Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 01, 2017 | Jul. 01, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | B&G Foods, Inc. | ||
Entity Central Index Key | 1,278,027 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,900,718,177 | ||
Entity Common Stock, Shares Outstanding | 66,474,474 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 28,833 | $ 5,246 |
Trade accounts receivable, less allowance for doubtful accounts and discounts of $1,719 and $1,167 as of December 31, 2016 and January 2, 2016, respectively | 119,265 | 69,712 |
Inventories | 356,590 | 312,880 |
Prepaid expenses and other current assets | 26,399 | 67,517 |
Income tax receivable | 10,787 | 2,514 |
Deferred income taxes | 7,902 | 5,292 |
Total current assets | 549,776 | 463,161 |
Property, plant and equipment, net | 245,344 | 163,642 |
Goodwill | 614,278 | 473,145 |
Other intangibles, net | 1,629,482 | 1,442,340 |
Other assets | 4,625 | 1,332 |
Total assets | 3,043,505 | 2,543,620 |
Current liabilities: | ||
Trade accounts payable | 98,033 | 49,593 |
Accrued expenses | 62,393 | 31,233 |
Current portion of long-term debt | 10,515 | 33,750 |
Income tax payable | 3,875 | |
Dividends payable | 30,879 | 20,292 |
Total current liabilities | 205,695 | 134,868 |
Long-term debt | 1,715,268 | 1,697,771 |
Other liabilities | 21,405 | 3,212 |
Deferred income taxes | 315,480 | 250,084 |
Total liabilities | 2,257,848 | 2,085,935 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding | ||
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 66,406,314 and 57,976,744 shares issued and outstanding as of December 31, 2016 and January 2, 2016 | 664 | 580 |
Additional paid-in capital | 387,699 | 162,568 |
Accumulated other comprehensive loss | (19,364) | (12,696) |
Retained earnings | 416,658 | 307,233 |
Total stockholders' equity | 785,657 | 457,685 |
Total liabilities and stockholders' equity | $ 3,043,505 | $ 2,543,620 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowance for doubtful accounts and discounts (in dollars) | $ 1,719 | $ 1,167 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 125,000,000 | 125,000,000 |
Common stock, shares issued | 66,406,314 | 57,976,744 |
Common stock, shares outstanding | 66,406,314 | 57,976,744 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Consolidated Statements of Operations | |||||||||||
Net sales | $ 413,656 | $ 318,247 | $ 306,376 | $ 352,978 | $ 342,291 | $ 213,300 | $ 193,645 | $ 217,122 | $ 1,391,257 | $ 966,358 | $ 848,017 |
Cost of goods sold | 943,295 | 676,794 | 600,246 | ||||||||
Gross profit | 106,906 | 115,426 | 109,715 | 115,915 | 88,563 | 71,596 | 62,008 | 67,397 | 447,962 | 289,564 | 247,771 |
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 174,759 | 105,939 | 93,033 | ||||||||
Amortization expense | 13,803 | 11,255 | 12,692 | ||||||||
Impairment of intangible assets | 5,405 | 34,154 | |||||||||
Gain on change in fair value of contingent consideration | (8,206) | ||||||||||
Operating income | 253,995 | 172,370 | 116,098 | ||||||||
Other income and expenses: | |||||||||||
Interest expense, net | 74,456 | 51,131 | 46,573 | ||||||||
Loss on extinguishment of debt | 2,836 | 0 | 5,748 | ||||||||
Other income | (363) | ||||||||||
Income before income tax expense | 177,066 | 121,239 | 63,777 | ||||||||
Income tax expense | 67,641 | 52,149 | 22,821 | ||||||||
Net income | $ 13,568 | $ 32,410 | $ 30,251 | $ 33,196 | $ 10,960 | $ 19,815 | $ 18,748 | $ 19,567 | $ 109,425 | $ 69,090 | $ 40,956 |
Earnings per share: | |||||||||||
Basic earning per share | $ 1.73 | $ 1.22 | $ 0.76 | ||||||||
Diluted earnings per share | 1.73 | 1.22 | 0.76 | ||||||||
Cash dividends declared per share | $ 0.47 | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.35 | $ 0.35 | $ 0.34 | $ 0.34 | $ 1.73 | $ 1.38 | $ 1.36 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Consolidated Statements of Comprehensive Income | |||||||||||
Net income | $ 13,568 | $ 32,410 | $ 30,251 | $ 33,196 | $ 10,960 | $ 19,815 | $ 18,748 | $ 19,567 | $ 109,425 | $ 69,090 | $ 40,956 |
Other comprehensive loss: | |||||||||||
Foreign currency translation adjustments | (8,180) | (3,737) | (116) | ||||||||
Amortization of unrecognized prior service cost and pension deferrals, net of tax | 1,512 | 2,075 | (8,447) | ||||||||
Other comprehensive loss | (6,668) | (1,662) | (8,563) | ||||||||
Comprehensive income | $ 102,757 | $ 67,428 | $ 32,393 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total |
Beginning balance at Dec. 28, 2013 | $ 534 | $ 183,113 | $ (2,471) | $ 197,187 | $ 378,363 |
Balance (in shares) at Dec. 28, 2013 | 53,445,910 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Foreign currency translation | (116) | (116) | |||
Change in pension benefit (net of $917, $1,258 $4,865 of during the years 2016,2015 and 2014 respectively) | (8,447) | (8,447) | |||
Net income | 40,956 | 40,956 | |||
Share-based compensation | 2,235 | 2,235 | |||
Issuance of common stock for share-based compensation | $ 3 | (4,377) | (4,374) | ||
Issuance of common stock for share-based compensation (in shares) | 217,787 | ||||
Tax benefit from issuance of common stock for share-based compensation | 2,356 | 2,356 | |||
Dividends declared on common stock, $1.73, $1.38 $1.36 per share during the years 2016,2015 and 2014 respectively | (72,978) | (72,978) | |||
Ending balance at Jan. 03, 2015 | $ 537 | 110,349 | (11,034) | 238,143 | 337,995 |
Balance (in shares) at Jan. 03, 2015 | 53,663,697 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Foreign currency translation | (3,737) | (3,737) | |||
Change in pension benefit (net of $917, $1,258 $4,865 of during the years 2016,2015 and 2014 respectively) | 2,075 | 2,075 | |||
Net income | 69,090 | 69,090 | |||
Share-based compensation | 5,817 | 5,817 | |||
Issuance of common stock for share-based compensation | $ 1 | (1,751) | (1,750) | ||
Issuance of common stock for share-based compensation (in shares) | 113,047 | ||||
Issuance of common stock | $ 42 | 126,188 | 126,230 | ||
Issuance of stock (in shares) | 4,200,000 | ||||
Tax benefit from issuance of common stock for share-based compensation | 539 | 539 | |||
Dividends declared on common stock, $1.73, $1.38 $1.36 per share during the years 2016,2015 and 2014 respectively | (78,574) | (78,574) | |||
Ending balance at Jan. 02, 2016 | $ 580 | 162,568 | (12,696) | 307,233 | 457,685 |
Balance (in shares) at Jan. 02, 2016 | 57,976,744 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Foreign currency translation | (8,180) | (8,180) | |||
Change in pension benefit (net of $917, $1,258 $4,865 of during the years 2016,2015 and 2014 respectively) | 1,512 | 1,512 | |||
Net income | 109,425 | 109,425 | |||
Share-based compensation | 5,798 | 5,798 | |||
Issuance of common stock for share-based compensation | (1,410) | (1,410) | |||
Issuance of common stock for share-based compensation (in shares) | 79,570 | ||||
Issuance of common stock | $ 84 | 331,795 | 331,879 | ||
Issuance of stock (in shares) | 8,350,000 | ||||
Tax benefit from issuance of common stock for share-based compensation | 343 | 343 | |||
Dividends declared on common stock, $1.73, $1.38 $1.36 per share during the years 2016,2015 and 2014 respectively | (111,395) | (111,395) | |||
Ending balance at Dec. 31, 2016 | $ 664 | $ 387,699 | $ (19,364) | $ 416,658 | $ 785,657 |
Balance (in shares) at Dec. 31, 2016 | 66,406,314 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Consolidated Statements of Changes in Stockholders' Equity | |||
Change in pension benefit, taxes | $ 917 | $ 1,258 | $ 4,865 |
Dividends declared on common stock, per share (in dollars per share) | $ 1.73 | $ 1.38 | $ 1.36 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | |
Cash flows from operating activities: | |||
Net income | $ 109,425 | $ 69,090 | $ 40,956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 37,266 | 28,653 | 27,434 |
Amortization of deferred debt financing costs and bond discount | 5,426 | 3,900 | 3,790 |
Deferred income taxes | 56,190 | 29,152 | 13,855 |
Interest accretion on contingent consideration | 432 | ||
Gain on change in fair value of contingent consideration | (8,206) | ||
Impairment of intangible assets | 5,405 | 34,154 | |
Write-off of property, plant, and equipment | 337 | 107 | |
Loss on disposal of inventory | 791 | 4,535 | |
Loss on extinguishment of debt | 2,836 | 0 | 5,748 |
Share-based compensation expense | 5,798 | 5,817 | 2,235 |
Excess tax benefits from share-based compensation | (343) | (539) | (2,356) |
Changes in assets and liabilities, net of effects of businesses acquired: | |||
Trade accounts receivable | (45,763) | (16,927) | 6,638 |
Inventories | 2,396 | 33,243 | (7,672) |
Prepaid expenses and other current assets | 41,929 | (52,879) | (5,097) |
Income tax receivable/payable | (3,658) | 13,622 | (4,652) |
Other assets | (747) | (110) | (642) |
Trade accounts payable | 47,250 | 7,763 | (8,373) |
Accrued expenses | 23,832 | 8,459 | (4,122) |
Other liabilities | 1,291 | (872) | 469 |
Net cash provided by (used in) operating activities | 289,661 | 128,479 | 99,126 |
Cash flows from investing activities: | |||
Capital expenditures | (42,418) | (18,574) | (19,025) |
Payments for acquisition of businesses, net of cash acquired | (438,787) | (873,811) | (154,277) |
Net cash used in investing activities | (481,205) | (892,385) | (173,302) |
Cash flows from financing activities: | |||
Repayments of long-term debt | (150,000) | (18,750) | (138,750) |
Proceeds from issuance of long-term debt | 746,250 | 299,250 | |
Repayments of borrowings under revolving credit facility | (99,000) | (164,000) | (258,500) |
Borrowings under revolving credit facility | 235,000 | 170,000 | 252,500 |
Proceeds from issuance of common stock, net | 331,879 | 126,230 | |
Dividends paid | (100,807) | (76,528) | (72,369) |
Excess tax benefits from share-based compensation | 343 | 539 | 2,356 |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,410) | (1,750) | (4,374) |
Debt financing costs | (14,547) | (8,494) | |
Net cash provided by financing activities | 216,005 | 767,444 | 71,619 |
Effect of exchange rate fluctuations on cash and cash equivalents | (874) | 218 | (60) |
Net increase (decrease) in cash and cash equivalents | 23,587 | 3,756 | (2,617) |
Cash and cash equivalents at beginning of year | 5,246 | 1,490 | 4,107 |
Cash and cash equivalents at end of year | 28,833 | 5,246 | 1,490 |
Supplemental disclosures of cash flow information: | |||
Cash interest payments | 69,755 | 47,231 | 42,642 |
Cash income tax payments | 15,406 | 9,398 | 13,624 |
Non-cash transactions: | |||
Dividends declared and not yet paid | $ 30,879 | 20,292 | $ 18,246 |
Accruals related to purchases of property, plant and equipment | $ 1,660 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Operations | |
Nature of Operations | (1) Nature of Operation Organization and Nature of Operations B&G Foods, Inc. is a holding company whose principal assets are the shares of capital stock of its subsidiaries. Unless the context requires otherwise, references in this report to “B&G Foods,” “our company,” “we,” “us” and “our” refer to B&G Foods, Inc. and its subsidiaries. Our financial statements are presented on a consolidated basis. We operate in a single industry segment and manufacture, sell and distribute a diverse portfolio of high-quality shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Our products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters and other specialty products. Our products are marketed under many recognized brands, including Ac’cent , B&G , B&M , Baker’s Joy , Bear Creek Country Kitchens , Brer Rabbit , Canoleo , Cary’s , Cream of Rice , Cream of Wheat , Devonsheer , Don Pepino , Durkee , Emeril’s , Grandma’s Molasses , Green Giant , JJ Flats , Joan of Arc , Las Palmas , Le Sueur , MacDonald’s , Mama Mary’s , Maple Grove Farms of Vermont , Molly McButter , Mrs. Dash , New York Flatbreads , New York Style , Old London , Original Tings , Ortega , Pirate’s Booty , Polaner , Red Devil , Regina , Sa-són , Sclafani , Smart Puffs , Spice Islands , Spring Tree , Sugar Twin , Tone’s , Trappey’s , TrueNorth , Underwood , Vermont Maid , Victoria , Weber and Wright’s . We also sell and distribute Static Guard , a household product brand . We compete in the retail grocery, foodservice, specialty, private label, club and mass merchandiser channels of distribution. We sell and distribute our products directly and via a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors. Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons/weather or certain other annual events. In general, our sales are higher in the first and fourth quarter. We purchase most of the produce used to make our frozen and shelf-stable canned vegetables, pickles, relishes, peppers, tomatoes and other related specialty items during the months of June through October, and we generally purchase the majority of our maple syrup requirements during the months of April through August. Consequently, our liquidity needs are greatest during these periods. Fiscal Year We utilize a 52 - 53 week fiscal year ending on the Saturday closest to December 31. The fiscal years ended December 31, 2016 (fiscal 2016) and January 2, 2016 (fiscal 2015) contained 52 weeks each and the fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks. Business and Credit Concentrations Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top ten customers accounted for approximately 56.0%, 52.3% and 52.4% of consolidated net sales in fiscal 2016, 2015 and 2014, respectively. Our top ten customers accounted for approximately 53.4%, 53.5% and 51.7% of our consolidated trade accounts receivables as of the end of fiscal 2016, 2015 and 2014, respectively. Other than Wal-Mart, which accounted for 24.1%, 20.4% and 19.1% of our consolidated net sales in fiscal 2016, 2015 and 2014, respectively, no single customer accounted for more than 10.0% of consolidated net sales in fiscal 2016, 2015 or 2014. Other than Wal-Mart, which accounted for 21.2%, 19.3% and 16.7% of our consolidated trade accounts receivables as of the end of fiscal 2016, 2015 and 2014, respectively, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables as of the end of fiscal 2016, 2015 and 2014. As of December 31, 2016, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivable with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Wal-Mart. During fiscal 2016, 2015 and 2014, our sales to foreign countries represented approximately 7.1%, 5.2% and 3.6%, respectively, of net sales. Our foreign sales are primarily to customers in Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) The consolidated financial statements include the accounts of B&G Foods, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current year’s presentation. (b) The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve trade and consumer promotion expenses; allowances for excess, obsolete and unsaleable inventories; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; the determination of the useful life of customer relationship and amortizable trademark intangibles; and the fair value of contingent consideration. Actual results could differ significantly from these estimates and assumptions. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions. (c) We have evaluated subsequent events for disclosure through the date of issuance of the accompanying consolidated financial statements. (d) For purposes of the consolidated statements of cash flows, all highly liquid instruments with maturities of three months or less when acquired are considered to be cash and cash equivalents. (e) Prepaid and other current assets at January 2, 2016, included a $52.6 million receivable related to a transition services agreement with General Mills, Inc. in connection with our Green Giant acquisition. The transition services agreement terminated as of October 2, 2016. See Note 3, “Acquisitions.” (f) Inventories are stated at the lower of cost or market and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on our management’s review of inventories on hand compared to estimated future usage and sales. (g) Property, plant and equipment are stated at cost. Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets, 10 to 30 years for buildings and improvements, 5 to 12 years for machinery and equipment, and 2 to 5 years for office furniture and vehicles. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Expenditures for maintenance, repairs and minor replacements are charged to current operations. Expenditures for major replacements and betterments are capitalized. We capitalize interest on qualifying assets based on our effective interest rate. During fiscal 2016, 2015 and 2014, we capitalized $0.5 million, $0.3 million and $0.3 million, respectively. (2) Summary of Significant Accounting Policies (Continued) (h) Goodwill and unamortizable intangible assets (trademarks) are tested for impairment at least annually and whenever events or circumstances occur indicating that goodwill or unamortizable intangibles might be impaired. We perform the annual impairment tests as of the last day of each fiscal year. The annual goodwill impairment test involves a two-step process. The first step of the impairment test involves comparing our company’s market capitalization with our company’s carrying value, including goodwill. If the carrying value of our company exceeds our market capitalization, we perform the second step of the impairment test to determine the amount of the impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of goodwill with the carrying value and recognizing a loss for the difference. We test our unamortizable intangibles by comparing the fair value with the carrying value and recognize a loss for the difference. We estimate the fair value of our unamortizable intangibles based on discounted cash flows that reflect certain third party market value indicators. Calculating our fair value for these purposes requires significant estimates and assumptions by management. We completed our annual impairment tests for fiscal 2016, 2015 and 2014 with no adjustments to the carrying values of goodwill and unamortizable intangibles. Each annual test confirmed that the market capitalization and fair values of our goodwill and unamortizable intangibles, respectively, exceeded their current carrying values. Customer relationship intangibles and amortizable trademarks are presented at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful lives of 10 to 20 years. Seed technology assets are presented at cost, net of accumulated amortization, and are amortized utilizing a declining balance approach over their estimated useful lives of 5 years. (i) Debt financing costs are capitalized and amortized over the term of the related debt agreements and are included as a reduction of long-term debt. Amortization of deferred debt financing costs for fiscal 2016, 2015 and 2014 was $4.9 million, $3.6 million and $3.6 million, respectively. (j) Long-lived assets, such as property, plant and equipment, and intangibles with estimated useful lives are depreciated or amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Recoverability of assets held for sale is measured by a comparison of the carrying amount of an asset or asset group to their fair value less estimated costs to sell. Estimating future cash flows and calculating the fair value of assets requires significant estimates and assumptions by management. Assets to be disposed of are separately presented in the consolidated balance sheets and are no longer depreciated. (k) Accumulated other comprehensive loss includes foreign currency translation adjustments relating to assets and liabilities located in our foreign subsidiaries and changes in our pension benefits due to the initial adoption and ongoing application of the authoritative accounting literature relating to pensions, net of tax. (2) Summary of Significant Accounting Policies (Continued) (l) Revenues are recognized when products are shipped. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. Shipping and handling costs are included in cost of goods sold. Consideration from a vendor to a retailer is presumed to be a reduction to the selling prices of the vendor’s products and, therefore, is characterized as a reduction of sales when recognized in the vendor’s income statement. As a result, coupon incentives, slotting and promotional expenses are recorded as a reduction of sales. (m) We promote our products with advertising, consumer incentives and trade promotions. These programs include, but are not limited to, discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization and redemption rates. We expense our advertising costs either in the period the advertising first takes place or as incurred. Advertising expenses were approximately $26.0 million, $5.7 million and $5.1 million, for fiscal 2016, 2015 and 2014, respectively. (n) We have defined benefit pension plans covering approximately one third of our employees. Our funding policy is to contribute annually the amount recommended by our actuaries. From time to time, however, we voluntarily contribute greater amounts based on pension asset performance, tax considerations and other relevant factors. (o) We provide compensation benefits in the form of stock options, performance share long-term incentive awards (LTIAs) and common stock to employees and non-employee directors. The cost of share based compensation is recorded at fair value at the date of grant and expensed in our consolidated statement of income over the requisite service period, if any. Performance share LTIAs granted to our executive officers and certain other members of senior management entitle each participant to earn shares of common stock upon the attainment of certain performance goals over the applicable performance period. The recognition of compensation expense for the performance share LTIAs is initially based on the probable outcome of the performance condition based on the fair value of the award on the date of grant and the anticipated number of shares to be awarded on a straight-line basis over the applicable performance period. The fair value of the awards on the date of grant is determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes) reduced by the present value of expected dividends using the risk-free interest-rate as the award holders are not entitled to dividends or dividend equivalents during the vesting period. Our company’s performance against the defined performance goals are re-evaluated on a quarterly basis throughout the applicable performance period and the recognition of compensation expense is adjusted for subsequent changes in the estimated or actual outcome. The cumulative effect of a change in the estimated number of shares of common stock to be issued in respect of performance share awards is recognized as an adjustment to earnings in the period of the revision. The fair value of stock option awards is estimated on the date of grant using the Black-Scholes option pricing model and is recognized in expense over the vesting period of the options using the straight-line method. The Black-Scholes option pricing model requires various assumptions, including the expected volatility of our stock, the expected term of the option, the risk-free interest rate and the expected dividend yield. Expected volatility is based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of grant, have a 10-year term and cliff vest three years from the date of grant. (2) Summary of Significant Accounting Policies (Continued) We recognize compensation expense for only that portion of share based awards that are expected