B&G Foods Reports Third Quarter 2012 Financial Results

  B&G Foods Reports Third Quarter 2012 Financial Results

                       — Narrows Fiscal 2012 Guidance —

Business Wire

PARSIPPANY, N.J. -- October 18, 2012

B&G Foods, Inc. (NYSE: BGS) today announced financial results for the third
quarter and first three quarters of 2012.

Highlights (vs. year-ago quarter where applicable):

  *Net sales increased 15.9% to $154.2 million
  *Net income increased 39.8% to $16.9 million
  *Diluted earnings per share increased 40.0% to $0.35
  *EBITDA^1 increased 37.7% to $42.8 million
  *EBITDA guidance has been narrowed to a range of $168.0 million to $170.0
    million for the full year, the higher end of the Company’s prior guidance

David L. Wenner, President and Chief Executive Officer of B&G Foods, stated,
“The strong improvement in key metrics – net sales, net income, earnings per
share and EBITDA – reflects the continued success of the Culver Specialty
Brands acquisition and improving sales trends in our base business. Margins in
the base business improved as we realized strong pricing and increased sales
of higher-margin products. At the end of the quarter we announced an agreement
to acquire the New York Style and Old London brands, which we expect to
complete by year end. We are very excited to add these brands to the B&G Foods
family as they mark our entry into the fast growing snack category. We expect
this acquisition to be immediately accretive to our earnings per share and
free cash flow.”

Financial Results for the Third Quarter of 2012

Net sales for the third quarter of 2012 increased 15.9% to $154.2 million from
$133.0 million for the third quarter of 2011. The Culver Specialty Brands,
which B&G Foods acquired at the end of November 2011, contributed $20.2
million to net sales for the quarter. For B&G Foods’ base business, a sales
price increase of $3.5 million partially offset by a $2.6 million unit volume
decrease resulted in a net sales increase of $0.9 million.

Gross profit for the third quarter of 2012 increased 33.4% to $55.3 million
from $41.5 million in the third quarter of 2011. Gross profit expressed as a
percentage of net sales increased 4.7 percentage points to 35.9% for the third
quarter of 2012 from 31.2% in the third quarter of 2011. The increase in gross
profit expressed as a percentage of net sales was primarily attributable to
pricing gains of $3.5 million and a sales mix shift to higher margin products
(primarily due to the Culver Specialty Brands acquisition), partially offset
by commodity cost increases. Operating income increased 41.5% to $38.3 million
for the third quarter of 2012, from $27.1 million in the third quarter of
2011.

Net interest expense for the third quarter of 2012 increased $3.7 million or
44.1% to $12.0 million from $8.3 million for the third quarter of 2011. The
increase in net interest expense for the third quarter was primarily
attributable to an increase in the Company’s indebtedness to finance the
Culver Specialty Brands acquisition, and an additional $0.8 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. generally accepted accounting
principles (GAAP) was $16.9 million, or $0.35 per diluted share, for the third
quarter of 2012, as compared to reported net income of $12.1 million, or $0.25
per diluted share, for the third quarter of 2011. The Company’s adjusted net
income for the third quarter of 2011 was $12.4 million.

For the third quarter of 2012, EBITDA increased 37.7% to $42.8 million from
$31.1 million for the third quarter of 2011.

Financial Results for the First Three Quarters of 2012

Net sales for the first three quarters of 2012 increased 16.8% to $460.1
million from $393.9 million for the first three quarters of 2011. Net sales of
the Culver Specialty Brands contributed $65.3 million to the Company’s net
sales for the first three quarters of 2012. Net sales for the base business
increased $0.9 million, with a sales price increase of $10.3 million offset by
a $9.4 million unit volume decline.

Gross profit for the first three quarters of 2012 increased 27.5% to $163.9
million from $128.5 million in the first three quarters of 2011. Gross profit
expressed as a percentage of net sales increased 3.0 percentage points to
35.6% in the first three quarters of 2012 from 32.6% in the first three
quarters of 2011. The increase in gross profit expressed as a percentage of
net sales was primarily attributable to pricing gains of $10.3 million and a
sales mix shift to higher margin products (primarily due to the Culver
Specialty Brands acquisition), partially offset by commodity cost increases.
Operating income increased 35.3% to $111.6 million in the first three quarters
of 2012, from $82.5 million in the first three quarters of 2011.

