B&G Foods, Inc. announced financial results for the fourth quarter and full year 2019. Financial results for the fourth quarter and full year 2019 reflect the impact of the divestiture of Pirate Brands during the fourth quarter of 2018 and the acquisitions of McCann’s during the third quarter of 2018 and Clabber Girl during the second quarter of 2019.
Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods, stated “I am happy to report 2019 financial results that are consistent with our short-term and long-term plans, which are based on our goal of a stable base business with pricing and cost savings initiatives to offset inflation, complemented by net sales and earnings growth through new product innovation and accretive acquisitions.”
Mr. Romanzi continued, “We have been successful in our efforts to generate growth by investing in plant-based innovation products by Green Giant. We recently augmented these efforts with our acquisition last week of Farmwise LLC, proud creator of Veggie Fries®, Veggie Tots® and Veggie Rings®. Additionally, in 2019, we acquired and successfully integrated Clabber Girl, the nation’s #1 manufacturer of retail baking powder. We also strengthened our organization in 2019, including organizational re-design, personnel enhancements and system improvements such as our new ERP system implementation. We believe that these initiatives, coupled with our investor-friendly capital allocation strategy, position us to create long-term value for our shareholders.”
Financial Results for the Fourth Quarter of 2019
Net sales increased $12.1 million, or 2.6%, to $470.2 million for the fourth quarter of 2019 from $458.1 million for the fourth quarter of 2018. The increase was primarily due to the Clabber Girl acquisition, partially offset by the Pirate Brands divestiture. Net sales of Clabber Girl, which was acquired on May 15, 2019 and therefore not part of the Company’s fourth quarter of 2018 results, contributed $25.2 million to the Company’s net sales for the fourth quarter of 2019. Net sales of Pirate Brands, which was sold on October 17, 2018 and therefore not part of the Company’s fourth quarter of 2019 results, were $2.1 million during the fourth quarter of 2018.
Base business net sales1 for the fourth quarter of 2019 decreased $10.8 million, or 2.4%, to $445.0 million from $455.8 million for the fourth quarter of 2018. The decrease in base business net sales reflected an increase in net pricing of $4.1 million, or 0.9% of base business net sales, inclusive of list price increases and promotional trade spend optimization, more than offset by a decrease in unit volume of $14.9 million.
Net sales of the Company’s spices & seasonings2 increased $0.8 million, or 1.0%, and net sales of New York Style increased $0.2 million, or 1.9%, for the fourth quarter of 2019 as compared to the fourth quarter of 2018. Net sales of Cream of Wheat decreased $1.4 million, or 7.5%; net sales of Ortega decreased $1.3 million, or 3.6%; net sales of Green Giant (including Le Sueur) decreased $1.3 million, or 0.8%; and net sales of Maple Grove Farms decreased $0.4 million, or 2.4%, for the fourth quarter of 2019 as compared to the fourth quarter of 2018. Net sales of all other brands in the aggregate decreased $7.4 million, or 5.8%, for the fourth quarter of 2019.
Gross profit was $94.4 million for the fourth quarter of 2019, or 20.1% of net sales. Excluding the negative impact of $2.6 million of acquisition/divestiture-related and non-recurring expenses during the fourth quarter of 2019, the Company’s gross profit would have been $97.0 million, or 20.6% of net sales. Gross profit was $49.9 million for the fourth quarter of 2018, or 10.9% of net sales. Excluding the negative impact of $36.9 million of acquisition/divestiture-related and non-recurring expenses during the fourth quarter of 2018, which includes expenses relating to the non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $86.8 million, or 19.0% of net sales.
Selling, general and administrative expenses decreased $3.1 million, or 6.5%, to $44.5 million for the fourth quarter of 2019 from $47.6 million for the fourth quarter of 2018. The decrease was composed of decreases in acquisition/divestiture-related and non-recurring expenses of $3.2 million, consumer marketing expenses of $1.6 million and warehousing expenses of $1.3 million, partially offset by increases in other general and administrative expenses of $2.2 million and selling expenses of $0.8 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 0.9 percentage points to 9.5% for the fourth quarter of 2019, compared to 10.4% for the fourth quarter of 2018.
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