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As filed with the Securities and Exchange Commission on November 9, 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023 or

Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the transition period from                to                .

Commission file number 001-32316

B&G FOODS, INC.

(Exact name of Registrant as specified in its charter)

Delaware

13-3918742

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

Four Gatehall Drive, Parsippany, New Jersey

07054

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (973) 401-6500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

BGS

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

As of November 3, 2023, the registrant had 78,624,419 shares of common stock, par value $0.01 per share, issued and outstanding.

B&G Foods, Inc. and Subsidiaries

Index

r

Page No.

PART I FINANCIAL INFORMATION

1

Item 1. Financial Statements (Unaudited)

1

Consolidated Balance Sheets

1

Consolidated Statements of Operations

2

Consolidated Statements of Comprehensive Loss

3

Consolidated Statements of Changes in Stockholders’ Equity

4

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

26

Item 3. Quantitative and Qualitative Disclosures About Market Risk

42

Item 4. Controls and Procedures

44

PART II OTHER INFORMATION

44

Item 1. Legal Proceedings

44

Item 1A. Risk Factors

45

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

45

Item 3. Defaults Upon Senior Securities

45

Item 4. Mine Safety Disclosures

45

Item 5. Other Information

45

Item 6. Exhibits

46

SIGNATURE

47

- i -

Forward-Looking Statements

This report includes forward-looking statements, including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The words “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by any forward-looking statements. We believe important factors that could cause actual results to differ materially from our expectations include the following:

our substantial leverage;
the effects of rising costs for and/or decreases in the supply of commodities, ingredients, packaging, other raw materials, distribution and labor;
crude oil prices and their impact on distribution, packaging and energy costs;
our ability to successfully implement sales price increases and cost saving measures to offset any cost increases;
intense competition, changes in consumer preferences, demand for our products and local economic and market conditions;
our 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 our company and our 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 our business, including among other things, our supply chain, our manufacturing operations, our workforce and customer and consumer demand for our products;
our ability to recruit and retain senior management and a highly skilled and diverse workforce at our corporate offices, manufacturing facilities and other work 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 our business;
our possible inability to identify new acquisitions or to integrate recent or future acquisitions, or our failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions;
our ability to successfully complete the integration of recent or future acquisitions into our enterprise resource planning (ERP) system;
tax reform and legislation, including the effects of the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, U.S. Tax Cuts and Jobs Act and the U.S. CARES Act, and any future tax reform or legislation;
our ability to access the credit markets and our borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of our 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 our international procurement, sales and operations;

- ii -

future impairments of our goodwill and intangible assets;
our ability to protect information systems against, or effectively respond to, a cybersecurity incident, other disruption or data leak;
our ability to successfully implement our sustainability initiatives and achieve our sustainability goals, and changes to environmental laws and regulations;
other factors that affect the food industry generally, including:
orecalls 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;
ocompetitors’ pricing practices and promotional spending levels;
ofluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and
othe risks associated with third-party suppliers and co-packers, including the risk that any failure by one or more of our third-party suppliers or co-packers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and
other factors discussed elsewhere in this report and in our other public filings with the Securities and Exchange Commission (SEC), including under Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K filed with the SEC on February 28, 2023, and Part, II, Item 1A, “Risk Factors,” in this report.

Developments in any of these areas could cause our results to differ materially from results that have been or may be projected by us or on our behalf.

All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this report.

We caution that the foregoing list of important factors is not exclusive. There may be other factors that may cause our actual results to differ materially from the forward-looking statements in this report, including factors disclosed under the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. We urge investors not to unduly rely on forward-looking statements contained in this report.

- iii -

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

September 30,

    

December 31,

2023

    

2022

Assets

Current assets:

Cash and cash equivalents

$

359,926

$

45,442

Trade accounts receivable, net

 

154,679

 

150,019

Inventories

 

644,060

 

726,468

Assets held for sale

68,823

51,314

Prepaid expenses and other current assets

 

44,123

 

37,550

Income tax receivable

 

9,100

 

8,024

Total current assets

 

1,280,711

 

1,018,817

Property, plant and equipment, net of accumulated depreciation of $413,352 and $390,821 as of September 30, 2023 and December 31, 2022, respectively

 

302,572

 

317,587

Operating lease right-of-use assets

68,688

65,809

Finance lease right-of-use assets

2,097

2,891

Goodwill

 

619,221

 

619,241

Other intangible assets, net

 

1,653,008

 

1,788,157

Other assets

 

20,262

 

19,088

Deferred income taxes

 

10,291

 

10,019

Total assets

$

3,956,850

$

3,841,609

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$

182,191

$

127,809

Accrued expenses

 

72,380

 

64,137

Current portion of operating lease liabilities

15,213

14,616

Current portion of finance lease liabilities

1,063

1,046

Current portion of long-term debt

 

555,439

 

50,000

Income tax payable

1,704

309

Dividends payable

 

14,938

 

13,617

Total current liabilities

 

842,928

 

