B&G Foods Announces Second Quarter 2007 Financial Results

Share Name	Share Symbol	Market	Type
B&G Foods	NYSE:BGF	NYSE	Ordinary Share

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	15.16				0.00	01:00:00

B&G Foods (NYSE:BGF)
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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 June 30, 2007 (second quarter of 2007) and the twenty-six weeks ended June 30, 2007 (first two quarters of 2007). Financial Results for the Second Quarter of 2007 Net sales for the second quarter of 2007 increased 12.3% to $118.2 million from $105.3 million for the thirteen weeks ended July 1, 2006 (second quarter of 2006). Excluding the impact of the Cream of Wheat acquisition and the termination of a temporary co-packing arrangement, net sales increased $1.6 million or 1.5% relating to increases in sales price and unit volume. The Cream of Wheat acquisition accounted for $12.4 million of the net sales increase offset by a decrease in net sales of $1.1 million relating to the termination of the temporary co-packing arrangement. Gross profit for the second quarter of 2007 increased 31.4% to $37.3 million from $28.4 million in the second quarter of 2006. Gross profit expressed as a percentage of net sales increased 4.6% to 31.6% for the second quarter of 2007 from 27.0% in the second quarter of 2006. The increase in gross profit expressed as a percentage of net sales was primarily due to the positive effect of the Cream of Wheat acquisition, which improved B&G Foods� overall gross profit expressed as a percentage of net sales by 4.1%. Operating income increased 46.7% to $21.5 million for the second quarter of 2007, from $14.7 million in the second quarter of 2006. Net income was $3.7 million for the second quarter of 2007 compared to $2.3 million for the second quarter of 2006. Earnings per share of Class A common stock increased to $0.17 for the second quarter of 2007 from $0.14 in the second quarter of 2006 and loss per share of Class B common stock for the second quarter of 2007 was $0.13 compared to $0.07 for the second quarter of 2006. During the second quarter of 2007, earnings per share of Class A common stock were impacted by the substantial increase in weighted average shares of Class A common stock outstanding to 26.1 million shares for second quarter of 2007 from 20.0 million shares for the second quarter of 2006 as a result of the Class A offering described below. Loss per share of Class B common stock was impacted by the substantial decrease in weighted average shares of Class B common stock outstanding to 4.8 million shares for second quarter of 2007 from 7.6 million shares in the second quarter of 2006 in connection with the Class A offering. For the second quarter of 2007, EBITDA (see �About Non-GAAP Financial Measures� below) increased 48.4% to $25.0 million from $16.8 million for the second quarter of 2006. David L. Wenner, Chief Executive Officer of B&G Foods, stated, �The company�s second quarter performance reflects successful pricing initiatives and ongoing effective cost management, as well as positive contributions from our recently-acquired Cream of Wheat business. During the quarter we were delighted to complete the initial public offering of our Class A common stock as a separately traded security. We believe that our new capital structure and reduced leverage leave us exceptionally well-positioned to continue to execute our growth strategies and to pursue attractive acquisition opportunities.� Financial Results for the First Two Quarters of 2007 Net sales for the first two quarters of 2007 increased 12.0% to $221.9 million from $198.2 million in the comparable period of fiscal 2006. Excluding the impact of Cream of Wheat acquisition and the termination of a temporary co-packing arrangement, net sales increased $6.2 million or 3.2% relating to increases in sales price and unit volume. The Cream of Wheat acquisition accounted for $18.8 million of the net sales increase offset by a decrease in net sales of $1.3 million relating to the termination of the temporary co-packing arrangement. Gross profit for the first two quarters of 2007 increased 24.4% to $70.0 million from $56.3 million in the comparable period of last year. Gross profit expressed as a percentage of net sales increased 3.1% to 31.5% in the