B&G Foods (BGS) 31 Jul 202020 Q2 Earnings call transcript

Good day, and welcome to the B&G Foods Second Quarter 2020 Earnings Call. Today's call is being recorded.

You can access detailed financial information on the quarter 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. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. could the subsequent recent more condition. SEC of risks to Form report detailed you future the and Company's XX-K filings that refer Company's and annual most on discussion operating We results the financial impact for a

adjusted company EBITDA, or publicly and sales. or otherwise. references of will the adjusted be forward-looking obligation financial today's The revise adjusted of new on to a making to share these whether financial company income, to earnings measures, earnings per GAAP in as result net base diluted no measures the are comparable business Reconciliations today's information, provided most undertakes any The release. update measures statements, future non-GAAP net directly call events also financial

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

Sir, to conference turn would I like now ahead. over please to our Ken. go

Thank for and safe healthy for you our Good I you, today that operator. difficult everyone's staying during afternoon, joining second times. call. us everyone. Thank very hope quarter earnings these

and our and values long-term short-term months company. unprecedented maintained team have highly few to steadfast B&G While been imperatives our of ensure and a core our last to unpredictable, Foods the success at strategic commitment the amazing

while food entire to thank the yet X,XXX of their almost efforts healthy, supply part to people Foods will all I Before, our taking produce want I results, team care second our of highlight to another to keep do B&G and stay we one today, extremely nation's to safe acknowledge remaining tireless share for productive and results our float. the quarter

them their Our pandemic, truly efforts. for enough true they're throughout cannot shown have employees the heroes heroic this frontline thank and I

have made the of What Terre New when organization we gesture world's bell have may manufacturing members Exchange York our the rang two of members to recognize represent you heroes Some in Stock Foods noticed the a the proud our small June, of team our closing Haute, stage. financial entire B&G back the Indiana on to moment team virtually.

major make Thanks Two, our consumer customer to the health And highlighting meet are Throughout the I the pandemic, increasingly of employees. priorities of our of remained and results They we demand. focused employees. financial our three, and deliver to safety today. efforts unprecedented B&G steadfast the success protect and Foods. ensure the one, will long-term tremendous investments health necessary the and on to to

adjusted outstanding net quarter, last an reported second of We to compared earnings and had year. the XX.X%, increase XX% sales for adjusted growing quarter year. We XX.X% increasing last the EBITDA, per ahead of of with nearly $X.XX quarter share of an diluted second

M&A some very performance business volume driven strong sales and pricing benefit. Our base by was growth,

above Our volumes. of from as EBITDA basis XX percentage began adjusted we sales a see leverage increased nice points year as XX%, operating was some net to ago,

from net benefit allowed operating from coupled with share, operating us results, working but operating saw net cumulative cash COVID flow we cash leverage, activities some by management, million $XXX.X the to of quarter, strong the will Bruce bringing very year-to-date actually to $XXX.X As million. increased These generate more of operations astounding offset an our costs. excellent for was capital

reduced pro and portion year borrowings. forma our quarter that. repay the debt this been strong have to We than X.XX. net revolver flow of by We one B&G And start a is the proved always term used has since to cash more the Foods cash maintained this to machine, of that flow adjusted certainly EBITDA generating

our this, dividend our and Directors, of of to our of with Board during remaining consecutive employees XXth the our Foods week, do quarterly nation accomplished difficult part while team of on since safety this committed XXXX. time. supplied and all going Furthermore, our health to this Tuesday declared to The public B&G food keep in

We a facilities, COVID-XX. to operating continued our work very to precautionary measures manufacturing challenging we're other in take a environment. wide although, in response at range of And and locations

that time ensuring able and same for Our operations of demand meet team while to health been unprecedented at safety facilities products, fantastic done our operating, has our a by increasing ensuring has an our our the chain manufacturing the job supply keeping employees.

this The B&G and themselves turn the highly of tasting, found home before. ever brands, eat great products meal to other and having their provide cook than to to and portfolio, are pandemic consumers they for families and brands solutions Foods at the in when comforting heroes that required more trusted

and times, frozen have across spices stable and perfect with seasonings, solutions attractive and foods, products meal We categories brands portfolio and very troubling a for snacks, shelf baking. breakfast vegetables, these of

approximately grocery brands at U.S. one we nearly found groups. products for the and every each day, store, in of our households, brands have aisle and of With and age XX% least all meal in for of of the

brands, And Green and tremendous ago, on list of on. our Wheat, few. Cream Ortega, experienced versus sales will including a almost and second a of Grandma's growing bit to in Giant, strength as the the Victoria, net XX% Bruce Girl, later, Clabber all goes brands our share name During with quarter, in McCann's, year a we of Molasses

Bear of the Incredibly, a brands in including Mama year doubled of net for Mary's. number our Joan have and Arc, sales versus Creek, ago quarter,

grow our high part, same retail did did at food but service those brands consumption. not more very have exposure strong with brands rates, most the For

strong net quarter. growth in our portfolio oppressive The the throughout sales was driven by across sustained consumption

and the the publicly as versus food growth the retailer U.S., Foods For food B&G growing in XX.X% year beverage total companies two the the XX and grew ending About in beginning times the pandemic. reported among by checkout since ago of the consumption XX, traded Nielsen, June portfolio weeks a rate, total through lanes. fastest

