B&G Foods Reports Strong Net Sales and Earnings Growth for Fourth Quarter and Full-Year 2012

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B&G Foods Reports Strong Net Sales and Earnings Growth for Fourth Quarter and Full-Year 2012

PARSIPPANY, N.J.--(BUSINESS WIRE)-- B&G Foods, Inc. (NYS: BGS) today announced financial results for the fourth quarter and full-year 2012.

Highlights:

  • Net sales increased 15.8% to $173.7 million for the quarter and 16.5% to $633.8 million for the year
  • Net income increased 17.9% to $59.3 million for the year
  • Adjusted net income* increased 25.6% to $66.7 million for the year
  • Diluted earnings per share increased 15.4% to $1.20 for the year
  • Adjusted diluted earnings per share* increased 23.9% to $1.35 for the year.
  • Adjusted EBITDA1 increased 20.0% to $44.0 million for the quarter and 28.9% to $169.0 million for the year
  • The Company expects to deliver 2013 adjusted EBITDA of $178.0 million to $182.0 million

David L. Wenner, President and Chief Executive Officer of B&G Foods, stated, "Our business set company records in net sales, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA for the fourth quarter and for the full year 2012 as we executed very well on the Culver Specialty Brands acquisition. Pricing gains continued to be strong and offset much of the volume weakness caused by industry trends and the effects of Hurricane Sandy. The New York Style and Old London acquisition completed in the quarter adds an exciting new element to our portfolio."

Financial Results for the Fourth Quarter of 2012

Net sales for the fourth quarter of 2012 increased 15.8% to $173.7 million from $150.0 million for the fourth quarter of 2011. Net sales of the Culver Specialty Brands, which B&G Foods acquired at the end of November 2011, contributed $15.7 million and net sales of the New York Style and Old London brands, which B&G Foods acquired at the end of October 2012, contributed $8.4 million to the Company's overall increase during the fourth quarter. For B&G Foods' base business, a sales price increase of $2.8 million offset by a $3.2 million unit volume decrease resulted in a net sales decrease of $0.4 million.

Gross profit for the fourth quarter of 2012 increased 20.7% to $59.5 million from $49.3 million in the fourth quarter of 2011. Gross profit expressed as a percentage of net sales increased 1.3 percentage points to 34.2% in the fourth quarter of 2012 from 32.9% in the fourth quarter of 2011, attributable to a sales mix shift to higher margin products (primarily due to the Culver Specialty Brands acquisition) and pricing gains of $2.8 million, partially offset by commodity and packaging cost increases. Operating income increased 20.8% to $37.4 million in the fourth quarter of 2012 from $31.0 million in the fourth quarter of 2011.

Net interest expense for the fourth quarter of 2012 and the fourth quarter of 2011 remained consistent at $11.8 million.

The Company's reported net income under U.S. generally accepted accounting principles (GAAP) was $9.6 million, or $0.18 per diluted share, for the fourth quarter of 2012, as compared to reported net income of $12.3 million, or $0.25 per diluted share, for the fourth quarter of 2011. The Company's adjusted net income for the fourth quarter of 2012 was $17.0 million, or $0.32 per adjusted diluted share, for the fourth quarter of 2012, as compared to adjusted net income of $14.7 million, or $0.30 per adjusted diluted share, for the fourth quarter of 2011.

Adjusted EBITDA, which for the fourth quarter of 2012 excludes the impact of transaction costs related to the New York Style and Old London acquisition and for the fourth quarter of 2011 excludes the impact of transaction costs related to the Culver Specialty Brands acquisition, increased 20.0% to $44.0 million from $36.7 million.

Financial Results for Full-Year 2012

Net sales for fiscal 2012 increased 16.5% to $633.8 million from $543.9 million for fiscal 2011. Net sales of the Culver Specialty Brands contributed $81.0 million and net sales of New York Style and Old London contributed $8.4 million to the Company's overall increase. Net sales for the base business increased $0.5 million, with a sales price increase of $13.1 million offset by a $12.6 million unit volume decline.

