Summary
|
|
|
Fourth Quarter of 2023
|
|
Fiscal Year 2023
|
|
(In millions, except per share data)
|
|
|
Change vs.
|
|
|
|
Change vs.
|
|
|
|
Amount
|
|
Q4 2022
|
|
Amount
|
|
FY 2022
|
|
Net Sales
|
|
$
|
578.1
|
|
|
(7.2
|
)
|
%
|
|
$
|
2,062.3
|
|
|
(4.7
|
)
|
%
|
|
Base Business Net Sales (1)
|
|
$
|
562.3
|
|
|
(2.3
|
)
|
%
|
|
$
|
1,997.2
|
|
|
(1.5
|
)
|
%
|
|
Diluted EPS
|
|
$
|
0.03
|
|
|
(91.2
|
)
|
%
|
|
$
|
(0.89
|
)
|
|
nm
|
|
%
|
|
Adj. Diluted EPS (1)
|
|
$
|
0.30
|
|
|
(25.0
|
)
|
%
|
|
$
|
0.99
|
|
|
(8.3
|
)
|
%
|
|
Net Income (Loss)
|
|
$
|
2.6
|
|
|
(89.4
|
)
|
%
|
|
$
|
(66.2
|
)
|
|
nm
|
|
%
|
|
Adj. Net Income (1)
|
|
$
|
23.5
|
|
|
(18.7
|
)
|
%
|
|
$
|
73.9
|
|
|
(3.1
|
)
|
%
|
|
Adj. EBITDA (1)
|
|
$
|
86.8
|
|
|
(7.3
|
)
|
%
|
|
$
|
318.0
|
|
|
5.7
|
|
%
|
Guidance for Full Year Fiscal 2024
- Net sales range of $1.975 billion to $2.020 billion.
- Adjusted EBITDA range of $305 million to $325 million.
- Adjusted diluted earnings per share range of $0.80 to $1.00.
Commenting on the results, Casey Keller, President and Chief Executive Officer of B&G Foods, stated, “B&G Foods’ fourth quarter and fiscal 2023 results demonstrated strong progress, with improved margins, stabilizing volumes, stronger cash flows, and a reduction in leverage. We further completed the divestiture of Green Giant U.S. canned vegetables to focus and strengthen the future portfolio.”
Financial Results for the Fourth Quarter of 2023
Net sales for the fourth quarter of 2023 decreased $45.1 million, or 7.2%, to $578.1 million from $623.2 million for the fourth quarter of 2022. The decrease was primarily attributable to a decrease in unit volume due to the divestitures of the Green Giant U.S. shelf-stable product line and Back to Nature, a decrease in net pricing and the negative impact of foreign currency. Net sales of Back to Nature, which the Company divested on January 3, 2023, and therefore not part of the Company’s fiscal 2023 results, were $11.9 million during the fourth quarter of 2022(2). Net sales of the Green Giant U.S. shelf-stable product line, which the Company divested on November 8, 2023, were $19.9 million lower in the fourth quarter of 2023 compared to the fourth quarter of 2022, primarily as a result of the divestiture.
Base business net sales for the fourth quarter of 2023 decreased $13.3 million, or 2.3%, to $562.3 million from $575.6 million for the fourth quarter of 2022. The decrease in base business net sales was driven by a decrease in net pricing and the impact of product mix of $15.9 million, or 2.8% of base business net sales (largely driven by a decrease in the Company’s Crisco pricing consistent with the Company’s Crisco pricing model as the Company’s costs for oil declined), and the negative impact of foreign currency of $0.3 million, partially offset by an increase in unit volume of $2.9 million.
Net sales of Clabber Girl increased $8.2 million, or 26.3%; net sales of Maple Grove Farms increased $0.7 million, or 3.4%; and net sales of the Company’s spices & seasonings(3) increased $0.7 million, or 0.8%. Net sales of Crisco decreased $10.6 million, or 8.7%; net sales of Green Giant (including Le Sueur but excluding net sales of the Green Giant U.S. shelf-stable product line) decreased $5.2 million, or 4.4%; net sales of Cream of Wheat decreased $2.2 million, or 9.0%; and net sales of Ortega decreased $0.3 million, or 1.0%, for the fourth quarter of 2023, as compared to the fourth quarter of 2022. Base business net sales of all other brands in the aggregate decreased $4.6 million, or 3.5%, for the fourth quarter of 2023, as compared to the fourth quarter of 2022.