Importantly, held share quarters or of categories. gained and our nearly we three in brands

more strong grew in in sales, frozen net of consumption vegetables, we last vegetables, Giant maintained we in by share than frozen quarter, driven XX% Our largest momentum. and gained vegetable where the nearly consumption for where and in XX% category, grew the Green exiting points versus XX% shelf stable May June, brand the year with growth share in strong but share quarter X.X growth

up. nicely, last year. growing as increase quite a to store consumption are stable center space a stock keep healthy vegetables the category categories, versus less Frozen category shelf did to in with up But XX% consumers for due didn't

numbers a don't growth we do a be While, believe out long more these home, to eating remain continue and are at or outside working as will people forever, sales little our less, sheltering elevated even from bit to our expect as home going little trends we candidly, and at these elevated, perfect some for trends a eventually remain are categories the fit will for And enjoying time, are quite believe them. we cooking our moves and pandemic on. Consumers after home, a brands, quite more. learning about eating

believe our new because volume from increase in We a significant we're brands. buyers of this, seeing

intent, our X.X Nielsen, portfolio, COVID households a again much buyers plan since households to at brands the have to or a buyers percentage of measured buy as As reporting to across our of high, a [ph] rate with million XX.X%. Encouragingly, as repurchase new brands who XX by continue for the increase by our Giant new X% struck, new by strong increasing brands like appetite purchased buyers XX%. as Underwood, remains these repeat led with new our buying some Canoleo brand appeared new Green

consumption their driver key beyond a as levels be increased trusted the brands. existing will also households of have households significant new growth, are elevated But these favorite, our pandemic. Retaining sales driving they of

total increase base. a from of certainly represent across estimate customer growing and retail to rapidly business inclusive large saw X% of in and X% that benefited and e-commerce shopping also online, sales, net approximately people are that. click click and and deliver collect our We sales our We our

XXX%, alone more ago versus Our year last XXX% quarter, year. for versus Amazon and the grew business than year-to-date

our people to or future, on stepped quarter. outstanding excited up In the summary, products, of results deliver most of our during importantly, about time. couldn't our past and unprecedented an based proud people our over brands, performance period more I be more our

provides I'll on plan capture opportunity, Bruce to after details future we more with on Bruce? share you how some thoughts performance. quarter second our

everyone. hope and Good I are and your healthy. you afternoon, you, safe Ken. families staying Thank

products increase continue that levels a home a As away packaged and in crisis. we elevated slowdown we Ken those time mentioned, food to while challenges we has our of other will second performance consumers consumption, in time. in or contributing the had for incredible some restaurant-oriented a This many at dramatic home quarter, of consumption, at driven really during to faced, flocked this manufacturers food as the despite that expect from

of towards be time not employees, across performance consumers of able the pandemic. our work would loyalty without this brands are are very achieve our the certainly face to we of of our to thankful efforts this team the this dedicated we continue B&G who in for And very Separately, of Foods, hard all of in who gravitating uncertainty.

well we believe that net for that and pandemic today, well the portfolio channel ourselves our believe sales and mix situation will recedes. is current that after environment our we our suited of the find We products in benefit this

of $XXX.X performance adjusted sales adjusted In we million and generated the earnings of second diluted share in record were of represented EBITDA second net and company. $X.XX. Results prior fact, year, for that the of quarter the of XXXX, far all excess million, per and $XXX.X quarter

M&A, or Our $XXX.X $XXX.X that of net in from growth in in approximately the quarter, sales in for astounding base million we an drag majority quarter. from increased contributed by the increased due The increased exchange on benefit from volumes net seen have approximately XX.X%, including impact net business the million of the increased to sales million an and volumes $XX.X sales of $XX.X foreign benefit resulted million to pricing. net $X.X sales, net million

by XXXX, already trade environment benefit environment. quarters that to we net normalize, and a impact third year. price pricing has driven increases, in the program our of $XX.X spend and and in temporarily optimization spend initiated benefits of list trade the was lower begun XXXX of less primarily expect we fourth the The million pricing The this spend trade

represented service overall only sales XXXX, e-commerce than and clubs, have wholesalers Increases offset which supermarkets, to for warehouse, in of merchants, net mass food net customers approximately our our declines XX% sales. fiscal that customers, more

quarter or million we ahead net XX% April or our last of And year-over-year. approximately XX% As first increased the XX%. increased more net of May million, for June, for sales more by Net than than $XX than increase $XX more $XX dollars disclosed year. increased million in an sales sales call, than on by more

the holidays which see to to holiday, While appears typically emerging a strong, build we that we what our prior of actually week final encourage in this theme strong of be to leading in when gatherings benefit that build. second that saw very while the a quarter and sales We build the not pandemic, holiday year compared period, an did did year this saw July. large ahead see decrease the in from Xth like traditional was up

Interestingly, seeing the prior what versus started year. pandemic, sales July this of data. at of was the year-over-year growth When we since which XX%, beginning to looking approximately of the bang some have to XX%, a see currently we net is based a of and XX% results. not July to weekly the growth July, would that net our combined, rates preliminary however, times are with be sales versus increase few in year on off consumption did net and the scanner more looks and June had one in sales similar last

sales brand the portfolio, of in XX.X% to Green our million, including million, or quarter. be $XXX.X the the of Sueur an of leader net net increase with Le $XX.X Giant continues in approximately sales, approximately

$XXX the sales. months, including XX net over Over Le Giant, generated last has Sueur in just Green million

was an over sales, with saw growth frozen an are million Tots. $XX.X demand by line, frozen such for in of frozen shelf canned Giant Green frozen, of bag-in-box net driven Veggie stable XX.X%. well stable continues [ph] increase in Giant outsized Green in both Giant Green the as million Spirals, as vegetables. and and to Veggies, XXX%, in increase or sales Veggie or second sales Green Giant net from products products, Frozen and Giant net and Amazon's as adding Rice shelf core stable for We Shelf quarter, $XX.X adding growth bag benefit legacy innovation Green

the of Girl prior quarter during on acquired million also quarter and May in second year, million owned we an portion were not we May million was of Clabber a approximately Girl, our second that also the $XX.X quarter last Clabber under Girl, approximately a XXXX, so, Clabber this Net plus to results and category, April XXXX of which growth. and the ownership. first-half what major slow of XX, period year was the the for in for sales contributor ordinarily $X $X.X is or additional compared second

from Among by sales and our exponential had approximately other Victoria, which $XX.X Cream or $X.X approximately which XX%. or approximately large million up of was million XX.X%, Wheat, growth increased brands, net we million which or $X.X XX.X%. was Ortega,

and Our continued in net $XX.X XX.X%, second-half softness service. seasonings with or despite spices aggregate acceleration of food in sales in million the an increased by the the quarter,

