B&G Foods (BGS) 25 Feb 202019 Q4 Earnings call transcript

Good day. And welcome to the B&G Foods Fourth Quarter and Fiscal 2019 Earnings Call. Today’s call is being recorded.

You can access detailed financial information on the quarter and full year in the company’s earnings release issued today, which is available at the Investor Relations section of bgfoods.com.

Before the company begins its formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. guarantees be performance, placed not reliance therefore, are not should upon statements of and future undue These them. a subsequent We most refer impact condition. filings the and and operating that recent company’s discussion for SEC financial Annual Report company’s the you on Form could to risks more detailed the results of future XX-K new revise whether as statements, company no undertakes forward-looking otherwise. obligation The or result to information, of any events publicly update or future a

call share, also to adjusted Reconciliations will making earnings business to be directly GAAP measures measures, income, on today’s the net financial non-GAAP company and today’s comparable the release. The financial EBITDA, adjusted references financial diluted and sales. net are adjusted measures these in most earnings of per base provided

the Chief his discuss the company’s Officer, fiscal company’s quarter XXXX outlook concerning with factors company’s for Bruce the call the discuss and Officer, as and remarks the the that well company’s guidance affected Romanzi, and highlights begin thoughts results the President will opening business will fourth and fiscal as XXXX for various Financial Chief the XXXX. selected financial for Executive results, and beyond. Wacha, Ken then

conference over would like turn Ken. to I now to our

Good for earnings and full cover joining call. to afternoon. year Today, us you for our Thank topics. three XXXX all today fourth quarter I’d like

of quick recap performance. and full quarter a fourth provide I’ll First, XXXX year

year; this I’ll year, context go of Foods how outlook on where third, our this in in view a of XXXX plan and perspective Second, against beyond. my the performance management developed we over of B&G performance an new April I’d to the and to past stock in as like share and past I provide of as expect we XXXX team the

fourth our fiscal recap results. and First, a XXXX of quarter quick

versus X.X% of we prior net year, a decrease of full of versus sales X.X% net During of Pirate $XXX.X $X,XXX,XXX,XXX, driven Brands. sale by million, increase the the quarter, year sales last of year to primarily an reported leading

Excluding that sale, full year net increased X.X%. sales

quarter, the $XX.X of $XXX.X million last adjusted and Pirate the our latest This was of versus EBITDA increase guidance. driven an resulted for was XX.X% decrease primarily at Adjusted of also a by quarter. versus EBITDA X.X% million, the Brands the midpoint sale year in full of year year-ago of

versus Excluding Pirate grew Brands, XXXX. adjusted EBITDA year X.X% full

sales. stumbled performance. So very surprises this expected with important earnings all of all, after and quarter growing XXXX years stable I many earnings in as delivered in we fourth because industry-leading performance, view XXXX while even our

critical team. was our in was So leadership delivering what new for XXXX expected

deliver that’s with Our XXXX and what plan to savings in was cover inflationary exactly modest initiatives. cost and And costs did. sales we growth pricing input

also Girl, While SKUs. divestiture, some Clabber and low-margin we we help net Pirate grew from reduced of we the while activity the Brands excluding X.X%, needed promotion trade sales addition

delivered the the of in second in of we we declines $XX.X $XX million, of was We and deals quarter, that year half the significantly planned the And of $XX the not list year. saw and range in pricing and our third combination trade side to while low-margin pricing did the consumption line. high We on million hurt fourth bottom very much did this earlier of removal planned of a through of our million.

price years help offset inflation. cost taking to our efforts While price easy the take I competitive over is ability in when believe demonstrate never our to environment, needed achieve, two particularly to today’s past input

on a expect in our million other infrastructure target savings $XX more side $XX for front, months. savings again million should our to cost plus million areas. the cost of in our into those terrific be work to primarily dig the in detail million to we’ll the $XX at XXXX, planned million, year, in and of drive $XX On the cost driven to delivered $XX In structure deeper logistics opportunities we coming and some another provide high by position

members and We highlights a And our implementation accomplishments pleased of is with terrific marketing and in our up April completed heads that and this and of new B&G supply running minimal new report XXXX with combination to team successful Edwards realigned JD include: veterans. ERP chain. Oracle leadership Key sales, last the of system new complementary from executive system. team disruption. year of year, I’m we – the It’s

of planning advantage drive operational system, streamline taking us we benefits and operations, forecasting. which improve accounting We’re will the processes of looking help in finance and expect and the financial forward to our efficiencies many our

plant-based brand to Giant mission people eat category vision march its future more of the of against growth Green veggie continued by The continued innovation. with to vegetables get the to brand its to be reinventing delivering

XXXX While due Green more innovation and in brand an lines less of growth billion on retail since Green in Giant’s the time annual $X.X $XXX in acquired than rate XXXX XXXX, run than the more trade million while to of over products that new low-margin slowed delivering under period. launched primarily sales now at product Foods legacy Giant reduction deals in are cumulatively than B&G

Giant single-handedly revolutionized the has almost frozen begun. just Green vegetable we’ve only addition, category, In and

later. and bit sales grocery into that integrating fully we’re on a the acquired XXXX, innovation range a our Girl, across food network. aisles. In launching distribution of We both Clabber business dry and the frozen More

