B&G Foods Reports Financial Results for Fourth Quarter and Full Year 2023
- Net sales decreased in Q4 and FY 2023 due to divestitures of Green Giant U.S. shelf-stable and Back to Nature.
- Adjusted EBITDA decreased slightly in Q4 2023 compared to Q4 2022.
- Net cash provided by operating activities increased by $241.8 million for FY 2023.
- Long-term debt decreased by $340.1 million during FY 2023.
- Guidance for FY 2024 includes net sales of $1.975 billion to $2.020 billion, adjusted EBITDA of $305 million to $325 million, and adjusted diluted earnings per share of $0.80 to $1.00.
- The company's President and CEO, Casey Keller, highlighted improved margins, stabilizing volumes, stronger cash flows, and reduced leverage in the financial results.
- Net sales decreased in Q4 and FY 2023 due to divestitures, impacting overall financial performance.
- Adjusted EBITDA showed a decrease in Q4 2023, reflecting challenges faced by the company.
- Losses were recorded in connection with the divestiture of Green Giant U.S. shelf-stable product line.
- Net loss for FY 2023 was $66.2 million, compared to a net loss of $11.4 million in FY 2022.
- Higher interest rates on long-term debt contributed to an increase in net interest expense for Q4 2023.
Insights
A key takeaway from the financial results is the notable improvement in cash flow from operations, which is a vital indicator of a company's financial health. The reported increase of $241.8 million suggests that B&G Foods has been effective in managing its working capital and generating liquidity. This improvement, coupled with the reduction of long-term debt by $340.1 million, indicates a strategic effort to strengthen the balance sheet and reduce leverage, which can be particularly appealing to investors concerned with financial stability.
The divestitures of the Back to Nature and Green Giant U.S. shelf-stable product lines are strategic moves that appear to be aimed at optimizing the company's portfolio for future growth. While these divestitures have contributed to a decrease in net sales and adjusted EBITDA, they also seem to have allowed the company to focus resources on more profitable or strategic areas. This tactic is often employed by companies seeking to streamline operations and improve long-term profitability.
The guidance for fiscal 2024, with net sales expected to be between $1.975 billion and $2.020 billion and adjusted EBITDA between $305 million and $325 million, suggests a cautiously optimistic outlook. The projected range indicates management's confidence in the company's direction, albeit acknowledging the challenges that may affect performance, such as market volatility and input cost fluctuations.
From a market perspective, B&G Foods' performance reflects broader trends in the consumer goods sector, where companies are grappling with dynamic pricing models and cost management in response to fluctuating commodity prices. The company's ability to improve gross profit margins in the face of such challenges is noteworthy. This was achieved through a combination of list price increases and cost moderation, which may indicate a strong pricing power and efficient cost control mechanisms.
Another point of interest is the sector-specific performance highlighted in the report. Notably, the increase in net sales for Clabber Girl and Maple Grove Farms, contrasted with the decrease in sales for Crisco and Green Giant, suggests a shift in consumer preferences or competitive dynamics within these categories. These insights can be crucial for investors and analysts in assessing the company's adaptability and potential growth areas.
An economist's perspective would focus on the macroeconomic implications of B&G Foods' financial results. The reported increase in net interest expense, primarily due to higher interest rates, is a reflection of the current interest rate environment and its impact on corporate finance. Companies like B&G Foods with significant long-term debt are likely to face increased financial costs as central banks continue to adjust rates in response to inflationary pressures.
The mention of the negative impact of foreign currency suggests exposure to exchange rate risk, which can be a concern for multinational corporations in times of currency volatility. It's important for stakeholders to consider how currency fluctuations could affect the company's international operations and profitability.
Furthermore, the adjustments made for non-recurring expenses and impairment charges indicate the presence of one-time factors that have affected the company's reported earnings. These adjustments are essential for understanding the company's core operating performance and distinguishing between temporary and structural changes in profitability.