of in as as have the seen food throughout We build recently developing strong the quarter, course service. in a traditional demand increased grocery well more

softness to the of second Similarly, key the by at with are sales York New Maple Net of as as was food were center service customers. performance to combination down that well retail Grove relative frozen exposure, offset in $X.X or Style up service some seeing in more $X.X Farms X.X% due food performance quarter, million the strong muted aisles. or X.X%, of store aisle, million a and we

saw portfolio. also the we strong rest of And performance our across

of digits of brands B&M, approximately by brands fact, the and million, increased mentioned the our sales quarter, B&G, McCann's, increasing Mama Underwood Las of Grandma's, XX% $XX.X Palmas, quarter. during XX.X%. Mary's, approximately XX%, sales our including In earlier, net double and Polaner Ken sales rest spices net net as by with And seasonings, in and seven our portfolio of large or increased the outside our

or profit for XXXX, $XXX.X of the net XX.X% sales. million Gross quarter of second was

XXXX. have million been profit expenses Excluding or sales. approximately $X.X of $XXX.X of the Gross XX.X% and during negative approximately related divestiture impact of acquisition, of second would million non-recurring the quarter

net million $XX.X of the of was sales. for or quarter second XX.X% profit Gross XXXX

XX.X% of quarter non-recurring Excluding been million, impact acquisition, the $XX.X during of gross million of $X.X expenses other divestiture the sales. XXXX, and or negative have related of net second would profit

net general million or administrative expenses sales. as $XX.X but quarter's decrease in XXXX, up net in of X.X% the XXX basis slightly sales, a Selling, approximately quarter points were percentage and of of the terms, second dollar a of

general of million the prior and composed expenses warehousing XX.X% selling $X.X The quarter, partially and administrative Selling, of were increase in of expenses million and of of a decrease general million, expenses administrative increases $X.X $XX.X year million, million of expenses offset was which sales. consumer non-recurring in net dollar expenses M&A marketing was $X.X $X.X by in and $X.X million.

of to in We compared represents in in EBITDA, following of in one-year quarterly quarter million consecutive the EBITDA adjusted adjusted generated anniversary $XXX.X the EBITDA third the year million to second the quarter the increase prior million of the fourth in prior of adjusted in The $XX.X our $XX quarter, period. of lapping compared comparable year Pirate Brands of as last divestiture year. XXXX, increase our

COVID-XX shelter at pandemic, Strong and onset of base work that from resulting sales, the the by and home been the performance from policies. enhanced home business increased has resulting

additional increased and our wage compensation pay temporary employees an or continued basis of foreign precautions, bonuses net due EBITDA and quarter. impacted a for last also employee sales percentage increase the the special year's XX quarter approximately expenses Adjusted manufacturing of the sales million million form an of in of was during negatively impacted Adjusted a was second health generated in points, net of basis percentage over or XX.X% points, paid safety exchange. XX% enhanced and COVID-XX $X EBITDA negatively quarantines. of the points was related XX screenings, including basis impact and by sanitations during EBITDA XX XXXX, to to approximately Adjusted to by approximately $X.X increases, as as second

year an expense our XXXX, in $X.XX diluted the about period, quarter quarter driven interest count. $XX.X generated second diluted in prior to of million Net share the prior in by of performance, compared year the million share $X.XX our the was second to earnings compared XXXX, and increase in a We per share adjusted of operating in in earnings $X.X adjusted period. strong reduction per

second in flow by quarter generated the been XXXX, net through $XXX.X provided of cash and of now activities, in a but the cash unprecedented operating us. year. months six million historically Foods strong cash million results generated have second net B&G we were We generator, has provided $XXX.X for by activities our quarter in operating first the

may this you provided recall, by our reduce and As we to cash activities. intention highlighted generate outsized capital net working operating year

accelerated our have year, operating first the of has by increase of working net improved in COVID-XX. dramatically capital reduction for months sales This from impact planned net in the been six combined the a activities. with our Our cash substantial

aspect regards our is our to performance balance deleveraging our sheet, strong with and leverage goals. accelerated has to this year impacted about cash other think net our how The flows our and

the by the $X.X to end billion year, have six the During approximately reduced of first million debt at months of we quarter. our second the net $XXX

We reduced year debt from times of the under to the pro X.X start today. our forma have just EBITDA at adjusted to net X

now well debt back-half the the X.X of times to are forma EBITDA, adjusted reduce target net financial XXXX. expect stated our We pro net to year range leverage within throughout X.X continued of and in strong to performance further we our

the suspended to due the fiscal we in. for everyday, world currently we a we're living that XXXX, learning environment, While macro more unpredictable guidance have are giving about lot

environment, Based and expect activity. continued from coronavirus still at on with expect economy elevated soft Unfortunately, confirmed work normal a incidences unemployment. the we cases, we home levels of also shelter than and of current home higher

while boosting year, that result, an a are than our meals we more sales, people will in environment, eating sales. pressure on we food home our believe service traditional where prior in putting remain As grocery the at

eventually of growth net today, what to And retail effectively is the fairly adjusted we July look retail our we EBITDA to levels trends. Based see expect continued closely EBITDA net where sales throughout in adjusted have our of this Ultimately, shipments back time, know to and our consumption sales, expect and the ourselves, June remainder we periods. and when elevated year. we at tie we on over found

keep to are to But in operating these is will factories costs which the incremental offset precautions helping we safely positive Our by feel expect environment. in to are also we to running necessary leverages. this with continue part benefits up be that that operate full steam generate the of demand, this

a with, small upside in margins will prior that levels. the a to result, and line perhaps our believe generally with As remain we year quarterly

is or timing COVID-XX the it COVID-XX pandemic to will However, pandemic as of have on including, second on States third hard environment, distancing to predict very social our on ultimate stay a our in guidance. business business, will COVID-XX continuing of to of and wave many financial others, provide factors, this mandates, North full America. result, of we will are whether affect rest the the duration among of The the giving at impact and spend guidance a and impact depend home and the United or or

operate disruption, impact material and pace supply our eating continue and of the the recovery maintain habits. subsequent resulting consumer chain to without ability from which Our our and conditions may pandemic manufacturing facilities to extent macroeconomic the the to

plans the to like rest Ken to back of turn I would now over Ken? call for highlight the year. to the our