271,534

Long-term debt, net of current portion

 

1,929,144

 

2,339,049

Deferred income taxes

 

268,903

 

288,712

Long-term operating lease liabilities, net of current portion

53,785

51,727

Long-term finance lease liabilities, net of current portion

996

1,795

Other liabilities

 

20,455

 

20,626

Total liabilities

 

3,116,211

 

2,973,443

Commitments and contingencies (Note 12)

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; 78,624,419 and 71,668,144 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

786

 

717

Additional paid-in capital

 

60,455

 

Accumulated other comprehensive loss

 

(3,117)

 

(9,349)

Retained earnings

 

782,515

 

876,798

Total stockholders’ equity

 

840,639

 

868,166

Total liabilities and stockholders’ equity

$

3,956,850

$

3,841,609

See Notes to Consolidated Financial Statements.

- 1 -

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

    

October 1,

    

September 30,

    

October 1,

2023

    

2022

    

2023

    

2022

Net sales

$

502,734

$

528,396

$

1,484,185

$

1,539,768

Cost of goods sold

 

388,896

 

422,635

 

1,153,835

 

1,256,222

Gross profit

 

113,838

 

105,761

 

330,350

 

283,546

Operating (income) and expenses:

Selling, general and administrative expenses

 

48,197

 

47,519

 

142,798

 

138,556

Amortization expense

 

5,197

 

5,427

 

15,649

 

16,009

Loss (gain) on sales of assets

 

 

85

 

(7,099)

Impairment of assets held for sale

132,949

103,625

132,949

103,625

Operating income (loss)

 

(72,505)

 

(50,810)

 

38,869

 

32,455

Other (income) and expenses:

Interest expense, net

 

35,859

 

31,874

 

111,108

 

88,617

Other income

(962)

(1,846)

(2,819)

(5,533)

Loss before income tax benefit

 

(107,402)

 

(80,838)

 

(69,420)

 

(50,629)

Income tax benefit

 

(24,661)

 

(21,255)

 

(647)

 

(14,958)

Net loss

$

(82,741)

$

(59,583)

$

(68,773)

$

(35,671)

Weighted average shares outstanding:

Basic

74,428

71,670

72,815

70,068

Diluted

74,428

72,018

72,815

70,440

Loss per share:

Basic

$

(1.11)

$

(0.83)

$

(0.94)

$

(0.51)

Diluted

$

(1.11)

$

(0.83)

$

(0.94)

$

(0.51)

Cash dividends declared per share

$

0.190

$

0.475

$

0.570

$

1.425

See Notes to Consolidated Financial Statements.

- 2 -

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

    

September 30,

    

October 1,

    

September 30,

    

October 1,

    

2023

    

2022

    

2023

    

2022

Net loss

$

(82,741)

$

(59,583)

$

(68,773)

$

(35,671)

Other comprehensive income (loss):

Foreign currency translation adjustments

 

(3,492)

 

(5,492)

 

6,247

 

(6,534)

Pension (loss) gain, net of tax

 

(9)

 

20

 

(15)

 

61

Other comprehensive income (loss)

 

(3,501)

 

(5,472)

 

6,232

 

(6,473)

Comprehensive loss

$

(86,242)

$

(65,055)

$

(62,541)

$

(42,144)

See Notes to Consolidated Financial Statements.

- 3 -

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

As of September 30, 2023

(In thousands, except share and per share data)

(Unaudited)

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Retained

Stockholders’

    

Shares

    

Amount

    

Capital

    

Loss

    

Earnings

    

Equity

Balance at December 31, 2022

 

71,668,144

$

717

$

$

(9,349)

$

876,798

$

868,166

Foreign currency translation

 

5,160

 

5,160

Net income

 

3,415

 

3,415

Share-based compensation

 

664

 

664

Issuance of common stock for share-based compensation

 

557,558

5

(1,666)

 

(1,661)

Cancellation of restricted stock for tax withholding upon vesting

(13,488)

(205)

(205)

Cancellation of restricted stock upon forfeiture

(414)

 

Dividends declared on common stock, $0.19 per share

 

1,207

(14,927)

 

(13,720)

Balance at April 1, 2023

72,211,800

$

722

$

$

(4,189)

$

865,286

$

861,819

Foreign currency translation

 

4,579

 

4,579

Change in pension benefit (net of $5 of income taxes)

 

(6)

 

(6)

Net income

 

10,553

 

10,553

Share-based compensation

 

3,166

 

3,166

Issuance of common stock for share-based compensation

 

82,917

1

(1)

 

Cancellation of restricted stock for tax withholding upon vesting

(960)

(13)

 

(13)

Cancellation of restricted stock upon forfeiture

(2,184)

 

Dividends declared on common stock, $0.19 per share

 

(3,152)

(10,583)

 

(13,735)

Balance at July 1, 2023

72,291,573

$

723

$

$

384

$

865,256

$

866,363

Foreign currency translation

 

(3,492)

 

(3,492)

Change in pension benefit (net of $3 of income taxes)

 

(9)

 

(9)

Net loss

 

(82,741)

 

(82,741)

Share-based compensation

 

1,887

 

1,887

Issuance of common stock in ATM offering

6,332,846

63

73,506

73,569

Dividends declared on common stock, $0.19 per share

 

(14,938)

 

(14,938)

Balance at September 30, 2023

 

78,624,419

$

786

$

60,455

$

(3,117)

$

782,515

$

840,639

See Notes to Consolidated Financial Statements.

