Fourth Quarter 2019 Financial Summary:
Full Year 2019 Financial Summary:
Guidance for Full Year Fiscal 2020
_________________
1 Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “adjusted diluted earnings per share,” “adjusted net income,” “EBITDA,” “adjusted EBITDA” and “base business net sales,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures. |
Financial Results for the Fourth Quarter of 2019
Net sales increased
Base business net sales1 for the fourth quarter of 2019 decreased
Net sales of the Company’s spices & seasonings2 increased
Gross profit was
Selling, general and administrative expenses decreased
_________________
2 Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Mrs. Dash and Ac’cent. Excludes net sales of French’s® seasoning mixes, which the Company discontinued during the third quarter of 2018. |
Net interest expense increased
The Company’s net income was
For the fourth quarter of 2019, adjusted EBITDA was
Financial Results for the Full Year Fiscal 2019
Base business net sales for fiscal 2019 decreased
Net sales of Green Giant (including Le Sueur) increased
Gross profit was
Selling, general and administrative expenses decreased
Net interest expense decreased
The Company’s net income was
For fiscal 2019, adjusted EBITDA was
Full Year Fiscal 2020 Guidance
For fiscal 2020, net sales are expected to be approximately
For fiscal 2020, net interest expense is expected to be approximately
Conference Call
A replay of the call will be available two hours after the call and can be accessed by dialing (844) 512-2921 for
About Non-GAAP Financial Measures and Items Affecting Comparability
“Adjusted net income” (net income adjusted for certain items that affect comparability), “adjusted diluted earnings per share,” (diluted earnings 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 before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and “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 sale of assets), non-recurring expenses, gains and losses and the non-cash accounting impact of the Company’s inventory reduction plan) 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 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 and to net cash provided by operating activities, is included below for the fourth quarter and full year 2019 and 2018, 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 income, changes in stockholders’ equity and cash flows.
About
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’ net sales, adjusted EBITDA, adjusted diluted earnings per share, cash interest payment, cash taxes, capital expenditure, depreciation expense, amortization expense and overall expectations for fiscal 2020 and beyond, including our goal of offsetting inflation with pricing and cost savings initiatives and achieving net sales and earnings growth through new product innovation and accretive acquisitions, and our ability to create long-term value for our shareholders. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of
|
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Consolidated Balance Sheets |
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(In thousands, except share and per share data) |
||||||
(Unaudited) |
||||||
|
|
|
|
|
||
|
|
2019 |
|
2018 |
||
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,315 |
|
$ |
11,648 |
Trade accounts receivable, net |
|
|
143,908 |
|
|
151,707 |
Inventories |
|
|
472,187 |
|
|
401,355 |
Prepaid expenses and other current assets |
|
|
25,449 |
|
|
19,988 |
Income tax receivable |
|
|
8,934 |
|
|
1,398 |
Total current assets |
|
|
661,793 |
|
|
586,096 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
304,934 |
|
|
282,553 |
Operating lease right-of-use assets |
|
|
38,698 |
|
|
— |
|
|
|
596,391 |
|
|
584,435 |
Other intangible assets, net |
|
|
1,615,126 |
|
|
1,595,569 |
Other assets |
|
|
3,277 |
|
|
4,202 |
