B&G Foods (BGS) 6 Aug 212021 Q2 Earnings call transcript

Good day, and welcome to the B&G Foods Second Quarter 2021 Earnings Call. Today's call, which is being recorded, is scheduled to last about 1 hour, including remarks by B&G Foods management and the question-and-answer session. I would now like to turn the call over to Sarah Jarolem, Senior Director of Corporate Strategy and Business Development for B&G Foods. Sarah?

Good afternoon, and thank you for joining us. Casey Chief Chief Financial are Bruce Officer; today our Wacha, Officer. me Keller, Executive our and With

You can is access and Investor the detailed section financial information release Relations issued on we today, bgfoods.com. which of available the earnings at the quarter

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

call fiscal XXXX. making financial and call diluted the earnings also EBITDA to opening the as expectations will business adjusted and in Bruce, for highlights the directly now measures as with I over adjusted thoughts income, will to well his affected adjusted financial to these remainder XXXX. would like to business discuss net begin of earnings our remarks selected concerning of before call share will provided for our quarter the various GAAP COVID-XX the factors on for and Casey. adjusted Casey then turn results, that second Reconciliations results measures, financial outlook be comparable net discuss per the base EBITDA, We measures financial non-GAAP are expenses, the references sales. today's most today's release.

joining for us Good you, second for earnings call. you Sarah, and our quarter today afternoon. all Thank thank

quarter the prospects of remainder with We year. in are performance company's and the pleased second our the the for

from COVID-XX during a to comparative was at quarter of stocking QX XXXX most occurred height perspective, the expected, the the we that pandemic. the and As given lap challenging second loading pantry

XXXX. performance elevated to relative However, remained

As earnings in CEO the my first many weeks. at I've of as you know, for B&G this about now Foods. is six been role call

yet, pleasure coming shows. that meet conferences, So for I get you months forward met we today folks to the is events phone. the I'm looking in-person a on over investor line as haven't person to in of cadence of and many it the over the the trade back into certainly you industry meeting

happy years many and past over are brands, the In business pandemic. this the maximizing X.X has my am of challenges keeping COVID-XX what portfolio, listen the I industry at is of the coming categories, biggest as be risk, the cases, of with observations While some safe, mitigating in performance employees management's share discussion DNA, a detailed now, then B&G our opportunities one back well come as will in a so of mostly far, quarters strategy, the I to and coupled are effectiveness what Obviously, around matter the maintaining mode for opportunity. more drivers supply been Foods. with and over portfolio

are in activity. normal do passage But time opportunities of for and of XXXX's economic country aren't proportion When the pandemic, the uneven, going vaccinated, opportunities during pandemic e-commerce, coming in recovery life of Foods, B&G cooking, flavorings lots portfolios brands, be match the the gradual, we we and increasing has population clearly comfort B&G business, a to enhancers, a than height from at and seasonings. base continues QX up Today, the accelerated a B&G's we interest that around base generated on year, with in COVID that a net out the At the baking, in job. but pretty were eating growth we the our some of and of XXXX. trends to We Here expect on if the and at cooking, the We pandemic across have largest larger at I at sales business look done last numbers concern industry. by in these business There packaged everyday good the home. though. in have world. is of baking center consumer the been we of food trends. continued X-year X% XXXX, growth stack the are the driven

foodservice, restaurants XX% Within as home. and the continue XX% of which remains meals coming United to the specifically establishments seasonings and XXXX seasonings reopen, on & dining the are total from sales in of consumers cook are States, well number often more more be And about versus at Also, are and pandemic positioned so QX also business portfolio, are and portfolio more XXXX. we and baking aggregates XX% seasonings more and spices company again. the the net two out benefiting Americans than to QX XX% our up is seasonings portfolio our about & spices brands up as to eating and XX% is spices out spices

spring per brands baking Brer Our Girl baking Clabber stalwarts of consumers trends at as were home of XXXX, and week, at Crisco. B&G that Grandma's such and such list approximately once studies well lifting Recent least prospects Rabbit our portfolio in that Foods show as is even recent more post-pandemic as growing also the positive Molasses, baking additions XX% seeing includes world. in the as of

of very ownership, after eight the We will of more top we line talking time spend this trends so about the but business. performance and Crisco, are category encouraged by far months

is impact at the unprecedented significant out inflation coming Another levels. and pandemic of

key of higher costs. the but cost early across acted commodities, approximately business have prices freight. inputs recover identified from X% Crisco doubled base to tradable the oil to and Foods, risks our seeing portfolio on inflation particularly portfolio, soybean material inflation B&G higher At on input raise X%, year. are on many we impact The We in where the much and costs packaging is last to

through We timing will and lag customers. see and impact the implementation of with inflationary pricing into the QX P&L QX, moving both on some more with from costs effect pricing

Finally, sales B&G grown thoughts I growth. Foods rate growth the The give company successful XX a my adjusted track forward. greater has acquisition-related some move its record last built and since net on of overall in This compound and company how IPO was on to upon annual EBITDA wanted perspective you XX% we XXXX. at than a over years

more was We successfully integrated it than have XX in and XXXX. into established company since acquired our brands

these other brands and but cash. a that incredible Many brands For spices, generate significant in the we sure, and of some of meals, are stodgy, acquired, and front businesses including them. little have have of opportunities still old many baking

increase continue sales, flows to and acquisitions profitability are organic businesses. and goals through disciplined cash growth of complementary Our to branded

on invest, detailed focus joining Going over forward, the now for will is Thank value. meetings and you me today. will portfolio I and expect where what future of quarter. we come discussion grow, stronger within us Much in for Bruce a calls. more to you create more call to acquire Bruce? should the turn from on that the

afternoon, Good you, Thank everyone. Casey.

