Parsippany / NJ. (bgs) B+G Foods Inc. announced financial results for the first quarter of 2016. Highlights versus year-ago quarter where applicable:
- Net sales increased 62.6 percent to 353.0 million USD
- Base business net sales decreased 2.2 percent or 4.8 million USD
- Net income increased 69.7 percent to 33.2 million USD
- Adjusted net income increased 88.0 percent to 38.6 million USD
- Diluted earnings per share increased 55.6 percent to 0.56 USD
- Adjusted diluted earnings per share increased 71.1 percent to 0.65 USD
- Adjusted Ebitda increased 79.4 percent to 89.6 million USD for the quarter
- Guidance for full year fiscal 2016:
- Net sales guidance increased to a range of 1.39 billion USD to 1.42 billion USD
- Adjusted Ebitda guidance increased to a range of 310.0 million USD to 320.0 million USD
- Adjusted diluted earnings per share guidance increased to a range of 2.05 USD to 2.15 USD
«The first quarter was extremely positive on many levels, particularly with respect to B+G Foods’ profitability, and as a result we have increased our 2016 guidance for net sales, adjusted Ebitda and adjusted diluted earnings per share. To date, our acquisition of Green Giant is turning out to be even more profitable than initially anticipated, a major driver of our favorable results in the first quarter. The Green Giant transition is well under way and on schedule and the Green Giant innovation pipeline is growing. We are more excited than ever about bringing Green Giant back to prominence and I believe we have the plan and the team to make that happen», said Robert C. Cantwell, President and Chief Executive Officer of B+G Foods.
Financial Results for the First Quarter of 2016
Net sales for the first quarter of 2016 increased 135.9 million USD, or 62.6 percent, to 353.0 million USD from 217.1 million USD for the first quarter of 2015. Net sales of Green Giant, acquired on November 02, 2015, and net sales of Mama Mary’s, acquired on July 10, 2015, contributed 130.2 million USD and 10.5 million USD, respectively, to the Company’s net sales for the quarter.
Base business net sales for the first quarter of 2016 decreased 4.8 million USD, or 2.2 percent, to 212.3 million USD from 217.1 million USD for the first quarter of 2015. The 4.8 million USD decrease was attributable to a decrease in unit volume of 4.8 million USD, or 2.2 percent, and the negative impact of currency fluctuations on foreign sales of approximately 0.3 million USD, or 0.2 percent, partially offset by an increase in net pricing of 0.3 million USD, or 0.2 percent.
Gross profit for the first quarter of 2016 increased 48.5 million USD, or 72.0 percent, to 115.9 million USD from 67.4 million USD for the first quarter of 2015. Gross profit expressed as a percentage of net sales increased to 32.8 percent in the first quarter of 2016 from 31.0 percent in the first quarter of 2015, an increase of 1.8 percentage points. The increase in gross profit percentage was primarily driven by the acquisition of Green Giant, which benefited from lower than anticipated trade spend and input costs, particularly from the Green Giant manufacturing facility in Irapuato, Mexico, as well as greater than anticipated synergies with the Company’s base business. Gross profit percentage was also positively impacted by decreased costs for commodities, packaging and distribution for the base business. Gross profit percentage, excluding the results of Green Giant, increased 0.4 percentage points.
Selling, general and administrative expenses increased 16.8 million USD, or 73.5 percent, to 39.6 million USD for the first quarter of 2016 from 22.8 million USD for the first quarter of 2015. The increase was primarily due to the Green Giant acquisition, which resulted in 15.7 million USD of incremental expenses for the first quarter. The overall 16.8 million USD increase was attributable to increases in consumer marketing of 9.2 million USD, selling expenses of 2.5 million USD (related primarily to a 2.7 million USD increase in brokerage expenses, partially offset by a 0.2 million USD decrease in salesperson compensation and other selling expenses), acquisition-related expenses of 2.2 million USD, warehousing expenses of 1.6 million USD (which includes 0.5 million USD of distribution restructuring expenses) and other expenses of 1.4 million USD (primarily related to compensation). Expressed as a percentage of net sales, selling, general and administrative expenses increased 0.7 percentage points to 11.2 percent for the first quarter of 2016 from 10.5 percent for the first quarter of 2015 because the increases in selling, general and administrative expenses resulted primarily from the recent acquisitions that also resulted in increased net sales.
Net interest expense for the first quarter of 2016 increased 7.6 million USD, or 65.8 percent, to 19.1 million USD from 11.5 million USD in the first quarter of 2015. The increase was primarily attributable to additional borrowings used to fund the Green Giant acquisition.
The Company’s reported net income under U.S. generally accepted accounting principles (GAAP) was 33.2 million USD, or 0.56 USD per diluted share, for the first quarter of 2016, as compared to reported net income of 19.6 million USD, or 0.36 USD per diluted share, for the first quarter of 2015. The Company’s adjusted net income for the first quarter of 2016, which excludes the after-tax impact of loss on extinguishment of debt, the amortization of acquisition-related inventory step-up, other acquisition-related expenses and distribution restructuring expenses, was 38.6 million USD, or 0.65 USD per adjusted diluted share. The Company’s adjusted net income for the first quarter of 2015, which excludes the after tax impact of the loss on product recall and acquisition-related expenses, was 20.5 million USD, or 0.38 USD per adjusted diluted share.
For the first quarter of 2016, adjusted Ebitda (which excludes the impact of the amortization of acquisition-related inventory step-up, the impact of the loss on product recall, other acquisition-related expenses and distribution restructuring expenses), increased 79.4 percent to 89.6 million USD from 49.9 million USD for the first quarter of 2015.
Guidance
B+G Foods increased full year 2016 guidance for net sales to a range of 1.39 billion USD to 1.42 billion USD, adjusted Ebitda to a range of 310.0 million USD to 320.0 million USD and adjusted diluted earnings per share to a range of 2.05 USD to 2.15 USD.
