B&G Foods, Inc 10-Q for FY2020 Q1

B&G Foods, Inc. (BGS)

10-Q 2020-05-06 For: 2020-03-28

Added on April 08, 2026

About this 10-Q

B&G Foods, Inc filed this 10-Q on May 6, 2020, covering the quarter ended March 28, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 28, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $449.37M; up 8.9% from $412.73M a year earlier
Net income: $28.09M; up 67.3% from net income of $16.79M a year earlier
Diluted EPS: $0.44; up 69.2% from $0.26 a year earlier

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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)


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


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐

Emerging growth company ☐

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 Income	3
	Consolidated Statements of Changes in Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	37
	Item 4. Controls and Procedures	38

PART II OTHER INFORMATION		39

	Item 1. Legal Proceedings	39
	Item 1A. Risk Factors	39
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40
	Item 3. Defaults Upon Senior Securities	40
	Item 4. Mine Safety Disclosures	40
	Item 5. Other Information	40
	Item 6. Exhibits	41

SIGNATURE		42


	March 28,		December 28,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	127,068	$	11,315
Trade accounts receivable, net		200,563		143,908
Inventories		399,189		472,187
Prepaid expenses and other current assets		25,815		25,449
Income tax receivable		19,087		8,934
Total current assets		771,722		661,793

Property, plant and equipment, net of accumulated depreciation of $277,493 and $270,454 as of March 28, 2020 and December 28, 2019, respectively		289,640		304,934
Operating lease right-of-use assets, net		38,313		38,698
Goodwill		599,557		596,391
Other intangible assets, net		1,610,404		1,615,126
Other assets		3,191		3,277
Deferred income taxes		5,957		7,371
Total assets	$	3,318,784	$	3,227,590

Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	102,629	$	114,936
Accrued expenses		59,179		55,659
Current portion of operating lease liabilities		10,806		9,813
Current portion of long-term debt		4,500		5,625
Income tax payable		1,728		454
Dividends payable		30,457		30,421
Total current liabilities		209,299		216,908

Long-term debt		1,974,861		1,874,158
Deferred income taxes		268,854		254,339
Long-term operating lease liabilities, net of current portion		30,513		31,997
Other liabilities		38,970		37,646
Total liabilities		2,522,497		2,415,048
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; 64,120,497 and 64,044,649 shares issued and outstanding as of March 28, 2020 and December 28, 2019, respectively		641		640
Additional paid-in capital		—		—
Accumulated other comprehensive loss		(45,947)		(31,894)
Retained earnings		841,593		843,796
Total stockholders’ equity		796,287		812,542
Total liabilities and stockholders’ equity	$	3,318,784	$	3,227,590


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


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


	Thirteen Weeks Ended
	March 28,		March 30,
	2020		2019
Net sales	$	449,370	$	412,734
Cost of goods sold		344,454		324,655
Gross profit		104,916		88,079

Operating expenses:
Selling, general and administrative expenses		39,973		38,297
Amortization expense		4,723		4,491
Operating income		60,220		45,291

Other income and expenses:
Interest expense, net		26,039		23,074
Other income		(453)		(258)
Income before income tax expense		34,634		22,475
Income tax expense		6,542		5,684
Net income	$	28,092	$	16,791

Weighted average shares outstanding:
Basic		64,047		65,587
Diluted		64,084		65,617

Earnings per share:
Basic	$	0.44	$	0.26
Diluted	$	0.44	$	0.26

Cash dividends declared per share	$	0.475	$	0.475


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Retained		Stockholders’
	Shares	Amount		Capital		Loss		Earnings		Equity
Balance at December 28, 2019	64,044,649	$	640	$	—	$	(31,894)	$	843,796	$	812,542
Foreign currency translation	—		—		—		(14,349)		—		(14,349)
Change in pension benefit (net of $104 of income taxes)	—		—		—		296		—		296
Net income	—		—		—		—		28,092		28,092
Share-based compensation	—		—		—		—		163		163
Issuance of common stock for share-based compensation	75,848		1		—		—		(1)		—
Repurchase of common stock	—		—		—		—		—		—
Dividends declared on common stock, $0.475 per share	—		—		—		—		(30,457)		(30,457)
Balance at March 28, 2020	64,120,497	$	641	$	—	$	(45,947)	$	841,593	$	796,287


Preliminary Purchase Price Allocation:	May 15, 2019
Cash and cash equivalents	$	2,202
Trade accounts receivable, net		5,627
Inventories		10,641
Prepaid expenses and other current assets		154
Income tax receivable		7
Property, plant and equipment, net		20,697
Operating lease right-of-use assets		7,841
Trademarks — indefinite-lived intangible assets		19,600
Customer relationships — finite-lived intangible assets		18,500
Trade accounts payable		(3,007)
Accrued expenses		(1,315)
Operating lease liabilities, current portion		(952)
Long-term operating lease liabilities, net of current portion		(7,319)
Goodwill		11,956
Total purchase price (paid in cash)	$	84,632