Gross profit was $125.2 million for the fourth quarter of 2023, or 21.7% of net sales. Adjusted gross profit(1), which excludes the negative impact of $1.6 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the fourth quarter of 2023, was $126.8 million, or 21.9% of net sales. Gross profit was $126.1 million for the fourth quarter of 2022, or 20.2% of net sales. Adjusted gross profit, which excludes the negative impact of $2.5 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the fourth quarter of 2022, was $128.6 million, or 20.6% of net sales.
The improvement in gross profit as a percentage of net sales was driven by an increase in net pricing relative to input costs as compared to the fourth quarter of 2022, the moderation of input cost inflation, lower transportation and warehousing costs, and lower depreciation expense. Beginning in the fourth quarter of 2022, the Company has realized the benefits of previously announced list price increases, which, together with additional list price increases in 2023, partially offset by certain list price decreases, contributed to the Company’s recovery in gross profit as a percentage of net sales during the fourth quarter of 2023.
Selling, general and administrative expenses increased $1.3 million, or 2.7%, to $53.2 million for the fourth quarter of 2023 from $51.9 million for the fourth quarter of 2022. The increase was composed of increases in general and administrative expenses of $5.8 million and consumer marketing expenses of $0.9 million, partially offset by decreases in warehousing expenses of $2.6 million, selling expenses of $2.3 million and acquisition/divestiture-related and non-recurring expenses of $0.5 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.9 percentage points to 9.2% for the fourth quarter of 2023, as compared to 8.3% for the fourth quarter of 2022.
In connection with the Company’s sale of assets relating to the Green Giant U.S. shelf-stable product line, which was completed during the fourth quarter of 2023, the Company recorded a loss on sale of assets of $137.7 million during fiscal 2023, of which $132.9 million was recorded during the third quarter and $4.8 million was recorded during the fourth quarter of 2023.
During the fourth quarter of 2023, the Company recorded pre-tax, non-cash impairment charges of $20.5 million related to intangible trademark assets for the Baker’s Joy, Molly McButter, Sugar Twin, and New York Flatbreads brands. The Company partially impaired the Baker’s Joy and Sugar Twin brands, and the Company fully impaired the Molly McButter and New York Flatbreads brands.
Net interest expense increased $3.9 million, or 10.8%, to $40.2 million for the fourth quarter of 2023 from $36.3 million for the fourth quarter of 2022. The increase was primarily attributable to higher interest rates on the Company’s long-term debt and a $0.5 million loss on extinguishment of debt, partially offset by a reduction in average long‑term debt outstanding as compared to the fourth quarter of 2022.
The Company’s net income was $2.6 million, or $0.03 per diluted share, for the fourth quarter of 2023, compared to net income of $24.3 million, or $0.34 per diluted share, for the fourth quarter of 2022. The decrease in net income and diluted earnings per share were primarily attributable to the Green Giant U.S. shelf-stable and Back to Nature divestitures, pre-tax, non-cash impairment charges of $20.5 million related to intangible trademark assets and an increase in interest expense. Diluted earnings per share was also negatively impacted by an increase in diluted weighted average shares outstanding. The Company’s adjusted net income for the fourth quarter of 2023 was $23.5 million, or $0.30 per adjusted diluted share, compared to adjusted net income of $28.9 million, or $0.40 per adjusted diluted share, for the fourth quarter of 2022. The decrease in adjusted net income and adjusted diluted earnings per share were primarily attributable to the Green Giant U.S. shelf-stable and Back to Nature divestitures and an increase in interest expense. Adjusted diluted earnings per share was also negatively impacted by an increase in diluted weighted average shares outstanding.
For the fourth quarter of 2023, adjusted EBITDA was $86.8 million, a decrease of $6.8 million, or 7.3%, compared to $93.6 million for the fourth quarter of 2022. The decrease in adjusted EBITDA was primarily attributable to the Green Giant U.S. shelf-stable and Back to Nature divestitures. Adjusted EBITDA as a percentage of net sales was 15.0% for the fourth quarter of 2023, compared to 15.0% for the fourth quarter of 2022.