to vest. We utilize historical employee termination behavior to determine our estimated forfeiture rates. If the actual forfeitures differ from those estimated by management, adjustments to compensation expense will be made in future periods. (p) Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities of our company are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. As part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process involves estimating our current tax expenses together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe the recovery is not likely, we establish a valuation allowance. Further, to the extent that we establish a valuation allowance or increase this allowance in a financial accounting period, we include such charge in our tax provision, or reduce our tax benefits in our consolidated statements of operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our deferred tax assets. There are various factors that may cause these tax assumptions to change in the near term, and we may have to record a valuation allowance against our deferred tax assets. We cannot predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes to the U.S. federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our consolidated financial statements when new regulations and legislation are enacted. We recognize the benefit of an uncertain tax position that we have taken or expect to take on our income tax returns we file if it is “more likely than not” that such tax position will be sustained based on its technical merits. (q) Cash dividends, if any, are accrued as a liability on our consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared. (2) Summary of Significant Accounting Policies (Continued) (r) Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance share LTIAs that may be earned as of the beginning of the period using the treasury stock method. Fiscal Fiscal Fiscal 2016 2015 2014 (in thousands, except share and per share data) Net income $ $ $ Weighted average common shares outstanding: Basic Net effect of potentially dilutive share-based compensation awards (1) Diluted Earnings per share: Basic $ $ $ Diluted $ $ $ (1) For fiscal 2016 and 2014, outstanding stock options of 22,692 and 418,158, respectively, were excluded from diluted earnings per share as their effect was antidilutive. (s) In April 2015, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We adopted the provisions of this ASU at the beginning of fiscal 2016 and applied the required changes in accounting principle on a retrospective basis. Accordingly, in our consolidated balance sheet as of January 2, 2016, $28.1 million of unamortized deferred financing costs were reclassified from other assets to long-term debt. The update impacted presentation and disclosure only, and therefore, the adoption of this ASU did not have any impact on our consolidated financial position, results of operations or liquidity. (t) In January 2017, the FASB issued a new ASU that simplifies the subsequent measurement of goodwill, including the elimination of the second step from the goodwill impairment test. The update is effective for annual or any interim impairment tests in fiscal years beginning after December 15, 2019. The adoption of this ASU will not have any impact on our consolidated financial position, results of operations or liquidity. In fiscal 2016, the FASB issued several new ASUs that provide for improvements to the revenue recognition accounting standard, including principal versus agent considerations, identifying performance obligations, licensing, narrow-scope improvements and practical expedients. The updates are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In preparation for our adoption of the new standard in our fiscal year ending December 29, 2018, we are obtaining representative samples of contracts and other forms of agreements with our customers in the U.S. and international locations and plan to evaluate the provisions contained therein in light of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract—an agreement between two or more parties that creates legally enforceable rights and obligations (2) Summary of Significant Accounting Policies (Continued) exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. We are also evaluating the impact of the new standard on certain common practices currently employed by us and by other manufacturers of consumer products, such as slotting fees, co-operative advertising, rebates and other pricing allowances, merchandising funds and consumer coupons. We have not yet determined the impact of the new standard on our financial statements or whether we will adopt on a prospective or retrospective basis in the first quarter of our fiscal year ending December 29, 2018. In March 2016, the FASB issued a new ASU that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires that excess tax benefits (which represent the excess of actual tax benefits received at the date of vesting or settlement over the benefits recognized over the vesting period or upon issuance of share-based payments) and tax deficiencies (which represent the amount by which actual tax benefits received at the date of vesting or settlement is lower than the benefits recognized over the vesting period or upon issuance of share-based payments) be recorded in the income statement as a reduction of income taxes when the awards vest or are settled. The new guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than as a financing activity. The ASU is effective for the first quarter of our fiscal year ending December 30, 2017. We expect that the adoption of this new guidance in fiscal 2017 will reduce our reported income taxes and will increase cash flows from operating activities; however, the amounts of that reduction/increase is dependent upon the underlying vesting or exercise activity and related future stock prices. In February 2016, the FASB issued a new ASU that requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current guidance. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the impact of this new standard. In November 2015, the FASB issued a new ASU that requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The ASU is effective for the first quarter of our fiscal year ending December 30, 2017. The adoption of this new guidance in fiscal 2017 will retrospectively reclassify all deferred tax assets and liabilities as noncurrent in our consolidated balance sheet. The adoption of this ASU will not have any impact on our results of operations or liquidity. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Acquisitions. | |
Acquisitions | (3) Acquisitions On December 2, 2016, we acquired Victoria Fine Foods, LLC, and a related entity, from Huron Capital Partners and certain other sellers for a purchase price of $71.9 million in cash, subject to a customary post-closing working capital adjustment. We refer to this acquisition as the “ Victoria acquisition.” On November 21, 2016, we completed the acquisition of the spices & seasonings business of ACH Food Companies, Inc. for a purchase price of $366.9 million. We refer to this acquisition as the “spices & seasonings acquisition.” In connection with the acquisition, as of December 31, 2016, we had payables related to a transition services agreement with ACH Food Companies of $12.6 million included in accrued expenses in the accompanying consolidated balance sheets. On November 2, 2015, we completed the acquisition of the Green Giant and Le Sueur brands from General Mills, Inc. for a purchase price of $765 million in cash plus an inventory adjustment at closing of $57.8 million. We refer to this acquisition as the “ Green Giant acquisition.” In connection with the acquisition, as of January 2, 2016, we had receivables related to a transition services agreement with General Mills of $52.6 million included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. On July 10, 2015, we acquired Spartan Foods of America, Inc., and related entities, including the Mama Mary’s brand, from Linsalata Capital Partners and certain other sellers for a purchase price of $51.0 million in cash. We refer to this acquisition as the “ Mama Mary’s acquisition.” (3) Acquisitions (Continued) On April 23, 2014, we completed the acquisition of Specialty Brands of America, Inc. and related entities, including the Bear Creek Country Kitchens, Spring Tree, Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands, from affiliates of American Capital, Ltd. and certain individual sellers for a purchase price of $154.3 million in cash. We refer to this acquisition as the “Specialty Brands acquisition.” We have accounted for each of these acquisitions using the acquisition method of accounting and, accordingly, have included the assets acquired, liabilities assumed and results of operations in our consolidated financial statements from the respective date of acquisition. The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. Unamortizable trademarks are deemed to have an indefinite useful life and are not amortized. Customer relationship intangibles and amortizable trademarks acquired are amortized over 10 to 20 years. Seed technology assets acquired in the Green Giant acquisition are amortized over a period of 5 years. Goodwill and other intangible assets, except in the case of the Specialty Brands, Mama Mary’s and Victoria acquisitions, are deductible for income tax purposes. Inventory has been recorded at estimated selling price less costs of disposal and a reasonable selling profit and the property, plant and equipment and other intangible assets (including trademarks, customer relationships and other intangibles) acquired have been recorded at fair value as determined by our management with the assistance of a third-party valuation specialist. See Note 6, “Goodwill and Other Intangible Assets.” The following table sets forth the preliminary allocation of the Victoria acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during the fourth quarter of fiscal 2017. Victoria Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Preliminary Allocation: Trademarks—unamortizable intangible assets Goodwill Property, plant and equipment Inventory Customer relationship intangibles—amortizable intangible assets Long-term deferred income tax liabilities, net Other working capital Total $ (3) Acquisitions (Continued) The following table sets forth the preliminary allocation of the spices & seasonings acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during the fourth quarter of fiscal 2017. Spices & Seasonings Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Preliminary Allocation: Goodwill Customer relationship intangibles—amortizable intangible assets Trademarks—unamortizable intangible assets Property, plant and equipment Inventory Other liabilities (1) Other working capital Total $ (1) In connection with the spices & seasonings acquisition, we agreed to establish a defined benefit plan for certain employees transferred to B&G Foods and certain former employees of the acquired spices & seasonings business. We also agreed to assume certain liabilities relating to the underfunded status of the former plan that such employees participated in prior to the acquisition. At December 31, 2016, we recognized $17.5 million in “other liabilities” in the accompanying consolidated balance sheet to reflect our obligations with respect to the underfunded status of the defined benefit plan assets and liabilities transferred to us. (3) Acquisitions (Continued) The following table sets forth the allocation of the Green Giant acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. During the third and fourth quarters of 2016, we recorded purchase price allocation adjustments by increasing goodwill and decreasing inventory by $7.2 million due to a change in our valuation of inventory as of the date of acquisition. During the fourth quarter of 2016, we recorded a purchase price allocation adjustment by increasing goodwill by $3.2 million and decreasing other working capital by $2.6 million due to a change in our estimated accrued expenses as of the date of acquisition and decreasing property, plant and equipment by $0.6 million due to a change our valuation of property, plant and equipment as of the date of acquisition. Green Giant Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Trademarks—unamortizable intangible assets Inventory Goodwill Customer relationship intangibles—amortizable intangible assets Property, plant and equipment Seed technology intangibles—amortizable intangible assets Other working capital Total $ The following table sets forth the allocation of the Mama Mary’s acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. During the second quarter of 2016, we recorded a purchase price allocation adjustment by decreasing goodwill and increasing other working capital by $0.6 million due to a change in our estimated accrued expenses as of the date of acquisition. Mama Mary’s Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Trademarks—unamortizable intangible assets Goodwill Customer relationship intangibles—amortizable intangible assets Property, plant and equipment Short-term deferred income tax assets Other working capital Long-term deferred income tax liabilities, net Total $ (3) Acquisitions (Continued) The following table sets forth the allocation of the Specialty Brands acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. During the first two quarters of fiscal 2015, we recorded a purchase price allocation adjustment by increasing goodwill and decreasing other working capital by $0.2 million due to a change in our valuation of inventory as of the date of acquisition. Specialty Brands Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Income tax receivable $ Short-term deferred income tax assets Trademarks—unamortizable intangible assets Goodwill Customer relationship intangibles—amortizable intangible assets Other working capital Long-term deferred income tax liabilities, net Total $ Unaudited Pro Forma Summary of Operations The following pro forma summary of operations presents our operations as if the spices & seasonings acquisition had occurred as of the beginning of fiscal 2015 and as if the Green Giant acquisition and Specialty Brands acquisitions had occurred as of the beginning of fiscal 2014. In addition to including the results of operations of these acquisitions, the pro forma information gives effect to the interest on additional borrowings, the amortization of trademark, customer relationship and seed technology intangibles, and the issuance of shares of common stock. On an actual basis, the spices & seasonings business and Green Giant contributed $28.2 million and $506.7 million, respectively, of our aggregate $1,391.3 million of consolidated net sales for fiscal 2016. On an actual basis, Green Giant contributed $106.2 million of our aggregate $966.4 million of consolidated net sales for fiscal 2015 and Specialty Brands contributed $65.5 million of our aggregate net sales for fiscal 2014. Fiscal 2016 Fiscal 2015 Fiscal 2014 (dollars in thousands, except per share data) Net sales $ $ $ Net income (loss) (1) $ $ $ Basic earnings (loss) per share (1) $ $ $ Diluted earnings (loss) per share (1) $ $ $ (1) During the second quarter of 2015, General Mills recorded a $260 million impairment charge related to the Green Giant brand intangible asset. The pro forma information presented above does not purport to be indicative of the results that actually would have been attained had the spices & seasonings acquisition had occurred as of the beginning of fiscal 2015, and Green Giant and Specialty Brands acquisitions occurred as of the beginning of fiscal 2014, and is not intended to be a projection of future results. (3) Acquisitions (Continued) Neither the Victoria nor the Mama Mary’s acquisition was material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | (4) Inventories consist of the following, as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Raw materials and packaging $ $ Work-in-process Finished goods Total $ $ |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, net. | |
Property, Plant and Equipment, net | (5) Property, plant and equipment, net, consists of the following as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Land $ $ Buildings and improvements Machinery and equipment Office furniture and vehicles Construction-in-progress Less: accumulated depreciation Total $ $ Depreciation expense was $23.5 million, $17.4 million and $14.7 million for fiscal 2016, 2015 and 2014, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (6) The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands): December 31, 2016 January 2, 2016 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Amortizable Intangible Assets Trademarks $ $ $ $ $ $ Customer relationships Seed technology $ $ $ $ $ $ Unamortizable Intangible Assets Goodwill $ $ Trademarks $ $ Note: The increases in the carrying amounts of unamortizable intangible assets during fiscal 2016 are attributable to the spices & seasonings and Victoria acquisitions and purchase accounting adjustments related to the Green Giant acquisition, partially offset by the impairment of the Rickland Orchards intangibles and purchase accounting adjustments related to the Mama Mary’s acquisition. (6) During fiscal 2016, 2015 and 2014, we amortized $13.8 million, $11.3 million and $12.7 million, respectively, of the amortizable intangible assets. We expect to recognize $17.6 million, $17.3 million, $17.2 million, $17.1 million and $17.1 million of amortization expense in fiscal years 2017, 2018, 2019, 2020 and 2021, respectively. See Note 3, “Acquisitions.” Rickland Orchards. During the second quarter of 2016, we discontinued the Rickland Orchards brand because there was not sufficient demand to warrant continued production. Accordingly, we wrote off the related intangible assets and recorded non-cash impairment charges to amortizable trademarks and customer relationship intangibles of $4.5 million and $0.9 million, respectively, which are recorded in “Impairment of intangible assets” in the accompanying consolidated statement of operations. We also recorded a charge to cost of goods sold of approximately $0.8 million in connection with the write-off of raw material and finished goods inventory for the Rickland Orchards brand. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long-Term Debt | |
Long-Term Debt | (7) Long-term debt consists of the following, as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Revolving credit loans: Outstanding principal $ $ Unamortized deferred financing costs Revolving credit loans, net Tranche A term loans due 2019: Outstanding principal Unamortized deferred financing costs Unamortized discount Tranche A term loans due 2019, net Tranche B term loans due 2022: Outstanding principal Unamortized deferred financing costs Unamortized discount Tranche B term loans due 2022, net 4.625% senior notes due 2021: Outstanding principal Unamortized deferred financing costs 4.625% senior notes due 2021, net Total long-term debt, net of unamortized financing costs and discount Current portion of long-term debt Long-term debt, net of unamortized financing costs and discount and excluding current portion $ $ Senior Secured Credit Agreement. On October 2, 2015, we amended and restated our existing senior secured credit agreement dated as of June 5, 2014. The amendment provided for an incremental tranche B term loan facility to be made available under the credit agreement to finance a portion of the purchase price for the Green Giant acquisition. (7) On November 2, 2015, we funded the purchase price, inventory adjustment at closing, initial working capital requirements and related transaction fees and expenses for the Green Giant acquisition with additional revolving loans and $750.0 million of tranche B term loans under the credit agreement. See Note 3, “Acquisitions.” During the first quarter of 2016, we made an optional prepayment of $40.1 million aggregate principal amount of our tranche A term loans and $109.9 million aggregate principal amount of our tranche B term loans using the proceeds of our March 2016 common stock offering. See Note 11, “Capital Stock.” At December 31, 2016, $233.6 million of tranche A term loans, $640.1 million of tranche B term loans and $176.0 million of revolving loans were outstanding under our credit agreement. At December 31, 2016, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.0 million, was $322.0 million. Proceeds of the revolving credit facility may be used for general corporate purposes, including acquisitions of targets in the same or a similar line of business as our company, subject to specified criteria. We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility. The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans. The revolving credit facility matures on June 5, 2019. The tranche A term loans are subject to principal amortization. $10.5 million is due and payable in fiscal 2017 and $76.9 million is due and payable in fiscal 2018. The balance of all borrowings under the tranche A term loan facility, or $146.2 million, is due and payable at maturity on June 5, 2019. The entire $640.1 million principal amount of tranche B term loans outstanding as of December 31, 2016, are due and payable at maturity on November 2, 2022. We may prepay the term loans or permanently reduce the revolving credit facility commitment under the credit agreement at any time without premium or penalty (other than customary “breakage” costs with respect to the early termination of LIBOR loans). Subject to certain exceptions, the credit agreement provides for mandatory prepayment upon certain asset dispositions or casualty events and issuances of indebtedness. Interest under the revolving credit facility, including any outstanding letters of credit, and under the tranche A term loan facility, is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin ranging from 0.50% to 1.00%, and LIBOR plus an applicable margin ranging from 1.50% to 2.00%, in each case depending on our consolidated leverage ratio. At December 31, 2016, the revolving credit facility and the tranche A term loan interest rates were approximately 2.74% and 2.76%, respectively. Interest under the tranche B term loan facility is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin of 2.00%, and LIBOR plus an applicable margin of 3.00%. At December 31, 2016, the tranche B term loan interest rate was approximately 3.75%. Our obligations under the credit agreement are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. The credit agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. The credit agreement also contains certain financial maintenance covenants, which, among other things, specify a maximum consolidated leverage ratio and a minimum interest coverage ratio, each ratio as defined in the credit agreement. Our consolidated leverage ratio (defined as the ratio of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA for such period), may not exceed 6.75 to 1.00 through the fourth quarter of 2016; and 6.50 to 1.00 for the first quarter of 2017 and thereafter. We are also required to maintain a consolidated interest coverage ratio of at least 1.75 to 1.00 as of the last day of any period of four consecutive fiscal (7) quarters. As of December 31, 2016, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement. The credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the credit agreement, and potentially other lenders, provide unlimited additional amounts of term loans or revolving loans or both on terms substantially consistent with those provided under the credit agreement. Among other things, the utilization of the incremental facility is conditioned on our ability to meet a maximum senior secured leverage ratio of 4.00 to 1.00, and a sufficient number of lenders or new lenders agreeing to participate in the facility. 