As filed with the Securities and Exchange Commission on ~~November~~August 3, ~~2017~~2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~For the quarterly period ended September 30, 2017~~

☐
	For the quarterly period ended July 1, 2023 or

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission file number 001-32316

B&G FOODS, INC.

(Exact name of Registrant as specified in its charter)


Delaware		13-3918742
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

4Four Gatehall Drive, Parsippany, New Jersey		07054
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: ~~(973)~~ (973) 401-6500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BGS	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
		~~(Do not check if a smaller reporting company)~~
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 31, 2017,~~July 28, 2023, the registrant had ~~66,496,333~~72,291,573 shares of common stock, par value $0.01 per share, issued and outstanding.

Table of Contents

B&G Foods, Inc. and Subsidiaries

Index

~~Index~~

r
		Page No.
		~~Page No.~~

PART I FINANCIAL INFORMATION		21

	Item 1. Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	~~Consolidated Balance Sheets~~	2
	Consolidated Statements of ~~Operations~~Comprehensive Income	3
	Consolidated Statements of ~~Comprehensive Income~~Changes in Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	~~Notes to Consolidated Financial Statements~~	6
	Notes to Consolidated Financial Statements	7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3025
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	4539
	Item 4. Controls and Procedures	4740

PART II OTHER INFORMATION		4841

	Item 1. Legal Proceedings	4841
	Item 1A. Risk Factors	4841
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4841
	Item 3. Defaults Upon Senior Securities	4842
	Item 4. Mine Safety Disclosures	4842
	Item 5. Other Information	4842
	Item 6. Exhibits	4842

SIGNATURE		4943

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Table of Contents

Forward-Looking Statements

This report includes forward-looking statements, including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The words “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by any forward-looking statements. We believe important factors that could cause actual results to differ materially from our expectations include the following:

●

our substantial leverage;

●

the effects of rising costs for and/or decreases in the supply of commodities, ingredients, packaging, other raw materials, distribution and labor;

●

crude oil prices and their impact on distribution, packaging and energy costs;

●

our ability to successfully implement sales price increases and cost saving measures to offset any cost increases;

●

intense competition, changes in consumer preferences, demand for our products and local economic and market conditions;

●

our continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity;

●

the ability of our company and our supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain or labor shortages;

●

the impact pandemics or disease outbreaks, such as the COVID-19 pandemic, may have on our business, including among other things, our supply chain, our manufacturing operations, our workforce and customer and consumer demand for our products;

●

our ability to recruit and retain senior management and a highly skilled and diverse workforce at our corporate offices, manufacturing facilities and other work locations despite a very tight labor market and changing employee expectations as to fair compensation, an inclusive and diverse workplace, flexible working and other matters;

●

the risks associated with the expansion of our business;

●

our possible inability to identify new acquisitions or to integrate recent or future acquisitions, or our failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions;

●

our ability to successfully complete the integration of recent or future acquisitions into our enterprise resource planning (ERP) system;

●

tax reform and legislation, including the effects of the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, U.S. Tax Cuts and Jobs Act and the U.S. CARES Act, and any future tax reform or legislation;

●

our ability to access the credit markets and our borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of our competitors;

●

unanticipated expenses, including, without limitation, litigation or legal settlement expenses;

●

the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar;

●

the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on our international procurement, sales and operations;

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Table of Contents

●

future impairments of our goodwill and intangible assets;

●

our ability to protect information systems against, or effectively respond to, a cybersecurity incident, other disruption or data leak;

●

our ability to successfully implement our sustainability initiatives and achieve our sustainability goals, and changes to environmental laws and regulations;

●

other factors that affect the food industry generally, including:

orecalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products;

ocompetitors’ pricing practices and promotional spending levels;

ofluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and

othe risks associated with third-party suppliers and co-packers, including the risk that any failure by one or more of our third-party suppliers or co-packers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and

●

other factors discussed elsewhere in this report and in our other public filings with the Securities and Exchange Commission (SEC), including under Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K filed with the SEC on February 28, 2023, and Part, II, Item 1A, “Risk Factors,” in this report.

Developments in any of these areas could cause our results to differ materially from results that have been or may be projected by us or on our behalf.

All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this report.

We caution that the foregoing list of important factors is not exclusive. There may be other factors that may cause our actual results to differ materially from the forward-looking statements in this report, including factors disclosed under the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. We urge investors not to unduly rely on forward-looking statements contained in this report.

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Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements ~~(Unaudited)~~(Unaudited)

B&G Foods, Inc. and Subsidiaries

Consolidated Balance ~~Sheets~~Sheets

(In thousands, except share and per share data)

(Unaudited)


	July 1,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	42,772	$	45,442
Trade accounts receivable, net		142,841		150,019
Inventories		674,682		726,468
Assets held for sale		—		51,314
Prepaid expenses and other current assets		41,451		37,550
Income tax receivable		12,810		8,024
Total current assets		914,556		1,018,817

Property, plant and equipment, net of accumulated depreciation of $419,243 and $390,821 as of July 1, 2023 and December 31, 2022, respectively		308,405		317,587
Operating lease right-of-use assets		64,600		65,809
Finance lease right-of-use assets		2,362		2,891
Goodwill		619,399		619,241
Other intangible assets, net		1,778,097		1,788,157
Other assets		20,816		19,088
Deferred income taxes		10,472		10,019
Total assets	$	3,718,707	$	3,841,609

Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	136,308	$	127,809
Accrued expenses		61,461		64,137
Current portion of operating lease liabilities		15,274		14,616
Current portion of finance lease liabilities		1,057		1,046
Current portion of long-term debt		—		50,000
Income tax payable		3,346		309
Dividends payable		13,735		13,617
Total current liabilities		231,181		271,534

Long-term debt, net of current portion		2,245,630		2,339,049
Deferred income taxes		302,943		288,712
Long-term operating lease liabilities, net of current portion		49,683		51,727
Long-term finance lease liabilities, net of current portion		1,263		1,795
Other liabilities		21,644		20,626
Total liabilities		2,852,344		2,973,443
Commitments and contingencies (Note 12)

Stockholders’ equity:
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding		—		—
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 72,291,573 and 71,668,144 shares issued and outstanding as of July 1, 2023 and December 31, 2022, respectively		723		717
Additional paid-in capital		—		—
Accumulated other comprehensive loss		384		(9,349)
Retained earnings		865,256		876,798
Total stockholders’ equity		866,363		868,166
Total liabilities and stockholders’ equity	$	3,718,707	$	3,841,609

See Notes to Consolidated Financial Statements.

September 30, 2017

December 31, 2016

Assets

Current assets:

Cash and cash equivalents

$
22,615

$
28,833

Trade accounts receivable, net

171,343

119,265

Inventories

487,390

356,590

Prepaid expenses and other current assets

33,601

26,399

Income tax receivable

9,567

10,787

Total current assets

724,516

541,874

Property, plant and equipment, net of accumulated depreciation of $192,867 and $169,474

266,381

245,344

Goodwill

615,770

614,278

Other intangibles, net

1,615,528

1,629,482

Other assets

6,292

4,625

Deferred income taxes

984

7,902

Total assets

$
3,229,471

$
3,043,505

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$
137,205

$
98,033

Accrued expenses

55,474

62,393

Current portion of long-term debt

—

10,515

Income tax payable

112

3,875

Dividends payable

30,921

30,879

Total current liabilities

223,712

205,695

Long-term debt

1,852,932

1,715,268

Other liabilities

17,779

21,405

Deferred income taxes

343,659

315,480

Total liabilities

2,438,082

2,257,848

Commitments and contingencies (Note 10)

Stockholders’ equity:

Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding

—

—

Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 66,496,333 and 66,406,314 shares issued and outstanding as of September 30, 2017 and December 31, 2016

665

664

Additional paid-in capital

297,303

387,699

Accumulated other comprehensive loss

(10,792)

(19,364)

Retained earnings

504,213

416,658

Total stockholders’ equity

791,389

785,657

Total liabilities and stockholders’ equity

$
3,229,471

$
3,043,505

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Table of Contents

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net sales	$	469,637	$	478,965	$	981,451	$	1,011,372
Cost of goods sold		367,361		402,468		764,939		833,587
Gross profit		102,276		76,497		216,512		177,785

Operating (income) and expenses:
Selling, general and administrative expenses		47,872		44,197		94,601		91,037
Amortization expense		5,211		5,359		10,452		10,582
Loss (gain) on sales of assets		—		—		85		(7,099)
Operating income		49,193		26,941		111,374		83,265

Other (income) and expenses:
Interest expense, net		35,814		29,941		75,249		56,743
Other income		(936)		(1,848)		(1,857)		(3,687)
Income (loss) before income tax expense (benefit)		14,315		(1,152)		37,982		30,209
Income tax expense (benefit)		3,762		(1,408)		24,014		6,297
Net income	$	10,553	$	256	$	13,968	$	23,912

Weighted average shares outstanding:
Basic		72,237		69,904		72,008		69,267
Diluted		72,380		70,286		72,087		69,652

Earnings per share:
Basic	$	0.15	$	—	$	0.19	$	0.35
Diluted	$	0.15	$	—	$	0.19	$	0.34

Cash dividends declared per share	$	0.190	$	0.475	$	0.380	$	0.950

See Notes to Consolidated Financial Statements.

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Table of Contents

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of ~~Operations~~Comprehensive Income (Loss)

(In ~~thousands, except per share data)~~thousands)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended


September 30,

October 1,

September 30,

October 1,



2017

2016

2017

2016

Net sales

$
408,364

$
318,247

$
1,194,372

$
977,601

Cost of goods sold

285,109

202,821

833,316

636,545

Gross profit

123,255

115,426

361,056

341,056

Operating expenses:

Selling, general and administrative expenses

43,019

42,465

146,244

115,989

Amortization expense

4,265

3,269

13,002

10,039

Impairment of intangible assets

—

—

—

5,405

Operating income

75,971

69,692

201,810

209,623

Other income and expenses:

Interest expense, net

23,374

17,974

65,019

55,535

Loss on extinguishment of debt

—

—

1,163

2,836

Other expense (income)

95

127

(2,865)

(2,173)

Income before income tax expense

52,502

51,591

138,493

153,425

Income tax expense

19,772

19,181

50,938

57,568

Net income

$
32,730

$
32,410

$
87,555

$
95,857

Weighted average shares outstanding:

Basic

66,496

64,758

66,484

62,135

Diluted

66,644

65,038

66,713

62,338

Earnings per share:

Basic

$
0.49

$
0.50

$
1.32

$
1.54

Diluted

$
0.49

$
0.50

$
1.31

$
1.54

Cash dividends declared per share

$
0.465

$
0.420

$
1.395

$
1.260


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net income	$	10,553	$	256	$	13,968	$	23,912

Other comprehensive income (loss):
Foreign currency translation adjustments		4,579		(3,721)		9,739		(1,042)
Pension (loss) gain, net of tax		(6)		20		(6)		41
Other comprehensive income (loss)		4,573		(3,701)		9,733		(1,001)
Comprehensive income (loss)	$	15,126	$	(3,445)	$	23,701	$	22,911

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.

Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses, income tax payable and dividends payable are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.

~~- 16 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(7)Fair Value Measurements (Continued)~~

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of ~~September 30, 2017~~July 1, 2023 and December 31, ~~2016 are~~2022 were as follows (in thousands):


		July 1, 2023						December 31, 2022
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	280,000		$	280,000	⁽¹⁾	$	282,500		$	282,500	⁽¹⁾
Tranche B term loans due 2026		549,009	⁽²⁾		539,401	⁽³⁾		668,532	⁽²⁾		636,777	⁽³⁾
5.25% senior notes due 2025		876,454	⁽⁴⁾		839,205	⁽³⁾		901,213	⁽⁴⁾		790,625	⁽³⁾
5.25% senior notes due 2027	$	550,000		$	470,250	⁽³⁾	$	550,000		$	420,558	⁽³⁾

September 30, 2017

December 31, 2016


Carrying Value

Fair Value

Carrying Value

Fair Value

Revolving credit loans

40,000

40,000
(1)

176,000

176,000
(1)
Tranche A term loans due 2019

—

—

233,378
(2)

232,795
(1)
Tranche B term loans due 2022

637,722
(3)

641,707
(1)

637,391
(3)

645,358
(1)
4.625% senior notes due 2021

700,000

713,125
(4)

700,000

714,000
(4)
5.25% senior notes due 2025

500,000

509,375
(4)

—

—

(1)

~~(1)~~

Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2)

~~(2)~~

The carrying values of the tranche A term loans are net of discount. On April 3, 2017, we repaid all of the outstanding borrowings and amounts due under our tranche A term loans. At December 31, 2016, the face amounts of the tranche A term loans were $233.6 million.

~~(3)~~

~~The carrying values~~value of the tranche B term loans ~~are net of~~includes a discount. At ~~September 30, 2017~~July 1, 2023 and December 31, ~~2016,~~2022, the face ~~amounts~~amount of the tranche B term loans ~~were $640.1 million.~~

was $550.6 million and $671.6 million, respectively.

(3)

~~(4)~~

Fair values are estimated based on quoted market prices.

(4)	The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 1, 2023 and December 31, 2022, the face amount of the 5.25% senior notes due 2025 was $875.6 million and $900.0 million, respectively.

There was no Level 3 activity during the ~~third~~second quarter or first ~~three~~two quarters of ~~2017~~2023 or ~~2016.~~2022.

~~(8)Accumulated Other Comprehensive Loss~~
(8)
Accumulated Other Comprehensive Loss

The reclassifications from accumulated other comprehensive loss (AOCL) for the ~~third~~second quarter and first ~~three~~two quarters of ~~2017~~2023 and ~~2016 are~~2022 were as follows (in thousands):


	Amounts Reclassified from AOCL				Amounts Reclassified from AOCL
	Thirteen Weeks Ended				Twenty-six Weeks Ended				Affected Line Item in
	July 1,		July 2,		July 1,		July 2,		the Statement Where
Details about AOCL Components	2023		2022		2023		2022		Net Income is Presented
Defined benefit pension plan items
Amortization of unrecognized (gain) loss	$	(11)	$	26	$	(11)	$	54	See (1) below
Accumulated other comprehensive (gain) loss before tax		(11)		26		(11)		54	Total before tax
Tax benefit (expense)		5		(6)		5		(13)	Income tax expense (benefit)
Total reclassification	$	(6)	$	20	$	(6)	$	41	Net of tax

Amounts Reclassified from AOCL

Thirteen Weeks Ended

Thirty-nine Weeks Ended

Affected Line Item in


September 30,

October 1,

September 30,

October 1,

the Statement Where

Details about AOCL Components

2017

2016

2017

2016

Net Income is Presented

Defined benefit pension plan items

Amortization of unrecognized prior service cost

$
9

$
11

$
27

$
33

See (1) below

Amortization of unrecognized loss

185

95

331

359

See (1) below

194

106

358

392

Total before tax

(74)

(40)

(136)

(148)

Income tax expense

Total reclassification

$
120

$
66

$
222

$
244

Net of tax

(1)

~~(1)~~

These items are included in the computation of net periodic pension cost. See Note 9,10, “Pension ~~Benefits”~~Benefits,” for additional information.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

~~(8)Accumulated Other Comprehensive Loss (Continued)~~

Changes in AOCL for the first ~~three~~two quarters of ~~2017 are~~2023 were as follows (in thousands):


			Foreign Currency
	Defined Benefit		Translation
	Pension Plan Items		Adjustments		Total
Beginning balance	$	(7,200)	$	(12,164)	$	(19,364)

									Foreign Currency
							Defined Benefit		Translation
							Pension Plan Items		Adjustments		Total
Balance at December 31, 2022							$	2,445	$	(11,794)	$	(9,349)
Other comprehensive income before reclassifications		—		8,350		8,350		—		9,739		9,739
Amounts reclassified from AOCL		222		—		222		(6)		—		(6)
Net current period other comprehensive income		222		8,350		8,572		(6)		9,739		9,733
Ending balance	$	(6,978)	$	(3,814)	$	(10,792)
Balance at July 1, 2023							$	2,439	$	(2,055)	$	384

~~(9)Pension Benefits~~

~~Company Sponsored~~

(9)Stockholders’ Equity

At-The-Market Equity Offering Program. We did not sell any shares of our common stock under our “at-the-market” (ATM) equity offering program during the first two quarters of 2023.

During the first quarter of 2022, we sold 112,353 shares of our common stock under the ATM equity offering program. We generated $3.3 million in gross proceeds, or $29.37 per share, from the sales and paid commissions to the sales agents of approximately $0.1 million. During the second quarter of 2022, we sold 2,739,568 shares of our common stock under the ATM equity offering program. We generated $63.2 million in gross proceeds, or $23.08 per share, from the sales and paid commissions to the sales agents of approximately $1.3 million and incurred other fees and expenses of approximately $0.1 million. We used the net proceeds from shares sold under the ATM equity offering program during the first two quarters of 2022 to repay revolving credit loans, to pay offering fees and expenses, and for general corporate purposes.

Future sales of shares, if any, under the ATM equity offering program will be made by means of transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including block trades and sales made in ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of the sale, at prices related to prevailing market prices or at negotiated prices. The timing and amount of any sales will be determined by a variety of factors considered by us.

We intend to use the net proceeds from any future sales of our common stock under the ATM offering for general corporate purposes, which could include, among other things, repayment, refinancing, redemption or repurchase of long-term debt or possible acquisitions.

As of July 1, 2023, 10,000,000 shares of our common stock remain authorized and available for issuance under our ATM equity offering program.

Omnibus Incentive Compensation Plan. At the annual meeting of stockholders of B&G Foods held on May 17, 2023, our stockholders approved an amendment to our Omnibus Incentive Compensation Plan. Upon the recommendation of our compensation committee, our board of directors had previously adopted the amendment to our Omnibus Plan, subject to stockholder approval. The amendment increases the number of shares of common stock available for grant under the Omnibus Plan by 5,000,000. As of July 1, 2023, 5,432,804 shares of common stock remained available for grant under the Omnibus Plan.