B&G the possible. dedicated of pleased I’d also thank Girl’s are to who efforts B&G this their the team the integration joined results like employees We acquisition tremendous transition date smooth the to with Foods Clabber to family. make for as have very and as

of policy our IPO very which XXXX. shareholders. second of debt dividends billion our our in that very rates company to interest X.XX%. at in cash We the million the attractive completed our since is a our our to of lowest and largest We returned dividend management consistent cash history included in in have form $XXX.X that and during committed served remain to $X coupon our history refinancing, long-standing returning the shareholders shareholders Board company’s fiscal well successful back XXXX, And with

additional returned of also fiscal We shareholders our an in to during XXXX. form repurchases the million $XX.X share

our piece allocation share buy into and both surprised is not historically of market the should While be step Board our a to time. shares time to share price our management repurchases people Directors capital have that us see undervalued, of recognize back and to not primary strategy, been from our

listened stepping my in over While issues our question I there why many room is, and the depressing as the stock so the CEO, first So debt back, elephant asking low? and holders, and everybody is three bankers year. have the investors, large in stock our to advisers, clearly are year last

concern more disappointing earnings quarter results, XXXX, in QX consumption greater disappointed trends. were of with quarter hit investors been that been First, stock given years the we two our fourth has Nielsen our increase we there’s recently, to And fourth under in pressure after due concerns guidance. to needed again over large

accretive our successful cash to third, is continue we’ll that driven strategy flow high at forma cut debt, net it. and too acquisitions. investor through before to EBITDA ability hampering an share-based cover our adjusted Second, fear yield our pro of X.X we growth leverage to there long-term is compensation our And enough that high our dividend concern by generate free don’t times

So, I’d of these like every issues. to address and one each

our will accretive our year our and we get was levers on hope acquisitions the high a say move balance of balance, is side earnings we deliver we forward. the And low continue these can to and important fourth on volumes side. fourth the shows in always as expectations quarter, delicate deliver. what This we’ll announcement full growth XXXX and back were pricing we quarter while I through First, to two

not are as improved yet, declaring we victory year of see XXXX many the first while So expected we in performance.

and no operating the cut have under to we our plans current Second, dividend assumptions. model

because believe company was upon in dividend the built. is that the vehicle which to continue We this

the believe enough flow conditions, that also under We we operating normal cover cash dividend. to generate

do from our should cash see our gain tax a you confidence in will working same see as continuing XXXX, sale as flow uses debt. repurchases from But will as sale that had that of we sizable detail, in XXXX, cash XXXX cash share Brands, in very in give we. the of and and Bruce in Pirate However, the related including more discuss Bruce you’ll a of on onetime bill operations in to our and from these several we cash dividend investments our share increased plan not capital uses net

our leverage. investor debt we Lastly, concern over understand

to get committed create Bruce Later, to excess are cash leverage our in help our We to times reduce leverage. plan flow share six our XXXX plan. below will

pipeline of more without acquiring believe In M&A opportunities The active, believe and do businesses. cases, acquire reduce businesses may addition, remain actually shut and some to in help that, increasing we is we leverage we’re leverage. out not

continue has model see long results consistent confidence and realized We it B&G. long The we have work XXXX investor come. we a B&G the here very worked to Foods. we deliver summary, of in for in to for a So believe can new as to era at time, B&G start gain a to time

to So now XXXX. on

strategic will make plan of promotion of growth flow. private-label and Green through We cash managing For while our and remaining to growth we margins, accretive of on winning brands. trade like low-margin grow business. – the to about a X%, Ortega, our our long-term some and low-margin overlap a net and spice Giant, acquisitions in the maintaining our Dash same: a reduce stable growth X% we remain amongst McCann, organic Mrs. sales we as X% be brands XXXX, SKUs tampered organic to improve for others, bit continue down our drive drive expect of growth In key brands several portfolio as But workplace. key XXXX, our to imperatives building large drive loss and brands

innovation Giant frozen categories a again sticks Cauliflower frozen across Cauliflower Pizza, vegetables, food through Cauliflower Hash Browns, to bread lead made charge range Gnocchi, of XXXX Breadsticks, and the cauliflower. stopping there. Cauliflower Veggies including introduction We expect Giant of the Green is in of Crust of frozen which Giant launching shelf-stable the in on outside Building with Green we an business annually, we’re aisle, success million rice Veggies Riced frozen now are $XX XX% tremendous Riced the aisle. in the And not Green

a category large with little innovation. is rice $X Shelf-stable billion

Veggies less more Riced regular chockful Veggies Giant like Green are rice, of veggies but like with Giant shelf-stable legumes perform are Rice from and lentils veggies blends protein. made and taste vegetables XXX% featuring peas, and carbohydrates chickpeas. of and Green Our cauliflower,

driven frozen and in Farmwise, brand Farmwise products growth a under the allow Giant good Farmwise Giant of them Green where channel Wednesday. from in brand will the their quickly name channel veggie small Giant and traditional food the but we to commercialize very acquisition natural prolific, be under is brand in Green is innovation the We pipeline the introduce which fit. the last a further us Green just to expect announced that by forward-thinking

capability scale-up a of what said quick We are new a it’s good with and excited this at very when about I B&G. small acquisition era I meant example

All Green Giant in all, But we expect from won’t $XX alone. load to Giant innovation the million have Green sales new carry XXXX. in in

brand, Ortega, Our XXXX, has remain very second and grown B&G steadily Mexican largest since Foods under food category. we bullish on the ownership

of some Tortillos, leaders bringing are veggie-forward Taco to plant-based of of Ortega Cauliflower introduction and we made the with through in over Ortega As Cauliflower the innovation, magic Giant cauliflower. Ortega, Shells Green XX%

get vegetables people Tuesdays. while help they their can more Ortega enjoy Taco diet in Now

food In of unique launch taco the flavor, a current and sauces craze. each a truck we’ll capitalizing addition, with street Ortega line on contemporary

both the of in XXXX. the Oatmeal, acquisition to throughout in driven we We XXXX accelerated be and Irish in consumption are acceptance. the continued Canada growth We’ve latest retailer quarter. McCann’s to receiving the made by McCann’s further U.S. X.X% distribution expanding been expansion small McCann’s terrific and expect

by continued our the improving to two margins, Our been we more second strategic since over be has to to we three program in To we appears our over reduction on imperative going last our improving see while original million years, toward $XX And costs, for tariffs our margins. modest and is whether offset or million. million To XXXX cost have work $XX of XXXX beyond goal set forward next these help we be it focused and inputs, expect goal, is still per year than labor. have the cost it $XX inflation extended increased date, million reduce to when in cost to goal taken $XX our approximately out years. pressures