— Net Cash Provided by Operating Activities Increased by
— Principal Amount of Long-Term Debt Decreased by
Summary
|
|
Fourth Quarter of 2023 |
|
Fiscal Year 2023 |
||||||||||||
(In millions, except per share data) |
|
|
Change vs. |
|
|
|
Change vs. |
|||||||||
|
|
Amount |
|
Q4 2022 |
|
Amount |
|
FY 2022 |
||||||||
Net Sales |
|
$ |
578.1 |
|
|
(7.2 |
) |
% |
|
$ |
2,062.3 |
|
|
(4.7 |
) |
% |
Base Business Net Sales (1) |
|
$ |
562.3 |
|
|
(2.3 |
) |
% |
|
$ |
1,997.2 |
|
|
(1.5 |
) |
% |
Diluted EPS |
|
$ |
0.03 |
|
|
(91.2 |
) |
% |
|
$ |
(0.89 |
) |
|
nm |
|
% |
Adj. Diluted EPS (1) |
|
$ |
0.30 |
|
|
(25.0 |
) |
% |
|
$ |
0.99 |
|
|
(8.3 |
) |
% |
Net Income (Loss) |
|
$ |
2.6 |
|
|
(89.4 |
) |
% |
|
$ |
(66.2 |
) |
|
nm |
|
% |
Adj. Net Income (1) |
|
$ |
23.5 |
|
(18.7 |
) |
% |
|
$ |
73.9 |
|
|
(3.1 |
) |
% |
|
Adj. EBITDA (1) |
|
$ |
86.8 |
|
|
(7.3 |
) |
% |
|
$ |
318.0 |
|
|
5.7 |
|
% |
Guidance for Full Year Fiscal 2024
-
Net sales range of
$1.97 5 billion$2.02 0 billion -
Adjusted EBITDA range of
$305 million $325 million -
Adjusted diluted earnings per share range of
$0.80 $1.00
Commenting on the results, Casey Keller, President and Chief Executive Officer of B&G Foods, stated, “B&G Foods’ fourth quarter and fiscal 2023 results demonstrated strong progress, with improved margins, stabilizing volumes, stronger cash flows, and a reduction in leverage. We further completed the divestiture of Green Giant
Financial Results for the Fourth Quarter of 2023
Net sales for the fourth quarter of 2023 decreased
Base business net sales for the fourth quarter of 2023 decreased
Net sales of Clabber Girl increased
Gross profit was
The improvement in gross profit as a percentage of net sales was driven by an increase in net pricing relative to input costs as compared to the fourth quarter of 2022, the moderation of input cost inflation, lower transportation and warehousing costs, and lower depreciation expense. Beginning in the fourth quarter of 2022, the Company has realized the benefits of previously announced list price increases, which, together with additional list price increases in 2023, partially offset by certain list price decreases, contributed to the Company’s recovery in gross profit as a percentage of net sales during the fourth quarter of 2023.
Selling, general and administrative expenses increased
In connection with the Company’s sale of assets relating to the Green Giant
During the fourth quarter of 2023, the Company recorded pre-tax, non-cash impairment charges of
Net interest expense increased
The Company’s net income was
For the fourth quarter of 2023, adjusted EBITDA was
Financial Results for Full Year Fiscal 2023
Net sales for fiscal 2023 decreased
Base business net sales for fiscal 2023 decreased
Net sales of Clabber Girl increased
Gross profit was
The improvements in gross profit and gross profit as a percentage of net sales were driven by an increase in net pricing relative to input costs as compared to fiscal 2022, the moderation of input cost inflation, lower transportation and warehousing costs, and lower depreciation expense. Beginning in the fourth quarter of 2022, the Company has realized the benefits of previously announced list price increases, which, together with additional list price increases in 2023, partially offset by certain list price decreases, contributed to the Company’s recovery in gross profit and gross profit as a percentage of net sales during fiscal 2023.
