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.
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