B&G Foods, Inc. (NYSE: BGS, BGF), a manufacturer and
distributor of high-quality, shelf-stable foods, today announced
financial results for the thirteen and fifty-two weeks ended
December 29, 2007. Financial Results for the Fourth Quarter Net
sales for the thirteen weeks ended December 29, 2007 (fourth
quarter of 2007) increased $21.2 million or 19.0% to $132.4 million
from $111.2 million for the thirteen weeks ended December 30, 2006
(fourth quarter of 2006). The Cream of Wheat acquisition accounted
for $20.0 million of the net sales increase offset by a decrease in
net sales of $0.6 million relating to the termination of a
temporary co-packing arrangement. The remaining $1.8 million of the
net sales increase related to increases in sales price and unit
volume. Net sales of Cream of Wheat products for the fourth quarter
of 2007 increased $2.4 million, or 13.8%, as compared to net sales
during the fourth quarter of 2006 under the brand�s prior owner.
Gross profit for the fourth quarter of 2007 increased 38.8% to
$39.7 million from $28.6 million in the fourth quarter of 2006.
Gross profit expressed as a percentage of net sales increased 4.3%
to 30.0% for the fourth quarter of 2007 from 25.7% in the fourth
quarter of 2006. The increase in gross profit expressed as a
percentage of net sales was due to the positive effect of the Cream
of Wheat acquisition. Operating income increased 48.2% to $20.7
million for the fourth quarter of 2007, from $14.0 million in the
fourth quarter of 2006. Net income increased 80.1% to $5.2 million
for the fourth quarter of 2007 compared to $2.9 million for the
fourth quarter of 2006. Earnings per share of Class A common stock
was $0.14 for the fourth quarter of 2007. Earnings per share of
Class A common stock was negatively impacted by $0.01 due to a $0.5
million accrual ($0.3 million, net of tax) during the fourth
quarter relating to the special bonus awards discussed below. Prior
to the third 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 fourth quarter of 2007 to the fourth
quarter of 2006 or fiscal 2007 to fiscal 2006. For the fourth
quarter of 2007, EBITDA (see �About Non-GAAP Financial Measures�
below) increased 51.0% to $24.3 million from $16.1 million for the
fourth quarter of 2006. David L. Wenner, Chief Executive Officer of
B&G Foods, stated, �Our company had an outstanding quarter,
setting company records in every metric including net sales, net
income and EBITDA. These results � for the fourth quarter of 2007
and for all of fiscal 2007 � testify to our successful integration
of the Cream of Wheat business and the stability of our base
business in a challenging cost environment.� Financial Results for
Fiscal 2007 Net sales increased $60.0 million or 14.6% to $471.3
million for fiscal 2007 from $411.3 million for fiscal 2006. The
Cream of Wheat acquisition accounted for $54.2 million of the net
sales increase offset by a decrease in net sales of $3.0 million
relating to the termination of a temporary co-packing arrangement.
The remaining $8.8 million of the net sales increase related to
increases in sales price and unit volume. Net sales of Cream of
Wheat products for fiscal 2007 (which includes two months of net
sales under the brand�s prior owner) increased $3.8 million, or
6.1%, as compared to net sales during fiscal 2006 under the brand�s
prior owner. Gross profit increased $33.7 million or 29.6% to
$148.0 million in fiscal 2007 from $114.3 million in fiscal 2006.