future their we challenging financial the As majority some an second the during packaged other of comparables. of eating Americans hope of of time, year. eating most were the performance despite sheltering months saw our midsummer away-from-home at still, of majority Casey dining a April, and this than home, effective shutdown, we creating meals demand industry mentioned, vaccine A the still of takeout near for had the part, for that products, very in of peak that at food and May sell. the strong types year ago and had little quarter a frozen June were budding we products home, unprecedented recovery were began and shelf-stable the last XXXX COVID-XX, at

prior reported growth its up XX% to quarter think we is lap we In discussing This we the our also of Margins was quarter it fact, the as results were at adjusted view pandemic-enhanced context year. comparisons last important the that I to nearly also growth in this when up significantly. second QX that year nearly EBITDA sales XXXX. results, from was were those net and year, XX% second time, up

April pre-pandemic sales of to months time. lower track continue XXXX mid-single-digit quarter, nicely that some we we and over finished to were to year, sales the March, net increases the and than for levels ahead May for had talking last levels While of been

a seeing the many of persist, year that the are consumer of numbers meals on basis. we at We in their daily witnessed last eating increase home behaviors a at preparing sustained home and Americans driving

we than had they Casey at more are consumers seeing frequently home eating and earlier, said baking cooking, pre-pandemic. As

impact raised our our At outlook worth QX is about factor but the we mentioning we we of and loosely, broader adapt inflation results certainly our the to to more get and too results fully the were COVID-XX. as when year, beginning hate deeper into I the the use we for we began little economy Another restarted, with delivering inflation. word of to this inflation recent year, concerns unprecedented precedent. seeing before are

Foods, seemed watch last that across While is may in help we listen At as it is to the hard it to And year's quickly likely cases, large here parts costs that of Inflation at structure. portfolio it marginally. as offset and inflation up In have here, be cost or take from up about without price tradable will may commodities, digits cases, levels. be for news some early some margin time, about our particularly appears the much conversations are read, now to our hearing B&G and for to other acted double preserve time. pandemic-depressed inflation. inflation our means

increases in list We of price our portfolio. the executed have in now XX% approximately brands

many hurt. were remain compressed we of setting short the like see purchases this largely more while but we but are to long in fairly effect price, bit mitigates cost up them the portions the year, covered the in a in would many where phenomenon it to increases term. may taking damage, little comes be fairly a with with the term, stable expected we lag a still throughout margins forward While are than the And cases common

or and price about sales and COVID-XX million; diluted inflation continue of a XX.X%. inflationary these adjusted percentage net pressures million net was $XXX.X We in as QX expect approximately of into of or down $XX Girl which per X.X% Crisco, will $XX.X compared net peak primarily but million $X.XX. exclude of of XXXX. a $XX.X which acquired COVID And million sales, business of XXXX. reported highlights. XXXX, we of adjusted net million; persist of XX.X% and EBITDA XXXX, Net million; up XXXX net XX%. EBITDA X.X% and of in December expenses now QX $XX.X was We percentage EBITDA sales before from increases million $XX.X Clabber million as pre-COVID earnings to COVID-XX adjusted or for sales were the well Adjusted QX before up sales sales, Crisco were of net Adjusted months XXXX. $XXX.X conversations XXXX. Base EBITDA expenses share to generated the $XX.X sales that QX X.X from

As XXXX. a reminder, in Girl Clabber acquired May we

continue lift volumes, material little single over and believe we includes benefit say, the a price that mix. in spend a a net obviously to we in also price, list optimization trade from by experienced to of see are sales, increases, are XXXX. will which bit mid XXXX levels decline We but Comparisons we seeing that driven digits a in

We price/mix XXXX, approximately COVID-XX combined. million or of a generated of $XX in million, before X million was of million the quarter decrease XX.X%. bringing recent quarter, for of the first the second approximately us $XX.X $XX.X expenses benefit EBITDA adjusted of benefit to quarters $X.X For a

and primarily XXXX, compensation for temporary During our $X.X the quarter costs we incurred included in at continue COVID-XX incremental second pay in and we manufacturing approximately measures. our expenses precautionary manufacturing to health other manufacturing while employees enhanced compensation quarantine employees, which related facilities, million of to safety

seeing sales of reduction Net continued the the is month averaged we these XXXX $X.X of one Inclusive or which Grove Adjusted or generated $XX.X our to sales that to Weber Spices per company channels, are or was taco last particularly our a our which in during quarter or Adjusted in as quarter real to Maple we from was XXXX, the XXXX a $X.X was & we XX.X% recipes callout eating of from XX.X% as quarter. a Maple percentage home. to from we sales $XX.X the XX.X% benefit brands, for while XXXX. of diluted strong adjusted and QX about taco second decrease per to & team chili demonstrate XX% sales brands are of is the which EBITDA QX were benefiting and reported XXXX. acquired & $X.X XX.X% compared on brand Tone's are XX.X% and benefited bit to million sales fully that were per of Ortega and a XXXX. as of net $XX.X of in cooking opportunity. & down net chain of to XX% Farms, as Ac'cent food key of we and Net still compared supply seasonings of as earnings QX are as XX% compared capitalize was of net or QX peppers. the compared maximize $X.X this into but and its in averaged million, as XXXX. million approximately $XX.X not see elevated $XX.X and costs, Dash, in all Ortega Farms and month to unfortunately, them, to million leaning as in million $X.X than both consumers their be pandemic up such seasonings approximately Adjusted million, interest COVID-like Ortega to a opportunity. of shells, $X.X a million up And brands the in as still spices for compared is brand more [ph] second products working QX XXXX, sauce to new up large business. capacity million retail in percentage net second very internal demand trying to XXXX. share demand Among is across able is other of compared total demand, Grove of quarter, and little height hard and quarter $X.X we due these million of QX but $X.XX compared the XXXX. million sales the expect than seasonings seasonings year's and remain costs, operations much can we our was XXXX a in fast spices in to and constraints, EBITDA the second brands $X.XX continues including sales and in XXXX. up quarter quarter. XXXX. QX $XX.X by a approximately portfolio. drivers second or Spices have was legacy million sales We such EBITDA million less net QX XX.X% and make repeatedly the external in $X.XX our X.X% sales at million were Net seasonings & recovery a our generated service well XX% little or the expand up compared spices of selling

