— Delivers Strong Net Sales, Earnings Per Share and Adjusted EBITDA1 Growth —
Fourth Quarter 2017 Financial Highlights (vs. Fourth Quarter 2016):
Full Year 2017 Financial Highlights (vs. Full Year 2016):
Guidance for Full Year Fiscal 2018
Mr. Cantwell continued, “In addition to generating company record net
sales, we also generated company record adjusted EBITDA of
“Our net sales of Green Giant frozen products increased by more
than 11% for the year, making Green Giant one of the fastest
growing brands in the frozen foods aisle, while our spices & seasonings
acquisition generated more than
“We believe we are well positioned to continue to grow in 2018 and
beyond. Our largest brands contribute more than 75% of our net sales and
are in categories that we believe have growth prospects in excess of the
broader packaged foods industry. We are addressing the modest cost
headwinds that we are facing, including increased freight and
transportation costs, with price increases that we are implementing
across our portfolio, and with cost cutting initiatives. We expect to
deliver strong net cash from operations and free cash flow in 2018 and
remain committed to our longstanding dividend policy, which resulted in
nearly
Financial Results for the Fourth Quarter of 2017
Net sales increased by
Base business net sales1 for the fourth quarter of 2017 were
essentially flat at
Gross profit was
Selling, general and administrative expenses were
Net interest expense was
The Company’s reported net income under U.S. generally accepted
accounting principles (GAAP) was
The Company’s adjusted net income for the fourth quarter of 2017, which
excludes acquisition-related and other non-recurring expenses, as well
as a benefit on the re-measurement of deferred tax liabilities,
including acquisition-related deferred tax liabilities, was
The Company’s adjusted EBITDA, which excludes acquisition-related and
other non-recurring expenses, was
Financial Results for the Full Year Fiscal 2017
Net sales increased by
Base business net sales for fiscal 2017 decreased by
approximately
The spices & seasonings business and
Gross profit increased
Selling, general and administrative expenses were
Net interest expense was
The Company’s reported net income under GAAP was
The Company’s adjusted net income for fiscal 2017, which excludes
acquisition-related and other non-recurring expenses, as well as a
benefit on the re-measurement of deferred tax liabilities, including
acquisition-related deferred tax liabilities, was
The Company’s adjusted EBITDA, which excludes acquisition-related and
other non-recurring expenses, was
Full Year Fiscal 2018 Guidance
For fiscal 2018, net sales is expected to be approximately
Based upon the Company’s expected adjusted EBITDA of 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 U.S. callers or (412) 317-6671
for international callers; the password is 6165586. The replay will be
available from
About Non-GAAP Financial Measures and Items Affecting Comparability
“Adjusted net income,” “adjusted diluted earnings per share,” “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 brands), “EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt), “adjusted EBITDA” (EBITDA as adjusted for cash and non-cash acquisition-related, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses and amortization of acquired inventory fair value step-up) and other non-recurring expenses, gains and losses; intangible asset impairment charges and related asset write-offs; gains and losses on sale of assets; and distribution restructuring expenses) and “net debt” (total long-term debt less cash and cash equivalents) 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,” “adjusted diluted earnings per share,” and “base business net sales,” which are calculated as reported net income, reported diluted earnings per share and reported net sales adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to reported net income, diluted earnings per share and net sales to eliminate the items identified 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. The Company uses “net debt” because the Company believes net debt provides useful information to the Company’s management and investors about the Company’s financial position, capital structure and leverage.
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 of 2017 and 2016, 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, working capital, capital expenditure, inventory, dividend
payment, net debt and overall expectations for fiscal 2018. 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. Factors that may affect actual
results include, without limitation: the Company’s substantial leverage;
the effects of rising costs for the Company’s raw materials, packaging
and ingredients; 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 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; tax reform and legislation, including the effects of the U.S.
Tax Cuts and Jobs Act; the Company’s ability to access the credit
markets and the Company’s borrowing costs and credit ratings, which may
be influenced by credit markets generally and the credit ratings of the
Company’s competitors; unanticipated expenses, including, without
limitation, litigation or legal settlement expenses; the effects of
currency movements of the Canadian dollar and the Mexican peso as
compared to the U.S. dollar; future impairments of the Company’s
goodwill and intangible assets; the Company’s ability to successfully
implement a new enterprise resource planning (ERP) system; the Company’s
ability to protect information systems against, or effectively respond
to, a cybersecurity incident or other disruption; the Company’s
sustainability initiatives and changes to environmental laws and
regulations; and other factors that affect the food industry generally.