- 4 -

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

As of October 1, 2022

(In thousands, except share and per share data)

(Unaudited)

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Comprehensive

Retained

Stockholders’

    

Shares

    

Amount

    

Capital

    

Loss

    

Earnings

    

Equity

Balance at January 1, 2022

 

68,521,651

$

685

$

3,547

$

(18,169)

$

934,191

$

920,254

Foreign currency translation

 

2,679

 

2,679

Change in pension benefit (net of $7 of income taxes)

 

21

 

21

Net income

 

23,656

 

23,656

Share-based compensation

 

791

 

791

Issuance of common stock for share-based compensation

 

261,014

3

(3,707)

 

(3,704)

Cancellation of restricted stock for tax withholding upon vesting

(10,871)

(298)

(298)

Cancellation of restricted stock upon forfeiture

(573)

 

Issuance of common stock in ATM offering

112,353

1

3,227

3,228

Stock options exercised

2,227

60

60

Dividends declared on common stock, $0.475 per share

 

(3,620)

(29,101)

 

(32,721)

Balance at April 2, 2022

68,885,801

$

689

$

$

(15,469)

$

928,746

$

913,966

Foreign currency translation

 

(3,721)

 

(3,721)

Change in pension benefit (net of $6 of income taxes)

 

20

 

20

Net income

 

256

 

256

Share-based compensation

 

1,924

 

1,924

Issuance of common stock for share-based compensation

 

47,335

 

Cancellation of restricted stock for tax withholding upon vesting

(1,250)

(28)

 

(28)

Cancellation of restricted stock upon forfeiture

(1,108)

 

Issuance of common stock in ATM offering

2,739,568

28

61,780

61,808

Dividends declared on common stock, $0.475 per share

 

(34,044)

 

(34,044)

Balance at July 2, 2022

71,670,346

$

717

$

29,632

$

(19,170)

$

929,002

$

940,181

Foreign currency translation

 

(5,492)

 

(5,492)

Change in pension benefit (net of $7 of income taxes)

 

20

 

20

Net loss

 

(59,583)

 

(59,583)

Share-based compensation

 

472

 

472

Cancellation of restricted stock for tax withholding upon vesting

(468)

(11)

 

(11)

Cancellation of restricted stock upon forfeiture

(1,067)

 

Issuance of common stock in ATM offering

1,421

31

31

Dividends declared on common stock, $0.475 per share

 

(30,124)

(3,920)

 

(34,044)

Balance at October 1, 2022

 

71,670,232

$

717

$

$

(24,642)

$

865,499

$

841,574

See Notes to Consolidated Financial Statements.

- 5 -

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Thirty-nine Weeks Ended

    

September 30,

    

October 1,

    

    

2023

    

2022

 

Cash flows from operating activities:

Net loss

$

(68,773)

$

(35,671)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

 

52,586

 

61,065

Amortization of operating lease right-of-use assets

13,325

12,539

Amortization of deferred debt financing costs and bond discount/premium

 

5,691

 

3,530

Deferred income taxes

 

(18,940)

 

(27,415)

Impairment of assets held for sale

132,949

103,625

Loss (gain) on sales of assets

775

(7,094)

Gain on extinguishment of debt

(1,368)

Share-based compensation expense

 

5,452

 

2,984

Changes in assets and liabilities, net of effects of businesses acquired:

Trade accounts receivable

 

(4,634)

 

(31,876)

Inventories

 

3,316

 

(206,704)

Prepaid expenses and other current assets

 

(5,446)

 

(8,926)

Income tax receivable/payable, net

 

524

 

(10,154)

Other assets

 

(1,104)

 

(1,379)

Trade accounts payable

 

52,291

 

101,108

Accrued expenses

 

(10,770)

 

(5,856)

Other liabilities

 

(193)

 

1,816

Net cash provided by (used in) operating activities

 

155,681

 

(48,408)

Cash flows from investing activities:

Capital expenditures

 

(16,946)

 

(17,421)

Proceeds from sales of assets

51,652

10,430

Payments for acquisition of businesses, net of cash acquired

 

 

(27,290)

Net cash provided by (used in) investing activities

 

34,706

 

(34,281)

Cash flows from financing activities:

Repurchases of senior notes

(42,900)

Repayments of borrowings under term loan facility

 

(121,000)

 

Proceeds from issuance of senior secured notes

 

550,000

 

Repayments of borrowings under revolving credit facility

 

(422,500)

 

(182,500)

Borrowings under revolving credit facility

 

140,000