Deferred income taxes |
|
|
7,371 |
|
|
4,940 |
Total assets |
|
$ |
3,227,590 |
|
$ |
3,057,795 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Trade accounts payable |
|
$ |
114,936 |
|
$ |
140,000 |
Accrued expenses |
|
|
55,659 |
|
|
55,660 |
Current portion of operating lease liabilities |
|
|
9,813 |
|
|
— |
Current portion of long-term debt |
|
|
5,625 |
|
|
— |
Income tax payable |
|
|
454 |
|
|
31,624 |
Dividends payable |
|
|
30,421 |
|
|
31,178 |
Total current liabilities |
|
|
216,908 |
|
|
258,462 |
|
|
|
|
|
|
|
Long-term debt |
|
|
1,874,158 |
|
|
1,638,877 |
Deferred income taxes |
|
|
254,339 |
|
|
235,902 |
Long-term operating lease liabilities, net of current portion |
|
|
31,997 |
|
|
— |
Other liabilities |
|
|
37,646 |
|
|
24,505 |
Total liabilities |
|
|
2,415,048 |
|
|
2,157,746 |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
— |
Common stock, |
|
|
640 |
|
|
656 |
Additional paid-in capital |
|
|
— |
|
|
116,339 |
Accumulated other comprehensive loss |
|
|
(31,894) |
|
|
(23,502) |
Retained earnings |
|
|
843,796 |
|
|
806,556 |
Total stockholders’ equity |
|
|
812,542 |
|
|
900,049 |
Total liabilities and stockholders’ equity |
|
$ |
3,227,590 |
|
$ |
3,057,795 |
|
|||||||||||
Consolidated Statements of Operations |
|||||||||||
(In thousands, except per share data) |
|||||||||||
(Unaudited) |
|||||||||||
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||
|
|
|
|
|
|
|
|
||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net sales |
$ |
470,172 |
|
$ |
458,055 |
|
$ |
1,660,414 |
|
$ |
1,700,764 |
Cost of goods sold |
|
375,775 |
|
|
408,123 |
|
|
1,277,290 |
|
|
1,351,264 |
Gross profit |
|
94,397 |
|
|
49,932 |
|
|
383,124 |
|
|
349,500 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
44,480 |
|
|
47,562 |
|
|
160,745 |
|
|
167,389 |
Amortization expense |
|
4,722 |
|
|
4,491 |
|
|
18,543 |
|
|
18,343 |
Gain on sale of assets |
|
— |
|
|
(176,386) |
|
|
— |
|
|
(176,386) |
Operating income |
|
45,195 |
|
|
174,265 |
|
|
203,836 |
|
|
340,154 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
27,721 |
|
|
24,489 |
|
|
98,126 |
|
|
108,334 |
Loss on extinguishment of debt |
|
1,177 |
|
|
9,811 |
|
|
1,177 |
|
|
13,135 |
Other income |
|
(317) |
|
|
(613) |
|
|
(1,159) |
|
|
(3,592) |
Income before income tax expense |
|
16,614 |
|
|
140,578 |
|
|
105,692 |
|
|
222,277 |
Income tax expense |
|
6,355 |
|
|
28,654 |
|
|
29,303 |
|
|
49,842 |
Net income |
$ |
10,259 |
|
$ |
111,924 |
|
$ |
76,389 |
|
$ |
172,435 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
64,045 |
|
|
65,827 |
|
|
65,013 |
|
|
66,145 |
Diluted |
|
64,045 |
|
|
65,934 |
|
|
65,039 |
|
|
66,255 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
1.70 |
|
$ |
1.17 |
|
$ |
2.61 |
Diluted |
$ |
0.16 |
|
$ |
1.70 |
|
$ |
1.17 |
|
$ |
2.60 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
$ |
0.475 |
|
$ |
0.475 |
|
$ |
1.900 |
|
$ |
1.890 |
|
||||||||||||
Items Affecting Comparability |
||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net Income and to Net Cash Provided by Operating Activities |
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(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net income |
|
$ |
10,259 |
|
$ |
111,924 |
|
$ |
76,389 |
|
$ |
172,435 |
Income tax expense |
|
|
6,355 |
|
|
28,654 |
|
|
29,303 |
|
|
49,842 |
Interest expense, net |
|
|
27,721 |
|
|
24,489 |
|
|
98,126 |
|
|
108,334 |
Depreciation and amortization |
|
|
15,192 |
|
|
13,706 |
|
|
58,734 |
|
|
53,639 |
Loss on extinguishment of debt(1) |
|
|
1,177 |
|
|
9,811 |
|
|
1,177 |
|
|
13,135 |
EBITDA(2) |
|
|
60,704 |
|
|
188,584 |
|
|
263,729 |
|
|
397,385 |
Acquisition/divestiture-related and non-recurring expenses(3) |
|
|
8,780 |
|
|
17,227 |
|
|
21,519 |
|
|
26,863 |
Inventory reduction plan impact(4) |
|
|
— |
|
|
29,041 |
|
|
16,382 |
|
|
66,320 |
Amortization of acquisition-related inventory step-up(5) |
