BGS 10-Q
B&G Foods, Inc. (BGS)
As filed with the Securities and Exchange Commission on November 5, 2025
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 | |
Transition Report Pursuant to Section 13 or 15(d) |
For the transition period from to .
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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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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, which may impact our ability, among other things, to fund capital expenditures, working capital needs, dividend payments and acquisitions, and to obtain refinancing or additional financing; |
| ● | our ability to comply with the ratios or tests under our long-term debt agreements, including the maximum consolidated leverage ratio and minimum consolidated interest coverage ratio under our credit agreement, which may be affected not only by our operating performance but also by events beyond our control, including prevailing economic, financial and industry conditions, and changes in interest rates; |
| ● | the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on our procurement, sales and operations (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and retaliatory actions taken or threatened to be taken by such countries); |
| ● | 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 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 possible expansion of our business through acquisitions or reduction in size through divestitures; |
| ● | our possible inability to successfully complete divestitures of non-core businesses, including the pending divestiture of our Green Giant and Le Sieur frozen and shelf-stable business in Canada or the possible divestiture of some or all of the other remaining assets of our Frozen & Vegetables business unit, to sharpen our focus, improve our margins, reduce costs and reduce our long-term debt, and, if completed, our possible inability to achieve the expected margin improvements, cost savings and debt reduction; |
| ● | 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; |
- ii -
| ● | 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 U.S. Tax Cuts and Jobs Act and the One Big Beautiful Bill 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; |
| ● | future impairments of our goodwill, other intangible assets, and tangible assets, such as property, plant, equipment or inventory, which impairments may be triggered if our operating results for any of our brands deteriorate at rates in excess of our current projections, our market capitalization declines or discount rates change, even if due to macroeconomic factors, or may be triggered by divestitures, including our possible divestiture of some or all of the remaining assets of our Frozen & Vegetables business unit, if divestiture proceeds are less than the book value of the assets being divested; |
| ● | 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; |
| ● | our ability to successfully adopt and utilize new technologies, such as artificial intelligence, including machine learning and generative artificial intelligence; |
| ● | 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 25, 2025, 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 you 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 27, |
| December 28, | |||
2025 |
| 2024 | |||
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 | | | |||
Other liabilities |
| |
| | |
Total liabilities |
| |
| | |
Commitments and contingencies (Note 13) | |||||
Stockholders’ equity: | |||||
Preferred stock, $ |
|
| |||
Common stock, $ |
| |
| | |
Additional paid-in capital |
|
| |||
Accumulated other comprehensive income (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 27, |
| September 28, |
| September 27, |
| September 28, | |||||
2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Net sales | $ | | $ | | $ | | $ | | |||
Cost of goods sold |
| |
| |
| |
| | |||
Gross profit |
| |
| |
| |
| | |||
Operating expenses: | |||||||||||
Selling, general and administrative expenses |
| |
| |
| |
| | |||
Amortization expense |
| |
| |
| |
| | |||
Impairment of goodwill | — |
| — | — | | ||||||
Impairment of intangible assets | |
| — | | — | ||||||
(Gain) loss on sales of assets | ( |
| — |
| ( |
| | ||||
Impairment of assets held for sale | | — | | — | |||||||
Operating income |
| |
| |
| |
| | |||
Other expenses (income): | |||||||||||
Interest expense, net |
| |
| |
| |
| | |||
Other income | ( | ( | ( | ( | |||||||
(Loss) income before income tax (benefit) expense |
| ( |
| |
| ( |
| ( | |||
Income tax (benefit) expense |
| ( |
| |
| ( |
| ( | |||
Net (loss) income | $ | ( | $ | | $ | ( | $ | ( | |||
Weighted average shares outstanding: | |||||||||||
Basic | | | | | |||||||
Diluted | | | | | |||||||
(Loss) earnings 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) Income
(In thousands)
(Unaudited)
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
| September 27, |
| September 28, |
| September 27, |
| September 28, | |||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Net (loss) income | $ | ( | $ | | $ | ( | $ | ( | ||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments |
| |
| ( |
| |
| ( | ||||
Pension loss, net of tax |
| ( |
| ( |
| ( |
| ( | ||||
Other comprehensive income (loss) |
| ( |
| ( |
| |
| ( | ||||
Comprehensive (loss) income | $ | ( | $ | | $ | ( | $ | ( | ||||
See Notes to Consolidated Financial Statements.
- 3 -
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
As of September 27, 2025
(In thousands, except share and per share data)
(Unaudited)
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock | Paid-in | Comprehensive | Retained | Stockholders’ | |||||||||||||
| Shares |
| Amount |
| Capital |
| Income (Loss) |
| Earnings |
| Equity | ||||||
Balance at December 28, 2024 |
| | $ | | $ | — | $ | ( | $ | | $ | | |||||
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 March 29, 2025 | | $ | | $ | — | $ | ( | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | | — |
| | |||||||||
Change in pension benefit (net of $ |
| — | — | — | ( | — |
| ( | |||||||||
Net loss |
| — | — | — | — | ( |
| ( | |||||||||
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 June 28, 2025 | | $ | | $ | — | $ | | $ | | $ | | ||||||
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 | ( | — | — | — | — |
| — | ||||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | ( |
| ( | |||||||||
Balance at September 27, 2025 |
| | $ | | $ | — | $ | | $ | | $ | | |||||
See Notes to Consolidated Financial Statements.
- 4 -
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
As of September 28, 2024
(In thousands, except share and per share data)
(Unaudited)
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock | Paid-in | Comprehensive | Retained | Stockholders’ | |||||||||||||
| Shares |
| Amount |
| Capital |
| Income (Loss) |
| Earnings |
| Equity | ||||||
Balance at December 30, 2023 |
| | $ | | $ | | $ | | $ | | $ | | |||||
Foreign currency translation |
| — | — | — | | — |
| | |||||||||
Change in pension benefit (net of $ |
| — | — | — | ( | — |
| ( | |||||||||
Net loss |
| — | — | — | — | ( |
| ( | |||||||||
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 March 30, 2024 | | $ | | $ | | $ | | $ | | $ | | ||||||
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 June 29, 2024 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
Foreign currency translation |
| — | — | — | ( | — |
| ( | |||||||||
Change in pension benefit (net of $ |
| — | — | — | ( | — |
| ( | |||||||||
Net income |
| — | — | — | — | |
| | |||||||||
Share-based compensation |
| — | — | | — | — |
| | |||||||||
Dividends declared on common stock, $ |
| — | — | ( | — | — |
| ( | |||||||||
Balance at September 28, 2024 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
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 27, |
| September 28, | |||
| 2025 |
| 2024 | |||
Cash flows from operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization |
| |
| | ||
Amortization of operating lease right-of-use assets | | | ||||
Amortization of deferred debt financing costs and bond discount |
| |
| | ||
Deferred income taxes |
| ( |
| ( | ||
Impairment of goodwill | — | | ||||
Impairment of intangible assets | | — | ||||
Impairment of assets held for sale | | — | ||||
Impairment of property, plant and equipment | | — | ||||
Loss on sales of property, plant and equipment | | | ||||
(Gain) loss on sales of assets | ( | | ||||
(Gain) loss on extinguishment of debt | ( | | ||||
Share-based compensation expense |
| |
| | ||
Changes in assets and liabilities: | ||||||
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 operating activities |
| |
| | ||
Cash flows from investing activities: | ||||||
Capital expenditures |
| ( |
| ( | ||
Proceeds from sales of assets and property, plant and equipment | | ( | ||||
Net cash provided by (used in) investing activities |
| |
| ( | ||
Cash flows from financing activities: | ||||||
Redemptions and repurchases of senior notes | ( | ( | ||||
Proceeds from issuance of senior secured notes |
| — |
| | ||
Repayments of borrowings under term loan facility |
| ( |
| ( | ||
Borrowings under term loan facility | — | | ||||
Repayments of borrowings under revolving credit facility |
| ( |
| ( | ||
Borrowings under revolving credit facility |
| |
| | ||
Dividends paid |
| ( |
| ( | ||
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation |
| ( |
| ( | ||
Payments of debt financing costs | ( | ( | ||||
Net cash used in financing activities |
| ( |
| ( | ||
Effect of exchange rate fluctuations on cash and cash equivalents |
| |
| ( | ||
Net increase in cash and cash equivalents |
| |
| | ||
Cash and cash equivalents at beginning of period |
| |
| | ||
Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental disclosures of cash flow information: | ||||||
Cash interest payments | $ | | $ | | ||
Cash income tax payments | $ | | $ | | ||
Non-cash investing and financing transactions: | ||||||
Dividends declared and not yet paid | $ | | $ | | ||
Accruals related to purchases of property, plant and equipment | $ | | $ | | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | | $ | | ||
See Notes to Consolidated Financial Statements.
- 6 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
(1) | Nature of Operations |
B&G Foods, Inc. is a holding company whose principal assets are the shares of capital stock of its subsidiaries. Unless the context requires otherwise, references in this report to “B&G Foods,” “our company,” “we,” “us” and “our” refer to B&G Foods, Inc. and its subsidiaries. Our financial statements are presented on a consolidated basis.
We manufacture, sell and distribute a diverse portfolio of high-quality shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Our products include frozen and canned vegetables, vegetable, canola and other cooking oils, vegetable shortening, cooking sprays, oatmeal and other hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, crackers, baking powder, baking soda, corn starch, nut clusters and other specialty products. Our products are marketed under many recognized brands.
We have
| (1) | Specialty, which includes among others, the Crisco, Clabber Girl, Bear Creek, Polaner, Underwood, B&G, Grandma’s, New York Style, B&M, Baker’s Joy, Regina, TrueNorth, Static Guard, SugarTwin and Brer Rabbit brands and included the Don Pepino and Sclafani brands until our divestiture of those brands on May 23, 2025; |
| (2) | Meals, which includes, among others, the Ortega, Maple Grove Farms, Cream of Wheat, Las Palmas, Victoria, Mama Mary’s, Spring Tree, McCann’s, Carey’s and Vermont Maid brands; |
| (3) | Frozen & Vegetables, which primarily includes the Green Giant brand and included the Le Sueur brand in the United States until its divestiture on August 1, 2025; and |
| (4) | Spices & Flavor Solutions, which includes, among others, the Dash, Spice Islands, Weber, Ac’cent, Tone’s, Trappey’s, Durkee and Wright’s brands. |
We compete in the retail grocery, foodservice, specialty, private label, club and mass merchandiser channels of distribution. We sell and distribute our products directly and via a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors.
(2) | Summary of Significant Accounting Policies |
Fiscal Year
Typically, our fiscal quarters and fiscal year consist of
Basis of Presentation
The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended September 27, 2025 (third quarter and first three quarters of 2025) and September 28, 2024 (third quarter and first three quarters of 2024) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of September 27, 2025, and the results of our operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows for the third quarter and first three quarters of 2025 and 2024. Our results of operations for the third quarter and first three quarters of
- 7 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
2025 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2024 filed with the SEC on February 25, 2025 (which we refer to as our 2024 Annual Report on Form 10-K).
Use of Estimates
The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.
Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions.
Segment Reporting
We manage and report the following
Recently Issued Accounting Standards – Pending Adoption
In July 2025, the Financial Accounting Standards Board (FASB) issued a new Accounting Standards Update (ASU) that provides certain entities with an additional practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions. This ASU is effective prospectively for annual and interim periods in fiscal years beginning with fiscal 2026. Early adoption is permitted. We currently expect to adopt this guidance when it becomes effective for the first quarter of 2026. We are currently evaluating the expected impact to our consolidated financial statements and related disclosures. Our credit losses have historically been infrequent and immaterial, and we do not expect this ASU to have a material impact to our consolidated financial statements.
In November 2024, the FASB issued a new ASU that requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant statement of operations expense caption. This ASU is effective prospectively for annual periods in fiscal years beginning with fiscal 2027, and interim periods within fiscal years beginning with fiscal 2028. Early adoption and retrospective application are permitted. We currently expect to adopt this guidance when it becomes effective for our annual reporting for fiscal 2027. We are currently evaluating the expected impact to our consolidated financial statements and related disclosures.
In December 2023, the FASB issued a new ASU that requires improved disclosures related to the tax rate reconciliation and income taxes paid. This ASU requires companies to reconcile the income tax expense attributable to continuing operations to the statutory federal income tax rate applied to pre-tax income from continuing operations. This ASU is effective for annual periods beginning with fiscal 2025. Early adoption is permitted. We currently expect to adopt this guidance when it becomes effective for our annual reporting for fiscal 2025. The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all prior periods presented in the financial statements. We are currently evaluating whether we will apply the guidance prospectively or retrospectively, as well as the expected impact to our consolidated financial statements and related disclosures.