- 16 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(10)

Pension Benefits

Company-Sponsored Defined Benefit Pension Plans. As of July 1, 2023, we had four company-sponsored defined benefit pension plans covering approximately 22% of our employees. Three of these defined benefit pension plans are for the benefit of certain of our union employees and one is for the benefit of salaried and certain hourly employees. The benefits in the salaried and hourly plan are based on each employee’s years of service and compensation, as defined. Newly hired employees are no longer eligible to participate in any of our four company-sponsored defined benefit pension plans. Net periodic pension cost for ~~company sponsored~~our four company-sponsored defined benefit pension plans for the ~~third~~second quarter and first ~~three~~two quarters of ~~2017~~2023 and ~~2016~~2022 includes the following components (in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,


2017

2016

2017

2016

Service cost—benefits earned during the period

$
1,798

$
790

$
4,538

$
2,535

Interest cost on projected benefit obligation

1,284

666

3,714

2,050

Expected return on plan assets

(1,771)

(1,121)

(5,271)

(3,312)

Amortization of unrecognized prior service cost

9

11

27

33

Amortization of unrecognized loss

185

95

331

359

Net periodic pension cost

$
1,505

$
441

$
3,339

$
1,665


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Service cost—benefits earned during the period	$	1,305	$	2,192	$	2,593	$	4,488
Interest cost on projected benefit obligation		1,858		1,365		3,718		2,736
Expected return on plan assets		(2,782)		(3,236)		(5,563)		(6,473)
Amortization of unrecognized (gain) loss		(11)		26		(11)		54
Net periodic pension cost	$	370	$	347	$	737	$	805

During the first ~~three~~two quarters of ~~2017,~~2023 and 2022, we ~~made $8.5 million of~~did not make any contributions to our company-sponsored defined benefit pension ~~plan contributions. We do not plan to make additional contributions during~~plans. During the remainder of fiscal ~~2017.~~2023, we expect to make approximately $2.5 million of contributions.

Multi-Employer Defined Benefit Pension Plan. WePrior to the closure of our Portland, Maine manufacturing facility during the fourth quarter of 2021, we also ~~contribute~~contributed to the Bakery and Confectionery Union and Industry International Pension Fund (EIN 52-6118572, Plan No. 001), a multi-employer defined benefit pension plan, sponsored by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM)~~. The plan provides multiple plan benefits~~ on behalf of certain employees at the Portland, Maine facility.

In connection with ~~corresponding contribution rates that are collectively bargained between participating employers~~the closure and ~~their affiliated BCTGM local unions.~~

~~We were notified that for~~sale of the Portland, Maine manufacturing facility, we withdrew from participation in the plan ~~year beginning January 1, 2012,~~during the fourth quarter of 2021. As a result, we are required to make monthly withdrawal liability payments to the plan ~~was in critical status and classified in~~over 20 years. These payments amount to approximately $0.9 million on an annual basis beginning March 1, 2022. Accordingly, the ~~Red Zone. As~~present value of the ~~date~~remaining payments amounting to $13.2 million as of July 1, 2023 is reflected as a liability on our unaudited consolidated balance sheet.

(11)

Leases

Operating Leases and Finance Lease. We determine whether an arrangement is a lease at inception. We have operating and finance leases for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to ten years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of use assets and lease liabilities.

- 17 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Our operating and finance leases are included in the accompanying unaudited consolidated ~~interim financial statements,~~balance sheets in the ~~plan remains in critical status.~~ following line items (in thousands):


	July 1,		December 31,
	2023		2022
Right-of-use assets:
Operating lease right-of-use assets	$	64,600	$	65,809
Finance lease right-of-use assets		2,362		2,891
Total lease right-of-use assets	$	66,962	$	68,700

Operating lease liabilities:
Current portion of operating lease liabilities	$	15,274	$	14,616
Long-term operating lease liabilities, net of current portion		49,683		51,727
Total operating lease liabilities	$	64,957	$	66,343

Finance lease liabilities:
Current portion of finance lease liabilities	$	1,057	$	1,046
Long-term finance lease liabilities, net of current portion		1,263		1,795
Total finance lease liabilities	$	2,320	$	2,841

The ~~law requires that all contributing employers pay~~following table shows supplemental information related to leases (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,488	$	4,273	$	9,082	$	8,194
Cash paid for amounts included in the measurement of finance lease liabilities	$	274	$	—	$	549	$	—

The components of operating lease costs were as follows:
Cost of goods sold	$	2,728	$	2,595	$	5,464	$	4,849
Selling, general and administrative expenses		1,727		1,718		3,441		3,324
Total operating lease costs	$	4,455	$	4,313	$	8,905	$	8,173

The components of finance lease costs were as follows:
Depreciation of finance right-of-use assets	$	266	$	109	$	530	$	109
Interest on finance lease liabilities		14		8		30		8
Total finance lease costs	$	280	$	117	$	560	$	117

Total net lease costs	$	4,735	$	4,430	$	9,465	$	8,290

Total rent expense was $5.1 million, including the ~~plan a surcharge to help correct the plan’s financial situation. The amount~~operating lease costs of ~~the surcharge is equal to a percentage of the amount an employer is otherwise required to contribute to the plan under the applicable collective bargaining agreement. During~~$4.5 million stated above, for the second quarter of ~~2015, we agreed to a collective bargaining agreement that, among other things, implements a rehabilitation plan. As a result, our contributions to~~2023 and $10.1 million, including the ~~plan are expected to increase by at least 5.0% per year.~~

~~B&G Foods made contributions to the plan~~operating lease costs of ~~$0.7~~$8.9 million instated above, for the first ~~three~~two quarters of ~~2017~~2023. Total rent expense was $4.6 million, including the operating lease costs of $4.3 million stated above, for the second quarter of 2022 and ~~expects to pay surcharges~~$9.1 million, including the operating lease costs of ~~less than $0.1~~$8.2 million stated above, for the first two quarters of 2022.

Because none of our operating or finance leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in ~~fiscal 2017 assuming consistent hours are worked. B&G Foods contributed $0.8 million in fiscal 2016~~determining the present value of lease payments. We have lease agreements that contain both lease and ~~paid less than $0.1 million in surcharges. These contributions represented less than five percent~~non-lease components. With the exception of ~~total contributions made to the plan.~~

our real estate leases, we account for our leases as a single lease component.

- 18 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:


	July 1,		December 31,
	2023		2022
Weighted average remaining lease term (years)
Operating leases		5.2		5.3
Finance lease		2.2		2.7
Weighted average discount rate
Operating leases		2.91%		2.72%
Finance lease		2.30%		2.30%

~~(10)Commitments and Contingencies~~

~~Operating Leases~~. As of ~~September 30, 2017, future minimum~~July 1, 2023, the maturities of lease ~~payments under non-cancelable operating leases in effect at quarter-end (with initial or remaining lease terms in excess of one year) for the periods set forth below~~liabilities were as follows (in thousands):

Fiscal year ending:

2017

$
2,643
2018

9,645
2019

8,632
2020

8,163
2021

6,106
Thereafter

8,060
Total

$
43,249


	Operating Leases		Finance Lease		Total Maturities of Lease Liabilities
Fiscal year:
2023 remaining	$	8,597	$	549	$	9,146
2024		16,004		1,099		17,103
2025		15,315		732		16,047
2026		10,693		—		10,693
2027		6,841		—		6,841
Thereafter		12,588		—		12,588
Total undiscounted future minimum lease payments		70,038		2,380		72,418
Less: Imputed interest		(5,081)		(60)		(5,141)
Total present value of future lease liabilities	$	64,957	$	2,320	$	67,277

(12)

Commitments and Contingencies

Legal Proceedings. We are from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving product liability claims, product labeling claims, worker’s compensation and other employee claims, and tort and other general liability claims, as well as trademark, copyright, patent infringement and related claims and legal actions. While we cannot predict with certainty the results of these claims and legal actions in which we are currently, or in the future may be, involved, we do not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Environmental.We are subject to environmental laws and regulations in the normal course of business. We did not make any material expenditures during the first ~~three~~two quarters of ~~2017~~2023 or ~~2016~~2022 in order to comply with environmental laws and regulations. Based on our experience to date, management believes that the future cost of compliance with existing environmental laws and regulations (and liability for any known environmental conditions) will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.

Collective Bargaining ~~Agreements.~~Agreements. As of ~~September 30, 2017, approximately 1,550~~July 1, 2023, 1,678 of our ~~2,548~~3,047 employees, or ~~60.8%~~approximately 55.1%, were covered by collective bargaining agreements. ~~None~~

As of the date of this report, two of our collective bargaining agreements are scheduled to expire in the next twelve months. The collective bargaining agreement for our Brooklyn, New York facility, which covers approximately 52 employees, is scheduled to expire ~~within one year.~~on December 31, 2023, and the collective bargaining agreement for our Terre Haute, Indiana facility, which covers approximately 103 employees, is scheduled to expire on March 30, 2024.

- 19 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate new collective bargaining agreements for our Brooklyn or Terre Haute facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect that the outcome of these negotiations will have a material adverse impact on our business, financial condition or results of operations.

Severance and Change of Control Agreements.We have employment agreements with our chief executive officer and each of our executive ~~officers except for our interim chief financial officer.~~vice presidents. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain circumstances, including termination by us without cause (as defined in the agreements) or as a result of the employee’s death or disability, or termination by us or a deemed termination upon a change of control (as defined in the agreements). Severance benefits generally include payments for salary continuation, continuation of health care and insurance benefits, present value of additional pension credits and, in ~~the case of a change of control,~~certain cases, accelerated vesting under compensation ~~plans and, in certain cases, potential gross up payments for excise tax liability.~~plans.

~~- 19 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(11)Earnings per Share~~
(13)
Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method. For the ~~third~~second quarter of ~~2017~~2023 and 2022, there were ~~349,015~~1,695,755 and ~~for the third quarter of 2016 there were 22,692~~721,427, respectively, shares of common stock issuable upon the exercise of stock options excluded from the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share.

Thirteen Weeks Ended

Thirty-nine Weeks Ended


September 30,

October 1,

September 30,

October 1,



2017

2016

2017

2016

Weighted average shares outstanding:

Basic

66,496,333

64,757,962

66,484,105

62,134,846

Net effect of potentially dilutive share-based compensation awards

147,310

280,084

228,979

202,912

Diluted

66,643,643

65,038,046

66,713,084

62,337,758


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Weighted average shares outstanding:
Basic		72,237,482		69,903,828		72,008,119		69,266,967
Net effect of potentially dilutive share-based compensation awards		142,332		382,505		79,063		384,638
Diluted		72,379,814		70,286,333		72,087,182		69,651,605

~~(12)Business and Credit Concentrations and Geographic Information~~

(14)

Business and Credit Concentrations and Geographic Information

Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top ten customers accounted for approximately ~~53.8%~~61.1% and ~~55.3%~~60.6% of consolidated net sales for the first ~~three~~two quarters of ~~2017~~2023 and ~~2016,~~2022, respectively. ~~Our top ten customers~~Other than Walmart, which accounted for approximately ~~47.9%~~29.7% and ~~53.4% of our consolidated trade accounts receivables as of September 30, 2017 and December 31, 2016, respectively. Other than Wal-Mart, which accounted for 24.7% and 24.3%~~28.9% of our consolidated net sales for the first ~~three~~two quarters of ~~2017~~2023 and ~~2016,~~2022, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first ~~three~~two quarters of ~~2017~~2023 or ~~2016. Other than Wal-Mart, which~~2022.

Our top ten customers accounted for ~~23.6%~~approximately 64.7% and ~~21.2%~~60.3% of our consolidated trade accounts receivables as of ~~September 30, 2017~~July 1, 2023 and December 31, ~~2016, respectively,~~2022, respectively. Other than Walmart, which accounted for approximately 30.6% and 30.6% of our consolidated trade accounts receivables as of July 1, 2023 and December 31, 2022, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables. As of ~~September 30, 2017,~~July 1, 2023, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts ~~receivable~~receivables with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to ~~Wal-Mart.~~Walmart.

During the first ~~three~~two quarters of ~~2017~~2023 and ~~2016,~~2022, our sales to customers in foreign countries represented approximately ~~6.4%~~8.6% and ~~8.4%~~8.1%, respectively, of net sales. Our foreign sales are primarily to customers in Canada.

~~(13)Share-Based Payments~~

Our company makes annual grants of stock options and performance share long-term incentive awards (LTIAs) to our executive officers and certain other members of senior management. The performance share LTIAs entitle the participants to earn shares of common stock upon the attainment of certain performance goals. In addition, our non-employee directors receive annual equity grants as part of their non-employee director compensation and may elect to receive a portion of their annual cash retainer in stock options.

- 20 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

~~(13)Share-Based Payments (Continued)~~
(15)
Share-Based Payments

The following table details our stock option activity for the first ~~three~~two quarters of fiscal ~~2017~~2023 (dollars in thousands, except per share data):



		Weighted		Weighted Average
		Average		Contractual Life	Aggregate
	Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at beginning of fiscal 2017	714,580	$	31.65

								Weighted		Weighted Average
								Average		Contractual Life	Aggregate
							Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at December 31, 2022							820,141	$	31.38	6.24	$	—
Granted	159,385	$	41.31				949,995	$	20.00
Exercised	(1,300)	$	27.77				—	$	—
Forfeited	(35,758)	$	28.31				—	$	—
Outstanding at end of third quarter of 2017	836,907	$	33.42	7.87	$	4,227
Exercisable at end of third quarter of 2017	24,396	$	42.62	8.61	$	12
Expired							(24,386)	$	37.04
Outstanding at July 1, 2023							1,745,750	$	25.11	7.93	$	48
Exercisable at July 1, 2023							566,873	$	30.05	5.11	$	—

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing ~~certain~~the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is generally based on the “simplified method” in accordance with accounting guidance. We ~~utilized~~generally utilize the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. However, a portion of the options granted during the first quarter of 2023 were granted with exercise prices significantly above the closing price on the date of grant. For those options, we modified the method for determining the expected term and adjusted to or towards the full remaining contractual life. The risk-free interest rate for the expected term of ~~the option~~options is based on the U.S. Treasury implied yield at the date of grant.

2017

2016

Weighted average grant date fair value

$
7.29

$
5.26

Expected volatility

27.5% - 29.2%

27.7%

Expected term

5.5 - 6.5 years

5.5 - 6.5 years

Risk-free interest rate

1.8% - 2.4%

1.5% - 1.7%

Dividend yield

4.5% - 5.22%

3.9% - 4.9%

The ~~following table sets forth~~assumptions used in the ~~compensation expense recognized~~Black-Scholes option-pricing model for ~~share-based payments (performance share LTIAs, stock~~ options ~~non-employee director stock grants and other share based payments)~~granted during the ~~third quarter and~~ first ~~three~~two quarters of ~~2017~~2023 and ~~2016 and where that expense is reflected in our consolidated statements of operations (in thousands):~~

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,

Consolidated Statements of Operations Location

2017

2016

2017

2016

Compensation expense included in cost of goods sold

$
217

$
273

$
689

$
785

Compensation expense included in selling, general and administrative expenses

865

1,068

3,595

3,672

Total compensation expense for share-based payments

$
1,082

$
1,341

$
4,284

$
4,457

As of September 30, 2017, there was $2.2 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.25 years and $1.4 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.5 years.2022 were as follows:


	2023		2022
Weighted average grant date fair value	$	2.71	$	3.73
Expected volatility		39.6% - 43.3%		39.5%
Expected term		5.5 years - 8.3 years		5.5 years
Risk-free interest rate		3.6% - 3.7%		3.0%
Dividend yield		5.4% - 5.9%		8.5%

~~- 21 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(13)Share-Based Payments (Continued)~~

The following table details the activity in our ~~non-vested~~ performance share ~~LTIAs~~long-term incentive awards (LTIAs) for the first ~~three~~two quarters of ~~2017:~~2023:


		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares⁽¹⁾	(per share)⁽²⁾
Outstanding at December 31, 2022	1,072,274	$	20.26
Granted	998,191	$	13.00
Vested	(360,926)	$	10.84
Forfeited	(102,771)	$	29.32
Outstanding at July 1, 2023	1,606,768	$	17.29

Weighted Average

Number of

Grant Date Fair Value


Performance Shares (1)

(per share)(2)

Beginning of fiscal 2017

436,554

$
26.81

Granted

132,000

$
36.15

Vested

(110,528)

$
27.50

Forfeited

(19,456)

$
28.08

End of third quarter of 2017

438,570

$
29.38

(1)

~~(1)~~

Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., ~~200%~~233.333% or 300%, as applicable, of the target number of performance shares).

(2)

~~(2)~~

The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period.

- 21 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

The following table details the activity in our restricted stock for the first two quarters of 2023:


		Weighted Average
	Number of Shares	Grant Date Fair Value
	of Restricted Stock	(per share)⁽¹⁾
Outstanding at December 31, 2022	83,294	$	26.51
Granted	329,821	$	15.17
Vested	(40,944)	$	24.66
Forfeited	(2,598)	$	18.63
Outstanding at July 1, 2023	369,573	$	16.65

(1)	The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes).