QX Giant from supply as a with of Giant up of up XX.X% to most to but million $X.X million was not most $X.X $X.X $XXX.X COVID its to in quarter story that similar XX.X% Palmas XXXX. Las QX down year. million the XXXX, continued we our net We X.X% to fully get down or XX.X% sales or QX compared largely Ortega, Las sales, Green comparison million to $X.X $X.X compared XXXX. pack pre-pandemic have the was compared compared the down tough to $XX.X a continue down with year or Las able Green Green the net million, capture Similar demand Giant wait XX.X% constraints Wheat generated to generated vegetable until from crop QX Palmas Palmas. to while has was XXXX, levels. been or of the net which supply pack. in $X.X face chain beneficiaries one XX.X% was the quarter largest combined tough emerging constraints QX Cream of or constraints consumer million new of Cream through had challenging for the with challenging from the generated patterns the XXXX third XXXX, chilis in portfolio million season our will for And chain opportunity or quarter. and pandemic, of the comparisons issues. due $XX.X QX million supply will sales down million and in of Wheat this

expect were when points second compared net to basis quarter We was on generated to for of $XXX.X XX.X% QX sequentially inventory. do XXXX of or of strong up XXXX or profit million almost gross sales. But XXXX profit of we we margins a and However, sales. loaded profit, gross net million compared QX sales. down XXX quarter $XXX.X in gross fully once are XX.X% net which of was fourth the profit XX% when Gross

earlier, as low low were facilities. increases purchasing by business double-digit in cost nearly costs These Crisco negatively input in in in various by with double-digit results. basis in a with regions, margining cost Crisco our was for Gross mid-single-digit depreciation packaging quarter. as discussed than in mid-single-digit initiatives largely of our strategy the impacted us include we our the also part in increases thus XXX an increases business, low- by manufacturing factory to and Crisco. seeing margin freight. increases As coupled single-digit base initiatives comes inclusion savings higher aggressive pricing well for forward we to are also down base offset increases increases points our rate These the

by the pressures the prior and to and during administrative levels or SG&A were the the sales. net XXXX. part increase in is year this The $XX.X $XX.X a in and almost or and The acquisition-related to marketing of related million for partially the brand, increase acquisition administrative of in expenses, fines and in million delays. is with costs of selling in expenses expenses entirely impact $X.X by the netted for of quarter and warehousing of expenses, spend. driven $X.X advertising for and million million as costs and from offset purposes. well quarter compares primarily margin increase million million COVID-XX These in acquisition nonrecurring This compared which adjusted coupled a incremental by and warehousing costs, million in Selling, shortages Crisco decreases customer increased of Although year $X.X ago relate general offset These and to were XX.X% EBITDA COVID-XX million which the XX.X% out QX was second as last XXXX. compared to integration of quarter adjusted general $X.X dollar were for driven in EBITDA $X.X X.X% lapping were to Crisco million. $X.X just primarily decreases $X.X

earlier, compares As mentioned costs million we $XXX.X to This generated COVID-XX before adjusted the and EBITDA $XX of quarter QX in in of EBITDA $XX.X XXXX. million million in EBITDA in XXXX adjusted adjusted The second Interest QX in in and $XX.X million expense the increase expense driver was year. $XX was the acquisition primary of quarter second compared million XXXX. million last Crisco. of in interest the $XX.X to I

million by quarter. was to compared of a price less in XXXX little new in debt, amortization currently $X.X As Crisco. little up financed also than expense to costs with second year's less Depreciation $X.X was revolver acquisition interest. we driven draw the X% in a of combination second quarter second million million year-over-year, and interest last in a million of Amortization last bit quarter. $XX.X than the second the year's us quarter loan. million The a compared XXXX and in term are Depreciation term X.XX% $XX.X and the $XXX revolver reminder, primarily expense loan entire in

net of we a sales challenges approximately and We $X.XX tax XXXX single-digit by XXXX, XX.X% the a sales against taxes mid- achieve XX% remain higher that for increase year, effective quarter expect XXXX of business of the for base in second COVID, per in of due tax net to XX.X% are $X.XX in the with continuing We year's to $X.XX still share the sales trends. addition share diluted coupled still pressures March. compared an Crisco, the second $X.XX quarter. and and with last comparisons to company at tough events compared reflecting to were in the some face, record to the rate for the continuing in XX%-plus of that we these $X.X to line share target are the an in earnings encouraged discrete We in years. billion per EBITDA And we QX this to year's quarter inflationary generated Despite than effective but guidance rate little QX XXXX that have in to despite compared year, in adjusted per recent the XXXX. provided adjusted that quarter net continued the margins second billion in high generated we we expecting

