BGS - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the B&G Foods, Inc.

Second Quarter 2024 Financial Results Conference Call. Today's call, which is being recorded, is scheduled to last about 1 hour, including remarks by B&G Foods management and the question-and-answer session. I would now like to turn the call over to AJ Schwabe Senior Associate, Corporate Strategy and Business Development for B&G Foods. A.J.?

AJ Schwabe

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

refer placed Before subsequent a our performance, should are We statements risks not I of XX-K discussion future formal need that reliance remind everyone upon recent These company's we of B&G annual report most condition. them. financial forward-looking our the the be you Foods' SEC statements. therefore, future begin to on of and not and operating undue that impact Form part discussion more and could remarks, to for today includes results filings detailed guarantees

obligation no information, of result publicly to as revise otherwise. update new whether statements, any undertakes Foods B&G forward-looking a future or events or

references financial income, segment call gross GAAP We today's to of release. comparable base be also profit diluted percentage earnings non-GAAP are to adjusted measures EBITDA, in earnings making adjusted provided gross per measures sales. most share the and the profit, will these Reconciliations net adjusted financial directly EBITDA, adjusted on adjusted adjusted business today's measures, financial net

outlook our Casey our the of guidance quarter discuss our for call various for then the results, XXXX. and will discuss of Bruce his with results XXXX. affected will concerning begin remainder for the factors the selected and XXXX that opening and remarks thoughts business We financial highlights fiscal second fiscal

Casey. to I over call like to would now turn the

Kenneth Keller

earnings QX our all for second results. thank Thank afternoon. quarter us joining you Good today AJ, and for call. XXXX you,

of were of expectations. and adjusted line $XX quarter net with $XXX.X million Second million sales in EBITDA

X.X% to continue Food the to consistent Excluding Crisco, than approximately impacted Base improved we sales the relative traffic but ago business industry. business to of whose X% net quarter, the sales trends lower the with more sales in and the decreased in restaurant reflect but by less service overall center by to declined period. were experience first Base compared the softer the patterns. with also trends of oil pricing soybean consistent store, decrease rest costs. year net net much

Spices on business, decline sales for $X the slightly the of X.X% representing adjusted line down Giant business U.S. Flavor operations product second Solutions Green Giant for exchange Net decreased of of represented prior year highest Adjusted by versus as The margin XX.X%, net period. XXXX. increased Mexico to EBITDA approximately million another quarter $X.X frozen was second year-over-year quarter & $X from the the percentage the compared $XX year. stable by million. sales million unit with million EBITDA QX from of foreign a last the shelf Green

continue X, moderating were quarter expenses fixed last and moderation see also in year, in down reflecting we versus costs warehousing. In some and other quarter insurance a Central inflation favorability Corporate to transportation Segment X in reporting. and

the into B&G visibility the & X segments, Spices business performance the operating first underlying units. Foods is Solutions. by results providing quarter, operating As reporting of of greater company's Flavor

highest quarter fiscal to a Second of segment reflect continue service to year quarter in quarter declines 'XX. moderated segment X.X% category. the leader a is sales Foods spices restaurant the seasonings, trends. versus as overall see in healthy B&G Food adjusted B&G trends second remains of and sales. and net we sales EBITDA percentage overall this up net X.X% increased Foods This adjusted with segment EBITDA

featured levels in franchise. the fiscal 'XX. isolated also under from issues Overall, the Sixes new restored We line blends service been TD in licensed customer of the Four seasoning some launched year and have grilling Yellowstone brand

Breakfast, are McCann's, net sales Cream Mexican components The although adjusted key this Maple X.X%, Farms the Meals by X.X%. segment were and Grove unit approximately segment quarter Hot business of EBITDA increased Ortega, Wheat, X Palmas down Meals, of meals, Syrups. Las

levels We dressings although in continued have were category, growth Ortega in progress made driving increased high we the weak and by strong over and and new behind were impacted the Taco productivity segment. strong items, distribution. a XX%. capacity syrup of salad channel back activity syrup good have have major behind service this Food Girl pipeline on product half at Customer expanded and in trends Skinny down Bell from a net this of customer. controlling sales competitive innovation Taco in year. also costs service remained sales

the the The and and prices oil have segment's Oil EBITDA a Weber The reflecting cetera. in grill Grandma's getting deliver sales Based lower strong term some down the at Crisco leading on Crisco reflected primary of staples, oil Specialty decline cash was X decrease stabilized commodity service segment that maintain baking our level with XX.X%. mostly business model, and shortening, in slight delays about sales customers #X will et pricing all Molasses, on near unit were behind and to year pricing brands versus for which powder, now last net SKUs, oil focus has baking through pricing the Specialty back on believe X% customer quarter customers. with Crisco is continues largely as objective of to year-over-year been in reflect modestly Specialty Specialty. lower rectified. strong, half. down flow to We the stable adjusted such key soybean expect Specialty profit dollars XX% soybean segment

