        
          368
        
        
        
      
      
        
          Class B common stock, $0.01 par value per share.
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Authorized 25,000,000 shares; no shares issued
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          or outstanding
        
        
        
        
        
        
          --
        
        
        
        
        
        
        
        
          --
        
        
        
      
      
        
          Additional paid-in capital
        
        
        
        
        
        
          194,400
        
        
        
        
        
        
        
        
          202,197
        
        
        
      
      
        
          Accumulated other comprehensive loss
        
        
        
        
        
        
          (7,167
        
        
          )
        
        
        
        
        
        
          (3,718
        
        
          )
        
      
      
        
          Accumulated deficit
        
        
        
        
           
        
        
          (19,803
        
        
          )
        
        
        
        
           
        
        
          (24,212
        
        
          )
        
      
      
        
        
        
          Total stockholders’ equity
        
        
        
        
           
        
        
          167,798
        
        
           
        
        
        
        
           
        
        
          174,635
        
        
           
        
      
      
        
        
        
          Total liabilities and stockholders’ equity
        
        
        
        
          $
        
        
          839,211
        
        
           
        
        
        
        
          $
        
        
          847,590
        
        
           
        
      
    
    
      
        
          
            B&G Foods, Inc. and Subsidiaries
          
        
      
      
        
          
            Consolidated Statements of Operations
          
        
      
      
        
          
            (Dollars in thousands, except per share data)
          
        
      
      
        
          
            (Unaudited)
          
        
      
      
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Thirteen Weeks Ended
        
      
      
        
        
        
        
        
          March 29, 2008
        
        
           
        
        
          March 31, 2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
          $
        
        
          116,342
        
        
        
        
          $
        
        
          103,745
        
        
        
      
      
        
          Cost of goods sold
        
        
        
        
           
        
        
          81,412
        
        
        
        
           
        
        
          71,062
        
        
           
        
      
      
        
           
        
        
          Gross profit
        
        
        
        
        
        
          34,930
        
        
        
        
        
        
          32,683
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
      
      
        
          Sales, marketing and distribution expenses
        
        
        
        
        
        
          12,289
        
        
        
        
        
        
          11,504
        
        
        
      
      
        
          General and administrative expenses
        
        
        
        
        
        
          1,358
        
        
        
        
        
        
          1,830
        
        
        
      
      
        
          Amortization expense—customer 
          relationships
        
        
        
        
           
        
        
          1,613
        
        
        
        
           
        
        
          663
        
        
           
        
      
      
        
        
        
          Operating income
        
        
        
        
        
        
          19,670
        
        
        
        
        
        
          18,686
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other expenses:
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Interest expense, net
        
        
        
        
           
        
        
          12,571
        
        
        
        
           
        
        
          12,125
        
        
           
        
      
      
        
          Income before income tax expense
        
        
        
        
        
        
          7,099
        
        
        
        
        
        
          6,561
        
        
        
      
      
        
          Income tax expense
        
        
        
        
           
        
        
          2,690
        
        
        
        
           
        
        
          2,487
        
        
           
        
      
      
        
        
        
          Net income
        
        
        
        
          $
        
        
          4,409
        
        
        
        
          $
        
        
          4,074
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Earnings per share calculations:
        
        
        
        
        
        
        
        
        
      
      
        
          Basic and diluted distributed earnings per share:
        
        
        
        
        
        
        
      
      
        
          Class A common stock
        
        
        
        
          $
        
        
          0.21
        
        
        
        
          $
        
        
          0.21
        
        
        
      
      
        
          Basic and diluted earnings (loss) per share:
        
        
        
        
        
        
        
        
        
      
      
        
          Class A common stock
        
        
        
        
          $
        
        
          0.12
        
        
        
        
          $
        
        
          0.20
        
        
        
      
      
        
          Class B common stock
        
        
        
        
          $
        
        
          —
        
        
        
        
          $
        
        
          (0.01
        
        
          )
        
      
    
    
      
        
          
            B&G Foods, Inc. and Subsidiaries
          
        
      
      
        
          
            Reconciliation of EBITDA to Net Income and to Net Cash Provided 
            by Operating Activities
          
        
      
      
        
          
            (Dollars in thousands)
          
        
      
      
        
          
            (Unaudited)
          
        
      
      
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Thirteen Weeks Ended
        
      
      
        
        
        
        
        
          March 29, 2008
        
        
           
        
        
          March 31, 2007
        
      
      
        
        
        
        
        
          (dollars in thousands)
        
      
      
        
          Net income
        
        
        
        
          $
        
        
          4,409
        
        
        
        
        
        
          $
        
        
          4,074
        
        
        
      
      
        
          Income tax expense
        
        
        
        
        
        
          2,690
        
        
        
        
        
        
        
        
          2,487
        
        
        
      
      
        
          Interest expense, net
        
        
        
        
        
        
          12,571
        
        
        
        
        
        
        
        
          12,125
        
        
        
      
      
        
          Depreciation and amortization
        
        
        
        
           
        
        
          3,689
        
        
           
        
        
        
        
           
        
        
          2,458
        
        
           
        
      
      
        
          EBITDA(1)
        
        
        
        
        
        
          23,359
        
        
        
        
        
        
        
        
          21,144
        
        
        
      
      
        
          Income tax expense
        
        
        
        
        
        
          (2,690
        
        
          )
        
        
        
        
        
        
          (2,487
        
        
          )
        
      
      
        
          Interest expense, net
        
        
        
        
        
        
          (12,571
        
        
          )
        
        
        
        
        
        
          (12,125
        
        
          )
        
      
      
        
          Deferred income taxes
        
        
        
        
        
        
          2,177
        
        
        
        
        
        
        
        
          2,076
        
        
        
      
      
        
          Amortization of deferred financing costs
        
        
        
        
        
        
          792
        
        
        
        
        
        
        
        
          773
        
        
        
      
      
        
          Changes in assets and liabilities, net of effects
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          of business combination
        
        
        
        
           
        
        
          (93
        
        
          )
        
        
        
        
           
        
        
          (4,564
        
        
          )
        
      
      
        
          Net cash provided by operating activities
        
        
        
        
          $
        
        
          10,974
        
        
           
        
        
        
        
          $
        
        
          4,817
        
        
           
        
      
    
    
      
        
          (1)
        
        
           
        
        
          EBITDA is a measure used by management to measure operating 
          performance. EBITDA is defined as net income before net interest 
          expense, income taxes, depreciation, and amortization. Management 
          believes that it is useful to eliminate net interest expense, income 
          taxes, depreciation and amortization 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, among other 
          things, to 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 facility and the indentures governing the 
          senior notes and the senior subordinated notes contain ratios based 
          on these measures. 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, if any, and pay its income 
          taxes and dividends, if any. Rather, EBITDA is a potential indicator 
          of an entity's ability to fund these cash requirements. EBITDA also 
          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 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.