cost our fully a efforts are quick our the fiscal callouts able full XXXX. have results provide However, we this to of at impact inflation to for guidance COVID-XX estimate the because mitigation cost not unable from more the XXXX, we are and for modeling time fiscal couple perspective. detailed remainder on of inflation earnings A of will of year

higher than As earlier, depreciation to are expense, I amortization interest as result Crisco a the of trend year mentioned acquisition. last continuing and

full $XXX $XX including expense of effective of $XX million; XX% million; of expect expense year. of million year to interest We rate $XXX for to an expense to approximately million and cash million expense amortization million $XX to $XX of full $XXX tax million; the depreciation million $XXX interest

extra week reminder, calendar a was included extra a estimated worth the in last of that result time, $XX week sales. extra week At an fiscal net year's XXXX. as we of Finally, as our XXrd the during million approximately quarter third the

call for turn the further Casey I'll remarks. Now back to over

Bruce. you, Thank

to pretty much that As high despite of set a ahead and peak digging single-digit on our I strategy a said time This forward the perspectives quarter remarks, strong company's the B&G mid- I played year. remains would deliver and target concludes to call, and like in And for the more my portfolio management on as fairly at call. performance, am beginning in the had my sharing as now lapping expected. company we demand. I ahead. benefited Q&A at Foods, and is which we of quarter look track the QX the this begin our portion Operator? enjoying of COVID-XX XXXX the The growth days XXXX, to out from early of to

Karru take question the line Thank you. we'll first go Martinson the Jefferies. [Operator with from And Please Instructions] ahead. of

Grossman products Karru. for say more you with? have What helpful. been you I would the Hi. that think would so XX% And that's would which having there on able in? the take any you Oliver be why price you better This think of increases, is trouble And to mentioned you price are case? portfolio has seen color

a I Yes, then start, talk bit. can and can Bruce little Yes.

the disclosed our say the has would I we've are portfolio core Crisco pricing we've the stage the - pretty of inflation We portfolio item. this on that think taken that costs, XX% I seen portfolio. broad the across we been on - and and input the the on because but smaller, before at increases depending pressure probably

that acquired those up. because mean, those very And have with justification Xx, able primary is pretty [oil it being Those successful we all I are soybean up] much. are obviously customers. with our industry some So goes has soybean we getting which implement see those to inputs discussions, we've is business. oil, that component your is strong Crisco going customers what since that happened we by and cost in at up the the but been tougher of When are through significant. the

have obviously discussions we've get I but say, But productive it. around tough successful environment, very would implemented. pricing it. about have customers discussions this overall, been look, able it feel and pricing I think to So We largely

hasn't of until couple is still come. a And just fully to implemented yet some announced of but it months. been We probably it it,

line that you And you. capacity just are have the guys to demand. on top do constraints due the lastly, you much not think Thank table fully left meet then how you Great. that letting

at I give think one time. hard a that's this to

definitely be get the certainly, corn on where in and the Mother significantly category. mean, product. in we'll on cob, I ourselves Nature relying on we're Green it higher think I frozen would depends canned the and Giant

And so the when in Nature will Mother throughout our crop competitors comes season.

XX% And lot one up heard. we a that's last had Spices where actually seasonings have supply, more compared unlimited so like XXXX, & sales. we certainly versus up to If year. we something

you I and see think go piece, piece the down that. by you portfolio

Yes. shells A supply sales of with taco in Static would had Static - place, taco yet. up kind our clothes about Guard if additional they sauce, Bruce have same Wacha it's to plans to struggling out get keep probably close not to and until and we've the and been on people on but unlimited to be of their kind are demand using those Ortega, go two there work. we capacity Guard, and when

That's an availability spray the of the cans been that's issue.

So...

Great. Thank much. you very

[Operator from Andrew take the the Lazar Instructions] go Please line of next We'll ahead. question Barclays. with

afternoon. Casey. Welcome, And Good

supplementing from years few then seems strategy detail yet. go-forward want growth that maybe modestly. start more looking to maybe Casey. of a growing past policy and a may lot of Thank keeping strategy dividend to the strayed of very whole around stable But I successful want you, deals. the of not Andrew. of a it have historically, with has that company very strategy the bit just I had little of relatively know And capital of core Maybe I the off, you're sense, allocation the for And ready core. to sort accretive right, to then B&G sort get a in sort little maybe growth lay kind out a out

in ideas know some I need about be in, understand team. and we crazy go. everything what say I moving with an is need so to where follow-up. form working and say starting I to do take to do would -- getting in, bolt is to in roots, sure or And think portfolio been then different Just in one to its a stabilizing that And I've getting it's And back -- Yes, things on we in gotten can we to has that what the that just I'm to of well bringing I to weeks intention of to But probably stage -- and about compete the look, the out to about job speak, shelf-stable modest everything remarkable would company don't got this build trying created that. Andrew, I we need making top in well, successfully. digging keep do a of sort think of B&G B&G equal. approach want acquisitions pretty those is has I am we that we're X then and we and they're entirely need direction? to which your say my And brands. done to sense -- at of get this build or I'd of say the it. and if I lots I'd say all where do even that accretive going that working a a the to say with to we've complementary we to I'm company are growth that categories piece lots

there think through we growth some synergies equipped brands either I bringing are will that -- better add in organic other create and things. we segments by or and or value categories them value, are to here,

significant believe places you'll probably beyond can we believe X just we where sort bringing want in-house we talk and value we So successful about where that to really more of be hear at we'll adding time. me play them win creation and