Thank you, Bruce.

future. it predict Bruce difficult mentioned, times to As the unprecedented extremely these make

the remain to and can nimbly the control things can't will focused we react we we control. things So, on

closely increased pandemic, to will employees to continue course, we from the to continue the our to of uninterrupted ensure and provide healthy. with safe meet keeping while, the our resulting chain second-half partners of During the and demand, supply work service year, we customers,

of building to continue efforts, we our demand increase and other some the in we product brands. for into opportunities pandemic-related time, innovation new this will At turn our growth as long-term look brand same

We are taking behind incremental building our e-commerce make to and marketing investments opportunity this brand capabilities. out innovation,

excited delayed the driven While remain reset have products our and from innovation introduction due been pipeline received delays, retailer of COVID customers. about very new our somewhat have terrific response shelf we to

with Green launch Cauliflower to continue Green Giant including Giant several products, Green we'll Breadsticks. carb products, new fall, Giant vegetable and Giant Green Pizza Cauliflower Veggie Cauliflower Browns, replacement Crust, Gnocchi Hash frozen including This

will We Green Onion Giant acquisition also introducing based Rings. Fries Gaint Farmwise by our our and Cauliflower take of on Green Veggie leverage Veggie Rings,

mainstream we’ll brand, as Farmwise a brand the few natural current the that relaunch also year channel, well. Regarding plus retail customers of this a later in

we stable On from of shelf Giant legumes the a launch nutritious sweetpeas Riced lentils, dry side rice, dry Green business, plant-based to plan alternative continue of to made a to grocery chickpeas. of version Veggies, traditional and XXX% like the the

plan seasoned We introduce are to Green do one brand. of first Dash we also Dash Green salt-free consumers seasonings our to already going with Frozen where Giant launch to cross Vegetables, to promotion Giant the

planned. volume And product in and given items year resets, even base to at a launches introducing While planned many not needed this growth these year the certainly the we delayed than XXXX increases in the customers have some should product provide than support new to their year, ensure marketing later business. next their pulling plan this large We originally success. our with greater increased we these investment new

addition, sure to In engage continue to this increase, adoption new shift during more behavior. will with shopping rapid make e-commerce the this to in we of consumers we investment

and throughout to business expect we rapidly e-commerce is Our which see continue. the pandemic, strong trends growing building we

year the of in fully internal year the e-commerce fourth our growth was to be year-to-date, even e-commerce capable capable. experienced fully ahead quarter. tremendous e-commerce fully expect of beginning end. by being be timeline, sales Our to We've we're goal capable but this by we and without

forward. going trends stronger even expect we So,

through opportunity true the our the us flow acquisitions. to execute business a unfortunate Lastly, tried tremendous so balance accretive stable take we'll the pandemic and sheet, and significant deleverage while B&G strategy can has we given growing generate of that food cash maintaining to base further continue

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

The we'll Brian question [Operator session. go sir. D.A. ahead, Thank Holland this question-and-answer Davidson. time you. Please a first with from At instructions] be is conducting

business about, performance composite ask of gentlemen. the concerns was evening, Good of the Thanks. congrats your kind of relative kind wanted And pre-COVID on categories. the I the of one on quarter. to strong

months. there's been an you within couple there think, I of inflection past noted the today As

that I'm you're specifically competitors. So, positioned, so point to categories would what's because curious but you effectively in are obviously, your are

specifically as the part the being today? the first So, of do inflection driving positive maybe you point moderately or worse, negative That'd share question. and be what for to to

second plans you you the is, relative do urgency need in feel preserve kind And part have to that what performance? of you what Or place? in improvement your

So, in did you ask we gaining us were share thought why these categories? we

sure. Yes,

So, data, inflection I think bit there's of the been where if past whole, the there's, maybe at you look in think on worse. months, I an little little negative, couple bit sometimes you've a been a

going positive. that's Now

two within curious categories, highlight in those benefited So, or that you if your categories? those would one competitors like where there's things feel than you more you've

terms Well, not in I'm were we positive. negative of fact you sure. not that the than I'm following

Our looked week and back. consumption March, haven't started we in of strong the third

Our which year in still up consumption across where in the frozen There like start tops growth a board, of were companies we're ever been vegetables versus has of cleaning Giant food since impact ago. promotions, the terms was Green areas some pandemic. negative the

As then we all of our adding past keel even a standpoint, and fully on planned, we're kind innovations now we're of lot. course, from a promotional that, so

the taking while and sauce products rice the So canned a categories of seasonings baking other was well, nature, fascinating off. beans delay and like and started category pasta as that and and things only spices

in well that as in as from our brands them really where take cupboard, their off baking, off have their start almost was in took activity cooking month, due and delay other most And like to and were back. and they seasonings you come Spices had COVID and March. the of think spices people using benefited because by category up in categories that I about a to April, seasonings increased the a saw

had color. more. I can consumers year, obviously you've one brands as you far I big also more priorities, a thinking these got notably year. bump That's lot through perfect. helpful look as first-half that debt in with here, then And the it. traction reinvestment you've so you allocation are the That's capital this EBITDA talked cushion migrating and home. at just guess, paydown your about maybe appreciate towards There's so of have about this at done the

the and no here change household the penetration? the following given maybe there EBITDA Is same the so shift in to beats? in near-term, real there opportunity bump maybe in big allocation any and priorities seize this in Or on capital kind bump of the

standpoint, excess dividend, thought best for think returning and keeping we've that primed allocation I cash from what making other was a form for always is is, still shareholders, in a one, sure sheet balance investments. Keeping the and priority. M&A to do high sheet strived which of capital and balance we healthy

much confident with And our first those two about, today. always healthy felt but things, sheet demonstrating so clearly leverage, a lower balance very is

the As absolutely, and highlighted has think, prowl It's being making selective the marketing finding And over of us. Ken a ones of are priority of today. the a then M&A. obviously, positioning but again, I far as importance reinvestment, in also our e-commerce disciplined, very always matter and for we're out for be pandemic and over the investments and brands to as on right as coming strong and they much

appreciate have, That's Thanks, Bruce. all I I gentlemen. it.