4.625% S enior Notes due 2021. On June 4, 2013, we issued $700.0 million aggregate principal amount of 4.625% senior notes due 2021 at a price to the public of 100% of their face value. Interest on the senior notes is payable on June 1 and December 1 of each year. The senior notes will mature on June 1, 2021, unless earlier retired or redeemed. We may redeem some or all of the senior notes at a redemption price of 103.469% beginning June 1, 2016 and thereafter at prices declining annually to 100% on or after June 1, 2019, in each case plus accrued and unpaid interest to the date of redemption. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the senior notes at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase. We may also, from time to time, seek to retire the senior notes through cash repurchases of the senior notes and/or exchanges of the senior notes for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Our obligations under the senior notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The senior notes and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the senior notes. The indenture contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of December 31, 2016, we were in compliance with all of the covenants in the indenture governing the senior notes. Subsidiary Guarantees. We have no assets or operations independent of our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fully and unconditionally guarantee our long-term debt. There are no significant restrictions on our ability and the ability of our subsidiaries to obtain funds from our respective subsidiaries by dividend or loan. See Note 17, “Guarantor and Non-Guarantor Financial Information.” Deferred Debt Financing Costs . During fiscal 2016, we did not capitalize debt financings costs. During fiscal 2015, we capitalized $14.5 million of debt financing costs relating to the tranche B term loans, which are being amortized over the seven year scheduled term of the tranche B term loans. During fiscal 2014, we also capitalized $5.6 million and $2.9 million of debt financing costs relating to the revolving credit facility and tranche A term loans, respectively, which are being amortized over the five year scheduled term of the revolving credit facility and tranche A term loans. (7) Loss on Extinguishment of Debt . During the first quarter of 2016, we incurred a loss on extinguishment of debt in connection with the repayment of $40.1 million aggregate principal amount of our tranche A term loans and $109.9 million aggregate principal amount of our tranche B term loans. The loss on extinguishment includes the write-off of deferred debt financing costs of $2.2 million and the write-off of unamortized discount of $0.6 million. During fiscal 2015, we did not have any loss on extinguishment of debt. Loss on extinguishment of debt for fiscal 2014 includes costs in connection with the termination of our prior credit agreement and the repayment of all outstanding obligations thereunder. The loss on extinguishment includes the write-off of deferred debt financing costs of $5.4 million, and the write-off of unamortized discount of $0.3 million. Contractual Maturities . As of December 31, 2016, the aggregate contractual maturities of long-term debt are as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 — 2021 Thereafter Total $ Accrued Interest . At December 31, 2016 and January 2, 2016, accrued interest of $5.0 million and $5.7 million, respectively, is included in accrued expenses in the accompanying consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | (8) The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under generally accepted accounting principles, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value. Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature. The three levels are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly. Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses, income tax payable and dividends payable are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. (8) The carrying values and fair values of our revolving credit loans, term loans and senior notes as of December 31, 2016 and January 2, 2016 are as follows (in thousands): December 31, 2016 January 2, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans (1) (1) Tranche A term loans due 2019 (2) (1) (2) (1) Tranche B term loans due 2022 (3) (1) (3) (1) 4.625% senior notes due 2021 (4) (4) (1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active. (2) The carrying values of the tranche A term loans are net of discount. At December 31, 2016 and January 2, 2016, the face amounts of the tranche A term loans were $233.6 million and $273.8 million, respectively. (3) The carrying values of the tranche B term loans are net of discount. At December 31, 2016 and January 2, 2016, the face amounts of the tranche B term loans were $640.1 million and $750.0 million, respectively. (4) Fair values are estimated based on quoted market prices. The following table summarizes the Level 3 activity during fiscal 2016, 2015 and 2014 (in thousands): December 31, January 2, January 3, 2016 2016 2015 Balance at beginning of year $ — $ — $ Contingent consideration accretion expense — — Gain on change in fair value of contingent consideration — — Balance at end of quarter $ — $ — $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Loss. | |
Accumulated Other Comprehensive Loss | (9) The reclassifications from accumulated other comprehensive loss (AOCL) for fiscal 2016, 2015 and 2014 are as follows (in thousands): Amount Reclassified From AOCL Affected Line Item in the December 31, January 2, January 3, Statement Where Net Income Details about AOCL Components 2016 2016 2015 (loss) is Presented Defined benefit pension plan items Amortization of unrecognized prior service cost $ $ $ See (1) below Amortization of unrecognized loss — See (1) below Total before tax Income tax expense Total reclassification $ $ $ Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 12, “Pension Benefits,” for additional information. (9) Changes in AOCL for fiscal 2016, 2015 and 2014 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Balance at December 28, 2013 $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at January 3, 2015 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at January 2, 2016 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at December 31, 2016 $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | (10) The components of income before income tax expense consist of the following (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 U.S. $ $ $ Foreign Total $ $ $ Income tax expense (benefit) consists of the following (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 Current: Federal $ $ $ State Foreign Subtotal Deferred: Federal State Foreign — Subtotal Total $ $ $ (10) Income tax expense differs from the expected income tax expense (computed by applying the U.S. federal income tax rate of 35% for fiscal years 2016, 2015 and 2014 to income before income tax expense) as a result of the following: Fiscal 2016 Fiscal 2015 Fiscal 2014 Expected tax expense % % % Increase (decrease): State income taxes, net of federal income tax benefit Impact on deferred taxes from changes in state tax rates — Foreign income taxes — — Permanent differences — Foreign tax credit — Other — Total % % % In fiscal 2016, 2015 and 2014, changes in state apportionments or state tax laws impacted our blended state rate, resulting in a tax expense in fiscal 2016 and fiscal 2015 of $1.8 million and $7.2 million, respectively, and a tax benefit in fiscal 2014 of $0.1 million. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands): December 31, January 2, 2016 2016 Deferred tax assets: Accounts receivable, principally due to allowance $ $ Inventories, principally due to additional costs capitalized for tax purposes Accruals and other liabilities Net operating loss and tax credit carry forwards Total gross deferred tax assets Deferred tax liabilities: Plant and equipment Goodwill and other intangible assets Prepaid expenses Total gross deferred tax liabilities Net deferred tax liability $ $ In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income and reversal of deferred tax liabilities over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences, at December 31, 2016. The amount of the deferred tax assets considered realizable, however, could be (10) reduced in the near term if estimates of future taxable income during future periods are reduced. The valuation allowance at December 31, 2016 and January 2, 2016 was $0. At December 31, 2016 we had intangibles of $1,288.0 million for tax purposes, which are amortizable through 2031. We operate in multiple taxing jurisdictions within the United States, Canada and Mexico and from time to time face audits from various tax authorities regarding the deductibility of certain expenses, state income tax nexus, intercompany transactions, transfer pricing and other matters. In August 2016, our company received notice that the IRS intends to conduct an audit of our 2014 tax year. During the third and fourth quarter of 2016, we provided documents and information to the IRS in response to its questions. Although the final resolution of the audit is uncertain, we believe that the ultimate disposition will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Although we do not believe that we are otherwise currently under examination in any of our major tax jurisdictions, we remain subject to examination in all of our tax jurisdictions until the applicable statutes of limitations expire. As of December 31, 2016, a summary of the tax years that remain subject to examination in our major tax jurisdictions are: United States—Federal 2013 and forward United States—States 2012 and forward Canada 2012 and forward Mexico 2015 and forward As of December 31, 2016, we do not have any reserves for uncertain tax positions. Our policy is to classify interest and penalties that result from any income tax uncertainties as income tax expense. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2016 | |
Capital Stock | |
Capital Stock | (11) Voting Rights. The holders of our common stock are entitled to one vote per share with respect to each matter on which the holders of our common stock are entitled to vote. The holders of our common stock are not entitled to cumulate their votes in the election of our directors. Dividends. The holders of our common stock are entitled to receive dividends, if any, as they may be lawfully declared from time to time by our board of directors, subject to any preferential rights of holders of any outstanding shares of preferred stock. In the event of any liquidation, dissolution or winding up of our company, common stockholders are entitled to share ratably in our assets available for distribution to the stockholders, subject to the prior rights of holders of any outstanding preferred stock. See Note 16, “Quarterly Financial Data (unaudited),” for dividends declared for each quarter of fiscal 2016 and 2015. Additional Issuance of Our Authorized Common Stock and Preferred Stock. Additional shares of our authorized common stock and preferred stock may be issued, as determined by our board of directors from time to time, without approval of holders of our common stock, except as may be required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Our board of directors has the authority by resolution to determine and fix, with respect to each series of preferred stock prior to the issuance of any shares of the series to which such resolution relates, the designations, powers, preferences and rights of the shares of preferred stock of such series and any qualifications, limitations or restrictions thereof. Stock Repurchases . We did not repurchase any shares of common stock during fiscal 2016, 2015 or 2014. (11) August 2016 Common Stock Offering. On August 12, 2016, we completed an underwritten public offering of 3,750,000 shares of our common stock at a price to the public of $49.00 per share. The proceeds of the offering were $179.9 million, after deducting underwriting discounts and commissions and other offering expenses. The offering was made by means of a prospectus and related prospectus supplement included as part of a new shelf registration statement filed with the SEC. We used the net proceeds of the offering to fund a portion of the purchase price for the spices & seasonings acquisition. See Note 3, “Acquisitions.” March 2016 Common Stock Offering . On March 15, 2016, we completed an underwritten public offering of 4,600,000 shares of our common stock at a price to the public of $33.55 per share. The proceeds of the offering were $152.0 million, after deducting underwriting discounts and commissions and other offering expenses. The offering was made by means of a prospectus and related prospectus supplement included as part of an effective shelf registration statement previously filed with the SEC. We used the net proceeds of the offering to repay a portion of our long-term debt. See Note 7, “Long-Term Debt.” May 2015 Common Stock Offering. In May 2015, we completed an underwritten public offering of 4,200,000 shares of our common stock at a price to the public of $30.60 per share. The proceeds of the offering were approximately $126.2 million, after deducting underwriting discounts and commissions and other offering expenses. The offering was made by means of a prospectus and related prospectus supplement included as part of an effective shelf registration statement previously filed with the SEC. We used the net proceeds of the offering to repay a portion of our long-term debt, to pay the purchase price and related transaction costs for the Mama Mary’s acquisition and for general corporate purposes. See Note 3, “Acquisitions.” |
Pension Benefits
Pension Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Pension Benefits | |
Pension Benefits | (12) As of December 31, 2016, we had four defined benefit pension plans covering approximately one third of our employees. The benefits are based on years of service and the employee’s compensation, as defined. (12) The following table sets forth our defined benefit pension plans’ benefit obligation, fair value of plan assets and funded status recognized in the consolidated balance sheets. We used December 31, 2016 and January 2, 2016 measurement dates for fiscal 2016 and 2015, respectively, to calculate end of year benefit obligations, fair value of plan assets and annual net periodic benefit cost (in thousands): December 31, January 2, 2016 2016 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Actuarial (gain) loss Service cost Interest cost Benefits paid Curtailments — Projected benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual gain on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year Net amount recognized: Other assets $ $ Other long-term liabilities — Funded status at the end of the year $ $ Amount recognized in accumulated other comprehensive loss consists of: Prior service cost $ $ Actuarial loss Deferred taxes Accumulated other comprehensive loss $ $ The accumulated benefit obligations of the three plans were $64.0 million and $59.6 million at December 31, 2016 and January 2, 2016, respectively. The following information is presented for those plans with an accumulated benefit obligation in excess of plan assets (in thousands): December 31, January 2, 2016 2016 Accumulated benefit obligation $ — $ Fair value of plan assets $ — $ The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in fiscal 2017 are as follows (in thousands): Prior service cost $ Actuarial loss $ (12) December 31, January 2, 2016 2016 Weighted-average assumptions: Discount rate % % Rate of compensation increase % % Expected long-term rate of return % % The discount rate used to determine year-end fiscal 2016 and fiscal 2015 pension benefit obligations was derived by matching the plans’ expected future cash flows to the corresponding yields from the Citigroup Pension Discount Curve. This yield curve has been constructed to represent the available yields on high-quality fixed-income investments across a broad range of future maturities. The overall expected long-term rate of return on plan assets assumption is based upon a building-block method, whereby the expected rate of return on each asset class is broken down into the following components: (1) inflation; (2) the real risk-free rate of return (i.e., the long-term estimate of future returns on default-free U.S. government securities); and (3) the risk premium for each asset class (i.e., the expected return in excess of the risk-free rate). All three components are based primarily on historical data, with modest adjustments to take into account additional relevant information that is currently available. For the inflation and risk-free return components, the most significant additional information is that provided by the market for nominal and inflation-indexed U.S. Treasury securities. That market provides implied forecasts of both the inflation rate and risk-free rate for the period over which currently available securities mature. The historical data on risk premiums for each asset class is adjusted to reflect any systemic changes that have occurred in the relevant markets; e.g., the higher current valuations for equities, as a multiple of earnings, relative to the longer-term average for such valuations. Net periodic pension cost includes the following components (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 Service cost—benefits earned during the period $ $ $ Interest cost on projected benefit obligation Expected return on plan assets Amortization of unrecognized prior service cost Amortization of unrecognized loss — Net periodic pension cost $ $ $ The asset allocation for our pension plans at the end of fiscal 2016 and fiscal 2015, and the target allocation for fiscal 2016, by asset category, follows. (12) Our pension plan assets are managed by outside investment managers; assets are rebalanced at the end of each quarter. Our investment strategy with respect to pension assets is to maximize return while protecting principal. The investment manager has the flexibility to adjust the asset allocation and move funds to the asset class that offers the most opportunity for investment returns. Percentage of Plan Assets at Year End Target December 31, January 2, Asset Category Allocation 2016 2016 Equity securities % % % Fixed income securities % % % Other — % % Total % % % The general investment objective of each of the pension plans is to grow the plan assets in relation to the plan liabilities while prudently managing the risk of a decrease in the plan’s assets relative to those liabilities. To meet this objective, our management has adopted the above target allocations that it reconsiders from time to time as circumstances change. The actual plan asset allocations may be within a range around these targets. The actual asset allocations are reviewed and rebalanced on a periodic basis. The fair values of our pension plan assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 8, “Fair Value Measurements” follow (in thousands): December 31, 2016 January 2, 2016 Level 1 Levels 2 & 3 Level 1 Levels 2 & 3 Asset Category Cash $ $ — $ $ — Equity securities: U.S. mutual funds — — Foreign mutual funds — — U.S. common stocks — — Foreign common stocks — — Fixed income securities: U.S. mutual funds — — Total $ $ — $ $ — The investment portfolio contains a diversified blend of common stocks, bonds, cash equivalents and other investments, which may reflect varying rates of return. The investments are further diversified within each asset classification. The portfolio diversification provides protection against a single security or class of securities having a disproportionate impact on aggregate performance. Of the $12.6 million of U.S. common stocks in the investment portfolio at the end of fiscal 2016, $7.2 million was invested in B&G Foods’ common stock. Of the $15.7 million of U.S. common stocks in the investment portfolio at the end of fiscal 2015, $5.8 million was invested in B&G Foods’ common stock. (12) Information about the expected cash flows for the pension plan follows (in thousands): Pension Payments Benefit payments: 2017 $ 2018 2019 2020 2021 2022 to 2026 We currently anticipate making contributions of approximately $3.5 million to our pension plans in fiscal 2017. We also sponsor defined contribution plans covering substantially all of our employees. Employees may contribute to these plans and these contributions are matched by us at varying amounts. Contributions for the matching component of these plans amounted to $1.1 million for fiscal 2016 and $1.0 million for each of fiscal 2015 and 2014. Multi-Employer Defined Benefit Pension Plan . We also contribute to the Bakery and Confectionery Union and Industry International Pension Fund (EIN 52-6118572, Plan No. 001), a multi-employer defined benefit pension plan, sponsored by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM). The plan provides multiple plan benefits with corresponding contribution rates that are collectively bargained between participating employers and their affiliated BCTGM local unions. We were notified that for the plan year beginning January 1, 2012, the plan was in critical status and classified in the Red Zone. As of the date of the accompanying audited consolidated financial statements, the plan remains in critical status. The law requires that all contributing employers pay to the plan a surcharge to help correct the plan’s financial situation. The amount of the surcharge is equal to a percentage of the amount an employer is otherwise required to contribute to the plan under the applicable collective bargaining agreement. During the second quarter of 2015, we agreed to a collective bargaining agreement that, among other things, implements a rehabilitation plan. As a result, our contributions to the plan are expected to increase by at least 5.0% per year. B&G Foods made contributions to the plan of $0.8 million, $0.8 million and $1.0 million, in fiscal 2016, 2015 and 2014, respectively. In each of fiscal 2016, 2015 and 2014, we paid less than $0.1 million in surcharges and expect to pay surcharges of less than $0.1 million in fiscal 2017 assuming consistent hours are worked. These contributions represented less than five percent of total contributions made to the plan. Spices & Seasonings Acquisition. In connection with the spices & seasonings acquisition, we agreed to establish a defined benefit plan for certain employees transferred to us and certain former employees of the acquired spices & seasonings business. We also agreed to assume certain liabilities relating to the underfunded status of the former plan that such employees participated in prior to the acquisition. At December 31, 2016, we recognized $17.5 million in “other liabilities” in the accompanying consolidated balance sheet to reflect our obligations with respect to the underfunded status of the defined benefit plan assets and liabilities transferred to us. