US firm B&G Foods has recorded an increase in full-year profits, boosted by acquisitions and price increases in 2012.
Earnings in the 12 months ended 29 December amounted to US$59.3m, a 17.9% increase on the prior year period. Operating profit climbed 31.3% to $149m.
CEO David Wenner attributed the increases to execution of the Culver Specialty Brands acquisition, "strong" pricing gains, which he said offset volume weakness, and the completion of its New York Style and Old London acquisitions.
Net sales were up 16.5% to $633.8m for the year, thanks in part to recent acquisitions. Sales of the Culver Specialty Brands contributed $81m and sales of New York Style and Old London weighed in with $8.4m.
B&G Foods Reports Strong Net Sales and Earnings Growth for Fourth Quarter and Full-Year 2012
PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb. 14, 2013-- B&G Foods, Inc. (NYSE: BGS) today announced financial results for the fourth quarter and full-year 2012.
Highlights:
Net sales increased 15.8% to $173.7 million for the quarter and 16.5% to $633.8 million for the year Net income increased 17.9% to $59.3 million for the year Adjusted net income* increased 25.6% to $66.7 million for the year Diluted earnings per share increased 15.4% to $1.20 for the year Adjusted diluted earnings per share* increased 23.9% to $1.35 for the year. Adjusted EBITDA1 increased 20.0% to $44.0 million for the quarter and 28.9% to $169.0 million for the year The Company expects to deliver 2013 adjusted EBITDA of $178.0 million to $182.0 million
David L. Wenner, President and Chief Executive Officer of B&G Foods, stated, “Our business set company records in net sales, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA for the fourth quarter and for the full year 2012 as we executed very well on the Culver Specialty Brands acquisition. Pricing gains continued to be strong and offset much of the volume weakness caused by industry trends and the effects of Hurricane Sandy. The New York Style and Old London acquisition completed in the quarter adds an exciting new element to our portfolio.”
Financial Results for the Fourth Quarter of 2012
Net sales for the fourth quarter of 2012 increased 15.8% to $173.7 million from $150.0 million for the fourth quarter of 2011. Net sales of the Culver Specialty Brands, which B&G Foods acquired at the end of November 2011, contributed $15.7 million and net sales of the New York Style and Old London brands, which B&G Foodsacquired at the end of October 2012, contributed $8.4 million to the Company’s overall increase during the fourth quarter. For B&G Foods’ base business, a sales price increase of $2.8 million offset by a $3.2 million unit volume decrease resulted in a net sales decrease of $0.4 million.
Gross profit for the fourth quarter of 2012 increased 20.7% to $59.5 million from $49.3 million in the fourth quarter of 2011. Gross profit expressed as a percentage of net sales increased 1.3 percentage points to 34.2% in the fourth quarter of 2012 from 32.9% in the fourth quarter of 2011, attributable to a sales mix shift to higher margin products (primarily due to the Culver Specialty Brands acquisition) and pricing gains of $2.8 million, partially offset by commodity and packaging cost increases. Operating income increased 20.8% to $37.4 millionin the fourth quarter of 2012 from $31.0 million in the fourth quarter of 2011.
Net interest expense for the fourth quarter of 2012 and the fourth quarter of 2011 remained consistent at $11.8 million.
The Company’s reported net income under U.S. generally accepted accounting principles (GAAP) was $9.6 million, or $0.18 per diluted share, for the fourth quarter of 2012, as compared to reported net income of $12.3 million, or $0.25 per diluted share, for the fourth quarter of 2011. The Company’s adjusted net income for the fourth quarter of 2012 was $17.0 million, or $0.32 per adjusted diluted share, for the fourth quarter of 2012, as compared to adjusted net income of $14.7 million, or $0.30 per adjusted diluted share, for the fourth quarter of 2011.
Adjusted EBITDA, which for the fourth quarter of 2012 excludes the impact of transaction costs related to theNew York Style and Old London acquisition and for the fourth quarter of 2011 excludes the impact of transaction costs related to the Culver Specialty Brands acquisition, increased 20.0% to $44.0 million from $36.7 million.