The following table details the number of shares of common stock issued by our company during the second quarter and first ~~three~~two quarters of ~~2017~~2023 and ~~2016~~2022 upon the vesting of performance share LTIAs, the exercise of stock options, the issuance of restricted stock and other share-based compensation net of cancellations:


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Number of performance shares vested		—		—		360,926		337,284
Shares withheld for tax withholding		—		—		(131,803)		(125,152)
Shares of common stock issued for performance share LTIAs		—		—		229,123		212,132
Shares of common stock issued upon the exercise of stock options		—		—		—		2,227
Shares of common stock issued to non-employee directors for annual equity grants		81,531		46,773		81,531		46,773
Shares of restricted common stock issued to employees		1,386		562		329,821		49,444
Shares of restricted stock withheld and cancelled for tax withholding upon vesting		(960)		(1,250)		(14,448)		(12,121)
Shares of restricted stock cancelled upon forfeiture		(2,184)		(1,108)		(2,598)		(1,681)
Net shares of common stock issued		79,773		44,977		623,429		296,774

The following table sets forth the compensation expense recognized for share-based payments (performance share ~~based payments (dollars~~LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the second quarter and first two quarters of 2023 and 2022 and where that expense is reflected in our consolidated statements of operations (in thousands):

Thirty-nine Weeks Ended

September 30,

October 1,

2017

2016

Number of performance shares vested

110,528

101,094

Shares withheld to fund statutory minimum tax withholding

42,368

37,596

Shares of common stock issued for performance share LTIAs

68,160

63,498

Shares of common stock issued upon the exercise of stock options

1,300

—

Shares of common stock issued to non-employee directors for annual equity grants

20,559

16,072

Total shares of common stock issued

90,019

79,570

Excess tax (deficiency) benefit
$
820
(1)
$
343

~~(1)~~

As a result of the adoption of ASU 2016-09, we recognized discrete tax benefits of $0.8 million in the income taxes line item of our consolidated statement of operations for the first three quarters of 2017 related to excess tax benefits upon vesting or settlement in that period. See Note 2, “Summary of Significant Accounting Policies—~~Newly Adopted Accounting Standards~~.”


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
Consolidated Statements of Operations Location	2023		2022		2023		2022
Compensation expense included in cost of goods sold	$	620	$	232	$	734	$	439
Compensation expense included in selling, general and administrative expenses		1,754		926		2,567		1,809
Total compensation expense for share-based payments	$	2,374	$	1,158	$	3,301	$	2,248

As of July 1, 2023, there was $10.2 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.5 years, $5.1 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over the next 2.8 years, and $2.8 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 3.8 years.

- 22 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

~~(14)Net Sales by Brand~~
(16)
Net Sales by Brand

The following table sets forth net sales by brand (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Brand:⁽¹⁾⁽²⁾
Crisco	$	67,002	$	71,849	$	139,451	$	150,932
Clabber Girl⁽³⁾		27,443		19,102		54,935		40,090
Back to Nature⁽⁴⁾		1,878		11,312		3,464		27,306
All Other Specialty Brands Total		57,514		52,584		118,610		115,266
Specialty Brands Total		153,837		154,847		316,460		333,594

Green Giant - Frozen⁽⁵⁾		78,087		82,425		169,184		180,398
Green Giant - Shelf-Stable		21,284		23,077		47,560		50,562
Green Giant - Le Sueur		8,391		7,089		17,224		17,396
Frozen & Vegetables Brands Total		107,762		112,591		233,968		248,356

Ortega		35,633		35,825		74,077		78,384
Maple Grove Farms of Vermont		22,003		21,377		44,502		43,286
Cream of Wheat		17,626		17,300		38,246		38,267
All Other Meals Brands Total		38,881		37,072		79,267		77,551
Meals Brands Total		114,143		111,574		236,092		237,488

Spices & Seasonings⁽⁶⁾		64,194		67,544		134,639		130,620
Dash		17,061		17,642		34,810		34,256
All Other Spices & Flavor Solutions Brands		12,640		14,767		25,482		27,058
Spices & Flavor Solutions Brands Total		93,895		99,953		194,931		191,934

Total Net Sales	$	469,637	$	478,965	$	981,451	$	1,011,372

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,

2017

2016

2017

2016
Brand:(1)

Green Giant

$
121,118

$
113,780

$
351,771

$
351,157
Ortega

33,461

35,090

105,429

106,709
Tone's(2)

30,484

—

79,127

—
Pirate Brands

27,159

22,447

70,099

66,941
Maple Grove Farms of Vermont

15,776

16,667

50,887

53,990
Mrs. Dash

14,791

14,655

46,532

47,247
Cream of Wheat

14,732

14,126

43,789

43,608
Victoria(3)

9,708

—

30,073

—
Weber(2)

7,342

—

29,888

—
Bear Creek Country Kitchens

12,907

13,633

29,584

32,611
Las Palmas

8,843

8,913

26,292

27,017
Polaner

8,663

7,506

26,219

25,058
New York Style

9,293

8,313

25,843

24,792
Mama Mary's

8,207

9,355

25,374

28,733
All other brands(4)

85,880

53,762

253,465

169,738
Total

$
408,364

$
318,247

$
1,194,372

$
977,601

(1)

~~(1)~~

Table includes net sales for each of our brands whose net sales for the first ~~three~~two quarters of ~~2017~~2023 or ~~fiscal 2016 net sales were equal to~~2022 equaled or exceeded 2%3% of our total ~~first three quarters of 2017 or fiscal 2016~~ net sales for those periods, and for ~~“all~~all other ~~brands”~~brands in the ~~aggregate.~~ aggregate by category.

(2)	Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand.

(3)

~~(2)~~

WeIncludes net sales for multiple brands acquired ~~the~~ ~~Tone’s~~ ~~and~~ ~~Weber~~ ~~brands on November 21, 2016~~ as part of the ~~spices & seasonings acquisition.~~

Clabber Girl acquisition that we completed on May 15, 2019, including, among others, the Clabber Girl,Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes.

(4)

~~(3)~~

We completed the ~~Victoria~~ ~~acquisition~~Back to Nature sale on ~~December 2, 2016.~~

~~(4)~~

January 3, 2023. See Note 3, “Acquisitions and Divestitures.” Net sales for ~~“all other brands” for~~ the ~~third~~second quarter and first ~~three~~two quarters of ~~2017 has been impacted by the acquisition~~2023 includes net sales of certain Back to Nature products not part of the ~~Spice Islands,Durkee~~divestiture that we will soon transition to another brand name.

(5)	For the second quarter and ~~certain other~~first two quarters of 2023, includes net sales from the Yuma acquisition, which was completed on May 5, 2022. See Note 3, “Acquisitions and Divestitures.”

(6)

Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition ~~which was~~that we completed on November 21, ~~2016.~~

2016, as well as more recent spices & seasonings products launched and sold under license. Does not include net sales for Dash and our other legacy spices & seasonings brands.

~~(15)Guarantor and Non-Guarantor Financial Information~~

As further discussed in Note 6, “Long-Term Debt,” our obligations under the 4.625% senior notes and the 5.25% senior notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries, which we refer to in this note as the guarantor subsidiaries. Our foreign subsidiaries, which we refer to in this note as the non-guarantor subsidiaries, do not guarantee the 4.625% senior notes or the 5.25% senior notes.

The following condensed consolidating financial information presents the condensed consolidating balance sheet as of September 30, 2017 and December 31, 2016, the related condensed consolidating statement of operations for the thirteen weeks and thirty-nine weeks ended September 30, 2017, and the related condensed consolidating statement of cash flows for the thirty-nine weeks ended September 30, 2017 for:

~~1.B&G Foods, Inc. (the Parent),~~

~~2.the guarantor subsidiaries,~~

~~3.the non-guarantor subsidiaries, and~~

~~4.the Parent and all of its subsidiaries on a consolidated basis.~~

- 23 -

Table of Contents

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(17)

Sale of Portland, Maine Manufacturing Facility

~~(15)Guarantor~~During the first quarter of 2022, we completed the sale of our Portland, Maine manufacturing facility and ~~Non-Guarantor Financial Information (Continued)~~

13.5 acre property and separately sold certain equipment that had been used at the facility. We received sales proceeds for the property and the equipment of approximately $11.1 million in the aggregate and recognized a gain of $7.1 million, which is recorded in “Gain on sales of assets” in the accompanying unaudited consolidated statements of operations. The ~~information includes elimination entries necessary to consolidate~~positive impact during the Parent with the guarantor subsidiaries and non-guarantor subsidiaries. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial information for eachfirst quarter of 2022 of the ~~guarantor subsidiaries~~gain on sales was partially offset by approximately $2.2 million of expenses incurred during the first quarter of 2022 relating to the closure of the facility and ~~non-guarantor subsidiaries are not presented because management believes such financial statements would not be meaningful to investors.~~the transfer of manufacturing operations, resulting in a net benefit of $4.9 million from the gain on sale.

~~Condensed Consolidating Balance Sheet~~

~~As of September 30, 2017~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Assets

Current Assets:

Cash and cash equivalents

$
—

$
19,133

$
3,482

$
—

$
22,615

Trade accounts receivable, net

—

158,101

13,242

—

171,343

Inventories, net

—

422,291

65,099

—

487,390

Prepaid expenses and other current assets

—

29,168

4,433

—

33,601

Income tax receivable

—

8,698

869

—

9,567

Total current assets

—

637,391

87,125

—

724,516

Property, plant and equipment, net

—

221,173

45,208

—

266,381

Goodwill

—

615,770

—

—

615,770

Other intangibles, net

—

1,615,528

—

—

1,615,528

Other assets

—

6,278

14

—

6,292

Deferred income taxes

—

—

984

—

984

Investments in subsidiaries

2,700,032

89,846

—

(2,789,878)

—

Total assets

$
2,700,032

$
3,185,986

$
133,331

$
(2,789,878)

$
3,229,471

Liabilities and Stockholders' Equity

Current Liabilities:

Trade accounts payable

$
—

$
104,376

$
32,829

$
—

$
137,205

Accrued expenses

—

52,539

2,935

—

55,474

Income tax payable

—

—

112

—

112

Dividends payable

30,921

—

—

—

30,921

Intercompany payables

—

(7,609)

7,609

—

—

Total current liabilities

30,921

149,306

43,485

—

223,712

Long-term debt

1,877,722

(24,790)

—

—

1,852,932

Other liabilities

—

17,779

—

—

17,779

Deferred income taxes

—

343,659

—

—

343,659

Total liabilities

1,908,643

485,954

43,485

—

2,438,082

Stockholders' Equity:

Preferred stock

—

—

—

—

—

Common stock

665

—

—

—

665

Additional paid-in capital

297,303

2,208,836

68,253

(2,277,089)

297,303

Accumulated other comprehensive loss

(10,792)

(10,792)

(3,814)

14,606

(10,792)

Retained earnings

504,213

501,988

25,407

(527,395)

504,213

Total stockholders’ equity

791,389

2,700,032

89,846

(2,789,878)

791,389

Total liabilities and stockholders’ equity

$
2,700,032

$
3,185,986

$
133,331

$
(2,789,878)

$
3,229,471

- 24 -

Table of Contents

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(15)Guarantor and Non-Guarantor Financial Information (Continued)~~

~~Condensed Consolidating Balance Sheet~~

~~As of December 31, 2016~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated
Assets

Current Assets:

Cash and cash equivalents

$
—

$
25,119

$
3,714

$
—

$
28,833
Trade accounts receivable, net

—

111,350

7,915

—

119,265
Inventories, net

—

309,584

47,006

—

356,590
Prepaid expenses and other current assets

—

20,296

6,103

—

26,399
Income tax receivable

—

10,780

7

—

10,787
Intercompany receivables

—

—

12,183

(12,183)

—
Total current assets

—

477,129

76,928

(12,183)

541,874

Property, plant and equipment, net

—

211,843

33,501

—

245,344
Goodwill

—

614,278

—

—

614,278
Other intangibles, net

—

1,629,482

—

—

1,629,482
Other assets

—

4,612

13

—

4,625
Deferred income taxes

—

7,036

866

—

7,902
Investments in subsidiaries

2,563,305

96,187

—

(2,659,492)

—
Total assets

$
2,563,305

$
3,040,567

$
111,308

$
(2,671,675)

$
3,043,505

Liabilities and Stockholders' Equity

Current Liabilities:

Trade accounts payable

$
—

$
88,668

$
9,365

$
—

$
98,033
Accrued expenses

—

60,957

1,436

—

62,393
Current portion of long-term debt

10,515

—

—

—

10,515
Income tax payable

—

—

3,875

—

3,875
Dividends payable

30,879

—

—

—

30,879
Intercompany payables

—

11,738

445

(12,183)

—
Total current liabilities

41,394

161,363

15,121

(12,183)

205,695

Long-term debt

1,736,254

(20,986)

—

—

1,715,268
Other liabilities

—

21,405

—

—

21,405
Deferred income taxes

—

315,480

—

—

315,480
Total liabilities

1,777,648

477,262

15,121

(12,183)

2,257,848

Stockholders' Equity:

Common stock

664

—

—

—

664
Additional paid-in capital

387,699

2,168,236

86,833

(2,255,069)

387,699
Accumulated other comprehensive loss

(19,364)

(19,364)

(12,164)

31,528

(19,364)
Retained earnings

416,658

414,433

21,518

(435,951)

416,658
Total stockholders’ equity

785,657

2,563,305

96,187

(2,659,492)

785,657
Total liabilities and stockholders’ equity

$
2,563,305

$
3,040,567

$
111,308

$
(2,671,675)

$
3,043,505

~~- 25 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(15)Guarantor and Non-Guarantor Financial Information (Continued)~~

~~Condensed Consolidating Statement of Operations and Comprehensive Income~~

~~Thirteen Weeks Ended September 30, 2017~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
374,514

$
45,697

$
(11,847)

$
408,364

Cost of goods sold

—

260,077

36,879

(11,847)

285,109

Gross profit

—

114,437

8,818

—

123,255

Operating expenses:

Selling, general and administrative expenses

—

39,877

3,142

—

43,019

Amortization expense

—

4,265

—

—

4,265

Operating income

—

70,295

5,676

—

75,971

Other income and expenses:

Interest expense, net

—

23,374

—

—

23,374

Other income

—

95

—

—

95

Income before income tax expense

—

46,826

5,676

—

52,502

Income tax expense

—

18,415

1,357

—

19,772

Equity in earnings of subsidiaries

32,730

4,319

—

(37,049)

—

Net income

$
32,730

$
32,730

$
4,319

$
(37,049)

$
32,730

Comprehensive income

$
33,563

$
32,609

$
5,031

$
(37,640)

$
33,563

~~Condensed Consolidating Statement of Operations and Comprehensive Income~~

~~Thirty-Nine Weeks Ended September 30, 2017~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated
Net sales

$
—

$
1,121,897

$
124,895

$
(52,420)

$
1,194,372
Cost of goods sold

—

776,312

109,424

(52,420)

833,316
Gross profit

—

345,585

15,471

—

361,056

Operating expenses:

Selling, general and administrative expenses

—

136,921

9,323

—

146,244
Amortization expense

—

13,002

—

—

13,002
Operating income

—

195,662

6,148

—

201,810

Other income and expenses:

Interest expense, net

—

65,019

—

—

65,019
Loss on extinguishment of debt

—

1,163

—

—

1,163
Other income

—

(2,865)

—

—

(2,865)
Income before income tax expense

—

132,345

6,148

—

138,493
Income tax expense

—

48,679

2,259

—

50,938
Equity in earnings of subsidiaries

87,555

3,889

—

(91,444)

—
Net income

$
87,555

$
87,555

$
3,889

$
(91,444)

$
87,555
Comprehensive income

$
96,127

$
87,333

$
12,239

$
(99,572)

$
96,127

~~- 26 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(15)Guarantor and Non-Guarantor Financial Information (Continued)~~

~~Condensed Consolidating Statement of Operations and Comprehensive Income~~

~~Thirteen Weeks Ended October 1, 2016~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net sales

$
—

$
294,871

$
30,573

$
(7,197)

$
318,247

Cost of goods sold

—

188,720

21,298

(7,197)

202,821

Gross profit

—

106,151

9,275

—

115,426

Operating expenses:

Selling, general and administrative expenses

—

39,619

2,846

—

42,465

Amortization expense

—

3,269

—

—

3,269

Operating income

—

63,263

6,429

—

69,692

Other income and expenses:

Interest expense, net

—

17,974

—

—

17,974

Other income

—

127

—

—

127

Income before income tax expense

—

45,162

6,429

—

51,591

Income tax expense

—

17,351

1,830

—

19,181

Equity in earnings of subsidiaries

32,410

4,599

—

(37,009)

—

Net income

$
32,410

$
32,410

$
4,599

$
(37,009)

$
32,410

Comprehensive income (loss)

$
29,095

$
32,344

$
1,218

$
(33,562)

$
29,095

~~Condensed Consolidating Statement of Operations and Comprehensive Income~~

~~Thirty-Nine Weeks Ended October 1, 2016~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated
Net sales

$
—

$
912,945

$
86,294

$
(21,638)

$
977,601
Cost of goods sold

—

593,688

64,495

(21,638)

636,545
Gross profit

—

319,257

21,799

—

341,056

Operating expenses:

Selling, general and administrative expenses

—

111,538

4,451

—

115,989
Amortization expense

—

10,039

—

—

10,039
Impairment of intangible assets

—

5,405

—

—

5,405
Operating income

—

192,275

17,348

—

209,623

Other income and expenses:

Interest expense, net

—

55,535

—

—

55,535
Loss on extinguishment of debt

—

2,836

—

—

2,836
Other income

—

(2,173)

—

—

(2,173)
Income before income tax expense

—

136,077

17,348

—

153,425
Income tax expense

—

52,745

4,823

—

57,568
Equity in earnings of subsidiaries

95,857

12,525

—

(108,382)

—
Net income

$
95,857

$
95,857

$
12,525

$
(108,382)

$
95,857
Comprehensive income (loss)

$
92,410

$
95,613

$
8,834

$
(104,447)

$
92,410

~~- 27 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(15)Guarantor and Non-Guarantor Financial Information (Continued)~~

~~Condensed Consolidating Statement of Cash Flows~~

~~Thirty-Nine Weeks Ended September 30, 2017~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net cash provided by operating activities

$
—

$
(2,069)

$
9,606

$
—

$
7,537

Cash flows from investing activities:

Capital expenditures

—

(32,348)

(10,380)

—

(42,728)

