B&G Foods Reports Third Quarter 2012 Financial Results

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, Maple Grove Farms of Vermont, 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&G Foods’ 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&G Foods 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 of $97,299 and $89,856				62,241					61,930
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 shares issued and outstanding as of September 29, 2012 and December 31, 2011				484					477
Additional paid-in capital				120,953					159,916
Accumulated other comprehensive loss				(10,003	)				(10,430	)
Retained earnings				135,285					85,584
Total stockholders’ equity				246,719					235,547
Total liabilities and stockholders’ equity			$	1,145,730				$	1,132,923

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 29,				October 1,				September 29,				October 1,
			2012				2011				2012				2011
Net sales			$	154,155			$	133,010			$	460,106			$	393,868
Cost of goods sold				98,876				91,560				296,246				265,382
Gross profit				55,279				41,450				163,860				128,486
Operating expenses:
Selling, general and administrative expenses				14,937				12,725				46,206				41,069
Amortization expense				2,022				1,637				6,067				4,913
Operating income				38,320				27,088				111,587				82,504
Other expenses:
Interest expense, net				11,994				8,323				35,845				24,854
Income before income tax expense				26,326				18,765				75,742				57,650
Income tax expense				9,429				6,681				26,041				19,662
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 share			$	0.27			$	0.21			$	0.81			$	0.63

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

(1)		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 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.
(2)		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 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 29,				October 1,				September 29,				October 1,
			2012				2011				2012				2011
Reported net income			$	16,897			$	12,084			$	49,701			$	37,988
Non-cash adjustments on interest rate swap, net of tax (1)				—				270				—				420
Adjusted net income			$	16,897			$	12,354			$	49,701			$	38,408
Adjusted diluted earnings per share			$	0.35			$	0.25			$	1.02			$	0.79

_____________________

(1)

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 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.

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