B&G Foods Inc. Reports Operating Results (10-K)

B&G Foods Inc. (BGS, Financial) filed Annual Report for the period ended 2011-12-31.

B&g Foods Cl-a has a market cap of $1.1 billion; its shares were traded at around $23.56 with a P/E ratio of 21.3 and P/S ratio of 2. The dividend yield of B&g Foods Cl-a stocks is 4%. B&g Foods Cl-a had an annual average earning growth of 2% over the past 5 years.

Highlight of Business Operations:

(5)Fiscal 2011 net interest expense includes a benefit of $0.6 million related to the realized gain on an interest rate swap, a charge of $1.6 million for the reclassification of the amount recorded in accumulated other comprehensive loss related to an interest rate swap and a $2.1 million charge relating to the write-off of the remaining amount recorded in accumulated other comprehensive loss on the interest rate swap due to our early termination of $130.0 million term loan borrowings. Fiscal 2010 net interest expense includes a charge of $0.4 million relating to the unrealized loss on the interest rate swap, and a charge of $1.7 million for the reclassification of the amount recorded in accumulated other comprehensive loss related to the swap. Fiscal 2009 net interest expense includes a $1.5 million benefit relating to the unrealized gain on the interest rate swap, more than offset by a $1.7 million charge for the reclassification of the amount recorded in accumulated other comprehensive loss related to the swap. Fiscal 2008 net interest expense includes a $5.6 million charge relating to the unrealized loss on the interest rate swap subsequent to our determination that the swap was no longer an effective hedge for accounting purposes and a $0.5 million charge for the reclassification of the amount recorded in accumulated other comprehensive loss related to the swap. (6)Fiscal 2010 loss on extinguishment of debt includes costs relating to our repurchase of senior subordinated notes, including the repurchase premium of $10.7 million and the write-off of deferred financing costs of $4.5 million. Fiscal 2009 loss on extinguishment of debt includes costs relating to our repurchase of senior subordinated notes, including the repurchase premium of $5.8 million and the write-off of deferred debt financing costs of $4.4 million. In fiscal 2007 we wrote-off $1.8 million of deferred debt financing costs in connection with our May 2007 prepayment of $100.0 million of term loan borrowings. (7)Prior to May 29, 2007, we had two classes of common stock issued and outstanding, designated as Class A common stock and Class B common stock. Therefore, for fiscal 2007 we present earnings per share using the two-class method. Net income is allocated between the two classes of common stock based upon the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and participation rights in undistributed earnings or losses. (8)EBITDA is a non-GAAP financial measure used by management to measure operating performance. 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 than the most directly comparable measure calculated and presented in accordance with GAAP in our consolidated balance sheets and related consolidated statements of operations, changes in stockholders' equity and comprehensive income, and cash flows. EBITDA is defined as net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt (see (B) below). We define adjusted EBITDA as EBITDA adjusted for acquisition-related transaction costs. Management believes that it is useful to eliminate net interest expense, income taxes, depreciation and amortization, loss on extinguishment of debt and acquisition-related transaction costs 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, among other things, to 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 and our senior notes indenture contain ratios based on these measures. As a result, internal management reports used 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. EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be an alternative to operating income or net income as an indicator of operating performance or any other GAAP measure. 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 two 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 costs and expenses for depreciation and amortization, interest and related expenses, loss on extinguishment of debt, acquisition-related transaction costs and income taxes. 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.

Net Sales. Net sales increased $30.5 million or 6.0% to $543.9 million for fiscal 2011 from $513.3 million for fiscal 2010. The increase was attributable to unit volume and sales price increases of $29.6 million and $1.7 million, respectively, offset by an increase in coupon and slotting expenses of $0.8 million. Net sales of our Don Pepino and Sclafani brands, which we acquired in late November 2010, contributed $12.5 million to the overall increase and net sales of the Culver Specialty Brands, which we acquired at the end of November 2011, contributed $6.5 million to the overall increase.

Net sales of our Ortega, Maple Grove Farms of Vermont, Cream of Wheat, Las Palmas and Underwood products increased by $5.1 million, $5.0 million, $3.1 million, $2.5 million and $0.7 million or 4.0%, 7.2%, 4.8%, 8.0% and 3.0%, respectively. These increases were offset by a reduction in net sales of B&G, Joan of Arc, Trappey's, Grandma's and Emeril's products of $1.2 million, $0.8 million, $0.7 million, 0.7 million and $0.7 million or 3.4%, 6.6%, 4.4%, 5.0% and 3.6%, respectively. In the aggregate, net sales for all other brands decreased $0.8 million or 0.6%.

Net Sales. Net sales increased $12.3 million or 2.5% to $513.3 million for fiscal 2010 from $501.0 million for fiscal 2009. The increase was attributable to unit volume and sales price increases of $7.5 million and $5.6 million, respectively, partially offset by an increase in coupon expenses of $0.8 million. Net sales of our Don Pepino and Sclafani brands, which we acquired in late November 2010, contributed $1.6 million to the overall unit volume increase.

Net sales of our Ortega, Cream of Wheat, Maple Grove Farms of Vermont, Las Palmas, Polaner, Grandma's, Underwood and Ac'cent products increased by $6.9 million, $3.0 million, $2.6 million, $1.4 million, $1.0 million, $0.6 million, $0.6 million and $0.6 million or 5.8%, 4.9%, 4.0%, 4.6%, 2.8%, 4.8%, 2.9% and 3.1%, respectively. These increases were offset by a reduction in net sales of B&G, B&M and Joan of Arc products of $2.6 million, $2.5 million and $0.8 million or 7.0%, 9.8% and 6.2%, respectively. In the aggregate, net sales for all other brands decreased $0.1 million or 0.2%.

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