XXXX. reducing and up expect this our packaging network. this manufacturing We and efforts do several throughout optimize network, the optimize to continuing announce initiatives to plan logistics We our costs to stepping to in area by product

And plans two far volume for $X pricing achieved XXXX, pricing As to we and significant past promotion benefit as pricing to price mix. have optimize refine to million. the to pricing from years should overlap the XXXX. goes, continue be trade We’ll to $X we in continue delicate million some over expect

to of accretive imperative been strategy strategy Our a our has beginning, continue well since that integrating and and into B&G businesses of to the part is future. we continue acquisitions. Acquiring third the expect the

We for defensible with positions are always the flow. opportunities good lookout products with market cash branded-food margins stable high, and on center-store and

like acquiring this and without We on in distribution and G&A M&A importantly, at achieve focus should Girl, an also accretive active in opportunity to products acquiring our sales, We Clabber leverage. with market facilitate the to synergies, brands to were acquire able give us XXXX multiples. the industry and on businesses pressure manufacturing,

And be incredible team wouldn’t B&G members B&G last have. not but the least, without we

XXXX, our enhancements We in been our an sure a winning talent on workplace new systems lot systems make remains investing such including and our to execution. operating process improve to ERP a improvements focus building and people, our redesign, always strengthened best. Our we’re integration. organization in We’ve organizational at systems as

begin we’ll and XXXX, the reap of new better to and system benefits management. inventory planning In financial the through forecasting

In new manage a trade spend. our we’re year, system large to promotion addition, us trade should this that better allow implementing management promotion

in Foods on B&G confident back improved get So progress in a XXXX continue that to year make against we’re will to And performance. we was XXXX sustainable closing, track.

financial to like to I’d our full of fourth to and call discuss Now, performance. details turn year over the quarter Bruce? Bruce the

Thank you, everyone. Ken. afternoon, Good

the solid year. XXXX we outlined, and our the had fiscal in just Ken continued of strong As quarter with we quarters in third that finish that the a business to both a saw momentum fourth second

generated $XXX.X full as of sales reported to sales EBITDA adjusted EBITDA net of billion million $X.XX of million We fourth EBITDA was for and a million the quarter, year in net and of sales leading of XXXX. percentage quarter, XX.X% $XX.X $XXX.X adjusted over net fiscal adjusted for with separately, percentage of point basis line period. XX.X% a as of our the which expectations. sales adjusted the represents for prior we EBITDA which a year in year improvement XXXX, net And was full XXX

that adjusting XXXX in for or year. sales over increase represented sales, the Girl fiscal million XXXX, net The net XXXX company the $XX.X million of contributed acquisition to in in net our the program our inclusive sales approximately $XX.X net fiscal an after $XX.X XXXX million from optimization approximately M&A, net of approximately Base by excludes $XX.X and Clabber XXXX X.X% reduced XXXX margin million driven list-price volumes $XX.X Pirate Fiscal May These part optimization were impact X.X%. which trade in SKUs. for program. from sales. fiscal or decreased benefited an Brands in last of of our business sales our as trade-spend benefited benefits well our active base reduce lower spring as million offset to business in pricing effort and increase and pricing, were by by unprofitable $XX.X

for continued our distribution Green year year innovations, and Spirals, well like was as Riced Giant Among with Giant the Green million as our by growth $X.X X.X%, new larger Green XXXX dollar Giant bag our of Veggies brands, our non half shelf-stable or in These our were gains half programs the and the the of products the holiday in key during as channel of frozen volumes part offset altered year. bag-in-a-box by products. Giant the of second our portion reduced of frozen year we Veggies strong that plus means up driven in by both first was innovations a trade previous some Green

saw just compared wave in As one we stated launches previously, in have Green Giant two XXXX. to XXXX innovation of

XXXX of we XXXX. some frozen with also of successful of some We the other big will We launches. the innovation in other reception the – be in-store more ideas have launches for believe think our frozen some line

had by driven Style X.X%, respectively. strong Maple a or winter, by a and or year, million off that our larger driven brands, mild Wheat, million X.X%. increased Farms by or X.X% in by successful XXXX by another X.X% sales or $X.X net was $X.X and essentially $X.X part following more winter York of million were flat by Victoria cold season. Grove Cream much increased X.X%. was a performance Among and down New Ortega

business in a input profits some spices strong losses of have seasonings the inclusive of Both lower Sasón negatively in were pepper, M&A label commodity and business spices and low our lower that pricing of $X.X modestly, some X.X%. black impacted outperformed Net Despite profit Dash, as sales we Dash was the costs, our down million and decreases Ac’cent as business, the commodity result Mrs. Ac’cent, in garlic primarily and up sales, and acquired as our or XXXX while the in rest was seasonings and well spices certain remain for model. private original of business by Mrs. contracts.

