US food group B&G Foods said it expects the third quarter to be “very positive”, despite high maple syrup and wheat costs affecting its second-quarter results.
Speaking at the company’s earnings conference call yesterday (28 July), CFO Bob Cantwell said that the third quarter will not be the best quarter for them from an EBITA point of view, but from a comparison to prior year, “very possibly”.
“Last year we had two major things that hit us, the high maple syrup costs which effected our, with a co-packer effected our profitability substantially and very high wheat costs. And we don’t have that going into the third quarter of this year.
“Last year was our worst quarter year over year back in 2007, we were over US$24m in EBITDA and we kind of did just a little over last year in the third quarter. So we expect this third quarter to be very positive.”
The company posted an increase in net profit for the first two quarters of 2009 to US$11.9m from $7.9m in 2008. Net sales for the period increased 2.6% to reach $241.5m. The result however, was negatively impacted by a poor maple syrup crop in Canada in 2008 that led to a global shortage.
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The group reaffirmed its guidance and said it expects EBITDA for fiscal 2009 to be around $99m to $102m. Capital expenditures are expected to be around $11.0m.
“In general our results are following the track we laid out nine months ago and we currently see no reason that our expectations for the next six months will change,” CEO David Wenner told analysts on its conference call.
“Our maple syrup volume losses of $1.4 million combined with $300,000 less in sales in private label pickles and peppers were a one-time drag on the sales line which we do not expect to repeat in the third quarter,” he added.
Wenner said he continues to see strength in the group’s Ortega brand which grew in net sales by 3.1% in the second quarter matching its first quarter performance.
Asked about possible M&A opportunities, Wenner said it was not seeing anything specific from large companies at the current time.
“There are a couple of small properties out there that are of minimal interest to us but the large companies seem to be musing about things but they’re not doing anything definitive yet,” he said.