	March 28, 2020		December 28, 2019
Raw materials and packaging	$	61,407	$	65,673
Work-in-process		72,894		111,866
Finished goods		264,888		294,648
Inventories	$	399,189	$	472,187


	March 28, 2020						December 28, 2019
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Finite-Lived Intangible Assets
Trademarks	$	19,600	$	4,735	$	14,865	$	19,600	$	4,462	$	15,138
Customer relationships		354,090		133,851		220,239		354,090		129,402		224,688
Total finite-lived intangible assets	$	373,690	$	138,586	$	235,104	$	373,690	$	133,864	$	239,826

Indefinite-Lived Intangible Assets
Goodwill	$	599,557					$	596,391
Trademarks	$	1,375,300					$	1,375,300


	March 28, 2020		December 28, 2019
Revolving credit loans	$	100,000	$	—
Tranche B term loans due 2026		448,875		450,000
5.25% senior notes due 2025		900,000		900,000
5.25% senior notes due 2027		550,000		550,000
Unamortized deferred debt financing costs		(20,102)		(20,869)
Unamortized discount/premium		588		652
Total long-term debt, net of unamortized deferred debt financing costs and discount/premium		1,979,361		1,879,783
Current portion of long-term debt		(4,500)		(5,625)
Long-term debt, net of unamortized deferred debt financing costs and discount/premium, and excluding current portion	$	1,974,861	$	1,874,158


	Aggregate Contractual Maturities
Fiscal year:
2020 remaining	$	4,500
2021		4,500
2022		104,500
2023		4,500
2024		4,500
Thereafter		1,876,375
Total	$	1,998,875


		March 28, 2020						December 28, 2019
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	100,000		$	100,000	⁽¹⁾	$	—		$	—
Tranche B term loans due 2026		446,766	⁽²⁾		402,089	⁽³⁾		447,820	⁽²⁾		451,179	⁽³⁾
5.25% senior notes due 2025		902,697	⁽⁴⁾		884,643	⁽³⁾		902,832	⁽⁴⁾		929,917	⁽³⁾
5.25% senior notes due 2027	$	550,000		$	530,750	⁽³⁾	$	550,000		$	550,000	⁽³⁾


	Thirteen Weeks Ended
	March 28,		March 30,
	2020		2019
Cash flows from operating activities:
Net income	$	28,092	$	16,791
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,534		13,863
Amortization of operating lease right-of-use assets		2,981		2,638
Amortization of deferred debt financing costs and bond discount/premium		898		873
Deferred income taxes		14,397		3,575
Write-off of property, plant, and equipment		2		1
Share-based compensation expense		423		580
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable		(57,759)		(10,807)
Inventories		66,812		27,320
Prepaid expenses and other current assets		(1,953)		(1,085)
Income tax receivable/payable		(8,523)		1,553
Other assets		(131)		70
Trade accounts payable		(8,405)		(14,444)
Accrued expenses		3,484		11,119
Other liabilities		1,726		(1,703)
Net cash provided by operating activities		57,578		50,344

Cash flows from investing activities:
Capital expenditures		(6,141)		(8,648)
Payments for acquisition of businesses, net of cash acquired		(3,419)		—
Net cash used in investing activities		(9,560)		(8,648)

Cash flows from financing activities:
Repayments of long-term debt		(1,125)		—
Repayments of borrowings under revolving credit facility		(60,000)		(40,000)
Borrowings under revolving credit facility		160,000		40,000
Dividends paid		(30,421)		(31,178)
Payments for repurchase of common stock, net		—		(10,000)
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation		—		(905)
Net cash provided by (used in) financing activities		68,454		(42,083)

Effect of exchange rate fluctuations on cash and cash equivalents		(719)		23
Net increase (decrease) in cash and cash equivalents		115,753		(364)



	Thirteen Weeks Ended				Affected Line Item in
	March 28,		March 30,		the Statement Where
Details about AOCL Components	2020		2019		Net Income is Presented
Defined benefit pension plan items
Amortization of unrecognized loss	$	400	$	215	See (1) below
Accumulated other comprehensive loss before tax		400		215	Total before tax
Tax expense		(104)		(53)	Income tax expense
Total reclassification	$	296	$	162	Net of tax


			Foreign Currency
	Defined Benefit		Translation
	Pension Plan Items		Adjustments		Total
Balance at December 28, 2019	$	(24,761)	$	(7,133)	$	(31,894)
Other comprehensive income before reclassifications		—		(14,349)		(14,349)
Amounts reclassified from AOCL		296		—		296
Net current period other comprehensive income		296		(14,349)		(14,053)
Balance at March 28, 2020	$	(24,465)	$	(21,482)	$	(45,947)