(3) | Acquisitions and Divestitures |
Le Sueur U.S. Divestiture
On August 1, 2025, we completed the sale of the Le Sueur U.S. shelf-stable vegetable brand to McCall Farms, Inc. for a purchase price of $
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
subject to a post-closing adjustment for final inventory. The sale did not include the Le Sieur Canada shelf-stable business. We refer to this sale as the “Le Sueur U.S. divestiture.”
During the third quarter of 2025, we recognized a pre-tax gain on sale of $
Cash received | $ | |
Less: | ||
Assets sold: | ||
Inventories | | |
Trademarks — indefinite-lived intangible assets | | |
Customer relationships — finite-lived intangible assets | | |
Total assets sold | | |
Expenses | | |
Pre-tax gain on sale of assets | $ | |
Don Pepino Divestiture
On May 23, 2025, we completed the sale of the Don Pepino and Sclafani brands of pizza and spaghetti sauces, crushed tomatoes, tomato puree and whole peeled tomatoes to Violet Foods LLC, a newly formed portfolio company of Amphora Equity Partners LLC, for a purchase price of $
During the second quarter of 2025, we recognized a pre-tax loss on sale of $
Cash received | $ | |
Less: | ||
Assets sold: | ||
Inventories | | |
Property, plant and equipment, net | | |
Goodwill | | |
Trademarks — indefinite-lived intangible assets | | |
Other assets | | |
Customer relationships — finite-lived intangible assets | | |
Total assets sold | | |
Expenses | | |
Pre-tax loss on sale of assets | $ | ( |
During the first quarter of 2024, we recorded an additional loss on sale of $
(4) | Inventories |
Inventories are stated at the lower of cost or net realizable value and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales.
During the third quarter of 2025, we reclassified $
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Inventories consist of the following, as of the dates indicated (in thousands):
| September 27, 2025 |
| December 28, 2024 | |||
Raw materials and packaging | $ | | $ | | ||
Work-in-process | | | ||||
Finished goods |
| |
| | ||
Inventories | $ | | $ | |||
(5) | Goodwill and Other Intangible Assets |
The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands):
September 27, 2025 | December 28, 2024 | ||||||||||||||||
Gross Carrying |
| Accumulated |
| Net Carrying |
| Gross Carrying |
| Accumulated |
| Net Carrying | |||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||
Finite-Lived Intangible Assets | |||||||||||||||||
Trademarks | $ | | $ | | $ | | $ | | $ | | $ | | |||||
Customer relationships |
| |
| |
| |
| |
| |
| | |||||
Total finite-lived intangible assets | $ | | $ | | $ | | $ | | $ | | $ | | |||||
Indefinite-Lived Intangible Assets | |||||||||||||||||
Goodwill | $ | | $ | | |||||||||||||
Trademarks | | | |||||||||||||||
Total indefinite-lived intangible assets | $ | | $ | | |||||||||||||
Total goodwill and other intangible assets | $ | | $ | | |||||||||||||
The changes in the carrying amount of goodwill by operating segment for the first three quarters of 2025 were as follows (in thousands):
Specialty | Meals | Frozen & Vegetables | Spices & Flavor Solutions | Total | ||||||||||
Balance as of December 31, 2024 | $ | | $ | | $ | — | $ | | $ | | ||||
Currency translation | | — | — | — | | |||||||||
Don Pepino divestiture | ( | — | — | — | ( | |||||||||
Balance as of September 27, 2025 | $ | | $ | | $ | — | $ | | $ | | ||||
The changes in the carrying amount of indefinite-lived trademark intangible assets by reporting unit for the first three quarters of 2025 were as follows (in thousands):
Specialty | Meals | Frozen & Vegetables | Spices & Flavor Solutions | Total | ||||||||||
Balance as of December 31, 2024 | $ | | $ | | $ | | $ | | $ | | ||||
Currency translation | | — | — | — | | |||||||||
Don Pepino divestiture | ( | — | — | — | ( | |||||||||
Le Sueur U.S. divestiture | — | — | ( | — | ( | |||||||||
Assets held for sale - Green Giant Canada | — | — | ( | — | ( | |||||||||
Impairment | — | ( | — | — | ( | |||||||||
Balance as of September 27, 2025 | $ | | $ | | $ | | $ | | $ | | ||||
Amortization expense associated with finite-lived intangible assets was $
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
During the third quarter of 2025, we recorded pre-tax, non-cash impairment charges of $
We did
As part of our quarterly impairment assessment process, we assessed the significant asset components within the Frozen & Vegetables reporting unit, including inventory, long-lived assets, finite-lived intangibles, and indefinite-lived intangibles following the prescribed order of impairment testing under U.S. GAAP. Based on this evaluation, we concluded that no impairment indicators or triggering events were present for these asset components.
However, in the third quarter of 2025, we determined that a portion of the Frozen & Vegetables reporting unit met the criteria for held for sale classification. We reclassified $
During the first quarter of 2024, we reorganized our reporting structure from
We allocated our goodwill to each of our reporting units, based on the percentage of the relative fair value of each of our reporting units. The relative fair value of our reporting units was estimated using a discounted cash flow analysis, which required us to estimate future cash flows as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions. We estimate cash flows for a reporting unit over a discrete period and a terminal period (considering expected long-term growth rates and trends). We used a discount rate of
During the first quarter of 2024, we completed an interim goodwill impairment test, both prior to and subsequent to the change in reporting structure described above, by comparing the fair values of the reporting units to the carrying values. As a result of this goodwill impairment test during the first quarter of 2024, we recognized pre-tax,
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
non-cash goodwill impairment charges of $
If future revenues and contributions to our operating results for any of our brands or operating segments, including any recently impaired brands and any newly acquired brands, deteriorate, at rates in excess of our current projections, we may be required to record additional non-cash impairment charges to certain intangible assets, including trademarks and goodwill. In addition, any significant decline in our market capitalization or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill or the goodwill of any of our operating segments. A determination that all or a portion of our goodwill or indefinite-lived intangible assets are impaired, although a non-cash charge to operations, could have a material adverse effect on our business, consolidated financial condition and results of operations. For a further discussion of our annual impairment testing of goodwill and indefinite-lived intangible assets (trademarks), see Note 2(g), “Summary of Significant Accounting Policies—Goodwill and Other Intangible Assets” to our 2024 Annual Report on Form 10-K.
(6) | Long-Term Debt |
Long-term debt consists of the following, as of the dates indicated (in thousands):
| September 27, 2025 |
| December 28, 2024 | |||
Revolving credit loans due 2028 |
| $ | |
| $ | |
Tranche B term loans due 2029 | | | ||||
| | |||||
| | |||||
Unamortized deferred debt financing costs | ( |
| ( | |||
Unamortized discount |
| ( |
| ( | ||
Total long-term debt, net of unamortized deferred debt financing costs and discount | | | ||||
Current portion of long-term debt |
| ( |
| ( | ||
Long-term debt, net of unamortized deferred debt financing costs and discount, and excluding current portion |
| $ | |
| $ | |
As of September 27, 2025, the aggregate contractual maturities of long-term debt were as follows (in thousands):
Aggregate Contractual Maturities(1) | ||
Fiscal year: | ||
2025 remaining | $ | |
2026 |
| |
2027 |
| |
2028 |
| |
2029 |
| |
Thereafter |
| — |
Total | $ | |
| (1) | Fiscal years 2025 to 2029 also reflect amortization payments per calendar quarter of |
Senior Secured Credit Agreement. Our senior secured credit agreement includes a term loan facility and a revolving credit facility.
Our tranche B term loans bear interest based on alternative rates that we may choose, including a base rate per annum plus an applicable margin of
Interest under the revolving credit facility, including any outstanding letters of credit, is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin ranging from
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
each case depending on our consolidated leverage ratio (as defined in the credit agreement). On July 1, 2025, we amended our credit agreement to, among other things, reduce the revolving credit facility commitments from $
We are required to pay a commitment fee of
We may prepay term loans or revolving loans at any time without premium or penalty (other than customary “breakage” costs with respect to the early termination of SOFR loans). Subject to certain exceptions, the credit agreement provides for mandatory prepayment upon certain asset dispositions or casualty events and issuances of indebtedness.
Our obligations under the credit agreement are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries (other than a domestic subsidiary that is a holding company for one or more foreign subsidiaries). The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. The credit agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens.
The credit agreement also contains certain financial maintenance covenants, which, among other things, specify a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio, each ratio as defined in the credit agreement. On July 1, 2025, we amended our credit agreement to, among other things, temporarily increase the maximum consolidated leverage ratio permitted under our revolving credit facility. As so amended, the credit agreement provides that our maximum consolidated leverage ratio (defined as the ratio, determined on a pro forma basis, of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA (as defined in the credit agreement) before share-based compensation for such period), is
As long as the revolving credit facility is outstanding, the amendment also further restricts the available amount (as defined in the credit agreement) of our cash that may be used for restricted debt payments and investments to a maximum consolidated leverage ratio of less than or equal to
We are also required to maintain a consolidated interest coverage ratio (defined as the ratio, determined on a pro forma basis, of our adjusted EBITDA (before share-based compensation) for any period of four consecutive fiscal quarters to our consolidated interest expense for such period payable in cash) of at least
The credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the credit agreement, and potentially other lenders, provide unlimited additional amounts of term loans or revolving loans or both on terms substantially consistent with those provided under the credit agreement. Among other things, the utilization of the incremental facility is conditioned on our ability to meet a
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
maximum senior secured leverage ratio of
We may redeem some or all of the
We may also, from time to time, seek to retire the
During the second quarter of 2025, we repurchased $
Our obligations under the
The indenture governing the
We may redeem some or all of the
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
to purchase a portion of the
We may also, from time to time, seek to retire the
The
The indenture governing the
Subsidiary Guarantees. We have no assets or operations independent of our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fully and unconditionally guarantee our long-term debt. There are no significant restrictions on our ability and the ability of our subsidiaries to obtain funds from our respective subsidiaries by dividend or loan. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”
Accrued Interest. At September 27, 2025 and December 28, 2024, accrued interest of $
Gain on Extinguishment of Debt. Net interest expense for the first three quarters of 2025 was reduced by $
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
(7) | Fair Value Measurements |
The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value. Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature. The three levels are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.
Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses, income tax payable and dividends payable are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.
The carrying values and fair values of our revolving credit loans, term loans, senior notes and senior secured notes as of September 27, 2025 and December 28, 2024 were as follows (in thousands):
September 27, 2025 | December 28, 2024 |
| |||||||||||
| Carrying Value |
| Fair Value |
| Carrying Value |
| Fair Value |
| |||||
Revolving credit loans | $ | | $ | | (1) | $ | | $ | | (1) | |||
Tranche B term loans due 2029 | | (2) | | (3) | | (2) | | (3) | |||||
| | (3) | | | (3) | ||||||||
$ | | (4) | $ | | (3) | $ | | (4) | $ | | (3) | ||
| (1) | Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active. |
| (2) | The carrying value of the tranche B term loans includes a discount. At September 27, 2025 and December 28, 2024, the face amount of the tranche B term loans was $ |
| (3) | Fair values are estimated based on quoted market prices. |
| (4) | The carrying value of the |
There were
During the third quarter of 2025, we recorded pre-tax, non-cash impairment charges of $
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
(8) | Accumulated Other Comprehensive Income (Loss) |
The reclassifications from accumulated other comprehensive income (loss) (AOCIL) for the third quarter and first three quarters of 2025 and 2024 were as follows (in thousands):
Amounts Reclassified from AOCIL | Amounts Reclassified from AOCIL | Affected Line Item in | |||||||||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | the Statement Where | |||||||||||
September 27, |
| September 28, |
| September 27, |
| September 28, | Net (Loss) Income | ||||||
Details about AOCIL Components | 2025 |
| 2024 |
| 2025 |
| 2024 |
| is Presented | ||||
Defined benefit pension plan items | |||||||||||||
Amortization of unrecognized gain | $ | ( | $ | ( | $ | ( | $ | ( | See (1) below | ||||
Accumulated other comprehensive gain before tax |
| ( |
| ( |
| ( |
| ( | Total before tax | ||||
Tax expense |
| |
| |
| |
| | Income tax (benefit) expense | ||||
Total reclassification | $ | ( | $ | ( | $ | ( | $ | ( | Net of tax | ||||
| (1) | These items are included in the computation of net periodic pension cost. See Note 11, “Pension Benefits,” for additional information. |
Changes in AOCIL for the first three quarters of 2025 were as follows (in thousands):
Foreign Currency | |||||||||
Defined Benefit | Translation | ||||||||
| Pension Plan Items |
| Adjustments |
| Total | ||||
Balance at December 28, 2024 |
| $ | |
| $ | ( |
| $ | ( |
Other comprehensive income before reclassifications |
| — |
| |
| | |||
Amounts reclassified from AOCIL |
| ( |
| — |
| ( | |||
Net current period other comprehensive (loss) income |
| ( |
| |
| | |||
Balance at September 27, 2025 |
| $ | |
| $ | ( |
| $ | |
(9) | Income Taxes |
Income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs. We determined that the estimated annual effective tax rate method would provide a reliable estimate of our overall annual effective tax rate.