Giant Canadian Canada sales sales excluding major a frozen Frozen and businesses, frozen canned product vegetable our Giant Net U.S. line. Vegetables impact vegetables. canned and of company's business Frozen consolidated the portion The and first trends. QX behind & Sueur the X.X%, versus price and an the trend, Le the the category Green DP's divestiture, is unit Green overall of includes but last business still business, showing year. strong in growth served the the premium can Giant sluggish quarter year-to-date U.S. were down improvement negative The from was and Green can

Mexican adjusted impact another exchange, reflected segment goods significantly and down but and EBITDA Veggie $X we shelf-stable pesos. the margin this in remains the million the million lowest [ of EBITDA from U.S. foreign strong service of fall, finished vegetables Giant a premium was Ramen Green adjusted business. of to innovation remained the This pipeline to plan loss segment strong sides This segment transfer and U.S. of our business, have $X launch ]. Frozen models Customer segment. the

The reshaping last sale fall, in to B&G Giant restructuring Foods the the cash back-to-bed sharpen of was continuing improved to and U.S. creation. of can shaping. of the following XXXX. margin completed flow Portfolio is focus Green value January business portfolio our divestiture vessel future maximize and and

quarter, divestiture and As discussed or review we sale businesses last vegetable a the strategic unit. possible of are of all the assets canned some business the of for and in Frozen conducting Vegetables frozen a & remaining

remains who's and particularly to the frozen since brand not the & and and awareness focus no on add a Frozen businesses just plans strong in constraints. capabilities. the be fit core dietary capital Vegetables and is the with broad and Green trend distribution there with portfolio, shelf-stable with more our health opportunities right overall are B&G may given It Giant category trends. assets in

is previously net around that total process disclosed, forward. of other smaller we represent evaluating XX% working moving lesser divestitures company That with As and have brands sales. on been some

to outlook on quarterly turn Thank now I the Bruce and over year. performance you, the remainder the for more detail the call and for will of

Bruce Wacha

Casey. you, everyone. Thank afternoon, Good

of sales second As into so quarter I shelf-stable million results, we a and sold included get of Giant U.S. lapping and we $XX.X before Green fall, of reminder are product net which approximately U.S. Green and XXXX million contribution. stable last our $X Giant our shelf line results,

compared $XX EBITDA, as a excludes U.S. of we adjusted sales the was or business net points decline percentage volumes sales, the or or a to million XX.X% the quarter million less pricing. $XXX.X by $X.XX adjusted X.X% of Base in line, second driven earnings million by adjusted under In quarter in X.X per of than the second was business unfavorable net decline driven shelf-stable lower by the $XXX,XXX little million bit by $X.X EBITDA points second just of the of product the driven net percentage $XX.X decreased in Giant FX. net Green of generated quarter $X.X which decline decreased was XXXX. and of in percentage sales, X of million net base share. diluted and XXXX, approximately XXXX sales

for the in reflect an million. to result of of model sales second our lower approximately Crisco decline volume our $X.X a pricing by pricing oil quarter partially a for of XXXX, brand. to which compared the second Net costs, brand increase million $X $X.X in as offset soybean commodity decreased of as primarily quarter of by million commodity the approximately net of drove XXXX

compared business XXXX. in Base decreased second or the quarter the to brand, of second Crisco of quarter the Excluding sales million $X.X XXXX by X.X% net

the of net of divestiture-related approximately or Gross net was net cost of profit sales. million sold $X.X quarter of sales. expenses of XX.X% of cost was XX.X% Gross negative profit, expenses XXXX, $XXX.X of gross acquisition, million $X.X negative $XX million million the impact or nonrecurring XX% for goods during Adjusted second the $XX.X and during quarter million second quarter XXXX nonrecurring profit of or sales. second divestiture-related of sold excludes and sales. including of profit, XXXX of of net of expenses XX.X% excludes included acquisition, the in for impact which $XXX.X quarter the XXXX expenses, and gross was million or of which Adjusted goods the second was

input continuing as cost material XXXX continuous initiatives soybean see that and in improvement saw as to have efforts oil, with we thus far the factories, in and cost inflation savings cans basket in such as increases, While well cost our mostly our most to some to and favorability those the regards Helping inputs the year. factories. of this of input modest been logistics in are extreme inflation continued and our through mitigate cost XXXX, cost our areas across our increases