Proceeds from sale of assets

—

2,229

—

—

2,229

Payments for acquisition of businesses, net of cash acquired

—

(117)

—

—

(117)

Net cash used in investing activities

—

(30,236)

(10,380)

—

(40,616)

Cash flows from financing activities:

Repayments of long-term debt

(233,640)

—

—

—

(233,640)

Proceeds from issuance of long-term debt

500,000

—

—

—

500,000

Repayments of borrowings under revolving credit facility

(221,000)

—

—

—

(221,000)

Borrowings under revolving credit facility

85,000

—

—

—

85,000

Proceeds from issuance of common stock, net

36

—

—

—

36

Dividends paid

(92,710)

—

—

—

(92,710)

Payments of tax withholding on behalf of employees for net share settlement of share-based compensation

—

(1,962)

—

—

(1,962)

Debt financing costs

—

(8,637)

—

—

(8,637)

Intercompany transactions

(37,686)

36,918

768

—

—

Net cash provided by financing activities

—

26,319

768

—

27,087

Effect of exchange rate fluctuations on cash and cash equivalents

—

—

(226)

—

(226)

Net increase (decrease) in cash and cash equivalents

—

(5,986)

(232)

—

(6,218)

Cash and cash equivalents at beginning of period

—

25,119

3,714

—

28,833

Cash and cash equivalents at end of period

$
—

$
19,133

$
3,482

$
—

$
22,615

~~- 28 -~~

~~Table of Contents~~

~~B&G Foods, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~(15)Guarantor and Non-Guarantor Financial Information (Continued)~~

~~Condensed Consolidating Statement of Cash Flows~~

~~Thirty-Nine Weeks Ended October 1, 2016~~

~~(In thousands)~~

Guarantor

Non-Guarantor




Parent

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Net cash provided by operating activities

$
—

$
165,362

$
27,416

$
—

$
192,778

Cash flows from investing activities:

Capital expenditures

—

(20,557)

(4,250)

—

(24,807)

Net cash used in investing activities

—

(20,557)

(4,250)

—

(24,807)

Cash flows from financing activities:

Repayments of long-term debt

(150,000)

—

—

—

(150,000)

Repayments of borrowings under revolving credit facility

(50,000)

—

—

—

(50,000)

Borrowings under revolving credit facility

10,000

—

—

—

10,000

Proceeds from issuance of common stock, net

331,879

—

—

—

331,879

Dividends paid

(72,916)

—

—

—

(72,916)

Excess tax benefits from share-based compensation

—

343

—

—

343

Payments of tax withholding on behalf of employees for net share settlement of share-based compensation

—

(1,410)

—

—

(1,410)

Intercompany transactions

(68,963)

85,655

(16,692)

—

—

Net cash provided by (used in) financing activities

—

84,588

(16,692)

—

67,896

Effect of exchange rate fluctuations on cash and cash equivalents

—

—

(533)

—

(533)

Net increase in cash and cash equivalents

—

229,393

5,941

—

235,334

Cash and cash equivalents at beginning of period

—

1,964

3,282

—

5,246

Cash and cash equivalents at end of period

$
—

$
231,357

$
9,223

$
—

$
240,580

~~(16)Subsequent Event~~

~~Back to Nature Acquisition~~. On October 2, 2017, we completed our acquisition of Back to Nature Foods Company, LLC and related entities from Brynwood Partners VI L.P., Mondelēz International and certain other sellers for approximately $162.5 million in cash, subject to customary closing and post-closing working capital adjustments. We funded the acquisition and related fees and expenses with additional revolving loans under our existing credit facility. The primary assets of the business purchased include intellectual property, business and customer information, equipment, accounts receivable and inventory. Due to the relatively short time from the date of acquisition to the completion of the accompanying unaudited interim consolidated financial statements, the initial accounting for the acquisition, including our preliminary evaluation of the fair value for certain significant assets and liabilities, including goodwill and intangibles, is not complete. The ~~Back to Nature~~ acquisition is not material to our consolidated results of operations or financial position. We will provide the preliminary purchase price allocation with our Annual Report on Form 10-K for fiscal 2017.

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~~Table of Contents~~

~~Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations~~
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Forward-Looking Statements” ~~below~~before Part I of this report and elsewhere in this report. The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~September 30, 2017 (third~~July 1, 2023 (second quarter and first ~~three~~two quarters of ~~2017)~~2023) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended December 31, ~~2016~~2022 (fiscal ~~2016)~~2022) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on ~~March 1, 2017~~February 28, 2023 (which we refer to as our ~~2016~~2022 Annual Report on Form 10-K).

General

We manufacture, sell and distribute a diverse portfolio of branded, high quality, shelf-stable and frozen foods and household products, many of which have leading regional or national market shares. In general, we position our branded products to appeal to the consumer desiring a high quality and reasonably priced product. We complement our branded product retail sales with institutional and foodservice sales and private label sales.

Our company has been built upon a successful track record of acquisition-driven growth. Our goal is to continue to increase sales, profitability and cash flows through strategic acquisitions, new product development and organic growth. We intend to implement our growth strategy through the following initiatives: expanding our brand portfolio with disciplined acquisitions of complementary branded businesses, continuing to develop new products and delivering them to market quickly, leveraging our multiple channel sales and distribution system and continuing to focus on higher growth customers and distribution channels.

Since 1996, we have successfully acquired and integrated more than 4550 brands or businesses into our company. Most recently, on ~~October 2, 2017,~~May 5, 2022, we acquired ~~Back to Nature Foods Company, LLC and related entities from Brynwood Partners VI L.P., Mondelēz International and certain other sellers. On December 2, 2016, we acquired Victoria Fine Foods, LLC, and a related entity, from Huron Capital Partners and certain other sellers. On November 21, 2016, we completed~~ the ~~acquisition~~frozen vegetable manufacturing operations of ~~the spices & seasonings business of ACH Food Companies, Inc.~~Growers Express, LLC. We refer to ~~these acquisitions~~this acquisition in this report as the “~~Victoria~~ ~~acquisition” and the “spices & seasonings~~“Yumaacquisition.” This acquisition~~” respectively. Each of these recent acquisitions~~ has been accounted for using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired ~~businesses~~business are included in our consolidated financial statements from the ~~respective dates~~date of acquisition. ~~These acquisitions~~This acquisition and the application of the acquisition method of accounting ~~affect~~affects comparability between periods.

On January 3, 2023, we completed the sale of the Back to Nature business. We refer to this divestiture in this report as the “Back to Nature sale” or “Back to Nature divestiture.” This divestiture affects comparability between periods.

We are subject to a number of challenges that may adversely affect our businesses. These challenges, which are discussed below and under the heading ~~“Forward‑Looking~~“Forward-Looking Statements,” include:

Fluctuations in Commodity Prices and Production and Distribution Costs.We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S. and foreign locations. Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price attributable to a number of ~~factors.~~factors, including pandemics, other disease outbreaks, the war in Ukraine, climate and weather conditions, supply chain disruptions (including raw material shortages) and labor shortages. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.

We attempt to manage cost inflation risks by locking in prices through ~~short‑term~~short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers ~~may~~generally lag behind rising input costs. Competitive pressures also may limit our ability to quickly raise prices in response to rising costs.

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We ~~have seen and expect to continue to see moderate~~experienced material net cost increases for raw materials during fiscal 2022 due to a number of factors, including the war in Ukraine and the ~~marketplace~~ongoing COVID-19 pandemic, and anticipate raw materials costs to remain elevated during ~~2017 and~~fiscal 2023. We are currently locked into our supply and prices for a majority of our most significant raw material commodities (excluding, among others, ~~maple syrup)~~oils) through the ~~remainder~~end of fiscal ~~2017 at a cost increase~~2023, and for most of ~~less than 1%~~our needs for oils through the third quarter of fiscal 2023.

In recent years, we have been negatively impacted by industry-wide increases in the cost of ~~goods sold. During~~distribution, primarily driven by increased freight rates. Freight rates increased significantly during the fourth quarter of 2020 throughout fiscal ~~2016,~~2021 and fiscal 2022. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives. For example, despite higher rates for freight in 2021 and 2022, we ~~had~~were able to offset a ~~minimal~~portion of the freight cost ~~decrease for a majority~~increases through pricing, which included both list price increases and trade spend optimization. Although freight rates have begun to decline, we expect freight rates to remain elevated during fiscal 2023.

In addition, during the past several years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs. We plan to continue managing inflation risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices. Beginning in the fourth quarter of 2022 through the first two quarters of 2023, we have seen improvements in our ~~most significant commodities (excluding, among others, maple syrup). To~~gross profit and gross profit margins as our net pricing has begun to catch up with input cost increases. However, to the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially adversely affected. In addition, if input costs ~~begin to~~ decline, customers may look for price reductions in situations where we have locked into purchases at higher costs.

Consolidation in the Retail Trade and Consequent Inventory ~~Reductions.~~Reductions. As ~~the retail grocery trade continues~~customers, such as supermarkets, discounters, e-commerce merchants, warehouse clubs and food distributors, continue to consolidate and ~~our retail customers~~ grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs. These customers are also reducing their inventories and increasing their emphasis on private label products.

Changing Consumer ~~Preferences.~~Preferences and Channel Shifts. Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences. In addition, the rapid growth of some channels and changing consumer preferences for these channels, in particular in e-commerce, which has expanded significantly following the outbreak of COVID-19, may impact our current operations or strategies more quickly than we planned for, create consumer price deflation, alter the buying behavior of consumers or disrupt our retail customer relationships. As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance. These expenditures may not be successful, including those related to our e-commerce and other technology-focused efforts, and might not result in trade and consumer acceptance of our efforts. If we are unable to effectively and timely adapt to changes in consumer preferences and channel shifts, our products may lose market share or we may face significant price erosion, and our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

Consumer Concern Regarding Food Safety, Quality and Health.The food industry is subject to consumer concerns regarding the safety and quality of certain food products. If consumers in our principal markets lose confidence in the safety and quality of our food products, even as a result of a product liability claim or a product recall by a food industry competitor, our business could be adversely affected.

Fluctuations in Currency Exchange Rates.Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. During the first ~~three~~two quarters of ~~2017~~2023 and ~~2016,~~2022, our net sales to customers in foreign countries represented approximately ~~6.4%~~8.6% and ~~8.4%~~8.1%, respectively, of our total net sales. We also purchase a significant majority of our maple syrup requirements from suppliers located in Québec, Canada. Any weakening of the U.S. dollar against the Canadian dollar could significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars in advance of any such weakening of the U.S. dollar or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars. We also operate a manufacturing facility in Irapuato, Mexico for the manufacture of

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Green Giant frozen products and are as a result exposed to fluctuations in the Mexican peso. Our results of operations could be adversely impacted by changes in foreign currency exchange rates. Costs and expenses in Mexico are recognized in local foreign currency, and therefore we are exposed to potential gains or losses from the translation of those amounts into U.S. dollars for consolidation into our consolidated financial statements. For example, our results of operations from our Green Giant frozen operations in Mexico have been negatively impacted during the first two quarters of 2023 as a result of the Mexican peso appreciating by nearly 14% against the U.S. dollar during the first two quarters of 2023.

To confront these challenges, we continue to take steps to build the value of our brands, to improve our existing portfolio of products with new product and marketing initiatives, to reduce costs through improved productivity, to address consumer concerns about food safety, quality and health and to favorably manage currency fluctuations.

Critical Accounting Policies; Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States (GAAP) requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management ~~involve~~involve: revenue recognition as it relates to trade and consumer promotion expenses; ~~allowances for excess, obsolete and unsaleable inventories;~~ pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment, and deferred tax assets; and the determination of the useful life of customer relationship and ~~amortizable~~finite-lived trademark ~~intangibles; and the accounting for share-based compensation expense.~~intangible assets. Actual results could differ significantly from these estimates and assumptions.

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~~Table of Contents~~

In our ~~2016~~2022 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our unaudited consolidated interim financial statements. There have been no material changes to these policies from those disclosed in our ~~2016~~2022 Annual Report on Form 10-K.

U.S. Tax Act and U.S. CARES Act

On December 22, 2017, the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act,” was signed into law. The U.S. Tax Act provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. The changes in the U.S. Tax Act are broad and complex and we continue to examine the impact the U.S. Tax Act may have on our business and financial results. The U.S. Tax Act contains provisions with separate effective dates but was generally effective for taxable years beginning after December 31, 2017.

Under FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, we are required to revalue any deferred tax assets or liabilities in the period of enactment of change in tax rates. Beginning on January 1, 2018, the U.S. Tax Act lowered the U.S. federal corporate income tax rate from 35% to 21% on our U.S. earnings from that date and beyond. The reduction in the corporate income tax rate from 35% to 21% was effective for our fiscal 2018 and subsequent years. We also expect to realize a cash tax benefit for future bonus depreciation on certain business additions, which, together with the reduced income tax rate, we expect to reduce our cash income tax payments. Our consolidated effective tax rate was approximately 63.2% and 20.8% for the first two quarters of 2023 and 2022, respectively.

The U.S. Tax Act also limits the deduction for net interest expense (including the treatment of depreciation and other deductions in arriving at adjusted taxable income) incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which we refer to as the “U.S. CARES Act,” was signed into law. The U.S. CARES Act, among other things, includes provisions related to net operating loss carryback periods, modifications to the interest deduction limitation and technical corrections to tax depreciation for qualified improvement property. The U.S. CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years 2019 and 2020 and the limitation reverted back to 30% beginning in 2021.

If we are unable to fully utilize our interest expense deductions in future periods, our cash taxes will increase. We were not subject to an interest expense deduction limitation in fiscal 2020 but were subject to the limitation in fiscal 2021, which increased our taxable income by $6.7 million. Beginning with fiscal 2022, our adjusted taxable income as computed for purposes of the interest expense deduction limitation is computed after any deduction allowable

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for depreciation and amortization. As a result, our adjusted taxable income (used to compute the limitation) decreased and we are subject to the interest expense deduction limitation in fiscal 2022, resulting in an increase to taxable income of $90.2 million. We may continue to be subject to the interest deduction limitation in future years. We have recorded a deferred tax asset of $22.2 million related to the interest deduction carryover, without a valuation allowance, as the disallowed interest may be carried forward indefinitely. The increase in our cash taxes resulting from the interest expense deduction limitation was approximately $20.6 million for fiscal 2022. There are various factors that may cause tax assumptions to change in the future, and we may have to record a valuation allowance against these deferred tax assets. See “—Liquidity and Capital Resources—Cash Flows–Cash Income Tax Payments.”

The U.S. Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on affiliate payments. These regulations are to be applied retroactively and did not materially impact our tax rates in fiscal 2022 or the first two quarters of 2023.

Results of Operations

The following table sets forth the percentages of net sales represented by selected items for the ~~third~~second quarter and first ~~three~~two quarters of ~~each of 2017~~2023 and ~~2016~~2022 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:


	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	September 30,		October 1,		September 30,		October 1,
	2017		2016		2017		2016

									Thirteen Weeks Ended				Twenty-six Weeks Ended
									July 1,		July 2,		July 1,		July 2,
									2023		2022		2023		2022
Statement of Operations Data:
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	69.8	%	63.7	%	69.8	%	65.1	%	78.2	%	84.0	%	77.9	%	82.4	%
Gross profit	30.2	%	36.3	%	30.2	%	34.9	%	21.8	%	16.0	%	22.1	%	17.6	%


Operating (income) and expenses:
Selling, general and administrative expenses	10.5	%	13.4	%	12.2	%	11.9	%	10.2	%	9.2	%	9.6	%	9.0	%
Amortization expense	1.0	%	1.0	%	1.1	%	1.0	%	1.1	%	1.2	%	1.2	%	1.1	%
Impairment of intangible assets	—	%	—	%	—	%	0.6	%
Loss (gain) on sales of assets									—	%	—	%	—	%	(0.7)	%
Operating income	18.7	%	21.9	%	16.9	%	21.4	%	10.5	%	5.6	%	11.3	%	8.2	%


Other (income) and expenses:
Interest expense, net	5.8	%	5.7	%	5.4	%	5.6	%	7.7	%	6.2	%	7.6	%	5.6	%
Loss on extinguishment of debt	—	%	—	%	0.1	%	0.3	%
Other expense (income)	—	%	—	%	(0.2)	%	(0.2)	%
Income before income tax expense	12.9	%	16.2	%	11.6	%	15.7	%

Income tax expense	4.8	%	6.0	%	4.3	%	5.9	%
Other income									(0.2)	%	(0.4)	%	(0.2)	%	(0.4)	%
Income (loss) before income tax expense (benefit)									3.0	%	(0.2)	%	3.9	%	3.0	%
Income tax expense (benefit)									0.8	%	(0.3)	%	2.5	%	0.6	%
Net income	8.1	%	10.2	%	7.3	%	9.8	%	2.2	%	0.1	%	1.4	%	2.4	%

As used in this section, the terms listed below have the following meanings:

Net Sales. Our net sales represents gross sales of products shipped to customers plus amounts charged to customers for shipping and handling, less cash discounts, coupon redemptions, slotting fees and trade promotional ~~spending.~~spending, including marketing development funds.

Gross Profit. Our gross profit is equal to our net sales less cost of goods sold. The primary components of our cost of goods sold are cost of internally manufactured products, purchases of finished goods from ~~co‑packers,~~co-packers, a portion of our warehousing expenses plus freight costs to our distribution centers and to our customers.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses include costs related to selling our products, as well as all other general and administrative expenses. Some of these costs include administrative, marketing and internal sales force employee compensation and benefits costs, consumer advertising programs, brokerage costs, a portion of our warehousing expenses, information technology and communication costs, office rent, utilities, supplies, professional services, ~~acquisition‑related~~severance, acquisition/divestiture-related and non-recurring expenses and other general corporate expenses.

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Amortization Expense.Amortization expense includes the amortization expense associated with customer relationships, ~~amortizable~~finite-lived trademarks and other ~~intangibles.~~intangible assets.

