B&G Foods Reports Strong Net Sales and Earnings Growth for Fourth Quarter and Full-Year 2012

  B&G Foods Reports Strong Net Sales and Earnings Growth for Fourth Quarter
  and Full-Year 2012

Business Wire

PARSIPPANY, N.J. -- February 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 EBITDA^1 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 OldLondon 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 Foods acquired 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 million in 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 the New 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 OldLondon 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 NewYorkStyle and 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.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, February 14,
2013. 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) 455-2263 for U.S. callers or (719)
325-2448 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 3747979. The replay will be available from February
14,2013 through February 28, 2013. Investors may also access a web-based
replay of the call at the Investor Relations section of B&G Foods’ website,
www.bgfoods.com.

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,
MapleGroveFarmsofVermont, MollyMcButter, 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.

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’ expectations regarding adjusted EBITDA,
capital expenditures and cash interest expense for 2013. Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the actual results of B&GFoods 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 and in its subsequent reports on Forms 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.

* Please see “About Non-GAAP Financial Measures and Items Affecting
Comparability” below for the definition of the terms adjusted net income,
adjusted diluted earnings per share, EBITDA and adjusted EBITDA, as well as
information concerning certain items affecting comparability and
reconciliations of the non-GAAP terms adjusted net income, adjusted diluted
earnings per share, EBITDA and adjusted EBITDA to the most comparable GAAP
financial measures.

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

                                        December 29, 2012  December 31, 2011
Assets
Current assets:
Cash and cash equivalents                $   19,219          $   16,738
Trade accounts receivable, less
allowance for doubtful accounts and          43,357              39,476
discounts of $831 and $723 in 2012 and
2011
Inventories                                  89,757              82,666
Prepaid expenses and other current           5,326               7,119
assets
Income tax receivable                        4,262               2,529
Deferred income taxes                       2,175             1,696      
Total current assets                         164,096             150,224
                                                             
Property, plant and equipment, net           104,746             61,930
Goodwill                                     267,940             262,827
Other intangibles, net                       637,196             634,522
Other assets                                17,990            23,420     
Total assets                             $   1,191,968      $   1,132,923  
                                                             
Liabilities and Stockholders’ Equity
                                                             
Current liabilities:
Trade accounts payable                   $   25,050          $   24,427
Accrued expenses                             23,610              26,719
Current portion of long-term debt            40,375              9,750
Dividends payable                           15,243            10,971     
Total current liabilities                    104,278             71,867
                                                             
Long-term debt                               597,314             710,357
Other liabilities                            8,038               9,409
Deferred income taxes                       121,163           105,743    
Total liabilities                            830,793             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;
52,560,765 and 47,700,132 issued and         526                 477
outstanding as of December 29, 2012
and December 31, 2011, respectively
Additional paid-in capital                   226,900             159,916
Accumulated other comprehensive loss         (11,095    )        (10,430    )
Retained earnings                           144,844           85,584     
Total stockholders’ equity                  361,175           235,547    
Total liabilities and stockholders’      $   1,191,968      $   1,132,923  
equity

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

                      Fourth Quarter Ended         Year Ended
                       December 29,  December 31,   December     December
                       2012           2011           29, 2012      31, 2011
                                                                   
Net sales              $   173,706    $   149,998    $  633,812    $  543,866
Cost of goods sold        114,223       100,708      410,469      366,090
Gross profit               59,483         49,290        223,343       177,776
                                                                   
Operating expenses:
Selling, general and
administrative             20,006         16,549        66,212        57,618
expenses
Amortization expense      2,059         1,766        8,126        6,679
Operating income           37,418         30,975        149,005       113,479
                                                                   
Other expenses:
Interest expense,          11,815         11,821        47,660        36,675
net
Loss on
extinguishment of         10,431        —            10,431       —
debt
Income before income       15,172         19,154        90,914        76,804
tax expense
Income tax expense        5,613         6,899        31,654       26,561
Net income             $   9,559      $   12,255       59,260       50,243
                                                                   
Weighted average
shares outstanding:
Basic                      52,154         47,712        49,239        47,856
Diluted                    52,602         48,665        49,557        48,541
                                                                   
Earnings per share:
Basic                  $   0.18       $   0.26       $  1.20       $  1.05
Diluted                $   0.18       $   0.25       $  1.20       $  1.04
                                                                   
Cash dividends         $   0.29       $   0.23       $  1.10       $  0.86
declared per share

B&G Foods, Inc. and Subsidiaries

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

(In thousands)

(Unaudited)

                      Fourth Quarter Ended           Year Ended
                       December 29,    December 31,   December    December
                       2012             2011           29, 2012    31, 2011
                                                                   
