UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
Quarterly Report Pursuant to Section 13 or 15(d) |
For the quarterly period ended | |
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incorporation or organization) | ||
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Securities registered pursuant to Section 12(b) of the Act:
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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.
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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. ☐
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As of November 3, 2023, the registrant had
B&G Foods, Inc. and Subsidiaries
Index
- 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: |
● | 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 | $ | | $ | | |
Trade accounts receivable, net |
| |
| | |
Inventories |
| |
| | |
Assets held for sale | | | |||
Prepaid expenses and other current assets |
| |
| | |
Income tax receivable |
| |
| | |
Total current assets |
| |
| | |
Property, plant and equipment, net of accumulated depreciation of $ |
| |
| | |
Operating lease right-of-use assets | | | |||
Finance lease right-of-use assets | | | |||
Goodwill |
| |
| | |
Other intangible assets, net |
| |
| | |
Other assets |
| |
| | |
Deferred income taxes |
| |
| | |
Total assets | $ | | $ | | |
Liabilities and Stockholders’ Equity | |||||
Current liabilities: | |||||
Trade accounts payable | $ | | $ | | |
Accrued expenses |
| |
| | |
Current portion of operating lease liabilities | | | |||
Current portion of finance lease liabilities | | | |||
Current portion of long-term debt |
| |
| | |
Income tax payable | | | |||
Dividends payable |
| |
| | |
Total current liabilities |
| |
| | |
Long-term debt, net of current portion |
| |
| | |
Deferred income taxes |
| |
| | |
Long-term operating lease liabilities, net of current portion | | | |||
Long-term finance lease liabilities, net of current portion | | | |||
Other liabilities |
| |
| | |
Total liabilities |
| |
| | |
Commitments and contingencies (Note 12) | |||||
Stockholders’ equity: | |||||
Preferred stock, $ |
|
| |||
Common stock, $ |
| |
| | |
Additional paid-in capital |
| |
| — | |
Accumulated other comprehensive loss |
| ( |
| ( | |
Retained earnings |
| |
| | |
Total stockholders’ equity |
| |
| | |
Total liabilities and stockholders’ equity | $ | | $ | |
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 | $ | | $ | | $ | | $ | | |||
Cost of goods sold |
| |
| |
| |
| | |||
Gross profit |
| |
| |
| |
| | |||
Operating (income) and expenses: | |||||||||||
Selling, general and administrative expenses |
| |
| |
| |
| | |||
Amortization expense |
| |
| |
| |
| | |||
Loss (gain) on sales of assets | — |
| — |
| |
| ( | ||||
Impairment of assets held for sale | | | | | |||||||
Operating income (loss) |
| ( |
| ( |
| |
| | |||
Other (income) and expenses: | |||||||||||
Interest expense, net |
| |
| |
| |
| | |||
Other income | ( | ( | ( | ( | |||||||
Loss before income tax benefit |
| ( |
| ( |
| ( |
| ( | |||
Income tax benefit |
| ( |
| ( |
| ( |
| ( | |||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||
Weighted average shares outstanding: | |||||||||||
Basic | | | | | |||||||
Diluted | | | | | |||||||
Loss per share: | |||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||
Cash dividends declared per share | $ | | $ | | $ | | $ | |
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 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments |
| ( |
| ( |
| |
| ( | ||||
Pension (loss) gain, net of tax |
| ( |
| |
| ( |
| | ||||
Other comprehensive income (loss) |
| ( |
| ( |
| |
| ( | ||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
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 |
| | $ | | $ | — | $ | ( | $ | | $ | | |||||
Foreign currency translation |
| — | — | — | | — |
| | |||||||||
Net income |
| — | — | — | — | |
| | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Issuance of common stock for share-based compensation |
| | | ( | — | — |
| ( | |||||||||
Cancellation of restricted stock for tax withholding upon vesting | ( | — | ( | — | — | ( | |||||||||||
Cancellation of restricted stock upon forfeiture | ( | — | — | — | — |
| — | ||||||||||
Dividends declared on common stock, $ |
| — | — | | — | ( |
| ( | |||||||||
Balance at April 1, 2023 | | $ | | $ | — | $ | ( | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | | — |
| | |||||||||
Change in pension benefit (net of $ |
| — | — | — | ( | — |
| ( | |||||||||
Net income |
| — | — | — | — | |
| | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Issuance of common stock for share-based compensation |