first two quarters of 2007 from 28.4% in the comparable period of fiscal 2006. The increase in gross profit expressed as a percentage of net sales was primarily due to the positive effect of the Cream of Wheat acquisition, which improved overall gross profit expressed as a percentage of net sales by 3.0%. Operating income increased 32.4% to $40.2 million during the first two quarters of 2007, compared to $30.4 million in the comparable period of fiscal 2006. Net income was $7.8 million for the first two quarters of 2007 compared to $5.3 million for the comparable period of fiscal 2006. For the first two quarters of 2007, earnings per share of Class A common stock increased to $0.38 from $0.30 for the comparable period of fiscal 2006 and loss per share of Class B common stock for the first two quarters of 2007 was $0.14 compared to $0.12 for the comparable period of fiscal 2006. During the first two quarters of 2007, earnings per share of Class A common stock were impacted by the substantial increase in weighted average shares of Class A common stock outstanding to 23.0 million shares for the first two quarters of 2007 from 20.0 million shares for the first two quarters of 2006 as a result of the Class A offering described below. Loss per share of Class B common stock was impacted by the substantial decrease in weighted average shares of Class B common stock outstanding to 6.2 million shares for the first two quarters of 2007 from 7.6 million shares for the first two quarters of 2006 in connection with the Class A offering. For the first two quarters of 2007, EBITDA increased 34.4% to $46.1 million from $34.3 million for the first two quarters of 2006. Class A Common Stock Offering As previously reported, during the second quarter of 2007, B&G Foods closed its initial public offering of 15,985,000 shares of its Class A common stock as a separately traded security, which includes 2,085,000 shares issued pursuant to the fully exercised underwriters� option to purchase additional shares, at $13.00 per share. The separately traded Class A common stock trades on the New York Stock Exchange under the trading symbol �BGS� and trades separately from B&G Foods� Enhanced Income Securities, each of which represents one share of Class A common stock and $7.15 principal amount of 12% senior subordinated notes due 2016 and trade on the New York Stock Exchange under the trading symbol �BGF.� The proceeds of the offering, after deducting underwriting discounts and commissions and other fees and expenses, were $193.2 million. In connection with the offering, B&G Foods repurchased 6,762,455 outstanding shares of its Class B common stock for $82.4 million, and the remaining 793,988 shares of its outstanding Class B common stock were exchanged for an equal number of shares of Class A common stock. B&G Foods also prepaid $100.0 million of its term loan borrowings under its senior secured credit facility. B&G Foods expects to use the remaining net proceeds of the offering for general corporate purposes. As of July 25, 2007, B&G Foods had 36,778,988 shares of Class A common stock issued and outstanding, 17,290,567 of which were held in the form of EISs and 19,488,421 of which were held separate from EISs. As of July 25, 2007, the registrant had no shares of Class B common stock issued or outstanding. Conference Call B&G Foods will hold a webcast and conference call at 4:30 pm ET today, July 30, 2007. 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 (800) 811-8824 or for international callers by dialing (913) 981-4903. A replay of the call will be available one hour after the call and can be accessed by dialing (888) 203-1112 or (719) 457-0820 for international callers. The password is 6414562. The replay will be available from July 30, 2007 through August 6, 2007. 