Financial Results for Full Year Fiscal 2023
Net sales for fiscal 2023 decreased $100.7 million, or 4.7%, to $2,062.3 million from $2,163.0 million for fiscal 2022. The decrease was primarily attributable to the Back to Nature divestiture, the Green Giant U.S. shelf‑stable divestiture, and a decrease in unit volume and the negative impact of foreign currency, which were partially offset by an increase in net pricing and the impact of product mix. Net sales of Back to Nature, which the Company divested on January 3, 2023, and therefore not part of the Company’s fiscal 2023 results, were $46.3 million during fiscal 2022(2). Net sales of the Green Giant U.S. shelf-stable product line, which the Company divested on November 8, 2023, were $24.6 million lower in fiscal 2023 compared to fiscal 2022, primarily due to the divestiture.
Base business net sales for fiscal 2023 decreased $30.0 million, or 1.5%, to $1,997.2 million from $2,027.2 million for fiscal 2022. The decrease in base business net sales was driven by a decrease in unit volume of $118.2 million and the negative impact of foreign currency of $5.1 million, partially offset by an increase in net pricing and the impact of product mix of $93.3 million, or 4.6% of base business net sales.
Net sales of Clabber Girl increased $31.1 million, or 32.1%; net sales of the Company’s spices & seasonings(3) increased $8.1 million, or 2.2%; and net sales of Maple Grove Farms increased $2.4 million, or 2.9%, in fiscal 2023 as compared to fiscal 2022. Net sales of Crisco decreased $38.2 million, or 10.3%; net sales of Green Giant (including Le Sueur and excluding net sales of the Green Giant U.S. shelf-stable product line) decreased $28.7 million, or 6.6%; net sales of Ortega decreased $6.4 million, or 4.1%; and net sales of Cream of Wheat decreased $2.9 million, or 3.6%, in fiscal 2023, as compared to fiscal 2022. Base business net sales of all other brands in the aggregate increased $4.6 million, or 1.0%, for fiscal 2023, as compared to fiscal 2022.
Gross profit was $455.5 million for fiscal 2023, or 22.1% of net sales. Adjusted gross profit(1), which excludes the negative impact of $2.9 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during fiscal 2023, was $458.4 million, or 22.2% of net sales. Gross profit was $409.6 million for fiscal 2022, or 18.9% of net sales. Adjusted gross profit, which excludes the negative impact of $9.1 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during fiscal 2022, was $418.7 million, or 19.4% of net sales.
The improvements in gross profit and gross profit as a percentage of net sales were driven by an increase in net pricing relative to input costs as compared to fiscal 2022, the moderation of input cost inflation, lower transportation and warehousing costs, and lower depreciation expense. Beginning in the fourth quarter of 2022, the Company has realized the benefits of previously announced list price increases, which, together with additional list price increases in 2023, partially offset by certain list price decreases, contributed to the Company’s recovery in gross profit and gross profit as a percentage of net sales during fiscal 2023.
Selling, general and administrative expenses increased $5.6 million, or 3.0%, to $196.0 million for fiscal 2023 from $190.4 million for fiscal 2022. The increase was composed of increases in general and administrative expenses of $14.1 million and consumer marketing expenses of $3.1 million, partially offset by decreases in warehousing expenses of $5.3 million, selling expenses of $3.2 million and acquisition/divestiture-related and non-recurring expenses of $3.1 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.7 percentage points to 9.5% for fiscal 2023, as compared to 8.8% for fiscal 2022.
In connection with the Company’s sale of assets relating to the Green Giant U.S. shelf-stable product line, which was completed during the fourth quarter of 2023, the Company recorded a loss on sale of assets of $137.7 million during fiscal 2023, of which $132.9 million was recorded during the third quarter and $4.8 million was recorded during the fourth quarter of 2023.
During the fourth quarter of 2023, the Company recorded pre-tax, non-cash impairment charges of $20.5 million related to intangible trademark assets for the Baker’s Joy, Molly McButter, Sugar Twin, and New York Flatbreads brands. The Company partially impaired the Baker’s Joy and Sugar Twin brands, and the Company fully impaired the Molly McButter and New York Flatbreads brands.
Net interest expense increased $26.4 million, or 21.1%, to $151.3 million for fiscal 2023 from $124.9 million for fiscal 2022. The increase was primarily attributable to higher interest rates on the Company’s long-term debt, the accelerated amortization of deferred debt financing costs relating to long-term debt prepayments and a $0.5 million loss on extinguishment of debt during the fourth quarter of 2023, partially offset by a reduction in average long-term debt outstanding, a $0.8 million gain on extinguishment of debt during the second quarter of 2023 and a $0.6 million gain on extinguishment of debt during the third quarter of 2023.