| | | ( | — | — |
| — | |||||||||
Cancellation of restricted stock for tax withholding upon vesting | ( | — | ( | — | — |
| ( | ||||||||||
Cancellation of restricted stock upon forfeiture | ( | — | — | — | — |
| — | ||||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | ( |
| ( | |||||||||
Balance at July 1, 2023 | | $ | | $ | — | $ | | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | ( | — |
| ( | |||||||||
Change in pension benefit (net of $ |
| — | — | — | ( | — |
| ( | |||||||||
Net loss |
| — | — | — | — | ( |
| ( | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Issuance of common stock in ATM offering | | | | — | — | | |||||||||||
Dividends declared on common stock, per share |
| — | — | ( | — | — |
| ( | |||||||||
Balance at September 30, 2023 |
| | $ | | $ | | $ | ( | $ | | $ | |
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 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Foreign currency translation |
| — | — | — | | — |
| | |||||||||
Change in pension benefit (net of $ |
| — | — | — | | — |
| | |||||||||
Net income |
| — | — | — | — | |
| | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Issuance of common stock for share-based compensation |
| | | ( | — | — |
| ( | |||||||||
Cancellation of restricted stock for tax withholding upon vesting | ( | — | ( | — | — | ( | |||||||||||
Cancellation of restricted stock upon forfeiture | ( | — | — | — | — |
| — | ||||||||||
Issuance of common stock in ATM offering | | | | — | — | | |||||||||||
Stock options exercised | | — | | — | — | | |||||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | ( |
| ( | |||||||||
Balance at April 2, 2022 | | $ | | $ | — | $ | ( | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | ( | — |
| ( | |||||||||
Change in pension benefit (net of $ |
| — | — | — | | — |
| | |||||||||
Net income |
| — | — | — | — | |
| | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Issuance of common stock for share-based compensation |
| | — | — | — | — |
| — | |||||||||
Cancellation of restricted stock for tax withholding upon vesting | ( | — | ( | — | — |
| ( | ||||||||||
Cancellation of restricted stock upon forfeiture | ( | — | — | — | — |
| — | ||||||||||
Issuance of common stock in ATM offering | | | | — | — | | |||||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | — |
| ( | |||||||||
Balance at July 2, 2022 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | ( | — |
| ( | |||||||||
Change in pension benefit (net of $ |
| — | — | — | | — |
| | |||||||||
Net loss |
| — | — | — | — | ( |
| ( | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Cancellation of restricted stock for tax withholding upon vesting | ( | — | ( | — | — |
| ( | ||||||||||
Cancellation of restricted stock upon forfeiture | ( | — | — | — | — |
| — | ||||||||||
Issuance of common stock in ATM offering | | — | | — | — | | |||||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | ( |
| ( | |||||||||
Balance at October 1, 2022 |
| | $ | | $ | — | $ | ( | $ | | $ | |
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 | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization |
| |
| | |||
Amortization of operating lease right-of-use assets | | | |||||
Amortization of deferred debt financing costs and bond discount/premium |
| |
| | |||
Deferred income taxes |
| ( |
| ( | |||
Impairment of assets held for sale | | | |||||
Loss (gain) on sales of assets | | ( | |||||
Gain on extinguishment of debt | ( | — | |||||
Share-based compensation expense |
| |
| | |||
Changes in assets and liabilities, net of effects of businesses acquired: | |||||||
Trade accounts receivable |
| ( |
| ( | |||
Inventories |
| |
| ( | |||
Prepaid expenses and other current assets |
| ( |
| ( | |||
Income tax receivable/payable, net |
| |
| ( | |||
Other assets |
| ( |
| ( | |||
Trade accounts payable |
| |
| | |||
Accrued expenses |
| ( |
| ( | |||
Other liabilities |
| ( |
| | |||
Net cash provided by (used in) operating activities |
| |
| ( | |||
Cash flows from investing activities: | |||||||
Capital expenditures |
| ( |
| ( | |||
Proceeds from sales of assets | | | |||||
Payments for acquisition of businesses, net of cash acquired |
| — |
| ( | |||
Net cash provided by (used in) investing activities |
| |
| ( | |||
Cash flows from financing activities: | |||||||
Repurchases of senior notes | ( | — | |||||
Repayments of borrowings under term loan facility |
| ( |
| — | |||
Proceeds from issuance of senior secured notes |
| |
| — | |||
Repayments of borrowings under revolving credit facility |
| ( |
| ( | |||
Borrowings under revolving credit facility |
| |
|