PARSIPPANY, N.J. — B&G Foods, Inc. is still hungry for more acquisitions, even after the recent purchase of the Green Giant business from General Mills for $765 million.
“We are always ready for the next acquisition,” said Bob Cantwell, president and chief executive officer, during an Oct. 27 earnings call with financial analysts. “We certainly want to absorb and transition Green Giant in over the next number of months, but we are not going to not look at something that comes to market that would make sense for B&G, either.
|Bob Cantwell, president and c.e.o. of B&G Foods
“But we’ve got a lot of transition work on Green Giant, and that’s first and foremost here, and really getting our balance sheet ready. As you look into the late winter, early springtime is perfect for us to be able to do it, assuming the market is there, and perfect to be ready for the next acquisition, assuming one comes along.”
Higher prices and lower transportation costs helped B&G Foods achieve solid earnings growth in the third quarter. The company had net income for the period ended Oct. 3 of $19.8 million, equal to 34c per share on the common stock, which compared with a loss of $4.4 million for the prior-year period. Adjusted net income advanced nearly 11% to $22.7 million, the company said.
Net sales increased 2.1% to $213.3 million from year-ago sales of $209 million. Sales of the Mama Mary’s pizza crust brand, which B&G Foods acquired in July, contributed positively to results, helping to offset continued weakness for the Rickland Orchards brand. Excluding the impact of the Mama Mary’s acquisition and the Rickland Orchards shortfall, comparable base business net sales fell 0.4%, due to a decrease in unit volume that partially was offset by an increase in pricing and reduced promotional activity. Canadian net sales were unfavorably impacted by a strong U.S. dollar.
The company expects to close its acquisition of Green Giant during the fourth quarter. The company announced in September it would buy the business, and the acquisition is expected to be immediately accretive to earnings per share and free cash flow.
“Our team has been working hand-in-hand with the General Mills team as we work toward closing the transaction, and to make sure the post-closing transition is as smooth as possible,” Mr. Cantwell said. “Internally, we have been putting the framework in place to stabilize and then revitalize the top line and regain market share. We expect to double the current marketing spend for Green Giant, and have begun the process of adding additional members to our marketing department to properly manage the new business and spend.”
For the full year, the company has lowered its sales outlook to a range of $865 million to $875 million, down from the prior target of $875 million to $885 million.“We’ve gotten the pricing this year, but we haven’t gotten the volume we wanted totally on some of our base businesses, and as we looked at our actual results here through the third quarter, just didn’t feel comfortable that we could achieve the original guidance; that we needed to take it down,” Mr. Cantwell said.