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
___________________________
1 | Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “adjusted net income,” “adjusted diluted earnings per share,” “base business net sales,” “EBITDA,” “adjusted EBITDA” and “net debt,” as well as information concerning certain items affecting comparability and historical reconciliations of the non-GAAP terms to the most comparable GAAP financial measures. | |
2 |
The Company acquired Back to Nature, which includes the Back to Nature and SnackWell’s brands, on October 2, 2017. In this earnings release, this acquisition is referred to as the Back to Nature acquisition and references to Back to Nature include both Back to Nature and SnackWell’s. |
|
3 | In May 2014, the Financial Accounting Standards Board (FASB) issued authoritative guidance related to new accounting requirements for the recognition of revenue from contracts with customers. The Company adopted this guidance and the related amendments as of the beginning of our fiscal 2018, applying the full retrospective transition approach to all contracts. Based on the Company’s comprehensive assessment of the new guidance, the Company has concluded that the adoption will not have a significant impact to the Company’s core revenue generating activities. However, the adoption will result in a change in presentation of certain trade and consumer promotion expenses, specifically in-store display incentives also referred to as marketing development funds. In-store display incentives or marketing development funds were previously recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations. Upon the adoption of the new guidance, this expense will not meet the specific criteria within the new guidance of providing a “distinct” good or service, and therefore, will be required to be presented as a reduction of the Company’s net sales. The Company currently anticipates that the impact of this change will result in a reduction of net sales and selling, general and administrative expenses by approximately $20 million during 2018, the first year of adoption, with no impact to net income. | |
B&G Foods, Inc. and Subsidiaries | ||||||||
Consolidated Balance Sheets | ||||||||
(In thousands, except share and per share data) | ||||||||
(Unaudited) | ||||||||
December 30, | December 31, | |||||||
2017 | 2016 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 206,506 | $ | 28,833 | ||||
Trade accounts receivable, net | 141,392 | 119,265 | ||||||
Inventories | 501,849 | 356,590 | ||||||
Prepaid expenses and other current assets | 20,054 | 26,399 | ||||||
Income tax receivable | 16,794 | 10,787 | ||||||
Total current assets | 886,595 | 541,874 | ||||||
Property, plant and equipment, net of accumulated depreciation of $200,664 and $169,474 | 272,192 | 245,344 | ||||||
Goodwill | 649,292 | 614,278 | ||||||
Other intangibles, net | 1,748,220 | 1,629,482 | ||||||
Other assets | 1,617 | 4,625 | ||||||
Deferred income taxes | 3,122 | 7,902 | ||||||
Total assets | $ | 3,561,038 | $ | 3,043,505 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 122,358 | $ | 98,033 | ||||
Accrued expenses | 48,067 | 62,393 | ||||||
Current portion of long-term debt | — | 10,515 | ||||||
Income tax payable | 139 | 3,875 | ||||||
Dividends payable | 30,922 | 30,879 | ||||||
Total current liabilities | 201,486 | 205,695 | ||||||
Long-term debt | 2,217,574 | 1,715,268 | ||||||
Other liabilities | 24,881 | 21,405 | ||||||
Deferred income taxes | 236,278 | 315,480 | ||||||
Total liabilities | 2,680,219 | 2,257,848 | ||||||
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; 66,499,044 and 66,406,314 shares issued and outstanding as of December 30, 2017 and December 31, 2016 | 665 | 664 | ||||||
Additional paid-in capital | 266,789 | 387,699 | ||||||
Accumulated other comprehensive loss | (20,756 | ) | (19,364 | ) | ||||
Retained earnings | 634,121 | 416,658 | ||||||
Total stockholders’ equity | 880,819 | 785,657 | ||||||
Total liabilities and stockholders’ equity | $ | 3,561,038 | $ | 3,043,505 | ||||
B&G Foods, Inc. and Subsidiaries | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||||||
December 30, | December 31, | December 30, | December 31, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 473,684 | $ | 413,656 | $ | 1,668,056 | $ | 1,391,257 | |||||||
Cost of goods sold | 372,493 | 306,750 | 1,205,809 | 943,295 | |||||||||||