Selling, general and administrative expenses increased
In connection with the Company’s sale of assets relating to the Green Giant
During the fourth quarter of 2023, the Company recorded pre-tax, non-cash impairment charges of
Net interest expense increased
The Company had a net loss of
For fiscal 2023, adjusted EBITDA was
Full Year Fiscal 2024 Guidance
For fiscal 2024, net sales are expected to be
B&G Foods provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the Company’s forward-looking adjusted EBITDA and adjusted diluted earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for deferred taxes; acquisition/divestiture-related expenses, gains and losses (which may include third-party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up and gains and losses on the sale of certain assets); gains and losses on extinguishment of debt; impairment of assets held for sale; impairment of intangible assets; non-recurring expenses, gains and losses; and other charges reflected in the Company’s reconciliation of historic non-GAAP financial measures, the amounts of which, based on past experience, could be material. For additional information regarding B&G Foods’ non-GAAP financial measures, see “About Non-GAAP Financial Measures and Items Affecting Comparability” below.
Conference Call
B&G Foods will hold a conference call at 4:30 p.m. ET today, February 27, 2024 to discuss fourth quarter and full year 2023 financial results. The live audio webcast of the conference call can be accessed at www.bgfoods.com/investor-relations. A replay of the webcast will be available following the conference call through the same link.
About Non-GAAP Financial Measures and Items Affecting Comparability
“Adjusted net income” (net income (loss) adjusted for certain items that affect comparability), “adjusted diluted earnings per share” (diluted earnings (loss) 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 (loss) before net interest expense, income taxes, and depreciation and amortization), “adjusted EBITDA” (EBITDA as adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses (which may include third-party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up and gains and losses on the sale of certain assets), gains and losses on extinguishment of debt, impairment of assets held for sale, and non-recurring expenses, gains and losses), “adjusted gross profit” (gross profit adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold) and “adjusted gross profit percentage” (gross profit as a percentage of net sales adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold) are “non-GAAP financial measures.” A non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in
The 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 (loss) and to net cash provided by operating activities, is included below for the fourth quarter and full year 2023 and 2022, along with the components of EBITDA and adjusted EBITDA. Also included below are reconciliations of the non-GAAP terms adjusted net income, adjusted diluted earnings per share and base business net sales to the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s consolidated balance sheets and related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows.
End Notes
(1) |
|
Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “base business net sales,” “adjusted diluted earnings per share,” “adjusted net income ,” “EBITDA,” “adjusted EBITDA,” “adjusted gross profit” and “adjusted gross profit percentage,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures. |
(2) |
|
Excludes net sales of certain Back to Nature products not part of the divestiture that the Company will soon transition to another brand name. |
(3) |
|
Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Dash and Ac’cent, and spices & seasonings products launched by the Company and sold under license. |
nm |
– |
Not meaningful. |
About B&G Foods, Inc.
Based in
Forward-Looking Statements
Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include, without limitation, statements related to B&G Foods’ expectations regarding net sales, adjusted EBITDA and adjusted diluted earnings per share, and the Company’s overall expectations for fiscal 2024 and beyond. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking. Factors that may affect actual results include, without limitation: the Company’s substantial leverage; the effects of rising costs for and/or decreases in supply of the Company’s commodities, ingredients, packaging, other raw materials, distribution and labor; crude oil prices and their impact on distribution, packaging and energy costs; the Company’s ability to successfully implement sales price increases and cost saving measures to offset any cost increases; intense competition, changes in consumer preferences, demand for the Company’s products and local economic and market conditions; the Company’s continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity; the ability of the Company and its supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain or labor shortages; the impact pandemics or disease outbreaks, such as the COVID-19 pandemic, may have on the Company’s business, including among other things, the Company’s supply chain, manufacturing operations or workforce and customer and consumer demand for the Company’s products; the Company’s ability to recruit and retain senior management and a highly skilled and diverse workforce at the Company’s corporate offices, manufacturing facilities and other locations despite a very tight labor market and changing employee expectations as to fair compensation, an inclusive and diverse workplace, flexible working and other matters; the risks associated with the expansion of the Company’s business; the Company’s possible inability to identify new acquisitions or to integrate recent or future acquisitions or the Company’s failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions; the Company’s ability to successfully complete the integration of recent or future acquisitions into the Company’s enterprise resource planning (ERP) system; tax reform and legislation, including the effects of the Infrastructure Investment and Jobs Act,
B&G Foods, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) |
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|
|
|
|
|
|
|
||
|
|
December 30, |
|
December 31, |
||||
|
|
2023 |
|
2022 |
||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
41,094 |
|
|
$ |
45,442 |
|
Trade accounts receivable, net |
|
|
143,015 |
|
|
|
150,019 |
|
Inventories |
|
|
568,980 |
|
|
|
726,468 |
|
Assets held for sale |
|
|
— |
|
|
|
51,314 |
|
Prepaid expenses and other current assets |
|
|
41,747 |
|
|
|
37,550 |
|
Income tax receivable |
|
|
7,988 |
|
|
|
8,024 |
|
Total current assets |
|
|
802,824 |
|
|
|
1,018,817 |
|
|
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
302,288 |
|
|
|
317,587 |
|
Operating lease right-of-use assets |
|
|
70,046 |
|
|
|
65,809 |
|
Finance lease right-of-use assets |
|
|
1,832 |
|
|
|
2,891 |
|
Goodwill |
|
|
619,399 |
|
|
|
619,241 |
|
Other intangible assets, net |
|
|
1,627,836 |
|
|
|
1,788,157 |
|
Other assets |
|
|
23,484 |
|
|
|
19,088 |
|
Deferred income taxes |
|
|
15,581 |
|
|
|
10,019 |
|
Total assets |
|
$ |
3,463,290 |
|
|
$ |
3,841,609 |
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Trade accounts payable |
|
$ |
123,778 |
|
|
$ |
127,809 |
|
Accrued expenses |
|
|
83,217 |
|
|
|
64,137 |
|
Current portion of operating lease liabilities |
|
|
16,939 |
|
|
|
14,616 |
|
Current portion of finance lease liabilities |
|
|
1,070 |
|
|
|
1,046 |
|
Current portion of long-term debt |
|
|
22,000 |
|
|
|
50,000 |
|
Income tax payable |
|
|
475 |
|
|
|
309 |
|
Dividends payable |
|
|
14,939 |
|
|
|
13,617 |
|
Total current liabilities |
|
|
262,418 |
|
|
|
271,534 |
|
|
|
|
|
|
|
|
||
Long-term debt, net of current portion |
|
|
2,023,088 |