Our well acquired which in was million Oatmeal, generated million XXXX, million Girl, Clabber the with the in had which XXXX, May in in acquired McCann’s sales recently that XXXX, July net $XX.X Irish generating and XXXX. in in in in generating owned acquired approximately net was net slightly sales, plan; XXXX. period brands ahead also McCann’s sales we performed business $XX.X approximately during of some $X.X

we in While when quarter McCann’s our McCann’s the for first as compared of Clabber in to XXXX sales discussing in fourth have of of and a the fourth were ownership also to XXXX, time done quarter Girl’s quarter full XXXX. net well up spent sales performance X.X% has we for brand. expand lot the net business distribution continue

or Gross profit for was net sales. XX.X% million $XXX.X of fiscal XXXX

XX.X% Gross fiscal XXXX, of been $XXX.X sales. gross of impact XX.X% of fiscal $XXX.X the net Excluding for or was nonrecurring the profit acquisition $XX negative million would and divestiture-related or sales. of million profit company’s XXXX have million approximately expenses during net

during million expenses fiscal net the and or of sales. of acquisition gross of $XXX.X been would the impact profit negative XXXX, have XX% nonrecurring Excluding $XX.X company’s divestiture-related other million

initiatives profit XXXX gross inflation maintain that what most cost increase offset in in is pricing the order and savings part, margins. was to plan to And happened. implement exactly for to Our

XXXX, benefited just our of For to $XX of an year full million, profit from full target pricing ahead year million. gross in $XX.X $XX million net increase of

Likewise, year in $XX our the with million largest approximately distribution our was as XX high our cost initiatives of $XX $XX of our contributor networks of in million savings also out The and to more savings frozen dry realignment than cost end of the at the network. the XXXX. successful of plan miles took for realized we million came million savings

improved from addition the in well implemented We cost procurement, billion goods XXXX to that also lower in These materials, cost initiatives, the year. earlier from billion freight our in $X.XX overhead, weight-outs rationalization as of XXXX. Pirate warehousing packaging and the we divestiture, benefits the saw G&A of $X.XX of in as sold to Brands inclusive and helped labor,

impacted Cost percentage and we costs prices resulting can to was particularly XXXX input goods in consecutive in driven despite aluminum our Green faced, of increased a sales XX.X% agricultural Giant that short increased prices. higher net of from negatively sold and tariffs increased XX.X% a crop that as margins, XXXX compared by second steel

for administrative of million general for was increase point selling decrease $X.X expenses $X.X warehouse to million, $X.X Selling, in by of for million, million fiscal for fiscal $XXX.X selling, consumer million. million by $X.X and to divestiture-related million, XXXX partially of and general to acquisition or $X.X decreased X.X% and improved $XXX.X expenses decreases of expenses X.X X.X% of administrative XXXX nonrecurring The XXXX. an composed in percentage sales, fiscal a and XXXX. net from of percentage of expenses million general X% Expressed fiscal expenses as compared $X.X other administrative offset expenses marketing expenses and

EBITDA prior fiscal adjusted $XXX.X to in generated the $XXX.X in million million XXXX We year. compared in

was roughly million XXXX. Pirate XXXX from fourth reminder, during quarter a Brands, As $XX which in the sold contribution EBITDA of included adjusted

see a the the generated initially of sales year the each sales what is finish of first quarter XXXX, lapped net year, highlighted increase $X of Pirate. the out or adjusted first an fourth nearly And happened. expected reduced fourth three in $XX.X We our EBITDA in period. to EBITDA million so with generating in we quarter see ago we or to As of of when million XXXX. quarters a adjusted and quarter favorable Pirate laid $XX just for then We we guidance we million exactly XX.X% year XXXX, expected fourth during in the the to as sale from this ago

the in in in from XX.X%, compared lower as adjusted from from earnings XXXX, represents line EBITDA was which by of resulting fourth diluted of fourth Clabber share XX.X% sales resulting quarter a per the the point and the approximately year of a the of XXXX. reduction per in which as generated and EBITDA XX.X% from by efforts. $X.XX in increase share part in XXXX in share a interest XXX sale our prior of Full Girl Brands contribution with primarily offset XXXX in decrease in to the net XXXX We a our fiscal sale percentage was contribution a of XXXX. repurchase XX.X% year. expense late incremental percentage small basis $X.XX the mid was resulting adjusted following the debt in Pirate the XXXX Pirate largely our of from the share expectations reduction The generated in adjusted generated sales our count acquisition net loss is driven quarter in Brands

and or a the expense Despite year, per penny fourth fall our issued for X quarter interest newly negatively X/X X share XXXX days by which retired were the approximately debt notes, mandatory for our X notice of by savings was that ultimately XX before refinancing $XXX,XXX we X/X the overall the XXXX retired. notes period in X/X during notes following both interest occurred [ph] negative our impacted the carry call of nearly the about

repurchases market. true dividends as to or paid remain which shareholders as to excess X.XX cash our of consisted XXXX shareholders, in Directors of or million cash return the share $XXX.X Board share, open per in our and to team management Foods B&G The well a commitment we that in made

shares. reduced $XX.XX price repurchases million XXXX million in one by fiscal share XXXX $X.X share share, repurchased which share XXXX, an we During average per of price The approximately our followed at million. million of our average million of shares stock $XX.XX to an at $XX.XX common $XX.X million repurchases count or of $XX.X shares

In gain fiscal tax adjusting of of on negative million we net from the sale operations $XXX.X XXXX, from impact Pirate for in cash generated million after $XX.X our Brands.

calls, great for obligation As resulted sold price, Separately, in investment, Pirates came on a we invested our XXXX inventory in XXXX, which a in payable. a return due working we less we in previous receivable $XX.X XXXX. that had net plus during fantastic also on million highlighted tax in but capital or accounts accounts

cash adjusting Pirates assuming operations after working for the flat $XXX.X Net have capital gain been on net would tax million. a and from sale number approximately

