Foodservice

B & G Foods boosts Q4 , FY 2020 sales and earnings

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March 3, 2021

B & G Foods Inc., which markets brands including Green Giant, Cream of Wheat, Maple Grove Farms, Crisco and more, increased net sales by $40.0 million, or 8.5%, to $510.2 million for the fourth quarter of 2020 ending Jan. 2, 2021 compared to $470.2 million for the fourth quarter of 2019. The increase was primarily attributable to the Crisco acquisition, net pricing and increased demand for products due to the COVID-19 pandemic, according to an earnings release.

The sales benefited $28.1 million from acquisitions, including $27.8 million from the Crisco acquisition, which was completed on Dec. 1, 2020.

The sales gain was partially offset by supply chain constraints for certain products as a result of increased demand as well as inventory building by retailers and other customers in the third quarter of 2020 in anticipation of increased COVID-19 restrictions in the fourth quarter.

Base business net sales for the fourth quarter of 2020 increased $12.0 million, or 2.5%, to $482.2 million from $470.2 million for the fourth quarter of 2019. The increase in base business net sales reflected an increase in net pricing and the impact of product mix of $11.7 million, or 2.5% of base business net sales, an increase in unit volume of $0.2 million, and the positive impact of foreign currency of $0.1 million.

The company's fourth quarter net income was $12.2 million, or 19 cents per diluted share, compared to net income of $10.3 million, or 16 cents per diluted share, for the fourth quarter of 2019.

The company's adjusted net income for the fourth quarter of 2020 was $22.8 million, or 35 cents per adjusted diluted share, compared to $17.8 million, or 28 cents per adjusted diluted share, for the fourth quarter of 2019.

Net sales for fiscal 2020 increased $307.5 million, or 18.5%, to $1,9 billion from $1.6 billion for fiscal 2019. The increase was primarily attributable to materially increased net sales beginning in March (as compared to prior year) resulting from increased demand for the company's products due to the COVID-19 pandemic, partially offset by supply chain constraints for certain of the company's products as a result of increased demand.

The company's 2020 net sales also benefited from acquisitions and from one extra reporting week in fiscal 2020 (which occurred in the third quarter) compared to fiscal 2019. Acquisitions benefited net sales in fiscal 2020 by $63.0 million, which primarily includes $33.7 million of net sales from an additional seven and one-half months of Clabber Girl net sales and $27.8 million of net sales from one month of Crisco net sales.

The company estimated the additional week in fiscal 2020 contributed approximately $35.0 million to net sales.

The company's $510.2 million revenue for the fourth quarter missed analyst estimates by $23.26 million, while Non-GAAP EPS of 35 cents missed analyst estimates by 10 cents and GAAP EPS of 19 cents missed estimates by 26 cents, according to Seeking Alpha.

Shares traded at $27.48 Wednesday against a 52-week range of $9.58-$47.84.

The company's net income was $132.0 million, or $2.04 per diluted share, for fiscal 2020, compared to net income of $76.4 million, or $1.17 per diluted share, for fiscal 2019. The company's adjusted net income for fiscal 2020 was $146.0 million, or $2.26 per adjusted diluted share, compared to $106.6 million, or $1.64 per adjusted diluted share, for fiscal 2019.

For fiscal 2021, net sales will be positively impacted by an additional 11 months of ownership of the Crisco brand, and are expected to be approximately $2.05 billion to $2.10 billion.

The company continues to see strong consumer demand for its products and expects commensurate elevated levels of net sales throughout fiscal 2021, according to the release. However, management is not able to fully estimate the impact COVID-19 will have on fiscal 2021 results and therefore is unable at this time to provide more detailed guidance for fiscal 2021.

"For the year, our net sales increased 18.5% to $1.968 billion and adjusted EBITDA increased 19.4% to $361.2 million," David Wenner, interim president and CEO, said in the release. "The remarkable increase slowed in the fourth quarter but demand for our products remains elevated and through the first two months of fiscal 2021, we have had a strong start to the year."

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