capital we'll make allocation, marketing our to reduce significantly continue well and in from so have to above to EBITDA leverage. above year e-commerce. and ago plan But we as our we growth and Bruce, Yes. cash be as dividends can And still clear, investments so plan that give just to

back clear from of get our that want investment and high little the for our and acquisition. to flexibility creative loud too got to strategy heard the a community their folks we for stomach, We've leverage

drill. best the do acquisition strong business, and nice the we're able we a for get having back can So, base that on thing excited to about being

question from next Lazar, Barclays. ahead, sir. is Andrew The go Please

Bruce, you? and are Ken how Hey,

you? are How Andrew. Good,

Fine.

guess, like I there's Thanks. in well. play Very dynamics obviously that a things here terms about that. of and guidance lot forward-looking in thinking realizing of

a EBITDA leverage lot phenomenal. better come or in this Your mean, obviously, obviously, maybe that increased seen And the little than about back-half we've of through I through margins with gotten has in the volume first-half line for of companies. been food year ago. comment a volume the you've being that off

that still to things a seem discrete might volume what restrain you're would less Because, consumption I'm the or aspects certain of of leverage while. back-half? some obviously, see in there levels for going that Are that aware elevated

that think trends settling that decelerate it's leverage I of were XX% from there. sequentially operating in lot of very here, you And, a kind even still recent mentioned if level. they

know incremental question. my anyway, you costs, don't maybe give it. investment some as get quantification the I sense gist just -- COVID to if to you just of of But mentioned, a there's it's those us So, and/or

Yes.

to hit SG&A. EBITDA. a and of that considerable an on And margins. operating in-house remember. what saw, question so an as is standpoint, of about XX% elevated is, a elevated -- products, XX% So co-packers. sales COGS leverage things things to couple we then happens One that produce standpoint there, through with you From I obviously couple a with the our And from one, mean part from about

And so we're not manufacturing, leverage. same an From leverage seeing definitely items. on incremental internal we necessarily operating co-packed are getting the

that of is incremental also COVID-XX benefit some However, by offset costs.

that take right smart And it's also a we're a perspective. than at an precaution them our factories, cost to extended keep people running rather but making policy, the we It's the to in long-term safe we're that, do, in time, every environment. and to for to any this of us, period sure can operating and sacrificing looking there's from for thing of keep

living there there's that probably world we that can showed just benefit So, a be is but in. given how much quarter, this ceiling think we're on benefit. We the there's benefit

right, for and right right be. there, And lapsed pretty debate it's and some now thanks Ken, from space over food consumers sticky a the big in will raging incremental how consumption that. of this All new obviously there's interesting consumers then

right this of on halo, pretty from all your key be could of some seem You post-pandemic sort that positive confident brands. there some even

Thank buyers it's sort sudden that this sort a they've you? think the some unrealistic get the of new level all I your for leave drives about just of you. too And XXX% world, brands, trying sort gives of know I that, of maybe of your debate that. once better these tried current see benefit? will of that But of you not post-pandemic to big what this brands a of of can that I'm idea what But a in but confidence that confidence these level them. there's continued environment, again, in

Good question.

years. fight are a believe so And we're and while households marketer. new try at to earnings in been Underwood increase the almost mentioned our household an for a love saw for get penetration, fountain the we doing when why and I've XX like We look this brand is actually reason percent youth the call of I new you increase So, in alone. XX% the confident years for households, I last growth, to

of of However, same households it's just when more. a the eating volumes, the you lot and look a at buying increased lot

the our have why to reason confident, much as I'm doesn't so it So, brands. do with

a in from we’re isn't CBA, brands Our Brands to big part know, going the new Association, a that Consumer I you food confident, fact, the the are B&G the or positioned. company of we're part -- company isn't -- And Grocery banking there versus because haven't post-pandemic, from the a Association. GMA, perfectly any work to work home old talked and Manufacturers haven't company, be I'm of said is work. there in out of old other I world heard there,

banana lunch. people's at you So because downstairs being in that find have if of throw a finding small I'm That's time that to oven, just to more up behavior home, have run you breakfast in stay enthusiastic, we're what bread quick-serve a behavior. my own time means have that means I at the home. whip means home, to you at people and that have got percentage you

even the everybody that what virus to be a makes post-pandemic So, pre-pandemic That's it's really there's world same tomorrow. not it so. world, going the about vaccine the feeling if as is

home and So we as to and more, vegetables in for little have and are bit like a positive that's long just trends categories be baking spices at people as going seasonings and breakfast.

I home, where we're portfolio the in versus a mean, warm or cereal again, XX% are ago. perfect breakfast XX% example growing, seeing consumption hot summer still as year months is people

So in to when vaccine arrives. be really a world's different it's world, about going a the even

you. Thank

Bank Reuter, go of William ahead. Please from America. question a have We

for thanks the taking Hi, question.

few 'XX? those response being and resets they'll You the think of of talked being delayed fall? resets it like July. do just terrific received January skipped very about you that new did Or sounds expecting shop customers in these do are one until from your supermarket products, the in Are you've are although, you

bag. mixed a It's

a have customers. on we tally of So one our every

some until base the Some the excited don't are to growth. our And new planning happy are our get we don't certainly business want we so time fourth we're year. and And again, customers got forecast. are to in products market, to know but do you do with that in appropriately delaying to next want. the quarter the anything fourth we've what, that quarter, for But all

lead their they They're put right we'll to a when So, customers shelf our having challenges. it on take labor way. on own the want

until shelf so resets And cases being are many delayed year. in next

but But in versus delays versus next balanced I it's exact I between fairly don't year the not pushing year. majority. mean, delays number, -- till it's off this know a just the

either Is and way next introductions? product this shelf any be what from that space gaining between there quantify may of to be Would fall January you in new year?

