— Net Sales Increased 9.0% and Base Business Net Sales Increased 8.9% for the Fourth Quarter of 2022 —

B&G Foods, Inc. (NYSE: BGS) today announced financial results for the fourth quarter and full year 2022.

Summary

Guidance for Full Year Fiscal 2023 (which does not include the recently divested Back to Nature business)

• Net sales range of $2.13 billion to $2.17 billion.
• Adjusted EBITDA range of $310 million to $330 million.
• Adjusted diluted earnings per share range of $0.95 to $1.15.

Commenting on the results, Casey Keller, President and Chief Executive Officer of B&G Foods, stated, “B&G Foods’ fourth quarter results and performance demonstrated strong recovery, reflecting the catch up of cumulative pricing actions against inflationary cost, a moderating inflationary environment, and the recovery of our higher margin spices & seasonings business. Net sales grew 9% in the fourth quarter behind pricing implementation and supply recovery, with margins improving versus the fourth quarter of last year. We expect to continue year over year margin recovery into fiscal 2023.”

Financial Results for the Fourth Quarter of 2022

Net sales for the fourth quarter of 2022 increased $51.4 million, or 9.0%, to $623.2 million from $571.8 million for the fourth quarter of 2021. The increase was primarily due to increases in net pricing and the impact of product mix, partially offset by volume declines primarily due to price elasticity.

Base business net sales for the fourth quarter of 2022 increased $51.2 million, or 8.9%, to $622.8 million from $571.6 million for the fourth quarter of 2021. The increase in base business net sales for the fourth quarter of 2022 was driven by an increase in net pricing and the impact of product mix of $99.2 million, or 17.4% of base business net sales, partially offset by a decrease in unit volume of $45.4 million and the negative impact of foreign currency of $2.6 million.

Net sales of Crisco increased $16.8 million, or 15.9%; net sales of the Company’s spices & seasonings² increased $13.4 million, or 17.4%; net sales of Clabber Girl increased $7.0 million, or 28.8%; net sales of Cream of Wheat increased $5.1 million, or 26.1%; net sales of Ortega increased $3.5 million, or 10.4%; and net sales of Maple Grove Farms increased $1.3 million, or 6.6%, for the fourth quarter of 2022, as compared to the fourth quarter of 2021. Net sales of Green Giant (including Le Sueur) decreased $11.3 million, or 6.9%, for the fourth quarter of 2022, as compared to the fourth quarter of 2021. Base business net sales of all other brands in the aggregate increased $15.4 million, or 12.1%, for the fourth quarter of 2022, as compared to the fourth quarter of 2021.

Gross profit was $126.1 million for the fourth quarter of 2022, or 20.2% of net sales. Excluding 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, the Company’s gross profit would have been $128.6 million, or 20.6% of net sales. Gross profit was $101.9 million for the fourth quarter of 2021, or 17.8% of net sales. Excluding the negative impact of $10.8 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the fourth quarter of 2021, the Company’s gross profit would have been $112.7 million, or 19.7% of net sales.

During fiscal 2021 and the first three quarters of fiscal 2022, the Company’s gross profit was negatively impacted by input cost inflation, including materially increased costs for raw materials and transportation. The Company attempted to mitigate the impact of inflation on its gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. The Company also announced several rounds of list price increases in 2021 and 2022. During the fourth quarter of 2022, the pace of input cost inflation moderated and the Company began to more fully receive the benefit of the prior list price increases, which, due to customer notice requirements and other factors, typically lag input cost inflation. As a result, the Company’s gross profit and gross profit as a percentage of net sales increased during the fourth quarter of 2022 as compared to the fourth quarter of 2021.

Selling, general and administrative expenses decreased $0.4 million, or 0.9%, to $51.9 million for the fourth quarter of 2022 from $52.3 million for the fourth quarter of 2021. The decrease was composed of decreases in acquisition/divestiture-related and non-recurring expenses of $6.5 million and consumer marketing expenses of $0.2 million, partially offset by increases in general and administrative expenses of $2.3 million, warehousing expenses of $2.3 million and selling expenses of $1.7 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 0.8 percentage points to 8.3% for the fourth quarter of 2022, as compared to 9.1% for the fourth quarter of 2021.

Net interest expense increased $9.7 million, or 36.6%, to $36.3 million for the fourth quarter of 2022 from $26.6 million in the fourth quarter of 2021. The increase was primarily attributable to higher interest rates on the Company’s variable rate borrowings and additional borrowings on the Company’s revolving credit facility during the fourth quarter of 2022, as compared to the fourth quarter of 2021.

