BGS - Earnings call transcript Q1 2022

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Operator

Good day. And welcome to B&G Foods First Quarter 2022 Earnings Conference Call. Today’s call which is being recorded is scheduled to last about 1 hour, including remarks by B&G Foods management and a question-and-answer session. I would now like to turn the call over to your host, Sarah Jarolem, Senior Director of Corporate Strategy and Business Development for B&G Foods. Sarah?

Sarah Jarolem

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

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

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

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

Casey Keller

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

were relatively elasticities. sales driven of recovery. first first quarter Sales and by demand elevated compared our XXXX, quarter by levels of ahead continued X.X% and Net of to low XXXX the challenged by pricing expectations. to increased pre-COVID with supply be inflation The continued versus higher

However, higher other cost our particularly accelerated in declined wheat, adjusted and fuel versus XX.X% inflationary war by expected Ukraine, year, the behind quarter corn, pressures commodities. EBITDA in first last oil, than

our half that in the XXXX. first XXXX. a these lag There pricing recover during higher of higher goods pricing expect costs initiatives the We sold will of latest between cost of back and half is

me specifics including New our required three-month plan pricing historical in sight to effect period to let per actions financial line costs. late have take but input implementation higher to primary is $X.XX for notification inflation the January In Bruce with QX will our retail of now portfolio early a address between by the of pound less soybean in to low have the particular, reached sharply increased have Ukraine-Russia vegetable Green higher of farmers for have costs risen prices. behind highs disruption and than oil Giant costs also $X.XX. planning. because crop corn Wheat delivery and shifted mid-teens over projections relative Crisco oil, now XXXX key and and the Freight Ukraine as first highlights. global and to significantly quarter, factors the in of impact on and the talk goods to more But partners. QX, sold will in XX%, projected two-month quarter issues. We detail. supply results war more cost total XX% and following inflation driving of the XXXX in in Inflation, is

million QX delivered spend well in trade from $XX.X reduction acted Second, pricing has several higher revenue and input as costs. additional of Pricing to that offset on May lower in will are July. pricing on reflected than increases March XXXX being rounds efficiencies, implemented in P&G and February. pricing weight between in implemented increases generally actions, initiatives pricing, price as have projected Pricing actions already fielded late More early in and April been shelf. additional elasticities

Third, shortages. fill related material but service co-manufacturers demand, categories labor lines output to also during QX And prior were infections levels and and Omicron we relative rates issues year supply, B&G and during XX%. and and to March, February supply strong Production customer and facilities finally, below experienced experienced B&G and steadily most at levels. demand QX product recovered pre-COVID through reasonably

continue in driven during days working see eating work the consumers We more partially home. spent hybrid with meals home, to week remotely some and at preparing the by models,

recent late any for expect outlook margins. rates for to The is enable back to elasticities levels. in fill pricing Looking and QX will the increasing steadily forward, disruptions improve somewhat inflationary increase previous expected guidance, cost current XXXX fiscal we barring XXXX. sales with Customer year in to growth net catch pricing further that half are up improve of from spikes than more to

priorities. bottomline, actions between previous on adjusted into the EBITDA projected lower higher lag and driven pricing moving On guidance, market. the major costs is than new Overall, we consistent by our remain the

supply B&G the and critical to which means as and inflationary to XX%. service costs and current possible input improve through above environment, levels as higher Foremost, effectively production recover managing pricing Foods quickly supply increasing pricing

plus Second, on interest post-pandemic capitalizing cooking. and growth of the to beyond improving performance trends organic remote, in working home renewed COVID X% recovery to from X%,

resources, distribution. the to of focusing are in disciplined dry making win where right and scale cash Third, terms store fit accretive our in flows Fourth, and and and capability, brands have portfolio on investment center core categories expertise and that structure. with our acquisitions we to

the portfolio. into cost focus within and non-value-added productivity costs, the longer efforts company are offset expectations B&G these to Finally, and on margins eliminate business To deliver and inflation operations clear to we four establishing term. and strengthen goals, priorities units, accelerating savings working reorganize

on performance. will and complete future units these closely summer improving more resource businesses speed structure platforms will down provide portfolio, acquisitions, run is the to over composition grow, growth changes and four I and The the specifics define B&G brands business three next may and categories fall. for unit push and that months, we and accountability will performance these the The clarity the structure we will complex and to responsibility for making cash decision in the discussed, and the or expectations late brands of and As that parts months to expect the early flow, time. also timeline exit of to organization multifunctional matched financial to deliver efficiency