Our effective tax rate was
The discrete tax benefits of $
One Big Beautiful Bill Act. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring
- 17 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
provisions of the U.S. Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Among the tax law changes that will impact us relate to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense. The OBBBA allows for 100% bonus depreciation to be taken on eligible assets, the option to immediately expense domestic R&D expenditures as well as accelerate the deduction of previously capitalized expenses, and restores the earnings before interest, taxes, depreciation and amortization (EBITDA) calculation for purposes of determining interest limitations. We implemented certain changes in the third quarter of 2025 related to the interest deduction limitation, and continue to evaluate the options newly available regarding bonus depreciation and the immediate expensing of R&D expenses. We are currently evaluating the impact of OBBBA on our effective income tax rate, results of operations, financial condition and liquidity and expect certain provisions of OBBBA, including the restoration of the EBITDA calculation for purposes of determining interest limitations, to drive a reduction in our cash taxes.
(10)Stockholders’ Equity
Omnibus Incentive Compensation Plan. As of September 27, 2025,
(11) | Pension Benefits |
Company-Sponsored Defined Benefit Pension Plans. As of September 27, 2025, we had
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||
September 27, | September 28, | September 27, | September 28, | ||||||||
2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Service cost—benefits earned during the period | $ | | $ | | $ | | $ | ||||
Interest cost on projected benefit obligation |
| |
| |
| |
| ||||
Expected return on plan assets |
| ( |
| ( |
| ( |
| ( | |||
Amortization of unrecognized gain |
| ( |
| ( |
| ( |
| ( | |||
Net periodic pension (benefit) cost | $ | ( | $ | | $ | ( | $ | | |||
During the first three quarters of 2025 and 2024, we did
Multi-Employer Defined Benefit Pension Plan. In connection with the closure and sale of our Portland, Maine manufacturing facility, we withdrew from participation in a multi-employer defined benefit pension plan during the fourth quarter of 2021. As a result, we are required to make monthly withdrawal liability payments to the plan over
(12) | Leases |
Operating Leases and Finance Lease. We determine whether an arrangement is a lease at inception. We have operating leases and had a finance lease for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
our right-of-use assets and lease liabilities. During the third quarter of 2025, we made the final payment related to our only finance lease. As of September 27, 2025 we no longer have any finance lease right-of-use assets or finance lease liabilities remaining on our consolidated balance sheet.
Operating leases and a finance lease are included in the accompanying unaudited consolidated balance sheets in the following line items (in thousands):
September 27, |
| December 28, | |||
2025 |
| 2024 | |||
Right-of-use assets: | |||||
Operating lease right-of-use assets | $ | | $ | | |
Finance lease right-of-use assets | — | | |||
Total lease right-of-use assets | $ | | $ | | |
Operating lease liabilities: | |||||
Current portion of operating lease liabilities | $ | | $ | | |
Long-term operating lease liabilities, net of current portion | | | |||
Total operating lease liabilities | $ | | $ | | |
Finance lease liabilities: | |||||
Current portion of finance lease liabilities | $ | — | $ | | |
Long-term finance lease liabilities, net of current portion | — | — | |||
Total finance lease liabilities | $ | — | $ | | |
During the second quarter of 2025, we entered into an operating lease agreement for new corporate headquarters in Parsippany, New Jersey. The lease has not yet commenced and therefore the operating lease right-of-use assets and the operating lease liabilities are not recorded on our unaudited consolidated balance sheet as of September 27, 2025. This operating lease is expected to commence during the fourth quarter of 2025 or the first quarter of 2026, with a lease term of
The following table shows supplemental information related to leases (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||
September 27, |
| September 28, |
| September 27, |
| September 28, | |||||
2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Operating cash flow information: | |||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | | $ | | $ | | $ | | |||
Cash paid for amounts included in the measurement of finance lease liabilities | $ | | $ | | $ | | $ | | |||
The components of operating lease costs were as follows: | |||||||||||
Cost of goods sold | $ | | $ | | $ | | $ | | |||
Selling, general and administrative expenses | | | | | |||||||
Total operating lease costs | $ | | $ | | $ | | $ | | |||
The components of finance lease costs were as follows: | |||||||||||
Depreciation of finance right-of-use assets | $ | | $ | | $ | | $ | | |||
Interest on finance lease liabilities | | | | | |||||||
Total finance lease costs | $ | | $ | | $ | | $ | | |||
Total net lease costs | $ | | $ | | $ | | $ | | |||
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Total rent expense was $
Because our operating and finance leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component.
The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:
September 27, | December 28, | ||||
2025 | 2024 | ||||
Weighted average remaining lease term (years) | |||||
Operating leases | |||||
Finance lease | |||||
Weighted average discount rate | |||||
Operating leases | |||||
Finance lease | — | ||||
As of September 27, 2025, the maturities of lease liabilities were as follows (in thousands):
Operating Leases |
| Finance Lease | Total Maturities of Lease Liabilities | |||||
Fiscal year: | ||||||||
2025 remaining | $ | | $ | — | $ | | ||
2026 | | — | | |||||
2027 |
| |
| — |
| | ||
2028 |
| |
| — |
| | ||
2029 |
| |
| — |
| | ||
Thereafter | | — | | |||||
Total undiscounted future minimum lease payments | | — | | |||||
Less: Imputed interest |
| ( |
| — |
| ( | ||
Total present value of future lease liabilities | $ | | $ | — | $ | | ||
(13) | Commitments and Contingencies |
Legal Proceedings. We are from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving product liability claims, product labeling claims, worker’s compensation and other employee claims, and tort and other general liability claims, as well as trademark, copyright, patent infringement and related claims and legal actions. While we cannot predict with certainty the results of these claims and legal actions in which we are currently, or in the future may be, involved, we do not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on our consolidated financial position, results of operations or liquidity.
Environmental. We are subject to environmental laws and regulations in the normal course of business. We did not make any material expenditures during the first three quarters of 2025 or 2024 in order to comply with environmental laws and regulations. Based on our experience to date, management believes that the future cost of compliance with existing environmental laws and regulations (and liability for any known environmental conditions) will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.
Collective Bargaining Agreements. As of September 27, 2025,
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B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
As of the date of this report, only two of our collective bargaining agreements are scheduled to expire in the next
While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate new collective bargaining agreements for our Stoughton or Roseland facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect that the outcome of the negotiations will have a material adverse impact on our business, financial condition or results of operations.
Severance and Change of Control Agreements. We have employment agreements with our chief executive officer and each of our executive vice presidents. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain circumstances, including termination by us without cause (as defined in the agreements) or as a result of the employee’s death or disability, or termination by us or a deemed termination upon a change of control (as defined in the agreements). Severance benefits generally include payments for salary continuation, continuation of health care and insurance benefits, present value of additional pension credits and, in certain cases, accelerated vesting under compensation plans.
(14) | (Loss) Earnings per Share |
Basic (loss) earnings per share is calculated by dividing net (loss) income by the weighted average number of shares of common stock outstanding. Diluted (loss) earnings per share is calculated by dividing net (loss) income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method. For the third quarter of 2024, there were
The table below shows weighted average common shares outstanding for the third quarter and first three quarters of 2025 and the third quarter and first three quarters of 2024, respectively:
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||
September 27, |
| September 28, |
| September 27, |
| September 28, | |||||
2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | | | | | |||||||
Net effect of potentially dilutive share-based compensation awards(1) | — | | — | — | |||||||
Diluted | | | | | |||||||
| (1) | For the third quarter and the first three quarters of 2025, and the first three quarters of 2024, there are |
(15) | Business and Credit Concentrations and Geographic Information |
Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top
- 21 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Our top
As of September 27, 2025, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivables with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Walmart.
During each of the first three quarters of 2025 and 2024, our sales to customers in foreign countries represented approximately
Our long-lived assets (including right-of-use assets and net property, plant and equipment) located outside of the United States represented approximately
(16) | Share-Based Payments |
The following table details our stock option activity for the first three quarters of fiscal 2025 (dollars in thousands, except per share data):
Weighted | Weighted Average | |||||||||
Average | Contractual Life | Aggregate | ||||||||
| Options |
| Exercise Price |
| Remaining (Years) |
| Intrinsic Value | |||
Outstanding at December 28, 2024 |
| | $ | |
| $ | — | |||
Granted |
| | $ | |
| |||||
Exercised |
| — | $ | — | ||||||
Forfeited |
| — | $ | — | ||||||
Expired | ( | $ | | |||||||
Outstanding at September 27, 2025 |
| | $ | |
| $ | | |||
Exercisable at September 27, 2025 |
| | $ | |
| $ | — | |||
The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is generally based on the “simplified method” in accordance with accounting guidance. We generally utilize the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate for the expected term of options is based on the U.S. Treasury implied yield at the date of grant. The assumptions used in the Black-Scholes option-pricing model for options granted during the first three quarters of 2025 and 2024 were as follows:
| 2025 |
| 2024 | |||
Weighted average grant date fair value | $ |
| $ | |||
Expected volatility | ||||||
Expected term | ||||||
Risk-free interest rate | ||||||
Dividend yield | ||||||
- 22 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following table details the activity in our performance share long-term incentive awards (LTIAs) for the first three quarters of 2025:
|
| Weighted Average | |||
Number of | Grant Date Fair Value | ||||
| Performance Shares(1) |
| (per share)(2) | ||
Outstanding at December 28, 2024 |
| | $ | | |
Granted |
| | $ | | |
Vested |
| — | $ | — | |
Forfeited |
| ( | $ | | |
Outstanding at September 27, 2025 |
| | $ | | |
| (1) | Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., |
| (2) | The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period. |
The following table details the activity in our restricted stock for the first three quarters of 2025:
|
| Weighted Average | |||
Number of Shares | Grant Date Fair Value | ||||
| of Restricted Stock |
| (per share)(1) | ||
Outstanding at December 28, 2024 |
| | $ | | |
Granted |
| | $ | | |
Vested |
| ( | $ | | |
Forfeited |
| ( | $ | | |
Outstanding at September 27, 2025 |
| | $ | | |
| (1) | The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes). |
The following table details the number of shares of common stock issued by our company during the third quarter and first three quarters of 2025 and 2024 upon the vesting of performance share LTIAs, the exercise of stock options, the issuance of restricted stock and other share-based compensation net of cancellations:
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
| September 27, |
| September 28, |
| September 27, |
| September 28, | |||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Number of performance shares vested |
| — |
| — |
| — |
| — | ||||
Shares withheld for tax withholding |
| — |
| — |
| — |
| — | ||||
Shares of common stock issued for performance share LTIAs |
| — |
| — |
| — |
| — | ||||
Shares of common stock issued to non-employee directors for annual equity grants |
| — |
| — |
| |
| | ||||
Shares of restricted common stock issued to employees | — | — | | | ||||||||
Shares of restricted stock withheld and cancelled for tax withholding upon vesting | ( | — | ( | ( | ||||||||
Shares of restricted stock cancelled upon forfeiture | ( | — | ( | ( | ||||||||
Net shares of common stock issued |
| ( |
| — |
| |
| | ||||
- 23 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the third quarter and first three quarters of 2025 and 2024 and where that expense is reflected in our consolidated statements of operations (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||
September 27, | September 28, | September 27, | September 28, | ||||||||
Consolidated Statements of Operations Location | 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Compensation expense included in cost of goods sold | $ | | $ | | $ | | $ | ||||
Compensation expense included in selling, general and administrative expenses |
| |
| |
| |
| ||||
Total compensation expense for share-based payments | $ | | $ | | $ | | $ | | |||
As of September 27, 2025, there was $
(17) | Business Segment Information |
We operate in, and report results by,
Segment net sales, segment adjusted expenses and segment adjusted EBITDA are the primary measures used by our chief operating decision maker (CODM) to evaluate segment operating performance and to decide how to allocate resources to our reportable segments. Our CODM is our chief executive officer.