million percentage points quarter marketing quarter general $X.X of Expressed million. of for improved net X.X% composed XXXX by expense compared as of as offset $X.X costs to second administrative Selling, for was $X.X decreased and million for expenses XXXX. the by of X.X% to selling in expenses second quarter $X.X million of warehousing The second an XXXX, XXXX. of million of of second and administrative $XX.X in X.X from $XX.X million administrative and $X.X decrease XX.X% percentage the a quarter general or increase general sales, for selling, expenses million, consumer of decreases the and expenses by of to and the partially

second As XX.X% or million earlier, in I of in EBITDA million in XX.X% the adjusted second quarter to of the sales net mentioned $XX.X compared $XX generated sold decline or additional currency million we impact adjusted so negative approximately XXXX quarter foreign from the of Giant Mexico. of increase XXXX. modest cost The of the which of mix. in adjusted product a million decrease sales goods the last shelf-stable Green driven the remainder for our result Green the were decline $X sold line, largely quarter or we in fall. on Giant the our divestiture in EBITDA Approximately was some business costs of EBITDA our manufactured frozen the by in of and An our negative net decline material for that of $X was the resulted the of raw U.S.

partially the to outstanding offset quarter $XX.X the was to of million rates to $XX.X long-term long-term due The second compared second on quarter XXXX and second million by quarter XXXX. compared XXXX, quarter our second of a debt the to primarily of compared average interest interest expense quarter quarter was in debt second of reduction second in the increase the of higher during XXXX. during XXXX of Net the in XXXX,

net principal long-term expense of an gain retirement noncash quarter whereas XXXX that $XX second also the debt accelerated $XXX,XXX million financing extinguishment of approximately amortization of to due from interest resulted of $X.X quarter, the ago during The expense of on the year of million the includes fees includes period early amount debt.

our had net XXXX, adjusted with quarter million million quarter $X.XX Depreciation the of and the and year. line million in diluted $X.XX million of $XX.X year. EBITDA second the net net second share diluted Adjustments in and million compared and income is share or share million share to income $XX.X are last of earnings diluted of $X.XX $XX.X described in adjusted the quarter in in second or $X.X per net $X.X in to which of $XX.X $X.XX diluted per XXXX, quarter per We or the income per release. and of last was our income of further amortization second or

the in Specialty primarily million for million Net to quarter or from coupled driven commodity million Crisco part the quarter second of or due XXXX of costs, to modest aggregate, higher Specialty like by $X rest the by on in lower the to business declines The XXXX. adjusted of EBITDA $X.X I'd offset the volumes across results XXXX. $XXX.X compared were X.X% Now the million sales second Crisco to decrease X.X% quarter decreased touch with was of pricing, decreased quarter business in segment unit second decreased the in by volumes. XXXX in second $XXX.X the by by which units. in of

X.X% increase second in sales compared quarter $XXX.X XXXX. Meals million unit, volumes net The quarter million lower Meals of adjusted in by pricing. of increased the decrease or across the to by decreased from EBITDA X.X% to due was the Net business $XXX,XXX for for offset segment primarily million a second or quarter by partially $XXX.X XXXX, to $X.X of modest and second the XXXX.

Giant currency of quarter $X of some decline of and approximately sales from from divestiture impact divestiture second foreign $X due impact & remainder Green was sales the by and or product negative mix. which the increases XXXX. million last net by Giant decreased line, the compared the fall, line, adjusted & decreased compared quarter Green to million product segment the the Frozen costs $X from Approximately the of for to we material Vegetables shelf-stable of Frozen XXXX. the shelf-stable million the the million in product in EBITDA $X.X sold to U.S. X.X% decrease Vegetables unfavorable the of U.S. Excluding second and net

or XXXX. was to primarily Net sales of the of million Flavor in XXXX Solutions the $XX.X X.X% second volumes The due of Spices million from & segment by $X.X compared million in increased quarter million quarter second for by Spices higher $XX.X in unit. of XXXX increased to second increase second or quarter adjusted the across XXXX. X.X% EBITDA quarter to the $X.X & business the Flavor Solutions

to on our Now moving balance sheet.