|
|
|
2,339,049 |
|
Deferred income taxes |
|
|
267,053 |
|
|
|
288,712 |
|
Long-term operating lease liabilities, net of current portion |
|
|
53,724 |
|
|
|
51,727 |
|
Long-term finance lease liabilities, net of current portion |
|
|
726 |
|
|
|
1,795 |
|
Other liabilities |
|
|
20,818 |
|
|
|
20,626 |
|
Total liabilities |
|
|
2,627,827 |
|
|
|
2,973,443 |
|
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
786 |
|
|
|
717 |
|
Additional paid-in capital |
|
|
46,990 |
|
|
|
— |
|
Accumulated other comprehensive income (loss) |
|
|
2,597 |
|
|
(9,349 |
) |
|
Retained earnings |
|
|
785,090 |
|
|
|
876,798 |
|
Total stockholders’ equity |
|
|
835,463 |
|
|
|
868,166 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,463,290 |
|
|
$ |
3,841,609 |
|
B&G Foods, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
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||||
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
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|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales |
$ |
578,128 |
|
|
$ |
623,232 |
|
|
$ |
2,062,313 |
|
|
$ |
2,163,000 |
|
Cost of goods sold |
|
452,957 |
|
|
|
497,154 |
|
|
|
1,606,792 |
|
|
|
1,753,376 |
|
Gross profit |
|
125,171 |
|
|
|
126,078 |
|
|
|
455,521 |
|
|
|
409,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses (income): |
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
53,246 |
|
|
|
51,855 |
|
|
|
196,044 |
|
|
|
190,411 |
|
Amortization expense |
|
5,111 |
|
|
|
5,241 |
|
|
|
20,760 |
|
|
|
21,250 |
|
Loss (gain) on sales of assets |
|
4,764 |
|
|
|
— |
|
|
|
137,798 |
|
|
|
(7,099 |
) |
Impairment of assets held for sale |
|
— |
|
|
|
2,809 |
|
|
|
— |
|
|
|
106,434 |
|
Impairment of intangible assets |
|
20,500 |
|
|
|
— |
|
|
|
20,500 |
|
|
|
— |
|
Operating income |
|
41,550 |
|
|
|
66,173 |
|
|
|
80,419 |
|
|
|
98,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other (income) and expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
40,225 |
|
|
|
36,298 |
|
|
|
151,333 |
|
|
|
124,915 |
|
Other income |
|
(962 |
) |
|
|
(1,847 |
) |
|
|
(3,781 |
) |
|
|
(7,380 |
) |
Income (loss) before income tax (benefit) expense |
|
2,287 |
|
|
|
31,722 |
|
|
|
(67,133 |
) |
|
|
(18,907 |
) |
Income tax (benefit) expense |
|
(288 |
) |
|
|
7,421 |
|
|
|
(935 |
) |
|
|
(7,537 |
) |
Net income (loss) |
$ |
2,575 |
|
|
$ |
24,301 |
|
|
$ |
(66,198 |
) |
|
$ |
(11,370 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
78,624 |
|
|
|
71,668 |
|
|
|
74,267 |
|
|
|
70,468 |
|
Diluted |
|
78,624 |
|
|
|
72,017 |
|
|
|
74,267 |
|
|
|
70,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.03 |
|
|
$ |
0.34 |
|
|
$ |
(0.89 |
) |
|
$ |
(0.16 |
) |
Diluted |
$ |
0.03 |
|
|
$ |
0.34 |
|
|
$ |
(0.89 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per share |
$ |
0.190 |
|
|
$ |
0.190 |
|
|
$ |
0.760 |
|
|
$ |
1.615 |
|
B&G Foods, Inc. and Subsidiaries Items Affecting Comparability Reconciliation of Net Income (Loss) to EBITDA(1) and Adjusted EBITDA(1) (In thousands) (Unaudited) |
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|
|
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|
|
|
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||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (loss) |
|
$ |
2,575 |
|
|
$ |
24,301 |
|
|
$ |
(66,198 |
) |
|
$ |
(11,370 |
) |
Income tax (benefit) expense |
|
|
(288 |
) |
|
|
7,421 |
|
|
|
(935 |
) |
|
|
(7,537 |
) |
Interest expense, net(2) |
|
|
40,225 |
|
|
|
36,298 |
|
|
|
151,333 |
|
|
|
124,915 |
|
Depreciation and amortization |
|
|
17,034 |
|
|
|
19,463 |
|
|
|
69,620 |
|
|
|
80,528 |
|
EBITDA(1) |
|
|
59,546 |
|
|
|
87,483 |
|
|
|
153,820 |
|
|
|
186,536 |
|
Acquisition/divestiture-related and non-recurring expenses(3) |
|
|
1,965 |
|
|
|
3,346 |
|
|
|
5,877 |
|
|
|
12,921 |
|
Loss (gain) on sales of assets, net of facility closure costs(4) |
|
|
4,764 |
|
|
|
— |
|
|
|
137,798 |
|
|
|
(4,928 |
) |