~~Impairment of Intangible Assets.~~ ~~Impairment of intangible assets represents a reduction of the carrying value of amortizable intangible assets to fair value when the carrying value of the assets is no longer recoverable.~~

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~~Table of Contents~~

Net Interest Expense.Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond ~~discount~~discount/premium and amortization of deferred debt financing costs (net of interest income).

~~Loss~~Gain on Extinguishment of Debt. ~~Loss~~Gain on extinguishment of debt includes ~~costs~~gains relating to the retirement of indebtedness, including any repurchase ~~premium, if any, and write‑off~~discount net of the accelerated amortization of deferred debt financing costs.

Other Income. Other income includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs, and ~~unamortized discount, if any.~~

~~Other Expense (Income).~~ ~~Other~~income or expense ~~(income) includes expense or income~~ resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes.

Non-GAAP Financial Measures

Certain disclosures in this report include non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of our financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with ~~accounting principles generally accepted in the United States (GAAP)~~GAAP in our consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.

Base Business Net Sales. Base business net sales is a non-GAAP financial measure used by management to measure operating performance. We define base business net sales as our net sales excluding (1) the ~~impact~~net sales of acquisitions until the net sales from such acquisitions are included in both comparable periods and (2) net sales of discontinued or divested brands. The portion of current period net sales attributable to recent acquisitions for which there is no corresponding period in the comparable period of the prior year is excluded. For each acquisition, the excluded period starts at the beginning of the most recent fiscal period being compared and ends on the first anniversary of the acquisition date. For discontinued or divested brands, the entire amount of net sales is excluded from each fiscal period being compared. ~~Management has~~We have included this financial measure because our management believes it provides useful and comparable trend information regarding the results of our business without the effect of the timing of acquisitions and the effect of discontinued or divested brands.

A reconciliation of net sales to base business net sales ~~to reported net sales~~ for the ~~third~~second quarter and first ~~three~~two quarters of ~~2017~~2023 and ~~2016~~2022 follows (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net sales	$	469,637	$	478,965	$	981,451	$	1,011,372
Net sales from acquisitions⁽¹⁾		(123)		—		(550)		—
Net sales from discontinued or divested brands⁽²⁾		1		(9,856)		31		(24,496)
Base business net sales	$	469,515	$	469,109	$	980,932	$	986,876

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,


2017

2016

2017

2016

Reported net sales

$
408,364

$
318,247

$
1,194,372

$
977,601

Net sales from acquisitions(1)

(80,082)

—

(231,000)

—

Net sales of Rickland Orchards(2)

—

—

—

(528)

Base business net sales

$
328,282

$
318,247

$
963,372

$
977,073

(1)

~~(1)~~

Reflects net sales ~~for~~from the ~~spices & seasonings business and~~ ~~Victoria~~ ~~for the third quarter and first three quarters of 2017~~Yuma acquisition, for which there is no comparable period of net sales ~~in 2016. The spices & seasonings business was acquired on November 21, 2016, and~~ ~~Victoria~~ ~~was acquired on December 2, 2016.~~

~~(2)~~

~~Rickland Orchards~~ ~~was discontinued~~ during the first month of the second quarter of ~~2016.~~

2022 and the first four months of the first two quarters of 2022. The Yuma acquisition was completed on May 5, 2022. See Note 3, “Acquisitions and Divestitures.”

(2)

For the second quarter and first two quarters of 2022, reflects net sales of the Back to Nature brand, which was sold on January 3, 2023, and net sales of the SnackWell’s and Farmwise brands, which have been discontinued. For the second quarter and first two quarters of 2023, reflects a net credit paid to customers relating to the discontinued brands.

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EBITDA and Adjusted EBITDA. EBITDA and adjusted EBITDA are ~~non‑GAAP~~non-GAAP financial measures used by management to measure operating performance. We define EBITDA as net income before net interest expense, income taxes and depreciation and ~~amortization and loss on extinguishment of debt.~~amortization. We define adjusted EBITDA as EBITDA adjusted for cash and non-cash ~~acquisition-related~~acquisition/divestiture-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up, ~~intangible asset impairment charges and related asset write offs,~~ and gains and losses on the sale of certain assets),; gains and ~~distribution restructuring expenses.~~losses on extinguishment of debt; impairment of assets held for sale; impairment of intangible assets; and non-recurring expenses, gains and losses. Management believes that it is useful to eliminate net interest expense, income taxes, depreciation and amortization, loss on extinguishment of debt, acquisition-related expenses, gains and losses, non-cash intangible asset impairment charges and related asset write offs and distribution restructuring expensesthese items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. We use EBITDA and adjusted EBITDA in our

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business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures. As a result, reports used by internal management ~~reports used~~ during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.

EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income, net income ~~(loss)~~ or any other GAAP measure as an indicator of operating performance. EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends. Rather, EBITDA and adjusted EBITDA are ~~two~~ potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include certain costs and expenses ~~for depreciation~~ and ~~amortization, interest and related expenses, loss on extinguishment of debt, acquisition-related expenses,~~ gains and losses ~~income taxes, intangible asset impairment charges and related asset write offs, and distribution restructuring expenses.~~described above. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.

~~- 34 -~~

~~Table~~Reconciliations of ~~Contents~~

~~A reconciliation of EBITDA and adjusted EBITDA to~~ net income and to net cash provided by operating activities to EBITDA and adjusted EBITDA for the ~~third~~second quarter and first ~~three~~two quarters of ~~each of 2017~~2023 and ~~2016~~2022 along with the components of EBITDA and adjusted EBITDA follows (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net income	$	10,553	$	256	$	13,968	$	23,912
Income tax expense (benefit)		3,762		(1,408)		24,014		6,297
Interest expense, net⁽¹⁾		35,814		29,941		75,249		56,743
Depreciation and amortization		17,286		20,474		35,304		40,299
EBITDA		67,415		49,263		148,535		127,251
Acquisition/divestiture-related and non-recurring expenses⁽²⁾		1,036		4,877		2,196		4,790
Loss (gain) on sales of assets, net of facility closure costs⁽³⁾		—		—		85		(4,928)
Adjusted EBITDA	$	68,451	$	54,140	$	150,816	$	127,113


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net cash provided by (used in) operating activities	$	62,850	$	(4,104)	$	132,377	$	21,127
Income tax expense (benefit)		3,762		(1,408)		24,014		6,297
Interest expense, net⁽¹⁾		35,814		29,941		75,249		56,743
Gain on extinguishment of debt⁽¹⁾		786		—		786		—
(Loss) gain on sales of assets⁽²⁾		(84)		—		(177)		7,113
Deferred income taxes		(78)		2,383		(15,097)		(530)
Amortization of deferred debt financing costs and bond discount/premium		(1,036)		(1,177)		(4,684)		(2,346)
Share-based compensation expense		(2,374)		(1,158)		(3,301)		(2,248)
Changes in assets and liabilities, net of effects of business combinations		(32,225)		24,786		(60,632)		41,095
EBITDA		67,415		49,263		148,535		127,251
Acquisition/divestiture-related and non-recurring expenses⁽³⁾		1,036		4,877		2,196		4,790
Loss (gain) on sales of assets, net of facility closure costs⁽²⁾		—		—		85		(4,928)
Adjusted EBITDA	$	68,451	$	54,140	$	150,816	$	127,113

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,


2017

2016

2017

2016

Net income

$
32,730

$
32,410

$
87,555

$
95,857

Income tax expense

19,772

19,181

50,938

57,568

Interest expense, net

23,374

17,974

65,019

55,535

Depreciation and amortization

11,737

8,655

36,284

26,813

Loss on extinguishment of debt

—

—

1,163

2,836

EBITDA

87,613

78,220

240,959

238,609

Acquisition-related expenses

6,448

6,544

20,141

10,475

Amortization of acquisition-related inventory step-up

—

—

1,550

3,074

Impairment of intangible assets

—

—

—

5,405

Loss on disposal of inventory

—

—

—

791

Loss on sale of assets

—

—

1,608

—

Distribution restructuring expenses

—

325

—

1,273

Adjusted EBITDA

94,061

85,089

264,258

259,627

Income tax expense

(19,772)

(19,181)

(50,938)

(57,568)

Interest expense, net

(23,374)

(17,974)

(65,019)

(55,535)

Acquisition-related expenses

(6,448)

(6,544)

(20,141)

(10,475)

Distribution restructuring expenses

—

(325)

—

(1,273)

Write-off of property, plant and equipment

2

—

107

—

Deferred income taxes

15,087

9,888

35,079

45,555

Amortization of deferred financing costs and bond discount

1,468

1,319

4,263

4,101

Amortization of acquisition-related inventory step-up

—

—

(1,550)

(3,074)

Share-based compensation expense

1,082

1,341

4,284

4,457

Excess tax benefits from share-based compensation

—

—

—

(343)

Changes in assets and liabilities, net of effects of business combinations

(74,393)

(61,508)

(162,806)

7,306

Net cash (used in) provided by operating activities

$
(12,287)

$
(7,895)

$
7,537

$
192,778

- 30 -

Table of Contents

Adjusted Net Income and Adjusted Diluted Earnings Per Share. ~~Adusted~~Adjusted net income and ~~adusted~~adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. We define adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to net income and diluted earnings per share to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view ~~the~~ our business from the same perspective as ~~the~~ our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our company’s performance or when making decisions regarding allocation of resources.

~~- 35 -~~

~~Table of Contents~~

A reconciliation of net income to adjusted net income and adjusted diluted earnings per share ~~to net income~~ for the ~~third~~second quarter and first ~~three~~two quarters of ~~each of 2017~~2023 and ~~2016~~2022 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Net income	$	10,553	$	256	$	13,968	$	23,912
Gain on extinguishment of debt⁽¹⁾		(786)		—		(786)		—
Acquisition/divestiture-related and non-recurring expenses⁽³⁾		1,036		4,877		2,196		4,790
Loss (gain) on sales of assets, net of facility closure costs⁽²⁾		—		—		85		(4,928)
Credit agreement amendment fee⁽⁴⁾		—		1,600		—		1,600
Tax adjustment⁽⁵⁾		—		—		14,736		—
Tax effects of non-GAAP adjustments⁽⁶⁾		(61)		(1,587)		(366)		(358)
Adjusted net income	$	10,742	$	5,146	$	29,833	$	25,016
Adjusted diluted earnings per share	$	0.15	$	0.07	$	0.41	$	0.36

Thirteen Weeks Ended

Thirty-nine Weeks Ended

September 30,

October 1,

September 30,

October 1,


2017

2016

2017

2016
Reported net income

$
32,730

$
32,410

$
87,555

$
95,857
Non-recurring adjustment to deferred taxes(1)

—

—

—

564
Loss on extinguishment of debt, net of tax(2)

—

—

727

1,784
Acquisition-related expenses, net of tax

4,028

4,116

12,582

6,588
Distribution restructuring expenses, net of tax(3)

—

204

—

801
Acquisition-related inventory step-up, net of tax(4)

—

—

968

1,934
Impairment of intangible assets, net of tax(5)

—

—

—

3,400
Loss on disposal of inventory, net of tax(5)

—

—

—

498
Loss on sale of assets, net of tax(6)

—

—

1,005

—
Adjusted net income

$
36,758

$
36,730

$
102,837

$
111,426
Adjusted diluted earnings per share

$
0.55

$
0.56

$
1.54

$
1.79

(1)

~~(1)~~

~~Non-recurring adjustment to deferred taxes~~Net interest expense for ~~the first three quarters of 2016 relates to a true-up of deferred taxes resulting from our decision during~~ the second quarter and first two quarters of ~~2016 to discontinue the~~ ~~Rickland Orchards~~ ~~brand and the related impairment~~2023 was reduced by $0.8 million as a result of ~~intangible assets.~~

~~(2)~~

~~Loss~~a gain on extinguishment of debt ~~for the first three quarters~~related to our repurchase of 2017 includes the write-off of deferred debt financing costs and unamortized discount of $0.9 million and $0.2 million, respectively, relating to the repayment of all outstanding borrowings under the tranche A term loans and less than $0.1 million relating to the refinancing of our tranche B term loans. Loss on extinguishment of debt for the first three quarters of 2016 includes the write-off of deferred debt financing costs and unamortized discount of $2.2 million and $0.6 million, respectively, relating to the repayment of $40.1 million aggregate principal amounts of our tranche A term loans and $109.9$24.4 million aggregate principal amount of our ~~tranche B term loans.~~

5.25% senior notes due 2025 in open market purchases at an average discounted repurchase price of 95.74% of such principal amount plus accrued and unpaid interest, which resulted in a pre-tax gain of $0.8 million, net of the accelerated amortization of deferred debt financing costs of $0.2 million.

(2)

~~(3)~~

~~Distribution restructuring~~Acquisition/divestiture-related and non-recurring expenses for the ~~third~~second quarter and first ~~three~~two quarters of ~~2016~~2023 of $1.0 million (or $0.8 million, net of tax) and $2.2 million (or $1.7 million, net of tax), respectively, primarily includes ~~expenses relating to our transitioning of the operations of our three primary shelf-stable distribution centers~~acquisition and ~~a new fourth primary shelf-stable distribution center in the United States to a third party logistics provider.~~

~~(4)~~

~~Acquisition-related inventory step-up~~integration expenses for the Crisco and Yuma acquisitions and divestiture-related expenses for the Back to Nature divestiture. Acquisition/divestiture-related and non-recurring expenses for the second quarter and first ~~three~~two quarters of ~~2017 relates to the purchase accounting adjustments made to the finished goods inventory acquired in the spices & seasonings acquisition. Acquisition-related inventory step-up~~2022 of $4.9 million (or $3.7 million, net of tax) and $4.8 million (or $3.6 million, net of tax), respectively, primarily includes acquisition and integration expenses for the ~~first three quarters of 2016 relates to the purchase accounting adjustments made to the finished goods inventory acquired in the~~ ~~Green Giant~~ ~~acquisition.~~

Crisco and Yuma acquisitions, and certain cost savings initiatives.

(3)

~~(5)~~

During the first ~~three quarters~~quarter of ~~2016,~~2023, we ~~discontinued~~completed the ~~Rickland Orchards~~ ~~brand because there was not sufficient demand~~Back to ~~warrant continued production. Accordingly,~~Nature divestiture and we wrote off the related intangible assets and recorded non-cash impairment charges to amortizable trademarks and customer relationship intangibles of $4.5 million and $0.9 million, respectively, which are recorded in “Impairment of intangible assets” in our consolidated statement of operations for the first three quarters of 2016. We also recorded a ~~charge to cost~~loss on the sale of ~~goods sold of approximately $0.8 million in connection with the write-off of raw materials and finished goods inventory used for the~~ ~~Rickland Orchards~~ ~~brand.~~

~~(6)~~

$0.1 million. During the first ~~three quarters~~quarter of ~~2017,~~2022, we ~~sold to~~completed the closure and sale of our Portland, Maine manufacturing facility. We recorded a ~~third-party co-packer our Le Sueur, Minnesota research center, including~~gain on the ~~seed technology assets,~~sale of the Portland property, plant and ~~equipment. We acquired~~equipment of $7.1 million during the ~~research center and related assets on November 2, 2015, as part~~first quarter of 2022. The positive impact during the quarter of the ~~Green Giant~~ ~~acquisition. The~~gain on sale ~~resulted~~was partially offset by approximately $2.2 million of expenses incurred during the quarter relating to the closure of the facility and the transfer of manufacturing operations, resulting in a net benefit of $4.9 million (or $3.7 million, net of tax) from the gain on sale.

(4)	During the second quarter of 2022, we paid a fee of $1.6 million ~~loss on sale~~(or $1.2 million, net of ~~assets.~~ tax) to amend our senior secured credit agreement to temporarily increase the maximum consolidated leverage ratio permitted under our revolving credit facility.

(5)

As a result of the Back to Nature divestiture, we incurred a capital loss for tax purposes, for which we recorded a deferred tax asset during the first quarter of 2023. A valuation allowance has been recorded against this deferred tax asset, which negatively impacted our first quarter of 2023 income tax expense by $14.7 million, or $0.21 per share.

(6)	Represents the tax effects of the non-GAAP adjustments listed above, assuming a tax rate of 24.5%.

- 3631 -

Table of Contents

~~Third~~Second quarter of ~~2017~~2023 compared to the ~~third~~second quarter of ~~2016~~2022

Net Sales. Net sales ~~increased $90.2~~for the second quarter of 2023 decreased $9.4 million, or ~~28.3%~~1.9%, to ~~$408.4~~$469.6 million from $479.0 million for the ~~third~~second quarter of ~~2017 from $318.2 million for~~2022. The decrease was primarily attributable to the ~~third quarter of 2016.~~Back to Nature divestiture. Net sales of Back to Nature, which we divested on January 3, 2023, and therefore not part of our fiscal 2023 results, were $9.8 million during the ~~spices & seasonings business, acquired on November 21, 2016, and net sales~~second quarter of ~~Victoria, acquired on December 2, 2016, contributed $70.4 million and $9.7 million, respectively, to the overall net sales increase.~~2022.

Base business net sales for the ~~third~~second quarter of ~~2017~~2023 increased ~~$10.1~~$0.4 million, or ~~3.2%~~0.1%, to ~~$328.3~~$469.5 million from ~~$318.2~~$469.1 million for the ~~third~~second quarter of ~~2016.~~2022. The ~~$10.1 million~~ increase in base business net sales was ~~attributable to~~driven by an increase in ~~unit volume~~net pricing and the impact of ~~$13.0~~product mix of $54.1 million, or ~~4.1%,~~11.5% of base business net sales, largely offset by a decrease in ~~net pricing~~unit volume of ~~$2.9~~$52.1 million ~~or 0.9%.~~

~~Net sales increased across half~~and the negative impact of ~~our brands, led by~~ ~~Green Giant~~ ~~which increased by $7.3 million for the third quarter.~~ ~~Green Giant~~ ~~frozen products increased by $11.6 million, driven by the brand’s new innovation products. The increase was offset by a decrease in net sales~~foreign currency of ~~Green Giant~~ ~~shelf-stable and other products of $4.3 million, primarily attributable to forecasted distribution losses with certain customers.~~ $1.6 million.