We define segment adjusted expenses as cost of goods sold and other expenses incurred by our business segments to run day-to-day operations. We define segment adjusted EBITDA as segment net sales less segment adjusted expenses. Segment adjusted expenses and segment adjusted EBITDA exclude unallocated corporate items, depreciation and amortization, acquisition/divestiture-related and non-recurring expenses, impairment of intangible assets, goodwill and assets held for sale, gains and losses on sales of assets, interest expense, and income tax expense or benefit. Unallocated corporate items consist of centrally managed corporate functions, including selling, marketing, procurement, centralized administrative functions, insurance, and other similar expenses not directly tied to segment operating performance. Depreciation and amortization expenses are neither maintained nor available by reporting unit, as our manufacturing, warehouse, and distribution activities are centrally managed. These items that are centrally managed at the corporate level, and therefore excluded from the measures of segment adjusted expenses and segment adjusted EBITDA, are reviewed by our CODM. Our CODM also compares segment net sales and segment adjusted EBITDA to performance-based compensation metrics to assess the performance of each segment and utilizes this review to allocate resources, make investment decisions, and deploy assets. Expenses that are managed centrally but can be attributed to a segment, such as warehousing and transportation expenses, are generally allocated to segments based on net sales.
Information about total assets by operating segment is not provided to or reviewed by our CODM.
- 24 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Our reportable segment results were as follows (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
Segment net sales: | ||||||||||||
Specialty | $ | | $ | | $ | | $ | | ||||
Meals | | | | | ||||||||
Frozen & Vegetables | | | | | ||||||||
Spices & Flavor Solutions | | | | | ||||||||
Total segment net sales | | | | | ||||||||
Segment adjusted expenses: | ||||||||||||
Specialty | | | | | ||||||||
Meals | | | | | ||||||||
Frozen & Vegetables | | | | | ||||||||
Spices & Flavor Solutions | | | | | ||||||||
Total segment adjusted expenses | | | | | ||||||||
Segment adjusted EBITDA: | ||||||||||||
Specialty | | | | | ||||||||
Meals | | | | | ||||||||
Frozen & Vegetables | | | ( | | ||||||||
Spices & Flavor Solutions | | | | | ||||||||
Total segment adjusted EBITDA | $ | | $ | | $ | | $ | | ||||
Unallocated corporate expenses | $ | | $ | | $ | | $ | | ||||
Depreciation and amortization | | | | | ||||||||
Acquisition/divestiture-related and non-recurring expenses | | | | | ||||||||
Impairment of goodwill | — | — | — | | ||||||||
Impairment of intangible assets | | — | | — | ||||||||
Impairment of property, plant and equipment, net | — | — | | — | ||||||||
(Gain) loss on sales of assets | ( | — | ( | | ||||||||
Impairment of assets held for sale | | — | | — | ||||||||
Interest expense, net | | | | | ||||||||
Income tax (benefit) expense | ( | | ( | ( | ||||||||
Net (loss) income | $ | ( | $ | | $ | ( | $ | ( | ||||
(18)Assets Held for Sale
During the third quarter of 2025, we reclassified $
The following table sets forth the assets held for sale at September 27, 2025 relating to Green Giant Canada (in thousands):
September 27, 2025 | ||
Inventories | $ | |
Trademarks - indefinite-lived intangible assets | | |
Customer relationships - finite-lived intangible assets | | |
Assets held for sale before impairments | | |
Impairments of assets held for sale | ( | |
Assets held for sale | $ | |
- 25 -
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
(19) | Subsequent Event |
Agreement to Sell Green Giant Canada; Possible Divestiture of Remaining Frozen & Vegetables Assets. On October 24, 2025, we entered into an agreement to sell our Green Giant and Le Sieur frozen and shelf-stable product lines in Canada to Nortera Foods Inc. for a purchase price equal to the inventory value (as defined in the sale agreement) of the inventory transferred at closing plus $
We are also continuing to evaluate and pursue a possible divestiture of some or all of the remaining assets in our Frozen & Vegetables business unit, either in a single transaction or in a series of transactions, and expect that some or all of such remaining assets may be reclassified as assets held for sale as early as the fourth quarter of 2025. In connection with the potential reclassification of the remaining assets of the Frozen & Vegetables business unit, we believe it is reasonably possible that we may recognize additional non-cash losses and impairments in the aggregate ranging from $
- 26 -
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Forward-Looking Statements” before Part I of this report and elsewhere in this report. The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the thirteen and thirty-nine weeks ended September 27, 2025 (third quarter and first three quarters of 2025) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended December 28, 2024 (fiscal 2024) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 25, 2025 (which we refer to as our 2024 Annual Report on Form 10-K).
General
We manufacture, sell and distribute a diverse portfolio of branded, high quality, shelf-stable and frozen foods and household products, many of which have leading regional or national market shares. In general, we position our branded products to appeal to the consumer desiring a high quality and reasonably priced product. We complement our branded product retail sales with institutional and foodservice sales and private label sales.
Our company has been built upon a successful track record of acquisition-driven growth. Our goal is to continue to increase sales, profitability and cash flows through strategic acquisitions, new product development and organic growth. We intend to implement our growth strategy through the following initiatives: expanding our brand portfolio with disciplined acquisitions of complementary branded businesses, continuing to develop new products and delivering them to market quickly, leveraging our multiple channel sales and distribution system and continuing to focus on higher growth customers and distribution channels.
Since 1996, we have successfully acquired and integrated more than 50 brands or businesses into our company. More recently, in an attempt to sharpen focus, improve margins and reduce our long-term debt, we have begun reshaping our portfolio through select divestitures. For example, on August 1, 2025, we completed the sale of the Le Sueur U.S. business; on May 23, 2025, we completed the sale of the Don Pepino and Sclafani brands; on January 3, 2023, we completed the sale of the Back to Nature business; and on November 8, 2023, we completed the sale of the Green Giant U.S. shelf-stable product line. These divestitures affect comparability between periods.
On October 24, 2025, we entered into an agreement to sell our Green Giant and Le Sieur frozen and shelf-stable product lines in Canada, which we refer to as “Green Giant Canada.” We expect the sale to close during the fourth quarter of 2025 or the first quarter of 2026, subject to regulatory approval in Canada and the satisfaction of customary closing conditions. We refer to this pending sale as the “Green Giant Canada divestiture.” We are also continuing to evaluate and pursue a possible divestiture of some or all of the remaining assets in our Frozen & Vegetables business unit, either in a single transaction or in a series of transactions. The Green Giant Canada divestiture, if completed, and any divestiture of some or all of the remaining Frozen & Vegetables business unit, will affect comparability between periods. See Note 18, “Assets Held for Sale” and Note 19, “Subsequent Event.”
We are subject to a number of challenges that may adversely affect our businesses. These challenges, which are discussed below and under the heading “Forward-Looking Statements,” include:
Fluctuations in Commodity Prices and Production and Distribution Costs. We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in the U.S. and foreign locations. Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price attributable to a number of factors, including climate and weather conditions, supply chain disruptions (including raw material shortages), labor shortages, wars and pandemics. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.
We attempt to manage cost inflation risks by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers may lag behind rising input costs. Competitive pressures also may limit our ability to quickly raise prices in response to rising costs.
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We experienced material net cost increases for raw materials during the last several years due to a number of factors. Raw material costs remained elevated in fiscal 2024 and the first three quarters of 2025 and we anticipate that certain raw material costs will remain elevated during the remainder of fiscal 2025 and fiscal 2026. We are currently locked into our supply and prices for a majority of our most significant raw material commodities through at least the end of fiscal 2025.
In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through list price increases, trade spend reductions and cost savings initiatives. Although freight rates began to moderate in 2023, freight rates remained elevated during fiscal 2024 and the first three quarters of 2025, and we expect freight rates to remain elevated during the remainder of fiscal 2025 and fiscal 2026.
We plan to continue managing inflation risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices. However, to the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially adversely affected. In addition, if input costs decline, customers may look for price reductions in situations where we have locked into purchases at higher costs.
During the past several years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs.
Trade and Regulatory Uncertainty. On February 1, 2025, the White House announced the imposition of tariffs of up to 25% on imports from Canada and Mexico and 10% on imports from China, and those countries subsequently announced retaliatory tariffs in response. Although the imposition of such tariffs has to a large extent been at least temporarily paused in the case of Canada and Mexico, tariffs on imports from China increased to as high as 145% and are now at 47%, and the Trump Administration has imposed tariffs on other countries throughout the globe. The situation remains dynamic, rapidly evolving and uncertain. The U.S. has also reinstated full 25% tariffs on steel imports and increased tariffs on aluminum imports to 25%.
If allowed to become or remain effective, these or any new or increased tariffs or resultant trade wars could lead to significant increases in the costs of raw materials and finished goods, including spices for our Spices & Flavor Solutions business unit, such as garlic, primarily sourced from China, and black pepper primarily sourced from Vietnam; finished goods produced at our Green Giant frozen vegetable manufacturing facility in Irapuato, Mexico; certain raw material vegetables we procure in Mexico for production in the United States; and the cost of steel cans and lids used for certain of our products. Our attempts to potentially offset cost increases through increases in the prices we charge for certain of our products may not be successful and may result in reduced sales volume.
If we are unable to offset increased costs or face significant sales volume declines, this could have a material adverse effect on our business, consolidated financial position, results of operation or liquidity. Although most of the Green Giant vegetable products that we sell to customers in Canada are grown and produced in Canada, retaliatory tariffs imposed or threatened to be imposed by Canada or any “buy Canadian” campaigns in response to U.S. tariffs could have an adverse impact on our sales to customers in Canada for any of our products that are not produced in Canada. In addition, if allowed to become or remain effective, these recent tariffs or any new or increased tariffs could also negatively affect U.S. national or regional economies or lead to increased inflation or a recession, which also could have a material adverse effect on our business, consolidated financial position, results of operation or liquidity. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products.
Consolidation in the Retail Trade and Consequent Inventory Reductions. As customers, such as supermarkets, discounters, e-commerce merchants, warehouse clubs and food distributors, continue to consolidate and grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs. These customers are also reducing their inventories and increasing their emphasis on private label products.
Changing Consumer Preferences and Channel Shifts. Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences. In addition, the rapid growth
- 28 -
of some channels and changing consumer preferences for these channels, in particular in e-commerce, may impact our current operations or strategies more quickly than we planned for, create consumer price deflation, alter the buying behavior of consumers or disrupt our retail customer relationships. As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance. These expenditures may not be successful, including those related to our e-commerce and other technology-focused efforts, and might not result in trade and consumer acceptance of our efforts. If we are unable to effectively and timely adapt to changes in consumer preferences and channel shifts, our products may lose market share or we may face significant price erosion, and our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.
Consumer Concern Regarding Food Safety, Quality and Health. The food industry is subject to consumer concerns regarding the safety and quality of certain food products. If consumers in our principal markets lose confidence in the safety and quality of our food products, even as a result of a product liability claim or a product recall by a food industry competitor, our business could be adversely affected.
Fluctuations in Currency Exchange Rates. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. During the first three quarters of 2025 and 2024, our net sales to customers in foreign countries represented approximately 9.1% of our total net sales. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars. A weakening of the U.S. dollar against the Canadian dollar would significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars, with one exception being certain purchases of raw materials in Mexico that are denominated in Mexican pesos.
In addition, we operate a frozen vegetable manufacturing facility in Irapuato, Mexico and as a result are exposed to fluctuations in the Mexican peso. A weakening of the U.S. dollar in relation to the Mexican peso would significantly increase our costs relating to the purchase of raw materials and the production of frozen vegetable products to the extent we have not purchased Mexican pesos or otherwise entered into hedging arrangements in advance of the weakening of the U.S. dollar. As a result, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an adverse impact on operating results. For example, our results of operations from our Green Giant frozen operations in Mexico were negatively impacted during fiscal 2024 as a result of the Mexican peso appreciating against the U.S. dollar.
To confront these challenges, we continue to take steps to build the value of our brands, to improve our existing portfolio of products with new product and marketing initiatives, to reduce costs through improved productivity, to address consumer concerns about food safety, quality and health and to favorably manage currency fluctuations.
Critical Accounting Policies; Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve: revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment, and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.
In our 2024 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our unaudited consolidated interim financial statements. There have been no material changes to these policies from those disclosed in our 2024 Annual Report on Form 10-K.