Gross profit for fiscal 2012 increased 25.6% to $223.3 million from $177.8 million in fiscal 2011. Gross profit expressed as a percentage of net sales increased 2.5 percentage points to 35.2% in fiscal 2012 from 32.7% in fiscal 2011, attributable to a sales mix shift to higher margin products (primarily due to the Culver Specialty Brands acquisition) and pricing gains of $13.1 million, partially offset by commodity and packaging cost increases. Operating income increased 31.3% to $149.0 million in fiscal 2012 from $113.5 million in fiscal 2011.

Net interest expense for fiscal 2012 increased $11.0 million or 30.0% to $47.7 million from $36.7 million in fiscal 2011 attributable to an increase in indebtedness to finance the Culver Specialty Brands acquisition, and an additional $2.8 million of amortization of deferred debt financing costs and bond discount relating to the acquisition financing.

The Company's reported net income under U.S. GAAP was $59.3 million, or $1.20 per diluted share, for fiscal 2012, as compared to reported net income of $50.2 million, or $1.04 per diluted share, for fiscal 2011. The Company's adjusted net income for fiscal 2012 was $66.7 million, and adjusted diluted earnings per share was $1.35, as compared to adjusted net income of $53.1 million and adjusted diluted earnings per share of $1.09 for fiscal 2011.

Adjusted EBITDA, which for fiscal 2012 excludes the impact of transaction costs related to the New York Style and Old London acquisition and for fiscal 2011 excludes the impact of transaction costs related to the Culver Specialty Brands acquisition, increased 28.9% to $169.0 million from $131.1 million.

Guidance

Adjusted EBITDA for fiscal 2013 is expected to be approximately $178.0 million to $182.0 million. Capital expenditures for fiscal 2013 are expected to be approximately $13.0 million. Cash interest expense for fiscal 2013 is expected to be approximately $35.0 million.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, February 14, 2013. The call will be webcast live from B&G Foods' website at www.bgfoods.com under "Investor Relations—Company Overview." The call can also be accessed live over the phone by dialing (888) 455-2263 for U.S. callers or (719) 325-2448 for international callers.

A replay of the call will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the password is 3747979. The replay will be available from February 14, 2013 through February 28, 2013. Investors may also access a web-based replay of the call at the Investor Relations section of B&G Foods' website, www.bgfoods.com.

About Non-GAAP Financial Measures and Items Affecting Comparability

"Adjusted net income," "adjusted diluted earnings per share," "EBITDA" (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and "adjusted EBITDA" (EBITDA as adjusted for acquisition-related transaction costs, which include outside fees and expenses and restructuring and consolidation costs of acquisitions incurred in fiscal 2012 and 2011) 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 GAAP in B&G Foods' consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders' equity and cash flows. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. The Company's non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

The Company uses "adjusted net income" and "adjusted diluted earnings per share," which are calculated as reported net income and reported diluted earnings per share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to reported net income and diluted earnings per share to eliminate the items identified below. 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 charges associated with unrealized gains or losses on the Company's interest rate swap, gains or losses on extinguishment of debt and acquisition-related transaction costs, management does not consider these costs 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 and to net cash provided by operating activities is included below for the fiscal 2012 and 2011, along with the components of EBITDA and adjusted EBITDA. Also included below are reconciliations of the non-GAAP terms adjusted net income and adjusted diluted earnings per share to reported net income and reported diluted earnings per share.

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. Based in Parsippany, New Jersey, B&G Foods' products are marketed under many recognized brands, including Ac'cent, B&G, B&M, Baker's Joy, Brer Rabbit, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril's, Grandma's Molasses, JJ Flats, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Sa-són, Sclafani, Sugar Twin, Trappey's, Underwood, VermontMaid and Wright's. B&G Foods also sells and distributes two branded household products, Static Guard and Kleen Guard.

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 adjusted EBITDA, capital expenditures and cash interest expense for 2013.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" 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 the Company's most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8-K.Investors are cautioned not to place undue reliance on any such forward looking statements, which speak only as of the date they are made.B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

* Please see "About Non-GAAP Financial Measures and Items Affecting Comparability" below for the definition of the terms adjusted net income, adjusted diluted earnings per share, EBITDA and adjusted EBITDA, as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms adjusted net income, adjusted diluted earnings per share, EBITDA and adjusted EBITDA to the most comparable GAAP financial measures.