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | (13) Operating Leases . We have several noncancelable operating leases, primarily for our corporate headquarters, certain of our manufacturing facilities, warehouses, transportation equipment and machinery. These leases generally require us to pay all executory costs such as maintenance, taxes and insurance. Total rental expense for our operating leases was $9.1 million, $8.0 million and $7.3 million, for fiscal 2016, 2015 and 2014, respectively. As of December 31, 2016, future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) for the periods set forth below were as follows (in thousands): Fiscal year ending: 2017 $ 2018 2019 2020 2021 Thereafter Total $ Legal Proceedings. We are from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving product liability claims, product labeling claims, worker’s compensation and other employee claims, and tort and other general liability claims, as well as trademark, copyright, patent infringement and related claims and legal actions. While we cannot predict with certainty the results of these claims and legal actions in which we are currently or in the future may be involved, we do not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on our consolidated financial position, results of operations or liquidity. Environmental. We are subject to environmental laws and regulations in the normal course of business. We did not make any material expenditures during fiscal 2016, 2015 or 2014 in order to comply with environmental laws and regulations. Based on our experience to date, management believes that the future cost of compliance with existing environmental laws and regulations (and liability for any known environmental conditions) will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims. Collective Bargaining Agreements. As of December 31, 2016, approximately 1,573 of our 2,590 employees, or 60%, were covered by collective bargaining agreements, of which approximately 80 were covered by a collective bargaining agreement expiring within the next 12 months. Our collective bargaining agreement with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, AFL-CIO, Local No. 334 that covers certain employees at our Portland, Maine manufacturing facility is scheduled to expire on April 29, 2017. We began negotiations for a new collective bargaining agreement during the first quarter of 2017. While we believe that our relations with our union employees are good, we cannot be certain that we will be able to negotiate a new collective bargaining agreement for the Portland, Maine manufacturing facility on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect the outcome of these negotiations to have a material adverse effect on our business, financial condition or results of operations. None of our other collective bargaining agreements is scheduled to expire within one year. (13) Severance and Change of Control Agreements. We have employment agreements with each of our seven executive officers. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain circumstances, including termination by us without cause (as defined in the agreements) or as a result of the employee’s death or disability, or termination by us or a deemed termination upon a change of control (as defined in the agreements). Severance benefits generally include payments for salary continuation, continuation of health care and insurance benefits, present value of additional pension credits and, in the case of a change of control, accelerated vesting under compensation plans and, in certain cases, potential gross up payments for excise tax liability. Ortega and Las Palmas Recall . On November 14, 2014, we announced a voluntary recall for certain Ortega and Las Palmas products after learning that one or more of the spice ingredients purchased from a third party supplier contained peanuts and almonds, allergens that are not declared on the products’ ingredient statements. A significant majority of the costs of this recall were incurred in the fourth quarter of 2014. The cost impact of this recall during fiscal 2015 was $1.9 million, of which $1.2 million was recorded as a decrease in net sales related to customer refunds; $0.5 million was recorded as an increase in cost of goods sold primarily related to costs associated with product retrieval, destruction charges and customer fees; and $0.2 million was recorded as an increase in selling, general, and administrative expenses related to administrative costs. The cost impact of this recall during fiscal 2014 (not including lost sales during the period of time production and distribution of the affected products were suspended), net of insurance recoveries of $5.0 million (received in fiscal 2015), was $12.8 million, of which $4.1 million was recorded as a decrease in net sales related to customer refunds; $8.2 million was recorded as an increase in cost of goods sold primarily related to costs associated with product retrieval, destruction charges and customer fees; and $0.5 million was recorded as an increase in selling, general, and administrative expenses related to administrative costs The charges we recorded are based upon costs incurred to date. There was no cost impact of this recall during fiscal 2016, and we do not expect future expenses, if any, to be material. During fiscal 2015, we recovered $5.0 million of insurance proceeds. |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2016 | |
Incentive Plans | |
Incentive Plans | (14) Annual Bonus Plan. Annually, our board of directors establishes a bonus plan that provides for cash awards to be made to our executive officers and other senior managers upon our company’s attainment of pre-set annual financial objectives and individual performance. Awards are normally paid in cash in a lump sum following the close of each plan year. At December 31, 2016 and January 2, 2016, accrued expenses in the accompanying consolidated balance sheets include an accrual for the annual bonus plan of $10.1 million and $7.0 million, respectively. 2008 Omnibus Incentive Compensation Plan. Upon the recommendation of our compensation committee, our board of directors on March 10, 2008 adopted (subject to stockholder approval) the B&G Foods, Inc. 2008 Omnibus Incentive Compensation Plan, which we refer to as the 2008 Omnibus Plan. Our stockholders approved the 2008 Omnibus Plan at our annual meeting on May 6, 2008. Our stockholders reapproved the material terms of the performance goals in our 2008 Omnibus Plan at our annual meeting on May 16, 2013. The 2008 Omnibus Plan authorizes the grant of performance share awards, restricted stock, options, stock appreciation rights, deferred stock, stock units and cash-based awards to employees, non-employee directors and consultants. Subject to adjustment as provided in the plan, the total number of shares of common stock available for awards under the plan is 4,500,000, of which 2,497,028 were available for future issuance as of December 31, 2016. (14) Some of those shares are subject to outstanding performance share long-term incentive awards (LTIAs) and stock options as described in the table below. Performance Share Awards. Beginning in fiscal 2008, our compensation committee has made annual grants of performance share LTIAs to our executive officers and certain other members of senior management under the 2008 Omnibus Plan. The performance share LTIAs entitle the participants to earn shares of common stock upon the attainment of certain performance goals over the applicable performance period. The performance period is typically three years. Each performance share LTIA has a threshold, target and maximum payout. The awards are settled based upon our performance over the applicable performance period. For the performance share LTIAs granted to date, the applicable performance metric is and has been “excess cash” (as defined in the award agreements). If our performance fails to meet the performance threshold, then the awards will not vest and no shares will be issued pursuant to the awards. If our performance meets or exceeds the performance threshold, then a varying amount of shares from the threshold amount (50% of the target number of shares) up to the maximum amount (200% of the target number of shares) may be earned. Subject to the performance goal for the applicable performance period being certified in writing by our compensation committee as having been achieved, shares of common stock are issued prior to March 15 following the completion of the performance period. The following table details the activity in our performance share LTIAs for fiscal 2016: Weighted Average Number of Grant Date Fair Value Performance Shares (1) (per share) (2) Beginning of fiscal 2016 $ Granted $ Vested $ Forfeited $ End of fiscal 2016 $ (1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% of the target number of performance shares). (2) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes) reduced by the present value of expected dividends using the risk-free interest-rate as the award holders are not entitled to dividends or dividend equivalents during the vesting period. (14) Stock Options. The following table details our stock option activity for fiscal 2016: Weighted Weighted Average Average Contractual Life Aggregate Options Exercise Price Remaining (Years) Intrinsic Value Outstanding at beginning of fiscal 2016 501,698 $ Granted 218,491 $ Exercised — — Forfeited (5,609) $ Outstanding at end of fiscal 2016 714,580 $ 8.3 $ 6,924 Exercisable at end of fiscal 2016 1,300 $ 0.5 $ 18 The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is based on the “simplified method” in accordance with accounting guidance. We utilized the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options. Fiscal 2016 Fiscal 2015 Fiscal 2014 Weighted average grant date fair value $ 5.26 $ 6.00 $ 6.74 Expected volatility 27.7% 36.0% 34.8% Expected term 5.5 - 6.5 years 6.5 years 6.5 years Risk-free interest rate 1.5% - 1.7% 1.6% - 1.9% 1.9% Dividend yield 3.9% - 4.9% 4.7% - 4.9% 4.4% Non-Employee Director Grants. Each of our non-employee directors receives an annual grant of common stock as part of his or her non-employee director compensation. These shares fully vest when issued. In addition, each of our non-employee directors is given the option to receive all or a portion of his or her annual board service fee in cash or an equivalent amount of stock options. Such stock options are reflected in the information provided above under “ Stock Options. ” (14) The following table details the number of shares of common stock issued by our company during fiscal 2016, 2015 and 2014 upon the vesting of performance share long-term incentive awards and for non-employee director annual equity grants and other share based compensation: December 31, January 2, January 3, 2016 2016 2015 Number of performance shares vested Shares withheld to fund statutory minimum tax withholding Shares of common stock issued for performance share LTIAs Shares of common stock issued to non-employee directors for annual equity grants Total shares of common stock issued Excess tax benefit recorded to additional paid in capital $ $ $ The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments) during the last three fiscal years and where that expense is reflected in our consolidated statements of operations (in thousands): Consolidated Statements of Operations Location Fiscal 2016 Fiscal 2015 Fiscal 2014 Compensation expense included in cost of goods sold $ $ $ Compensation expense included in selling, general and administrative expenses Total compensation expense for share-based payments $ $ $ As of December 31, 2016, there was $4.3 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next two fiscal years and $1.7 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next three fiscal years. |
Net Sales by Brand
Net Sales by Brand | 12 Months Ended |
Dec. 31, 2016 | |
Net Sales by Brand | |
Net Sales by Brand | (15) The following table sets forth net sales by brand (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 (7) Brand (1) : Green Giant (2) $ 506,679 $ 106,173 $ — Ortega 142,093 145,840 134,374 Pirate Brands 84,918 81,715 82,563 Maple Grove Farms of Vermont 72,799 77,724 79,177 Cream of Wheat 62,178 62,342 62,494 Mrs. Dash 60,653 63,210 64,105 Bear Creek Country Kitchens (3) 52,787 53,865 41,432 Las Palmas 39,159 36,729 35,121 Mama Mary's (4) 35,778 18,358 — Polaner 34,299 33,813 36,136 New York Style 33,132 23,315 28,075 Spices & Seasonings (5) 28,171 — — All other brands (6) 238,611 263,274 284,540 Total $ $ $ (1) Table includes net sales for each of our brands whose fiscal 2016 net sales equaled or exceeded 2% of our total fiscal 2016 net sales and for all other brands in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand. (2) We completed the Green Giant acquisition on November 2, 2015. (3) We completed the Specialty Brands acquisition, including the Bear Creek Country Kitchens brand, on April 23, 2014. (4) We completed the Mama Mary’s acquisition on July 10, 2015. (5) We completed the spices & seasonings acquisition on November 21, 2016. (6) Fiscal 2016 net sales for “all other brands” has been impacted by the Victoria acquisition, which was completed on December 2, 2016. Fiscal 2014 net sales for “all other brands” has been impacted by the acquisition of the Spring Tree , Cary’s , MacDonald’s , New York Flatbreads and Canoleo brands acquired as part of the Specialty Brands acquisition, which was completed on April 23, 2014. (7) Fiscal 2016 and fiscal 2015 contained 52 weeks and fiscal 2014 contained 53 weeks. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (unaudited) | |
Quarterly Financial Data (unaudited) | (16) First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, expect per share data) Net sales 2016 $ $ $ $ 2015 $ $ $ $ Gross profit 2016 $ $ $ $ 2015 $ $ $ $ Net income 2016 $ $ $ $ 2015 $ $ $ $ Basic and diluted earnings per share 2016 $ $ $ $ 2015 $ $ $ $ Cash dividends declared per share 2016 $ $ $ $ 2015 $ $ $ $ Earnings per share were computed individually for each of the quarters presented using the weighted average number of shares outstanding during each quarterly period, while earnings per share for the full year were computed using the weighted average number of shares outstanding during the full year; therefore, the sum of the earnings per share amounts for the quarters may not equal the total for the full year |
Guarantor and Non-Guarantor Fin
Guarantor and Non-Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Guarantor and Non-Guarantor Financial Information | |
Guarantor and Non-Guarantor Financial Information | (17) As further discussed in Note 7, “Long-Term Debt,” our obligations under the senior notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries, which we refer to in this note as the guarantor subsidiaries. Our foreign subsidiaries, which we refer to in this note as the non-guarantor subsidiaries, do not guarantee the senior notes. The following condensed consolidating financial information presents the condensed consolidating balance sheet as of December 31, 2016 and January 2, 2016, the related condensed consolidating statement of operations for the fiscal years ended December 31, 2016 and January 2, 2016, and the related condensed consolidating statement of cash flows for the fiscal years ended December 31, 2016 and January 2, 2016, for: 1. 2. 3. 4. (17) The information includes elimination entries necessary to consolidate the Parent with the guarantor subsidiaries and non-guarantor subsidiaries. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial information for each of the guarantor subsidiaries and non-guarantor subsidiaries are not presented because management believes such financial statements would not be meaningful to investors. Condensed Consolidating Balance Sheet As of December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ $ $ — $ Trade accounts receivable, net — — Inventories, net — — Prepaid expenses and other current assets — — Income tax receivable — — Deferred income taxes — — Intercompany receivables — — — Total current assets — Property, plant and equipment, net — — Goodwill — — — Other intangibles, net — — — Other assets — — Investments in subsidiaries — — Total assets $ $ $ $ $ Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ $ $ — $ Accrued expenses — — Current portion of long-term debt — — — Income tax payable — — — Dividends payable — — — Intercompany payables — — Total current liabilities Long-term debt — — Other liabilities — — — Deferred income taxes — — — Total liabilities Stockholders' Equity: Preferred stock — — — — — Common stock — — — Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ (17) Condensed Consolidating Balance Sheet As of January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ $ $ — $ Trade accounts receivable, net — — Inventories, net — — Prepaid expenses and other current assets — — Income tax receivable — Deferred income taxes — Intercompany receivables — — — Total current assets — Property, plant and equipment, net — — Goodwill — — — Other intangibles, net — — — Other assets — — — Investments in subsidiaries — — Total assets $ $ $ $ $ Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ $ $ — $ Accrued expenses — Current portion of long-term debt — — — Income tax payable — — — — — Dividends payable — — — Intercompany payables — — — Total current liabilities Long-term debt — — Other liabilities — — — Deferred income taxes — — Total liabilities Stockholders' Equity: Preferred stock — — — — — Common stock — — — Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ (17) Condensed Consolidating Statements of Operations and Comprehensive Income Year Ended December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ Cost of goods sold — Gross profit — — Operating expenses: Selling, general and administrative expenses — — Amortization expense — — — Impairment of intangible assets — — Operating income — — Other income and expenses: Interest expense, net — — — Loss on extinguishment of debt — — — Other expense (income) — — — Income before income tax expense — — Income tax expense — — Equity in earnings of subsidiaries — — Net income $ $ $ $ $ Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations and Comprehensive Income Year Ended January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ Cost of goods sold — Gross profit — — Operating expenses: Selling, general and administrative expenses — — Amortization expense — — — Impairment of intangible assets — — — — — Operating income — — Other income and expenses: Interest expense, net — — — Loss on extinguishment of debt — — — — — Other expense (income) — — — — — Income before income tax expense — — Income tax expense — — Equity in earnings of subsidiaries — — Net income $ $ $ $ $ Comprehensive income (loss) $ $ $ $ $ (17) Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ $ $ — $ Cash flows from investing activities: Capital expenditures — — Payments for acquisition of businesses, net of cash acquired — — — Net cash used in investing activities — — Cash flows from financing activities: Repayments of long-term debt — — — Repayments of borrowings under revolving credit facility — — — Borrowings under revolving credit facility — — — Proceeds from issuance of common stock, net — — — Dividends paid — — — Excess tax benefits from share-based compensation — — — Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — — — Intercompany transactions — — Net cash provided by financing activities — — Effect of exchange rate fluctuations on cash and cash equivalents — — — Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of year — — Cash and cash equivalents at end of period $ — $ $ $ — $ Condensed Consolidating Statement of Cash Flows Year Ended January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ $ $ — $ Cash flows from investing activities: Capital expenditures — — Payments for acquisition of businesses, net of cash acquired — — Net cash used in investing activities — — Cash flows from financing activities: Repayments of long-term debt — — — Proceeds from issuance of long-term debt — — — Repayments of borrowings under revolving credit facility — — — Borrowings under revolving credit facility — — — Proceeds from issuance of common stock, net — — — Dividends paid — — — Excess tax benefits from share-based compensation — — — Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — — — Debt financing costs — — — Intercompany transactions — — Net cash provided by financing activities — — Effect of exchange rate fluctuations on cash and cash equivalents — — — Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of year — — Cash and cash equivalents at end of period $ — $ $ $ — $ |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring | |
Restructuring | (18) During the third and fourth quarters of fiscal 2016, we closed our Spartanburg, South Carolina manufacturing and warehouse facilities and moved our Mama Mary’s operations to our manufacturing facility in Yadkinville, North Carolina. This decision is consistent with our ongoing efforts to reduce excess production capacity, improve productivity and operating efficiencies and reduce overall costs. In connection with the restructuring, we recorded a charge for employee severance and other employee costs of approximately $0.8 million during the third quarter of 2016 and a non-cash write-off of equipment of approximately $0.3 million during the fourth quarter of 2016. |
Schedule II Schedule of Valuati
Schedule II Schedule of Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II Schedule of Valuation and Qualifying Accounts | |
Schedule II Schedule of Valuation and Qualifying Accounts | Schedule II B&G FOODS, INC. AND SUBSIDIARIES Schedule of Valuation and Qualifying Accounts (In thousands) Column A Column B Column C Column D Column E Additions Balance at Charged to Charged to beginning of costs and other accounts— Deductions— Balance at Description period expenses describe describe end of period Year ended January 3, 2015: Allowance for doubtful accounts and discounts $ $ — $ (a) $ Year ended January 2, 2016: Allowance for doubtful accounts and discounts $ $ — $ (a) $ Year ended December 31, 2016: Allowance for doubtful accounts and discounts $ $ — $ (a) $ (a) Represents bad-debt write-offs. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) The consolidated financial statements include the accounts of B&G Foods, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current year’s presentation. |
Use of Estimates | (b) The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve trade and consumer promotion expenses; allowances for excess, obsolete and unsaleable inventories; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; the determination of the useful life of customer relationship and amortizable trademark intangibles; and the fair value of contingent consideration. Actual results could differ significantly from these estimates and assumptions. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions. |
Subsequent Events | (c) We have evaluated subsequent events for disclosure through the date of issuance of the accompanying consolidated financial statements. |
Cash and Cash Equivalents | (d) For purposes of the consolidated statements of cash flows, all highly liquid instruments with maturities of three months or less when acquired are considered to be cash and cash equivalents. |
Prepaid and Other Current Assets | (e) Prepaid and other current assets at January 2, 2016, included a $52.6 million receivable related to a transition services agreement with General Mills, Inc. in connection with our Green Giant acquisition. The transition services agreement terminated as of October 2, 2016. See Note 3, “Acquisitions.” |