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 (used in) operating activities is included below for the second quarter and first two quarters of 2007 and the second quarter and first two quarters of 2006, 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. B&G Foods� products include hot cereals, jams, jellies and 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 and peppers and other specialty food products. B&G Foods competes in the retail grocery, food service, specialty store, 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, San Del, Sa-s�n Ac�cent, 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. B&G Foods, Inc. and Subsidiaries Consolidated Balance Sheets (Dollars in thousands, except per share data) (Unaudited) � Assets June 30, 2007 December 30, 2006 � Current assets: Cash and cash equivalents $ 37,426 $ 29,626 Trade accounts receivable, net 32,318 31,090 Inventories 90,255 78,269 Prepaid expenses 2,762 3,246 Income tax receivable 577 516 Deferred income taxes � 2,574 � � 2,574 � Total current assets 165,912 145,321 � Property, plant and equipment, net of accumulated depreciation of $51,394 and $47,720 46,086 40,269 Goodwill 253,763 198,076 Trademarks 227,220 200,220 Customer relationship intangibles, net 125,993 14,369 Net deferred financing costs and other assets � 20,599 � � 17,950 � Total assets $ 839,573 � $ 616,205 � � Liabilities and Stockholders� Equity � Current liabilities: Trade accounts payable $ 23,828 $ 21,520 Accrued expenses 16,685 16,520 Dividends payable � 7,797 � � 4,240 � Total current liabilities 48,310 42,280 � Long-term debt 535,800 430,800 Other liabilities 4,771 4,972 Deferred income taxes � 67,281 � � 62,666 � Total liabilities 656,162 540,718 � 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 and 20,000,000 shares issued and outstanding as of June 30, 2007 and December 30, 2006, respectively 368 200 Class B common stock, $0.01 par value per share. Authorized 25,000,000 shares; no shares issued or outstanding as of June 30, 2007 and 7,556,443 shares issued and outstanding as of December 30, 2006 � 76 Additional paid-in capital 217,832 119,152 Accumulated other comprehensive loss (563 ) (1,904 ) Accumulated deficit � (34,226 ) � (42,037 ) Total stockholders� equity � 183,411 � � 75,487 � Total liabilities and stockholders� equity $ 839,573 � $ 616,205 � � B&G Foods, Inc. and Subsidiaries Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited) � Thirteen Weeks Ended Twenty-six Weeks Ended June 30, 2007 July 1, 2006 June 30, 2007 July 1, 2006 � Net sales $ 118,204 $ 105,265 $ 221,949 $ 198,245 Cost of goods sold � 80,881 � � 76,862 � � 151,943 � � 141,976 � Gross profit 37,323 28,403 70,006 56,269 � Operating expenses: Sales, marketing and distribution expenses 12,566 11,588 24,070 22,069 General and administrative expenses 1,598 1,775 3,428 3,463 Amortization expense�customer relationships � 1,613 � � 354 � � 2,276 � � 354 � Operating income 21,546 14,686 40,232 30,383 � Other expenses: Interest expense, net � 15,529 � � 10,929 � � 27,654 � � 21,787 � Income before income tax expense 6,017 3,757 12,578 8,596 Income tax expense � 2,280 � � 1,448 � � 4,767 � � 3,335 � Net income $ 3,737 � $ 2,309 � � 7,811 � � 5,261 � � Earnings per share calculations: Basic and diluted distributed earnings per share (1): Class A common stock $ 0.30 $ 0.21 $ 0.52 $ 0.42 Basic and diluted earnings (loss) per share: Class A common stock $ 0.17 $ 0.14 $ 0.38 $ 0.30 Class B common stock $ (0.13 ) $ (0.07 ) $ (0.14 ) $ (0.12 ) � (1) �Distributed earnings� differs from actual per share amounts paid as dividends as the earnings per share computation under GAAP requires the use of the weighted average rather than the actual number of shares outstanding. B&G Foods, Inc. and Subsidiaries Reconciliation of EBITDA to Net Income and to Net Cash (Used in) Provided by Operating Activities (Dollars in thousands) (Unaudited) � Thirteen Weeks Ended Twenty-six Weeks Ended June 30, 2007 July 1, 2006 June 30, 2007 July 1, 2006 Net income $ 3,737 $ 2,309 $ 7,811 $ 5,261 Income tax expense 2,280 1,448 4,767 3,335 Interest expense, net 15,529 10,929 27,654 21,787 Depreciation and amortization � 3,405 � � 2,133 � � 5,863 � � 3,904 � EBITDA(1) 24,951 16,819 46,095 34,287 Income tax expense (2,280 ) (1,448 ) (4,767 ) (3,335 ) Interest expense, net (15,529 ) (10,929 ) (27,654 ) (21,787 ) Deferred income taxes 1,766 1,178 3,842 2,794 Amortization of deferred financing costs 832 704 1,605 1,412 Write off of deferred debt issuance costs 1,769 � 1,769 � Changes in assets and liabilities, net of effects of business combination � (13,624 ) � (928 ) � (9,060 ) � 673 � Net cash (used in) provided by operating activities $ (2,115 ) $ 5,396 � $ 11,830 � $ 14,044 � (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.

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