Net interest expense for the first three quarters of 2012 increased $11.0
million or 44.2% to $35.8 million from $24.9 million in the first three
quarters of 2011. The increase in net interest expense for the first three
quarters was primarily attributable to an increase in indebtedness to finance
the Culver Specialty Brands acquisition, and an additional $2.3 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 $49.7 million, or $1.02
per diluted share, for the first three quarters of 2012, as compared to
reported net income of $38.0 million, or $0.78 per diluted share, for the
first three quarters of 2011. The Company’s adjusted net income for the first
three quarters of 2011 was $38.4 million, and adjusted diluted earnings per
share was $0.79.

For the first three quarters of 2012, EBITDA increased 32.4% to $125.0 million
from $94.5 million for the first three quarters of 2011.

Guidance

B&G Foods now expects that EBITDA for fiscal 2012 will be at the higher end of
its prior guidance and range from approximately $168.0 million to $170.0
million. This guidance excludes the impact of the pending acquisition
described below.

New York Style and Old London Acquisition

On September 19,2012, B&G Foods announced an agreement to acquire the New
York Style and OldLondon brands from ChipitaAmerica,Inc. for approximately
$62.5 million in cash. The acquisition includes a manufacturing facility in
Yadkinville, North Carolina. Subject to the satisfaction of customary closing
conditions. B&G Foods expects the acquisition to close during the fourth
quarter of 2012.

Common Stock Offering

On October 9, 2012, B&G Foods completed an underwritten public offering of
4,173,540 shares of its common stock. The proceeds of the offering were
approximately $120.3 million, after deducting underwriting discounts and
commissions and other estimated offering expenses. The offering was made by
means of a prospectus and the related prospectus supplement included as part
of an effective shelf registration statement previously filed with the SEC.
B&G Foods expects to use the net proceeds of the offering for general
corporate purposes, which may include among other things, the payment of all
or a portion of the purchase price and related transaction costs for the New
York Style and Old London brands acquisition or any future acquisitions, and
the repayment or retirement of a portion of B&G Foods’ long-term debt.

Increase in Quarterly Dividend Rate

On October 16, 2012, the Company announced that its Board of Directors has
increased the Company’s quarterly dividend rate from $0.27 per share of common
stock to $0.29 per share of common stock. On an annualized basis, the dividend
increases from $1.08 per share to $1.16 per share. The first quarterly
dividend at the new rate is payable on January 30, 2013 to shareholders of
record as of December 31, 2012. At the closing market price of the common
stock on October 16, 2012, the new dividend represents an annualized yield of
4.1%.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, October 18, 2012.
The call will be webcast live from B&G Foods’ website at www.bgfoods.com under
“Investor Relations—Company Overview.” The call can also be accessed live over
the phone by dialing (888) 337-8192 for U.S. callers or (719) 325-2207 for
international callers.

A replay of the call will be available one hour after the call and can be
accessed by dialing (877) 870-5176 or (858)384-5517 for international
callers; the password is 4769596. The replay will be available from October
18,2012 through November 1, 2012. Investors may also access a web-based
replay of the call at the Investor Relations section of B&G Foods’ website,
www.bgfoods.com.

__________________________________________

^1 Please see “About Non-GAAP Financial Measures and Items Affecting
Comparability” below for the definition of the term EBITDA and a
reconciliation of EBITDA to the most comparable GAAP financial measures.

About Non-GAAP Financial Measures and Items Affecting Comparability

“Adjusted net income,” “adjusted diluted earnings per share” and “EBITDA” (net
income before net interest expense, income taxes, depreciation and
amortization and loss on extinguishment of debt) 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 stockholder’s
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 and gains
or losses on extinguishment of debt, 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 a reconciliation of EBITDA to net
income and to net cash provided by operating activities is included below for
the third quarter and first three quarters of 2012 and 2011, along with the
components of 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. B&G Foods’ products include hot cereals, fruit spreads,
canned meats and beans, spices, seasonings, marinades hot sauces, wine
vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco
shells and kits, salsas, pickles, peppers and other specialty food products.
B&G Foods competes in the retail grocery, food service, specialty, private
label, club and mass merchandiser channels of distribution. 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, Don Pepino, Emeril’s, Grandma’s Molasses, Joan of Arc, Las
Palmas, MapleGroveFarmsofVermont, Molly McButter, Mrs. Dash, 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.