The Company had a net loss of $66.2 million, or $0.89 per diluted share, for fiscal 2023, compared to a net loss of $11.4 million, or $0.16 per diluted share, for fiscal 2022. The Company’s net loss for fiscal 2023 was primarily attributable to the pre-tax, non-cash impairment charges during the third quarter of 2023, the loss on sale during the fourth quarter of 2023 in connection with the sale of assets relating to the Company’s Green Giant U.S. shelf-stable product line, the pre-tax, non-cash impairment charges recorded during the fourth quarter of 2023 related to intangible trademark assets, and the net negative impact on income taxes resulting from the Back to Nature divestiture. The Company’s net loss for fiscal 2022 was primarily attributable to non‑cash charges for the impairment of assets held for sale in connection with the Back to Nature divestiture. The Company’s adjusted net income for fiscal 2023 was $73.9 million, or $0.99 per adjusted diluted share, compared to adjusted net income of $76.2 million, or $1.08 per adjusted diluted share, for fiscal 2022.
For fiscal 2023, adjusted EBITDA was $318.0 million, an increase of $17.0 million, or 5.7%, compared to $301.0 million for fiscal 2022. The increase in adjusted EBITDA was primarily attributable to the improvement in gross profit described above, partially offset by the impact of the Green Giant U.S. shelf-stable and Back to Nature divestitures. Adjusted EBITDA as a percentage of net sales was 15.4% for fiscal 2023, compared to 13.9% for fiscal 2022.
Full Year Fiscal 2024 Guidance
For fiscal 2024, net sales are expected to be $1.975 billion to $2.020 billion, adjusted EBITDA is expected to be $305 million to $325 million, and adjusted diluted earnings per share are expected to be $0.80 to $1.00.
B&G Foods provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the Company’s forward-looking adjusted EBITDA and adjusted diluted earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for deferred taxes; 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 the sale of certain assets); gains and losses on extinguishment of debt; impairment of assets held for sale; impairment of intangible assets; non-recurring expenses, gains and losses; and other charges reflected in the Company’s reconciliation of historic non-GAAP financial measures, the amounts of which, based on past experience, could be material. For additional information regarding B&G Foods’ non-GAAP financial measures, see “About Non-GAAP Financial Measures and Items Affecting Comparability” below.
Conference Call
B&G Foods will hold a conference call at 4:30 p.m. ET today, February 27, 2024 to discuss fourth quarter and full year 2023 financial results. The live audio webcast of the conference call can be accessed at www.bgfoods.com/investor-relations. A replay of the webcast will be available following the conference call through the same link.
About Non-GAAP Financial Measures and Items Affecting Comparability
“Adjusted net income” (net income (loss) adjusted for certain items that affect comparability), “adjusted diluted earnings per share” (diluted earnings (loss) 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 (loss) before net interest expense, income taxes, and depreciation and amortization), “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 the sale of certain assets), gains and losses on extinguishment of debt, impairment of assets held for sale, and non-recurring expenses, gains and losses), “adjusted gross profit” (gross profit adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold) and “adjusted gross profit percentage” (gross profit as a percentage of net sales adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold) 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 generally accepted accounting principles in the United States (GAAP) in B&G Foods’ consolidated balance sheets and related consolidated statements of operations, comprehensive (loss) 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 (loss) and to net cash provided by operating activities, is included below for the fourth quarter and full year 2023 and 2022, 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 (loss) income, changes in stockholders’ equity and cash flows.
End Notes
|
(1)
|
|
Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “base business net sales,” “adjusted diluted earnings per share,” “adjusted net income ,” “EBITDA,” “adjusted EBITDA,” “adjusted gross profit” and “adjusted gross profit percentage,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures.
|
|
(2)
|
|
Excludes net sales of certain Back to Nature products not part of the divestiture that the Company will soon transition to another brand name.
|
|
(3)
|
|
Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Dash and Ac’cent, and spices & seasonings products launched by the Company and sold under license.
|
|
|
|
|
nm
|
–
|
Not meaningful.
|
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including B&G, B&M, Bear Creek, Cream of Wheat, Crisco, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.
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 net sales, adjusted EBITDA and adjusted diluted earnings per share, and the Company’s overall expectations for fiscal 2024 and beyond. 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,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking.
Contacts
Investor Relations:
ICR, Inc.
Dara Dierks
866.211.8151
Media Relations:
ICR, Inc.
Matt Lindberg
203.682.8214
Read full story here