-- see it's -- that's little for about So it. of a how little but I'm that, early me talk a little that's kind I a to

still of will done in on that honor and want those to B&G and we I But the a make buying things that do places we acquire the want do things we the think of sure what's But maintain well. business. that I from grow, invest, for right bit focus doing little need and well, don't the I where going walk away principles smart So the has would to forward prioritize we future.

think for Yes. you And then, Bruce, that. I that sure, you that I margin. timing the with say pricing know the we you're all I that just between about or I of talked heard missed inflation sticking in EBITDA kind time? wasn't lag and have may this I Was just have and year and over Because of it. also XX%-plus typical also

an no targeting you side produce. we hit quarter, we be for the this of less look, I that's our what mean, I quarter. business about XX% probably were that's margins. still end able certainly we expectation in We're XX%, than but that because a bit XX.X% compression little on goal. we saw this And enough. the have margin still EBITDA thing to certainly, XXXX, talked at Fair on We the for would the year, that in think Yes. and XX% lower should think our earlier we right were the that

that how call are then, I of food with typical a companies, -- sort the environment. rate making And the of to the that their, sense are is faster perspective you additional implemented? that from cost type or able year normal again, on I reach input bunch a aren't of, in of lags get year. -- still what Great. timing to because there get margin that margin making got it, what's allow just lag works this pricing because guess for that what's just to that a -- get this obviously, is that things let's for to up that a Trying run gap or EBITDA to rising of guess timing and it You've were up you productivity. to

cost we from a we've because we year this thought to but have the sales there one, that higher increases. we many certainly challenge acted the seen But highlighted theory, and but not area results and easy. challenges costs. in Crisco kind risks. as we've In beginning, going to we gave a be pricing, I of is both coming a weren't area there's always benefit because the seeing on this and margin formal that. the Sure. of And when we from year we It's taking cost we're taken through look, lesser an we've should of the And that also saying pricing. side. an degree, for would to But our guidance where said, it's quarter we still it standpoint, be business. mean, thinking COVID, quick where same, that's be input out have There's fourth a our going giving outlook margin portfolio, terms a part year as

think But else margin opportunity everybody too with see an I think in crazy so Casey year building like wouldn't the upside space, that's because still this I we we're challenges. And EBITDA for right go the going Keller. to

pretty the that out the Andrew, did which quickly, of rest from looking I on industry, here in the just would believe say, call B&G is just pricing of and acted very a aggressively. I outside now coming inflation earlier lot followed earlier than

a good ourselves. The that would we is on commodities thing say job protecting I did certain second

So having long, soybean we that with fairly oil. coverage did

And costs get some seen making QX those think that through of impact were supply that half, up first on the savings, last around and to that of going the productivity. hedged We'll sure thing costs and a And on to combination chain have coming I protected huge gone or doing possible that a just in the it's from dramatically. QX, were see spending So sort stay longer to impact. focus we to that's then we all the is haven't enable cost because us we more number. of everything XX% things

Thank you. Great.

next the line Piper Sandler. from take Lavery of Michael go We'll the with ahead question Please

Thank get bit little a you, more evening. I wanted to good specific.

you were calling can a XXXX? inflation covered amount for And You know Is fourth big you a on of exposure? coverage be when in us still of got wildcard give out How earlier quarter the good year, or said But sense good was I concerns commodities. there. some pressures there you've may that any how now? the positioned is you

position in now would…. right give a Not our We to guidance. XXXX typically

guidance. I No, sorry, Yes. mean don't

Something covered that. XX% have you -- are XX%? commodities? on do like XX%? Just you

disclose we this that at something would Not point.

and through say I against it's to were well -- we think the covered I'm pretty increases. about talking fair that

covered against the year, first we're through actually larger So fairly we increases this the the but recovered through year. of half

flowing The through inventory going rolling we to increasing of us year, P&L. offset second and help costs that our have to the through the half be are will pricing

what's that's kind happening. of So

see into into the we QX. So effect a larger -- as flow coming pricing a more in we're we'll have more QX of and the P&L costs

no I when call. something inflation remain think across also I our one to board. was like inflation that's we're that's ago, talking seeing seems had we months And the fluid. mean, Four what going

XXXX, to cost that it. talking in talking If about Now and taking of be you inflationary are watch price. increases. And hearing go even is have an everybody an well. there's environment as we'll If to increases these we inflationary about price being away, the environment is more end probably we continue retailer some up not

a pricing Okay. the follow-up on maybe And side. That's helpful. just

of into it kind talking the as an But you're that then, pricing issue leader this the and you've lag and inflationary coming saying effect here, peers. that about note were correctly quickly? Is now You got you a pricing that then earlier just guess pressure. I your take than you also trying between help Can the so and careful timing? Is too the mechanics that some got moved to pricing to the it understand a just not -- you you've inflation be soon has of around gap. were to the us take

have when I input you you those increases. can place. certainly have cost that you price and and you materialize so them in can conversation increases customers around to verify there's validate cost mean a put Yes. then have And with see

lag people of our are it. And but a still And I And still so is and of We was were ourselves, aware act of we prepared like point quickly, are there and we effect. takes aware it. seeing lot to time. we suspect I think said, a it it ready

on see increases. been most when XX-day a I have really we up, with price are time the customers we the way, which, months. last And as like as well it to And getting by X take over customers. that's for going basically line have pricing insist when costs increasing going do implemented the they mean we the that lead time

those try usually, there's as much get as possible, line in it we timing So factors. but effect. just But and lag some it's

so Thanks much. Okay.