Gross profit | 101,191 | 106,906 | 462,247 | 447,962 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative expenses | 58,990 | 58,770 | 205,234 | 174,759 | |||||||||||
Amortization expense | 4,609 | 3,764 | 17,611 | 13,803 | |||||||||||
Impairment of intangible assets | — | — | — | 5,405 | |||||||||||
Operating income | 37,592 | 44,372 | 239,402 | 253,995 | |||||||||||
Other income and expenses: | |||||||||||||||
Interest expense, net | 26,765 | 18,921 | 91,784 | 74,456 | |||||||||||
Loss on extinguishment of debt | — | — | 1,163 | 2,836 | |||||||||||
Other expense (income) | 1,258 | 1,810 | (1,607 | ) | (363 | ) | |||||||||
Income before income tax (benefit) expense | 9,569 | 23,641 | 148,062 | 177,066 | |||||||||||
Income tax (benefit) expense | (120,339 | ) | 10,073 | (69,401 | ) | 67,641 | |||||||||
Net income | $ | 129,908 | $ | 13,568 | $ | 217,463 | $ | 109,425 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 66,497 | 66,407 | 66,487 | 63,203 | |||||||||||
Diluted | 66,687 | 66,666 | 66,706 | 63,420 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 1.95 | $ | 0.20 | $ | 3.27 | $ | 1.73 | |||||||
Diluted | $ | 1.95 | $ | 0.20 | $ | 3.26 | $ | 1.73 | |||||||
Cash dividends declared per share | $ | 0.465 | $ | 0.465 | $ | 1.86 | $ | 1.73 | |||||||
B&G Foods, Inc. and Subsidiaries | ||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net Income and to Net Cash Provided by Operating | ||||||||||||||||
Activities | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
December 30, | December 31, | December 30, | December 31, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income | $ | 129,908 | $ | 13,568 | $ | 217,463 | $ | 109,425 | ||||||||
Income tax (benefit) expense | (120,339 | ) | 10,073 | (69,401 | ) | 67,641 | ||||||||||
Interest expense, net | 26,765 | 18,921 | 91,784 | 74,456 | ||||||||||||
Depreciation and amortization | 12,888 | 10,453 | 49,172 | 37,266 | ||||||||||||
Loss on extinguishment of debt | — | — | 1,163 | 2,836 | ||||||||||||
EBITDA(1) | 49,222 | 53,015 | 290,181 | 291,624 | ||||||||||||
Acquisition-related and other non-recurring expenses | 15,604 | 7,048 | 35,745 | 17,523 | ||||||||||||
Amortization of acquisition-related inventory step-up | 830 | 2,350 | 2,380 | 5,424 | ||||||||||||
Impairment of intangible assets | — | — | — | 5,405 | ||||||||||||
Loss on disposal of inventory | 3,287 | — | 3,287 | 791 | ||||||||||||
Loss on sale of assets | — | — | 1,608 | — | ||||||||||||
Distribution restructuring expenses | — | — | — | 1,273 | ||||||||||||
Adjusted EBITDA(1) | 68,943 | 62,413 | 333,201 | 322,040 | ||||||||||||
Income tax benefit (expense) | 120,339 | (10,073 | ) | 69,401 | (67,641 | ) | ||||||||||
Interest expense, net | (26,765 | ) | (18,921 | ) | (91,784 | ) | (74,456 | ) | ||||||||
Acquisition-related and other non-recurring expenses | (15,604 | ) | (7,048 | ) | (35,745 | ) | (17,523 | ) | ||||||||
Distribution restructuring expenses | — | — | — | (1,273 | ) | |||||||||||
Write-off of property, plant and equipment | 101 | 337 | 208 | 337 | ||||||||||||
Deferred income taxes | (115,604 | ) | 10,635 | (80,525 | ) | 56,190 | ||||||||||
Amortization of deferred financing costs and bond discount | 1,549 | 1,325 | 5,812 | 5,426 | ||||||||||||
Amortization of acquisition-related inventory step-up | (830 | ) | (2,350 | ) | (2,380 | ) | (5,424 | ) | ||||||||
Share-based compensation expense | 331 | 1,341 | 4,615 | 5,798 | ||||||||||||
Excess tax benefits from share-based compensation | — | — | — | (343 | ) | |||||||||||
Changes in assets and liabilities, net of effects of business combinations | (2,198 | ) | 59,224 | (165,004 | ) | 66,530 | ||||||||||
Net cash provided by operating activities | $ | 30,262 | $ | 96,883 | $ | 37,799 | $ | 289,661 | ||||||||
______________________________________
(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 our 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 our consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows. We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt. We define adjusted EBITDA as EBITDA adjusted for cash and non-cash acquisition-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses and amortization of acquired inventory fair value step-up, and gains and losses on the sale of assets) and other non-recurring expenses, gains and losses; intangible asset impairment charges and related asset write offs; and distribution restructuring expenses. Management believes that it is useful to eliminate net interest expense, income taxes, depreciation and