Forward-Looking Statements

Statements in this press release that are not statements of historical or
current fact constitute “forward-looking statements.” The forward-looking
statements contained in this press release include, without limitation,
statements related to B&G Foods’ EBITDA expectations for fiscal 2012; the
planned acquisition of the New York Style and Old London brands and the timing
thereof; the expected impact of the planned acquisition, including without
limitation the expected impact on B&GFoods’ earnings per share and free cash
flow; and the use of proceeds of the common stock offering. Such
forward-looking statements involve known and unknown risks, uncertainties and
other unknown factors that could cause the actual results of B&G Foods to be
materially different from the historical results or from any future results
expressed or implied by such forward-looking statements. In addition to
statements that explicitly describe such risks and uncertainties readers are
urged to consider statements labeled with the terms “believes,” “belief,”
“expects,” “projects,” “intends,” “anticipates” or “plans” to be uncertain and
forward-looking. The forward-looking statements contained herein are also
subject generally to other risks and uncertainties that are described from
time to time in B&G Foods’ filings with the Securities and Exchange
Commission, including under Item 1A, “Risk Factors” in the Company’s most
recent Annual Report on Form 10-K for fiscal 2011 filed on February 28, 2012
and in its subsequent reports on Form 10-Q and 8-K. Investors are cautioned
not to place undue reliance on any such forward looking statements, which
speak only as of the date they are made. B&GFoods undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.

                                                        
B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)
                                                             
Assets                                September 29, 2012     December 31, 2011
                                                             
Current assets:
Cash and cash equivalents             $   15,350             $   16,738
Trade accounts receivable, net            41,124                 39,476
Inventories                               107,236                85,234
Prepaid expenses                          2,723                  4,551
Income tax receivable                     3,383                  2,529
Deferred income taxes                    1,855                1,696      
Total current assets                      171,671                150,224
                                                             
Property, plant and equipment,
net of accumulated depreciation           62,241                 61,930
of $97,299 and $89,856
Goodwill                                  262,977                262,827
Other intangibles, net                    628,455                634,522
Other assets                             20,386               23,420     
Total assets                          $   1,145,730         $   1,132,923  
                                                             
Liabilities and Stockholders’
Equity
                                                             
Current liabilities:
Trade accounts payable                $   29,308             $   24,427
Accrued expenses                          19,174                 26,719
Current portion of long-term debt         15,375                 9,750
Dividends payable                        13,065               10,971     
Total current liabilities                 76,922                 71,867
                                                             
Long-term debt                            698,019                710,357
Other liabilities                         6,890                  9,409
Deferred income taxes                    117,180              105,743    
Total liabilities                         899,011                897,376
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value
per share. Authorized 1,000,000           —                      —
shares; no shares issued or
outstanding
Common stock, $0.01 par value per
share. Authorized 125,000,000
shares; 48,387,225 and 47,700,132         484                    477
shares issued and outstanding as
of September 29, 2012 and
December 31, 2011
Additional paid-in capital                120,953                159,916
Accumulated other comprehensive           (10,003     )          (10,430    )
loss
Retained earnings                        135,285              85,584     
Total stockholders’ equity               246,719              235,547    
Total liabilities and                 $   1,145,730         $   1,132,923  
stockholders’ equity
                                                             

                                               
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     October 1,     September     October 1,
                     29,                            29,
                     2012            2011           2012            2011
                                                                    
Net sales            $  154,155      $  133,010     $  460,106      $  393,868
Cost of goods          98,876         91,560        296,246        265,382
sold
Gross profit            55,279          41,450         163,860         128,486
                                                                    
Operating
expenses:
Selling, general
and                     14,937          12,725         46,206          41,069
administrative
expenses
Amortization           2,022          1,637         6,067          4,913
expense
Operating income        38,320          27,088         111,587         82,504
                                                                    
Other expenses:
Interest               11,994         8,323         35,845         24,854
expense, net
Income before
income tax              26,326          18,765         75,742          57,650
expense
Income tax             9,429          6,681         26,041         19,662
expense
Net income           $  16,897       $  12,084        49,701         37,988
                                                                    
Weighted average
shares
outstanding:
Basic                   48,387          47,822         48,267          47,903
Diluted                 48,743          48,479         48,597          48,574
                                                                    
Earnings per
share:
Basic                $  0.35         $  0.25        $  1.03         $  0.79
Diluted              $  0.35         $  0.25        $  1.02         $  0.78
                                                                    
Cash dividends
declared per         $  0.27         $  0.21        $  0.81         $  0.63
share
                                                                    

                                               
B&G Foods, Inc. and Subsidiaries

Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating
Activities

(In thousands)

(Unaudited)
                                                    