were As in $XXX our which and term existing summer. saw, launched effort, included $XXX June, our in statements. July a senior add-on $XXX we you a late likely will June Instead, second quarter but the financial due million early transactions we this be reflected not financing notes markets XXXX. million reflected a revolver, capital the late busy a The X-part are secured of thus priced loan quarter our In face to on they did and close not until statements. in third million financial

statements described Further earlier X-K release the transactions of details the have regarding XX-Q. footnotes previously disclosed part been the today refinancing by press and we filed filings financial in as and to that our are

of our operations the due from September revolver debt and to majority effect by end completed notes being repurchase refinancing fiscal of future XXXX. our the cash have our XXXX our long-term will XXXX, and X.XX% or for we draw, million our due X.XX% pushed of of into we remaining notes planned giving the the to recently which with of redemption expect fund After successfully with nearest maturity the dates senior $XXX maturity

as we earnings million $X.XXX revising billion our sales, release, are $XXX in adjusted $X.XX $X.XX EBITDA for and earnings million $XXX XXXX to we our share. adjusted $X.XXX fiscal guidance for noted to And to to press billion per finally, diluted per net

We channels. We and both in trade has believe reflects in retail our our pricing which lap customers in drag guidance promotional net as in volume improvement less retail consumption a this continued consumer year spending continued to volumes do QX foodservice the revised activity the better increased dampened we on and year. throughout challenges that of industry-wide sales of the expect

in first business sales based net XXXX, the of of $XXX sales for plus million half net sales and the half U.S. of approximately on range second XXXX base XXXX sales Giant net growth me. which business X.X%, X% to negative of Green is approximately projected million approximately Our $XX excludes our guidance from net excuse a shelf-stable

an tax million $XXX to million million expense to of to of including $XX.X $XXX $XX.X Additionally, expense million Depreciation we expense to CapEx of interest XX% XXXX $XX million million. $XX of million. rate expect $XX $XX full $XXX XX% interest million, expense amortization million; effective cash net and to to of of year million $XXX

XX% the remaining expect dividends excess and approximately to long use to Over debt. cash term, to XX% of pay pay down continue the we to our

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

Kenneth Keller

the Thank the of plus you, long-term trends portfolio growth, Bruce. reshaping divestitures cash strategic well X%; higher focused In business below flow two, core as through reducing on critical leverage facilitate business to closing, improving to B&G X% and for platforms key for future future one, acquisitions. is and priorities: structuring the Foods laser margins as the to base the X.Xx growth; and stability, sales acquisition three, few flows of excess objective net cash

base food industry Our minus second net from more demonstrated Crisco, at quarter sales, service moderating restaurant trends consistent excluding showing trends. quarter with improving the first results and with declines business X.X%, sales

the expect We our are including strategic Further, improvement reviewing working back are in to we prioritizing reshape the and to efforts review and portfolio gradual possible ongoing frozen and and the clarify continue our half. actively of business. vegetables divestitures, on

This Q&A call. concludes would now the to portion our our remarks, begin and Operator? like we of

Operator

Andrew first Lazar [Operator come Instructions] our with And Barclays. will question from

Andrew Lazar

of & or highlights, better the categories of the if sort will, Spices store. one center as of better category, have the you in been a of growing the Seasonings sort

strong, results, You're as they of purchase as cooking or perimeter I flavor to others, that stretch there well. cook? around to you, meals what and budget, have how center guess that sort store seeing of need a is are you're of look right? food weaker. seeing the your bit Seasonings some the they you're of scratch of that more And then sort that similar the The as Is things and seeing play consumers And the parts been portfolio have store, would trend, some look other you... some to Or more at the do benefits like theory drive the little in items a of for been maybe & of Spiced what there? dynamic? of they

Kenneth Keller

that store what that. proteins. is of the to know we're mentioned. seeing people ways growth spices the tied that business fresh is flavor that the No, now. think We prepare our or on Yes. it's fresh right what perimeter we you in see in And one I produce And seasonings the and or

And so strong seen market. of its the based of be we've perimeter center meals. you of part in referenced kind solutions in to sales. we've to seen And on that kind kind kind of continue the of flavor correlation more the our store prepared market, food which weakness

have people baking, relatively seen over think -- terms I we've So in baking of time. stay scratch stable

people pandemic, kind but and of habit. growing, to of It's that not in staying continued So stable. the bake learn it's kind they've

business so pricing are powder consistent. in fluctuations And around business, on our shortening has all pretty that soybean Crisco everything oil. the been behind baking The commodity

our people things more terms scratch fresh we'll up is think to from right food that that So make yes, to it begin people seeing home, in our fine But I we're ride of standpoint that in flavor make the we portfolio. that or what now. is at from business. just enable in base it