Finally, the before turning I’d call additional items. Bruce, back mention to two to like

Green release. Growers of Spirals, we our manufacturing Green our in and shortly for help shortly us launched manufacturing brand. of which Giant acquisition control enhance chain, we acquiring take Giant improve been of a important greater expect announced and This our Growers supply closed as partner First, allows small we vegetable protect has today Veggies frozen margins brand. access relatively Giant vegetable which press to efforts product, earnings after our long-term release Green our also two Giant the the operations our we that innovation Express frozen for Veggie Riced acquired products to to Express. to after Green our the innovation our Today

quarter, this sale closed Maine, I earlier Portland, you previously the our manufacturing and to the Thank we of announced will Bruce. facility. on call turn Second, over now

Bruce Wacha

you, Good Thank afternoon, Casey. everyone.

that been increases, net impact chain the price to weighed have initiatives across The product offset drag portfolio, severe was coupled first heavily trade with industry-wide disruptions improving pressures just business. out a of spend supply that discussed, and have mix. that increases on reductions, been in cost input by our as taken still have portions our while be has large the been part by list These to a product As designed negative equally quarter of pricing pricing we impacted include continued initiatives improve Casey large.

short-term. However, due to margins lag the compressed in on implementation, our effect have the been

year. of levels cost compression our increases to quarter in similar late half will cost second beginning and margin the of our increases, expect to initiatives catch begin and We assumes lead that to the but second quarter the the to the second in input due in up model relief pricing the

expect supply performance chain net and sales issues year. improve continue Our we throughout the continue to to strong

increase. the $XX.X first quarter earnings million $X.XX. ahead $XX.X and $XXX.X the of generated share adjusted the XXXX, of million sales our accounted supply and net X.X% believe impact volume for We $X sales and chain supply During declines. per adjusted annual for a of targets, quarter fill rates the diluted of of decrease coupled challenges XXXX $XX.X majority sales million. negligible that a million first or for chain Net we had despite with challenges. of accounted low mix, increased of by contributed EBITDA FX the Price volumes million, of net the to

our oil We to a soybean monitor offset majority to sales pricing initiatives, impact help of by elasticity and the brands modest selection been we impacts far, Net concentrated of on sales to $XX Crisco. input contributed from relatively cost or which oil, resulting for to increased so particularly have brands. but our pricing, of of XX.X%. increases, relatively these negative for continue small and of Crisco Net measure extreme levels canola the increase the million our implemented

last products, Net of $X.X However, Crisco or of driven and benefited down showing for Cream from of Cream our strong Clabber seasonings increased during or increasing new million which part year’s also Cream stable sales both or net Wheat in of volume Wheat has on Net Hurlock, price two the of but production Grove sales also or increases first shelf momentum. million $X.X of the by from a strong Girl X.X%. brand’s Maryland, increased against Clabber had we which $X.X for net Green increased strong the the benefited Farms with lapping price were sales, million business Green we Green sales benefited quarter, demand $X.X quarter. Giant growth. slightly frozen quarter. Like factors. Maple other by allocation our $X.X significant Net million continued quarter Clabber X.X% Net quarter, off baking Giant and XX.X%. the offline benefited volume, and full of still net Giant across strong season. the net meaningful very up or Net by quarter. X%. a products, of or Ortega, during another another sales out had volumes tacos to products million spices sales for modest closed of by had hand, of from from with had growth, quarter the particularly constrained Net sales sales levels sales $X.X sales million in primarily by are of in driven and Girl $X.X extent from in as capacity Cresco, by Girl XX.X% increasing or X.X%. portfolio, off by lesser, increased million XX.X%. were by were Rice

had quarter demand the was $XX.X supply business year year, our chain spice produce Separately significant or than quarter first compared that peak keep quite lower of on sales up decreased constraints, and performance quarters to early levels elevated. and first challenging year’s were in the category. million with and the First, one first late XX.X% the our in last of the by it lapping while which a Net last last seasonings last first still as of to quarter was challenging of impact year. XXXX ability our when quarter spices remain for