XXXX, While little the us up bit creates opportunity for a we in at think on of XXXX. back inventory nice a end us this that crept

to capital to cash dividends in provide million create a net additional from working cushion $XX normalized an and $XX of operations XXXX. expect We our million to during expected levels million for $XXX

for review XXXX. I now to your guidance would like And

range to We $X.XX the sales expect billion. in be billion net of $X.XX to

impacted to net Clabber $XX million $XX sales generate so an be full $XX year XXXX. was XXXX in Girl, fiscal acquired in XXXX, in million approximately by should generated million We under our and a net to expect May, sales watch or Girl. additional positively which in Clabber of

and launches with this series Browns, Spinach also Hash Cauliflower Cauliflower Pizza, year We for including expect of strong Gnocchi Giant Cauliflower Rice strong Breadsticks. Giant and a Veggies, innovation year, Cauliflower Green Green a Crust

to again Green which XXXX an week. and earlier, of receive our this Veggie following in also vegetable set. be of frozen mentioned complementary Farmwise will last to announced year our the to portfolio proud of We expect efforts extra Fries, Ken boost Tots Veggie to Giant and Farmwise, innovation these we think just products creator our the extremely frozen Veggie addition the efforts was frozen is our As Rings. revolutionize acquisition that

space we the private $XX a pare back to expect and million to $XX million certain lower-margin as our approximately On commodity in label see to service continue we contracts. food sales by reduction downside,

company first result trade of program. sales level quarter the our also see We the XXXX softer some a at to as in spend expect of optimization

XQ While our were pricing and came the we than at of volumes wanted. end a XXXX, year in our in softer high little expectations full

this as optimize of quarter expect a may throughout performance. spending to Trade We the area strategically invest dynamic further we year our trade for an tweak first in a from be year more in may that of elastic we some similar very sales well the performance brands standpoint.

guidance. back of fiscal to XXXX the Now, our rest

to million; We expect XXXX, expense cash $XX $XXX.X $XX last slightly of to be CapEx per to share earnings $XX million approximately expense capital approximately of $XX million, depreciation and amortization net XX%; million; benefit fiscal approximately anticipate million $XXX.X $XX expense to of of $XX to $XX of which of million expense including tax approximately to effective below EBITDA amortization of of to $XX million; $X.X rate working year. a million in $XX taxes $XX approximately $X.XX $XXX adjusted million approximately interest interest we cash $X.XX; $XX of XX% an finally, million; million adjusted is million of cash million; to million interest million; to and expense

million less midpoint we interest, cash CapEx, EBITDA Based adjusted cash and on taxes our our $XXX be approximately $XXX guidance EBITDA, that will to of the range, expect adjusted million.

$XX reasonable anticipated annual a million, to $XX to us an leave million benefit We also from which with taking million. dividend $XXX approximately million this should million reduction closer expect to $XXX cushion see which our pay of cash from to additional number in to capital, an working $XXX

compensation, per our calculation our before approximately expect by debt EBITDA be fiscal X.X Absent to credit agreement, in to covenant to share-based X.X adjusted XXXX. our we net the acquisitions, times as end of

would the Q&A portion we of to remarks, like and begin Operator? our our concludes This now, call.

the line first Barclays. Please your Instructions] question. comes from proceed question Thank with Our you. with [Operator Andrew of Lazar

everybody. afternoon, Good

Hey, Andrew.

Hi.

take disparity the little of on doesn’t up want call couple it A I just into talked see seen account to think maybe guess, Perhaps get between sales obviously, little a weaker. we trying what, little – been performance things sales growing a areas make Giant for in course to about of are the a bit if I bit just to in data. Green that what in that a – disparity scanner get we’ve scanner, today a franchise. sense the the were that the sure of I wanted some I it’s we’ve quick But sense because of you a of of quarter and Hi. off, and Giant, me. there, seen Green over first any, of the the that for some

the unmeasured Giant year total, But Green first Green lot we – Green terrific sales in – that’s as reduction U.S. the were Well, some through first program. softer had first results has to as was what showed, cutbacks be with normalized up nearly year. a more Yes. scanner not we expect of post on trade the as of that quarter of and in a all, stepped Green had channels. of Canada, Giant quarter innovation, but this effect are Giant in our quite to soft not and on But there promotion the much plus that trade

XXXX Clabber expecting Girl. anticipate I a Thanks about what whole Girl. then think Got EBITDA? have incremental you you talked recall, you something for for sales in from weren’t it, XXXX you Do for of Clabber And benefit As in that. on okay. EBITDA I lot from similar

or… the you a So, somewhere the EBITDA? year I of base Maybe full it’s half $XX of kind closer incrementality of on thinking only XXXX, is that more million year to around though even was for in in it get

Sure.

in fiscal Girl of a the XXXX. couple will XXXX. first was in dollars in be million fiscal fiscal XXXX. a positive Clabber of again positive So half It

Got it.

Okay.

So, up actually you it benefit as went did down? some getting end

XXXX. thought. the Yes. we And into we XXXX guidance second that Clabber We got in benefit some fiscal baked our of half have

sort thing move be disruption market. last any whether the changing all number having in the towards on for was off of companies that broadly being maybe to turning be take the more and such, your in maybe and different have the frozen hear a the level phasings resets, slower that perspective We innovation rid from business, I see. impact as just a you of the you. so vegetables, of you a it’s what of have shelf, the because lot get trying lot of just the say, to business if velocity highest on frozen have do, would forward whether it some holding power the items, at your terms frozen of, things whole little shelf space, of from put let’s they’re just your relates collect and at industry at moving lot of and to you brought click-and-collect happening things more to retail like click There’s of your Okay. standpoint. or grocery. And all. specific and timing about And The happening. hoping area, it of things sort dynamics more of other or meals around be that Thank and the in just operate that having it any the broader to trends change sort could a freezer it

whole store. could that Well, say when about hearing you Frozen, the you’ve been just in you what described

frozen they They major timing So, there with when retailers innovation. in shelf changes, year to. stated lot are only once from the two out. to a however, our wanted figure innovation wait the launches have where increase to of reset launch pass reset from up to to a and in everybody, they in we don’t to want customers the that even – We’ve change went innovation want times

Frozen more Retailers wouldn’t I volatile So, any innovation than their store set comes. frames. the of of have say the rest when that time there’s necessarily lots

retailers is them. to It very are same they in hard timeframe, get because all change individual. own Sometimes they their the

we muscle were is going to new while frozen launching we major had vegetables. we good forward Our – rhythm have exercise

go categories. multiple Our to frozen across new going is now innovation

going as recount because to we’re items So, new there pizzas, launch that’s frozen the few different we categories reset a different – in well within as could vegetables breadsticks, food different side. be gnocchi, that timing four when four are that

multiple how dates pertains because are those to retailers. can’t going each our launch multiple is, that to in when I So, to you to launched retailer be businesses exactly it it’s be we’re tell going going

that So, category frozen’s but in difficult other wouldn’t there any I of is a any lot than more the say noise, active store.

very color. Thanks much it. for the Got

Thank you.