Andrew Lazar

perspective characterize of and expecting of a the of from half a to gives less I confidence more different operate promotional promotional you seeing the price year? I due you can so. that broadly primarily categories, drag outside some like seeing the store drag others into sort that, a of back Crisco than what you, of be that It go then going others guess, less as guess sounds what the nature, are a lot in maybe the some actions. And be to could you're in you from promotional of environment. you're in by pricing But of of lapping some are sort you pricing obviously, less

Kenneth Keller

the as mean was we year back of significant I end year-over-year, half. promotional think sort be almost first QX. at it return of the I not beyond the we the as which pre-pandemic just not in but pricing quite So levels in last to to started to half Crisco differential expect

-- terms a QX from year. need of to begin we spend see this the at don't year we in or where to QX and last promotional of in of So rate depth. end lap QX to increase we that And the move

spending is promotional last saying fourth quarters promotion show we we're at what year. to than we did higher and a a dip that expect rate have third in don't So the would us

Andrew Lazar

last that review or not around more expected? you real probably it, guess, much it, can I terms than amount quick, you more have perhaps there's Anything And understanding progressing? Or seen around that less thing of say interest there's there? sensitivity on you frozen, in how have is similar but might strategic say and you can the that of

Bruce Wacha

I think comment on we Yes. And not Andrew, the try is sensitivity to M&A.

call our in of sense but a on our as we least the it early there's the at fluid. that Giant on think quarterly recognition disclose I update process, for overall that a Green just kind not last size the and the get we things the the and goal process. us we on discussed because of It's makes It's into process, are name where evaluating of going of to [ ]. lot to in too were is

Operator

from next of Reuter Bank will Our question with come William America.

William Reuter

opportunity levels quarters inventory further on over next or Is has the question, continued inventory a year? to there decline year-over-year basis. your into first handful reduce of My to next

Bruce Wacha

year-over-year of So from in it our basis, certainly, the significantly see was the inventory balance last where sheet, a year. on it reduced beginning we you at

favorability this have portion going good so for a And to we're year. of

of probably pandemic As to favorability, inventory expectation we lifting post the is but is lot but year, much, we level. to continue to back very half drive a from that the into done, of the get of reduce kind our expect still easy

Kenneth Keller

levels, decline business. exiting driven improvement the inventory But continuous vegetable that. versus a level canned show the more year-over-year in improvement our by continuous on we'll The big

William Reuter

what align from you this sales was Got with year. it. seeing completed we're kind and broadly and customers your destocking been foodservice there sell-through like then earlier feel similarly, foodservice? Has will that more trends by of the now And your process

Bruce Wacha

case. the that's think We

Kenneth Keller

certainly our trend QX that's shows. And what

William Reuter

Okay.

lot X I Just have What those of the months of a channels? nontrack terms channels. Nielsen. through And how your guess, I over channels, referring have track towards X versus done of lastly, sales I'm there. tracked last are nontrack than And times of trends think, or the kind percentage in more been channels? better,

Kenneth Keller

Yes.

is our capturing total XX% Nielsen about of only sales. So

obviously, We terms which business. industrial retail It's by business, X% there's have, and And food then data of Canadian have doesn't Nielsen, XX% sales, in untracked captured that we the channels our is Nielsen U.S. that Nielsen a about cover. about aren't probably not covered by the

XX% correlates XX% so yes, to kind Nielsen, of is outside. So

And quarter. reasonably so had we a -- Canada strong

Our down tracked foodservice And are down industry. slightly with but by kind well. Nielsen perform one moderate declines much much, we've as industrial was about, business to the two we've consistent of or that talked reasonably in not customers more continued that

Operator

Dickerson Our next with Jefferies. from question will Rob come

Robert Dickerson

I couple questions. guess Great. a of

QX seeing first fairly QX, relative rest of think updated kind we thinking of the guide on through Just be kind just relative we question of these the of to QX? we're or kind improvement what of to sequential just in cadence should year, the the year-over-year are more as the

Bruce Wacha

the Maybe second half a bias this is first challenged half year trends. at towards this year from line always X top we half of slight looked improvement, would be and sequential of but pieces, first

that think to still show which case. the we expect improvement, I half, be Second

U.S. a were Green we plus guide minus sell X. thinking to down year, just X% X business Our as then Giant the did back can And business to half versus plus a reminder, earlier we base last year. is X.X% in

a $XX And million drag business so concept. a there's from nonbase about

Robert Dickerson

Yes.