amortization, loss on extinguishment of debt, acquisition-related and other non-recurring expenses, gains and losses, non-cash intangible asset impairment charges and related asset write offs, and distribution restructuring expenses 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 and adjusted EBITDA in our business operations to, among other things, 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 and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures. As a result, internal management reports used 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, 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 costs and expenses for depreciation and amortization, interest and related expenses, loss on extinguishment of debt, acquisition-related and other non-recurring expenses, gains and losses, income taxes, intangible asset impairment charges and related asset write offs, and distribution restructuring expenses. 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 our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts. | ||
B&G Foods, Inc. and Subsidiaries | ||||||||||||||
Items Affecting Comparability — Reconciliation of Adjusted Information to GAAP Information | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
(Unaudited) | ||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||
December 30, | December 31, | December 30, | December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||
Reported net income | $ | 129,908 | $ | 13,568 | $ | 217,463 | $ | 109,425 | ||||||
Non-recurring adjustment to deferred income taxes(1) | (109,641 | ) | — | (109,641 | ) | 881 | ||||||||
Loss on extinguishment of debt, net of tax(2) | 120 | — | 847 | 1,770 | ||||||||||
Acquisition-related and other non-recurring expenses, net of tax(3) | 13,915 | 4,399 | 26,497 | 10,934 | ||||||||||
Distribution restructuring expenses, net of tax(4) | — | — | — | 794 | ||||||||||
Acquisition-related inventory step-up, net of tax(5) | 765 | 1,466 | 1,733 | 3,385 | ||||||||||
Impairment of intangible assets, net of tax(6) | — | — | — | 3,373 | ||||||||||
Loss on disposal of inventory, net of tax(6) | 2,393 | — | 2,393 | 494 | ||||||||||
Loss on sale of assets, net of tax(7) | 166 | — | 1,171 | — | ||||||||||
Adjusted net income | $ | 37,626 | $ | 19,433 | $ | 140,463 | $ | 131,056 | ||||||
Adjusted diluted earnings per share | $ | 0.57 | $ | 0.29 | $ | 2.12 | $ | 2.07 | ||||||
_________________________________
(1) |
Non-recurring adjustment to deferred income taxes for the fourth quarter and fiscal 2017 relate to the revaluation of our opening deferred income taxes as a result of the recently enacted U.S. Tax Cuts and Jobs Act as if it had been enacted on January 1, 2017. Non-recurring adjustment to deferred income taxes for fiscal 2016 relates to a true-up of deferred income taxes resulting from our decision during the second quarter of 2016 to discontinue the Rickland Orchards brand and the related impairment of intangible assets. |
|
(2) | Loss on extinguishment of debt for the fourth quarter 2017 includes the tax impact recorded as a result of our effective tax rate change. Loss on extinguishment of debt for fiscal 2017 includes the write-off of deferred debt financing costs and unamortized discount of $0.9 million and $0.2 million, respectively, relating to the repayment of all outstanding borrowings under the tranche A term loans and less than $0.1 million relating to the refinancing of our tranche B term loans. Loss on extinguishment of debt for fiscal 2016 includes the write-off of deferred debt financing costs and unamortized discount of $2.2 million and $0.6 million, respectively, relating to the repayment of $40.1 million aggregate principal amounts of our tranche A term loans and $109.9 million aggregate principal amount of our tranche B term loans. | |
(3) |
Acquisition-related and other non-recurring expenses for the fourth quarter and fiscal 2017 primarily include acquisition and integration expenses for the Green Giant, spices & seasonings, Victoria and Back to Nature acquisitions, severance and hiring costs, a non-recurring interest charge relating to the refinancing of our credit agreement and a non-recurring startup surcharge paid to a co-packer. |
|
(4) | Distribution restructuring expenses for fiscal 2016 includes expenses relating to our transitioning of the operations of our three primary shelf-stable distribution centers and a new fourth primary shelf-stable distribution center in the United States to a third party logistics provider. | |