- 29 -
Results of Operations
The following table sets forth the percentages of net sales represented by selected items for the third quarter and first three quarters of 2025 and 2024 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Statement of Operations Data: | ||||||||||||
Net sales |
| 100.0 | % | 100.0 | % |
| 100.0 | % | 100.0 | % | ||
Cost of goods sold |
| 77.5 | % | 77.8 | % |
| 78.6 | % | 78.0 | % | ||
Gross profit |
| 22.5 | % | 22.2 | % |
| 21.4 | % | 22.0 | % | ||
Operating expenses: | ||||||||||||
Selling, general and administrative expenses |
| 10.2 | % | 10.0 | % |
| 10.9 | % | 10.0 | % | ||
Amortization expense | 1.2 | % | 1.1 | % | 1.2 | % | 1.1 | % | ||||
Impairment of goodwill | — | % | — | % | — | % | 5.1 | % | ||||
Impairment of intangible assets | 5.8 | % | — | % | 2.0 | % | — | % | ||||
Gain on sales of assets | (3.5) | % | — | % | (0.2) | % | — | % | ||||
Impairment of assets held for sale | 6.3 | % | — | % | 2.2 | % | — | % | ||||
Operating income |
| 2.5 | % | 11.1 | % |
| 5.3 | % | 5.8 | % | ||
Other expenses (income): | ||||||||||||
Interest expense, net |
| 8.5 | % | 9.1 | % |
| 8.6 | % | 8.5 | % | ||
Other income | (0.3) | % | (0.2) | % | (0.3) | % | (0.2) | % | ||||
(Loss) income before income tax (benefit) expense |
| (5.7) | % | 2.2 | % |
| (3.0) | % | (2.5) | % | ||
Income tax (benefit) expense |
| (1.3) | % | 0.6 | % |
| (0.8) | % | (0.5) | % | ||
Net (loss) income |
| (4.4) | % | 1.6 | % |
| (2.2) | % | (2.0) | % | ||
As used in this section, the terms listed below have the following meanings:
Net Sales. Our net sales represents gross sales of products shipped to customers plus amounts charged to customers for shipping and handling, less cash discounts, coupon redemptions, slotting fees and trade promotional spending, including marketing development funds.
Gross Profit. Our gross profit is equal to our net sales less cost of goods sold. The primary components of our cost of goods sold are cost of internally manufactured products, purchases of finished goods from co-packers, a portion of our warehousing expenses plus freight costs to our distribution centers and to our customers.
Selling, General and Administrative Expenses. Our selling, general and administrative expenses include costs related to selling our products, as well as all other general and administrative expenses. Some of these costs include administrative, marketing and internal sales force employee compensation and benefits costs, consumer advertising programs, brokerage costs, a portion of our warehousing expenses, information technology and communication costs, office rent, utilities, supplies, professional services, severance, acquisition/divestiture-related and non-recurring expenses and other general corporate expenses.
Amortization Expense. Amortization expense includes the amortization expense associated with customer relationships, finite-lived trademarks and other intangible assets.
Impairment of Goodwill. Impairment of goodwill includes pre-tax, non-cash impairment charges to goodwill.
Impairment of Intangible Assets. Impairment of intangible assets includes pre-tax, non-cash impairment charges to indefinite-lived intangible trademark assets.
Impairment of Assets Held for Sale. Impairment of assets held for sale includes pre-tax, non-cash impairment charges to assets held for sale for Green Giant Canada.
Net Interest Expense. Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond discount and amortization of deferred debt financing costs (net of interest income).
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Other Income. Other income includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs.
Non-GAAP Financial Measures
Certain disclosures in this report include non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of our financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in our consolidated balance sheets and related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows.
Base Business Net Sales. Base business net sales is a non-GAAP financial measure used by management to measure operating performance. We define base business net sales as our net sales excluding (1) the net sales of acquisitions until the net sales from such acquisitions are included in both comparable periods and (2) net sales of discontinued or divested brands. The portion of current period net sales attributable to recent acquisitions for which there is no corresponding period in the comparable period of the prior year is excluded. For each acquisition, the excluded period starts at the beginning of the most recent fiscal period being compared and ends on the first anniversary of the acquisition date. For discontinued or divested brands, the entire amount of net sales is excluded from each fiscal period being compared. We have included this financial measure because our management believes it provides useful and comparable trend information regarding the results of our business without the effect of the timing of acquisitions and the effect of discontinued or divested brands.
A reconciliation of net sales to base business net sales for the third quarter and first three quarters of 2025 and 2024 follows (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Net sales | $ | 439,304 | $ | 461,073 | $ | 1,289,131 | $ | 1,380,886 | ||||
Net sales from discontinued or divested brands(1) | (2,329) | (12,169) | (22,633) | (35,093) | ||||||||
Base business net sales | $ | 436,975 | $ | 448,904 | $ | 1,266,498 | $ | 1,345,793 | ||||
| (1) | For the third quarter and first three quarters of 2024, reflects net sales of the Le Sueur U.S. shelf-stable vegetable brand, which was divested on August 1, 2025, net sales of the Don Pepino and Sclafani brands, which were divested on May 23, 2025, and a net credit paid to customers relating to other discontinued and divested brands. For the third quarter of 2025, reflects net sales of the Le Sueur U.S. shelf-stable vegetable brand through the date of the divestiture. For the first three quarters of 2025, reflects net sales of the Le Sueur U.S. shelf-stable vegetable brand and the Don Pepino and Sclafani brands through the applicable dates of the divestitures. |
EBITDA and Adjusted EBITDA. EBITDA and adjusted EBITDA are non-GAAP financial measures used by management to measure operating performance. We define EBITDA as net income (loss) before net interest expense, income taxes and depreciation and amortization. We define adjusted EBITDA as EBITDA 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; impairment of intangible assets; and non-recurring expenses, gains and losses.
Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. We use EBITDA and adjusted EBITDA in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement, our senior secured notes indenture and our senior notes indenture contain ratios based on these measures. As a result, reports used by internal management during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.
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EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income (loss), net income (loss) or any other GAAP measure as an indicator of operating performance. EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends. Rather, EBITDA and adjusted EBITDA are potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.
Reconciliations of net (loss) income and net cash provided by (used in) operating activities to EBITDA and adjusted EBITDA for the third quarter and first three quarters of 2025 and 2024 along with the components of EBITDA and adjusted EBITDA follows (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 | |||||
Net (loss) income | $ | (19,142) | $ | 7,464 | $ | (28,079) | $ | (28,837) | ||||
Income tax (benefit) expense |
| (5,926) |
| 2,663 |
| (10,304) |
| (6,341) | ||||
Interest expense, net(1) (2) (3) |
| 37,297 |
| 42,166 |
| 110,835 |
| 117,799 | ||||
Depreciation and amortization |
| 16,570 |
| 17,157 |
| 50,124 |
| 51,709 | ||||
EBITDA |
| 28,799 |
| 69,450 |
| 122,576 |
| 134,330 | ||||
Acquisition/divestiture-related and non-recurring expenses(4) |
| 3,321 |
| 919 |
| 11,022 |
| 4,289 | ||||
Impairment of goodwill(5) | — | — | — | 70,580 | ||||||||
Impairment of intangible assets(6) | 26,000 | — | 26,000 | — | ||||||||
(Gain) loss on sales of assets(7) | (15,513) |
| — | (2,867) | 135 | |||||||
Impairment of property, plant and equipment(8) | — |
| — | 2,994 | — | |||||||
Impairment of assets held for sale(9) |
| 27,800 |
| — |
| 27,800 |
| — | ||||
Adjusted EBITDA | $ | 70,407 | $ | 70,369 | $ | 187,525 | $ | 209,334 | ||||
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
2025 |
| 2024 |
| 2025 |
| 2024 | ||||||
Net cash provided by (used in) operating activities | $ | (64,618) | $ | 4,156 | $ | 5,950 | $ | 50,566 | ||||
Income tax (benefit) expense |
| (5,926) |
| 2,663 |
| (10,304) |
| (6,341) | ||||
Interest expense, net(1) (2) (3) |
| 37,297 |
| 42,166 |
| 110,835 |
| 117,799 | ||||
Impairment of goodwill(5) | — | — | — | (70,580) | ||||||||
Impairment of intangible assets(6) | (26,000) | — | (26,000) | — | ||||||||
Gain (loss) on extinguishment of debt(1) | 681 | (1,938) | 2,754 | (1,938) | ||||||||
Loss on sales of property, plant and equipment | (126) |
| — | (1,029) | (123) | |||||||
Gain (loss) on sales of assets(7) |
| 15,513 |
| — |
| 2,867 |
| (135) | ||||
Impairment of property, plant and equipment(8) | — |
| — | (2,994) | — | |||||||
Impairment of assets held for sale(9) | (27,800) |
| — | (27,800) | — | |||||||
Deferred income taxes |
| (4,702) |
| 1,810 |
| 13,801 |
| 16,968 | ||||
Amortization of deferred debt financing costs and bond discount |
| (1,782) |
| (1,329) |
| (4,937) |
| (4,537) | ||||
Share-based compensation expense |
| (4,050) |
| (2,400) |
| (10,604) |
| (6,795) | ||||
Changes in assets and liabilities, net of effects of business combinations |
| 110,312 |
| 24,322 |
| 70,037 |
| 39,446 | ||||
EBITDA | 28,799 | 69,450 | 122,576 | 134,330 | ||||||||
Acquisition/divestiture-related and non-recurring expenses(4) |
| 3,321 |
| 919 |
| 11,022 |
| 4,289 | ||||
Impairment of goodwill(5) | — | — | — | 70,580 | ||||||||
Impairment of intangible assets(6) | 26,000 | — | 26,000 | — | ||||||||
(Gain) loss on sales of assets(7) | (15,513) |
| — |
| (2,867) |
| 135 | |||||
Impairment of property, plant and equipment(8) | — | — | 2,994 | — | ||||||||
Impairment of assets held for sale(9) | 27,800 | — | 27,800 | — | ||||||||
Adjusted EBITDA | $ | 70,407 | $ | 70,369 | $ | 187,525 | $ | 209,334 | ||||
Adjusted Net Income and Adjusted Diluted Earnings Per Share. Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. We define adjusted net income and adjusted diluted earnings per share as net income (loss) and diluted earnings (loss) per
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share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to net income (loss) and diluted earnings (loss) per share to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our company’s performance or when making decisions regarding allocation of resources.
A reconciliation of net (loss) income to adjusted net income and adjusted diluted earnings per share for the third quarter and first three quarters of 2025 and 2024 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
2025 |
| 2024 |
| 2025 |
| 2024 | ||||||
Net (loss) income | $ | (19,142) | $ | 7,464 | $ | (28,079) | $ | (28,837) | ||||
(Gain) loss on extinguishment of debt(1) | (681) | 1,938 | (2,754) | 1,938 | ||||||||
Accelerated amortization of deferred debt financing costs(2) | 289 | — | 588 | 456 | ||||||||
Debt financing costs(3) | 28 | 1,140 | 28 | 1,140 | ||||||||
Acquisition/divestiture-related and non-recurring expenses(4) | 3,321 | 919 | 11,022 | 4,289 | ||||||||
Impairment of goodwill(5) | — | — | — | 70,580 | ||||||||
Impairment of intangible assets(6) | 26,000 | — | 26,000 | — | ||||||||
(Gain) loss on sales of assets(7) | (15,513) | — | (2,867) | 135 | ||||||||
Impairment of property, plant and equipment, net(8) | — | — | 2,994 | — | ||||||||
Impairment of assets held for sale(9) | 27,800 | — | 27,800 | — | ||||||||
Tax benefit related to IRC Section 987 and other discrete items and tax true-ups(10) | (299) | (351) | (1,296) | 646 | ||||||||
Tax effects of non-GAAP adjustments(11) | (10,070) | (979) | (15,366) | (19,240) | ||||||||
Adjusted net income | $ | 11,733 | $ | 10,131 | $ | 18,070 | $ | 31,107 | ||||
Adjusted diluted earnings per share | $ | 0.15 | $ | 0.13 | $ | 0.23 | $ | 0.39 | ||||
| (1) | Net interest expense for the third quarter and first three quarters of 2025 was reduced by $0.5 million and $2.3 million, respectively, as a result of gains on extinguishment of debt related to our repurchases of $20.0 million aggregate principal amount and $40.7 million aggregate principal amount, respectively, of our 5.25% senior notes due 2027 in open market purchases during the third quarter and first three quarters of 2025 at discounted repurchase prices, which resulted in pre-tax gains of $0.8 million and $2.9 million, respectively, partially offset by the accelerated amortization of deferred debt financing costs of $0.3 million and $0.6 million, respectively, described in footnote (2) below, for the third quarter and first three quarters of 2025. |
Net interest expense for the third quarter and first three quarters of 2024 includes a loss on extinguishment of debt of $1.9 million, which consists of $1.3 million related to the refinancing of tranche B term loans and $0.6 million related to the refinancing of revolving credit loans.
| (2) | Net interest expense for the third quarter and first three quarters of 2025 includes the accelerated amortization of deferred debt financing costs of $0.3 million (or $0.2 million, net of tax) and $0.6 million (or $0.4 million, net of tax), respectively, resulting from our repurchases of 5.25% senior notes due 2027 described in footnote (1) above. |
Net interest expense for the first three quarters of 2024 includes the accelerated amortization of deferred debt financing costs of $0.5 million (or $0.3 million, net of tax), resulting from our prepayment of $21.3 million aggregate principal amount of tranche B term loans and repurchase of $0.7 million aggregate principal amount of 8.00% senior secured notes due 2028 during the second quarter of 2024.