We'll take with line ahead. the next Reuter of Bank the William Please of question go America. from

I the often their during changes if the or year. a space any was shelf the in shelf middle month during expect I over key any your wondering, for there that next of Hi. part happen some you COVID. It were retailers products? kind didn't space wondering lot of reset of X was

they normal cadence get to the to trying back much as can. as are People

I and for indications mean, don't we most just now do of honestly, shelving planograms. and new just -- getting that reviews major beginning retailers to we're doing category they're the -- sets

going to customers discussions to process it's of So new we lot items is in early just because now around shifting several now initial timing little a have of be the and yet around. over to the those I happening some a understand getting of coming some really next information what's reviews. with market And think are We're some category don't that are innovation our going. even But months. of that

way more vulnerabilities don't information into have don't market. have we do plus how we will another, our about that what's the So any say to new we or of going optimize bring I innovation how happen be and a one suspect SKU assortment we that to will lot do

Okay. follow-up, one And if can. just then I

shortage certain your certain some with continuing that On Green they'd fully products on products. are on the a were you guess, we allocation to now? And have of that provide to in inputs, of Giant, not such customers disruption all supply are stand the like. that them you chain I do where able

Giant, the the for just Green can past of we're And begins just quarter. season. now ago into pack now Certainly, basically third side through and weeks on the getting end that the still continues

And and to so that's normal. that's get a back improving steadily position trying to

you. Thank helpful. That’s Great.

Thanks, Will.

the with Please Your next question comes ahead. from of Goldman go Jenna Giannelli line Sachs.

Thanks taking for Hi. question. my

pipeline. maybe then on pause how interest of guess, just it us again, [Technical are and some I high about, potentially opportunistic commentary just you're you. fact talked Thank leverage Difficulty] obviously, remind to You to term near there your be on terms desire to M&A. take And the continue willing in valuation. and But given

Yes.

great question. So

or here without hard we less I X mean to know always a acquisitions. a it's think and Crisco. couple seeing the than than next go from what We're always there year at is. B&G, looking. But we're year one removed are Don't looking. I X more of

aspect an of focus opportunistic we're I willing opportunity. to buyer. develops There's think, we where or find a less Casey going for company, be certainly, see seller to willing strategy to there's in the going more areas his order as on that

target ratio x. And so to We've will times as as of that leverage. far X.X continue to evolve X.X a got

that make a a But paying above. we're far but for little the certainly has not valuation above bit things. work, so to how math And consideration a and we're too from that that's both

to willing so do willing and the to always next And something math fund how comes. on always to look, see the where one we'll

debt. taking some Thank callable And I makes That that to you coming of you. high-yield have about How advantage market, ask, thinking cetera? I then to the potentially are sense. addressing market, guess you et have favorable

similar off. in was We're are to get structure today, still happy which getting is the at very, attractive question, although opportunity very high-yield a there I the maturity M&A, rates. with our ways the the wish capital out to market XXXX, to an answer on little Great -- we a it's bit closer but

and structure, got think the right both now, we're very and if I the we've capital to and our But on to evaluate something there's with do that's look structurally, floating happy bonds. side great.

much. so you Thank

from line ahead. the next the We'll Jefferies. now Rob of take question with go Please Dickerson

implied way. but going would there's on EBITDA your haven't guide sure that. go is. in us I start giving year Thanks to of development kind is, you here, kind commentary I'm there no just around to But much. EBITDA know there's not right, provided parts. myself just outside direct guidance included, to the and given that XX% no want margin Q&A question. guidance then what in call, else you're of rest ask the prevent you trying hold that the of revenue what with just make to not the kind that Great. for in this of so new a for I'll I guidance. the this EBITDA Bruce, of year something

Yes.

a And all risks out of all there, our brought put knowing in for not. of year last ability been this in and restaurants the cases, just just what that number us, year were COVID in beginning in times. for eat And us. has and really months ahead happens restrictions has opportunities some terms there's think what I coming to or the harder recognition what there to fine unprecedented and in that a it's

And so there's a lot of unknowns out there.

Our guidance on year reflection this lack guidance of that. a is or

All right. And Fair enough. secondly... then

that, earnings on it's COVID only say, going the figure volatility top can to environment out happening. variant what's to at hard look go what's there's when what's going think, you of really in lot and see volatility, I environment, there. you the guidance and I inflationary hard also a of say, like what's and forward. makes happen the volatility Delta mean can't of A I would expectations, not now I in But giving think it's -- lot which to is, going exactly

We environment think, the too we just costs really I external the earnings margin. able to are XX% targeting the it. think So much look, there's to be and pinpoint volatility in

whether third ten are And There's going we're compression we guys companies there's margin of other quarter below you Yes. behind debating best, than ten lot call, want process we above And earnings like where thought but margin an we - the a the do said, lot in of risks. seeing certainly, be or in it's to EBITDA unknowns, part isn't an a how a more had. our of number. quarter we're situation the and second didn't you're and was there guidance where or lot to a year gave this a

So we'll continue to do that.