Inventories | (f) Inventories are stated at the lower of cost or market and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on our management’s review of inventories on hand compared to estimated future usage and sales. |
Property, Plant and Equipment | (g) Property, plant and equipment are stated at cost. Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets, 10 to 30 years for buildings and improvements, 5 to 12 years for machinery and equipment, and 2 to 5 years for office furniture and vehicles. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Expenditures for maintenance, repairs and minor replacements are charged to current operations. Expenditures for major replacements and betterments are capitalized. We capitalize interest on qualifying assets based on our effective interest rate. During fiscal 2016, 2015 and 2014, we capitalized $0.5 million, $0.3 million and $0.3 million, respectively. |
Goodwill and Other Intangible Assets | (h) Goodwill and unamortizable intangible assets (trademarks) are tested for impairment at least annually and whenever events or circumstances occur indicating that goodwill or unamortizable intangibles might be impaired. We perform the annual impairment tests as of the last day of each fiscal year. The annual goodwill impairment test involves a two-step process. The first step of the impairment test involves comparing our company’s market capitalization with our company’s carrying value, including goodwill. If the carrying value of our company exceeds our market capitalization, we perform the second step of the impairment test to determine the amount of the impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of goodwill with the carrying value and recognizing a loss for the difference. We test our unamortizable intangibles by comparing the fair value with the carrying value and recognize a loss for the difference. We estimate the fair value of our unamortizable intangibles based on discounted cash flows that reflect certain third party market value indicators. Calculating our fair value for these purposes requires significant estimates and assumptions by management. We completed our annual impairment tests for fiscal 2016, 2015 and 2014 with no adjustments to the carrying values of goodwill and unamortizable intangibles. Each annual test confirmed that the market capitalization and fair values of our goodwill and unamortizable intangibles, respectively, exceeded their current carrying values. Customer relationship intangibles and amortizable trademarks are presented at cost, net of accumulated amortization, and are amortized on a straight-line basis over their estimated useful lives of 10 to 20 years. Seed technology assets are presented at cost, net of accumulated amortization, and are amortized utilizing a declining balance approach over their estimated useful lives of 5 years. |
Deferred Debt Financing Costs | (i) Debt financing costs are capitalized and amortized over the term of the related debt agreements and are included as a reduction of long-term debt. Amortization of deferred debt financing costs for fiscal 2016, 2015 and 2014 was $4.9 million, $3.6 million and $3.6 million, respectively. |
Long-Lived Assets | (j) Long-lived assets, such as property, plant and equipment, and intangibles with estimated useful lives are depreciated or amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Recoverability of assets held for sale is measured by a comparison of the carrying amount of an asset or asset group to their fair value less estimated costs to sell. Estimating future cash flows and calculating the fair value of assets requires significant estimates and assumptions by management. Assets to be disposed of are separately presented in the consolidated balance sheets and are no longer depreciated. |
Accumulated Other Comprehensive Loss | (k) Accumulated other comprehensive loss includes foreign currency translation adjustments relating to assets and liabilities located in our foreign subsidiaries and changes in our pension benefits due to the initial adoption and ongoing application of the authoritative accounting literature relating to pensions, net of tax. |
Revenue Recognition | (l) Revenues are recognized when products are shipped. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to shipping and handling. Shipping and handling costs are included in cost of goods sold. Consideration from a vendor to a retailer is presumed to be a reduction to the selling prices of the vendor’s products and, therefore, is characterized as a reduction of sales when recognized in the vendor’s income statement. As a result, coupon incentives, slotting and promotional expenses are recorded as a reduction of sales. |
Selling, General and Administrative Expenses | (m) We promote our products with advertising, consumer incentives and trade promotions. These programs include, but are not limited to, discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization and redemption rates. We expense our advertising costs either in the period the advertising first takes place or as incurred. Advertising expenses were approximately $26.0 million, $5.7 million and $5.1 million, for fiscal 2016, 2015 and 2014, respectively. |
Pension Plans | (n) We have defined benefit pension plans covering approximately one third of our employees. Our funding policy is to contribute annually the amount recommended by our actuaries. From time to time, however, we voluntarily contribute greater amounts based on pension asset performance, tax considerations and other relevant factors. |
Share Based Compensation Expense | (o) We provide compensation benefits in the form of stock options, performance share long-term incentive awards (LTIAs) and common stock to employees and non-employee directors. The cost of share based compensation is recorded at fair value at the date of grant and expensed in our consolidated statement of income over the requisite service period, if any. Performance share LTIAs granted to our executive officers and certain other members of senior management entitle each participant to earn shares of common stock upon the attainment of certain performance goals over the applicable performance period. The recognition of compensation expense for the performance share LTIAs is initially based on the probable outcome of the performance condition based on the fair value of the award on the date of grant and the anticipated number of shares to be awarded on a straight-line basis over the applicable performance period. The fair value of the awards on the date of grant is determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes) reduced by the present value of expected dividends using the risk-free interest-rate as the award holders are not entitled to dividends or dividend equivalents during the vesting period. Our company’s performance against the defined performance goals are re-evaluated on a quarterly basis throughout the applicable performance period and the recognition of compensation expense is adjusted for subsequent changes in the estimated or actual outcome. The cumulative effect of a change in the estimated number of shares of common stock to be issued in respect of performance share awards is recognized as an adjustment to earnings in the period of the revision. The fair value of stock option awards is estimated on the date of grant using the Black-Scholes option pricing model and is recognized in expense over the vesting period of the options using the straight-line method. The Black-Scholes option pricing model requires various assumptions, including the expected volatility of our stock, the expected term of the option, the risk-free interest rate and the expected dividend yield. Expected volatility is based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of grant, have a 10-year term and cliff vest three years from the date of grant. (2) Summary of Significant Accounting Policies (Continued) We recognize compensation expense for only that portion of share based awards that are expected to vest. We utilize historical employee termination behavior to determine our estimated forfeiture rates. If the actual forfeitures differ from those estimated by management, adjustments to compensation expense will be made in future periods. |
Income Tax Expense Estimates and Policies | (p) Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities of our company are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. As part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process involves estimating our current tax expenses together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe the recovery is not likely, we establish a valuation allowance. Further, to the extent that we establish a valuation allowance or increase this allowance in a financial accounting period, we include such charge in our tax provision, or reduce our tax benefits in our consolidated statements of operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our deferred tax assets. There are various factors that may cause these tax assumptions to change in the near term, and we may have to record a valuation allowance against our deferred tax assets. We cannot predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes to the U.S. federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our consolidated financial statements when new regulations and legislation are enacted. We recognize the benefit of an uncertain tax position that we have taken or expect to take on our income tax returns we file if it is “more likely than not” that such tax position will be sustained based on its technical merits. |
Dividends | (q) Cash dividends, if any, are accrued as a liability on our consolidated balance sheets and recorded as a decrease to additional paid-in capital when declared. |
Earnings Per Share | (r) Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance share LTIAs that may be earned as of the beginning of the period using the treasury stock method. Fiscal Fiscal Fiscal 2016 2015 2014 (in thousands, except share and per share data) Net income $ $ $ Weighted average common shares outstanding: Basic Net effect of potentially dilutive share-based compensation awards (1) Diluted Earnings per share: Basic $ $ $ Diluted $ $ $ (1) For fiscal 2016 and 2014, outstanding stock options of 22,692 and 418,158, respectively, were excluded from diluted earnings per share as their effect was antidilutive. |
Recently Issued Accounting Standards | (s) In April 2015, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We adopted the provisions of this ASU at the beginning of fiscal 2016 and applied the required changes in accounting principle on a retrospective basis. Accordingly, in our consolidated balance sheet as of January 2, 2016, $28.1 million of unamortized deferred financing costs were reclassified from other assets to long-term debt. The update impacted presentation and disclosure only, and therefore, the adoption of this ASU did not have any impact on our consolidated financial position, results of operations or liquidity. (t) In January 2017, the FASB issued a new ASU that simplifies the subsequent measurement of goodwill, including the elimination of the second step from the goodwill impairment test. The update is effective for annual or any interim impairment tests in fiscal years beginning after December 15, 2019. The adoption of this ASU will not have any impact on our consolidated financial position, results of operations or liquidity. In fiscal 2016, the FASB issued several new ASUs that provide for improvements to the revenue recognition accounting standard, including principal versus agent considerations, identifying performance obligations, licensing, narrow-scope improvements and practical expedients. The updates are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In preparation for our adoption of the new standard in our fiscal year ending December 29, 2018, we are obtaining representative samples of contracts and other forms of agreements with our customers in the U.S. and international locations and plan to evaluate the provisions contained therein in light of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract—an agreement between two or more parties that creates legally enforceable rights and obligations (2) Summary of Significant Accounting Policies (Continued) exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. We are also evaluating the impact of the new standard on certain common practices currently employed by us and by other manufacturers of consumer products, such as slotting fees, co-operative advertising, rebates and other pricing allowances, merchandising funds and consumer coupons. We have not yet determined the impact of the new standard on our financial statements or whether we will adopt on a prospective or retrospective basis in the first quarter of our fiscal year ending December 29, 2018. In March 2016, the FASB issued a new ASU that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires that excess tax benefits (which represent the excess of actual tax benefits received at the date of vesting or settlement over the benefits recognized over the vesting period or upon issuance of share-based payments) and tax deficiencies (which represent the amount by which actual tax benefits received at the date of vesting or settlement is lower than the benefits recognized over the vesting period or upon issuance of share-based payments) be recorded in the income statement as a reduction of income taxes when the awards vest or are settled. The new guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than as a financing activity. The ASU is effective for the first quarter of our fiscal year ending December 30, 2017. We expect that the adoption of this new guidance in fiscal 2017 will reduce our reported income taxes and will increase cash flows from operating activities; however, the amounts of that reduction/increase is dependent upon the underlying vesting or exercise activity and related future stock prices. In February 2016, the FASB issued a new ASU that requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current guidance. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the impact of this new standard. In November 2015, the FASB issued a new ASU that requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The ASU is effective for the first quarter of our fiscal year ending December 30, 2017. The adoption of this new guidance in fiscal 2017 will retrospectively reclassify all deferred tax assets and liabilities as noncurrent in our consolidated balance sheet. The adoption of this ASU will not have any impact on our results of operations or liquidity. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of calculations related to basic and diluted earning per share | Fiscal Fiscal Fiscal 2016 2015 2014 (in thousands, except share and per share data) Net income $ $ $ Weighted average common shares outstanding: Basic Net effect of potentially dilutive share-based compensation awards (1) Diluted Earnings per share: Basic $ $ $ Diluted $ $ $ (1) For fiscal 2016 and 2014, outstanding stock options of 22,692 and 418,158, respectively, were excluded from diluted earnings per share as their effect was antidilutive. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | Spices & Seasonings Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Preliminary Allocation: Goodwill Customer relationship intangibles—amortizable intangible assets Trademarks—unamortizable intangible assets Property, plant and equipment Inventory Other liabilities (1) Other working capital Total $ (1) In connection with the spices & seasonings acquisition, we agreed to establish a defined benefit plan for certain employees transferred to B&G Foods and certain former employees of the acquired spices & seasonings business. We also agreed to assume certain liabilities relating to the underfunded status of the former plan that such employees participated in prior to the acquisition. At December 31, 2016, we recognized $17.5 million in “other liabilities” in the accompanying consolidated balance sheet to reflect our obligations with respect to the underfunded status of the defined benefit plan assets and liabilities transferred to us. |
Schedule of unaudited pro forma summary of operations | Fiscal 2016 Fiscal 2015 Fiscal 2014 (dollars in thousands, except per share data) Net sales $ $ $ Net income (loss) (1) $ $ $ Basic earnings (loss) per share (1) $ $ $ Diluted earnings (loss) per share (1) $ $ $ (1) During the second quarter of 2015, General Mills recorded a $260 million impairment charge related to the Green Giant brand intangible asset. |
Victoria Acquisition | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | Victoria Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Preliminary Allocation: Trademarks—unamortizable intangible assets Goodwill Property, plant and equipment Inventory Customer relationship intangibles—amortizable intangible assets Long-term deferred income tax liabilities, net Other working capital Total $ |
Green Giant | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | Green Giant Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Trademarks—unamortizable intangible assets Inventory Goodwill Customer relationship intangibles—amortizable intangible assets Property, plant and equipment Seed technology intangibles—amortizable intangible assets Other working capital Total $ |
Mama Mary's | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | Mama Mary’s Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Trademarks—unamortizable intangible assets Goodwill Customer relationship intangibles—amortizable intangible assets Property, plant and equipment Short-term deferred income tax assets Other working capital Long-term deferred income tax liabilities, net Total $ |
Specialty Brands acquisition | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | Specialty Brands Acquisition (dollars in thousands): Purchase Price: Cash paid $ Total $ Allocation: Income tax receivable $ Short-term deferred income tax assets Trademarks—unamortizable intangible assets Goodwill Customer relationship intangibles—amortizable intangible assets Other working capital Long-term deferred income tax liabilities, net Total $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Summary of Inventories | Inventories consist of the following, as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Raw materials and packaging $ $ Work-in-process Finished goods Total $ $ |
Property, Plant and Equipment32
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, net. | |
Schedule of Property, plant and equipment, net | Property, plant and equipment, net, consists of the following as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Land $ $ Buildings and improvements Machinery and equipment Office furniture and vehicles Construction-in-progress Less: accumulated depreciation Total $ $ |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill and other intangible assets | The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands): December 31, 2016 January 2, 2016 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Amortizable Intangible Assets Trademarks $ $ $ $ $ $ Customer relationships Seed technology $ $ $ $ $ $ Unamortizable Intangible Assets Goodwill $ $ Trademarks $ $ Note: The increases in the carrying amounts of unamortizable intangible assets during fiscal 2016 are attributable to the spices & seasonings and Victoria acquisitions and purchase accounting adjustments related to the Green Giant acquisition, partially offset by the impairment of the Rickland Orchards intangibles and purchase accounting adjustments related to the Mama Mary’s acquisition. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Long-Term Debt | |
Schedule of Long-term debt | Long-term debt consists of the following, as of the dates indicated (in thousands): December 31, 2016 January 2, 2016 Revolving credit loans: Outstanding principal $ $ Unamortized deferred financing costs Revolving credit loans, net Tranche A term loans due 2019: Outstanding principal Unamortized deferred financing costs Unamortized discount Tranche A term loans due 2019, net Tranche B term loans due 2022: Outstanding principal Unamortized deferred financing costs Unamortized discount Tranche B term loans due 2022, net 4.625% senior notes due 2021: Outstanding principal Unamortized deferred financing costs 4.625% senior notes due 2021, net Total long-term debt, net of unamortized financing costs and discount Current portion of long-term debt Long-term debt, net of unamortized financing costs and discount and excluding current portion $ $ |
Schedule of aggregate contractual maturities of long-term debt | As of December 31, 2016, the aggregate contractual maturities of long-term debt are as follows (in thousands): Fiscal Year: 2017 $ 2018 2019 2020 — 2021 Thereafter Total $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Summary of carrying values and fair values of our revolving credit loans, term loans and senior notes | The carrying values and fair values of our revolving credit loans, term loans and senior notes as of December 31, 2016 and January 2, 2016 are as follows (in thousands): December 31, 2016 January 2, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans (1) (1) Tranche A term loans due 2019 (2) (1) (2) (1) Tranche B term loans due 2022 (3) (1) (3) (1) 4.625% senior notes due 2021 (4) (4) (1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active. (2) The carrying values of the tranche A term loans are net of discount. At December 31, 2016 and January 2, 2016, the face amounts of the tranche A term loans were $233.6 million and $273.8 million, respectively. (3) The carrying values of the tranche B term loans are net of discount. At December 31, 2016 and January 2, 2016, the face amounts of the tranche B term loans were $640.1 million and $750.0 million, respectively. (4) Fair values are estimated based on quoted market prices. |
Summary of changes in contingent consideration measured at level 3 | The following table summarizes the Level 3 activity during fiscal 2016, 2015 and 2014 (in thousands): December 31, January 2, January 3, 2016 2016 2015 Balance at beginning of year $ — $ — $ Contingent consideration accretion expense — — Gain on change in fair value of contingent consideration — — Balance at end of quarter $ — $ — $ — |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Loss. | |
Schedule of reclassification from accumulated other comprehensive loss | The reclassifications from accumulated other comprehensive loss (AOCL) for fiscal 2016, 2015 and 2014 are as follows (in thousands): Amount Reclassified From AOCL Affected Line Item in the December 31, January 2, January 3, Statement Where Net Income Details about AOCL Components 2016 2016 2015 (loss) is Presented Defined benefit pension plan items Amortization of unrecognized prior service cost $ $ $ See (1) below Amortization of unrecognized loss — See (1) below Total before tax Income tax expense Total reclassification $ $ $ Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 12, “Pension Benefits,” for additional information. |
Schedule of changes in accumulated other comprehensive loss | Changes in AOCL for fiscal 2016, 2015 and 2014 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Balance at December 28, 2013 $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at January 3, 2015 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at January 2, 2016 Other comprehensive income (loss) before reclassifications Amounts reclassified from AOCL — Net current period other comprehensive income (loss) Balance at December 31, 2016 $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of components of income before income tax expense | The components of income before income tax expense consist of the following (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 U.S. $ $ $ Foreign Total $ $ $ |