Thank you.

your Karru question Please next of the with with comes from proceed line question. Jefferies. Martinson Our

a more we new do Giant I of little And in rice new for when product I just vein, sales correct? number products get that in the a on $XX do see same color guess wanted heard shelf-stable out I housekeeping. thought that Green shelf, there. veggie the see million Is to I the on when we XXXX.

Yes.

weighted, this And more everyone that? Okay. to own I about mean, I then time, front should half? half we going recognize but about How think has back how should when their we more be cadence? think is that the

quarter in items, and Well, early, some first them be we that all quarter the launching with took beyond. some to already of throughout the going customers they’re launched fourth and

first Specifically, all on product $XX when rate, aren’t can run I we’re achieve can’t you. based the first different at second rice the going you at a we’re going new annual all It’s shelf another quarter. first retailers XX date ships level shipping the of stable, but year. by ship we not million asked times. way, acceptance SKUs the project ship Said grid differs about customer. throughout in veggie what I the to promise the customer first the launch to – how adding best in – that’s and all until up new across But sales by the Imagine is the distribution the

optimum get the is of of look you with And the volume do guys seeing What elasticity would like that you’ve guys when you the portfolio, mean to balance Absolutely. that in how to pricing? products? the guys the I at declines you the been terms mix

in everyday we’d a $X.XX more more in But in came way. much or are. maybe normally pricing, little just bit either We’ve straight-list come base price past where took answered XXXX, in elasticities huge of we price. thought is volume which in a what we And unit the that’s in. years, of question of up a this swings pretty we maybe couple $X.XX It predictable show because over the doesn’t

to little of You pretty proved it be our might brands some – XXXX, downtick, bit so a to of delivered. volume have inelastic in of pricing

categories. forecasting list to much elasticity, – about we that cutting you’re elasticity, discounting transitioned only And points on because When greater in much, goes about some changing many back you decline talking not some transition XXXX, very, very very did price swings along and few talk times, very, that with with, pricing, volume low In that’s then, a them. to getting of the really on on is deep guessing excess merchandising promoted to very but complicated.

where places, little volume not than very, were below like change. might more to we’re and some volumes said back. we going we many margin. a a get You mentioned, Bruce up and discounting, to We do may we that it’s going want to lost be wholesale there less and learn low very of because over We were time, we thought. deep giving knew as at But have

So, a empty sales bit hit because on it’s why lower end a guidance were them our the little of lot we cases. were of able and withstand to EBITDA

that China. prices Okay. just higher And are called reports out, again to lastly, production coronavirus, you with out garlic we’ve coming up enough guys just tariffs. And the now hearing because not going quarter, garlic there’s of due last the been costs

through and thinking lead-in to of your inputs ability price a as to Just at kind that that. looking how for of you’re

ability. some have We

supply. So we’re securing garlic

supply interruption from looking other we in never at supply. – are already protected we’re already already have and regions sure So But make also we of we’re inventory good have to we’re in China. an

And the an uptick uptick probably cost. in in costs. is So to going that’s biggest be there one of our

but on We of gave seen that It’s negative volatility, the haven’t a in based. spices we commodity back And our the year Bruce many way we lot uptick an said, spice some of can garlic commodity contracts as more some other And pass cost. are is savings we last got. along. written, there we really pricing that of had of because

either not in way, it’s pass-through the does world. but space go it in XXX% tandem So

Thank you.

comes question. line with with your of Our Hunt the from next Wells Please Bryan Fargo. proceed question

Thanks was X% could maybe if X% for wondering remainder of to for you growth your time the out help this afternoon. EBITDA the I XXXX. bridge

bit of rest cover a little Again, contribution, us I can gave from it. a million was the You Clabber of if help of wondering Girl. you couple

Yes.

a price So there a Green we efforts. referenced some little which incremental be benefit wraparound year is and small should then cost last Giant more really increase, sales. of the savings And bit from of

of that’ll costs. All and some contribute offset increased

Very good.

was contribution wondering costs as business. Farmwise, for the could mean, XXXX maybe I if what be Next, just for and it maybe is on And might what acquisition sales EBITDA that are, I touch you there the well.

