Parsippany, N.J, July 28, 2008 - B&G Foods, Inc., a manufacturer and distributor of high-quality, shelf-stable foods, today announced financial results for the thirteen weeks ended June 28, 2008 (second quarter of 2008) and the twenty-six weeks ended June 28, 2008 (first two quarters of 2008).
Financial Results for the Second Quarter of 2008
Net sales for the second quarter of 2008 increased 0.8% to $119.2 million from $118.2 million for the thirteen weeks ended June 30, 2007 (second quarter of 2007). The increase in net sales of $1.0 million was due to an increase in unit volume.
Gross profit for the second quarter of 2008 decreased 10.1% to $33.6 million from $37.3 million in the second quarter of 2007. Gross profit expressed as a percentage of net sales decreased 3.4% to 28.2% for the second quarter of 2008 from 31.6% in the second quarter of 2007. The decrease in gross profit expressed as a percentage of net sales was primarily attributable to increased spending on trade promotions and increased costs for wheat, maple syrup, corn, packaging, transportation and sweeteners. Operating income decreased 13.7% to $18.6 million for the second quarter of 2008 from $21.5 million in the second quarter of 2007.
Net income was $3.5 million for the second quarter of 2008 compared to $3.7 million for the second quarter of 2007. Earnings per share of Class A common stock was $0.10 for the second quarter of 2008. During the second quarter of 2007, B&G Foods had two classes of common stock outstanding and computed earnings per share under the two class method. As a result, it is not meaningful to compare earnings per share for the second quarter of 2008 or the first two quarters of 2008 to the second quarter of 2007 or the first two quarters of 2007. For the second quarter of 2008, EBITDA (see "About Non-GAAP Financial Measures" below) decreased 10.0% to $22.4 million from $25.0 million for the second quarter of 2007.
David L. Wenner, Chief Executive Officer of B&G Foods, stated, "The second quarter was a very challenging quarter for our company with cost increasing, particularly in maple syrup, more quickly than we could raise pricing to compensate. We believe that cost, while still higher, will be more predictable in the second half of fiscal 2008 and that our pricing actions will be better able to offset cost increases going forward."
Financial Results for the First Two Quarters of 2008
Net sales for the first two quarters of 2008 increased 6.1% to $235.5 million from $221.9 million in the comparable period of fiscal 2007. Excluding the impact of the Cream of Wheat acquisition and the termination of a temporary co-packing arrangement, net sales increased $4.5 million or 2.0% due to increases in sales price and unit volume. The Cream of Wheat acquisition, which was completed in late February 2007, accounted for $9.9 million of the net sales increase offset by a decrease in net sales of $0.8 million relating to the termination of the temporary co-packing arrangement.
Gross profit for the first two quarters of 2008 decreased 2.2% to $68.5 million from $70.0 million in the comparable period of last year. Gross profit expressed as a percentage of net sales decreased 2.4% to 29.1% in the first two quarters of 2008 from 31.5% in the comparable period of fiscal 2007. The decrease in gross profit expressed as a percentage of net sales was primarily attributable to increased spending on trade promotions and increased costs for wheat, maple syrup, corn, packaging, transportation and sweeteners. Operating income decreased 4.9% to $38.3 million during the first two quarters of 2008, compared to $40.2 million in the comparable period of fiscal 2007.
Net income was $7.9 million for the first two quarters of 2008 compared to $7.8 million for the comparable period of fiscal 2007. For the first two quarters of 2008, earnings per share of Class A common stock was $0.22. For the first two quarters of 2008, EBITDA decreased 0.6% to $45.8 million from $46.1 million for the first two quarters of 2007.