Summary of income tax expense (benefit) | Income tax expense (benefit) consists of the following (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 Current: Federal $ $ $ State Foreign Subtotal Deferred: Federal State Foreign — Subtotal Total $ $ $ |
Reconciliation of provision for income taxes at the statutory rate and the effective tax rate | Fiscal 2016 Fiscal 2015 Fiscal 2014 Expected tax expense % % % Increase (decrease): State income taxes, net of federal income tax benefit Impact on deferred taxes from changes in state tax rates — Foreign income taxes — — Permanent differences — Foreign tax credit — Other — Total % % % |
Tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands): December 31, January 2, 2016 2016 Deferred tax assets: Accounts receivable, principally due to allowance $ $ Inventories, principally due to additional costs capitalized for tax purposes Accruals and other liabilities Net operating loss and tax credit carry forwards Total gross deferred tax assets Deferred tax liabilities: Plant and equipment Goodwill and other intangible assets Prepaid expenses Total gross deferred tax liabilities Net deferred tax liability $ $ |
Summary of the tax years that remain subject to examination | United States—Federal 2013 and forward United States—States 2012 and forward Canada 2012 and forward Mexico 2015 and forward |
Pension Benefits (Tables)
Pension Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pension Benefits | |
Schedule of defined benefit pension plans' benefit obligation, fair value of plans assets and funded status recognized in the consolidated balance sheets | We used December 31, 2016 and January 2, 2016 measurement dates for fiscal 2016 and 2015, respectively, to calculate end of year benefit obligations, fair value of plan assets and annual net periodic benefit cost (in thousands): December 31, January 2, 2016 2016 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Actuarial (gain) loss Service cost Interest cost Benefits paid Curtailments — Projected benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual gain on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year Net amount recognized: Other assets $ $ Other long-term liabilities — Funded status at the end of the year $ $ Amount recognized in accumulated other comprehensive loss consists of: Prior service cost $ $ Actuarial loss Deferred taxes Accumulated other comprehensive loss $ $ |
Schedule of changes in accumulated postemployment benefit obligations | The following information is presented for those plans with an accumulated benefit obligation in excess of plan assets (in thousands): December 31, January 2, 2016 2016 Accumulated benefit obligation $ — $ Fair value of plan assets $ — $ |
Schedule of amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in next fiscal year | The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in fiscal 2017 are as follows (in thousands): Prior service cost $ Actuarial loss $ |
Schedule of weighted-average assumptions | December 31, January 2, 2016 2016 Weighted-average assumptions: Discount rate % % Rate of compensation increase % % Expected long-term rate of return % % |
Schedule of components of net periodic pension costs | Net periodic pension cost includes the following components (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 Service cost—benefits earned during the period $ $ $ Interest cost on projected benefit obligation Expected return on plan assets Amortization of unrecognized prior service cost Amortization of unrecognized loss — Net periodic pension cost $ $ $ |
Schedule of target asset allocation and plan assets at year end | Percentage of Plan Assets at Year End Target December 31, January 2, Asset Category Allocation 2016 2016 Equity securities % % % Fixed income securities % % % Other — % % Total % % % |
Schedule of fair values of pension plan assets utilizing the fair value hierarchy | The fair values of our pension plan assets at December 31, 2016 and January 2, 2016, utilizing the fair value hierarchy discussed in Note 8, “Fair Value Measurements” follow (in thousands): December 31, 2016 January 2, 2016 Level 1 Levels 2 & 3 Level 1 Levels 2 & 3 Asset Category Cash $ $ — $ $ — Equity securities: U.S. mutual funds — — Foreign mutual funds — — U.S. common stocks — — Foreign common stocks — — Fixed income securities: U.S. mutual funds — — Total $ $ — $ $ — |
Schedule of expected cash flows for the pension plan | Information about the expected cash flows for the pension plan follows (in thousands): Pension Payments Benefit payments: 2017 $ 2018 2019 2020 2021 2022 to 2026 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Summary of future minimum lease payments under non-cancelable operating leases | As of December 31, 2016, future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) for the periods set forth below were as follows (in thousands): Fiscal year ending: 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Incentive Plans (Tables)
Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Incentive Plans | |
Schedule of non-vested performance share LTIAs | Weighted Average Number of Grant Date Fair Value Performance Shares (1) (per share) (2) Beginning of fiscal 2016 $ Granted $ Vested $ Forfeited $ End of fiscal 2016 $ (1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% of the target number of performance shares). (2) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes) reduced by the present value of expected dividends using the risk-free interest-rate as the award holders are not entitled to dividends or dividend equivalents during the vesting period. |
Schedule of stock option activity | Weighted Weighted Average Average Contractual Life Aggregate Options Exercise Price Remaining (Years) Intrinsic Value Outstanding at beginning of fiscal 2016 501,698 $ Granted 218,491 $ Exercised — — Forfeited (5,609) $ Outstanding at end of fiscal 2016 714,580 $ 8.3 $ 6,924 Exercisable at end of fiscal 2016 1,300 $ 0.5 $ 18 |
Schedule of stock options, valuation assumption | Fiscal 2016 Fiscal 2015 Fiscal 2014 Weighted average grant date fair value $ 5.26 $ 6.00 $ 6.74 Expected volatility 27.7% 36.0% 34.8% Expected term 5.5 - 6.5 years 6.5 years 6.5 years Risk-free interest rate 1.5% - 1.7% 1.6% - 1.9% 1.9% Dividend yield 3.9% - 4.9% 4.7% - 4.9% 4.4% |
Schedule of number of shares of common stock issued by our entity upon the vesting of performance share long-term incentive awards and for non-employee director annual equity grants and other share based compensation | December 31, January 2, January 3, 2016 2016 2015 Number of performance shares vested Shares withheld to fund statutory minimum tax withholding Shares of common stock issued for performance share LTIAs Shares of common stock issued to non-employee directors for annual equity grants Total shares of common stock issued Excess tax benefit recorded to additional paid in capital $ $ $ |
Schedule of compensation expense recognized for share-based payments | Consolidated Statements of Operations Location Fiscal 2016 Fiscal 2015 Fiscal 2014 Compensation expense included in cost of goods sold $ $ $ Compensation expense included in selling, general and administrative expenses Total compensation expense for share-based payments $ $ $ |
Net Sales by Brand (Tables)
Net Sales by Brand (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net Sales by Brand | |
Schedule of net sales by brand | The following table sets forth net sales by brand (in thousands): Fiscal 2016 Fiscal 2015 Fiscal 2014 (7) Brand (1) : Green Giant (2) $ 506,679 $ 106,173 $ — Ortega 142,093 145,840 134,374 Pirate Brands 84,918 81,715 82,563 Maple Grove Farms of Vermont 72,799 77,724 79,177 Cream of Wheat 62,178 62,342 62,494 Mrs. Dash 60,653 63,210 64,105 Bear Creek Country Kitchens (3) 52,787 53,865 41,432 Las Palmas 39,159 36,729 35,121 Mama Mary's (4) 35,778 18,358 — Polaner 34,299 33,813 36,136 New York Style 33,132 23,315 28,075 Spices & Seasonings (5) 28,171 — — All other brands (6) 238,611 263,274 284,540 Total $ $ $ (1) Table includes net sales for each of our brands whose fiscal 2016 net sales equaled or exceeded 2% of our total fiscal 2016 net sales and for all other brands in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand. (2) We completed the Green Giant acquisition on November 2, 2015. (3) We completed the Specialty Brands acquisition, including the Bear Creek Country Kitchens brand, on April 23, 2014. (4) We completed the Mama Mary’s acquisition on July 10, 2015. (5) We completed the spices & seasonings acquisition on November 21, 2016. (6) Fiscal 2016 net sales for “all other brands” has been impacted by the Victoria acquisition, which was completed on December 2, 2016. Fiscal 2014 net sales for “all other brands” has been impacted by the acquisition of the Spring Tree , Cary’s , MacDonald’s , New York Flatbreads and Canoleo brands acquired as part of the Specialty Brands acquisition, which was completed on April 23, 2014. (7) Fiscal 2016 and fiscal 2015 contained 52 weeks and fiscal 2014 contained 53 weeks. |
Quarterly Financial Data (una42
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data (unaudited) | |
Schedule of quarterly financial data (unaudited) | First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, expect per share data) Net sales 2016 $ $ $ $ 2015 $ $ $ $ Gross profit 2016 $ $ $ $ 2015 $ $ $ $ Net income 2016 $ $ $ $ 2015 $ $ $ $ Basic and diluted earnings per share 2016 $ $ $ $ 2015 $ $ $ $ Cash dividends declared per share 2016 $ $ $ $ 2015 $ $ $ $ |
Guarantor and Non-Guarantor F43
Guarantor and Non-Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Guarantor and Non-Guarantor Financial Information | |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ $ $ — $ Trade accounts receivable, net — — Inventories, net — — Prepaid expenses and other current assets — — Income tax receivable — — Deferred income taxes — — Intercompany receivables — — — Total current assets — Property, plant and equipment, net — — Goodwill — — — Other intangibles, net — — — Other assets — — Investments in subsidiaries — — Total assets $ $ $ $ $ Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ $ $ — $ Accrued expenses — — Current portion of long-term debt — — — Income tax payable — — — Dividends payable — — — Intercompany payables — — Total current liabilities Long-term debt — — Other liabilities — — — Deferred income taxes — — — Total liabilities Stockholders' Equity: Preferred stock — — — — — Common stock — — — Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ (17) Condensed Consolidating Balance Sheet As of January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ $ $ — $ Trade accounts receivable, net — — Inventories, net — — Prepaid expenses and other current assets — — Income tax receivable — Deferred income taxes — Intercompany receivables — — — Total current assets — Property, plant and equipment, net — — Goodwill — — — Other intangibles, net — — — Other assets — — — Investments in subsidiaries — — Total assets $ $ $ $ $ Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ $ $ — $ Accrued expenses — Current portion of long-term debt — — — Income tax payable — — — — — Dividends payable — — — Intercompany payables — — — Total current liabilities Long-term debt — — Other liabilities — — — Deferred income taxes — — Total liabilities Stockholders' Equity: Preferred stock — — — — — Common stock — — — Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ |
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) | Condensed Consolidating Statements of Operations and Comprehensive Income Year Ended December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ Cost of goods sold — Gross profit — — Operating expenses: Selling, general and administrative expenses — — Amortization expense — — — Impairment of intangible assets — — Operating income — — Other income and expenses: Interest expense, net — — — Loss on extinguishment of debt — — — Other expense (income) — — — Income before income tax expense — — Income tax expense — — Equity in earnings of subsidiaries — — Net income $ $ $ $ $ Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations and Comprehensive Income Year Ended January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ $ $ $ Cost of goods sold — Gross profit — — Operating expenses: Selling, general and administrative expenses — — Amortization expense — — — Impairment of intangible assets — — — — — Operating income — — Other income and expenses: Interest expense, net — — — Loss on extinguishment of debt — — — — — Other expense (income) — — — — — Income before income tax expense — — Income tax expense — — Equity in earnings of subsidiaries — — Net income $ $ $ $ $ Comprehensive income (loss) $ $ $ $ $ |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ $ $ — $ Cash flows from investing activities: Capital expenditures — — Payments for acquisition of businesses, net of cash acquired — — — Net cash used in investing activities — — Cash flows from financing activities: Repayments of long-term debt — — — Repayments of borrowings under revolving credit facility — — — Borrowings under revolving credit facility — — — Proceeds from issuance of common stock, net — — — Dividends paid — — — Excess tax benefits from share-based compensation — — — Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — — — Intercompany transactions — — Net cash provided by financing activities — — Effect of exchange rate fluctuations on cash and cash equivalents — — — Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of year — — Cash and cash equivalents at end of period $ — $ $ $ — $ Condensed Consolidating Statement of Cash Flows Year Ended January 2, 2016 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ $ $ — $ Cash flows from investing activities: Capital expenditures — — Payments for acquisition of businesses, net of cash acquired — — Net cash used in investing activities — — Cash flows from financing activities: Repayments of long-term debt — — — Proceeds from issuance of long-term debt — — — Repayments of borrowings under revolving credit facility — — — Borrowings under revolving credit facility — — — Proceeds from issuance of common stock, net — — — Dividends paid — — — Excess tax benefits from share-based compensation — — — Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — — — Debt financing costs — — — Intercompany transactions — — Net cash provided by financing activities — — Effect of exchange rate fluctuations on cash and cash equivalents — — — Net increase in cash and cash equivalents — — Cash and cash equivalents at beginning of year — — Cash and cash equivalents at end of period $ — $ $ $ — $ |
Nature of Operations (Details)
Nature of Operations (Details) - customer | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Fiscal Year | |||
Number of weeks in fiscal year | 364 days | 364 days | 371 days |
Number of top customers | 10 | ||
Minimum | |||
Fiscal Year | |||
Number of weeks in fiscal year | 364 days | ||
Maximum | |||
Fiscal Year | |||
Number of weeks in fiscal year | 371 days | ||
Net sales | Consolidated net sales | |||
Fiscal Year | |||
Maximum percentage of net sales to foreign countries | 7.10% | 5.20% | 3.60% |
Net sales | Consolidated net sales | Wal-Mart | |||
Fiscal Year | |||
Percentage of concentration risk | 21.20% | 19.30% | 16.70% |
Net sales | Consolidated net sales | Top ten customers | |||
Fiscal Year | |||
Percentage of concentration risk | 56.00% | 52.30% | 52.40% |
Accounts receivable | Consolidated net sales | Wal-Mart | |||
Fiscal Year | |||
Percentage of concentration risk | 24.10% | 20.40% | 19.10% |
Accounts receivable | Trade accounts receivables | Top ten customers | |||
Fiscal Year | |||
Percentage of concentration risk | 53.40% | 53.50% | 51.70% |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Information related to useful life of property, plant and equipment | |||
Prepaid expenses and other current assets | $ 26,399 | $ 67,517 | |
Number of weeks in fiscal year | 364 days | 364 days | 371 days |
Interest on qualifying assets capitalized | $ 500 | $ 300 | $ 300 |
Minimum | |||
Information related to useful life of property, plant and equipment | |||
Number of weeks in fiscal year | 364 days | ||
Maximum | |||
Information related to useful life of property, plant and equipment | |||
Number of weeks in fiscal year | 371 days | ||
Building and improvements | Minimum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 10 years | ||
Building and improvements | Maximum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 30 years | ||
Machinery and equipment | Minimum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 5 years | ||
Machinery and equipment | Maximum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 12 years | ||
Office furniture and vehicles | Minimum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 2 years | ||
Office furniture and vehicles | Maximum | |||
Information related to useful life of property, plant and equipment | |||
Estimated useful life | 5 years | ||
Green Giant | |||
Information related to useful life of property, plant and equipment | |||
Prepaid expenses and other current assets | $ 52,600 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Intangible Assets, Financing Costs, Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Information related to useful life of finite-lived intangible assets | |||||||||||
Amortization expense | $ 13,803 | $ 11,255 | $ 12,692 | ||||||||
Information related to deferred debt financing costs | |||||||||||
Amortization of Deferred Debt Financing Costs | 4,900 | 3,600 | 3,600 | ||||||||
Information related to advertising costs | |||||||||||
Advertising costs | 26,000 | 5,700 | 5,100 | ||||||||
Information related to earning per share | |||||||||||
Net income | $ 13,568 | $ 32,410 | $ 30,251 | $ 33,196 | $ 10,960 | $ 19,815 | $ 18,748 | $ 19,567 | $ 109,425 | $ 69,090 | $ 40,956 |
Weighted average common shares outstanding: | |||||||||||
Basic | 63,202,900 | 56,584,946 | 53,658,100 | ||||||||
Net effect of potentially dilutive share-based compensation awards (in shares) | 216,892 | 70,927 | 89,111 | ||||||||
Diluted (in shares) | 63,419,792 | 56,655,873 | 53,747,211 | ||||||||
Basic earning per share | $ 1.73 | $ 1.22 | $ 0.76 | ||||||||
Diluted earnings per share | $ 1.73 | $ 1.22 | $ 0.76 | ||||||||
outstanding stock options | 22,692 | 418,158 | |||||||||
Term (in years) | 10 years | ||||||||||
Vesting period(in years) | 3 years | ||||||||||
Customer relationship | Minimum | |||||||||||
Information related to useful life of finite-lived intangible assets | |||||||||||
Estimated useful life | 10 years | ||||||||||
Customer relationship | Maximum | |||||||||||
Information related to useful life of finite-lived intangible assets | |||||||||||
Estimated useful life | 20 years | ||||||||||
Seed technology | |||||||||||
Information related to useful life of finite-lived intangible assets | |||||||||||
Estimated useful life | 5 years |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Newly Adopted Accounting Standards (Details) - Accounting Standards Update 201503 - Restatement Adjustment $ in Millions | Jan. 02, 2016USD ($) |
Newly Adopted Accounting Standards | |
Other assets | $ (28.1) |
Long-term debt | $ 28.1 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 02, 2016 | Nov. 21, 2016 | Nov. 02, 2015 | Jul. 10, 2015 | Apr. 03, 2014 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Jul. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Aug. 12, 2016 | Mar. 15, 2016 | May 30, 2015 |
Business Acquisition | ||||||||||||||||||||
Purchase price allocation adjustments increasing goodwill | $ 3,200 | |||||||||||||||||||
Purchase price allocation adjustments decreasing other working capital | 2,600 | |||||||||||||||||||
Purchase price allocation adjustments decreasing Property plant and equipment | 600 | |||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Share Price | $ 49 | $ 33.55 | $ 30.60 | |||||||||||||||||
Allocation: | ||||||||||||||||||||
Goodwill | 614,278 | $ 473,145 | $ 614,278 | $ 473,145 | ||||||||||||||||
Unaudited Pro Forma Summary of Operations | ||||||||||||||||||||
Net sales | 1,606,162 | 1,653,762 | $ 1,455,076 | |||||||||||||||||
Net income (loss) | 129,712 | $ (54,710) | 60,928 | |||||||||||||||||
Impairment of intangible assets | $ 5,405 | $ 34,154 | ||||||||||||||||||
Basic earnings per share | $ 2.01 | $ (0.93) | $ 1.14 | |||||||||||||||||
Diluted earnings per share | $ 2 | $ (0.93) | $ 1.13 | |||||||||||||||||
Net sales | 413,656 | $ 318,247 | $ 306,376 | $ 352,978 | 342,291 | $ 213,300 | $ 193,645 | $ 217,122 | $ 1,391,257 | $ 966,358 | $ 848,017 | |||||||||
General Mills Inc | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Receivables related to an ongoing transition services agreement | $ 52,600 | 52,600 | ||||||||||||||||||
Customer relationship | Minimum | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Estimated useful life | 10 years | |||||||||||||||||||
Customer relationship | Maximum | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Estimated useful life | 20 years | |||||||||||||||||||
Seed technology | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Estimated useful life | 5 years | |||||||||||||||||||
Victoria Acquisition | ||||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Cash paid | $ 71,855 | |||||||||||||||||||
Total | 71,855 | |||||||||||||||||||
Allocation: | ||||||||||||||||||||
Trademarks - unamortizable intangible assets | 45,500 | |||||||||||||||||||
Inventory | 5,729 | |||||||||||||||||||
Goodwill | 12,271 | |||||||||||||||||||
Amortizable intangible assets | 6,400 | |||||||||||||||||||
Property, Plant and Equipment | 9,298 | |||||||||||||||||||
Other working capital | (1,690) | |||||||||||||||||||
Long-term deferred income tax liabilities, net | (5,653) | |||||||||||||||||||
Total | $ 71,855 | |||||||||||||||||||
Spices and seasonings Acquisition | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Accounts Payable | $ 12,600 | $ 12,600 | ||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Cash paid | $ 366,932 | |||||||||||||||||||
Total | 366,932 | |||||||||||||||||||
Allocation: | ||||||||||||||||||||
Trademarks - unamortizable intangible assets | 65,200 | |||||||||||||||||||
Inventory | 49,571 | |||||||||||||||||||
Goodwill | 119,089 | |||||||||||||||||||
Amortizable intangible assets | 89,250 | |||||||||||||||||||
Property, Plant and Equipment | 62,193 | |||||||||||||||||||
Other liabilities | (17,502) | |||||||||||||||||||
Other working capital | (869) | |||||||||||||||||||
Total | $ 366,932 | |||||||||||||||||||
Unaudited Pro Forma Summary of Operations | ||||||||||||||||||||
Net sales | $ 28,200 | |||||||||||||||||||
Specialty Brands acquisition | ||||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Cash paid | $ 154,277 | |||||||||||||||||||
Total | 154,277 | |||||||||||||||||||
Allocation: | ||||||||||||||||||||
Income tax receivable | 4,012 | |||||||||||||||||||
Trademarks - unamortizable intangible assets | 137,300 | |||||||||||||||||||
Goodwill | 49,017 | |||||||||||||||||||
Amortizable intangible assets | 13,300 | |||||||||||||||||||
Short-term deferred income tax assets | 1,786 | |||||||||||||||||||
Other working capital | (2,233) | |||||||||||||||||||
Long-term deferred income tax liabilities, net | (48,905) | |||||||||||||||||||
Total | $ 154,277 | |||||||||||||||||||
Unaudited Pro Forma Summary of Operations | ||||||||||||||||||||