Giant, in back or of and you kind constraint call way. out the maybe It's Yes. And It still I or not sense. of it call capacity, have what on that overall of I chain. out you there. makes it in chain capacity some kind just supply right supply you guess foresee on know as kind of what's is part was anything all your much then complexity, reading it the pause gives half I don't you… QX there I co-manned. just I'm some of there. But network know happening just inclusive labor Green is

all doing or very is co-packers. for us it's a people Yes, are lot relying much like on of who manufacturing it there for

in on side folks last terms we year staffed. of like having concerns lucky your the at think massive could time, of And not was had. shutdowns factory some you pretty the there get were this I the protein

and or have, part, a shells, the we mean healthy. we lot for I Ortega, it's to sure, could a as heck but minus, plus brands we sell different there's we reasonably a most we different it's more unlimited could that I now more. if sell products of had and taco lot out think risks kind But called

stores. most into go You

You see said, that still stocked. to decent shelves putting not up fully we're relative With numbers XXXX. sales

demand that. maximize we about certain product less enough and it's the have and sell opportunity. to certain Certainly, have brands do to you products, about you So more have do sell to

have. -- And new environment, that kind trying we're and a in it's -- to good to factory full problem of people hire we spices it's We're this running a & tough. out, seasonings, we're

going It's some our -- business it's are add trying it's new places, done. there capacity. it's right about now, bringing In So it we're areas get some just In about some easy lines. to but we're where to not labor. terribly places, on of additional

work maximize trying through So all portfolio. to to the we're this opportunities from our

price off go-forward go you to of can quickly. Right. versus kind But seem upfront in the year. now those you you think My a getting of to as later end with roll you're complexity right, into the get [ph] the retailer, assuming is back and as hedges saying you costs what year. basis. Great. the you that ongoing, And when rolling some said at like And to assumption I'm to we then -- be here just hedges last kind go some trying we retailers where talk through assuming if of to I'm those you're conversations and on trying as go Crisco, 'XX thing kind move forward. then on through rolled-off there's here of I kind sit today, of obviously, know somewhat

-- to to about the figure that that just is out trying what you relative visibility Just spot think off today. your pricing dynamic how

mean, to we are be. business long-term ultimately, costs I have with to going off think the the Yes. price the I of input what

term. be we're of call, the as margin short price on compressed And so kind day, term. not margin end some said so at compression this in long And the the over look, to of we need repeatedly there may the we've

maintain term. long to the over is goal margins Our our

so All guys. Thank it. Really, Got much. right. appreciate, you

Thanks, Rob.

Please Casella question line JPMorgan. of from ahead. the comes next with Carla Your go

something next Hi. year fourth Most is something that's the the questions more that answered. my come third have building capacity, where quarter But could been you're talking that capacity front, on is of constraints? Or talking on the and about in new that you're in others Ortega quarter? about

it's be Yes. more shell in year. be taco quarter really I QX, a honest, on -- first quarter but the come and of just might there probably months. QX mean To next impact for it's another some X line slight And fourth on sauce. won't

-- count pack Green on really talked on -- about. could about then I and think seasonal the the that's as the Giant, supply pack, on constraints Bruce you

changes lines you in COVID Great. versus out? you're promotional frozen further come any whether And away could out or see whether as seeing product lockdown, -- shelves? about or then talk you're to cadence the different starting Okay. call from just you and we in like could among Anything environment

Yes.

this fall and promotions spring even last pandemic, COVID there's the promotional of time during less whatever. traditional kind -- seen the Easter in frames, time it -- traffic is we've what store think I promotional call foot during or

as lift And is will so things we bit that, to begin normalize But a promotion off less. improve. that expect, the little

middle little that -- of retailers. we see promotion trying the was bit -- of fall moving we're to some and from it's and pandemic. And kind back that promotion than we're gradually follow be it that in line there it's promotion in sure of what in be the that pulling We're we're kind will But we're just So better period. not make returning. on with necessarily last a activity events fall will at promotion expecting

you. Okay, great. Thank

the of ahead. Ken with take question the line Montreal. of from We'll Please next go Zaslow Bank

everyone.. evening, Good

Hey, Ken.

are hey, of you to how not you as a you're out plan, tell going what lot we plan have in plan, you're business, a you set to which like reveal you're it? of kind your -- are XXX-day a that? And the plan. CEOs to look how in And more? basis? will I Casey, know what's know longer-term position year going the to is about us plans about through guess? and which plan say, going when schedule what come in X-year And a a what is, a look, but plan, at philosophy have on your the And up your do a going I I

weeks, a Where what XXX happening? -- across where see about do within to Where see not because Yes. time are I about these Where to typically, I successful value that the willing just least I to days want do spend my where future. I do to we trying in been it's I understand the How I'm change to be successful in I'm the creation and do value. and at talk maybe plan the resource we working. capabilities? And do working line And company what businesses we've have been things. the past, I'll first allocation has where What need months think working company, a really against. I'm before do at a that's it. see see point in

I focus see be frame. where will what more initiatives I've in in priorities kinds place? I'll this about of when this And is all I'll to of -- begin time provide few So done now. lay and we where detail out, we some times you have we'll and do a expect I this can think it, us able put some that November, X- call to and going to this Probably again call X-month

about investors, value you So and to all the creation. and then to and place not team to working working communicating what's the out on with plan figuring to strategy what's cetera. putting it's doing all in drive what And et align a me, higher we're

from to want of that. we're value sure we where do is you, and has creation. on clear do weeks building and creation, can knowledge think real I'm But drive done past, said little Like in my So improve I I see value want make that just off the about B&G what before, what go. coming well I very to complexity terms do we opportunities of in within to we can in have I aligned for for value I'm we and than It's sure enhancing think X say tell maybe we can that will the that and more a where shareholders the of base want to I with value I just drive with where the focus more that portfolio out make to due I create probably a with team. track diligence. to to I want want work that I with that because the premature terms business.