Financial Results for Full-Year 2012
Net sales for fiscal 2012 increased 16.5% to $633.8 million from $543.9 million for fiscal 2011. Net sales of the Culver Specialty Brands contributed $81.0 million and net sales of New York Style and Old London contributed$8.4 million to the Company’s overall increase. Net sales for the base business increased $0.5 million, with a sales price increase of $13.1 million offset by a $12.6 million unit volume decline.
Gross profit for fiscal 2012 increased 25.6% to $223.3 million from $177.8 million in fiscal 2011. Gross profit expressed as a percentage of net sales increased 2.5 percentage points to 35.2% in fiscal 2012 from 32.7% in fiscal 2011, attributable to a sales mix shift to higher margin products (primarily due to the Culver Specialty Brands acquisition) and pricing gains of $13.1 million, partially offset by commodity and packaging cost increases. Operating income increased 31.3% to $149.0 million in fiscal 2012 from $113.5 million in fiscal 2011.
Net interest expense for fiscal 2012 increased $11.0 million or 30.0% to $47.7 million from $36.7 million in fiscal 2011 attributable to an increase in indebtedness to finance the Culver Specialty Brands acquisition, and an additional $2.8 million of amortization of deferred debt financing costs and bond discount relating to the acquisition financing.
The Company’s reported net income under U.S. GAAP was $59.3 million, or $1.20 per diluted share, for fiscal 2012, as compared to reported net income of $50.2 million, or $1.04 per diluted share, for fiscal 2011. The Company’s adjusted net income for fiscal 2012 was $66.7 million, and adjusted diluted earnings per share was$1.35, as compared to adjusted net income of $53.1 million and adjusted diluted earnings per share of $1.09 for fiscal 2011.
Adjusted EBITDA, which for fiscal 2012 excludes the impact of transaction costs related to the New York Styleand Old London acquisition and for fiscal 2011 excludes the impact of transaction costs related to the Culver Specialty Brands acquisition, increased 28.9% to $169.0 million from $131.1 million.
Guidance
Adjusted EBITDA for fiscal 2013 is expected to be approximately $178.0 million to $182.0 million. Capital expenditures for fiscal 2013 are expected to be approximately $13.0 million. Cash interest expense for fiscal 2013 is expected to be approximately $35.0 million.
About Non-GAAP Financial Measures and Items Affecting Comparability
“Adjusted net income,” “adjusted diluted earnings per share,” “EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and “adjusted EBITDA” (EBITDA as adjusted for acquisition-related transaction costs, which include outside fees and expenses and restructuring and consolidation costs of acquisitions incurred in fiscal 2012 and 2011) are “non-GAAP financial measures.” A non-GAAP financial measure is a numerical measure of 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 B&G Foods’ consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
The Company uses “adjusted net income” and “adjusted diluted earnings per share,” which are calculated as reported net income and reported diluted earnings per share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to reported net income and diluted earnings per share to eliminate the items identified below. This information is provided in order to allow investors to make meaningful comparisons of the Company’s operating performance between periods and to view the Company’s business from the same perspective as the Company’s management. Because the Company cannot predict the timing and amount of charges associated with unrealized gains or losses on the Company’s interest rate swap, gains or losses on extinguishment of debt and acquisition-related transaction costs, management does not consider these costs when evaluating the Company’s performance or when making decisions regarding allocation of resources.
Additional information regarding EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to net income and to net cash provided by operating activities is included below for the fiscal 2012 and 2011, along with the components of EBITDA and adjusted EBITDA. Also included below are reconciliations of the non-GAAP terms adjusted net income and adjusted diluted earnings per share to reported net income and reported diluted earnings per share.
About B&G Foods, Inc.
B&G Foods and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico. Based in Parsippany, New Jersey, B&G Foods’ products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Baker’s Joy, Brer Rabbit, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril’s, Grandma’s Molasses, JJ Flats, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Sa-són, Sclafani, Sugar Twin, Trappey’s, Underwood, Vermont Maid and Wright’s. B&G Foods also sells and distributes two branded household products, Static Guard and Kleen Guard.