Impairment of assets held for sale(5) |
|
|
— |
|
|
|
2,809 |
|
|
|
— |
|
|
|
106,434 |
|
Impairment of intangible assets(6) |
|
|
20,500 |
|
|
|
— |
|
|
|
20,500 |
|
|
|
— |
|
Adjusted EBITDA(1) |
|
$ |
86,775 |
|
|
$ |
93,638 |
|
|
$ |
317,995 |
|
|
$ |
300,963 |
|
B&G Foods, Inc. and Subsidiaries Items Affecting Comparability Reconciliation of Net Cash Provided by Operating Activities to EBITDA(1) and Adjusted EBITDA(1) (In thousands) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net cash provided by operating activities |
|
$ |
92,078 |
|
|
$ |
54,371 |
|
|
$ |
247,759 |
|
|
$ |
5,963 |
|
Income tax (benefit) expense |
|
|
(288 |
) |
|
|
7,421 |
|
|
|
(935 |
) |
|
|
(7,537 |
) |
Interest expense, net(2) |
|
|
40,225 |
|
|
|
36,298 |
|
|
|
151,333 |
|
|
|
124,915 |
|
(Loss) gain on extinguishment of debt(2) |
|
|
(457 |
) |
|
|
— |
|
|
|
911 |
|
|
|
— |
|
(Loss) gain on sales of assets(4) |
|
|
(4,799 |
) |
|
|
(8 |
) |
|
|
(138,523 |
) |
|
|
7,086 |
|
Deferred income taxes |
|
|
7,455 |
|
|
|
(518 |
) |
|
|
26,395 |
|
|
|
26,897 |
|
Amortization of deferred debt financing costs and bond discount/premium |
|
|
(1,819 |
) |
|
|
(1,193 |
) |
|
|
(7,510 |
) |
|
|
(4,723 |
) |
Share-based compensation expense |
|
|
(1,739 |
) |
|
|
(933 |
) |
|
|
(7,191 |
) |
|
|
(3,917 |
) |
Changes in assets and liabilities, net of effects of business combinations |
|
|
(50,610 |
) |
|
|
(5,146 |
) |
|
|
(97,919 |
) |
|
|
144,286 |
|
Impairment of assets held for sale(5) |
|
|
— |
|
|
|
(2,809 |
) |
|
|
— |
|
|
|
(106,434 |
) |
Impairment of intangible assets(6) |
|
|
(20,500 |
) |
|
|
— |
|
|
|
(20,500 |
) |
|
|
— |
|
EBITDA(1) |
|
|
59,546 |
|
|
|
87,483 |
|
|
|
153,820 |
|
|
|
186,536 |
|
Acquisition/divestiture-related and non-recurring expenses(3) |
|
|
1,965 |
|
|
|
3,346 |
|
|
|
5,877 |
|
|
|
12,921 |
|
Loss (gain) on sales of assets, net of facility closure costs(4) |
|
|
4,764 |
|
|
|
— |
|
|
|
137,798 |
|
|
|
(4,928 |
) |
Impairment of assets held for sale(5) |
|
|
— |
|
|
|
2,809 |
|
|
|
— |
|
|
|
106,434 |
|
Impairment of intangible assets(6) |
|
|
20,500 |
|
|
|
— |
|
|
|
20,500 |
|
|
|
— |
|
Adjusted EBITDA(1) |
|
$ |
86,775 |
|
|
$ |
93,638 |
|
|
$ |
317,995 |
|
|
$ |
300,963 |
|
B&G Foods, Inc. and Subsidiaries Items Affecting Comparability Reconciliation of Net Income (Loss) to Adjusted Net Income(6) and Adjusted Diluted Earnings per Share(6) (In thousands, except per share data) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (loss) |
|
$ |
2,575 |
|
|
$ |
24,301 |
|
|
$ |
(66,198 |
) |
|
$ |
(11,370 |
) |
Gain on extinguishment of debt(2) |
|
|
457 |
|
|
|
— |
|
|
|
(911 |
) |
|
|
— |
|
Acquisition/divestiture-related and non-recurring expenses(3) |
|
|
1,965 |
|
|
|
3,346 |
|
|
|
5,877 |
|
|
|
12,921 |
|
Loss (gain) on sales of assets, net of facility closure costs(4) |
|
|
4,764 |
|
|
|
— |
|
|
|
137,798 |
|
|
|
(4,928 |
) |
Credit agreement amendment fee(8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,600 |
|
Impairment of assets held for sale(5) |
|
|
— |
|
|
|
2,809 |
|
|
|
— |
|
|
|
106,434 |
|
Impairment of intangible assets(6) |
|
|
20,500 |
|
|
|
— |
|
|
|
20,500 |
|
|
|
— |
|
Tax adjustment related to Back to Nature divestiture(9) |
|
|
— |
|
|
|
— |
|
|
|
14,736 |
|
|
|
— |
|
Tax effects of non-GAAP adjustments(10) |
|
|
(6,712 |
) |
|
|
(1,508 |
) |
|
|
(37,925 |
) |
|
|
(28,427 |
) |
Adjusted net income(7) |
|
$ |
23,549 |
|
|
$ |
28,948 |
|
|
$ |
73,877 |
|
|
$ |
76,230 |
|
Adjusted diluted earnings per share(7) |
|
$ |
0.30 |
|
|
$ |
0.40 |
|
|
$ |
0.99 |
|
|
$ |
1.08 |
|
(1) |
|