Net income             $  9,559         $  12,255      $ 59,260    $ 50,243
Income tax expense        5,613            6,899         31,654      26,561
Interest expense,         11,815           11,821        47,660      36,675
net^(1)
Depreciation and          5,410            4,265         18,853      16,229
amortization
Loss on
extinguishment of        10,431         —           10,431    —       
debt^(2)
EBITDA^(3)                42,828           35,240        167,858     129,708
Acquisition-related      1,159          1,418       1,159     1,418   
transaction costs
Adjusted EBITDA^(3)       43,987           36,658        169,017     131,126
Income tax expense        (5,613   )       (6,899  )     (31,654 )   (26,561 )
Interest expense,         (11,815  )       (11,821 )     (47,660 )   (36,675 )
net^(1)
Acquisition-related       (1,159   )       (1,418  )     (1,159  )   (1,418  )
transaction costs
Deferred income           4,328            882           15,295      13,529
taxes
Amortization of
deferred financing        1,257            751           5,028       2,251
costs and bond
discount
Realized gain on
interest rate             —                —             —           (612    )
swap^(1)
Reclassification to
net interest expense      —                2,399         —           3,669
for interest rate
swap^(1)
Share-based               877              1,401         3,777       4,098
compensation expense
Excess tax benefits
from share-based          —                70            (8,031  )   (1,047  )
compensation
Changes in assets
and liabilities, net
of effects of            15,170         10,717      (4,085  )  (16,327 )
business
combinations
Net cash provided by   $  47,032       $  32,740     $ 100,528  $ 72,033  
operating activities

(1) Net interest expense for the fourth quarter of 2011 includes a charge of
$0.3 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 related to the swap due to our prepayment
and termination of $130.0 million of term loan borrowings. Net interest
expense for fiscal 2011 includes a benefit of $0.6 million related to the
realized gain on the interest rate swap, a charge of $1.6 million for the
reclassification of the amount recorded in accumulated other comprehensive
loss related to the swap and a $2.1 million charge relating to the write-off
of the remaining amount recorded in accumulated other comprehensive loss
related to the swap due to our prepayment and termination of $130.0 million of
term loan borrowings.

(2) Loss on extinguishment of debt for the fourth quarter and full-year fiscal
2012 includes costs relating to our partial redemption of $101.5 million
aggregate principal amount of our 7.625% senior notes, including the
repurchase premium and other expenses of $7.7 million, the write-off of
deferred debt financing costs of $1.5 million and the write-off of unamortized
discount of $0.5 million. Loss on extinguishment during fiscal 2012 also
includes costs related to the amendment and restatement of our credit
agreement, including the write-off of deferred debt financing costs of $0.4
million, unamortized discount of $0.1 million and other expenses of $0.2
million. During fiscal 2011 B&G Foods did not have any loss on extinguishment
of debt.

(3) 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. We define adjusted EBITDA as EBITDA 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. 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.

B&G Foods, Inc. and Subsidiaries

Items Affecting Comparability — Reconciliation of Adjusted Information to GAAP
Information

(In thousands, except per share data)

(Unaudited)

                          Fourth Quarter Ended       Year Ended
                           December 29,  December     December    December
                           2012           31, 2011     29, 2012     31, 2011
Reported net income        $   9,559      $  12,255    $  59,260    $  50,243
Loss on extinguishment         6,707         —            6,707        —
of debt, net of tax^(1)
Acquisition-related
transaction costs, net         745           906          745          906
of tax
Non-cash adjustments on
interest rate swap,           —            1,533       —           1,953
net of tax^(2)
Adjusted net income        $   17,011     $  14,694    $  66,712    $  53,102
Adjusted diluted           $   0.32       $  0.30      $  1.35      $  1.09
earnings per share

(1) Loss on extinguishment of debt for the fourth quarter and full-year fiscal
2012 includes costs relating to our partial redemption of $101.5 million
aggregate principal amount of our 7.625% senior notes, including the
repurchase premium and other expenses of $7.7 million, the write-off of
deferred debt financing costs of $1.5 million and the write-off of unamortized
discount of $0.5 million. Loss on extinguishment during fiscal 2012 also
includes costs related to the amendment and restatement of our credit
agreement, including the write-off of deferred debt financing costs of $0.4
million, unamortized discount of $0.1 million and other expenses of $0.2
million. During fiscal 2011 B&G Foods did not have any loss on extinguishment
of debt.

(2) Net interest expense for the fourth quarter of fiscal 2011 includes a
charge of $0.3 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 related to the swap due to our
prepayment and termination of $130.0 million of term loan borrowings. Net
interest expense for fiscal 2011 includes a benefit of $0.6 million related to
the realized gain on the interest rate swap, a charge of $1.6 million for the
reclassification of the amount recorded in accumulated other comprehensive
loss related to the swap and a $2.1 million charge relating to the write-off
of the remaining amount recorded in accumulated other comprehensive loss
related to the swap due to our prepayment and termination of $130.0 million of
term loan borrowings.

Contact:

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