|
|
— |
|
|
— |
|
|
891 |
|
|
— |
Gain on sale of assets(6) |
|
|
— |
|
|
(176,386) |
|
|
— |
|
|
(176,386) |
Adjusted EBITDA(2) |
|
|
69,484 |
|
|
58,466 |
|
|
302,521 |
|
|
314,182 |
Income tax expense |
|
|
(6,355) |
|
|
(28,654) |
|
|
(29,303) |
|
|
(49,842) |
Interest expense, net |
|
|
(27,721) |
|
|
(24,489) |
|
|
(98,126) |
|
|
(108,334) |
Acquisition/divestiture-related and non-recurring expenses(3) |
|
|
(8,780) |
|
|
(17,227) |
|
|
(21,519) |
|
|
(26,863) |
Inventory reduction plan impact(4) |
|
|
— |
|
|
(29,041) |
|
|
(16,382) |
|
|
(66,320) |
Amortization of acquisition-related inventory step-up(5) |
|
|
— |
|
|
— |
|
|
(891) |
|
|
— |
Write-off of property, plant and equipment |
|
|
8 |
|
|
832 |
|
|
97 |
|
|
931 |
Deferred income taxes |
|
|
4,793 |
|
|
(17,990) |
|
|
20,415 |
|
|
(1,494) |
Amortization of deferred debt financing costs and bond discount/premium |
|
|
893 |
|
|
872 |
|
|
3,511 |
|
|
5,282 |
Share-based compensation expense |
|
|
(369) |
|
|
(321) |
|
|
2,594 |
|
|
3,025 |
Changes in assets and liabilities, net of effects of business combinations |
|
|
13,222 |
|
|
127,945 |
|
|
(116,413) |
|
|
138,889 |
Net cash provided by operating activities(6) |
|
$ |
45,175 |
|
$ |
70,393 |
|
$ |
46,504 |
|
$ |
209,456 |
__________________
(1) |
Loss on extinguishment of debt for the fourth quarter and fiscal 2019 includes the write-off of deferred debt financing costs of |
(2) |
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 |
|
EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income, net income 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 two 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. |
(3) |
Acquisition/divestiture-related and non-recurring expenses for the fourth quarter and fiscal 2019 of |
(4) |
Inventory reduction plan impact relates to the Company’s 2018 inventory reduction plan. For fiscal 2019, inventory reduction plan impact of |
|
For the fourth quarter of 2018, inventory reduction plan impact of |
|
For fiscal 2018, inventory reduction plan impact of |
(5) |
For fiscal 2019, amortization of acquisition-related inventory step-up relates to the purchase accounting adjustments made to inventory acquired in the Clabber Girl acquisition. |
(6) |
The Company’s divestiture of Pirate Brands during the fourth quarter of 2018 resulted in a gain on sale during 2018 of approximately |
|
||||||||||||
Items Affecting Comparability |
||||||||||||
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share to Net Income |
||||||||||||
(In thousands, except per share data) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net income |
|
$ |
10,259 |
|
$ |
111,924 |
|
$ |
76,389 |
|
$ |
172,435 |
Loss on extinguishment of debt, net of tax(1) |
|
|
889 |
|
|
7,611 |
|
|
889 |
|
|
10,190 |
Acquisition/divestiture-related and non-recurring expenses, net of tax(2) |
|
|
6,629 |
|
|
13,278 |
|
|
16,247 |
|
|
20,754 |
Inventory reduction plan impact, net of tax(3) |
|
|
— |
|
|
22,530 |
|
|
12,368 |
|
|
51,451 |
Amortization of acquisition-related inventory step-up, net of tax(4) |
|
|
— |
|
|
— |
|
|
673 |
|
|
— |
Gain on sale of assets, net of tax(5) |
|
|
— |
|
|
(133,172) |
|
|
— |
|
|
(133,172) |
Tax true-ups(6) |
|
|
— |
|
|
121 |
|
|
— |
|
|
650 |
Adjusted net income |
|
$ |
17,777 |
|
$ |
22,292 |
|
$ |
106,566 |
|
$ |
122,308 |
Adjusted diluted earnings per share |
|
$ |
0.28 |
|
$ |
0.34 |
|
$ |
1.64 |
|
$ |
1.85 |
__________________
(1) |
Loss on extinguishment of debt for the fourth quarter and fiscal 2019 includes the write-off of deferred debt financing costs and unamortized discount of |
(2) |