but don't it is I have offhand, at we numbers look the net increase. SKU

get we space. we five, new positive. products, in at terms of So, net going have in not so new five because give up there's as we hole to there's up speak, SKUs long Whenever the giving that if to altar, everybody's necessarily come to unlimited a SKUs, introduce as don't

SKU that So, that to we positive sure count the always look we're we highly make have. net in

I'm SKUs, in have to There's but all planned meaning going new to that's two. lose cannibalization, And because systematic -- forecast, there's five launch we our of types cannibalization. two I'm going

SKUs. the I've lost volume two those So, from

base there always So some that's cannibalization that consumer of new then of consumption consumption. from is comes And systematic cannibalization. the your course sometimes

trend excited focused long-term vegetables just we're launching launching other really after products, real categories and of bunch been so products. areas. from those on of Giant The vegetable why a not is on about we're Green going that made a new new We've in reason estate

So most we're that's what excited about.

and now veggies which all is and dried and and hash drive real is incrementality. more pizza in This browns the aisle this and the rice -- pasta an our we will aisle. the potato dry believe Giant, riced over section gnocchi and So, frozen tots estate for Green

pass it onto Great. you. I’ll Thank others.

Bill. Thanks,

from We Nik sir. ahead, have RBC a Modi, Markets. go Capital Please question

questions. Hey, quick you? everyone. I evening, two are have just Good how

mean, is of the seeing is I'm vantage what your replacement every just question. what is point, from obviously, curious, here? a buy that's I one first environment a online. is a first of brick-and-mortar this would kind a someone company in just buying online. So The And consumer product surge online? incrementality where

question prepare they're the up from starting a a to wave. to And second hearing the We're second the degree we've around cases. to country surge then retailers for that stock is, in seen

I'm that So, that and curious, off that's things commentary help. Thank start. I'm to anything in maybe it. with your if has something just that very that your you are referenced do you've good seen wondering if you July a for to

about the mean, changing question you cost is e-commerce there first believe your a So, because are people we I buying their was be adventure, got e-commerce. patterns. to

mixture. see older There's we but people. also So, millennial a shopping, there's younger

as online So, version. click store, people have going online shopping collect as now, and well, shopping exposed at older or be to home older the don't people are it is as in want and much in delivered

continue now So, the we and to better a job. better before, me, online do we're we'll to than doing job were

of end I is mix it's what day, incremental increased shopping. before, online at So, consumption, perhaps the is not a seen online any bit that driving we've it's but of data just necessarily. know than the more don't of a little says

to got there. be You've

it. You've got to be present. And our retailers demand

well want electronic to want to And any they sure well in just be represented storefront represented, they that So, make want our want we're as difference, it same. physical don't their large the their all like retailers they storefront. is

us our are the that's So in capable. what and ready their absolutely And for working as no that that customer. want been it's to simple e-commerce of shop front click be that's in how and hard, manufacturers matter customers, collect. seamless be what click be it, the They ready wants to sure and to for getting seamless store, make -- talk that when customer the deliver, customer it they I to we've working able we're about products and want

second it of your was, -- terms remind was. In question me

retailers wave for any are second Yes, just and a you that? of preparing seeing

perhaps so were now down absolutely that having states I as increase daily We and open little got It's now, orders mean, look fascinating. bit out the guess, our if you as Yes, at we I reports, lackadaisical immediately. an issue. a and in book and saw average order Florida looking in is California reports too shut got an news saw people news aggressive soon

bit of inventory, building in about guess necessarily So, guess, not inventories in states, as I big say, jump, retailer as know well, to started you a soon you saw and we little total. a don't I see could my

could restaurants ready store going be they're states are numbers increased and the Nielsen and are I they that guess at down level. you that hear activity But consumption that IRI the as say, once if services. shutting in to again, happens, we'll backwards And, going reported see for by

for Excellent. help. your Thank you

Thanks, Nick.

question go from a JPMorgan. ahead, have We Carla Please ma'am. Casella with

viewing questions returning Hi. out do Or retailers seeing But see any trade of terms in trends trade I spender? trends COVID? How back and the trade opening guess spend coming products the there. goes new also, a along up? are the of with you're spending? about this that Is

they of going a in year on from on spend planning a making we're promoting of of little the as aggressive course, huge levels we're relief might to be of as there's to saw We promotion a first the trade the in did bit again, in sure the for year, pandemic not unless customers jump that be want rest equal fears the in part the as first-half time. of then, ago, pre-COVID they may But year, be year. on

not from continue as whether our from We'll want they ago. take customers to our We're that. So, match promotional activity ready to lead to the year do customers. from or take it to we'll our

you. Thank great. Okay,

We've Please go Hunt, ahead, question from Bryan sir. Fargo. a Wells

you're you Thank was And period you about had. this and seasonal fluctuations, the you're of years. I have? stock? you. I three missing Can quality they're I the out I you imagine at the were talk throughout half wondering, probably but sales best because look questions. or the and all in you've you ever of inventories recently, at level have inventories granted, lowest just two One, have the pack, a because if

that. any out talk clean to able just inventories. old Again, been You've about

you any Your sales? inventories and whether missed

are a I April and able in pandemic, the for, we manufacturing helped our to in into high as of depleted, we're going I I us good are running, the be boosted, really brands us inventories those inventories. -- high major think up and system position. company, And year the when for got growth think, big keeping the that ago, as Nielsen reason, categories We food and inventories is IRI. of plus is are we actually number that plants terms in part were with of terms by any and and in which growth of think, consumption March a why We safe quarter when geared because we reported our first why having runoff our a inventory people went to in right two

packed comes vegetables got were had the you is year. where in in that the fall our a time And XX% crop to pack a or one which well levels lines below the only summer, that because last make in, We year. that We you've to as is and like the we be few be customer canned service to don't more. want One's product XX%, there.

