PARSIPPANY, NJ. โ While bottom-line financials for fiscal 2023 may not have been as strong as executives hoped due to several divestitures during the year, B&G Foods made headway on several milestones as part of its effort to reshape and strengthen operations, said Kenneth Keller, president and chief executive officer.
โOverall, we are pleased with the performance in the fourth quarter and the recovery of the B&G Foods business in fiscal year โ23,โ Keller said during a Feb. 27 conference call with analysts. โThereโs clearly more work to do, but our team has made significant progress toward creating a stronger, more valuable B&G Foods.โ
Keller mentioned four milestones in fiscal 2023, led by margin recovery after historic inflation pressure in fiscal 2022. He said the companyโs pricing actions and productivity efforts helped spur a 280-basis points increase in adjusted gross profit percentage, to 22.2% in 2023 from 19.4% in 2022. Adjusted EBITDA as a percentage of net sales also improved, rising 150 basis points to 15.4% in fiscal 2023, he said.
โGoing forward, input cost inflation has moderated to low single digits and in some cases, such as soybean oil, has come down from historic highs,โ he said.
A second milestone, and one that had an impact on financial results for the year, was portfolio shaping.
โWe divested the low margin working capital intensive businesses of Back to Nature cookie crackers and Green Giant US canned vegetables,โ Keller said. โBoth did not fit with our future portfolio focus and were strained to deliver adequate cash flow against the leverage model. As previously disclosed, we expect to divest additional business and brands over the next year to focus the portfolio for future success and intend to use the proceeds to pay down debt.โ
B&G Foodsโ third milestone in 2023 was an increase in cash flow, working capital and net cash from operations, which jumped to $248 million in fiscal 2023 from $6 million in fiscal 2022, Keller said. He said the results were driven by better operating performance and margin recovery and by improvement in working capital.
A fourth milestone involved the companyโs spices and seasonings business, which now represents approximately 18% of B&G Foodsโ portfolio.
โThe core high margin spices and seasoning business increased net sales by 2.2%,โ Keller said. โTrends were particularly strong on the foodservice and Memberโs Mark Sam label business, which largely serve out of home and small business customers. The core retail branded trends, Dash, Weber, Spice Islands, etc., are improving and have recovered from temporary service and production issues in our Ankeny (Iowa) factory. We have also strengthened our innovation and new product pipeline launching new license seasoning and grilling blends under the Buffalo Trace, Fireball and Southern Comfort brands, which are performing very well in initial distribution.โ
Overall, B&G Foods sustained a loss of $66.2 million in the year ended Dec. 30, 2023, which compared with a loss of $11.4 million in fiscal 2022. Fiscal 2023 results included nearly $138 million in losses associated with the sale of certain assets, including the divestiture of the Back to Nature business and Green Giant US shelf stable line. The company also recorded $20.5 million in charges related to intangible trademark assets for the Bakerโs Joy, Molly McButter, Sugar Twin and New York Flatbreads brands.
Sales fell 4.7% to $2.06 billion from $2.16 billion the year prior.
For fiscal 2024, B&G Foods is guiding sales in a range of $1.975 billion to $2.02 billion and adjusted EBITDA to be between $305 million to $325 million.
