B&G Foods(BGS) - 2025 Q2 - Quarterly Results

Executive Summary & Guidance This section provides an overview of B&G Foods' financial performance, strategic initiatives, and revised full-year 2025 guidance Performance Highlights B&G Foods reported a decline in key financial metrics for the second quarter and first half of 2025 compared to the prior year. Net sales, diluted EPS, and adjusted EBITDA all decreased, with the company experiencing a net loss in both periods Q2 & H1 2025 Financial Summary (vs. 2024) | Metric | Q2 2025 | Q2 Change | H1 2025 | H1 Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $424.4M | (4.5)% | $849.8M | (7.6)% | | Base Business Net Sales | $422.6M | (4.2)% | $844.6M | (7.5)% | | Diluted EPS | $(0.12) | (340.0)% | $(0.11) | 76.1% | | Adjusted Diluted EPS | $0.04 | (50.0)% | $0.08 | (70.4)% | | Net Loss | $(9.8)M | (348.1)% | $(8.9)M | 75.4% | | Adjusted Net Income | $2.9M | (56.1)% | $6.3M | (69.8)% | | Adjusted EBITDA | $58.0M | (9.3)% | $117.1M | (15.7)% | Management Commentary & Strategic Initiatives The CEO noted sequential improvement in Q2 after a challenging Q1 and expects further improvement in the second half of 2025. The company is actively reshaping its portfolio through divestitures to simplify the business, improve margins, and enhance cash flow - Management is focusing on reshaping and restructuring the company's portfolio to sharpen focus and improve financial performance[3] - The company completed the divestitures of the Don Pepino and Sclafani brands in Q2 and the Le Sueur brand in Q3[3] Full Year 2025 Guidance B&G Foods has revised its full-year fiscal 2025 guidance downwards. The new guidance anticipates net sales between $1.83 billion and $1.88 billion, with adjusted diluted EPS expected to be in the range of $0.50 to $0.60 Revised Full Year 2025 Guidance | Metric | Revised Range | | :--- | :--- | | Net Sales | $1.83 billion to $1.88 billion | | Adjusted EBITDA | $273.0 million to $283.0 million | | Adjusted Diluted EPS | $0.50 to $0.60 | - The guidance does not account for potential impacts from tariffs or other trade barriers due to the uncertain political and economic environment[28] Consolidated Financial Performance This section details B&G Foods' consolidated financial results for the second quarter and first half of 2025, highlighting key revenue and profitability metrics Second Quarter 2025 Financial Results In Q2 2025, net sales fell 4.5% to $424.4 million, driven by lower volume, unfavorable pricing/mix, and foreign currency impacts. The company reported a net loss of $9.8 million, a significant decline from a $3.9 million net income in Q2 2024, primarily due to a $12.6 million loss on the sale of brands. Adjusted EBITDA also decreased by 9.3% to $58.0 million - Q2 net sales decreased by $20.2 million (4.5%) to $424.4 million, primarily due to a decrease in volume[4][5] - Adjusted gross profit margin remained flat at 21.0% year-over-year[6] - The company reported a net loss of $9.8 million, or ($0.12) per diluted share, largely attributable to a $12.6 million loss on the sale of the Don Pepino and Sclafani brands[10] - Adjusted EBITDA for Q2 2025 was $58.0 million, a 9.3% decrease from $63.9 million in Q2 2024[12] First Two Quarters 2025 Financial Results For the first half of 2025, net sales declined 7.6% to $849.8 million, with base business net sales down 7.5%. The company's net loss narrowed to $8.9 million from $36.3 million in the prior-year period, which had included a significant goodwill impairment charge. Adjusted EBITDA for the period fell 15.7% to $117.1 million - Net sales for the first two quarters of 2025 decreased by $70.0 million (7.6%) to $849.8 million, driven by lower volume and unfavorable pricing/mix[13][14] - The net loss for H1 2025 was $8.9 million, an improvement from a $36.3 million loss in H1 2024. The prior year's loss was primarily due to a $70.6 million goodwill impairment charge[18] - Adjusted net income for H1 2025 was $6.3 million, a significant decrease from $21.0 million in H1 2024, mainly due to the reduction in net sales[19] - Adjusted EBITDA for the first two quarters of 2025 decreased by 15.7% to $117.1 million[20] Segment Performance Analysis This section analyzes the financial performance of B&G Foods' key business segments, including Specialty, Meals, Frozen & Vegetables, and Spices & Flavor Solutions Specialty Segment The Specialty segment's net sales declined 8.0% in Q2 and 10.6% in H1 2025, primarily due to decreased volumes and lower net pricing. Despite the sales drop, Q2 adjusted EBITDA increased by 3.0% to $32.7 million, benefiting from lower raw material costs Specialty Segment Performance (in thousands) | Period | Net Sales | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $134,859 | (8.0)% | $32,650 | 3.0% | | H1 2025 | $269,259 | (10.6)% | $66,170 | (3.9)% | - The decrease in net sales for both Q2 and H1 was driven by lower volumes and reduced net pricing[23] Meals Segment The Meals segment saw a net sales decrease of 3.5% in Q2 and 7.8% in H1 2025, driven by lower volumes. However, adjusted EBITDA grew 7.7% in Q2 and 2.4% in H1, positively