Okay.

come piece, And And little you bit, bit same. had high a Okay. quarter. of great at Cool. I the clearly, a the QX expected a then low stays on in a the end range year, for I the sales the margin year. the same our lowered time, gross down but little the just last you margin guess end right, EBITDA lighter was mean, your little than

up but for then kind little So the still thinking one maybe bit offsets in down up wages highest a quickly, business. again, right? just other back instead bit to a bit expected? then in growing down like came was still of QX. add. be bit QX Like could down also bit. are are and it of quick does And seasonings SG&A so we a gross a flat little that year, just QX, key like in market like there than maybe of year-over-year in it come the Should spice It's little up a sounds being margin half? the just you little the little of maybe a sounds the more that to be given part kind And It you through more caused be

Bruce Wacha

So a EBITDA and guidance basis. We them try margin all. EBITDA things. couple give I'll to of get on an implied

little bit here increase. and flat up sort like Our and back of of guidance between somewhere Nothing year. EBITDA suggests last a expects from somewhere year's margins the in the just half of

margin, If and EBITDA this basically flat the on EBITDA first or on X gross the year were quarter months margins a so and about the of think year-to-date year SG&A far you through margin.

little basis opposite direction. as was and bit the these was year XX But Gross in first quarter. slip and up a bit it's you second a the a period. points. I think in we're versus we within prior gross down quarter, margin SG&A the it year-to-date margin, went little the basis I SG&A. think in remember, flat And had on

some think, this, is of I So timing.

of million, That is is Mexico. we've then there impact the of And out, out thing a margin piece not in manufacture gross Giant currency the obviously business The quarter. a works majority, second that all, Green is business our we facility way in little in Giant but other the from Green mind, that translation. majority to bit drag the little it of bit. for that And we the the in other And sold. got first noise our of an frozen keep something probably million the impacts similar about $X.X of just the was $X a quarter U.S.

Kenneth Keller

-- back come far We the pesos kind so of up. and don't

less back that think be impact we So half in the year. the will of

Operator

Jefferies. with Martinson Karru from comes question next The

Karru Martinson

to your meals being about doesn't a by wanted what's saying half. there sound Certainly, on to Kind to in competitive be Taco more like Ortega sense I challenged read also was the But going was environment. get feeding that the are just of I that? curious promotions. on we're comments prepared I the It others. and excessively haven't second Bell promotional the if

Kenneth Keller

the some I the in coming now. entrant items competitive of case Ortega, particular this pretty pushing drive Taco retreated, But competitor I kind or new lot of in, got before come feel items. it's a we've just taco this like items new year. they've coming new in half seen and think time, Bell pushing distribution they're sauces of another back and We've and of in kind and new with we're in, again and but tried back of

seen Ortega we're and taco on taco going impacted both new trends sauce, improved just us kid bit shell, to taco back a to business little I and you're see El of by going you've the in the Paso entry area, get Old a competitor So the think up I think taco But seasonings. half. in fine, hold

making the at fall brought I'm what in QX because promotional trying promotion and say have last or spending promotions, up we end promotional year is of and of before to back and of seasonality half lot seasonality. terms 'XX, the a at In QX that levels promotional of baking we

going that. lap to we're So

of terms in year, 'XX, us at see prepandemic we So don't and we'll were where kind intensity end pre-pandemic. intensity in promotion but lap the of back this promotion of beyond we going I that we're to already levels where

spend and there, believe right stay competitive we'll with we kind that rate. think we're I of

Karru Martinson

that there that and growth then Or on there? you're your license line seasoning, And products developing look of is are model when Okay. spices own? we at the extension kind for

Kenneth Keller

combination the right the model I we where think I to both. us designed Western like blend license have Four think, think to of proteins We kind seasoning business Sixes, we a a kind like that's kind of the a is barbecue properties of and way into enhance of the great get for style.

spaces bring brands we're portfolio really equities where to So properties we that well. licensed like competing in put and our us relevant they in that and not

at necessarily look extend brands to of current items or ways but even see our properties. that, to either are new we continue So of maybe our kind you'll also current that launch licensed brands, drive will some

So it's a development in a we margins. We've good there and and our to on the organic long long-term we built place term, it's think the category. and We want that culinary, think capabilities inorganic. seasoning growth. spice focus it's good possibly like in We both up

Operator

Sandler. Our next Piper comes with from question Lavery Michael

Michael Lavery

bit translating some You're better that the got aligned you're a particularly affects sense with us now. just think how to little some And trends just are you've how give there? read-through you it better of of into typically? maybe worse from companies how of projects than But can general and foodservice traffic or if about exposed a bigger the

Kenneth Keller

Michael, portfolio. it's it's on mean I obviously, dependent the Yes.

Our portfolio is and about half spices seasonings.

mostly distributors. through So sold

traffic the closely quarter track we've second seen that So in trends. to pretty restaurant

We have a customer food that major service syrup with business a not that's healthy.