The Company’s net income was $24.3 million, or $0.34 per diluted share, for the fourth quarter of 2022, compared to net loss of $4.8 million, or $0.07 per diluted share, for the fourth quarter of 2021. The Company’s net income for the fourth quarter of 2022 was negatively impacted by acquisition/divestiture related and non‑recurring expenses of $3.3 million (or $2.5 million, net of tax) and pre-tax, non-cash impairment charges of $2.8 million (or $2.1 million, net of tax) relating to the Company’s decision to sell the Back to Nature business. The Company’s adjusted net income for the fourth quarter of 2022 was $28.9 million, or $0.40 per adjusted diluted share, compared to adjusted net income of $26.3 million, or $0.39 per adjusted diluted share, for the fourth quarter of 2021.

For the fourth quarter of 2022, adjusted EBITDA was $93.6 million, an increase of $8.5 million, or 10.0%, compared to $85.1 million for the fourth quarter of 2021. The increase in adjusted EBITDA was primarily attributable to increases in net pricing, partially offset by industry-wide input cost inflation and supply chain disruptions. Additionally, the fourth quarter of 2022 had favorable comparisons against the fourth quarter of 2021 due to the supply chain disruptions resulting from the COVID-19 Omicron variant that occurred during the fourth quarter of 2021. Adjusted EBITDA as a percentage of net sales was 15.0% for the fourth quarter of 2022, compared to 14.9% in the fourth quarter of 2021.

Financial Results for the Full Year Fiscal 2022

Net sales for fiscal 2022 increased $106.7 million, or 5.2%, to $2,163.0 million from $2,056.3 million for fiscal 2021. The increase was primarily due to increases in net pricing and the impact of product mix, partially offset by volume declines primarily due to price elasticity and supply chain challenges in fiscal 2022.

Base business net sales for fiscal 2022 increased $107.0 million, or 5.2%, to $2,160.8 million from $2,053.8 million for fiscal 2021. The increase in base business net sales was driven by increases in net pricing and the impact of product mix of $231.4 million, or 11.3% of base business net sales, partially offset by a decrease in unit volume of $119.9 million and the negative impact of foreign currency of $4.5 million.

Net sales of Crisco increased $78.5 million, or 26.8%; net sales of Clabber Girl increased $17.5 million, or 22.0%; net sales of Cream of Wheat increased $14.1 million, or 21.0%; net sales of Maple Grove Farms increased $3.2 million, or 4.0%, and net sales of Ortega increased $3.1 million, or 2.0%, in fiscal 2022 as compared to fiscal 2021. Net sales of Green Giant (including Le Sueur) decreased $19.5 million, or 3.6%; and net sales of the Company’s spices & seasonings² decreased $12.0 million, or 3.2%, in fiscal 2022, as compared to fiscal 2021. The decrease in spices & seasonings was driven in part by comparisons against the very strong fiscal 2021 for the Company’s spices & seasonings and supply chain challenges during the first half of fiscal 2022, partially offset by the positive impact of recent product launches. Base business net sales of all other brands in the aggregate increased $22.1 million, or 4.7%, for fiscal 2022, as compared to fiscal 2021.

Gross profit was $409.6 million for fiscal 2022, or 18.9% of net sales. Excluding 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, the Company’s gross profit would have been $418.7 million, or 19.4% of net sales. Gross profit was $437.0 million for fiscal 2021, or 21.3% of net sales. Excluding the negative impact of a $13.9 million accrual for the estimated present value of a multi-employer pension plan withdrawal liability in connection with the sale and closure of the Company’s Portland, Maine manufacturing facility, $14.6 million of acquisition/divestiture-related expenses, and $5.1 million of amortization of acquisition-related inventory fair value step-up and non-recurring expenses included in cost of goods sold during fiscal 2021, the Company’s gross profit would have been $470.6 million, or 22.9% of net sales.

During fiscal 2022, the Company’s gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials and transportation. The Company expects input cost inflation will continue to have a significant industry-wide impact into fiscal 2023. The Company is attempting to mitigate the impact of inflation on its gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. The Company also announced several rounds of list price increases in 2021 and 2022. However, increases in the prices the Company charges its customers generally lag behind rising input costs. As such, the Company did not fully offset the incremental costs that it faced in fiscal 2022. However, as noted above, during the fourth quarter, the Company began to more fully realize the benefits of prior list price increases.

Selling, general and administrative expenses decreased $5.8 million, or 2.9%, to $190.4 million for fiscal 2022 from $196.2 million for fiscal 2021. The decrease was composed of decreases in acquisition/divestiture-related and non-recurring expenses of $11.9 million and consumer marketing expenses of $2.2 million, partially offset by increases in selling expenses of $5.0 million, general and administrative expenses of $3.1 million and warehousing expenses of $0.2 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 0.7 percentage points to 8.8% for fiscal 2022, as compared to 9.5% for fiscal 2021.