Net sales | $ 65,500 | |||||||||||||||||||
Specialty Brands acquisition | Accounts receivable and inventory | ||||||||||||||||||||
Allocation: | ||||||||||||||||||||
Goodwill and other working capital purchase accounting adjustment | $ 200 | |||||||||||||||||||
Mama Mary's | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Purchase price allocation adjustment decreasing goodwill and increasing other working capital | 600 | |||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Cash paid | $ 51,025 | |||||||||||||||||||
Total | 51,025 | |||||||||||||||||||
Allocation: | ||||||||||||||||||||
Trademarks - unamortizable intangible assets | 38,900 | |||||||||||||||||||
Goodwill | 17,735 | |||||||||||||||||||
Amortizable intangible assets | 4,800 | |||||||||||||||||||
Property, Plant and Equipment | 1,900 | |||||||||||||||||||
Short-term deferred income tax assets | 2,961 | |||||||||||||||||||
Other working capital | (19) | |||||||||||||||||||
Long-term deferred income tax liabilities, net | (15,252) | |||||||||||||||||||
Total | $ 51,025 | |||||||||||||||||||
Green Giant | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Inventory adjustment | $ 57,800 | |||||||||||||||||||
Estimated useful life | 5 years | |||||||||||||||||||
Purchase price allocation adjustment increasing goodwill and decreasing inventory | 7,200 | |||||||||||||||||||
Purchase Price: | ||||||||||||||||||||
Cash paid | 765,000 | |||||||||||||||||||
Adjusted cash paid | 822,786 | |||||||||||||||||||
Total | 822,786 | |||||||||||||||||||
Allocation: | ||||||||||||||||||||
Inventory | 232,522 | |||||||||||||||||||
Goodwill | 94,593 | |||||||||||||||||||
Property, Plant and Equipment | 43,641 | |||||||||||||||||||
Other working capital | (9,970) | |||||||||||||||||||
Total | 822,786 | |||||||||||||||||||
Unaudited Pro Forma Summary of Operations | ||||||||||||||||||||
Net sales | $ 506,700 | $ 106,200 | ||||||||||||||||||
Impairment of intangible assets | $ 260,000 | |||||||||||||||||||
Green Giant | Customer relationship | ||||||||||||||||||||
Allocation: | ||||||||||||||||||||
Amortizable intangible assets | 38,000 | |||||||||||||||||||
Green Giant | Seed technology | ||||||||||||||||||||
Allocation: | ||||||||||||||||||||
Amortizable intangible assets | 2,000 | |||||||||||||||||||
Green Giant | Trademarks | ||||||||||||||||||||
Allocation: | ||||||||||||||||||||
Trademarks - unamortizable intangible assets | $ 422,000 | |||||||||||||||||||
Rickland Orchards acquisition | ||||||||||||||||||||
Business Acquisition | ||||||||||||||||||||
Write-off of certain raw material and finished goods inventory | 800 | |||||||||||||||||||
Rickland Orchards acquisition | Trademarks | ||||||||||||||||||||
Unaudited Pro Forma Summary of Operations | ||||||||||||||||||||
Impairment of intangible assets | $ 4,500 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Inventories | ||
Raw materials and packaging | $ 60,532 | $ 32,143 |
Work-in-process | 98,664 | 123,817 |
Finished goods | 197,394 | 156,920 |
Total | $ 356,590 | $ 312,880 |
Property, Plant and Equipment50
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | $ 414,818 | $ 309,979 | |
Less: accumulated depreciation | (169,474) | (146,337) | |
Total | 245,344 | 163,642 | |
Depreciation expense | 23,500 | 17,400 | $ 14,700 |
Land | |||
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | 11,682 | 7,450 | |
Building and improvements | |||
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | 102,043 | 69,924 | |
Machinery and equipment | |||
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | 263,849 | 207,373 | |
Office furniture and vehicles | |||
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | 22,477 | 18,973 | |
Construction-in-progress | |||
Information related to useful life of property, plant and equipment | |||
Property, Plant and Equipment, Gross | $ 14,767 | $ 6,259 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Oct. 01, 2016 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Goodwill and Other Intangible Assets | ||||
Amortization expense | $ 13,803 | $ 11,255 | $ 12,692 | |
Amortizable Intangible Assets | ||||
Gross Carrying Amount | 339,090 | 249,769 | ||
Accumulated Amortization | 83,409 | 70,530 | ||
Net Carrying Amount | 255,681 | 179,239 | ||
Unamortizable Intangible Assets | ||||
Goodwill | 614,278 | 473,145 | ||
Future amortization expense | ||||
2,017 | 17,600 | |||
2,018 | 17,300 | |||
2,019 | 17,200 | |||
2,020 | 17,100 | |||
2,021 | 17,100 | |||
Acquisitions. | ||||
Impairment of intangible assets | 5,405 | $ 34,154 | ||
Rickland Orchards acquisition | ||||
Acquisitions. | ||||
Write-off of certain raw material and finished goods inventory | $ 800 | |||
Trademarks | ||||
Amortizable Intangible Assets | ||||
Gross Carrying Amount | 1,373,801 | 1,263,101 | ||
Trademarks | Rickland Orchards acquisition | ||||
Acquisitions. | ||||
Impairment of intangible assets | 4,500 | |||
Customer relationship | Rickland Orchards acquisition | ||||
Acquisitions. | ||||
Impairment of intangible assets | $ 900 | |||
Trademarks | ||||
Amortizable Intangible Assets | ||||
Gross Carrying Amount | 6,800 | 12,056 | ||
Accumulated Amortization | 1,662 | 1,806 | ||
Net Carrying Amount | 5,138 | 10,250 | ||
Customer relationship | ||||
Amortizable Intangible Assets | ||||
Gross Carrying Amount | 330,290 | 235,713 | ||
Accumulated Amortization | 80,847 | 68,591 | ||
Net Carrying Amount | 249,443 | 167,122 | ||
Seed technology | ||||
Amortizable Intangible Assets | ||||
Gross Carrying Amount | 2,000 | 2,000 | ||
Accumulated Amortization | 900 | 133 | ||
Net Carrying Amount | $ 1,100 | $ 1,867 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Apr. 02, 2016USD ($) | Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | Nov. 02, 2015USD ($) | Jun. 04, 2013USD ($) | |
Information related to long-term debt | ||||||
Total | $ 1,749,750 | |||||
Total long-term debt, net of unamortized discount | 1,725,783 | $ 1,731,521 | ||||
Current portion of long-term debt | (10,515) | (33,750) | ||||
Long-term debt | 1,715,268 | 1,697,771 | ||||
Aggregate contractual maturities of long-term debt | ||||||
2,017 | 10,515 | |||||
2,018 | 76,875 | |||||
2,019 | 322,250 | |||||
2,021 | 700,000 | |||||
Thereafter | 640,110 | |||||
Long-term debt agreements | ||||||
Loss on extinguishment of debt | $ (2,836) | 0 | $ (5,748) | |||
Number of quarters consolidated leverage ratio to be maintained | item | 4 | |||||
Number of quarters consolidated interest coverage ratio to be maintained | item | 4 | |||||
Information related to senior notes | ||||||
Accrued interest | $ 5,000 | 5,700 | ||||
Write-off of deferred debt financing costs | $ 2,200 | 5,400 | ||||
Prepayments and repurchases of long-term debt | $ 150,000 | 18,750 | 138,750 | |||
Write-off of unamortized discount | 600 | 300 | ||||
First quarter of 2016 through the fourth quarter of 2016 | ||||||
Long-term debt agreements | ||||||
Maximum permissible consolidated leverage ratio | 6.75 | |||||
First quarter of 2017 and thereafter | ||||||
Long-term debt agreements | ||||||
Maximum permissible consolidated leverage ratio | 6.50 | |||||
Minimum | ||||||
Long-term debt agreements | ||||||
Consolidated interest leverage ratio | 1.75 | |||||
Base rate | Minimum | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 0.50% | |||||
Base rate | Maximum | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 1.00% | |||||
LIBOR | Minimum | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 1.50% | |||||
LIBOR | Maximum | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 2.00% | |||||
Revolving credit loans | ||||||
Information related to long-term debt | ||||||
Total | $ 176,000 | 40,000 | ||||
Unamortized deferred financing costs | (2,703) | (3,822) | ||||
Total long-term debt, net of unamortized discount | 173,297 | 36,178 | ||||
Outstanding amount of debt | $ 176,000 | |||||
Commitment fees (as a percent) | 0.50% | |||||
Long-term debt agreements | ||||||
Available borrowing capacity | $ 322,000 | |||||
Information related to senior notes | ||||||
Deferred financing costs capitalized | $ 5,600 | |||||
Debt financing costs, amortization period | 5 years | |||||
Letters of credit facility | ||||||
Information related to long-term debt | ||||||
Fronting fee (as a percent) | 0.25% | |||||
Long-term debt agreements | ||||||
Maximum capacity available | $ 50,000 | |||||
Outstanding letters of credit | $ 2,000 | |||||
Incremental term loan | Maximum | ||||||
Long-term debt agreements | ||||||
Senior secured leverage ratio after utilization of incremental facility | 4 | |||||
4.625% Senior notes due 2021 | ||||||
Information related to long-term debt | ||||||
Total | $ 700,000 | 700,000 | $ 700,000 | |||
Unamortized deferred financing costs | (6,725) | (8,244) | ||||
Total long-term debt, net of unamortized discount | $ 693,275 | $ 691,756 | ||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | |||
Information related to senior notes | ||||||
Debt issuance price (as a percent) | 100.00% | |||||
4.625% Senior notes due 2021 | Redemption period beginning June 1, 2016 | ||||||
Information related to senior notes | ||||||
Redemption price (as a percent) | 103.469% | |||||
4.625% Senior notes due 2021 | Redemption period on or after June 1, 2019 | ||||||
Information related to senior notes | ||||||
Redemption price (as a percent) | 100.00% | |||||
Tranche B Term Loan | ||||||
Information related to long-term debt | ||||||
Outstanding amount of debt | $ 640,100 | |||||
Long-term debt agreements | ||||||
Maximum capacity available | $ 750,000 | |||||
Interest rate at period end (as a percent) | 3.75% | |||||
Information related to senior notes | ||||||
Principal amount of debt repurchased | 109,900 | |||||
Deferred financing costs capitalized | $ 0 | $ 14,500 | ||||
Debt financing costs, amortization period | 7 years | |||||
Prepayments and repurchases of long-term debt | 109,900 | |||||
Tranche B Term Loan | Base rate | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 2.00% | |||||
Tranche B Term Loan | LIBOR | ||||||
Information related to senior notes | ||||||
Interest rate added to variable base rate (as a percent) | 3.00% | |||||
Tranche B Term loans due 2022 | ||||||
Information related to long-term debt | ||||||
Total | $ 640,110 | 750,000 | ||||
Unamortized deferred financing costs | (10,546) | (14,232) | ||||
Unamortized discount | 2,719 | 3,669 | ||||
Total long-term debt, net of unamortized discount | 626,845 | 732,099 | ||||
Tranche A Term Loan | ||||||
Information related to long-term debt | ||||||
Outstanding amount of debt | 233,600 | |||||
Aggregate contractual maturities of long-term debt | ||||||
2,017 | 10,500 | |||||
2,018 | 76,900 | |||||
2,019 | $ 146,200 | |||||
Information related to senior notes | ||||||
Principal amount of debt repurchased | 40,100 | |||||
Deferred financing costs capitalized | $ 2,900 | |||||
Prepayments and repurchases of long-term debt | $ 40,100 | |||||
Tranche A Term Loan | Minimum | ||||||
Long-term debt agreements | ||||||
Interest rate at period end (as a percent) | 2.74% | |||||
Tranche A Term Loan | Maximum | ||||||
Long-term debt agreements | ||||||
Interest rate at period end (as a percent) | 2.76% | |||||
Tranche A term loans due 2019 | ||||||
Information related to long-term debt | ||||||
Total | $ 233,640 | 273,750 | ||||
Unamortized deferred financing costs | (1,012) | (1,797) | ||||
Unamortized discount | 262 | 465 | ||||
Total long-term debt, net of unamortized discount | $ 232,366 | $ 271,488 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 03, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jun. 04, 2013 | |
Changes in contingent consideration measured at level 3 | ||||
Balance at beginning of year | $ 7,774 | |||
Contingent consideration expense, including interest accretion | 432 | |||
Gain on change in fair value of contingent consideration | $ (8,206) | |||
4.625% Senior notes due 2021 | ||||
Changes in contingent consideration measured at level 3 | ||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | |
Fair value measured on recurring basis | Tranche A term loans due 2019 | ||||
Changes in contingent consideration measured at level 3 | ||||
Face amount of senior notes | $ 233,600 | $ 273,800 | ||
Fair value measured on recurring basis | Tranche B term loan due 2022 | ||||
Changes in contingent consideration measured at level 3 | ||||
Face amount of senior notes | 640,100 | 750,000 | ||
Fair value measured on recurring basis | Fair Value | Revolving credit loans | Level 2 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 176,000 | 40,000 | ||
Fair value measured on recurring basis | Fair Value | Tranche A term loans due 2019 | Level 2 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 232,795 | 272,381 | ||
Fair value measured on recurring basis | Fair Value | Tranche B term loan due 2022 | Level 2 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 645,358 | 749,063 | ||
Fair value measured on recurring basis | Fair Value | 4.625% Senior notes due 2021 | Level 2 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 714,000 | 691,250 | ||
Fair value measured on recurring basis | Carrying Value | Revolving credit loans | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 176,000 | 40,000 | ||
Fair value measured on recurring basis | Carrying Value | Tranche A term loans due 2019 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 233,378 | 273,285 | ||
Fair value measured on recurring basis | Carrying Value | Tranche B term loan due 2022 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 637,391 | 746,331 | ||
Fair value measured on recurring basis | Carrying Value | 4.625% Senior notes due 2021 | ||||
Changes in contingent consideration measured at level 3 | ||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | $ 700,000 | $ 700,000 |
Accumulated Other Comprehensi54
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Changes in accumulated other comprehensive loss | |||
Beginning balance | $ 457,685 | $ 337,995 | $ 378,363 |
Net current period other comprehensive income (loss) | (6,668) | (1,662) | (8,563) |
Ending balance | 785,657 | 457,685 | 337,995 |
Amount Reclassified from AOCL | |||
Reclassification from AOCL | |||
Total before tax | 498 | 847 | 45 |
Income tax expense | (188) | (320) | (17) |
Net of tax | 310 | 527 | 28 |
Defined Benefit Pension Plan Items | |||
Changes in accumulated other comprehensive loss | |||
Beginning balance | (8,712) | (10,787) | (2,340) |
Other comprehensive income (loss) before reclassifications | 1,202 | 1,548 | (8,475) |
Amounts reclassified from AOCL | 310 | 527 | 28 |
Net current period other comprehensive income (loss) | 1,512 | 2,075 | (8,447) |
Ending balance | (7,200) | (8,712) | (10,787) |
Amortization of unrecognized prior service cost | Amount Reclassified from AOCL | |||
Reclassification from AOCL | |||
Total before tax | 44 | 44 | 45 |
Amortization of unrecognized loss | Amount Reclassified from AOCL | |||
Reclassification from AOCL | |||
Total before tax | 454 | 803 | |
Foreign Currency Translation Adjustments | |||
Changes in accumulated other comprehensive loss | |||
Beginning balance | (3,984) | (247) | (131) |
Other comprehensive income (loss) before reclassifications | (8,180) | (3,737) | (116) |
Net current period other comprehensive income (loss) | (8,180) | (3,737) | (116) |
Ending balance | (12,164) | (3,984) | (247) |
Accumulated Other Comprehensive Loss | |||
Changes in accumulated other comprehensive loss | |||
Beginning balance | (12,696) | (11,034) | (2,471) |
Other comprehensive income (loss) before reclassifications | (6,978) | (2,189) | (8,591) |
Amounts reclassified from AOCL | 310 | 527 | 28 |
Net current period other comprehensive income (loss) | (6,668) | (1,662) | (8,563) |
Ending balance | $ (19,364) | $ (12,696) | $ (11,034) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Components of income before income tax expense | |||
U.S. | $ 150,266 | $ 120,168 | $ 63,232 |
Foreign | 26,800 | 1,071 | 545 |
Income before income tax expense | 177,066 | 121,239 | 63,777 |
Current: | |||
Federal | 1,993 | 19,534 | 7,993 |
State | 1,348 | 3,205 | 820 |
Foreign | 8,110 | 258 | 153 |
Subtotal | 11,451 | 22,997 | 8,966 |
Deferred: | |||
Federal | 50,587 | 20,729 | 13,330 |
State | 6,229 | 8,725 | 525 |
Foreign | (626) | (302) | |
Subtotal | 56,190 | 29,152 | 13,855 |
Income tax expense | $ 67,641 | $ 52,149 | $ 22,821 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Taxes | |||
Expected tax expense (as a percent) | 35.00% | 35.00% | 35.00% |
Increase (decrease): | |||
State income taxes, net of federal income tax benefit (as a percent) | 2.90% | 3.00% | 1.80% |
Impact on deferred taxes from changes in state tax rates (as a percent) | 1.00% | 5.90% | |
Foreign income taxes (as a percent) | 2.80% | ||
Permanent differences (as a percent) | (0.10%) | (0.70%) | |
Foreign tax credit (as a percent) | (3.10%) | (0.20%) | |
Other (as a percent) | (0.30%) | (1.00%) | |
Total (as a percent) | 38.20% | 43.00% | 35.80% |
Tax expense/(benefit) resulting from changes in state tax laws | $ 1,800 | $ 7,200 | $ 100 |
Deferred tax assets: | |||
Accounts receivable, principally due to allowance | 67 | 38 | |
Inventories, principally due to additional costs capitalized for tax purposes | 3,097 | 2,781 | |
Accruals and other liabilities | 4,499 | 4,546 | |
Net operating loss and tax credit carry forwards | 9,516 | 2,311 | |
Total gross deferred tax assets | 17,179 | 9,676 | |
Deferred tax liabilities: | |||
Plant and equipment | (20,573) | (15,653) | |
Goodwill and other intangible assets | (303,015) | (237,866) | |
Prepaid expense | (1,169) | (949) | |
Total gross deferred tax liabilities | (324,757) | (254,468) | |
Net deferred tax liability | (307,578) | (244,792) | |
Valuation allowance | 0 | $ 0 | |
Value of intangibles for tax purposes, which are amortizable through 2029 | 1,288,000 | ||
Uncertain tax positions | $ 0 |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Thousands | Aug. 12, 2016USD ($)$ / sharesshares | Mar. 15, 2016USD ($)$ / sharesshares | May 30, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)itemshares | Jan. 02, 2016USD ($)shares | Jan. 03, 2015shares |
Capital Stock | ||||||
Number of votes to which holders of common shares are entitled for each share held | item | 1 | |||||
Shares of common stock repurchased and retired | 0 | 0 | 0 | |||
Issuance of stock (in shares) | 3,750,000 | 4,600,000 | 4,200,000 | |||
Share price (in dollars per share) | $ / shares | $ 49 | $ 33.55 | $ 30.60 | |||
Issuance of common stock | $ | $ 179,900 | $ 152,000 | $ 126,200 | $ 331,879 | $ 126,230 |
Pension Benefits (Details)
Pension Benefits (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | |
Pension Benefits | |||
Number of defined benefit pension plans | item | 4 | ||
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 66,384 | $ 66,727 | |
Actuarial (gain) loss | (249) | (4,589) | |
Service cost | 3,325 | 3,909 | $ 2,940 |
Interest cost | 2,717 | 2,577 | 2,387 |
Benefits paid | (1,752) | (1,415) | |
Curtailments | (825) | ||
Projected benefit obligation at end of year | 70,425 | 66,384 | 66,727 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 66,534 | 63,163 | |
Actual gain on plan assets | 6,115 | 1,286 | |
Employer contributions | 3,500 | 3,500 | |
Benefits paid | (1,752) | (1,415) | |
Fair value of plan assets at end of year | 74,397 | 66,534 | $ 63,163 |
Net amount recognized: | |||
Other assets | 3,972 | 865 | |
Other long-term liabilities | (715) | ||
Funded status at the end of the year | 3,972 | 150 | |
Amount recognized in accumulated other comprehensive loss consists of: | |||
Prior service cost | (37) | (82) | |
Actuarial loss | (11,202) | (13,586) | |
Deferred taxes | 4,039 | 4,956 | |
Accumulated other comprehensive loss | (7,200) | (8,712) | |
Accumulated benefit obligations related to one plan | $ 64,000 | 59,600 | |
Accumulated benefit obligations related to two other plans | 5,842 | ||
Fair value of plan assets related to two other plans | $ 5,780 |
Pension Benefits - Net Periodic
Pension Benefits - Net Periodic Pension Cost, AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Components of net periodic pension cost | |||
Service cost-benefits earned during the period | $ 3,325 | $ 3,909 | $ 2,940 |
Interest cost on projected benefit obligation | 2,717 | 2,577 | 2,387 |
Expected return on plan assets | (4,434) | (4,214) | (4,347) |
Amortization of unrecognized prior service cost | 44 | 44 | 45 |
Amortization of unrecognized loss | 454 | 803 | |
Net periodic pension cost | 2,106 | $ 3,119 | $ 1,025 |
Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost | |||
Prior service cost | 36 | ||
Actuarial loss | 293 | ||
Total | $ 329 | ||
Weighted-average assumptions | |||
Discount rate (as a percent) | 4.039% | 4.225% | |
Rate of compensation increase (as a percent) | 3.00% | 3.00% | |
Expected long-term rate of return (as a percent) | 6.50% | 6.50% |
Pension Benefits - Investment A
Pension Benefits - Investment Allocation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Pension Benefits | ||
Target Allocation (as a percent) | 100.00% | |
Percentage of Plan Assets at Year End | 100.00% | 100.00% |
Equity securities | ||
Pension Benefits | ||
Target Allocation (as a percent) | 75.00% | |
Percentage of Plan Assets at Year End | 69.00% | 80.00% |
Fixed income securities | ||
Pension Benefits | ||
Target Allocation (as a percent) | 25.00% | |
Percentage of Plan Assets at Year End | 27.00% | 15.00% |
Other | ||
Pension Benefits | ||
Percentage of Plan Assets at Year End | 4.00% | 5.00% |
Pension Benefits - Fair Value C
Pension Benefits - Fair Value Common Stock (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
Pension Benefits | |||
Fair value of pension plan assets | $ 74,397 | $ 66,534 | $ 63,163 |
U.S. common stock in investment portfolio | 12,600 | 15,700 | |
U.S. common stocks invested in B&G Foods, Inc | 7,200 | 5,800 | |
Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 74,397 | 66,534 | |
Cash | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 3,286 | 3,558 | |
U.S. mutual funds | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 26,179 | 28,728 | |
Foreign mutual funds | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 1,390 | 1,143 | |
Common Stock | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 12,582 | 15,716 | |
Foreign common stocks | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | 10,585 | 7,723 | |
U.S. mutual funds | Level 1 | |||
Pension Benefits | |||
Fair value of pension plan assets | $ 20,375 | $ 9,666 |
Pension Benefits - Expected Cas
Pension Benefits - Expected Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Oct. 03, 2015 | |
Pension Benefits | |||||
Matching component of contribution by employer to defined contribution plan | $ 1,100 | $ 1,000 | $ 1,000 | ||
Expected cash flows for pension plan | |||||
Benefit payments for the year 2017 | 2,000 | ||||
Benefit payments for the year 2018 | 2,262 | ||||
Benefit payments for the year 2019 | 2,592 | ||||
Benefit payments for the year 2020 | 2,802 | ||||
Benefit payments for the year 2021 | 3,080 | ||||
Benefit payments for the years 2022 to 2026 | 18,868 | ||||
Anticipated contribution in fiscal year 2017 | 3,500 | ||||
Multi-Employer Defined Benefit Pension Plan | |||||
Maximum contribution to multi-employer plan (as a percent) | 5.00% | 5.00% | |||
Contribution to the multi-employer plan | 800 | $ 800 | 1,000 | ||
Other liabilities | |||||
Multi-Employer Defined Benefit Pension Plan | |||||
Other liabilities | 17,500 | ||||
Maximum | |||||
Multi-Employer Defined Benefit Pension Plan | |||||
Surcharges paid or expected to be paid | $ 100 | $ 100 | $ 100 | ||