So we've there, of not significant. bit decline little that a but seen

to technomics it, ] profile. components. a read going we think overall, is somewhere continue because doing kind will I what channels trends of we We're with in think So we're what X% reflect channels. of patterns, in is places, back-end traffic business to reflect supplying [ the in to we in of with kind range for remainder just kind call the just see ingredient traffic the restaurant those in other X% year and depending that's restaurant And until our on customer our those portfolio tracking of the of kind turnaround

Michael Lavery

But Could complicated kind then you frozen Yes. smaller you the give the to of those on shape? one-offs touched fairly going? helpful. sell dissynergies? or some any as complexity Is there? well, touched on And at -- bundle that's take that's all on avoid a much to brands process and to that too distraction? No, And of Andrew the think you update some divestiture. for to do that of have here about need it that would just the how is how some does know of Just I certain and you

Bruce Wacha

above. the of all of bit little a potentially It's Yes.

it's sold things been one-offs, ways So happen very what could that situation but dependent. we've has it there other be could in other and far

Kenneth Keller

business if a business, was kind look the it the its for back-of-nature decimal divested that with isolated supply kind of mean contract we've at of -- you pack own already business and I itself. had then Green business

titer of a a lot products, overhead can't or of absorption our we'll So out lot says, as but easily Bruce without combination, carve have a problem. we having pretty

Operator

comes with question next Our Casella Carla JPMorgan. from

Carla Casella

that there On you? from behind its that work shelf, is next, Or I would left the over is that Giant Green asset costs of or sales stranded any way out guess, all year X?

Bruce Wacha

not It's what really. less XXX% canned is. pretty U.S. structurally business So you Yes, much pretty it but is is mean a the the maybe airlift line little and I not it and the from costs, freight vegetables, business, take There's co-packed, warehouse straightforward. there's away. really. itself product like just around Freight right? that business bit

and much I pretty gets that just clean. out airlifted nice it's think

Carla Casella

then do And you... Okay.

Kenneth Keller

can any too. that resources think that working we're You business, directly about in

Carla Casella

Okay. Great.

pro forma end? quarter after credit could your closed revolving facility that You on the availability financing post the

Bruce Wacha

Sorry, in sense? what

Kenneth Keller

down I'm quarter, end of some how much available. I At million but wondering so revolver guess, just paid is you've the announced the quarter end, available of $XXX it. you after the also today. it about $XXX you downsized million, of

Bruce Wacha

Yes.

going So and dates. based we've footnoted closing suggest what offering just I I the docs, on drawn and debt was would think available to appropriately,

Carla Casella

Perfect.

of that point shelf And you've percentage can Okay. timing kind mean kind to? numbers -- you what you if either gains ramen, of offering. that wondering what's I And -- was on missed or the the just I place then I of the on any you got said

Kenneth Keller

going It's fall. in the

see customers, a of It's kind shelf start couple growth you'll months. a vegetable ramen So good from their it on customers in We've start dish, until we'll shipping set on acceptance the shortly. when in I fall cases. of within don't it next the had recession but think based will shipping

Carla Casella

forward it. Okay. to Great. Look trying

Operator

with comes Our ISI. David from next question Palmer Evercore

David Palmer

acquisitions frozen. those would to was and trying of snacks about a work vision long B&G? was talking categories wanted to then I B&G. term are And I there's wave businesses be gone business talk now company what And that things There I'm soon be inside reticence would talk or gross within brands, the the businesses about to gone. about for be types of of of really long but going know to your sorts up what of terms ago with fit in where to the

kind B&G. So rejected the from were shell of is they that

you've seen you and what bigger? where I'm get do So wondering to want does you think might from work what

Kenneth Keller

I successful our Yes, structure this but -- margin been cash we've relatively before, pretty about have time talked looking think where at and over where I good it's we and business think flows. it's it's clear -- we've

and and and And spices the foremost, so first seasonings I business. like,

it's margin, that quarter, our our the margin, actually at we year-over-year segment EBITDA margin good had look improved you high If business. too. on We in growth

want I importantly, business But that more acquisitions. think that's over add additional on to a we we to time to organically. would look focus want

have capabilities. facility. culinary great got of our our built a Iowa We and asset kind up there. R&D good We've in We've capability

I in kind job which comments, pricing, for So flow Clabber even managing the profitability future said of that's one some I baking categories, we've Crisco, as the pretty business -- with cash those of of volatility I my in in business, of that strong managing businesses. we've the see brands specialty a staples, a Girl, is trends stable great done good job those and in commodity of done B&G and Also, kind that is, XX% as the think with #X a