| (3) | Debt financing costs for the third quarter and first three quarters of 2024 and 2025 reflects the portion of debt financing costs incurred in connection with the refinancing of our senior secured credit facility that is included in net interest expense for the third quarter and first three quarters of 2024 and 2025. Of the $1.1 million included in net interest expense for the third quarter and first three quarters of 2024, $0.4 million relates to the refinancing of tranche B term loans and $0.7 million relates to the refinancing of revolving credit loans. |
| (4) | Acquisition/divestiture-related and non-recurring expenses primarily include acquisition, integration and divestiture-related expenses for prior and potential future acquisitions and divestitures, and non-recurring expenses. |
| (5) | In connection with our transition from one reportable segment to four reportable segments during the first quarter of 2024, we reassigned assets and liabilities, including goodwill, between four reporting units (which are the same as our reportable |
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| segments). We completed a goodwill impairment test, both prior to and subsequent to the change in reporting structure, comparing the fair values of the reporting units to the carrying values. The goodwill impairment test resulted in us recognizing pre-tax, non-cash goodwill impairment charges of $70.6 million (or $53.4 million, net of tax) within our Frozen & Vegetables reporting unit during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report. |
| (6) | During the third quarter of 2025, we recorded pre-tax, non-cash impairment charges of $26.0 million (or $19.6 million, net of tax) related to indefinite-lived intangible trademark assets for the Victoria and McCann’s brands. |
| (7) | During the first three quarters of 2025, we recognized a net gain on sale of assets of $2.9 million (or $2.1 million, net of tax), which includes a gain on sale of $15.5 million (or $11.6 million, net of tax) for the Le Sueur U.S. divestiture during the third quarter of 2025 and a loss on sale of $12.6 million (or $9.5 million, net of tax) for the Don Pepino divestiture during the second quarter of 2025. See Note 3, “Acquisitions and Divestitures,” to our unaudited consolidated interim financial statements in Part I, Item I of this report. |
| (8) | During the first quarter of 2025, we recorded pre-tax, non-cash impairment charges of $3.0 million related to property, plant and equipment. |
| (9) | During the third quarter of 2025, we reclassified $75.6 million of inventories, $6.3 million of indefinite-lived trademark intangible assets and $3.1 million of finite-lived customer relationship intangible assets related to Green Giant Canada within the Frozen & Vegetables business unit to assets held for sale as of the end of the third quarter of 2025. We then measured the assets held for sale at the lower of their carrying value or fair value less the estimated costs to sell, and recorded pre-tax non-cash impairment charges of $27.8 million (or $21.0 million, net of tax) during the third quarter of 2025. |
| (10) | During the first three quarters of 2025, we recorded a net discrete tax benefit of $1.3 million. During the first quarter of 2025, we recorded a net discrete tax benefit of $1.4 million, primarily related to a discrete tax benefit of $2.1 million for the tax effect of a pre-transition loss related to Section 987 of the Internal Revenue Code of 1986 for the cumulative unrecognized foreign exchange loss relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987, partially offset by discrete tax expenses of $0.7 million related to stock-based compensation and rate changes. During the second quarter of 2025, we recorded other net discrete tax expenses of $0.4 million. During the third quarter of 2025, we recorded other net discrete tax benefits of $0.3 million. |
Tax true-up for the third quarter and first three quarters of 2024 relates to return to tax provision adjustments in the U.S., Mexico and Canada.
| (11) | Represents the tax effects of the non-GAAP adjustments listed above, assuming a tax rate of approximately 24.5%. |
Segment Adjusted EBITDA and Segment Adjusted Expenses. For a discussion of segment adjusted EBITDA, segment adjusted expenses and a reconciliation of segment adjusted EBITDA to net (loss) income, see Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.
Adjusted Gross Profit and Adjusted Gross Profit Percentage. Adjusted gross profit and adjusted gross profit percentage are non-GAAP financial measures used by management to measure operating performance. We define adjusted gross profit as gross profit adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold and adjusted gross profit percentage as gross profit percentage (i.e., gross profit as a percentage of net sales) adjusted for acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold. These non-GAAP financial measures reflect adjustments to gross profit and gross profit percentage to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our performance or when making decisions regarding allocation of resources.
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A reconciliation of gross profit to adjusted gross profit and gross profit percentage to adjusted gross profit percentage for the third quarter and first three quarters of 2025 and 2024, respectively, follows (in thousands, except percentages):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||
2025 | 2024 |
| 2025 | 2024 | ||||||||
Gross profit | $ | 99,013 | $ | 102,345 | $ | 276,082 | $ | 303,263 | ||||
Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold(1) | (184) | 130 | 2,422 | 2,321 | ||||||||
Adjusted gross profit | $ | 98,829 | $ | 102,475 | $ | 278,504 | $ | 305,584 | ||||
Gross profit percentage | 22.5% | 22.2% | 21.4% | 22.0% | ||||||||
Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold as a percentage of net sales | 0.0% | 0.0% | 0.2% | 0.2% | ||||||||
Adjusted gross profit percentage | 22.5% | 22.2% | 21.6% | 22.1% | ||||||||
| (1) | Acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold primarily include acquisition, integration and divestiture-related expenses for prior and potential future acquisitions and divestitures, and non-recurring expenses. |
Third quarter of 2025 compared to the third quarter of 2024
Net Sales. Net sales for the third quarter of 2025 decreased $21.8 million, or 4.7%, to $439.3 million from $461.1 million for the third quarter of 2024. The decrease was primarily attributable to a decrease in volume and the negative impact of foreign currency, partially offset by an increase in net pricing and the impact of product mix.
Base business net sales for the third quarter of 2025 decreased $11.9 million, or 2.7%, to $437.0 million from $448.9 million for the third quarter of 2024. The decrease in base business net sales was driven by a decrease in volume of $12.9 million, or 2.9% of base business net sales, and the negative impact of foreign currency of $0.3 million, partially offset by an increase in net pricing and the impact of product mix of $1.3 million, or 0.3% of base business net sales.
Gross Profit. Gross profit was $99.0 million for the third quarter of 2025, or 22.5% of net sales. Adjusted gross profit was $98.8 million, or 22.5% of net sales. Gross profit was $102.3 million for the third quarter of 2024, or 22.2% of net sales. Adjusted gross profit was $102.4 million, or 22.2% of net sales.
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $1.4 million, or 3.0%, to $44.6 million for the third quarter of 2025 from $46.0 million for the third quarter of 2024. The decrease was composed of decreases in consumer marketing expenses of $1.8 million, general and administrative expenses of $0.6 million, warehousing expenses of $0.5 million and selling expenses of $0.3 million, partially offset by an increase in acquisition/divestiture-related and non-recurring expenses of $1.8 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.2 percentage points to 10.2% for the third quarter of 2025, as compared to 10.0% for the third quarter of 2024.
Amortization Expense. Amortization expense remained flat at $5.1 million for each of the third quarter of 2025 and the third quarter of 2024.
Impairment of Intangible Assets. During the third quarter of 2025, we recorded pre-tax, non-cash impairment charges of $26.0 million related to indefinite-lived intangible trademark assets for the Victoria and McCann’s brands.
Gain on Sale of Assets. During the third quarter of 2025, we completed the Le Sueur U.S. divestiture and recognized a gain on sale of $15.5 million.
Impairment of Assets Held for Sale. During the third quarter of 2025, we reclassified $75.6 million of inventories, $6.3 million of indefinite-lived trademark intangible assets and $3.1 million of finite-lived customer relationship intangible assets related to Green Giant Canada within the Frozen & Vegetables business unit to assets held for sale as of the end of the third quarter of 2025. We then measured the assets held for sale at the lower of their carrying value or fair value less the estimated costs to sell, and recorded pre-tax non-cash impairment charges of $27.8 million during the third quarter of 2025.
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Operating Income. As a result of the foregoing, operating income decreased $40.2 million, or 78.5%, to $11.0 million for the third quarter of 2025 from $51.2 million for the third quarter of 2024. Operating income expressed as a percentage of net sales decreased to 2.5% in the third quarter of 2025 from 11.1% in the third quarter of 2024.
Net Interest Expense. Net interest expense decreased $4.9 million, or 11.5%, to $37.3 million for the third quarter of 2025 from $42.2 million for the third quarter of 2024. The decrease was primarily attributable to a reduction in average long-term debt outstanding during the third quarter of 2025 compared to the third quarter of 2024, lower interest rates on our variable rate borrowings during the third quarter of 2025 compared to the third quarter of 2024, and a net gain on extinguishment of debt of $0.5 million during the third quarter of 2025, compared to a loss on extinguishment of debt of $1.9 million during the third quarter of 2024.
Other Income. Other income for the third quarter of 2025 and 2024 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $1.2 million and $1.0 million, respectively.
Income Tax (Benefit) Expense. Income tax benefit increased $8.6 million to an income tax benefit of $5.9 million for the third quarter of 2025 from an income tax expense of $2.7 million for the third quarter of 2024. Our effective tax rate was 23.6% for the third quarter of 2025 and 26.3% for the third quarter of 2024.
During the third quarter of 2025, we recorded a net discrete tax benefit of $9.6 million, comprised of a discrete tax benefit of $13.2 million due to the tax impact of the impairment of indefinite-lived intangible trademark assets for the Victoria and McCann’s brands and the impairment of assets held for sale for Green Giant Canada within the Frozen & Vegetables business unit and other net discrete tax benefits of $0.3 million, partially offset by a discrete tax expense of $3.9 million related to the gain on the Le Sueur U.S. divestiture.
First three quarters of 2025 compared to the first three quarters of 2024
Net Sales. Net sales for the first three quarters of 2025 decreased $91.8 million, or 6.6%, to $1,289.1 million from $1,380.9 million for the first three quarters of 2024. The decrease was primarily attributable to a decrease in volume, a decrease in net pricing and the impact of product mix, and the negative impact of foreign currency.
Base business net sales for the first three quarters of 2025 decreased $79.3 million, or 5.9%, to $1,266.5 million from $1,345.8 million for the first three quarters of 2024. The decrease in base business net sales was driven by a decrease in volume of $68.2 million, or 5.1% of base business net sales, a decrease in net pricing and the impact of product mix of $8.3 million, or 0.6% of base business net sales, and the negative impact of foreign currency of $2.8 million.
Gross Profit. Gross profit was $276.1 million for the first three quarters of 2025, or 21.4% of net sales. Adjusted gross profit was $278.5 million, or 21.6% of net sales. Gross profit was $303.3 million for the first three quarters of 2024, or 22.0% of net sales. Adjusted gross profit was $305.6 million, or 22.1% of net sales.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $3.2 million, or 2.3%, to $140.9 million for the first three quarters of 2025 from $137.7 million for the first three quarters of 2024. The increase was composed of an increase in acquisition/divestiture-related and non-recurring expenses of $8.7 million, partially offset by decreases in consumer marketing expenses of $2.7 million, warehousing expenses of $1.4 million, selling expenses of $1.2 million and general and administrative expenses of $0.2 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 0.9 percentage points to 10.9% for the first three quarters of 2025, as compared to 10.0% for the first three quarters of 2024.
Amortization Expense. Amortization expense remained flat at $15.3 million for each of the first three quarters of 2025 and the first three quarters of 2024.
Impairment of Goodwill. In connection with our transition from one reportable segment to four reportable segments during the first quarter of 2024, we reassigned assets and liabilities, including goodwill, between four reporting units (which are the same as our reportable segments) and completed a goodwill impairment test, both prior to and subsequent to the change, comparing the fair values of the reporting units to the carrying values. The goodwill impairment test resulted in us recognizing pre-tax, non-cash goodwill impairment charges of $70.6 million within our Frozen & Vegetables reporting segment during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report.
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Impairment of Intangible Assets. During the third quarter of 2025, we recorded pre-tax, non-cash impairment charges of $26.0 million related to indefinite-lived intangible trademark assets for the Victoria and McCann’s brands.
(Gain) Loss on Sales of Assets. During the first three quarters of 2025, we recognized a net gain on sale of assets of $2.9 million, which includes a gain on sale of $15.5 million for the Le Sueur U.S. divestiture during the third quarter of 2025 and a loss on sale of $12.6 million for the Don Pepino divestiture during the second quarter of 2025.
During the first quarter of 2024, we recorded a post-closing inventory adjustment related to the 2023 Green Giant U.S. shelf-stable divestiture and recorded an additional loss on sale of assets of $0.1 million.