EBITDA and adjusted EBITDA are non-GAAP financial measures used by management to measure operating performance. A non-GAAP financial measure is defined as a numerical measure of the Company’s financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s consolidated balance sheets and related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows. The Company defines EBITDA as net income (loss) before net interest expense, income taxes, and depreciation and amortization. The Company defines adjusted EBITDA as EBITDA adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses (which may include third-party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up, and gains and losses on the sale of certain assets); gains and losses on extinguishment of debt; impairment of assets held for sale; impairment of intangible assets; and non-recurring expenses, gains and losses. |
|
|
Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and the Company’s ability to generate cash flow from operations. The Company uses EBITDA and adjusted EBITDA in the Company’s business operations to, among other things, evaluate the Company’s operating performance, develop budgets and measure the Company’s performance against those budgets, determine employee bonuses and evaluate the Company’s cash flows in terms of cash needs. The Company also presents EBITDA and adjusted EBITDA because the Company believes they are useful indicators of the Company’s historical debt capacity and ability to service debt and because covenants in the Company’s credit agreement and the Company’s senior notes indentures contain ratios based on these measures. As a result, reports used by internal management during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity. |
|
|
EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income (loss), net income (loss) or any other GAAP measure as an indicator of operating performance. EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends. Rather, EBITDA and adjusted EBITDA are potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating the Company’s performance against the Company’s peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts. |
(2) |
|
Net interest expense for fiscal 2023 was reduced by |
(3) |
|
Acquisition/divestiture-related and non-recurring expenses for the fourth quarter and full year 2023 of |
(4) |
|
In connection with the sale of assets relating to the Company’s Green Giant |
|
|
On the first business day of fiscal 2023, the Company completed the Back to Nature divestiture and recorded a loss on the sale of |
|
|
During the first quarter of 2022, the Company completed the closure and sale of its |
(5) |
|
In connection with the Company’s decision to sell its Back to Nature business, the Company reclassified |
(6) |
|
During the fourth quarter of 2023, the Company recorded pre-tax, non-cash impairment charges of |
(7) |
|
Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. The Company defines adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to net income and diluted earnings per share to eliminate the items identified in the reconciliation above. 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, management does not consider these items when evaluating the Company’s performance or when making decisions regarding allocation of resources. |
(8) |
|
During the second quarter of 2022, the Company paid a fee of |
(9) |
|
As a result of the Back to Nature divestiture, the Company incurred a capital loss for tax purposes, for which the Company recorded a deferred tax asset during the first quarter of 2023. A valuation allowance has been recorded against this deferred tax asset, which negatively impacted the Company’s first quarter of 2023 income taxes by |
(10) |
|
Represents the tax effects of the non-GAAP adjustments listed above, assuming a tax rate of |
B&G Foods, Inc. and Subsidiaries Items Affecting Comparability Reconciliation of Net Sales to Base Business Net Sales(1) (In thousands) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales |
|
$ |
578,128 |
|
|
$ |
623,232 |
|
|
$ |
2,062,313 |
|
|
$ |
2,163,000 |
|
Net sales from acquisitions(2) |
|
|
— |
|
|
|
— |
|
|
|
(550 |
) |
|
|
— |
|
Net sales from discontinued or divested brands(3) |
|
|
(15,813 |
) |
|
|
(47,681 |
) |
|
|
(64,599 |
) |
|
|
(135,813 |
) |
Base business net sales |