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)


(Unaudited)

 
 December 29, 2012 December 31, 2011
Assets
Current assets:
Cash and cash equivalents$19,219$16,738
Trade accounts receivable, less allowance for doubtful accounts and discounts of $831 and $723 in 2012 and 201143,35739,476
Inventories89,75782,666
Prepaid expenses and other current assets5,3267,119
Income tax receivable4,2622,529
Deferred income taxes 2,175  1,696 
Total current assets164,096150,224
 
Property, plant and equipment, net104,74661,930
Goodwill267,940262,827
Other intangibles, net637,196634,522
Other assets 17,990  23,420 
Total assets$1,191,968 $1,132,923 
 
Liabilities and Stockholders' Equity
 
Current liabilities:
Trade accounts payable$25,050$24,427
Accrued expenses23,61026,719
Current portion of long-term debt40,3759,750
Dividends payable 15,243  10,971 
Total current liabilities104,27871,867
 
Long-term debt597,314710,357
Other liabilities8,0389,409
Deferred income taxes 121,163  105,743 
Total liabilities830,793897,376
Commitments and contingencies
 
Stockholders' equity:
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 52,560,765 and 47,700,132 issued and outstanding as of December 29, 2012 and December 31, 2011, respectively526477
Additional paid-in capital226,900159,916
Accumulated other comprehensive loss(11,095)(10,430)
Retained earnings 144,844  85,584 
Total stockholders' equity 361,175  235,547 
Total liabilities and stockholders' equity$1,191,968 $1,132,923 

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)


(Unaudited)

 
 Fourth Quarter Ended Year Ended
December 29, 2012 December 31, 2011December 29, 2012 December 31, 2011
 
Net sales$173,706$149,998$633,812$543,866
Cost of goods sold 114,223 100,708 410,469 366,090
Gross profit59,48349,290223,343177,776
 
Operating expenses:
Selling, general and administrative expenses20,00616,54966,21257,618
Amortization expense 2,059 1,766 8,126 6,679
Operating income37,41830,975149,005113,479
 
Other expenses:
Interest expense, net11,81511,82147,66036,675
Loss on extinguishment of debt 10,431  10,431 
Income before income tax expense15,17219,15490,91476,804
Income tax expense 5,613 6,899 31,654 26,561
Net income$9,559$12,255 59,260 50,243
 
Weighted average shares outstanding:
Basic52,15447,71249,23947,856
Diluted52,60248,66549,55748,541
 
Earnings per share:
Basic$0.18$0.26$1.20$1.05
Diluted$0.18$0.25$1.20$1.04
 
Cash dividends declared per share$0.29$0.23$1.10$0.86

B&G Foods, Inc. and Subsidiaries

Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating Activities

(In thousands)


(Unaudited)

 
 Fourth Quarter Ended Year Ended
December 29, 2012 December 31, 2011December 29, 2012December 31, 2011
 
Net income$9,559$12,255$59,260$50,243
Income tax expense5,6136,89931,65426,561
Interest expense, net(1)11,81511,82147,66036,675
Depreciation and amortization5,4104,26518,85316,229
Loss on extinguishment of debt(2) 10,431    10,431   
EBITDA(3)42,82835,240167,858129,708
Acquisition-related transaction costs 1,159  1,418  1,159  1,418 
Adjusted EBITDA(3)43,98736,658169,017131,126
Income tax expense(5,613)(6,899)(31,654)(26,561)
Interest expense, net(1)(11,815)(11,821)(47,660)(36,675)
Acquisition-related transaction costs(1,159)(1,418)(1,159)(1,418)
Deferred income taxes4,32888215,29513,529
Amortization of deferred financing costs and bond discount1,2577515,0282,251
Realized gain on interest rate swap(1)(612)
Reclassification to net interest expense for interest rate swap(1)2,3993,669
Share-based compensation expense8771,4013,7774,098
Excess tax benefits from share-based compensation70(8,031)(1,047)
Changes in assets and liabilities, net of effects of business combinations 15,170  10,717  (4,085) (16,327)
Net cash provided by operating activities$47,032 $32,740 $ Read Full Story

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