about, $X million this EBITDA more that a less that’s all And cases. generating acquisition this than business year going Ken It’s in Yes. was and leverage likes an to around we’re less in ability as complementary that with channel products Green natural this sense, to demonstrated with describe are do lab, innovation, we’re to research a it, as product looking and very what the into launch Giant. to small

really accelerating for even we’re it comes with to de forward. a – impact Green what Yes. yet going going haven’t the this plan of we’ll business, the Farmwise channel. have minimis natural It developed our it’s as in, in on do numbers. is And innovation we Giant

the have Green into excited brands. They of don’t we want very our – in which any a great about don’t innovation, of natural veggie have this opportunity. channel. But XXXX access the are Giant We we channel, all be will probably don’t more mainstream natural

our ability with a now Farmwise build as natural Farmwise access, take for great innovation and see well have Farmwise engine, we in both So innovation engine it the channel. engine B&G as to the the as B&G great to

about Ortega? could you Breadsticks the Very such good. wondering corn-blended portfolio and I talked your Cauliflower if shells acceptance When about items as of innovation, about lot – touch how you the of Cauliflower at look innovation. was across wide also you a is

got food, that by not and are appropriate look stores a at lot hard products. has of convenience if like which and Well, ex-AOC, for because as to measure stuff in really you it, measured Nielsen, our

in Giant don’t distribution a more our XX%, brand So Green the gets lot we’re on day On Ortega, top-selling food we’re on distribution, innovation believe It’s of customers. A if or as XX% distribution range. food XX% Green every presenting Giant. you our at innovation very yet, high. I but is that high on look our to

to they the clearly have priority XX% what distribution it’s in on to don’t So, the given XX% going are range the be about somewhere innovation, high is. number I But ACV ones. final

can to much. that get going a on So, we to do so innovation regional want brand just big more not on brands the national amount all to distribution, is innovation and we that

the discrepancy channels. just – just reported in of the Is growth between for guys you assessment data, you placement Do situation? – what Giant it you a non-measured was of had fair in the you better and believe Nielsen kind that Green

have we we biggest the the little don’t lot have did difference in was sales. of this, but a that due But numbers. But Green consumption A driver did probably see between trade. on Canada pullback to slowdown did Canadian – again, bit, was the you of Giant a

else. I good. off somebody it will to Very hand

agencies. improvement Sorry, leverage When [ph], what last that to B+? you’re and the does proposed B able to your at to you look with a discussions imply you the the maintain spot, X.X Does question. where that get X.X to into with

to our on would important probably conversations the ratings But improve them, not with We me our love to maintain ratings existing and certainly, comment for to appropriate us. are analysts.

of pricing is cost been debt on to important Our fortunate us. We’ve with debt. our very

a fall. just mentioned last Ken earlier, refinancing As debt did we

largest coupons ever. Our that one and ever largest our of

obviously us. that’s to important so And

evening. a Have good. good Very

Thank you.

you. Thank

comes next your Dickerson from Jefferies. question. proceed with with line of question Please Rob Our the

so Great. Thank you much.

next just remarks that – it there about XXXX, prepared Is the I’m savings. said like in like, kind First, of years? you that… Or of maybe of the year-over-year you mentioned includes, some other regular $XX assuming EBITDA productivity? if really million, sounds we is by each three $XX asking you uptick million the expect that see, in I’m the to think driven

talking Yes. that’s productivity, it. That about. what we’re is exactly That’s the

Okay.

all put given, the year So, there’s reinvest if that each I’m like assuming of the million $XX to more of you’re that to increase, about some pulled not dynamics to back competitive you if three just back, spend next some, you back we’re plan the pressure, you years. million posting $XX never trade some thinking but might the in, over have more volume like obviously, end. back know,

like, we’re million $XX.X we forecasting and dropping taking, be the So next year the to years, line. bottom it, call shouldn’t all per if that three

correct. absolutely You’re

Okay. Thanks. And then…

Yes.

forward. provide to earnings really going is model to some our Our stability

had known performance get B&G huge before be always to increases track we to on and of then really over on we back being was to in little going few to had not acquisitions. the presenting earnings. the leakage. get steady-Eddy for XXXX It’s acquisition has accretive that We’re base – business been that the while a The hunt continued years back last problem we kind

but And because the didn’t so the a perform, acquisitions were because leaky acquisition bucket. had accretive. we Not

ex is Pirates goal because Clabber with and our So, bit, grow Girl out. bucket, leaky much Pirates to stop last we and in did been year, the a which little there’s noise so

going to our EBITDA, but prepared debt our sure then sheet our to the little at have the this put for do to saying company a some And that And drop as is quite will forward, did be that We And will opportunities is going said that our not doing leverage, accretive Clabber. need stability not But us marketing. we’re cost over we which that’s in bottom acquisitions. maybe in line. to will make do line pressure it XX we’re We impossible. has inflation productivity with we’re in help tricky can so top and looking to – offset with frankly, what been way remarks, but the our there’s on right grow balance and line, invest that of it now, bottom maybe some years.

quickly just then dividend. on the And enough. Fair

You dividend. one out the that you the stated caught with three of upfront, stock, there them probably pressured are issues

materially acquisitions? to your That’s just how understand company dividend understand also – behind you But Thanks. So, just to of kind an why which said allocate built, ask, the not next was I little to I just allocation the curious, prepared that’s of capital is space. not process And all. more strategy, have extent. to in better, capital the trying kind dividend higher a then given to remarks, highest because trimming the bit you within the to capital this I’m the more yield than

this, included, of think view here our the Ken the policy generation We lot idea the yield a based on flows. the a on It’s We And consistent of never dividend view public on the set doesn’t the price doesn’t cash a but function management policy dividend the been company. sense, based think dividend had make I and returning with our the shareholders. and generation make the yield Board doesn’t on yield. of the sense. And excess I Sure. just view and because do stock make cash more we to cash have the team, is went and cash we sense

Okay, great. guys. Thanks,

you. Thank

you. Thank

Hale question Barclays. proceed with line with of Please Holden next Our from question. comes your the

you. the taking questions two call. had for thanks Hi, I for

But Ortega little were then, new The is you distribution. a about that to the it since at the of or kind to growth distribution question, first, in sauces, we’ve bit a is veggie get growth. little been you And sort talked innovation just to you’re gave looking of tacos Bryan’s while the brand? on gains? about take it response low it’s it kind a talked And of street where would single-digit in on as a that schematics of and

the Well, biggest it’s since probably definitely taco news shells. the the launch the we in taco think, shells of, –

low that sauces guided growth. single-digit and – good launches the some and those you we of taco some with should acceptance, – in see So

