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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