However million by $XX.X of when compared the of net and to our XXXX, sales increased quarter or spices XX.X%. first seasonings

this made business. significant are rates of our Iowa, investments our and we for seasonings Ankeny, have see facility, important meaningful in to improvements beginning We spices in and our fill category

million of our the that net $XXX.X of XXXX quarter net and for seasonings this year. Gross was maximize our of quarter us enable We sales. better the spices profit opportunity million XX% expect the of sales. profit XX.X% first in $XXX.X or Gross in XXXX first category to improvements was or will

expected of it input was gross which fourth the quarter in profit XXXX. higher the first higher was quarter cases cost XXXX, in than quarter negatively XXXX impacted than the first of in During inflation, of many was by

impact to industry-wide Our that fiscal during XXXX. will cost expectation continue input is inflation have significant

and and we calls, discussed able commodities of short-term measures. by we agreements, previous cost locking mitigate impact supply have of on to implementing purchase by have advanced As in contracts inflation a savings the through portion been prices

optimization trade pricing We including increases, executing various also list product readouts. are and initiatives, price

initiatives pricing input lag However, generally behind these costs. rising

are the of that fully all first offset faced in such, As quarter costs of to we the unable we XXXX. incremental

of expenses half the recovery expect administrative XXXX. have XXXX. We million $X.X in by million in quarter to XXXX, quarter cost the million, of marketing see $X.X of selling, million, second and related expect current to of and decreases million, of quarter and Based costs, $X.X by $X.X X.X $XX.X levels of first million, margin similar as million of decrease $X.X general input non-recurring X% was divestiture million. pressures a on Selling, to of net and XXXX. $XX.X to for partially improved expenses compared of expenses decreased in to composed the in increases second general we quarter general of and first warehousing X.X% $X in by selling administrative first of expenses expenses, acquisition, expenses the first for in The as year. percentage to percentage the expenses and consumer or the offset Expressed last sales, administrative XX% quarter XXXX, of points compared of of

During facility quarter of operation. of on Maine and Portland, the the partially expenses completed offset sale our of the the facility, first sale, the was closure we and which closure related XXXX, manufacturing gain by recognized transfer to manufacturing the and of

last effective of to in margin year, diluted cash the million for quarter, $XX.X $X.XX generated in We XXXX, to net in during the quarter decrease cash to Despite inflation by XXXX, in Portland adjusted spend the to of of million net the to and net generated quarter first per quarter operations quarter relating earlier, XXXX, an XXXX, the in mentioned first EBITDA the XX.X% Interest expense first was in disruptions, chain was in quarter million million reductions supply to of XXXX. and first to price first attributable increases, we for in XX.X% the from in to the of adjusted last net and trade the rate closure of to decrease in year. earnings operations share quarter in compared quarter industry-wide fiscal of prior $XX in I of XXXX. quarter amortization input primarily flat to XXXX, million offset adjusted as and XXXX. a of in EBITDA, compared $XX.X As year. benefit year. in was first percentage quarter million last $XX.X Adjusted million of EBITDA sales $XX.X first in compared was cost partially the generated quarter had compared prior relatively the $XX.X the tax the $X.XX EBITDA pressures from first Depreciation The and the XX.X% the was of We adjusted $XX.X sale. cost XXXX. the list year. in compared when XXXX, of million We the compared first quarter first $XX compared in compared XX.X% first to the compared

we what similarities As about earlier the call, pricing, I catch we to price between and of quarter in logistics. $XXX we that the year on implemented the more have quarter. expect generate second labor of implemented third first beginning increases, expect from the full terms million end year. of of mentioned the of the what initiatives negative we Based than impact are a cost expecting expect we the Similarly, the progress factory, up price quarter XXXX to know to benefit of in second today to speaking, increases implementing the on our increases to and have during the cost for over and million in quarter. cost material Directionally we we have many of a combination $XXX or