Net sales of ~~Pirate Brands increased $4.7~~Green Giant products in the aggregate (including Le Sueur) decreased $4.9 million, ~~benefitting from a strong back-to-school season, new distribution gains and the shift~~or 4.4%, in ~~timing of certain promotional spending from~~ the second quarter of ~~last year~~2023, as compared to the ~~third~~second quarter of ~~this year. Other brands that contributed to the net sales growth for the quarter include~~ ~~Polaner~~, ~~Underwood~~, ~~New York Style~~ ~~and~~ ~~Cream of Wheat~~.2022.

See Note ~~14,~~16, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales by brand for ~~the third quarter of 2017 and the third quarter of 2016 for~~ each of our brands ~~that exceed approximately 2%~~whose net sales for the first two quarters of 2023 or fiscal 2022 equaled or exceeded 3% of our ~~fiscal 2017 or fiscal 2016~~total net sales for those periods, and for all other brands in the aggregate.

The following ~~chart~~table sets forth the most significant base business net sales increases and decreases by brand for those brands for the ~~third~~second quarter of ~~2017:~~2023:


	Second Quarter
	2023 vs. 2022
	Base Business
	Net Sales Increase (Decrease)
	Dollars (in millions)		Percentage
Brand:
Clabber Girl	$	8.3	43.7	%
Maple Grove Farms of Vermont		0.6	2.9	%
Cream of Wheat		0.3	1.9	%
Crisco		(4.8)	(6.7)	%
Green Giant - frozen⁽¹⁾		(4.4)	(5.4)	%
Spices & Seasonings⁽²⁾		(3.3)	(5.0)	%
Dash		(0.5)	(3.3)	%
Green Giant - shelf-stable⁽³⁾		(0.5)	(1.6)	%
Ortega		(0.2)	(0.5)	%	��
All other brands		4.9	4.7	%
Base business net sales increase	$	0.4	0.1	%

Base Business

Net Sales Increase (Decrease)

Dollars

Percentage

(in millions)

Brand:

Green Giant

$
7.3

6.4
%

Pirate Brands

4.7

21.0
%

Polaner

1.2

15.4
%

Underwood

1.0

20.6
%

New York Style

1.0

11.8
%

Cream of Wheat

0.6

4.3
%

Ortega

(1.6)

(4.6)
%

Mama Mary's

(1.1)

(12.3)
%

Maple Grove Farms of Vermont

(0.9)

(5.3)
%

Bear Creek Country Kitchens

(0.7)

(5.3)
%

All other brands

(1.4)

(2.0)
%

Base business net sales decrease

$
10.1

3.2
%

(1)	For the second quarter of 2023, includes net sales from the Yuma acquisition from May 5, 2023 through July 1, 2023, as net sales prior to May 5, 2023 are not included in base business net sales. The Yuma acquisition was completed on May 5, 2022. See Note 3, “Acquisitions and Divestitures.”

(2)

Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016, as well as more recent spices & seasonings products launched and sold under license. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(3)	Includes net sales of the Le Sueur brand.

Gross Profit. Gross profit ~~increased $7.9 million, or 6.8%, to $123.3~~was $102.3 million for the ~~third~~second quarter of ~~2017 from $115.4~~2023, or 21.8% of net sales. Excluding the negative impact of $0.4 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the second quarter of 2023, our gross profit would have been $102.7 million, or 21.9% of net sales. Gross profit was $76.5 million for the ~~third~~second quarter of ~~2016. Gross~~2022, or 16.0% of net sales. Excluding the negative impact of $2.3 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the second quarter of 2022, our gross profit ~~expressed~~would have been $78.8 million, or 16.5% of net sales.

The improvements in gross profit and gross profit as a percentage of net sales ~~was 30.2%~~were driven by an increase in net pricing as compared to the ~~third~~second quarter of ~~2017 compared to 36.3% in~~2022 and the ~~third~~impact of moderating input cost inflation and lower transportation and warehousing costs. During the fourth quarter of ~~2016. Excluding spices & seasonings~~2022, we began to more fully realize the benefits of previously announced list price increases. This trend continued during the first and ~~Victoria, approximately 2.9 percentage points~~second quarters of 2023, with the

- 32 -

Table of Contents

impact of previously announced list price increases the ~~decrease~~primary driver of recoveries in gross profit and gross profit as a percentage ~~was due to an increase in warehousing and distribution costs, 1.0 percentage point~~ of the decrease was due to an increase in coupon and slotting expenses and 0.9 percentage points of the decrease was due to a decrease in pricing. The remaining 1.3 percentage points of the decrease was due to an increase in all other costs, including the impact of product mix.net sales.

~~- 37 -~~

~~Table of Contents~~

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased ~~$0.5~~$3.7 million, or ~~1.3%~~8.3%, to ~~$43.0~~$47.9 million for the ~~third~~second quarter of ~~2017~~2023 from ~~$42.5~~$44.2 million for the ~~third~~second quarter of ~~2016.~~2022. The increase was composed of increases in general and administrative expenses of $3.0 million, consumer marketing expenses of $2.0 million, selling expenses of $0.6 million, and warehousing expenses of ~~$1.4~~$0.1 million, ~~and selling expenses of $1.4 million (which includes a $2.1 million increase in brokerage expenses~~partially offset by a ~~$0.6 million~~ decrease in ~~salesperson compensation), offset by decreases in marketing~~acquisition/divestiture-related and non-recurring expenses of ~~$0.9 million and all other expenses of $1.4~~$2.0 million. Expressed as a percentage of net sales, selling, general and administrative expenses ~~improved~~increased by ~~2.9~~1.0 percentage points to ~~10.5%~~10.2% for the ~~third~~second quarter of ~~2017~~2023, as compared to ~~13.4%~~9.2% for the ~~third~~second quarter of ~~2016.~~2022.

Amortization Expense. Amortization expense ~~increased $1.0~~decreased $0.2 million, or 2.8%, to ~~$4.3~~$5.2 million for the ~~third~~second quarter of ~~2017~~2023 from ~~$3.3~~$5.4 million for the ~~third~~second quarter of ~~2016 due to the spices & seasonings and~~ ~~Victoria~~ ~~acquisitions completed in fiscal 2016.~~2022.

Operating Income. As a result of the foregoing, operating income increased ~~$6.3~~$22.3 million, or ~~9.0%~~82.6%, to ~~$76.0~~$49.2 million for the ~~third~~second quarter of ~~2017~~2023 from ~~$69.7~~$26.9 million for the ~~third~~second quarter of ~~2016.~~2022. Operating income expressed as a percentage of net sales ~~decreased~~increased to ~~18.7%~~10.5% in the ~~third~~second quarter of ~~2017~~2023 from ~~21.9%~~5.6% in the ~~third~~second quarter of ~~2016.~~2022.

Net Interest Expense. Net interest expense increased ~~$5.4~~$5.9 million, or ~~30.0%~~19.6%, to ~~$23.4~~$35.8 million for the ~~third~~second quarter of ~~2017~~2023 from ~~$18.0~~$29.9 million infor the ~~third~~second quarter of ~~2016.~~2022. The increase was primarily attributable to ~~additional~~higher interest rates on our variable rate borrowings, ~~made~~partially offset by a reduction in ~~the fourth quarter~~average long-term debt outstanding of ~~2016 to fund the spices & seasonings acquisition~~$49.2 million and ~~the~~ ~~Victoria~~ ~~acquisition and~~a $0.8 million gain on extinguishment of debt. The reduction in average long-term debt outstanding in the second quarter of ~~2017 in connection with~~2023 as compared to the second quarter of 2022 resulted primarily from our ~~credit agreement refinancing~~use of $50.0 million of the gross proceeds of the Back to Nature divestiture and an additional $71.0 million of cash on hand to make aggregate prepayments of $121.0 million principal amount of term loans during the first quarter of 2023, as well as our repurchase of $24.4 million aggregate principal amount of our 5.25% senior notes ~~offering.~~due 2025 in open market purchases at an average discounted repurchase price of 95.74% of such principal amount plus accrued and unpaid interest during the second quarter of 2023, partially offset by an increase in average revolver borrowings outstanding of approximately $77.9 million. See “—Liquidity and Capital ~~Resources—Debt”~~Resources — Debt” below.

Other ~~Expense.~~ Income.Other ~~expense~~income for the ~~third~~second quarter of ~~2017~~2023 and ~~2016~~2022 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $0.9 million and $1.8 million, respectively. Other income for the second quarter of 2023 and 2022 also includes income resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes of less than $0.1 million ~~and $0.1 million, respectively.~~in both periods.

Income Tax ~~Expense.~~ Expense (Benefit). Income tax expense increased ~~$0.6~~$5.2 million to ~~$19.8~~an income tax expense of $3.8 million for the ~~third~~second quarter of ~~2017~~2023 from ~~$19.2~~an income tax benefit of $1.4 million for the ~~third~~second quarter of ~~2016.~~2022, primarily due to an increase in operating income. Our effective tax rate was ~~37.7%~~26.3% for the ~~third~~second quarter of ~~2017~~2023 and ~~37.2%~~122.2% for the ~~third~~second quarter of ~~2016.~~2022. See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact of the tax legislation on income tax expense (benefit).

First ~~three~~two quarters of ~~2017~~2023 compared to the first ~~three~~two quarters of ~~2016~~2022

Net Sales. Net sales ~~increased $216.8~~for the first two quarters of 2023 decreased $29.9 million, or ~~22.2%~~3.0%, to ~~$1,194.4~~$981.5 million from $1,011.4 million for the first ~~three~~two quarters of ~~2017~~2022. The decrease was primarily attributable to the Back to Nature divestiture, partially offset by the Yuma acquisition. Net sales of Back to Nature, which we divested on January 3, 2023, and therefore not part of our fiscal 2023 results, were $24.2 million during the first two quarters of 2022. An additional four months of net sales from ~~$977.6~~the Yuma acquisition, which was completed on May 5, 2022, contributed an incremental $0.6 million to our net sales for the first ~~three~~two quarters of ~~2016. Net sales of the spices & seasonings business, acquired on November 21, 2016, and net sales of~~ ~~Victoria, acquired on December 2, 2016, contributed $200.9 million and $30.1 million, respectively, to the overall net sales increase.~~2023.

Base business net sales for the first ~~three~~two quarters of ~~2017~~2023 decreased ~~$13.7~~$6.0 million, or ~~1.4%~~0.6%, to ~~$963.4~~$980.9 million from ~~$977.1~~$986.9 million for the first ~~three~~two quarters of ~~2016.~~2022. The ~~$13.7 million~~ decrease in base business net sales was ~~attributable to decreases~~driven by a decrease in unit volume of ~~$8.6~~$119.6 million and the negative impact of foreign currency of $3.6 million, largely offset by an increase in net pricing and the impact of product mix of $117.3 million, or ~~0.9%, and net pricing~~11.9% of ~~$5.1 million, or 0.5%.~~

~~Our~~ base business net ~~sales decline for the first three quarters of 2017 was largely attributable to our maple syrup products,~~ ~~Mama Mary’s~~ ~~and~~ ~~Bear Creek Country Kitchens~~. sales.

Net sales of ~~our maple syrup~~Green Giant products in the aggregate (including Le Sueur) decreased ~~$5.2~~$14.9 million, or ~~7.0%~~6.0%, ~~primarily due to our decision during~~in the first ~~quarter~~two quarters of ~~2017~~2023, as compared to ~~discontinue certain private label sales. Net sales of~~ ~~Mama Mary’s~~ ~~decreased $3.4 million, or 11.7%, generally in line with a category decline of approximately 8.4%. Net sales of~~ ~~Bear Creek Country Kitchens, which faced aggressive competition and a category decline of approximately 4.0% during~~ the first ~~three~~two quarters of ~~2017, decreased $3.0 million, or 9.3%. For the first three quarters~~2022.

- 33 -

Table of ~~2017, net sales of Pirate Brands,~~ ~~Underwood, Polaner, New York Style~~ ~~and~~ ~~Green Giant~~ ~~increased by $3.2 million, $1.3 million, $1.2 million, $1.1 million and $0.6 million, or 4.7%, 9.1%, 4.6%, 4.2% and 0.2%, respectively.~~Contents

See Note ~~14,~~16, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales by brand for ~~the first three quarters of 2017 and the first three quarters of 2016 for~~ each of our brands ~~that exceed approximately 2%~~whose net sales for the first two quarters of 2023 or fiscal 2022 equaled or exceeded 3% of our ~~fiscal 2017 or fiscal 2016~~total net sales for those periods, and for all other brands in the aggregate.

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The following ~~chart~~table sets forth the most significant base business net sales increases and decreases by brand for those brands for the first ~~three~~two quarters of ~~2017:~~2023:


	First Two Quarters
	2023 vs. 2022
	Base Business
	Net Sales Increase (Decrease)
	Dollars (in millions)		Percentage
Brand:
Clabber Girl	$	14.8	37.0	%
Spices & Seasonings⁽¹⁾		4.0	3.1	%
Maple Grove Farms of Vermont		1.2	2.8	%
Dash		0.5	1.6	%
Green Giant - frozen⁽²⁾		(11.7)	(6.5)	%
Crisco		(11.4)	(7.6)	%
Ortega		(4.3)	(5.5)	%
Green Giant - shelf-stable⁽³⁾		(3.2)	(4.7)	%
Cream of Wheat		(0.1)	(0.1)	%
All other brands		4.2	1.8	%
Base business net sales decrease	$	(6.0)	(0.6)	%

Base Business

Net Sales Increase (Decrease)

Dollars

Percentage

(in millions)

Brand:

Pirate Brands

$
3.2

4.7
%

Underwood

1.3

9.1
%

Polaner

1.2

4.6
%

New York Style

1.1

4.2
%

Green Giant

0.6

0.2
%

Mama Mary's

(3.4)

(11.7)
%

Maple Grove Farms of Vermont

(3.1)

(5.7)
%

Bear Creek Country Kitchens

(3.0)

(9.3)
%

SpringTree

(1.7)

(12.2)
%

B&M

(1.5)

(10.0)
%

TrueNorth

(1.3)

(15.7)
%

Bloch & Guggenheimer

(1.3)

(6.7)
%

Ortega

(1.3)

(1.2)
%

Emeril's

(1.2)

(11.2)
%

All other brands

(3.3)

(1.6)
%

Base business net sales decrease

$
(13.7)

(1.4)
%

(1)

(2)	For the first two quarters of 2023, includes net sales from the Yuma acquisition from May 5, 2023 through July 1, 2023, as net sales prior to May 5, 2023 are not included in base business net sales. The Yuma acquisition was completed on May 5, 2022. See Note 3, “Acquisitions and Divestitures.”

(3)	Includes net sales of the Le Sueur brand.

Gross Profit. Gross profit ~~increased $20.0 million, or 5.9%, to $361.1~~was $216.5 million for the first ~~three~~two quarters of ~~2017 from $341.1~~2023, or 22.1% of net sales. Excluding the negative impact of $1.1 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the first two quarters of 2023, our gross profit would have been $217.6 million, or 22.2% of net sales. Gross profit was $177.8 million for the first ~~three~~two quarters of ~~2016. Gross~~2022, or 17.6% of net sales. Excluding the negative impact of $4.4 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the first two quarters of 2022, our gross profit ~~expressed~~would have been $182.2 million, or 18.0% of net sales.

The improvements in gross profit and gross profit as a percentage of net sales ~~was 30.2%~~were driven by an increase in net pricing as compared to the first ~~three~~two quarters of ~~2017 compared~~2022 and the impact of moderating input cost inflation and lower transportation and warehousing costs. During the fourth quarter of 2022, we began to ~~34.9% in~~more fully realize the benefits of previously announced list price increases. This trend continued during the first ~~three~~two quarters of ~~2016. Excluding spices & seasonings and~~ ~~Victoria, approximately 2.9 percentage points~~2023, with the impact of previously announced list price increases the ~~decrease~~primary driver of recoveries in gross profit and gross profit as a percentage ~~was due to an increase in warehousing and distribution costs, 0.7 percentage points~~ of the decrease was due to an increase in coupon and slotting expenses and 0.5 percentage points of the decrease was due to a decrease in pricing. The remaining 0.6 percentage points of the decrease was due to an increase of all other costs, including the impact of product mix.net sales.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased ~~$30.2~~$3.6 million, or ~~26.1%~~3.9%, to ~~$146.2~~$94.6 million for the first ~~three~~two quarters of ~~2017~~2023 from ~~$116.0~~$91.0 million for the first ~~three~~two quarters of ~~2016.~~2022. The increase was composed of increases in general and administrative expenses of $5.2 million and consumer marketing expenses of ~~$10.4~~$1.8 million, ~~acquisition-related~~partially offset by decreases in acquisition/divestiture-related and non-recurring expenses of ~~$9.7~~$1.5 million, warehousing expenses of ~~$9.3~~$1.4 million, and selling expenses of $3.5 million (which includes a $3.6 million increase in brokerage expenses and a $0.7 million decrease in salesperson compensation) and a loss on sale of assets of $1.6 million, partially offset by a decrease in distribution restructuring expenses of $1.3 million and all other expenses of $3.0$0.5 million. Expressed as a percentage of net sales, selling, general and administrative expenses increased ~~0.3~~by 0.6 percentage points to ~~12.2%~~9.6% for the first ~~three~~two quarters of ~~2017 from 11.9%~~2023, as compared to 9.0% for the first ~~three~~two quarters of ~~2016.~~2022.

