US: B&G profits rise on pricing, acquisitions

By Katy Askew | 19 October 2012

  •  Profits rise to US$16.9m
  •  Net sales up 16%
  •  Guides to high-end of FY profit range

B&G Foods has booked an increase in third-quarter income, boosted by price hikes and the contribution from acquisitions. 

The US company said yesterday (18 October) net profit increased to US$16.9m from $12.1m in the comparable period of last year. 

Profits were boosted by higher sales, which increased 15.9% to $154.2m. The company said its Culver Speciality Brands business, acquired at the end of November last year, added $20.2m to sales in the period. 

Comparable sales were up $0.9m as a decrease in volume - of $2.6m - was more than offset by a $3.5m increase in prices, the company added. 

Looking to the full year, the company narrowed its profit outlook to $168-170m, the higher end of its previously stated profit range. This excludes the impact of the group's planned $62.5m acquisition of New York Style and Old London brands from Chiquita. The deal is expected to close in the fourth quarter.  

Show the press release

 

B&G Foods Reports Third Quarter 2012 Financial Results

— Narrows Fiscal 2012 Guidance —

PARSIPPANY, N.J.--(BUSINESS WIRE)--Oct. 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 EBITDA1 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.

 

Original source: B&G Foods

Sectors: Bakery, Canned food, Cereal, Condiments, dressings & sauces, Dried foods

Companies: B&G Foods

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