We of needed multiple increases of year to course do the already have and the we executed price as will over rounds so year. continue this list

net negatively net This Omicron-related factor impacted to portfolio. of hit includes our zero our will disruption approximately we initiatives rates year. X% of any management of from to key algorithm and the pricing to X% fill to our guidance influence based first from are $X.X growth X% pricing that sales this the have for our the to guidance that to to on increasing various the billion. XX% billion X% and XXXX percent on earlier large rates. of traditional growth of in a chain supply disruption prior we cover end X%. to further implies $X.XX our of of long-term and where or for this net finished sales impact customer the revenue at recover quarter, Fill up expect A ability With target our performance XXXX than the begun brands sales We driver our year performance more as

we move the our While expectations, fill far we beginning correct still were below are rate to customer direction. in

negative for are signs We any also of watching elasticity. closely

EBITDA we the far brands. to our majority $XXX leading brands. approximately net experiencing be the we our input are performance management current topline down in to expect cost So both the modest million initiatives, margins million. have for supply will revenue when on moderate. only certain Based factoring EBITDA do time inflation previously, of mentioned adjusted very chain we recovery elasticity generate of Adjusted over and challenges But the forecast and as sales when of of cost we expect driver obviously but $XXX in increases pace been

we $XXX to and amortization $XXX $XX million. adjusted $XX million. XX.X% million, $XXX of XX.X%, to per million interest million million Depreciation and diluted million, $XXX of effective earnings to share Additionally expenses to million of of expect interest expense $XX cash million, $X.XX approximately of CapEx rate of expense of including $XX to $X.XX to tax $XX

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

Casey Keller

Thank you, Bruce.

operating discussed, gross could but costs. of and not pricing the As delivering showed growth, margin in first offset escalating quarter progress sales impact input the and

pricing Additional QX, flow will higher linked of implemented been have half in actions back the and to through fielded in and recover costs, XXXX.

closely begin and pricing This would of portion respond inflation and our Operator? continued to monitor remarks we quickly concludes and We call. like further productivity Q&A any continue now the efforts. to with will our

Operator

from Reuter William of the comes Bank Instructions] Thank you. of [Operator Our question first from line America.

is Your now line open.

William Reuter

that you talked Would next pushed expect take inflation have the of increases you to that year, price all back to from will XX% still EBITDA that in be past kind could accelerating XX% have we some Once we time about that the through don’t afternoon. assuming margins of there? been additional in and Good or range get here.

Bruce Wacha

I to system quarter that be do those margin the with goal. think shocks and had what to certainly continues more the to have the return this the The goal per is But we would parts. like big happen inflation that of year. over first is wildcard any we to

William Reuter

Okay.

Casey Keller

going mean and largely recover is price our dollars. gross margin I to

goal little to higher will have you But our margins, a stay said have to while in is to our long-term to XX% the Bruce back price over that and a we So think, compression probably compression margin because XX%, but I get will realization. high, that, natural of as cost a slight goals. of

William Reuter

Yeah. improve to No. to bit. a in four That guess I question headcount? it’s put mean, to the actually you agility. in Is that savings over cost and months to or place regard inflation Is this going that and costs some terms I any change there rate speed then in sense makes to But organizational margin down that’s the the structures -- of the coming second more my of next going having and in on with going months. either three mentioned incremental this labor your -- result is the

Casey Keller

real-time. are our the business our that to is I to think units and to more reorganization maintain largely of multifunctional business. total neutrality. goal decisions this be relative closer ourselves aspects which costs cost It’s But G&A people or kind business driving to are with in terms of expect make associated we which it’s in of have largely reorganizing neutral the at in create a SG&A relatively the

some be we some restructuring you that So designed slight so cost and and know other you far puts movements to takes neutral. have relatively but we this some are costs, know have things maybe will and

William Reuter

you. Thank That’s Perfect. me. all for

Operator

Our Piper next from comes Lavery from Sandler. question Michael

now Your line open. is

Michael Lavery

you. Thank afternoon. Good

Casey Keller

Michael. Hey,

Michael Lavery

to that I follow-up just question. margin want on

look guidance I year to margins the what it I really did of the to, does is right. you trying like. the quarter hope based I guess if - you there it Just rest and what would for the and just looks of this But the your math bag the to trajectory on EBITDA what what first gets that’s like in are guiding right, point for what understand, quickly, XX% XX% have you are kind and

more more would quarter to I just if skewed, think the it’s the even those of said you higher is course, similar half second second which first. numbers push

Bruce Wacha

Yeah. expansion. a Not talking for directionally specific is quarter, there but to margins

communicating business year, of after face If so a we think increase that you already that so, very do there’s need year. about the is increases And second ramped need of price be and have that driver. just pricing underway, we the a are materialized And a to half through there’s and will to in it the it then biggest hasn’t most right? the go of very the wait yet, to cost lot expecting costs the process year the fully this of get large we that, to customers. those till large this and to We process pricing that’s and into