I we staples synergies some be margins, that into shelf-stable cash or making and could products lifted stable maintain good where baking think would be additional picking we interested in give flow. up portfolio,

consumption. we've meals, We places, meals. kind Mexican terms talked us I to those Mexican trends think people seeing longer Mexican grow of meals. is lastly, a meals different good term about think will X going, meals do centered in believe at-home place types are be. in I making of then that. We're for And I of

think but look buying there, preparation sauces and opportunities at home Mexican Las would of other lots Ortega Palmas meal portfolio, our over think to that other time. I there's at we is well I consider items founded

those I a So whether remaining after fits around business have question we long think which term. business, that Frozen X us review with really we the or units said under

us to fits a hard it, said not we place we places of but for it, would growth, drive think scale X, to I for fits X like probably Refrigerated distribute up should be that to get less be decided make buy we into. that drive want certainly platforms we is I those it at our If to to but a would importantly, able be more something good those acquisitions. place that we sure would costs capabilities. want our and to outside that organic look It ability down. -- frozen are the to be

we adjacent distribution but stay if might unit the want that that we categories So have be where some know places, manage of over time. create acquire that to how I things to synergies, synergies, to in another would manage we may business we the categories selling to other

view I with So going. that's that's what with a activity. we're the shaping of us of longer-term But vision kind where more the see up of divestiture the

David Palmer

is those that's encapsulate would of But do probably think much you how that. I with unabridged probably you core. not think just your everything really that answer. would helpful And not very by those I is currently? a you business like Over know that's mega that appreciate half? mentioned, Yes. those X Those -- platforms say that's answer, way, you the X an

Kenneth Keller

flow basis, sales cash on EBITDA on and a basis. from an higher basis, a XX% higher

David Palmer

mean I what was of you release, you in was bit wondering foodservice the for into a food quarter foodservice accounts? with lot actually your you little better first I So it there looking seeing said, the companies, out second worse? maybe think it the getting just for than was And half? seeing I'm what foodservice a particular service the are are in

Bruce Wacha

timing, but highlighted remember, X which right, that one X of to we was that last to unique some some of or the and was quarter was challenges, mean thing some had we customers. I

Kenneth Keller

traffic of to we kind rest minus people I've I our in of it and X% the see which until what kind should that changes, of that in that's overall. mean I mirroring near And and of seen for our kind terms restaurant we're restaurant and something who see trends foodservice are projecting -- what kind what read call to if we think is be that's a minus going different we in X% it the business, now, that what call for data. are the see minus of I year. recessionary environment, the numbers, track to what think of future trends. expect traffic. we that knows in but would largely sort but we're right We X% we get that's but seeing of what industry expect. QX, worse, And

David Palmer

Yes.

bit. better a of people expectations think might comparisons. because that were be I second be would fading And half thinking a Now lot think I of the those

many think think worse. don't it get people I there's So will necessarily

Operator

Robert our from with Moskow Cowen. And final will question TD come

Robert Moskow

a glass full question. half empty half and have glass I a

full I'm think just glass the question. I do going half So to

Bruce Wacha

the glass, in Rob? What's

Robert Moskow

It's pretty late.

want a like ] you So I who's maybe look something like uncover to data, the show -- to selling some at but or starting it tracking signs at about it, forgetting honestly, grocery overall sales, is all if just so it and don't ELS of -- [ look acceleration.

to save the being I think would argue, I to store X of weeks. the last consumers you sign, money, a clear it's about and in lot. up trying a going can X% it's back down And foodservice see grocery

half in you because so easy bold say back grocery to heard half of as have easier I a outlook -- of could that the environment, a better year. as know the -- are your comparisons? be well the could better do hey, backdrop be retail but there as haven't that the in you for overall you -- I about back much So you in

Bruce Wacha

Yes.

our which of have disagree first it end, you're saying. little than do caution. half think somewhat on So the to a took We right? is that, the suggest guidance bit what I with little of bit is a year I So back based half. more favorable don't We obviously down high at growth, some this

talking earlier is there were to and to an I back happen giving us expectation recovery think sooner. was I you of most if year, this went that that, guidance, think when going

have seeing. bit signs of seeing would we're the a loved to full. it just it. that's we're I think I half be what That's sooner. But little glass

Robert Moskow

Okay. All right.

both. me and You

Operator

ended. And session you conference has now and Ladies the and disconnect. gentlemen, joining Thank this today. you all question-and-answer now will for may conclude for the

B&G Foods (BGS) 6 Aug 242024 Q2 Earnings call transcript