(5) |
Acquisition-related inventory step-up for the fourth quarter and fiscal 2017 relates to the purchase accounting adjustments made to the finished goods inventory acquired in the Back to Nature and spices & seasonings acquisitions. Acquisition-related inventory step-up for the fourth quarter and fiscal 2016 relates to the purchase accounting adjustments made to the finished goods inventory acquired in the spices & seasonings acquisition. |
|
(6) |
During the fourth quarter of 2017, we recorded a loss on disposal of inventory of $3.3 million. During the second quarter of 2016, we discontinued the Rickland Orchards brand because there was not sufficient demand to warrant continued production. Accordingly, we wrote off the related intangible assets and recorded non-cash impairment charges to amortizable trademarks and customer relationship intangibles of $4.5 million and $0.9 million, respectively, which are recorded in “Impairment of intangible assets” in our consolidated statement of operations for fiscal 2016. We also recorded a charge to cost of goods sold of approximately $0.8 million in connection with the write-off of raw materials and finished goods inventory used for the Rickland Orchards brand. |
|
(7) |
During 2017, we sold to a third-party co-packer our Le Sueur, Minnesota research center, including the seed technology assets, property, plant and equipment. We acquired the research center and related assets on November 2, 2015, as part of the Green Giant acquisition. The sale resulted in a $1.6 million loss on sale of assets. |
|
B&G Foods, Inc. and Subsidiaries | ||||||||||||||||
Items Affecting Comparability — Reconciliation of Base Business Net Sales to Reported Net Sales | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
December 30, | December 31, | December 30, | December 31, | |||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Reported net sales | $ | 473,684 | $ | 413,656 | $ | 1,668,056 | $ | 1,391,257 | ||||||||
Net sales from acquisitions(1) | (92,794 | ) | (31,437 | ) | (323,794 | ) | (31,437 | ) | ||||||||
Net sales of Rickland Orchards(2) | — | — | — | (528 | ) | |||||||||||
Base business net sales (3) | $ | 380,890 | $ | 382,219 | $ | 1,344,262 | $ | 1,359,292 | ||||||||
______________________________
(1) |
Reflects all net sales for Victoria and the spices & seasonings business for each period presented and net sales for Back to Nature for the fourth quarter and fiscal 2017. Back to Nature were acquired on October 2, 2017, Victoria was acquired on December 2, 2016, and the spices & seasonings business was acquired on November 21, 2016. |
|
(2) |
Reflects all net sales of Rickland Orchards for each period presented. Rickland Orchards was discontinued during the second quarter of 2016. |
|
(3) | Base business net sales is a non-GAAP financial measure used by management to measure operating performance. We define base business net sales as our net sales excluding (1) the impact of acquisitions until at least one full quarter of net sales from such acquisitions are included in both comparable periods and (2) net sales of discontinued brands. The portion of current period net sales attributable to recent acquisitions for which there is not at least one full quarter of net sales 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 last day of the quarter in which the first anniversary of the date of acquisition occurs, and the period from the date of acquisition to the end of the quarter in which the acquisition occurred. For discontinued brands, the entire amount of net sales is excluded from each fiscal period being compared. Management has included this financial measure because it provides useful and comparable trend information regarding the results of our business without the effect of the timing of acquisitions and the effect of discontinued brands. | |
The definition of base business net sales set forth above, as it relates to acquisitions, has been modified from the definition the Company had used previously. Under the Company’s previous 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 first anniversary of the acquisition date. The Company believes that it is more useful to measure base business net sales on a full quarter basis. |
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Source:
Investor Relations:
ICR, Inc.
Dara Dierks, 866.211.8151
or
Media
Relations:
ICR, Inc.
Matt Lindberg, 203.682.8214