Casey Keller

Yeah.

see margins half to the back We in will back two expect better quarters, the quarters. course, of

Michael Lavery

or Well, it more can XX year, year second higher of little a the around that and referencing think contextualize is to half I next of guidance in is you on little you that your were of a an really I for this prior bit bit caution but pointing the that, achievable? waving guess, question, kind just

Bruce Wacha

seen is cost have point whole premised increases in already input that we increases. the price Again, on

the shock we increases have the input the to have half it. back we another cost additional increases the cost, increases the year. by of to have should so catch the year to if half And from back up system in not, to If price this take pricing will an

Michael Lavery

Okay.

Casey Keller

-- is think clear, our yeah, are to what get to the XX%. goal XX% to we be I term but long saying is just

because XX, higher think in compression I this year, issue realizations will that with to be next get higher costs, right? the challenged be margin of natural will we over even

Michael Lavery

why item. just sale feels a gain thinking the adjusted one-time that been EBITDA like Got would can of included you you. in some the have much the And on more give on us more

Bruce Wacha

of in in gain each we shutdown, an costs don’t against netted that so was mean, offset by know, I I a It factory part of calculation. terms other those part. accounting incurred It’s sale. in it’s some some on look,

Michael Lavery

a Okay. Thanks lot.

Casey Keller

Yeah.

Operator

Carla Our comes next from JPMorgan. from question Casella

now may question. state your You

Carla Casella

you Thank Great. for call. taking my

did the how you M&A much say so Express? -- front, for paid you you Growers On

Casey Keller

didn’t. was transaction. the private side and a not were It smaller We disclosed. terms on It’s

Carla Casella

Okay.

so them? sold the that Green I the, to that owned And they Giant you license, sorry, am that was recently

Casey Keller

time years. Before owned business. actually, of have small it for a That’s they our piece the

Bruce Wacha

Right.

Casey Keller

Yeah. two the they And manufacturing of spiral time then kind other initiative, are rice part the products, for of veggies veggies. the our is and innovation long the

Carla Casella

Great. Okay.

Casey Keller

And transaction that’s really was all the what about.

Carla Casella

Are there larger other about opportunities or you mentioned on when a like what that to seen buy, brand already scale? M&A, bring you the someone talking we working been in-house -- them past you are that like acquisitions you with have are talking in have

Casey Keller

not To -- I mean, this. like opportunities ton there’s the yeah, a of

are will to own, do what to have going more like models similar have we successful point past. done and what portfolio. that we to role looking. we a We that’s the do that more we looking opportunities have what we the and that’s general, focused not But are well in the ones for in Obviously, always today more been than build

So expectation the mean, more I in to is past. disciplined, be

Bruce Wacha

our don’t on buying some Most be our this, others There one really, be a will be -- will there opportunity businesses. anything be probably see Hi. happens integrate just acquisitions supply near-term I This chain. horizon. to to the great of entire but like may

Carla Casella

look, it to limited your high this Okay. regardless? is somewhat Are -- at And I in you -- financing assume just then, are or M&A just would relatively are you continue was even M&A leverage a -- leverage you though mean, it, point process is you the to is Great. looking steady of -- high. how given I is I

Casey Keller

right. All

to a I structure fund certainly the stuff are of debt think valid for looking so have we and with to leverage open capital equity our but within process it’s a got It’s where got of raising steady and point. context you M&A, from a standpoint. which is and fit

to how got We smart be we about finance have things.

Carla Casella

and you then so, And oil, there how those corn, hedged? on Great. out, you hedge your can or of can’t can increases, hedge fuel, that if that the anything far cost wheat, you any Okay. just mentioned just be

Bruce Wacha

we feel Honestly, now on But doesn’t like some the coverage increasing these thing to of honest, coverage commodities. right historical be right Hi. do. can to highs increase at

So just go they historical the market are protect our know near-term trying hedge don’t but go to are out going long-term so and is and at we we supply, we to highs. where don’t when

Carla Casella

will back in I get Great. queue. Okay. Thanks.

Casey Keller

Thank you.