Net interest expense increased $18.0 million, or 16.9%, to $124.9 million for fiscal 2022 from $106.9 million in fiscal 2021. The increase was primarily attributable to higher interest rates on the Company’s variable rate borrowings, additional borrowings on the Company’s revolving credit facility during fiscal 2022 as compared to fiscal 2021 and a $1.6 million fee for an amendment to the Company’s credit agreement.

The Company’s net loss was $11.4 million, or $0.16 per diluted share, for fiscal 2022, compared to net income of $67.4 million, or $1.02 per diluted share, for fiscal 2021. The Company’s adjusted net income for fiscal 2022 was $76.2 million, or $1.08 per adjusted diluted share, compared to adjusted net income of $123.7 million, or $1.88 per adjusted diluted share, for fiscal 2021. The Company’s net loss for fiscal 2022 was primarily attributable to pre-tax, non-cash impairment charges of $106.4 million (or $80.4 million, net of tax) recorded during the third and fourth quarters of 2022 relating to the Company’s decision to sell the Back to Nature business, in addition to industry-wide input cost inflation and supply chain disruptions, partially offset by a pre-tax benefit of approximately $4.9 million (or $3.7 million, net of tax) resulting from a pre-tax $7.1 million gain on sale of the Company’s Portland, Maine manufacturing facility, net of $2.2 million of pre-tax expenses relating to the closure of the facility and the transfer of manufacturing operations.

The decreases in adjusted net income and adjusted diluted earnings per share were primarily attributable to industry-wide input cost inflation and supply chain disruptions, and, in the case of adjusted diluted earnings per share, the year-over-year weighted average impact of the approximately 6.5 million shares of common stock sold by the Company through the Company’s at-the-market (ATM) equity offering program beginning in the third quarter of fiscal 2021 and during fiscal 2022, in each case partially offset by increases in net pricing.

For fiscal 2022, adjusted EBITDA was $301.0 million, a decrease of $57.0 million, or 15.9%, compared to $358.0 million for fiscal 2021. The decrease in adjusted EBITDA was primarily attributable to industry-wide input cost inflation and supply chain disruptions, partially offset by increases in net pricing. Adjusted EBITDA as a percentage of net sales was 13.9% for fiscal 2022, compared to 17.4% in fiscal 2021.

Full Year Fiscal 2023 Guidance

For fiscal 2023, net sales are expected to be $2.13 billion to $2.17 billion, adjusted EBITDA is expected to be approximately $310 million to $330 million, and adjusted diluted earnings per share are expected to be $0.95 to $1.15. Fiscal 2023 guidance does not include results for the Back to Nature business, which was sold by the Company effective the first business day of the year.

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); loss 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 28, 2023 to discuss fourth quarter and full year 2022 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) 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 the sale of certain assets), loss on extinguishment of debt, impairment of assets held for sale, and non-recurring expenses, gains and losses) 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 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 2022 and 2021, 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.

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” and “adjusted EBITDA,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures.
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 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, adjusted diluted earnings per share and margin recovery, and the Company’s overall expectations for fiscal 2023 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. Factors that may affect actual results include, without limitation: the Company’s substantial leverage; the effects of rising costs for and/or decreases in supply of the Company’s commodities, ingredients, packaging, other raw materials, distribution and labor; 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 ability of the Company and its supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain or labor shortages; the impact pandemics or disease outbreaks, such as the COVID-19 pandemic, may have on the Company’s business, including among other things, the Company’s supply chain, manufacturing operations or workforce and customer and consumer demand for the Company’s products; the Company’s ability to recruit and retain senior management and a highly skilled and diverse workforce at the Company’s corporate offices, manufacturing facilities and other locations despite a very tight labor market and changing employee expectations as to fair compensation, an inclusive and diverse workplace, flexible working and other matters; 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 from recent or future acquisitions; the Company’s ability to successfully complete the integration of recent or future acquisitions into the Company’s enterprise resource planning (ERP) system; tax reform and legislation, including the effects of the Infrastructure Investment and Jobs Act, U.S. Tax Cuts and Jobs Act and the U.S. CARES Act, and future tax reform or legislation; 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; the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on the Company’s international procurement, sales and operations; future impairments of the Company’s goodwill and intangible assets; the Company’s ability to protect information systems against, or effectively respond to, a cybersecurity incident, other disruption or data leak; the Company’s ability to successfully implement the Company’s sustainability initiatives and achieve the Company’s sustainability goals, and changes to environmental laws and regulations; and other factors that affect the food industry generally, including: recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products; competitors’ pricing practices and promotional spending levels; fluctuations in the level of the Company’s customers’ inventories and credit and other business risks related to the Company’s customers operating in a challenging economic and competitive environment; and the risks associated with third-party suppliers and co-packers, including the risk that any failure by one or more of the Company’s third-party suppliers or co-packers to comply with food safety or other laws and regulations may disrupt the Company’s supply of raw materials or certain finished goods products or injure the Company’s reputation. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006339/en/