Impairment of Assets Held for Sale. During the third quarter of 2025, we reclassified $75.6 million of inventories, $6.3 million of indefinite-lived trademark intangible assets and $3.1 million of finite-lived customer relationship intangible assets related to Green Giant Canada within the Frozen & Vegetables business unit to assets held for sale as of the end of the third quarter of 2025. We then measured the assets held for sale at the lower of their carrying value or fair value less the estimated costs to sell, and recorded pre-tax non-cash impairment charges of $27.8 million during the third quarter of 2025.
Operating Income. As a result of the foregoing, operating income decreased $10.6 million, or 13.3%, to $68.9 million for the first three quarters of 2025 from $79.5 million for the first three quarters of 2024. Operating income expressed as a percentage of net sales decreased to 5.3% in the first three quarters of 2025 from 5.8% in the first three quarters of 2024.
Net Interest Expense. Net interest expense decreased $7.0 million, or 5.9%, to $110.8 million for the first three quarters of 2025 from $117.8 million for the first three quarters of 2024. The decrease was primarily attributable to a reduction in average long-term debt outstanding during the first three quarters of 2025 compared to the first three quarters of 2024, lower interest rates on our variable rate borrowings during the first three quarters of 2025 compared to the first three quarters of 2024, and a net gain on extinguishment of debt of $2.3 million during the first three quarters of 2025 (as a result of a $2.9 million gain on extinguishment of debt related to our repurchase of $40.7 million aggregate principal amount of our 5.25% senior notes due 2027 for $37.8 million, plus accrued and unpaid interest, partially offset by the accelerated amortization of deferred debt financing costs of $0.6 million), compared to a loss on extinguishment of debt of $1.9 million during the first three quarters of 2024.
Other Income. Other income for the first three quarters of 2025 and 2024 includes the expected return on pension plan assets and the amortization of unrecognized gain less the interest cost on the projected benefit obligation of $3.5 million and $3.1 million, respectively.
Income Tax Benefit. Income tax benefit increased $4.0 million to $10.3 million for the first three quarters of 2025 from $6.3 million for the first three quarters of 2024. Our effective tax rate was 26.8% for the first three quarters of 2025 and 18.0% for the first three quarters of 2024.
During the first three quarters of 2025, we recorded a net discrete tax benefit of $13.7 million. During the first quarter of 2025, we recorded a net discrete tax benefit of $1.4 million, including a discrete tax benefit of $2.1 million for the tax effect of a pre-transition loss related to Section 987 of the Internal Revenue Code of 1986 for the cumulative unrecognized foreign exchange loss relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987, partially offset by a discrete tax expense of $0.7 million related to stock-based compensation and rate changes. During the second quarter of 2025, we recorded a net discrete tax benefit of $2.7 million, including a discrete tax benefit of $3.1 million related to the loss on the Don Pepino divestiture, partially offset by other discrete tax expenses of $0.4 million. During the third quarter of 2025, we recorded a net discrete tax benefit of $9.6 million, including a discrete tax benefit of $13.2 million due to the tax impact of the impairment of indefinite-lived intangible trademark assets for the Victoria and McCann’s brands and the impairment of assets held for sale for Green Giant Canada within the Frozen & Vegetables business unit; and other discrete tax benefits of $0.4 million during the third quarter of 2025; partially offset by a discrete tax expense of $4.0 million, primarily related to the gain on the Le Sueur U.S. divestiture.
As a result of the goodwill impairment charges of $70.6 million (or $53.4 million, net of tax) within our Frozen & Vegetables reporting segment during the first quarter of 2024, as described above, we recorded a discrete deferred tax benefit of $17.2 million during the first quarter of 2024. See Note 5, “Goodwill and Other Intangible Assets,” and Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item I of this report.
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Business Segment Operating Results. We operate in four reportable business segments: Specialty; Meals; Frozen & Vegetables; and Spices & Flavor Solutions. See Note 17, “Business Segment Information,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report for a description of our business segments and for a reconciliation of the non-GAAP financial measure segment adjusted EBITDA to net (loss) income.
Specialty Segment Results. Specialty segment results were as follows (dollars in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
| 2025 | 2024 |
| $ Change |
| % Change |
| 2025 | 2024 |
| $ Change |
| % Change | |||||||||||
Specialty segment net sales | $ | 150,526 | $ | 160,991 | $ | (10,465) | (6.5)% | $ | 419,785 | $ | 462,344 | $ | (42,559) | (9.2)% | ||||||||||
Specialty segment adjusted expenses | 112,802 | 119,680 | (6,878) | (5.7)% | 315,891 | 352,153 | (36,262) | (10.3)% | ||||||||||||||||
Specialty segment adjusted EBITDA | $ | 37,724 | $ | 41,311 | $ | (3,587) | (8.7)% | $ | 103,894 | $ | 110,191 | $ | (6,297) | (5.7)% | ||||||||||
For the third quarter and first three quarters of 2025, the decrease in Specialty segment net sales was primarily due to decreased volumes across the Specialty business unit in the aggregate and lower net pricing. The decrease in Specialty segment adjusted EBITDA for the third quarter and first three quarters of 2025 was primarily due to the decrease in net sales, which was offset in part by a decrease in raw material costs as a percentage of net sales.
Meals Segment Results. Meals segment results were as follows (dollars in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
| 2025 |
| 2024 |
| $ Change |
| % Change |
| 2025 | 2024 |
| $ Change |
| % Change | ||||||||||
Meals segment net sales | $ | 109,966 | $ | 111,582 | $ | (1,616) | (1.4)% | $ | 320,187 | $ | 339,502 | $ | (19,315) | (5.7)% | ||||||||||
Meals segment adjusted expenses | 86,087 | 88,329 | (2,242) | (2.5)% | 245,589 | 266,709 | (21,120) | (7.9)% | ||||||||||||||||
Meals segment adjusted EBITDA | $ | 23,879 | $ | 23,253 | $ | 626 | 2.7% | $ | 74,598 | $ | 72,793 | $ | 1,805 | 2.5% | ||||||||||
For the third quarter and first three quarters of 2025, the decrease in Meals segment net sales was primarily due to a decrease in volumes across the Meals business unit in the aggregate, partially offset by an increase in net pricing and product mix. The increase in Meals segment adjusted EBITDA in the third quarter and first three quarters of 2025 was primarily due to the increase in net pricing and improved product mix, offset in part by lower net sales volumes.
Frozen & Vegetables Segment Results. Frozen & Vegetables segment results were as follows (dollars in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
| 2025 |
| 2024 |
| $ Change |
| % Change |
| 2025 |
| 2024 |
| $ Change |
| % Change | |||||||||
Frozen & Vegetables segment net sales | $ | 77,398 | $ | 89,181 | $ | (11,783) | (13.2)% | $ | 259,506 | $ | 285,648 | $ | (26,142) | (9.2)% | ||||||||||
Frozen & Vegetables segment adjusted expenses | 73,223 | 88,022 | (14,799) | (16.8)% | 259,534 | 272,851 | (13,317) | (4.9)% | ||||||||||||||||
Frozen & Vegetables segment adjusted EBITDA | $ | 4,175 | $ | 1,159 | $ | 3,016 | 260.2% | $ | (28) | $ | 12,797 | $ | (12,825) | (100.2)% | ||||||||||
For the third quarter of 2025, the decrease in Frozen & Vegetables segment net sales was primarily due to a decrease in volume and the negative impact of foreign currency, partially offset by an increase in net pricing and product mix. For the first three quarters of 2025, the decrease in Frozen & Vegetables segment net sales was primarily due to a decrease in volume, a decrease in net pricing and the impact of product mix, as well as the negative impact of foreign currency. The increase in Frozen & Vegetables segment adjusted EBITDA for the third quarter of 2025 was primarily due to a decrease in raw material and manufacturing costs and the favorable impact of foreign currency on cost of goods, offset in part by lower net sales. The decrease in Frozen & Vegetables segment adjusted EBITDA for the first three quarters of 2025 was primarily due to a decrease in net sales, increased trade promotions, an increase in raw material and manufacturing costs and the impact of tariffs.
Spices & Flavor Solutions Segment Results. Spices & Flavor Solutions segment results were as follows (dollars in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | |||||||||||||||||||||||
September 27, | September 28, | September 27, | September 28, | |||||||||||||||||||||
| 2025 |
| 2024 |
| $ Change |
| % Change |
| 2025 |
| 2024 |
| $ Change |
| % Change | |||||||||
Spices & Flavor Solutions segment net sales | $ | 101,414 | $ | 99,319 | $ | 2,095 | 2.1% | $ | 289,653 | $ | 293,392 | $ | (3,739) | (1.3)% | ||||||||||
Spices & Flavor Solutions segment adjusted expenses | 75,015 | 70,810 | 4,205 | 5.9% | 212,866 | 208,567 | 4,299 | 2.1% | ||||||||||||||||
Spices & Flavor Solutions segment adjusted EBITDA | $ | 26,399 | $ | 28,509 | $ | (2,110) | (7.4)% | $ | 76,787 | $ | 84,825 | $ | (8,038) | (9.5)% | ||||||||||
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For the third quarter of 2025, the increase in Spices & Flavor Solutions segment net sales was primarily due to an increase in net pricing and the impact of product mix, partially offset by a decline in volumes across the Spices & Flavor Solutions business unit in the aggregate. For the first three quarters of 2025, the decrease in Spices & Flavor Solutions segment net sales was primarily due to a decline in volumes across the Spices & Flavor Solutions business unit in the aggregate, partially offset by an increase in net pricing and the impact of product mix. The decrease in Spices & Flavor Solutions segment adjusted EBITDA for the third quarter and first three quarters of 2025 was primarily due to a decrease in net sales (in the case of the first three quarters of 2025), the impact of product mix, increases in raw material costs, particularly for garlic and black pepper, and the impact of tariffs.
Unallocated Corporate Items. Unallocated corporate expenses decreased $2.1 million, or 8.8% in the third quarter of 2025 to $21.8 million from $23.9 million for the third quarter of 2024. Unallocated corporate expenses decreased $3.6 million, or 5.0% in the first three quarters of 2025 to $67.7 million from $71.3 million for the first three quarters of 2024.
Net Sales by Brand. The following table sets forth net sales for each of our brands whose net sales for the first three quarters of 2025 or fiscal 2024 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate (in thousands):
Thirteen Weeks Ended | Thirty-nine Weeks Ended | ||||||||||||
September 27, | September 28, | September 27, | September 28, | ||||||||||
Brand(1): | Business Unit: | 2025 | 2024 | 2025 | 2024 | ||||||||
Green Giant(2) | Frozen & Vegetables |
| $ | 77,398 |
| $ | 89,181 | $ | 259,506 |
| $ | 285,648 | |
Crisco | Specialty | 68,799 | 72,930 | 181,292 | 200,304 | ||||||||
Ortega | Meals |
| 32,114 |
| 33,678 |
| 97,350 |
| 103,632 | ||||
Clabber Girl(3) | Specialty | 29,192 | 29,880 | 80,712 | 84,635 | ||||||||
Maple Grove Farms of Vermont | Meals |
| 20,534 |
| 19,941 |
| 60,829 |
| 63,289 | ||||
Cream of Wheat | Meals |
| 16,972 |
| 17,465 |
| 51,326 |
| 55,374 | ||||
Dash | Spices & Flavor Solutions |
| 13,951 |
| 15,066 |
| 43,728 |
| 46,865 | ||||
All other brands | All Business Units | 180,344 | 182,932 | 514,388 | 541,139 | ||||||||
Total |
| $ | 439,304 |
| $ | 461,073 | $ | 1,289,131 |
| $ | 1,380,886 | ||
| (1) | Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand. |
| (2) | Also includes net sales for the Le Sueur brand. |
| (3) | Includes net sales for multiple brands acquired as part of the Clabber Girl acquisition that we completed on May 15, 2019, including, among others, the Clabber Girl, Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes. |
Liquidity and Capital Resources
Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, “Dividend Policy” below. We fund our liquidity requirements, as well as our dividend payments and financing for acquisitions, primarily through cash generated from operations and external sources of financing, including our revolving credit facility. We do not have any off-balance sheet financing arrangements.
Cash Flows
Net Cash Provided by Operating Activities. Net cash provided by operating activities decreased $44.6 million to $6.0 million for the first three quarters of 2025, as compared to $50.6 million for the first three quarters of 2024. The decrease was primarily driven by lower net sales in the first three quarters of 2025 as compared to the first three quarters of 2024, and unfavorable working capital comparisons in the first three quarters of 2025 as compared to the first three quarters of 2024, primarily comprised of inventories and accrued expenses, partially offset by a favorable working capital comparison for trade accounts receivable.
The unfavorable working capital comparison was due in large part to the Le Sueur U.S. divestiture and the timing of our inventory purchases during pack season prior to the closing date of the divestiture, which had negative impact on our net cash provided by operating activities during the third quarter of 2025, but increased the purchase price we received for the Le Sueur U.S. divestiture, which had a positive impact on our net cash provided by investing activities during the quarter.