again, that not that out, playing leave you. we about And X Thank this year, I'd out? next X think enough. but question case I'm should business say Fair to I'm can who at you be years. case in it talking obviously, the in Crisco the not situation business see renewable assuming, with but you. about perspective. And how a But the do of the diesel you business, sure I'm given pushed where is profitability side to this you the to different that as assess the look it? And That you're question. would

feel just Clabber trends the the about Feel for It like where good line We XXXX. strategic the Girl in complements category. categories. us. about very where built feel but case. going back higher where area also businesses we good is Yes. in up than that consumer very an and good it they are overall It's built the baking. our involved for like some model bought We we pricing is to really up. costs Input really other some very Crisco about molasses other higher of we top are of M&A trends This the than relative the in and and things categories, the are also is things where the

also to to go category where the rather us price with the happy it's favorable reflect and kind in most input than of costs. So have Would input of are change acquisition. taking board up. preferred across our the to But competitors us become a things like costs the

to your the pricing assume you're obviously about with And if and to margins to will actions my constraints, -- capacity will XX.X% off, that coming last the XX the roll have then crop margins XX online? question thinking all business XX% is, the your doing you restored coming hedges be the the capacity in. that vegetable And --

you from that, XX.X% margin say, and everything that kind stays hey, forward you if of But after… in still doable to here. by, So fast is goes would time just XX% say

you'd year are what going Yes, me tell have from input to what a price... costs to be now, and then

you and went if everything, stopped. have you your you was Would all Time would Like just No, stable, off hedges And if vegetable have rolled everything price so just actions the just the and from been… capacity restored will stopped, inflation crop. everything the restored here. the from of forward kind you stop. got

stayed prices they price permanently I if think up list Again, see more. up levels you'll are, where take people the at

philosophically, we about with want a to to things. price recover is our asking. efforts philosophy philosophy, yes, us to are help that's of look, the sure is it's costs to you if cost going implement of maintain what and being drive. profitability. matter price to save of But will some and to those margins, time you're effect we maintain lag our That talk we that margins able and make help But what that's productivity period the higher And and that what will

I you, Thank guys, very appreciate it. much.

Larson the Research Group. next ahead. Seaport from will Eric line of Please with question come Your go

Casey, good pass luck. on and everyone. Thank to you, welcome I you, my also Yes.

Thank you.

apple your is side as to cost and the your second the to cost the the made flatten has call, But another take that have getting your on of was of to you you price still thing I to you the seen to death. this what Or that starting cost out? And costs think does And one the kind he it rising? of have - left go we've given the So on very rampant at are how bite I beaten it already last -- costs curious kind derivative have inflation was That's pricing? third know been is that increases it. seen back you -- few and - was -- Wenner and at whole mean Dave increases. last that or customers I'm comments input that worse.

be look, what now actions need recent including we we would have environment on Yes, you And for see the next that. pricing in actions I do prepared to for that some next that like we this analyzing we I'd sure that pricing cost look will against make year, certain key commodities to really months. say, think taken and watching year. we're pricing the we're pricing additional do tell

categories, So is what at of plan. transitory. a looking at the that's to of as say think -- at next have impact think need of to a the additional you are increases some it's I that's it's stabilize. be we In In seeing have early pricing But on to and categories, inflation we we a plans going say other areas little seen X and justifiable our that costs. increases. more make we'll can't to cost and I'm Hopefully, part said, based it's I I still we And we that projected looking inflation a tell we look think are, what of decisions looks if we execute we'll but year. helps part in do in pretty Yes. that although to there and moving the -- manage how next lot, watch about some relative would needed next for and place be to inflation pricing we're don't as some Right some that where bit. that's target. we're will next like input in year. inflation do input that this already kind than what just months, the XXXX some We year, I now, really pricing you've input we we Bruce game. have still up to being costs moving And gone see will starting into But it, actions, out cost kind are carefully, given

Okay, thanks.

little that Hopefully, a helps bit. Yes.

Last here. follow-up Yes. No, it does.

pretty of weird yet? related Given last COVID that negative on it any your of at that. actually price a the et I lot to to down Is on be probably elasticity this on there's because industry is of you tough but too year, elasticity movements products? if from comps, some Can all curious where volume thoughts analyze any it's point, I'd the attribute the hard early obviously cetera. mean,

the a are our have where relatively easy probably coming and far I and we're answer, think sales with answer, the taken year. answer is so out easy price, full happy it's we but not this

because year. the is enough still to only XXXX. of talked we kind But of out X the about think to trends months into we to end bold you started where back went far, even if are jury sales we're so about so And X, XXXX, when

than at a higher than better mid, digits trending little that bit are XXXX. maybe We mid-single

you. enough. Got Thank it. Fair

into Honestly, input the of Crisco where the magnitude yet. place costs we're because the And going that that's the to most highest. look is the is the pricing rolled elasticity, at and the hasn't of really market magnitude

first And as Bruce of pricing May, one. June So that what's QX, is I elasticity not that's of that taken we the tracking mean close, I from one it's have personally, you coming happening. we've real if in pretty that that. and me late we seen which am watching things in. saw implemented we'll But kind wave in a said, better been - so see already when that's weekly to QX have read any on far, almost the I'm ask

color. Got it. Thank you, Thanks. Casey, appreciate the

Thanks, Eric,

at questions to And conference there turn the additional to management or this remarks. are over I'd back any for further closing no like time.

more is do I for to today, joining say even the ahead I Casey. and about you this close, and that, to there'll for And where think the you we'll opportunities in have go maybe think thank you I other and to all talking thoughts questions. that call those look what I to and And November the plenty but want forward just I'm as thank conversations. be go we great around we to around times said, seeing I can of future. want

very you thank much. So

your now does and and this gentlemen, Ladies call. your conclude Thank participation, today's you disconnect may for lines.+ you