Amortization Expense. Amortization expense ~~increased $3.0~~decreased $0.1 million, or 1.2%, to ~~$13.0~~$10.5 million for the first ~~three~~two quarters of ~~2017~~2023 from ~~$10.0~~$10.6 million for the first ~~three~~two quarters of ~~2016 due~~2022.

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(Loss) gain on sales of assets. During the first quarter of 2023, we completed the Back to Nature divestiture and we recorded a loss on the sale of $0.1 million. During the first quarter of 2022, we completed the closure and sale of our Portland, Maine manufacturing facility. We recorded a gain on the sale of the Portland property, plant and equipment of $7.1 million during the first quarter of 2022. The positive impact during the first two quarters of 2022 of the gain on sale was partially offset by approximately $2.2 million of expenses incurred during the quarter relating to the ~~spices & seasonings~~closure of the facility and ~~Victoria~~ ~~acquisitions completed in fiscal 2016.~~the transfer of manufacturing operations.

~~Impairment of Intangible Assets.~~ Impairment of intangible assets of $5.4 million for the first three quarters of 2016 includes a $4.5 million loss for the impairment of amortizable trademarks and a $0.9 million loss for the impairment of customer relationship intangibles, both relating to ~~Rickland Orchards,~~ ~~as we discontinued the~~ ~~Rickland~~ ~~Orchards brand during the second quarter of 2016 because there was not sufficient demand to warrant continued production.~~

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Operating Income. As a result of the foregoing, operating income ~~decreased $7.8~~increased $28.1 million, or ~~3.7%~~33.8%, to ~~$201.8~~$111.4 million for the first ~~three~~two quarters of ~~2017~~2023 from ~~$209.6~~$83.3 million for the first ~~three~~two quarters of ~~2016.~~2022. Operating income expressed as a percentage of net sales ~~decreased~~increased to ~~16.9%~~11.3% in the first ~~three~~two quarters of ~~2017~~2023 from ~~21.4%~~8.2% in the first ~~three~~two quarters of ~~2016.~~2022.

Net Interest Expense.Net interest expense increased ~~$9.5~~$18.5 million, or ~~17.1%~~32.6%, to ~~$65.0~~$75.2 million for the first ~~three~~two quarters of ~~2017~~2023 from ~~$55.5~~$56.7 million infor the first ~~three~~two quarters of ~~2016.~~2022. The increase was primarily attributable to ~~additional~~higher interest rates on our variable rate borrowings, ~~made in~~as well as the ~~fourth quarter of 2016 to fund the spices & seasonings acquisition and the~~ ~~Victoria~~ ~~acquisition and in the second quarter of 2017 in connection with our credit agreement refinancing and senior notes offering. See “—Liquidity and Capital Resources—Debt” below.~~

~~Loss on Extinguishment of Debt.~~ ~~Loss on extinguishment of debt for the first three quarters of 2017 includes the write-off~~accelerated amortization of deferred debt financing costs ~~and unamortized discount of $0.9 million and $0.2 million, respectively,~~ relating to the ~~repayment~~prepayments described below, partially offset by a reduction in average long-term debt outstanding of ~~all~~$12.9 million and a $0.8 million gain on extinguishment of debt during the second quarter of 2023. The reduction in average long-term debt outstanding ~~borrowings under~~in the ~~tranche A~~first two quarters of 2023 as compared to the first two quarters of 2022 resulted primarily from our use of $50.0 million of the gross proceeds of the Back to Nature divestiture and an additional $71.0 million of cash on hand to make aggregate prepayments of $121.0 million principal amount of term ~~loans. During~~loans during the first quarter of ~~2017, we incurred a loss on extinguishment~~2023 as well as our repurchase of debt relating to the refinancing of our tranche B term loans of less than $0.1 million. Loss on extinguishment of debt for the first three quarters of 2016 includes the write-off of deferred debt financing costs and unamortized discount of $2.2 million and $0.6 million, respectively, relating to the repayment of $40.1$24.4 million aggregate principal amount of our ~~tranche A term loans and $109.9 million aggregate~~5.25% senior notes due 2025 in open market purchases at an average discounted repurchase price of 95.74% of such principal amount plus accrued and unpaid interest during the second quarter of ~~our tranche B term loans.~~2023, partially offset by an increase in average revolver borrowings outstanding of approximately $77.8 million. See “—Liquidity and Capital Resources — Debt” below.

Other Income.Other income for the first ~~three~~two quarters of ~~2017~~2023 and ~~2016~~2022 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $1.9 million and $3.7 million, respectively. Other income for the first two quarters of 2023 and 2022 also includes income resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes of ~~$2.9~~less than $0.1 million ~~and $2.2 million, respectively.~~in both periods.

Income Tax Expense. Income tax expense ~~decreased $6.7~~increased $17.7 million to ~~$50.9~~$24.0 million for the first ~~three~~two quarters of ~~2017~~2023 from ~~$57.6~~$6.3 million for the first ~~three~~two quarters of ~~2016.~~2022. As a result of the Back to Nature divestiture, we incurred a capital loss for tax purposes, for which we recorded a deferred tax asset during the first quarter of 2023. A valuation allowance has been recorded against this deferred tax asset, which negatively impacted our first quarter of 2023 income tax expense by $14.7 million, or $0.21 per share. Our effective tax rate was ~~36.8%~~63.2% for the first ~~three~~two quarters of ~~2017~~2023 and ~~37.5%~~20.8% for the first ~~three~~two quarters of ~~2016.~~2022. See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact of the tax legislation on income tax expense.

Liquidity and Capital Resources

Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, “Dividend Policy” ~~and “Commitments and Contractual Obligations”~~ below. We fund our liquidity requirements, as well as our dividend payments and financing for acquisitions, primarily through cash generated from operations and external sources of financing, including our revolving credit facility. We do not have any off-balance sheet financing arrangements.

Cash Flows

Net Cash Provided by Operating Activities. Net cash provided by operating activities ~~decreased $185.3~~increased $111.3 million to ~~$7.5~~$132.4 million for the first ~~three~~two quarters of ~~2017 from $192.8~~2023, as compared to $21.1 million for the first ~~three~~two quarters of ~~2016.~~2022. The decrease in net cash provided by operating activities primarily reflects unfavorable working capital (comprised of changes in inventories, accounts receivable and accrued expenses) comparisons to the first three quarters of 2016. This decrease is mainlyincrease was due to an increase in ~~inventory~~operating income and favorable working capital comparisons in the ~~timing~~first two quarters of ~~payments received~~2023 compared to the first two quarters of 2022, primarily comprised of inventories, income tax receivable/payable, net, and trade accounts receivable, partially offset by unfavorable working capital comparisons for trade accounts payable and accrued expenses.

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Net Cash Provided by (Used in) Investing Activities. Cash flows provided by investing activities increased $71.0 million to $40.9 million of net cash provided by investing activities for the first two quarters of 2023, as compared to $30.1 million of net cash used in investing activities for the first two quarters of 2022. The increase was primarily attributable to the Back to Nature sale, which produced gross proceeds from ~~post-acquisition transition services agreements.~~

the sale of assets of $51.4 million in the first two quarters of 2023, an increase of $41.1 million compared to the gross proceeds from the sale of assets in the first two quarters of 2022. Net cash used in investing activities for the first ~~three~~two quarters of ~~2017 increased $15.8~~2022 includes $27.3 million of cash used to ~~$40.6 million from $24.8 million~~pay the purchase price for the Yuma acquisition, compared to no payments for acquisitions during the first ~~three~~two quarters of ~~2016. The increase was attributable to an increase~~2023. Net cash provided by investing activities also benefited from a reduction in capital ~~spending, partially offset by the proceeds from the sale of assets. Capital~~ expenditures in the first ~~three~~two quarters of ~~2017 and 2016 included expenditures for building improvements, purchases of manufacturing and computer equipment and capitalized interest. During~~2023 compared to the first ~~three~~two quarters of ~~2017, we sold~~2022.

Net Cash (Used in) Provided by Financing Activities. Cash flows used in financing activities increased $194.6 million to ~~a third-party co-packer our Le Sueur, Minnesota research center, including~~$176.1 million of net cash used in financing activities for the ~~seed technology assets, property, plant and equipment, which we acquired~~first two quarters of 2023, as ~~part~~compared to $18.5 million of ~~the~~ ~~Green Giant~~ ~~acquisition, resulting in a $1.6 million loss on sale of assets.~~

~~Net~~net cash provided by financing activities for the first ~~three~~two quarters of ~~2017 decreased $40.8~~2022. The increase was primarily driven by $121.0 million ~~to $27.1 million from net cash used in financing activities~~ of ~~$67.9 million for~~mandatory and optional payments on our tranche B term loans during the first ~~three quarters~~quarter of ~~2016. Net cash provided by financing activities for the first three quarters~~2023 and our repurchase of ~~2017 consisted of $500.0~~$24.4 million ~~of proceeds from the issuance~~aggregate principal amount of our 5.25% senior notes ~~and $85.0 million~~due 2025 during the second quarter of ~~revolving credit facility borrowings, partially offset by $233.6 million~~

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repayment of our tranche A term loan, $221.0 million of repayments of revolving credit facility borrowings, $92.7 million of dividend payments, $8.6 million of debt financing costs and $2.0 million of payments of tax withholding on behalf of employees for net share settlement of share based compensation. Net cash provided by financing activities for the first three quarters of 2016 consisted of $331.9 million of2023; no proceeds from the issuance of common stock ~~$10.0~~during the first two quarters of 2023 compared to $65.2 million during the first two quarters of 2022; and a $25.0 million decrease in net borrowings under our revolving credit facility ~~borrowings, and $0.3 million excess tax benefits~~during the first two quarters of ~~share-based compensation,~~2023 compared to the first two quarters of 2022; partially offset by ~~$150.0~~a $37.9 million decrease in dividends paid during the first two quarters of term loan repayment, $50.0 million of repayments of revolving credit facility borrowings, $72.9 million of dividend payments and $1.4 million of payments of tax withholding on behalf of employees for net share settlement of share based compensation.

Based on a number of factors, including amortization for tax purposes of our trademarks, goodwill and other intangible assets acquired in prior acquisitions, we realized a significant reduction in cash taxes in fiscal 2016 as2023 compared to ~~our tax expense for financial reporting purposes. During~~ the ~~second quarter~~first two quarters of ~~2016, we discontinued the~~ ~~Rickland Orchards~~ ~~brand, which resulted in a one-time cash taxes benefit of $17.3 million for fiscal 2016.~~2022.

Cash Income Tax Payments. We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years ~~2017~~2023 through ~~2031.~~2037. See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact and expected impact of the U.S. CARES Act and the U.S. Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2022 and fiscal 2021 and is expected to have in fiscal 2023 and beyond on our interest expense deductions and our cash taxes. If there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend ~~payments.~~payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.

Dividend Policy

Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We have paid dividends every quarter since our initial public offering in October 2004.

For the first ~~three~~two quarters of ~~2017~~2023 and ~~2016,~~2022, we had net cash ~~flows~~ provided by operating activities of ~~$7.5~~$132.4 million and ~~$192.8~~$21.1 million, respectively, and distributed as dividends ~~of $92.7~~$27.3 million and ~~$72.9~~$65.3 million, respectively.

Beginning with the dividend payment declared on November 8, 2022 and paid on January 30, 2023, the current intended dividend rate for our common stock has been reduced from $1.90 per share per annum to $0.76 per share per annum. Based upon ~~our~~the new current intended dividend rate of ~~$1.86~~$0.76 per share per annum and our current number of outstanding shares, we expect our aggregate dividend payments in fiscal ~~2017~~2023 to be approximately ~~$123.6~~$54.9 million.

Our dividend policy is based upon our current assessment of our business and the environment in which we operate, and that assessment could change based on competitive or other developments (which could, for example, increase our need for capital expenditures or working capital), new acquisition opportunities or other factors. Our board of directors is free to depart from or change our dividend policy at any time and could do so, for example, if it was to determine that we have insufficient cash to fund capital expenditure or working capital needs, reduce leverage or ensure compliance with our maximum consolidated leverage ratio under our credit agreement, or take advantage of growth opportunities.

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Acquisitions

Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions. As discussed elsewhere in this report, as part of our growth strategy we plan to expand our brand portfolio with disciplined acquisitions of complementary brands. We have historically financed acquisitions by incurring additional indebtedness, issuing equity and/or using cash flows from operating activities. Our interest expense has over time increased as a result of additional indebtedness we have incurred in connection with acquisitions and will increase with any additional indebtedness we may incur to finance future acquisitions. Although we may subsequently issue equity and use the proceeds to repay all or a portion of the additional indebtedness incurred to finance an acquisition and reduce our interest expense, the additional shares of common stock would increase the amount of cash flows from operating activities necessary to fund dividend payments.

~~We financed the~~ ~~Back to Nature~~ ~~acquisition, completed in October 2017, with additional revolving loans under our senior secured revolving credit facility. We financed the spices & seasonings acquisition, completed in November~~

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~~2016, with cash on hand, including the net proceeds of our August 2016 public offering of common stock, and additional revolving loans under our senior secured credit facility. We financed the~~ ~~Victoria~~ ~~acquisition, completed in December 2016, with cash on hand and additional revolving loans under our senior secured credit facility.~~ The impact of future acquisitions, whether financed with additional indebtedness or otherwise, may have a material impact on our liquidity and capital resources.

Debt

~~Debt~~

~~Senior Secured Credit Agreement.~~ On March 30, 2017, we refinanced our senior secured credit facility. The refinancing reduced by 0.75% the spread over LIBOR or the applicable base rate on $640.1 million of tranche B term loans. On April 3, 2017, we repaid all of the outstanding borrowings and amounts due under our revolving credit facility and tranche A term loans using the net proceeds of our registered public offering of $500.0 million aggregate principal amount of 5.25% senior notes due 2025. At September 30, 2017, $640.1 million of tranche B term loans and $40.0 million of revolving loans were outstanding under our credit agreement. The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. At September 30, 2017, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.0 million, was $458.0 million. See Note 16, “Subsequent Event,” to our unaudited consolidated interim financial statements in Part 1, Item 1 of this report. Proceeds of the revolving credit facility may be used for general corporate purposes, including acquisitions of targets in the same or a similar line of business as our company, subject to specified criteria. The revolving credit facility matures on June 5, 2019.

~~The entire $640.1 million principal amount of tranche B term loans outstanding are due and payable at maturity on November 2, 2022.~~

Interest under the revolving credit facility, including any outstanding letters of credit, is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin ranging from 0.50% to 1.00%, and LIBOR plus an applicable margin ranging from 1.50% to 2.00%, in each case depending on our consolidated leverage ratio. At September 30, 2017, the revolving credit facility interest rate was approximately 3.24%.

Interest under the tranche B term loan facility is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin of 1.25%, and LIBOR plus an applicable margin of 2.25%. At September 30, 2017, the tranche B term loan interest rate was approximately 3.49%.

~~For further information regarding our senior secured credit agreement, including a description of optional and mandatory prepayment terms, and financial and restrictive covenants, see~~ Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this ~~report.~~

~~4.625% Senior Notes due 2021~~. On June 4, 2013, we issued $700.0 million aggregate principal amount of 4.625% senior notes due 2021 at a price to the public of 100% of their face value. Interest on the 4.625% senior notes is payable on June 1 and December 1 of each year. The 4.625% senior notes will mature on June 1, 2021, unless earlier retired or redeemed as permitted or required by the terms of the indenture governing the 4.625% senior notes as described in Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements. We may also, from time to time, seek to retire the 4.625% senior notes through cash repurchases of the 4.625% senior notes or exchanges of the 4.625% senior notes for equity securities or both, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. See Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statementsreport for a ~~more detailed~~ description of ~~the 4.625%~~our senior ~~notes.~~

~~5.25% Senior Notes due 2025~~. On April 3, 2017, we issued $500.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public of 100% of their face value. We used the net proceeds of the offering to repay all of the outstanding borrowings and amounts due undersecured credit agreement, including our revolving credit facility and tranche A

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B term ~~loans, and to pay related fees and expenses, and for general corporate purposes, which could include, among other things, repayment of other long term debt or possible acquisitions. Interest on the~~loans; our 5.25% senior notes ~~is payable on April 1~~due 2025; and ~~October 1 of each year, commencing October 1, 2017. The~~our 5.25% senior notes will mature on April 1, 2025, unless earlier retired or redeemed as permitted or required by the terms of the indenture governing the 5.25% senior notes as described in Note 6, “Debt,” to our unaudited consolidated interim financial statements. We may also, from time to time, seek to retire the 5.25% senior notes through cash repurchases of the 5.25% senior notes or exchanges of the 5.25% senior notes for equity securities or both, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. due 2027.

Equity

See Note ~~6 “Debt,” to our unaudited consolidated interim financial statements for a more detailed description of the 5.25% senior notes.~~

~~Future Capital Needs~~

~~On September 30, 2017, our total long-term debt of $1,852.9 million, net of our cash and cash equivalents of $22.6 million, was $1,830.3 million. See Note 16, “Subsequent Event,~~9, “Stockholder’s Equity,” to our unaudited consolidated interim financial statements in Part 1,I, Item 1I of this ~~report.~~report for information about our “at-the-market” (ATM) equity offering program.

Future Capital Needs

We are highly leveraged. On July 1, 2023, our total long-term debt of $2,245.6 million, net of our cash and cash equivalents of $42.8 million, was $2,202.8 million. Stockholders’ equity as of that date was ~~$791.4~~$866.4 million.

Our ability to generate sufficient cash to fund our operations depends generally on our results of operations and the availability of financing. Our management believes that our cash and cash equivalents on hand, cash flow from operating activities and available borrowing capacity under our revolving credit facility will be sufficient for the foreseeable future to fund operations, meet debt service requirements, fund capital expenditures, make future acquisitions, if any, and pay our anticipated quarterly dividends on our common stock.