Acquisition/divestiture-related and non-recurring expenses for the fourth quarter and fiscal 2019 primarily includes acquisition and integration expenses for the Clabber Girl acquisition and transition expenses for the Pirate Brands sale, and severance and other expenses primarily relating to a workforce reduction. Acquisition/divestiture-related and non-recurring expenses for the fourth quarter and fiscal 2018 primarily includes transition expenses for the Pirate Brands sale and acquisition and integration expenses for the McCann’s, Green Giant, spices & seasonings, |
(3) |
Inventory reduction plan impact relates to the Company’s 2018 inventory reduction plan. For fiscal 2019, inventory reduction plan impact of |
|
For the fourth quarter of 2018, inventory reduction plan impact of |
|
For fiscal 2018, inventory reduction plan impact of |
(4) |
For fiscal 2019, amortization of acquisition-related inventory step-up, net of tax relates to the purchase accounting adjustments made to inventory acquired in the Clabber Girl acquisition. |
(5) |
During the fourth quarter of 2018, the Company completed the Pirate Brands sale. The sale resulted in a gain of |
(6) |
Tax true-ups for the fourth quarter and fiscal 2018 reflects prior year foreign tax expense true-up and impact of enacted state rate changes. |
|
||||||||||||
Items Affecting Comparability |
||||||||||||
Reconciliation of Base Business |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Fourth Quarter Ended |
|
Fiscal Year Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
Net sales |
|
$ |
470,172 |
|
$ |
458,055 |
|
$ |
1,660,414 |
|
$ |
1,700,764 |
Net sales from acquisitions(1) |
|
|
(25,183) |
|
|
— |
|
|
(59,455) |
|
|
— |
Net sales of non-branded IQF bulk rice products(2) |
|
|
— |
|
|
(188) |
|
|
— |
|
|
(1,494) |
Net sales from divested and discontinued brands(3) |
|
|
— |
|
|
(2,046) |
|
|
— |
|
|
(76,091) |
Base business net sales(4) |
|
$ |
444,989 |
|
$ |
455,821 |
|
$ |
1,600,959 |
|
$ |
1,623,179 |
__________________
(1) |
For the fourth quarter of 2019 and fiscal 2019, includes net sales for Clabber Girl. For fiscal 2019, also includes six and one-half months of net sales for McCann’s in 2019, for which there was no comparable period of net sales in fiscal 2018. McCann’s was acquired on |
(2) |
Reflects net sales of the Company’s non-branded individually quick frozen (IQF) bulk rice products, which is a product line the Company acquired as part of the Green Giant acquisition, and which the Company is excluding from net sales for the purposes of calculating base business net sales because the Company does not consider the non-branded IQF bulk rice products to be part of its core business or material. The Company discontinued the sale of non-branded IQF bulk rice products during the fourth quarter of 2018. |
(3) |
Reflects |
(4) |
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, (2) net sales of discontinued or divested brands and (3) net sales of the Company’s IQF bulk rice products, see footnote 2 above. 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. |
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The definition of base business net sales set forth above, as it relates to acquisitions, was modified during the third quarter of 2019 from the definition the Company had most recently used. Under the Company’s most recent prior definition of base business net sales, for each acquisition, the excluded period started at the beginning of the most recent fiscal period being compared and ended on the last day of the quarter in which the first anniversary of the date of acquisition occurred. The Company believes that it is more useful to measure base business net sales on a partial quarter basis based upon the actual period of comparable ownership instead of adjusting for an entire quarter. |
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Investor Relations:
ICR, Inc.
Dara Dierks
866.211.8151
Media Relations:
ICR, Inc.
Matt Lindberg
203.682.8214
Source:
Investor Relations:
ICR, Inc.
Dara Dierks
866.211.8151
Media Relations:
ICR, Inc.
Matt Lindberg
203.682.8214