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Net cash provided by operating activities was also negatively impacted by the timing of cash interest payments made during the third quarter of 2025 compared to the third quarter 2024 as a result of the June 2024 refinancing of our 5.25% senior notes due 2025.
Net Cash Provided by (Used in) Investing Activities. Net cash provided by investing activities increased $66.1 million to $47.1 million of cash provided by investing activities for the first three quarters of 2025, as compared to $19.0 million of net cash used in investing activities for the first three quarters of 2024. The increase was primarily attributable to the $59.1 million of proceeds we received from the Le Sueur U.S. divestiture and the $10.6 million of proceeds we received from the Don Pepino divestiture, partially offset by a $4.3 million increase in capital expenditures in the first three quarters of 2025 as compared to the first three quarters of 2024.
Net Cash Used in Financing Activities. Net cash used in financing activities increased $25.9 million to $43.4 million for the first three quarters of 2025, as compared to $17.5 million for the first three quarters of 2024. The increase was primarily driven by a $36.9 million decrease in net cash flows from long-term debt (proceeds of borrowings, net of redemptions, repurchases and repayments), partially offset by a $11.7 million decrease in payments of debt financing costs in the first three quarters of 2025 as compared to the first three quarters of 2024.
Cash Income Tax Payments. We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years 2025 through 2038. We also take material annual deductions for net interest expense due to our substantial indebtedness. However, the U.S. Tax Cuts and Jobs Act enacted in 2017 limits the deduction for net interest expense incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income. We have been subject to the interest expense deduction limitation for the past three fiscal years and, even though the One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025 restores the earnings before interest, taxes, depreciation and amortization (EBITDA) calculation for purposes of determining interest expense deduction limitations, we expect to continue to be subject to the interest expense deduction limitation in fiscal 2025 and future years. In addition, if there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.
Dividend Policy
Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, and capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We have paid dividends every quarter since our initial public offering in October 2004.
For the first three quarters of 2025 and 2024, we had net cash provided by operating activities of $6.0 million and $50.6 million, respectively, and distributed as dividends $45.4 million and $45.0 million, respectively. Including the dividend payment that we made in the fourth quarter on October 27, 2025, we paid quarterly dividends of $60.6 million in fiscal 2025. Based upon our current intended dividend rate of $0.76 per share per annum and the current number of outstanding shares, we expect our aggregate dividend payments in fiscal 2026 to be approximately $60.8 million.
Our dividend policy is based upon our current assessment of our business and the environment in which we operate, and that assessment could change based on competitive or other developments (which could, for example, increase our need for capital expenditures or working capital), new acquisition opportunities or other factors. Our board of directors is free to depart from or change our dividend policy at any time and could do so, for example, if it was to determine that we have insufficient cash to fund capital expenditure or working capital needs, reduce leverage or ensure compliance with our maximum consolidated leverage ratio under our credit agreement, or take advantage of growth opportunities.
Acquisitions
Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the
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foreseeable future by additional acquisitions. As discussed elsewhere in this report, as part of our growth strategy we plan to expand our brand portfolio with disciplined acquisitions of complementary brands. We have historically financed acquisitions by incurring additional indebtedness, issuing equity and/or using cash flows from operating activities. Our interest expense has over time increased as a result of additional indebtedness we have incurred in connection with acquisitions and will increase with any additional indebtedness we may incur to finance future acquisitions. Although we may subsequently issue equity and use the proceeds to repay all or a portion of the additional indebtedness incurred to finance an acquisition and reduce our interest expense, the additional shares of common stock would increase the amount of cash flows from operating activities necessary to fund dividend payments.
The impact of future acquisitions, whether financed with additional indebtedness or otherwise, may have a material impact on our liquidity and capital resources.
Debt
See Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report for a description of our senior secured credit agreement, including our revolving credit facility and tranche B term loans, our 5.25% senior notes due 2027, and our 8.00% senior secured notes due 2028.
Future Capital Needs
We are highly leveraged. On September 27, 2025, the aggregate principal amount of our long-term debt (including current portion) of $2,045.3 million, net of our cash and cash equivalents of $60.9 million, was $1,984.4 million. Stockholders’ equity as of that date was $470.7 million.
Our ability to generate sufficient cash to fund our operations depends generally on our results of operations and the availability of financing. Our management believes that our cash and cash equivalents on hand, cash flow from operating activities and available borrowing capacity under our revolving credit facility will be sufficient for the foreseeable future to fund operations, meet debt service requirements, fund capital expenditures, make future acquisitions, if any, and pay our anticipated quarterly dividends on our common stock.
We expect to make capital expenditures of approximately $30.0 million to $35.0 million in the aggregate during fiscal 2025. During the first three quarters of 2025, we made capital expenditures of $25.8 million, of which $22.9 million were paid in cash. Our projected capital expenditures for fiscal 2025 primarily relate to asset sustainability projects, cost savings initiatives, information technology (hardware and software), including cybersecurity, and environmental compliance.
Seasonality
Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons or certain other annual events. In general, our sales are higher during the first and fourth quarters.
We purchase most of the produce used to make our frozen and shelf-stable vegetables, shelf-stable pickles, relishes, peppers, tomatoes and other related specialty items during the months of June through October, and we generally purchase the majority of our maple syrup requirements during the months of April through August. Consequently, our liquidity needs are greatest during these periods.
Inflation
See “—General—Fluctuations in Commodity Prices and Production and Distribution Costs” above.
Contingencies
See Note 13, “Commitments and Contingencies,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.
Recent Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies —Recently Issued Accounting Standards – Pending Adoption,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.
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Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries
As further discussed in Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, our obligations under the 5.25% senior notes due 2027 and the 8.00% senior secured notes due 2028 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries, which we refer to in this section as the guarantor subsidiaries. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2027 or the 8.00% senior secured notes due 2028. In this section, we refer to these foreign subsidiaries and future foreign or partially owned domestic subsidiaries as the non-guarantor subsidiaries. See Note 6, “Long-Term Debt” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.
The 5.25% senior notes due 2027 and the related subsidiary guarantees are our and the guarantor subsidiaries’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantor subsidiaries’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantor subsidiaries’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantor subsidiaries’ future subordinated debt.
The 8.00% senior secured notes due 2028 are our senior secured obligations. The 8.00% senior secured notes due 2028 have the same guarantors as our credit agreement. The 8.00% senior secured notes due 2028 and the related guarantees are secured by, subject to permitted liens, first-priority security interests in certain collateral (which generally includes most of our and our guarantors’ right or interest in or to property of any kind, except for our and our guarantors’ real property and certain intangible assets), which assets also secure (and will continue to secure) our credit agreement on a pari passu basis. Pursuant to the terms of the applicable indenture, the related collateral agreement and an intercreditor agreement, the 8.00% senior secured notes due 2028 and the guarantees rank (1) pari passu (equally and ratably) in right of payment to all of our and the guarantors’ existing and future senior debt, including existing and future senior debt under our existing or any future senior secured credit agreement (including the term loan borrowings under our existing senior secured credit facility, any obligations under our existing revolving credit facility and all other borrowings and obligations under our credit agreement), (2) effectively senior in right of payment to our and such guarantors’ existing and future senior unsecured debt, including our 5.25% senior notes due 2027 to the extent of the value of the collateral, (3) effectively junior to our and the guarantors’ future secured debt, secured by assets that do not constitute collateral, to the extent of the value of the collateral securing such debt, (4) senior in right of payment to our and such guarantors’ other existing and future subordinated debt and (5) structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries that do not guarantee the 8.00% senior secured notes due 2028.
Each guarantee contains a provision intended to limit the guarantor subsidiary’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. However, we cannot assure you that this provision will be effective to protect the subsidiary guarantees from being voided under fraudulent transfer laws.
A guarantor subsidiary’s guarantee will be automatically released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that guarantor subsidiary (including by way of merger or consolidation) to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods under the applicable indenture, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (2) in connection with any sale or other disposition of all of the capital stock of that guarantor subsidiary to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (3) if B&G Foods designates any “restricted subsidiary” that is a guarantor subsidiary to be an “unrestricted subsidiary” in accordance with the applicable provisions of the indenture; (4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the applicable indenture; (5) if such guarantor subsidiary no longer constitutes a domestic subsidiary; or (6) if it is determined in good faith by B&G Foods that a liquidation, dissolution or merger out of existence of such guarantor subsidiary is in the best interests of B&G Foods and is not materially disadvantageous to the holders of the senior notes or the senior secured notes, as applicable.
The following tables present summarized unaudited financial information on a combined basis for B&G Foods and each of the guarantor subsidiaries described above after elimination of (1) intercompany transactions and balances among B&G Foods and the guarantor subsidiaries and (2) investments in any subsidiary that is a non-guarantor (in thousands):
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September 27, |
| December 28, | |||
2025 |
| 2024 | |||
Current assets(1) | $ | 725,534 | $ | 690,367 | |
Non-current assets | 2,057,425 | 2,146,552 | |||
Current liabilities(2) | $ | 249,008 | $ | 224,344 | |
Non-current liabilities | 2,215,637 | 2,230,946 | |||
| (1) | Current assets includes amounts due from non-guarantor subsidiaries of $50.6 million and $50.2 million as of September 27, 2025 and December 28, 2024, respectively. |
| (2) | Current liabilities includes amounts due to non-guarantor subsidiaries of $40.7 million and $13.0 million as of September 27, 2025 and December 28, 2024, respectively. |
Thirty-nine Weeks Ended | |||||
September 27, | September 28, | ||||
2025 | 2024 | ||||
Net sales | $ | 1,197,012 | $ | 1,287,001 | |
Gross profit | 273,598 | 282,226 | |||
Operating income | 69,814 | 61,458 | |||
Loss before income taxes | (37,415) | (53,256) | |||
Net loss | $ | (27,384) | $ | (43,521) | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Our principal market risks are exposure to changes in commodity prices, interest rates on borrowings and foreign currency exchange rates and market fluctuation risks related to our defined benefit pension plans.
Commodity Prices and Inflation. The information under the heading “General—Fluctuations in Commodity Prices and Production and Distribution Costs” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is incorporated herein by reference.
Interest Rate Risk. In the normal course of operations, we are exposed to market risks relating to our long-term debt arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates.
Changes in interest rates impact our fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows. At September 27, 2025, we had $1,308.6 million of fixed rate debt and $736.6 million of variable rate debt.
Based upon our principal amount of long-term debt outstanding at September 27, 2025, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately $7.4 million.
Cash and cash equivalents, trade accounts receivable, income tax receivable/payable, trade accounts payable, accrued expenses and dividends payable are reflected on our consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.
For more information, see Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.
The information in Note 7, “Fair Value Measurements,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report is incorporated herein by reference.
Foreign Currency Risk. The information under the heading “Fluctuations in Currency Exchange Rates” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is incorporated herein by reference.
Market Fluctuation Risks Relating to our Defined Benefit Pension Plans. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates” and Note 12, “Pension Benefits,” to our consolidated financial statements in Part II, Item 8
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of our 2024 Annual Report on Form 10-K for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations.
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, our management, including our chief executive officer and our chief financial officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures that we use that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting. As required by Rule 13a-15(d) under the Exchange Act, our management, including our chief executive officer and our chief financial officer, also conducted an evaluation of our internal control over financial reporting to determine whether any change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our chief executive officer and our chief financial officer concluded that there has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls. Our company’s management, including the chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
PART II
OTHER INFORMATION
Item 1. | Legal Proceedings |
The information set forth under the heading “Legal Proceedings” in Note 13 to our unaudited consolidated interim financial statements in Part I, Item 1 of this report is incorporated herein by reference.
Item 1A. Risk Factors
We do not believe there have been any material changes in our risk factors as previously disclosed in our 2024 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q/A for the quarterly period ended March 29, 2025 filed on May 7, 2025.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Not applicable.
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Item 3. | Defaults Upon Senior Securities |
Not applicable.
Item 4. | Mine Safety Disclosures |
Not applicable.
Item 5. | Other Information |
Rule 10b5-1 Trading Arrangements. During the period covered by this report, none of our directors or officers
Item 6. | Exhibits |
EXHIBIT |
| DESCRIPTION |
3.1 | ||
3.2 | ||
10.1 | ||
22.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101 | The following unaudited financial information from B&G Foods’ Quarterly Report on Form 10-Q for the quarter ended September 27, 2025, 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 (Loss) 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 September 27, 2025, formatted in iXBRL and contained in Exhibit 101. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 5, 2025 | B&G FOODS, INC. | |
By: | /s/ Bruce C. Wacha | |
Bruce C. Wacha Executive Vice President of Finance (Principal Financial Officer and Authorized Officer) | ||
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