                     Thirteen Weeks Ended           Thirty-nine Weeks Ended
                     September     October 1,     September     October 1,
                     29,                            29,
                     2012            2011           2012            2011
                                                                    
Net income           $ 16,897        $ 12,084       $ 49,701        $ 37,988
Income tax             9,429           6,681          26,041          19,662
expense
Interest               11,994          8,323          35,845          24,854
expense, net^(1)
Depreciation and       4,529           4,038          13,443          11,964
amortization
Loss on
extinguishment        —             —            —             —       
of debt
EBITDA^(2)             42,849          31,126         125,030         94,468
Income tax             (9,429  )       (6,681 )       (26,041 )       (19,662 )
expense
Interest               (11,994 )       (8,323 )       (35,845 )       (24,854 )
expense, net
Deferred income        4,345           2,527          10,967          12,647
taxes
Amortization of
deferred
financing costs        1,257           500            3,771           1,500
and bond
discount
Realized gain on
interest rate          —               —              —               (612    )
swap
Reclassification
to net interest
expense for            —               423            —               1,270
interest rate
swap
Share-based
compensation           871             825            2,900           2,697
expense
Excess tax
benefits from          (43     )       —              (8,031  )       (1,117  )
share-based
compensation
Changes in
assets and            (16,160 )      (7,285 )      (19,255 )      (27,044 )
liabilities
Net cash
provided by          $ 11,696       $ 13,112      $ 53,496       $ 39,293  
operating
activities
                                                                              

      Net interest expense in the first three quarters of 2011 includes a
      benefit of $0.6 million relating to the realized gain on an interest
(1)  rate swap, and in the third quarter and first three quarters of 2011, a
      charge for the reclassification of the amount recorded in accumulated
      other comprehensive loss related to the swap of $0.4 million and $1.3
      million, respectively.
      
      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,
      comprehensive income, changes in stockholders’ equity and cash flows. We
      define EBITDA as net income before net interest expense, income taxes,
      depreciation and amortization and loss on extinguishment of debt.
      Management believes that it is useful to eliminate net interest expense,
      income taxes, depreciation and amortization and loss on extinguishment
      of debt because it allows management to focus on what it deems to be a
      more reliable indicator of ongoing operating performance and our ability
(2)   to generate cash flow from operations. We use 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 because we believe it is a useful
      indicator 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 this measure. As a result, internal
      management reports used during monthly operating reviews feature the
      EBITDA metric. However, management uses this metric 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 this measure as its only
      measure of operating performance and liquidity.
      
      EBITDA is not a recognized term under GAAP and does not purport to be an
      alternative to operating income or net income as an indicator of
      operating performance or any other GAAP measure. EBITDA is not a
      complete net cash flow measure because EBITDA is a measure of liquidity
      that does 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 is a potential indicator of an entity’s ability to fund
      these cash requirements. EBITDA is not a complete measure of an entity’s
      profitability because it does not include costs and expenses for
      depreciation and amortization, interest and related expenses, loss on
      extinguishment of debt and income taxes. Because not all companies use
      identical calculations, this presentation of EBITDA may not be
      comparable to other similarly titled measures of other companies.
      However, EBITDA can still be useful in evaluating our performance
      against our peer companies because management believes this measure
      provides users with valuable insight into key components of GAAP
      amounts.
      

                                                
B&G Foods, Inc. and Subsidiaries

Items Affecting Comparability — Reconciliation of Adjusted Information to GAAP
Information

(In thousands)

(Unaudited)
                                                     
                      Thirteen Weeks Ended           Thirty-nine Weeks Ended
                      September     October 1,     September    October 1,
                      29,                            29,
                      2012            2011           2012           2011
Reported net          $   16,897      $  12,084      $  49,701      $  37,988
income
Non-cash
adjustments on
interest rate            —             270           —             420
swap, net of
tax^(1)
Adjusted net          $   16,897      $  12,354      $  49,701      $  38,408
income
Adjusted diluted
earnings per          $   0.35        $  0.25        $  1.02        $  0.79
share
                                                                       

_____________________

      The first three quarters of 2011 includes a realized gain on interest
      rate swap of $0.6 million and in the third quarter and first three
(1)  quarters of 2011, a reclassification from accumulated other
      comprehensive loss to interest expense, net on interest rate swap of
      $0.4 million and $1.3 million, respectively.

Contact:

ICR, Inc.
Investor Relations:
Don Duffy, 866-211-8151
or
Media Relations:
Matt Lindberg, 203-682-8214
 
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