Expected | Maximum | |||||
Multi-Employer Defined Benefit Pension Plan | |||||
Surcharges paid or expected to be paid | $ 100 |
Commitments and Contingencies63
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Future minimum lease payments under non-cancelable operating leases | |||
2,017 | $ 8,302 | ||
2,018 | 7,535 | ||
2,019 | 7,388 | ||
2,020 | 6,539 | ||
2,021 | 4,292 | ||
Thereafter | 77 | ||
Total | 34,133 | ||
Total rental expense | $ 9,100 | $ 8,000 | $ 7,300 |
Commitments and Contingencies -
Commitments and Contingencies - Collective Bargaining (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)employeeitem | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | |
Information related to Collective Bargaining Agreements | |||
Number of executive officers with employment agreements | item | 7 | ||
Information related to Ortega and Las Palmas recall | |||
Insurance recoveries receivable | $ 12.8 | ||
Cost impact of recall, net of expected insurance recoveries | $ 0 | $ 1.9 | 5 |
Reduction of net sales | 1.2 | 4.1 | |
Cost of sales | 0.5 | 8.2 | |
Administrative costs | 0.2 | $ 0.5 | |
Insurance recoveries | $ 5 | ||
Number of employees covered under collective bargaining agreements | |||
Information related to Collective Bargaining Agreements | |||
Number of employees | item | 1 | ||
Percentage of total employees covered under collective bargaining agreements | 60.00% | ||
Total number of employees | |||
Information related to Collective Bargaining Agreements | |||
Number of employees | item | 2 | ||
Number of collective bargaining agreements expiring within one year | |||
Information related to Collective Bargaining Agreements | |||
Collective bargaining agreements expiration period | 1 year | ||
Number of other collective bargaining agreements expiring within one year | item | 0 | ||
Number of employees covered under collective bargaining agreements expiring with next 12 months | |||
Information related to Collective Bargaining Agreements | |||
Number of employees | employee | 80 | ||
Collective bargaining agreements expiration period | 12 years |
Incentive Plans (Details)
Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Annual bonus accrual | $ 10,100 | $ 7,000 | |
Share based compensation expense related to long-term incentive plans | |||
Total shares of common stock issued | 79,570 | 113,047 | 217,787 |
Compensation expense | |||
Compensation expense recognized for share-based payments | $ 5,798 | $ 5,817 | $ 2,235 |
Cost of Goods Sold | |||
Compensation expense | |||
Compensation expense recognized for share-based payments | 1,060 | 1,420 | 1,075 |
Selling, General and Administrative Expenses | |||
Compensation expense | |||
Compensation expense recognized for share-based payments | $ 4,738 | $ 4,397 | $ 1,160 |
Non-Employee Directors | |||
Share based compensation expense related to long-term incentive plans | |||
Total shares of common stock issued | 16,072 | 18,095 | 14,010 |
2008 Omnibus Incentive Compensation Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Total number of shares of common stock authorized for awards | 4,500,000 | ||
Shares of common stock available for future awards | 2,497,028 | ||
Performance share long Term incentive awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance period | 3 years | ||
Percentage of target number of shares that may be earned, minimum | 50.00% | ||
Percentage of target number of shares that may be earned scenario 1, maximum | 200.00% | ||
Number of Shares | |||
Balance at the beginning of the period (in shares) | 368,274 | ||
Granted (in shares) | 173,646 | ||
Vested (in shares) | (101,094) | (153,194) | (342,576) |
Forfeited (in shares) | (4,272) | ||
Balance at the end of the period (in shares) | 436,554 | 368,274 | |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 26.16 | ||
Granted (in dollars per share) | 29.04 | ||
Vested (in dollars per share) | 28.24 | ||
Forfeited (in dollars per share) | 28 | ||
Balance at the end of the period (in dollars per share) | $ 26.81 | $ 26.16 | |
Share based compensation expense related to long-term incentive plans | |||
Number of performance shares vested | 101,094 | 153,194 | 342,576 |
Shares withheld to fund statutory minimum tax withholding | 37,596 | 58,242 | 138,799 |
Total shares of common stock issued | 63,498 | 94,952 | 203,777 |
Excess tax benefit recorded to additional paid in capital | 343,000 | 539,000 | 2,356,000 |
Compensation expense | |||
Unrecognized compensation expense | $ 1,700 | ||
Period over which unrecognized compensation expense is expected to be recognized | 3 years | ||
Stock Option | |||
Options | |||
Outstanding at beginning of fiscal 2016 (in shares) | 501,698 | ||
Granted (in shares) | 218,491 | ||
Forfeited (in shares) | (5,609) | ||
Outstanding at end of fiscal 2016 (in shares) | 714,580 | 501,698 | |
Exercisable at end of fiscal 2016 (In shares) | 1,300 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of fiscal 2016 (in dollar per share) | $ 30.20 | ||
Granted (in dollars per share) | 34.99 | ||
Forfeited (in dollars per share) | 33.28 | ||
Outstanding at end of second quarter of 2016 (in dollar per share) | 31.65 | $ 30.20 | |
Exercisable at end of second quarter of 2016 ( in dollars per share) | $ 27.77 | ||
Additional disclosures | |||
Weighted Average Contractual Life Remaining (Years) | 8 years 3 months 18 days | ||
Exercisable, Weighted Average Contractual Life Remaining (Years) | 6 months | ||
Aggregate Intrinsic Value | $ 6,924 | ||
Exercisable, Aggregate Intrinsic Value | $ 18 | ||
Assumptions: | |||
Weighted average grant date fair value (in dollars per share) | $ 5.26 | $ 6 | $ 6.74 |
Expected volatility (as a percent) | 27.70% | 36.00% | 34.80% |
Expected term | 6 years 6 months | 6 years 6 months | |
Risk-free interest rate (as a percent) | 1.90% | ||
Dividend yield (as a percent) | 4.40% | ||
Compensation expense | |||
Unrecognized compensation expense | $ 4,300 | ||
Period over which unrecognized compensation expense is expected to be recognized | 2 years | ||
Stock Option | Minimum | |||
Assumptions: | |||
Expected term | 5 years 6 months | ||
Risk-free interest rate (as a percent) | 1.50% | 1.60% | |
Dividend yield (as a percent) | 3.90% | 4.70% | |
Stock Option | Maximum | |||
Assumptions: | |||
Expected term | 6 years 6 months | ||
Risk-free interest rate (as a percent) | 1.70% | 1.90% | |
Dividend yield (as a percent) | 4.90% | 4.90% |
Net Sales by Brand (Details)
Net Sales by Brand (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net Sales by Brand | |||||||||||
Net sales | $ 413,656 | $ 318,247 | $ 306,376 | $ 352,978 | $ 342,291 | $ 213,300 | $ 193,645 | $ 217,122 | $ 1,391,257 | $ 966,358 | $ 848,017 |
Specific brand sale to total sale (as a percent) | 2.00% | ||||||||||
Number of weeks in fiscal year | 364 days | 364 days | 371 days | ||||||||
Green Giant | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | $ 506,679 | $ 106,173 | |||||||||
Ortega | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 142,093 | 145,840 | $ 134,374 | ||||||||
Pirate Brands | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 84,918 | 81,715 | 82,563 | ||||||||
Maple Grove Farms of Vermont | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 72,799 | 77,724 | 79,177 | ||||||||
Cream of Wheat | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 62,178 | 62,342 | 62,494 | ||||||||
Mrs. Dash | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 60,653 | 63,210 | 64,105 | ||||||||
Bear Creek Country Kitchens | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 52,787 | 53,865 | 41,432 | ||||||||
Las Palmas | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 39,159 | 36,729 | 35,121 | ||||||||
Mama Mary's | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 35,778 | 18,358 | |||||||||
Polaner | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 34,299 | 33,813 | 36,136 | ||||||||
New York Style | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 33,132 | 23,315 | 28,075 | ||||||||
Spices and Seasonings | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | 28,171 | ||||||||||
All other brands | |||||||||||
Net Sales by Brand | |||||||||||
Net sales | $ 238,611 | $ 263,274 | $ 284,540 |
Quarterly Financial Data (una67
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net sales | $ 413,656 | $ 318,247 | $ 306,376 | $ 352,978 | $ 342,291 | $ 213,300 | $ 193,645 | $ 217,122 | $ 1,391,257 | $ 966,358 | $ 848,017 |
Gross profit | 106,906 | 115,426 | 109,715 | 115,915 | 88,563 | 71,596 | 62,008 | 67,397 | 447,962 | 289,564 | 247,771 |
Net income | $ 13,568 | $ 32,410 | $ 30,251 | $ 33,196 | $ 10,960 | $ 19,815 | $ 18,748 | $ 19,567 | $ 109,425 | $ 69,090 | $ 40,956 |
Basic and diluted earnings (loss) per share (in dollars per share) | $ 0.20 | $ 0.50 | $ 0.48 | $ 0.56 | $ 0.19 | $ 0.34 | $ 0.33 | $ 0.36 | |||
Cash dividends declared per share | $ 0.47 | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.35 | $ 0.35 | $ 0.34 | $ 0.34 | $ 1.73 | $ 1.38 | $ 1.36 |
Guarantor and Non-Guarantor F68
Guarantor and Non-Guarantor Financial Information (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Jun. 04, 2013 |
Current assets: | |||||
Cash and cash equivalents | $ 28,833 | $ 5,246 | $ 1,490 | $ 4,107 | |
Trade accounts receivable, net | 119,265 | 69,712 | |||
Inventories, net | 356,590 | 312,880 | |||
Prepaid expenses and other current assets | 26,399 | 67,517 | |||
Income tax receivable | 10,787 | 2,514 | |||
Deferred income taxes | 7,902 | 5,292 | |||
Total current assets | 549,776 | 463,161 | |||
Property, plant and equipment, net | 245,344 | 163,642 | |||
Goodwill | 614,278 | 473,145 | |||
Other intangibles, net | 1,629,482 | 1,442,340 | |||
Other assets | 4,625 | 1,332 | |||
Total assets | 3,043,505 | 2,543,620 | |||
Current liabilities: | |||||
Trade accounts payable | 98,033 | 49,593 | |||
Accrued expenses | 62,393 | 31,233 | |||
Current portion of long-term debt | 10,515 | 33,750 | |||
Income tax payable | 3,875 | ||||
Dividends payable | 30,879 | 20,292 | |||
Total current liabilities | 205,695 | 134,868 | |||
Long-term debt | 1,715,268 | 1,697,771 | |||
Other liabilities | 21,405 | 3,212 | |||
Deferred income taxes | 315,480 | 250,084 | |||
Total liabilities | 2,257,848 | 2,085,935 | |||
Stockholders' equity: | |||||
Preferred stock | |||||
Common Stock | 664 | 580 | |||
Additional paid-in capital | 387,699 | 162,568 | |||
Accumulated other comprehensive loss | (19,364) | (12,696) | |||
Retained earnings | 416,658 | 307,233 | |||
Total stockholders' equity | 785,657 | 457,685 | 337,995 | $ 378,363 | |
Total liabilities and stockholders' equity | $ 3,043,505 | $ 2,543,620 | |||
4.625% Senior notes due 2021 | |||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | ||
Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | $ 28,833 | $ 5,246 | |||
Eliminations | |||||
Current assets: | |||||
Income tax receivable | (104) | ||||
Deferred income taxes | (127) | ||||
Intercompany receivables | (12,183) | (4,659) | |||
Total current assets | (12,183) | (4,890) | |||
Investments in subsidiaries | (2,659,492) | (2,322,667) | |||
Total assets | (2,671,675) | (2,327,557) | |||
Current liabilities: | |||||
Accrued expenses | (104) | ||||
Intercompany payables | (12,183) | (4,659) | |||
Total current liabilities | (12,183) | (4,763) | |||
Deferred income taxes | (127) | ||||
Total liabilities | (12,183) | (4,890) | |||
Stockholders' equity: | |||||
Preferred stock | |||||
Additional paid-in capital | (2,255,069) | (2,032,114) | |||
Accumulated other comprehensive loss | 31,528 | 16,680 | |||
Retained earnings | (435,951) | (307,233) | |||
Total stockholders' equity | (2,659,492) | (2,322,667) | |||
Total liabilities and stockholders' equity | (2,671,675) | (2,327,557) | |||
Parent | Reportable Legal Entities | |||||
Current assets: | |||||
Investments in subsidiaries | 2,563,305 | 2,237,593 | |||
Total assets | 2,563,305 | 2,237,593 | |||
Current liabilities: | |||||
Current portion of long-term debt | 10,515 | 33,750 | |||
Dividends payable | 30,879 | 20,292 | |||
Total current liabilities | 41,394 | 54,042 | |||
Long-term debt | 1,736,254 | 1,725,866 | |||
Total liabilities | 1,777,648 | 1,779,908 | |||
Stockholders' equity: | |||||
Preferred stock | |||||
Common Stock | 664 | 580 | |||
Additional paid-in capital | 387,699 | 162,568 | |||
Accumulated other comprehensive loss | (19,364) | (12,696) | |||
Retained earnings | 416,658 | 307,233 | |||
Total stockholders' equity | 785,657 | 457,685 | |||
Total liabilities and stockholders' equity | 2,563,305 | 2,237,593 | |||
Guarantor Subsidiaries | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 25,119 | 1,964 | 1,438 | ||
Trade accounts receivable, net | 111,350 | 63,890 | |||
Inventories, net | 309,584 | 277,432 | |||
Prepaid expenses and other current assets | 20,296 | 53,242 | |||
Income tax receivable | 10,780 | 2,611 | |||
Deferred income taxes | 7,036 | 5,116 | |||
Intercompany receivables | 4,659 | ||||
Total current assets | 484,165 | 408,914 | |||
Property, plant and equipment, net | 211,843 | 128,227 | |||
Goodwill | 614,278 | 473,145 | |||
Other intangibles, net | 1,629,482 | 1,442,340 | |||
Other assets | 4,612 | 1,332 | |||
Investments in subsidiaries | 96,187 | 85,074 | |||
Total assets | 3,040,567 | 2,539,032 | |||
Current liabilities: | |||||
Trade accounts payable | 88,668 | 45,646 | |||
Accrued expenses | 60,957 | 30,465 | |||
Intercompany payables | 11,738 | ||||
Total current liabilities | 161,363 | 76,111 | |||
Long-term debt | (20,986) | (28,095) | |||
Other liabilities | 21,405 | 3,212 | |||
Deferred income taxes | 315,480 | 250,211 | |||
Total liabilities | 477,262 | 301,439 | |||
Stockholders' equity: | |||||
Preferred stock | |||||
Additional paid-in capital | 2,168,236 | 1,945,281 | |||
Accumulated other comprehensive loss | (19,364) | (12,696) | |||
Retained earnings | 414,433 | 305,008 | |||
Total stockholders' equity | 2,563,305 | 2,237,593 | |||
Total liabilities and stockholders' equity | 3,040,567 | 2,539,032 | |||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 3,714 | 3,282 | $ 52 | ||
Trade accounts receivable, net | 7,915 | 5,822 | |||
Inventories, net | 47,006 | 35,448 | |||
Prepaid expenses and other current assets | 6,103 | 14,275 | |||
Income tax receivable | 7 | 7 | |||
Deferred income taxes | 866 | 303 | |||
Intercompany receivables | 12,183 | ||||
Total current assets | 77,794 | 59,137 | |||
Property, plant and equipment, net | 33,501 | 35,415 | |||
Other assets | 13 | ||||
Total assets | 111,308 | 94,552 | |||
Current liabilities: | |||||
Trade accounts payable | 9,365 | 3,947 | |||
Accrued expenses | 1,436 | 872 | |||
Income tax payable | 3,875 | ||||
Intercompany payables | 445 | 4,659 | |||
Total current liabilities | 15,121 | 9,478 | |||
Total liabilities | 15,121 | 9,478 | |||
Stockholders' equity: | |||||
Preferred stock | |||||
Additional paid-in capital | 86,833 | 86,833 | |||
Accumulated other comprehensive loss | (12,164) | (3,984) | |||
Retained earnings | 21,518 | 2,225 | |||
Total stockholders' equity | 96,187 | 85,074 | |||
Total liabilities and stockholders' equity | $ 111,308 | $ 94,552 |
Guarantor and Non-Guarantor F69
Guarantor and Non-Guarantor Financial Information - Operating Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net sales | $ 413,656 | $ 318,247 | $ 306,376 | $ 352,978 | $ 342,291 | $ 213,300 | $ 193,645 | $ 217,122 | $ 1,391,257 | $ 966,358 | $ 848,017 |
Cost of goods sold | 943,295 | 676,794 | 600,246 | ||||||||
Gross profit | 106,906 | 115,426 | 109,715 | 115,915 | 88,563 | 71,596 | 62,008 | 67,397 | 447,962 | 289,564 | 247,771 |
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 174,759 | 105,939 | 93,033 | ||||||||
Amortization expense | 13,803 | 11,255 | 12,692 | ||||||||
Impairment of intangible assets | 5,405 | 34,154 | |||||||||
Operating income | 253,995 | 172,370 | 116,098 | ||||||||
Other income and expenses: | |||||||||||
Interest expense, net | 74,456 | 51,131 | 46,573 | ||||||||
Loss on extinguishment of debt | 2,836 | 0 | 5,748 | ||||||||
Other income | (363) | ||||||||||
Income before income tax expense | 177,066 | 121,239 | 63,777 | ||||||||
Income tax expense | 67,641 | 52,149 | 22,821 | ||||||||
Net income | $ 13,568 | $ 32,410 | $ 30,251 | $ 33,196 | $ 10,960 | $ 19,815 | $ 18,748 | $ 19,567 | 109,425 | 69,090 | 40,956 |
Comprehensive income | 102,757 | 67,428 | $ 32,393 | ||||||||
Eliminations | |||||||||||
Net sales | (48,335) | (4,267) | |||||||||
Cost of goods sold | (48,335) | (4,267) | |||||||||
Other income and expenses: | |||||||||||
Equity in earnings of subsidiaries | (128,718) | (70,247) | |||||||||
Net income | (128,718) | (70,247) | |||||||||
Comprehensive income | (119,026) | (64,848) | |||||||||
Parent | Reportable Legal Entities | |||||||||||
Other income and expenses: | |||||||||||
Equity in earnings of subsidiaries | 109,425 | 69,090 | |||||||||
Net income | 109,425 | 69,090 | |||||||||
Comprehensive income | 102,757 | 67,428 | |||||||||
Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Net sales | 1,300,569 | 934,260 | |||||||||
Cost of goods sold | 887,163 | 647,256 | |||||||||
Gross profit | 413,406 | 287,004 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 167,003 | 104,449 | |||||||||
Amortization expense | 13,803 | 11,255 | |||||||||
Impairment of intangible assets | 5,405 | ||||||||||
Operating income | 227,195 | 171,300 | |||||||||
Other income and expenses: | |||||||||||
Interest expense, net | 74,456 | 51,131 | |||||||||
Loss on extinguishment of debt | 2,836 | ||||||||||
Other income | (363) | ||||||||||
Income before income tax expense | 150,266 | 120,169 | |||||||||
Income tax expense | 60,134 | 52,236 | |||||||||
Equity in earnings of subsidiaries | 19,293 | 1,157 | |||||||||
Net income | 109,425 | 69,090 | |||||||||
Comprehensive income | 107,913 | 67,428 | |||||||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||||||
Net sales | 139,023 | 36,365 | |||||||||
Cost of goods sold | 104,467 | 33,805 | |||||||||
Gross profit | 34,556 | 2,560 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 7,756 | 1,490 | |||||||||
Operating income | 26,800 | 1,070 | |||||||||
Other income and expenses: | |||||||||||
Income before income tax expense | 26,800 | 1,070 | |||||||||
Income tax expense | 7,507 | (87) | |||||||||
Net income | 19,293 | 1,157 | |||||||||
Comprehensive income | $ 11,113 | $ (2,580) |
Guarantor and Non-Guarantor F70
Guarantor and Non-Guarantor Financial Information - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | $ 289,661 | $ 128,479 | $ 99,126 |
Cash flows from investing activities: | |||
Capital expenditures | (42,418) | (18,574) | (19,025) |
Payments for acquisition of businesses, net of cash acquired | (438,787) | (873,811) | (154,277) |
Net cash used in investing activities | (481,205) | (892,385) | (173,302) |
Cash flows from financing activities: | |||
Repayments of long-term debt | (150,000) | (18,750) | (138,750) |
Proceeds from issuance of long-term debt | 746,250 | 299,250 | |
Repayments of borrowings under revolving credit facility | (99,000) | (164,000) | (258,500) |
Borrowings under revolving credit facility | 235,000 | 170,000 | 252,500 |
Proceeds from issuance of common stock, net | 331,879 | 126,230 | |
Dividends paid | (100,807) | (76,528) | (72,369) |
Excess tax benefits from share-based compensation | 343 | 539 | 2,356 |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,410) | (1,750) | (4,374) |
Debt financing costs | (14,547) | (8,494) | |
Net cash provided by financing activities | 216,005 | 767,444 | 71,619 |
Effect of exchange rate fluctuations on cash and cash equivalents | (874) | 218 | (60) |
Net increase (decrease) in cash and cash equivalents | 23,587 | 3,756 | (2,617) |
Cash and cash equivalents at beginning of year | 5,246 | 1,490 | 4,107 |
Cash and cash equivalents at end of year | 28,833 | 5,246 | 1,490 |
Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | 289,661 | ||
Cash flows from investing activities: | |||
Capital expenditures | (42,418) | ||
Payments for acquisition of businesses, net of cash acquired | (438,787) | ||
Net cash used in investing activities | (481,205) | ||
Cash flows from financing activities: | |||
Repayments of long-term debt | (150,000) | ||
Repayments of borrowings under revolving credit facility | (99,000) | ||
Borrowings under revolving credit facility | 235,000 | ||
Proceeds from issuance of common stock, net | 331,879 | ||
Dividends paid | (100,807) | ||
Excess tax benefits from share-based compensation | 343 | ||
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,410) | ||
Net cash provided by financing activities | 216,005 | ||
Effect of exchange rate fluctuations on cash and cash equivalents | (874) | ||
Net increase (decrease) in cash and cash equivalents | 23,587 | ||
Cash and cash equivalents at beginning of year | 5,246 | ||
Cash and cash equivalents at end of year | 28,833 | 5,246 | |
Parent | Reportable Legal Entities | |||
Cash flows from financing activities: | |||
Repayments of long-term debt | (150,000) | (18,750) | |
Proceeds from issuance of long-term debt | 746,250 | ||
Repayments of borrowings under revolving credit facility | (99,000) | (164,000) | |
Borrowings under revolving credit facility | 235,000 | 170,000 | |
Proceeds from issuance of common stock, net | 331,879 | 126,230 | |
Dividends paid | (100,807) | (76,528) | |
Intercompany transactions | (217,072) | (783,202) | |
Guarantor Subsidiaries | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | 263,388 | 137,330 | |
Cash flows from investing activities: | |||
Capital expenditures | (33,847) | (18,209) | |
Payments for acquisition of businesses, net of cash acquired | (438,787) | (796,524) | |
Net cash used in investing activities | (472,634) | (814,733) | |
Cash flows from financing activities: | |||
Excess tax benefits from share-based compensation | 343 | 539 | |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,410) | (1,750) | |
Debt financing costs | (14,547) | ||
Intercompany transactions | 233,468 | 693,687 | |
Net cash provided by financing activities | 232,401 | 677,929 | |
Net increase (decrease) in cash and cash equivalents | 23,155 | 526 | |
Cash and cash equivalents at beginning of year | 1,964 | 1,438 | |
Cash and cash equivalents at end of year | 25,119 | 1,964 | 1,438 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net cash provided by (used in) operating activities | 26,273 | (8,851) | |
Cash flows from investing activities: | |||
Capital expenditures | (8,571) | (365) | |
Payments for acquisition of businesses, net of cash acquired | (77,287) | ||
Net cash used in investing activities | (8,571) | (77,652) | |
Cash flows from financing activities: | |||
Intercompany transactions | (16,396) | 89,515 | |
Net cash provided by financing activities | (16,396) | 89,515 | |
Effect of exchange rate fluctuations on cash and cash equivalents | (874) | 218 | |
Net increase (decrease) in cash and cash equivalents | 432 | 3,230 | |
Cash and cash equivalents at beginning of year | 3,282 | 52 | |
Cash and cash equivalents at end of year | $ 3,714 | $ 3,282 | $ 52 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Oct. 01, 2016 | |
Restructuring | ||
Expected non-cash write off of equipment | $ 0.3 | |
Restructuring cost | $ 0.8 |
Schedule II Schedule of Valua72
Schedule II Schedule of Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts and discounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Changes in Valuation and Qualifying Accounts | |||
Balance at beginning of period | $ 1,167 | $ 1,005 | $ 1,081 |
Charged to costs and expenses | 559 | 178 | 21 |
Deductions describe | 7 | 16 | 97 |
Balance at end of period | $ 1,719 | $ 1,167 | $ 1,005 |