For the fourth quarter ended Jan. 1, net income was $14,278,000, or 30c per share, up sharply from $1,338,000, or 3c per share, in the same period a year ago. Net sales in the quarter totaled $141,866,000, up 5% from $135,608,000.
“Our record-breaking fourth-quarter results capped a remarkable year for B&G Foods,” said David L. Wenner, president and chief executive officer. “Unit volume and net pricing gains, cost reductions and a favorable sales mix combined to lift our quarterly and annual EBITDA to record levels thanks to the efforts of our sales, manufacturing and marketing teams.”
Mr. Wenner said the company’s balance sheet “is as strong as it has ever been,” adding that the board of directors’ decision to raise the company’s dividend rate by 24% reflected “present strength and confidence in the 2011 outlook for our business.”
In a March 1 conference call, Mr. Wenner explained that B&G Foods’ volume gains came in the brands it most hopes to grow.
“We have formalized our overall brand strategy, dividing our portfolio into three tiers, sorted primarily by growth prospects and secondarily by margins,” he said. “Tier 1 consists of brands with higher growth prospects and higher margins, and includes Ortega and Cream of Wheat. This tier receives our most focused efforts in terms of new product development, and investment and distribution. This tier grew by 6.2% in the fourth quarter and by 5% for the full year of 2010.”
He noted that the launch last fall of Cream of Wheat Cinnabon has been a windfall for B&G Foods.
“In just a few months, (Cream of Wheat Cinnabon) generated over $1 million in factory sales and became our third best-selling Cream of Wheat Instant s.k.u., where it gained retail distribution,” he said. “We have hopes that this product alone could generate 1% growth for us in 2011. We believe that we will also have opportunities to increase the distribution of this and other new products and existing products in 2011, and we plan to increase the spending behind that effort by at least 25%.”