some So, issues there. saw we

grown has bit Underwood there. not or our had higher huge lines, material. we a saw keep of struggled four EBITDA, because could been on flow. cash little we our some sales It But, wouldn't product It's on up. impact a three have dramatically, to constraints While yes, have

them issue XX And And increased of have out good of back, we've issues. last three pretty or a month resolved thought an in brands the just service plus four of gotten on having we levels. But our some was those we're alone, performance.

year. that for that packing building years building. a that during frame. baking is was of buy they powder, that is going ago. powder -- ever the that of people that that than purchased can. baking facilities our building more XXX research doing can and us our a some shows And to of And like of expanding company. baking purchased have the too now have built going that demands, still produce That’s do brand thing that intended, they just dreamed something to We same they've it's been amazing powder, much. in one that some But meet help -- people we're We not be Girl we to a through other great while this these lot They've example. they've over through that pushing production to was a actually been Clabber because been are time gone making many

ready customers to And strong have people be quarter, be do want they saying traditional gearing fourth a because our the to are -- they’re up fourth to for still baking their quarter. in

problems, of in production past, XX%. the whatever ready year So, rest the whatever shortages get the we're but problems, production service had we above rapidly levels back get not those to for customer solving to

are whether what having So, with it's partners? external internal co-packing you if issues any, or having any -- you're or your supply are chain, the your within

one two up good, partners in co-packing very Our spotty or scale as able terms of much. lines, been where very product quite they it's to been been haven't have

we before. we're So, in own brand and packed to on that our relieve a a do two of product of line supplemental haven't packing going that some or fact,

rates. them where co-packers been for We've gear maxed. For the couple on didn't brought co-pack of lines of couple helped sustained we've out places traditionally high in at our have have actually us partners most to consumption help product us up we in a terms part, us that co-pack -- helping of back

That's talked about luck. and of relative ago? crops Ken, me. question, how can you. last Best pack it plan to year you is your my this ago, about what just for Then talk Thank for look right. a a pack maybe minute All the is, you year

understand, good. wasn't so was The pack, The good, what there delayed you. we spring Thank from is plantings.

a what crop We continues lot, very years going be decent. it to few is we we but any to still got And goes So, but got ultimately basically the a nature Peas fall the of go. lot been has to be the mother wanted, heard we on are hear we We in like that way physical. pea a crop the so The short issues we harvest what all would haven't peas running, for to from a to and horizon, there's get long the is still didn't we in. wanted. and have. short summer close

far, But better we've heard crop it's of it than the a will be so in years. last couple been

time Thanks safe. and for stay your

you. Thank

Please question Lavery, is next The go Piper ahead, Michael sir. Jaffray. from

Good Thanks. evening.

Michael. Hey,

the on questions do what look we should growth be related very retailer with third restocking you the the of inventories. And apart. looking or a much surge, Two organic a quarter, how IRI, see aren't specifically? like? sales we maybe trade But lift for inventories, second-half to your and inventories such know numbers in your One growth sales the far

sense the us of may on gotten. of as Can restock just strong? working year-to-date your your inventories own then how you've benefit any as course, Just cash And much you and of that you that own your very with flow, sense, capital quarter some are reverse inventories well? of any give

depleted, inventories. inventories our any replenishment and Yes. Green But vegetable retailer inventories, big our that we're the inventories, customers there's we're given not I'll going build sensing around inventories of program. they're chain turn to -- rebuild. our bring supply now The are our of meaning it over huge going to in. then now there's to really, retailers-built efficient Bruce Most big most on Giant stock obviously headline -- to load, going be pack our will

order takeaway if the to more. seeing they're going in really more increases store, it's So, they're the shoppers and about all gets,

with as not it's effect our lag retailers. So, much a of

we August into running said, places I saw Florida and out orders already, future pop first like think open the Like difficulty. are up or of the California it that in because, second I looking was week

long-term stock effect. and So, it's up pretty drawdown immediate versus some

regards call about to quarter our year. after with our bit little I desiring or during quarter Michael, talked inventory, to fourth our fourth capital a working And this we bring down had mean, call

some this plan. but some of within planned, still of its So, is accelerated,

right, back around fair There what with usually quarter, fourth a ramp it the we is think up what of amount during is, I particularly year, COVID-XX, back-half the school. because a usually flux, quarters inventory is in you're pack to really with third happens down. season, draw happens that's

chugging it's going everything producing sell assuming that And forward. continues. And that's the We're we the can, along product to got months. we've kind of got so been prepared demand last be few how enough seeing We're and we strong to people. that for

very you Thank Great. much.

a question Rob Jeffries. sir. ahead, from have Please Dickerson, go We

Great, thank you.

a investment the seems then share future. Look, topline both of maybe certain back-half kind side. a I the doing So, bump, the your you potential, out good, part kind maybe company but of on for some like But year, just there quickly, the question nice one once say then category to some this that, of well sales so it that now will but penetration, guess rate be increasing speak. kind of on foreseeable you have decelerate as in very But categories for general extent. lifetime, in for the of decelerating household the average most positioning obviously, you this in come of if kind nice, not to get would

budgets say everybody. competitive let's getting in we’re kind going is everybody feel of everybody more in to argument, off. compared rushes spend, of increase environment gets to or excuse it that this hold by right of And what been get, try have penetration, the is and then like what reinvest are able then you marketing which to the of kind so Then of general That's half competitive general, me. the kind sake in that's hearing, year, household back and trade bit to little tougher food a what