impacted by increased net pricing and favorable product mix Meals Segment Performance (in thousands) | Period | Net Sales | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $104,079 | (3.5)% | $25,745 | 7.7% | | H1 2025 | $210,221 | (7.8)% | $50,719 | 2.4% | - The increase in adjusted EBITDA was primarily due to higher net pricing and improved product mix, which offset the impact of lower sales volumes[24] Frozen & Vegetables Segment The Frozen & Vegetables segment experienced a 2.8% decline in Q2 net sales and a 7.3% decline in H1. The segment reported a significant drop in profitability, with adjusted EBITDA turning to a loss of $2.7 million in Q2 and $4.2 million in H1, driven by lower sales, increased promotions, higher costs, and tariffs Frozen & Vegetables Segment Performance (in thousands) | Period | Net Sales | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $88,989 | (2.8)% | $(2,730) | (171.7)% | | H1 2025 | $182,108 | (7.3)% | $(4,203) | (136.1)% | - The sharp decrease in adjusted EBITDA was attributed to lower net sales, increased trade promotions, higher raw material and manufacturing costs, and the impact of tariffs[25] Spices & Flavor Solutions Segment Net sales for the Spices & Flavor Solutions segment decreased by 2.0% in Q2 and 3.0% in H1, mainly due to volume declines. Adjusted EBITDA fell 12.8% in Q2 and 10.5% in H1, impacted by lower sales, unfavorable product mix, and increased raw material costs for items like garlic and black pepper Spices & Flavor Solutions Segment Performance (in thousands) | Period | Net Sales | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $96,498 | (2.0)% | $24,119 | (12.8)% | | H1 2025 | $188,239 | (3.0)% | $50,388 | (10.5)% | - The decrease in adjusted EBITDA was primarily due to lower net sales, product mix impact, and rising costs for key raw materials such as garlic and black pepper[26] Financial Statements and Reconciliations This section presents B&G Foods' unaudited consolidated financial statements and detailed reconciliations of non-GAAP financial measures to their GAAP equivalents Consolidated Financial Statements The report includes unaudited consolidated balance sheets as of June 28, 2025, and December 28, 2024, showing total assets of $2.94 billion. The consolidated statements of operations detail the company's performance for the second quarter and first half of 2025 and 2024 - Total assets decreased slightly to $2.937 billion as of June 28, 2025, from $2.994 billion at the end of fiscal 2024[44] - The Consolidated Statements of Operations provide a detailed breakdown of revenues, costs, and expenses leading to the net loss for the reported periods[46] Reconciliation of Non-GAAP Measures The company provides detailed reconciliations for its non-GAAP financial measures to the most directly comparable GAAP measures. These include reconciliations for EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Base Business Net Sales, and Adjusted Gross Profit, which are used by management to assess ongoing operational performance - The report includes reconciliations of Net Income to EBITDA and Adjusted EBITDA, showing adjustments for items like acquisition/divestiture expenses and loss on sales of assets[48] - A reconciliation of Net Sales to Base Business Net Sales is provided to show performance excluding the impact of recent divestitures[57][58] - The reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS adjusts for items such as gains on debt extinguishment, loss on asset sales, and related tax effects[53] Other Information This section provides context on the company's use of non-GAAP financial measures and outlines key forward-looking statements and associated risk factors About Non-GAAP Financial Measures The company explains its use of non-GAAP financial measures such as adjusted EBITDA, adjusted net income, and base business net sales. Management believes these metrics provide a clearer view of ongoing operating performance and allow for more meaningful period-to-period comparisons by excluding certain items that affect comparability - B&G Foods uses non-GAAP measures to allow investors to make meaningful comparisons of operating performance between periods, consistent with management's own evaluation[33] - Key non-GAAP measures include adjusted net income, adjusted diluted EPS, base business net sales, EBITDA, and adjusted EBITDA[32] Forward-Looking Statements & Risk Factors This section contains standard cautionary language regarding forward-looking statements, including the company's financial guidance. It outlines numerous risks and uncertainties that could cause actual results to differ materially, such as substantial leverage, international trade disputes, cost inflation, intense competition, and supply chain disruptions - The press release contains forward-looking statements concerning expectations for the remainder of fiscal 2025, which are subject to various risks and uncertainties[37] - Key risk factors mentioned include the company's substantial leverage, effects of trade tariffs, rising commodity costs, intense competition, and potential supply chain disruptions[37][39]