	Maturities of Operating Lease Liabilities
Fiscal year:
2020 remaining	$	9,199
2021		11,536
2022		5,890
2023		5,683
2024		5,058
Thereafter		8,516
Total undiscounted future minimum lease payments		45,882
Less: Imputed interest		(4,563)
Total present value of future operating lease liabilities	$	41,319


		Weighted		Weighted Average
		Average		Contractual Life	Aggregate
	Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at December 28, 2019	1,110,212	$	31.20	6.4	$	—
Granted	—	$	—
Exercised	—	$	—
Forfeited	(7,989)	$	27.32
Cancelled	—	$	—
Outstanding at March 28, 2020	1,102,223	$	31.23	6.2	$	—
Exercisable at March 28, 2020	884,897	$	32.47	5.7	$	—


		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares⁽¹⁾	(per share)⁽²⁾
Outstanding at December 28, 2019	661,305	$	22.37
Granted	459,882	$	10.83
Vested	—	$	—
Forfeited	(133,900)	$	32.85
Outstanding at March 28, 2020	987,287	$	15.57


		Weighted Average
	Number of Shares	Grant Date Fair Value
	of Restricted Stock	(per share)⁽¹⁾
Outstanding at December 28, 2019	32,059	$	24.33
Granted	75,848	$	16.50
Vested	—	$	—
Forfeited	—	$	—
Outstanding at March 28, 2020	107,907	$	18.83


			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	117,171	$	9,897	$	—	$	127,068
Trade accounts receivable, net		—		179,540		21,023		—		200,563
Inventories, net		—		344,207		54,982		—		399,189
Prepaid expenses and other current assets		—		19,815		6,000		—		25,815
Income tax receivable		—		18,470		617		—		19,087
Intercompany receivables		—		26,209		—		(26,209)		—
Total current assets		—		705,412		92,519		(26,209)		771,722

Property, plant and equipment, net		—		253,910		35,730		—		289,640
Operating lease right-of-use assets, net		—		38,260		53		—		38,313
Goodwill		—		599,557		—		—		599,557
Other intangible assets, net		—		1,610,404		—		—		1,610,404
Other assets		—		3,090		101		—		3,191
Deferred income taxes		—		—		5,957		—		5,957
Investments in subsidiaries		2,826,207		91,550		—		(2,917,757)		—
Total assets	$	2,826,207	$	3,302,183	$	134,360	$	(2,943,966)	$	3,318,784

Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	—	$	91,778	$	10,851	$	—	$	102,629
Accrued expenses		—		55,218		3,961		—		59,179
Current portion of operating lease liabilities		—		10,763		43		—		10,806
Current portion of long-term debt		4,500		—		—		—		4,500
Income tax payable		—		—		1,728		—		1,728
Dividends payable		30,457		—		—		—		30,457
Intercompany payables		—		—		26,209		(26,209)		—
Total current liabilities		34,957		157,759		42,792		(26,209)		209,299

Long-term debt		1,994,963		(20,102)		—		—		1,974,861
Deferred income taxes		—		268,854		—		—		268,854
Long-term operating lease liabilities, net of current portion		—		30,495		18		—		30,513
Other liabilities		—		38,970		—		—		38,970
Total liabilities		2,029,920		475,976		42,810		(26,209)		2,522,497

Stockholders' equity:
Preferred stock		—		—		—		—		—
Common stock		641		—		—		—		641
Additional paid-in capital		—		1,963,342		68,253		(2,031,595)		—
Accumulated other comprehensive loss		(45,947)		(45,948)		(21,484)		67,432		(45,947)
Retained earnings		841,593		908,813		44,781		(953,594)		841,593
Total stockholders’ equity		796,287		2,826,207		91,550		(2,917,757)		796,287
Total liabilities and stockholders’ equity	$	2,826,207	$	3,302,183	$	134,360	$	(2,943,966)	$	3,318,784


	Base Business
	Net Sales Increase (Decrease)
	Dollars (in millions)		Percentage
Brand:
Green Giant - shelf-stable⁽¹⁾	$	15.0	42.3	%
Green Giant - frozen		7.2	7.2	%
Cream of Wheat		1.5	8.7	%
Ortega		1.5	4.1	%
Maple Grove Farms of Vermont		0.5	3.0	%
Spices & Seasonings⁽²⁾		(11.4)	(18.1)	%
Back to Nature		(3.1)	(18.5)	%
Dash		(0.7)	(4.7)	%
All other brands		7.3	6.5	%
Base business net sales increase	$	17.8	4.3	%


EXHIBIT NO.		DESCRIPTION

31.1		Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer.

31.2		Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer and Chief Financial Officer.

101		The following unaudited financial information from B&G Foods’ Quarterly Report on Form 10-Q for the quarter ended March 28, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2020, formatted in iXBRL and contained in Exhibit 101.


Dated: May 6, 2020	B&G FOODS, INC.


	By:	/s/ Bruce C. Wacha
		Bruce C. Wacha Executive Vice President of Finance and Chief Financial Officer (Principal Financial Officer and Authorized Officer)