Gross profit expressed as a percentage of net sales increased 3.6%
to 31.4% in fiscal 2007 from 27.8% in fiscal 2006. The increase in
gross profit expressed as a percentage of net sales was due to the
positive effect of the Cream of Wheat acquisition. Operating income
increased 33.0% to $81.2 million during fiscal 2007, compared to
$61.0 million in the comparable period of fiscal 2006. Net income
increased 54.0% to $17.8 million for fiscal 2007 compared to $11.6
million for fiscal 2006. For fiscal 2007, earnings per share of
Class A common stock was $0.62. Earnings per share of Class A
common stock was negatively impacted by $0.04 due to a $1.9 million
accrual ($1.2 million, net of tax) for special bonus awards to be
paid in March 2008 to certain executive officers and members of our
senior management in recognition of their contributions to the
successful completion of the Cream of Wheat acquisition and the
Class A common stock offering. For the fiscal 2007, EBITDA
increased 36.9% to $94.5 million from $69.0 million for fiscal
2006. Conference Call B&G Foods will hold a webcast and
conference call at 4:30 p.m. ET today, March 6, 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 (888)
686-9704 or for international callers by dialing (913) 312-0850. 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 2927248. The replay will be
available from March 6, 2008 through March 13, 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 fourth quarter and fiscal 2007 and the fourth quarter
and fiscal 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, 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-s�n, 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) � � December 29,2007 December
30,2006 Assets Current assets: Cash and cash equivalents $ 36,606 $
29,626 Trade accounts receivable, less allowance for doubtful
accounts and discounts of $745 in 2007 and $568 in 2006,
respectively 42,362 31,090 Inventories 93,181 78,269 Prepaid
expenses 3,556 3,246 Income tax receivable 569 516 Deferred income
taxes � 648 � � 2,574 � Total current assets 176,922 145,321 �
Property, plant and equipment, net 49,658 40,269 Goodwill 253,353
198,076 Trademarks 227,220 200,220 Customer relationship
intangibles, net 122,768 14,369 Net deferred debt issuance costs
and other assets � 17,669 � � 17,950 � Total assets $ 847,590 � $
616,205 � � Liabilities and Stockholders� Equity � Current
liabilities: Trade accounts payable 32,126 21,520 Accrued expenses
21,894 16,520 Dividends payable � 7,797 � � 4,240 � Total current
liabilities 61,817 42,280 � Long-term debt 535,800 430,800 Other
liabilities 6,376 4,972 Deferred income taxes � 68,962 � � 62,666 �
Total liabilities 672,955 540,718 � 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 December 29, 2007
and December 30, 2006 368 200 Class B common stock, $0.01 par value
per share. Authorized 25,000,000 shares; no shares issued or
outstanding as of December 29, 2007 and 7,556,443 shares issued and
outstanding as of December 30, 2006 � 76 Additional paid-in capital
202,197 119,152 Accumulated other comprehensive loss (3,718 )
(1,904 ) Accumulated deficit � (24,212 ) � (42,037 ) Total
stockholders� equity � 174,635 � � 75,487 � Total liabilities and
stockholders� equity $ 847,590 � $ 616,205 � B&G Foods, Inc.
and Subsidiaries Consolidated Statements of Operations (Dollars in
thousands, except per share data) (Unaudited) � � Thirteen Weeks
Ended Fifty-two Weeks Ended December 29, 2007 � December 30, 2006
December 29, 2007 � December 30, 2006 � Net sales $ 132,384 $
111,207 $ 471,336 $ 411,306 Cost of goods sold � 92,648 � 82,576 �
� 323,316 � � 297,053 � Gross profit 39,736 28,631 148,020 114,253
� Operating expenses: Sales, marketing and distribution expenses
14,500 11,812 51,684 45,343 General and administrative expenses
2,880 2,632 9,682 7,688 Gain on sale of property, plant and
equipment � � � (525 ) Amortization expense�customer relationships
� 1,613 � 189 � � 5,501 � � 731 � Operating income 20,743 13,998
81,153 61,016 � Other expenses: Interest expense, net � 12,660 �
10,685 � � 52,688 � � 43,481 � Income before income tax expense
8,083 3,313 28,465 17,535 Income tax expense � 2,915 � 444 � �
10,640 � � 5,962 � Net income $ 5,168 $ 2,869 � � 17,825 � � 11,573
� � Earnings per share calculations: Basic and diluted distributed
earnings per share: Class A common stock $ 0.21 $ 0.21 $ 0.92(1 ) $
0.85 Basic and diluted earnings (loss) per share: Class A common
stock $ 0.14 $ 0.16 $ 0.62 $ 0.65 Class B common stock $ � $ (0.05
) $ (0.30 ) $ (0.20 ) (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 Provided by Operating Activities
(Dollars in thousands) (Unaudited) � � Thirteen Weeks Ended
Fifty-two Weeks Ended December 29, 2007 � December 30, 2006
December 29, 2007 � December 30, 2006 � Net income $ 5,168 $ 2,869
$ 17,825 $ 11,573 Income tax expense 2,915 444 10,640 5,962
Interest expense, net 12,660 10,685 52,688 43,481 Depreciation and
amortization � 3,592 � � 2,121 � � 13,298 � � 7,984 � EBITDA(1)
24,335 16,119 94,451 69,000 Income tax expense (2,915 ) (444 )
(10,640 ) (5,962 ) Interest expense, net (12,660 ) (10,685 )
(52,688 ) (43,481 ) Deferred income taxes 2,379 1,255 9,323 6,165
Amortization of deferred debt issuance costs 793 708 3,190 2,830
Gain on sale of property, plant and equipment � � � (525 ) Write
off of deferred debt issuance costs � � 1,769 � Changes in assets
and liabilities, net of effects of business combination � 917 � �
7,642 � � (11,356 ) � 4,744 � Net cash provided by operating
activities $ 12,849 � $ 14,595 � $ 34,049 � $ 32,771 � (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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