Operator

Jefferies. comes next Martinson from Karru Our question from

Your line open. now is

Karru Martinson

afternoon. Good

In say longer terms that the potential divestitures. heard your up the thought positioned that I with the just portion of not for to would business think no full would you you magnitude of, be if to do be a I what’s a may come reorganization, there businesses wanted of that sense get of I standards? fit you they

Bruce Wacha

might flows those was we our belong assets business over the have that collection within of some for decide businesses a a we think I in would stability. And unit business portfolio. would cash unit time, managing and that structure, of that we don’t I manage think

we the value in value to deciding and add do acquisition those small at roll in relatively But huge. future, and think that our which we have portfolio are where for near-term I are up. going looking and think not will where we platforms always it’s drive fit, be and we the businesses, future businesses

Karru Martinson

fill when And guys and grocers have being your talk getting others. -- mean, we kind I you about from still we rates own signals am of mixed getting below I been are customers,

rates that suggest Some customers? from are certainly strong or fill there. are lap the saying, Others tougher are a guys your we demand. I bit. But below demand are would comps. mean, Consumers pulling they is seeing that back hearing saying are out what seeing starting still to still are you

Bruce Wacha

pre-COVID we to still I that hearing mean, levels. elevated are demand compared remains

traditional the other of some in So, and things. preparing categories and meals

is COVID So it we highs. demand off are high, but hearing still is that the

behind some So of is breakfast which in work home to kind meal week research. then occasions pretty meal particularly see coming the parts to we continue clearly as of people more out few a remotely, driving at continue and strength their consumption, lunch like and

I a behavior. the category I demand seeing still we seeing out But will higher are see we are still again, ship expect relative vary people’s of people by demand. and elevated home eating at kind to of to do is more bit So home margin. going levels, at in on pre-COVID little some that you terms think, consumption

Karru Martinson

much, you Appreciate very it. Thank guys.

Casey Keller

Thanks Karru.

Operator

Robert from question next our And Suisse. Moskow comes Credit from

line open. now Your is

Robert Moskow

Hi. you that’s and characterized a year I $XXX flow like the and of last am looks Bruce, curve. capital guess, first quarter cash It Hey, if Thanks just like working at ago big cash question. playing and a like for Casey first by as looks out were a the year. year looking quarter being again I this was million, chasing use upward inflation an lot

the is flow, at size end another depressed Does what balance of would - that of scenario your or too cash and what have you to that the this equity deal pressure if do put happen another much think? will and you cash the where, year. on use you So of do sheet, free have

Casey Keller

saw second to the It some. not is was the that cost big Yeah. was quite The was much have was pressure that with going Giant. would two of there other to think year. part we as Green a half goal and the things. for re-piping last be which the the last product year real of year be as The still I inflation,

product was So during we Green enhanced from Giant and period virtually big out of year a ran last some COVID others. had the investment and a

it be last was as some right, it year. expect are to much will there pressure. as Don’t be you So

Robert Moskow

strong the And Okay. handle or? is to that enough balance sheet

Casey Keller

sure to manage it. the balance sheet handle to make would We Yeah.

Robert Moskow

you. right. All Thank Okay.

Casey Keller

Thank you. Yep.

Operator

question we Eric Seaport comes will Research And take next from Partners. Larson now our from

is now open. Your line

Eric Larson

them Great. from you question. me. for Thank of the Two

that pricing. talked you So of obviously, first little elasticity elevated then there be just you prepared bit more you a seeing that also caution? to you in looking are in would, is, that but are said threw elasticity. because for of have sales expected Are comments, this, more had an overabundance about going your or But you maybe you you is from yet than

Bruce Wacha

think the I little bit a latter.

can I and elasticity. been implemented the has in elasticity relatively have we seen pricing do low not when far, measurements, So would no say we that market track elasticity. some

a predicted. historically our caution little relatively going what because low -- that projections low have expect bit assume our maybe modestly predicting some models level, elasticity, goes category were the In that future this have at that up historical at We go would are we not a up to elasticity more, predict but kind it’s still seen assume we little rate to of up is are would where is of a going that, but entire to bit we everybody, stay below up. but

So just our -- -- higher That’s a we I are to bit answer. guess projections. cautious, elasticity we go assumed to easy the be little we in

Eric Larson

Okay.