June, you about to to we're up, because right, really talking XXXX. reinvest? you that, enough I'm this like much maybe remains what the thinking about about, skyrocket I'm be gives could dynamic, question to all for which bit, be? tend So, next I you kind I at But the too. confidence elevated. an not competitive top extent And kind able of with that home room line to could a how top spend you this do QX, really to How year? Andrew’s do back food What point goes line off leave of at doesn't the about guess July. agree yourself only budget need that thinking to remain

keep to months? color you kind that penetrations of, hold in on XX reinvestment household any next Kind of you how or sticky the XX side on that

haven't XXXX of Well, we our We're the competitive. very yet. done dealing always But this still is current state plan business affairs. with

if fighting shelf We're say just to encouraged competitive, new our and I pandemic any has to capture even us, get So pandemic the is for I robust. our more household. very because that get don't know new we're it's pipeline going this retain trying always because share. and is households post allowed more set What to trying we're households delays would because

was delayed by So pipeline nine what we just, saying I'm that were to that. already is if six planning months, our beyond

pipeline our is So so innovation delay. now six really or months because had we've full, chock

And were this so pipeline driving to it's growth encouraged of is farther drive the our into because planning innovation year. much we're able very be because our future than we going to growth not

hoping investment to excited we're our this So having keep built it. haven't we for we year, plan like about rather than The innovation. to yet. year But reduce make that next I the said, we're

this a we year -- first soft will have quarter next benefit of also We year.

of had a see the good rest hoping of rest really build build for and the how shakes of the the planning, as then we for we're rest the start So year. next we're consumption -- the to to year, out we've plan

Okay.

kind on kind of Is quarter, reinvest that to of seems right with investment just little maybe could that pull given per to even out possibly So because are it's be of bit delay, then line innovation gain that you you the better think? that the had hopefully later way like, of investing, but share the to back return kind just a that because hopefully, probability of that innovation summarize, higher, of it sticks.

Absolutely. Absolutely.

I Great. it on. pass right. All Thanks again.

Thank you.

question Moskow, a sir. Suisse. from Credit have We ahead, Robert go Please

for you question. Thank the

Hey Rob.

you Hi. How are all doing?

Good.

the vegetable And the really than vegetables? going materials strong, follow-up Are you XX get to how from as what growth you you a decide months do the we'll buying the conservatively for if had demand -- to to making -- the know you then year I for forecast bought buy much aggressively well, year Or other question pack more be a crop. sources this is are when is raw buy? you assume, the demand and you So for prior on way. result? do want in along I a just just next it

how it Just works? wondering

and a make No, business. to you going demand have be you the able if we is customer, pack secure that and up, the pack enough And lost we a BMG before year, a few make last can we but for, they customer, vegetables you to the so be hurt one forecast. have to inventories was in sure ago can sales to determined increase forecast sure be have about the the did years our knew major that believe popped were the because you and to that customer,

our the a May, get of from start forecast. a the through we chance get year we adjust chance So to

for didn't a demand take everything it and asked down for. increased get supplemental what major got asked up in did us crops even all suppliers suppliers not then the give lot what But alternative we of canned again, for. particular. our We when couldn't yet. We vegetables for And we we the based in wanted on we

drew commitments because of the a year we inventory. the, ago, are so So much down though up versus

we pack, good ensure now. the have new from a had demand, only back have a when we we not -- to So but get service, customer to only levels, year do to project we to that'll inventory not today,

so sense? the bought ago, you continue make you year Does the net to of to be But than more that aggressively, because a demand is strong. expect this did Okay. you

Correct.

Thank Okay. All right. you.

inventory. sure stock Yes. And have enough to we make

All good. right. Very Okay.

sir. We Evercore have ISI. Palmer, ahead, a Please from go question David

about cash year? was of the cash for Do the free should free any year flow think first of higher through that might that How should sort about or the full congrats on stay and we reasons think Thanks you conversion or Hey, of flow the the results. it half think we lower? number ratio XXX% at EBITDA.

the big. vegetable going buy lot keep the to quarter, a thing we mind, be It's do pack. that Obviously, in within one to third

we've EBITDA softest some large sales causes So, standpoint. flow large to and quarter of time, that's going free large lot always large cash create cash sales, demand EBITDA our for a large from usually causes saying, as been But a is flow.

Yes.

this wouldn't year So, cash EBITDA surprise like of north than higher being but you? free flow like

I'd and more inventory year. good year that in ultimately, some have know expect this don't third we the it I to buying quarter. reinvesting be than then higher were because real we'll But EBITDA a

to and Got even it? We're getting the seen your where and many trying consumer product, expansion insights household far has what the as actual feel and what their Do on other enough those of points is. have along like giving you right you now, triers? data any where you been, who's the you see have And most then and share which clue -- categories been. satisfied you there in most data repeat brands consumers you've satisfaction to the about might you've had might words, a what your understand triers has you this, data how

It's across the board.

saw upwards penetration top mentioned, I have penetration we numbers a and our off but the XX% or XX% household all and brand I my brand, overall encouraging X% don't the household Giant we Green like rate. of and a we As repeat largest saw -- head indicated increased saw increase

are those that's numbers. So, that's pretty nice pretty --

thing is, of always the the not it perfect the a of some audit that data, fact terms And going people promotional to activity what's it's on in the not see doesn't, core, scan then we there's the in these of out check when because last stores.

is there times, activity some it promotional in looks than like. more So,

Are more like, you and seeing in X, of a categories? terms that much Is heading spend, the your bit second drop more into being the really activity, environment looks there promotion? spending X, on what there's, sold seems out in do half a you of X it to or to down going key little your and promotional promotional there points money of be anticipate then year

talks to its of pricing Bruce promotion. when due So, is most some efficiencies less pricing -- when mentions our trade promotion so of Bruce and

And to in or look aggressive in prior So, are do We down. than necessarily year. of when across of promotion in promotional year you the, first planning that volumes the half see that be than second and the board. cases Nielsen many to be are base year go folk volumes don't when did in the up more of we think But rest volume, we at the promoting to going the is incremental we you are make so the the half versus you base year. the more IRI,

Thank you. it. Got

But that could change.

-- could You again, a than have the change, in states lockdown less like March and just promotion and could like of April another be timeframe. couple in more it there in

you. Thank sense. Makes

Ladies and the session. conclude conference. And we concludes gentlemen, this today's question-and-answer

may thank now for and disconnect lines you participation. You your your

you. Thank

you, Thank us. joining operator. for Thanks