And does around and that that do take or… marketing more noise to

Excuse me, I’m sorry.

support Would that do? to marketing take more

with on – amongst a don’t lot it to allocate But going has brands, we budget. brand each we’re biggest that yes, advertising marketing what focus support we a have have going we the we our Well, depending on. –

on a on digital, we on we lot with So, a and also marketing and focus we focused our lot shopper in-store. retailers, focused lot do a

we categories. categories some we are the of signage We’ve on have in the several that shared bought signage. the exclusivity freezer where vegetables, out the So, have doors, that there where goes frozen on past like

cross-brand we other innovation. store of merchandising support to areas in So, the as done well as have that both

my give it from? working drove in? little this pulling capital, the coming where the a sense increase Bruce, million question what the Or Got year where on you And could is it. bit capital $XX of – you’re is back guess year that second last us working where a savings, I the

about came receivable, down. job accounts little bringing XXXX We thinking accounts capital, inventory literally working thinking as And sure. It payable, did a I’m I’m bit up great inventory. in again a Yes, XXXX.

of wrong on Clabber then is us. went Some And payables that the Girl. the way acquisition of

there’s And generate a of big down cash think will so the levels. We some excess to opportunity that back both right focus by XXXX. an those bringing be to those in

There no can category that is the do liquidated – to of one that. of you out kind like category,

system. So, just better management it’s the across

Better management across the system.

Okay. Thank it. appreciate I so you guys, much.

you. Thank

Thank you.

of comes question. question Montreal. Ken the with Please next with Our line from Zaslow Bank of proceed your

Hey, good afternoon, everybody.

how are Hey, you?

Good. A couple of questions.

that. ask flow lower-margin operating so to in numbers? have reduction how took about SKU to that away You your When Is rationalization, cash that’s I come line? to your don’t not profit going the I all the add not question, SKUs, the to think accretive

you the It quarter. was EBITDA up was if fourth in and million look, $XX our

Is is to though that going XXXX or done? that continue action into

in talked $X million. million we think small So, about I to a very benefit price $X XXXX,

thought about but I SKUs. any rationalization, if be some you of and when then what said more by low-margin SKU offset But talked – that. you you’re would about it X% for SKUs, account but not you guidance, the partially rid X%, we calling to getting would some

of baked that is full all in And to XXX.X Yes. and XXX.X. year into guidance our factored

be when it But incremental? – you’re is to say I but guess incrementally, It materially just what I’m trying would about anyway… to that the seems is, like bridge XXXX, thinking marginally EBITDA

Marginally into our incremental numbers. baked and

Okay. complexity. is, in of My question second managing terms

– innovation don’t product this much going you able – remember be have different to what relative complexities exactly I into much history? coming, had are to the this to products So, How categories. what last equipped when capabilities you you manage was do better

in a say products XXXX, now started in Giant right, that have steady for launching of XXXX. so XXXX, I’d Well, XXXX, array XXXX, we frozen been new Green

any in and are that old the launch one on, – had in accelerator in hiccups to the everything bag, initiatives same the that are we to we salesperson’s haven’t it. we lot in was brands significant Having XX are model haven’t bag said it we of has taking So, doing our that material B&G shared now a is have we’re put ability innovation new that that, take over frozen. the of since we we and – putting dedicating

are our we So to Green some salespeople frozen on dedicating only of Giant. focus

the And line. group categories our frozen people space. and across there’s on then to that rest activity are customers, of going the have the now major because dedicated so frozen, a that’s we’ll food within have competing multiple So, we’re much out in

So that’s handle to our commitment Giant. to Green accelerate our capabilities

it – for is to is as – for how then And think talk the something a and as to to goes question the innovation, new that this investment new much product you’re new build a think where be onto? the that investment? capital you’re is last investment a the how how base about you this you Okay. about one-time required Or your new level my Does this? going year-over-year of investment is that, And launches, a think is about going this alongside on launches product you Can about case per-year infusion? incremental going basis? investment product you

significant proposing increase in we’re No. a investment. not marketing I mean,

not and with slotting we’re quick outside of manufacturers. these of next spending a of a but sales little lot and are with of capital. a R&D year, commercialization on gross-to-net We and reduction. slotting are that’s spending in items bit our these capital, more in lot And commercial, But is partners terms baked assumptions a

if shells be pizzas correct but of Giant’s what going none will I capital wrong, that of significant I’m produced, outlined we internally me in none Cauliflower – XXXX, wasn’t be produced. to investment. internally and So innovation the taco Green what a for And

about else. insights and expertise than anything So, R&D consumer really more

be that than think the we’re radically we’re proposing done to on in planning going don’t past. I doing is different anything Yes. we’ve what in that XXXX

billion Giant, in since it sales launch. $XX brand, what So sales. in the able of just million year, was different And retail brands. something new then contributed with to Green for today. When do like something over been big million innovation $XXX in showing bought north last we It’s up million $X.X Ortega, we’ve sales like $XXX but

of the Giant brands an to brand, big more we’ve And far with innovate it’s as some we’re with we’ve of same couple been Green things. our the so category. for doing demonstrated dealing years. grow But the in last is of what revolutionary definitely Green the Giant as ability what key Clearly, around with

Great. it. I really appreciate

Thank you.

you. Thank

for any closing Mr. like of remarks. are call. We out the Romanzi back time to call to over I’d for today’s turn

we’re you and understand Well, for performance sustained to the the committed that this we can for you us thank in performance people future the model past in joining with I our and and afternoon. that alive works. have B&G that we that is hope continued drive and addressed issues well the

and you thank a good all, So night. have

concludes teleconference. Thank you. today’s This

may time. disconnect day. a at you You Have wonderful this Thank your your participation. for lines