some going mentioned also had acreage saying crops you -- season to… I we into like maybe mean much So this corn, So are on soybeans, wheat, planting be question you other farmers vegetable that am just that, yet. to haven’t throughout expecting acreage as that were isn’t you is, guess to think and But more that going think you started shifting started you are I kind your there are inflation vegetable never that the much suppliers I input -- from the role curious are more farmers whatever. life, I as be some really traditional stated that you side year? our of the telling no

Bruce Wacha

planting last and farmers of those are soybeans those more the the to based it’s, contracts, record lock our suppliers. We are and in, in planting -- that what we what is they seeing towards kind conversations, because corn. plantings, get expensive vegetable We of in shifting with contracting we think, are kind in Yes. month high I lock a lot contracted, vegetable of and the prices on

Eric Larson

are the more… cost going probably it’s to you acreage, I So understand getting

Bruce Wacha

Yeah.

are to get acreage. We the going

Eric Larson

Okay.

Bruce Wacha

are other going because to That’s competing to are we little it’s now the going more, But us cost are hearing. a bit what against land we get We acreage. use.

Eric Larson

Got it.

Okay. Yeah. -- I I didn’t was…

Bruce Wacha

That’s has terms actually inflation one of the things assumptions. our the us in last month changed that for of in

cost have our expect farmers clarity be from we around new are to coming in We the starting got kind of what July, the crop of August. out

Eric Larson

what actually maybe was of you -- some point. I saying I was I shortage anticipating thinking assuming at this were -- But you maybe supply. guess, I that understand are Perfect. even

you. So thank

Bruce Wacha

So we needs met. told can be far being are our that

Eric Larson

Got it.

Okay. Thanks.

Bruce Wacha

so crop standpoint, needs. from far lot kind but And meet and on can obviously so like a our that it what of comes really -- of out a looks planning depends we a

Operator

follow-up a have now question we Casella Carla And from comes of JPMorgan.

Carla Casella

terms do any I you also any year going color -- labor are the costs have through wondering on or or with am of the if you labor you in labor issues just labor comparison give easier up laughing front?

Bruce Wacha

of So unemployment. extremely plans our and we we in is, labor markets raised I wages labor, think of in our our there’s to -- some our factory workforce have in maintain this. our some two of One of components low many have

So staffing. it’s maintain full to been difficult

quite over So improving couple months. bit I this think has of a last the been

We have raised wages.

recruit put in programs have to new We labor.

factories we you trying So pressures year in are like that back full still staffing. this are will full maybe staffing the maintain us labor one our up our that getting get to maintain expect is I up situation direct hearing But I still or to most are production. full over what we feel our cost of inflation factories to to better say be labor is in think costs last do about and year, and two

Carla Casella

Thank you. Great.

Operator

Okay.

question comes from Ken next Montreal. Bank of Our Zaslow from

Your line open. now is

Ken Zaslow

guys. Hey. Good evening,

Casey Keller

Ken, how are you?

Ken Zaslow

Can just are do XXXX? ask private any And elasticities or on label? in year, value of factor seeing kind what how into and I one just are that brands seeing this you but not about, you you question

Bruce Wacha

of little be I relatively still price below still a some might mean, model to our higher, see but think I of we sensitive well are them seeing we kind elasticities. most historical low products, In bit predictions.

of our it bit, one where not -- historically elasticity saying but reasons kind some prices would that on are to a have really raised do we expectations why little we the we will migration as is been and bit increases particularly of our little higher think I we big are of have on products see higher, cost that have of that expect a we get label. private

expect we that that could seen but as have kind we of go broadly, not some far, very prices really happen. higher that of So

Ken Zaslow

to any competitors follow I competitors any any but I sure follow trying appreciate first, have the change and been across will I it not the and am of then your there or am of seen not you you in between sure same disparity leave Have just parts there that you your some has that it. portfolio And which and of make comes not or competitors? still I your are your

Bruce Wacha

largely the It’s same.

private competitors the label to or responded you largely, Sometimes costs. people moving different have input higher see, at different rates, but

Ken Zaslow

Thank very Great. appreciate it. much. I you

Casey Keller

Thank, Ken

Operator

are further continue. There time. may this at you Presenters no questions

Casey Keller

you, everybody. Great. Thank

Bruce Wacha

Thank you.

Operator

participating. call. today’s for you And concludes conference this Thank everyone

disconnect. You now may

B&G Foods (BGS) 6 May 222022 Q1 Earnings call transcript