|
$ |
562,315 |
|
|
$ |
575,551 |
|
|
$ |
1,997,164 |
|
|
$ |
2,027,187 |
|
(1) |
|
Base business net sales is a non-GAAP financial measure used by management to measure operating performance. The Company defines base business net sales as the Company’s net sales excluding (1) the net sales of acquisitions until the net sales from such acquisitions are included in both comparable periods and (2) net sales of discontinued or divested brands. The portion of current period net sales attributable to recent acquisitions for which there is no corresponding period in the comparable period of the prior year is excluded. For each acquisition, the excluded period starts at the beginning of the most recent fiscal period being compared and ends on the first anniversary of the acquisition date. For discontinued or divested brands, the entire amount of net sales is excluded from each fiscal period being compared. The Company has included this financial measure because management believes it provides useful and comparable trend information regarding the results of the Company’s business without the effect of the timing of acquisitions and the effect of discontinued or divested brands. |
(2) |
|
Reflects net sales from the Yuma acquisition, for which there is no comparable period of net sales during the first four months of fiscal 2022. The Yuma acquisition was completed on May 5, 2022. |
(3) |
|
For the fourth quarter and fiscal 2022, reflects net sales of the Green Giant |
B&G Foods, Inc. and Subsidiaries Items Affecting Comparability Reconciliation of Gross Profit to Adjusted Gross Profit(1) and Gross Profit Percentage to Adjusted Gross Profit Percentage(1) (In thousands, except percentages) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
December 30, |
|
December 31, |
|
December 30, |
|
December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Gross profit |
|
$ |
125,171 |
|
|
$ |
126,078 |
|
|
$ |
455,521 |
|
|
$ |
409,624 |
|
Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold(2) |
|
|
1,568 |
|
|
|
2,529 |
|
|
|
2,921 |
|
|
|
9,117 |
|
Adjusted gross profit(1) |
|
$ |
126,739 |
|
|
$ |
128,607 |
|
|
$ |
458,442 |
|
|
$ |
418,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit percentage |
|
|
21.7 |
% |
|
|
20.2 |
% |
|
|
22.1 |
% |
|
|
18.9 |
% |
Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold as a percentage of net sales |
|
|
0.3 |
% |
|
|
0.4 |
% |
|
|
0.1 |
% |
|
|
0.4 |
% |
Adjusted gross profit percentage(1) |
|
|
21.9 |
% |
|
|
20.6 |
% |
|
|
22.2 |
% |
|
|
19.4 |
% |
(1) |
|
Adjusted gross profit and adjusted gross profit percentage are non-GAAP financial measures used by management to measure operating performance. The Company defines adjusted gross profit as gross profit adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold and adjusted gross profit percentage as gross profit percentage (i.e., gross profit as a percentage of net sales) adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold. These non-GAAP financial measures reflect adjustments to gross profit and gross profit percentage to eliminate the items identified in the reconciliation above. 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, management does not consider these items when evaluating the Company’s performance or when making decisions regarding allocation of resources. |
(2) |
|
Acquisition/divestiture related expenses and non-recurring expenses included in cost of goods sold for the fourth quarter and full year 2023 of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227435116/en/
Investor Relations:
ICR, Inc.
Dara Dierks
866.211.8151
Media Relations:
ICR, Inc.
Matt Lindberg
203.682.8214
Source: B&G Foods, Inc.
FAQ
What was the change in net sales for Q4 2023 compared to Q4 2022?
How did adjusted EBITDA change in Q4 2023 compared to Q4 2022?
What was the net income for Q4 2023?
How did long-term debt change during FY 2023?
What is the guidance for net sales in FY 2024?