We expect to make capital expenditures of approximately ~~$60.0~~$35.0 million to $40.0 million in the aggregate during fiscal ~~2017, $42.7~~2023. During the first two quarters of 2023, we made capital expenditures of $12.1 million, of which $10.6 million were ~~made during the first three quarters.~~paid in cash. Our projected capital expenditures for fiscal ~~2017 include anticipated capital expenditures of approximately $9.8 million~~2023 primarily relate to ~~move equipment used in the production of certain~~ ~~Green Giant~~ ~~products from General Mills’ Belvidere, Illinois manufacturing facility to an existing B&G Foods manufacturing facility~~asset sustainability projects, productivity and ~~one or more co-packers, approximately $11.0 million for the purchase of equipment for innovation products for~~ ~~Green Giant~~cost saving initiatives, environmental compliance, and ~~approximately $12.2 million in connection with the implementation of a new enterprise resource planning (ERP) system.~~information technology (hardware and software), including cybersecurity.

Seasonality

Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons or certain other annual events. In general, our sales are higher during the first and fourth quarters.

We purchase most of the produce used to make our frozen and shelf-stable vegetables, shelf-stable pickles, relishes, peppers, tomatoes and other related specialty items during the months of June through October, and we generally purchase the majority of our maple syrup requirements during the months of April through August. Consequently, our liquidity needs are greatest during these periods.

Inflation

~~We are currently locked into pricing~~See “—General—Fluctuations in Commodity Prices and ~~supply for substantially all of our major commodities, other than maple syrup, through the remainder of fiscal 2017 at a cost increase of less than 1% of cost of goods sold~~Production and will continue to manage inflation risk by entering into short term supply contracts and advance commodities purchase agreements from time to time, and, if necessary, by raising prices. During fiscal 2016, we had a minimal cost decrease for a majority of our most significant commodities (excluding, among others, maple syrup). To the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially and adversely affected. In addition, if input costs begin to decline, customers may look for price reductions in situations where we have locked into purchases at higher costs.Distribution Costs” above.

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Contingencies

See Note ~~10,~~12, “Commitments and Contingencies,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

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Recent Accounting Pronouncements

See Note 2, “Summary of Significant Accounting Policies —~~Newly Adopted Accounting Standards~~”~~and~~ “—Recently Issued Accounting Standards – Pending Adoption,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

~~Off-balance Sheet Arrangements~~Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries

As further discussed in Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of ~~September 30, 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.~~

~~Commitments and Contractual Obligations~~

~~Our contractual~~this report, our obligations ~~and commitments principally include obligations associated with our outstanding indebtedness, future minimum operating lease obligations and future pension obligations. During~~under the ~~first three quarters of 2017, except for the refinancing of our tranche B term loans and the issuance of our~~ 5.25% senior notes ~~see “—Debt” above, there were no material changes outside~~due 2025 and the ~~ordinary course~~5.25% senior notes due 2027 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of ~~business in the specified contractual obligations set forth in the Commitments~~our existing and ~~Contractual Obligations table in our 2016 Annual Report on Form 10-K.~~

~~Forward-Looking Statements~~

This report includes forward-looking statements, including without limitation the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The words “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “projects” and similar expressions are intendedcertain future domestic subsidiaries, which we refer to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by any forward-looking statements. We believe important factors that could cause actual results to differ materially from our expectations include the following:

~~our substantial leverage;~~

~~the effects of rising costs for our raw materials, packaging and ingredients;~~

~~crude oil prices and their impact on distribution, packaging and energy costs;~~

~~our ability to successfully implement sales price increases and cost saving measures to offset any cost increases;~~

~~intense competition, changes in consumer preferences, demand for our products and local economic and market conditions;~~

~~the risks associated with the expansion of our business;~~

~~our possible inability to identify new acquisitions or to integrate recent or future acquisitions or our failure to realize anticipated revenue enhancements, cost savings or other synergies;~~

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~~our ability to access the credit markets and our borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of our competitors;~~

~~unanticipated expenses, including, without limitation, litigation or legal settlement expenses;~~

~~the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar;~~

~~future impairments of our goodwill and intangible assets;~~

~~our ability to successfully implement a new enterprise resource planning (ERP) system;~~

~~our ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption;~~

~~our sustainability initiatives and changes to environmental laws and regulations;~~

~~other factors that affect the food industry generally, including:~~

recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products;

~~competitors’ pricing practices and promotional spending levels;~~

~~fluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and~~

the risks associated with third-party suppliers and co-packers, including the risk that any failure by one or more of our third-party suppliers or co-packers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and

~~other factors discussed elsewhere in this report and in our other public filings with the SEC, including under Item 1A, “Risk Factors,” in our 2016 Annual Report on Form 10-K.~~

~~Developments in any of these areas could cause our results to differ materially from results that have been or may be projected by or on our behalf.~~

We caution that the foregoing list of important factors is not exclusive. There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed elsewhere in this section as the guarantor subsidiaries. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2025 or the 5.25% senior notes due 2027. In this section, we refer to these foreign subsidiaries and future foreign or partially owned domestic subsidiaries as the non-guarantor subsidiaries. See Note 6, “Long-Term Debt” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report. ~~You should evaluate~~

The senior notes and the subsidiary guarantees are our and the guarantor subsidiaries’ general unsecured obligations and are effectively junior in right of payment to all ~~forward-looking statements made~~of our and the guarantor subsidiaries’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantor subsidiaries’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantor subsidiaries’ future subordinated debt.

Each guarantee contains a provision intended to limit the guarantor subsidiary’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. However, we cannot assure you that this ~~report~~provision will be effective to protect the subsidiary guarantees from being voided under fraudulent transfer laws.

A guarantor subsidiary’s guarantee will be automatically released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that guarantor subsidiary (including by way of merger or consolidation) to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods under the applicable indenture, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (2) in connection with any sale or other disposition of all of the capital stock of that guarantor subsidiary to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (3) if B&G Foods designates any “restricted subsidiary” that is a guarantor subsidiary to be an “unrestricted subsidiary” in accordance with the applicable provisions of the indenture; (4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the applicable indenture; (5) if such guarantor subsidiary no longer constitutes a domestic subsidiary; or (6) if it is determined in good faith by B&G Foods that a liquidation, dissolution or merger out of existence of such guarantor subsidiary is in the ~~context~~best interests of ~~these risks~~B&G Foods and ~~uncertainties. We urge investors~~is not materially disadvantageous to ~~unduly rely~~the holders of the senior notes.

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The following tables present summarized unaudited financial information on ~~forward-looking statements contained~~a combined basis for B&G Foods and each of the guarantor subsidiaries of the senior notes described above after elimination of (1) intercompany transactions and balances among B&G Foods and the guarantor subsidiaries and (2) investments in ~~this report.~~any subsidiary that is a non-guarantor (in thousands):


	July 1,		December 31,
	2023		2022
Current assets⁽¹⁾	$	834,550	$	930,287
Non-current assets		2,724,703		2,746,965
Current liabilities⁽²⁾	$	227,688	$	200,307
Non-current liabilities		2,621,071		2,751,661

(1)	Current assets includes amounts due from non-guarantor subsidiaries of $46.3 million and $37.7 million as of July 1, 2023 and December 31, 2022, respectively.

(2)	Current liabilities includes amounts due to non-guarantor subsidiaries of $19.2 million and $7.7 million as of July 1, 2023 and December 31, 2022, respectively.


	Twenty-six Weeks Ended
	July 1,		July 2,
	2023		2022
Net sales	$	923,082	$	952,428
Gross profit		215,695		169,101
Operating income		107,074		70,951
Income before income tax expense		33,682		17,895
Net income	$	10,720	$	14,755

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Our principal market risks are exposure to changes in commodity prices, interest rates on borrowings and foreign currency exchange rates and market fluctuation risks related to our defined benefit pension plans.

Commodity Prices and Inflation. The information under the heading ~~“Inflation”~~“General—Fluctuations in Commodity Prices and Production and Distribution Costs” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is incorporated herein by reference.

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Interest Rate Risk. In the normal course of operations, we are exposed to market risks relating to our long-term debt arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates.

Changes in interest rates impact our fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows. At ~~September 30, 2017,~~July 1, 2023, we had ~~$1,200.0~~$1,425.6 million of fixed rate debt and ~~$680.1~~$830.6 million of variable rate debt.

Based upon our principal amount of long-term debt outstanding at ~~September 30, 2017,~~July 1, 2023, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately ~~$6.8~~$8.3 million.

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The carrying values and fair values of our revolving credit loans, term loans ~~4.625% senior notes~~ and ~~5.25%~~ senior notes as of ~~September 30, 2017~~July 1, 2023 and December 31, ~~2016 are~~2022 were as follows (in thousands):


		July 1, 2023						December 31, 2022
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	280,000		$	280,000	⁽¹⁾	$	282,500		$	282,500	⁽¹⁾
Tranche B term loans due 2026		549,009	⁽²⁾		539,401	⁽³⁾		668,532	⁽²⁾		636,777	⁽³⁾
5.25% senior notes due 2025		876,454	⁽⁴⁾		839,205	⁽³⁾		901,213	⁽⁴⁾		790,625	⁽³⁾
5.25% senior notes due 2027	$	550,000		$	470,250	⁽³⁾	$	550,000		$	420,558	⁽³⁾

(1)

~~(1)~~

Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2)

~~(2)~~

~~(3)~~

was $550.6 million and $671.6 million, respectively.

(3)

~~(4)~~

Fair values are estimated based on quoted market prices.

(4)	The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 1, 2023 and December 31, 2022, the face amount of the 5.25% senior notes due 2025 was $875.6 million and $900.0 million, respectively.

Cash and cash equivalents, trade accounts receivable, income tax receivable/payable, trade accounts payable, accrued expenses and dividends payable are reflected on our consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.

For more information, see Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Foreign Currency Risk. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. ~~During the first three quarters of 2017, our~~Our net sales to customers in foreign countries represented approximately ~~6.4%~~8.6% and 8.1% of our total net ~~sales. During~~sales during the first ~~three~~two quarters of ~~2016, our net sales to customers in foreign countries represented approximately 8.4% of our total net sales.~~2023 and 2022, respectively. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars. A weakening of the U.S. dollar in relation to the Canadian dollar would significantly increase our future costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars, but certain purchases of raw materials in Mexico are denominated in Mexican pesos. In addition, we operate a frozen vegetable manufacturing facility in Irapuato, Mexico. A weakening of the U.S. dollar in relation to the Mexican peso would significantly increase our costs relating to the production of frozen vegetable products to the extent we have not purchased Mexican pesos or otherwise entered into hedging arrangements in advance of the weakening of the U.S. dollar. For example, our results of operations from our Green Giant frozen operations in Mexico have been negatively impacted during the first two quarters of 2023 as a result of the Mexican peso appreciating by nearly 14% against the U.S. dollar during the first two quarters of 2023.

As a result, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an adverse impact on operating results.

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Market Fluctuation Risks Relating to our Defined Benefit Pension Plans. See Part I,II, Item 2,7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates” and Note 9,12, “Pension Benefits,” to our ~~unaudited~~ consolidated ~~interim~~ financial statements in Part I,II, Item 18 of ~~this report~~our 2022 Annual Report on Form 10-K for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations.

~~Item 4.~~

~~Controls and Procedures~~

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, our management, including our chief executive officer and our chief financial officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures that we use that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure

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controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control ~~Over~~over Financial Reporting. As required by Rule 13a-15(d) under the Exchange Act, our management, including our chief executive officer and our chief financial officer, also conducted an evaluation of our internal control over financial reporting to determine whether any change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our chief executive officer and our chief financial officer concluded that ~~except as described below,~~ there has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~We transitioned our~~During fiscal 2022 and the first two quarters of 2023, we continued to implement additional modules and transition recently acquired ~~spices & seasonings business to a new~~businesses into the enterprise resource planning (ERP) system ~~during the third quarter of 2017. We plan to continue implementing the ERP system throughout the remainder~~that we use for substantially all of our ~~businesses over the course of approximately the next two years.~~operations other than our operations in Mexico. In connection with ~~these implementations~~each implementation, integration and transition, and resulting business process changes, we continue to review and enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting following the completion of each such implementation, integration and transition. To date, the implementations, integrations and transitions have not materially affected our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls.Our company’s management, including the chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II

OTHER ~~INFORMATION~~INFORMATION

~~Item 1.Legal Proceedings~~
Item 1.
Legal Proceedings

The information set forth under the heading “Legal Proceedings” in Note 1012 to our unaudited consolidated interim financial statements in Part I, Item 1 of this quarterly report on Form 10-Q is incorporated herein by reference.

Item 1A.Risk ~~Factors~~Factors

We do not believe there have been any material changes in our risk factors as previously disclosed in our ~~2016~~2022 Annual Report on Form 10-K.

~~Item 2.Unregistered Sales of Equity Securities and Use of Proceeds~~
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

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~~Item 3.Defaults Upon Senior Securities~~

Item 3.

Defaults Upon Senior Securities

Not applicable.

~~Item 4.Mine Safety Disclosures~~
Item 4.
Mine Safety Disclosures

Not applicable.

~~Item 5.Other Information~~

~~Not applicable.~~

~~Item 6.Exhibits~~

Item 5.

Other Information

Rule 10b5-1 Trading Arrangements. During the period covered by this report, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as such terms are defined under Item 408(a) of Regulation S-K.

Item 6.

Exhibits


EXHIBIT NO.		DESCRIPTION
EXHIBIT NO.		~~DESCRIPTION~~
~~10.1~~21.1		~~Employment Agreement, dated as~~Subsidiaries of ~~August 1, 2017, between Bruce C. Wacha and~~ B&G Foods, Inc.

~~12.1~~22.1		~~Computation of Ratio of Earnings to Fixed Charges.~~Guarantor Subsidiaries.

31.1		Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer.

31.2		Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer and Chief Financial Officer.

~~101.1~~101		The following unaudited financial information from B&G Foods’ Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2017,~~July 1, 2023, formatted in ~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, ~~(v)~~(vi) Notes to Consolidated Financial Statements, and ~~(vi)~~(vii) document and entity information.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2023, formatted in iXBRL and contained in Exhibit 101.

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~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: ~~November~~August 3, ~~2017~~2023	B&G FOODS, INC.


	By:	/s/ ~~Amy J. Chiovari~~Bruce C. Wacha
		~~Amy J. Chiovari~~Bruce C. Wacha ~~Corporate Controller~~ Executive Vice President of Finance and ~~Interim~~ Chief Financial Officer ~~(Principal~~ (Principal Financial ~~and Accounting~~ Officer and Authorized Officer)

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	Twenty-six Weeks Ended
	July 1,		July 2,
	2023		2022
Cash flows from operating activities:
Net income	$	13,968	$	23,912
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		35,304		40,299
Amortization of operating lease right-of-use assets		8,905		8,173
Amortization of deferred debt financing costs and bond discount/premium		4,684		2,346
Deferred income taxes		15,097		530
Loss (gain) on sales of assets		177		(7,113)
Gain on extinguishment of debt		(786)		—
Share-based compensation expense		3,301		2,248
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable		7,381		(4,081)
Inventories		57,200		(56,632)
Prepaid expenses and other current assets		(2,332)		(1,977)
Income tax receivable/payable, net		(1,078)		(12,923)
Other assets		(1,042)		(887)
Trade accounts payable		6,639		35,481
Accrued expenses		(16,046)		(9,290)
Other liabilities		1,005		1,041
Net cash provided by operating activities		132,377		21,127

Cash flows from investing activities:
Capital expenditures		(10,605)		(13,200)
Proceeds from sales of assets		51,497		10,429
Payments for acquisition of businesses, net of cash acquired		—		(27,290)
Net cash provided by (used in) investing activities		40,892		(30,061)

Cash flows from financing activities:
Repurchases of senior notes		(23,350)		—
Repayments of borrowings under term loan facility		(121,000)		—
Repayments of borrowings under revolving credit facility		(107,500)		(162,500)
Borrowings under revolving credit facility		105,000		185,000
Proceeds from issuance of common stock, net		—		65,202
Dividends paid		(27,337)		(65,269)
Proceeds from exercise of stock options		—		60
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation		(1,879)		(4,029)
Net cash (used in) provided by financing activities		(176,066)		18,464

Effect of exchange rate fluctuations on cash and cash equivalents		127		(194)
Net (decrease) increase in cash and cash equivalents		(2,670)		9,336

Cash and cash equivalents at beginning of period		45,442		33,690
Cash and cash equivalents at end of period	$	42,772	$	43,026

Supplemental disclosures of cash flow information:
Cash interest payments	$	71,916	$	53,954
Cash income tax payments	$	9,991	$	18,989
Non-cash investing and financing transactions:
Dividends declared and not yet paid	$	13,735	$	34,043
Accruals related to purchases of property, plant and equipment	$	1,525	$	876
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,750	$	2,588


Victoria Acquisition (dollars in thousands):

Purchase Price:
Cash paid	$	71,972
Total	$	71,972

Preliminary Allocation:
Trademarks—unamortizable intangible assets		45,500
Goodwill		12,745
Property, plant and equipment		9,298
Inventory		5,729
Customer relationship intangibles—amortizable intangible assets		6,400
Long-term deferred income tax liabilities, net		(5,653)
Other working capital		(2,047)
Total	$	71,972


Purchase Price Allocation (in thousands):	May 5, 2022
Inventories	$	3,342
Prepaid expenses and other current assets		187
Property, plant and equipment, net		12,508
Operating lease right-of-use assets		12,770
Finance lease right-of-use assets		3,529
Other intangible assets, net		4,483
Current portion of operating lease liabilities		(1,624)
Current portion of finance lease liabilities		(1,035)
Long-term operating lease liabilities, net of current portion		(8,756)
Long-term finance lease liabilities, net of current portion		(2,493)
Goodwill		4,379
Total purchase price (paid in cash)	$	27,290


Spices & Seasonings Acquisition (dollars in thousands):

Purchase Price:
Cash paid	$	366,932
Total	$	366,932

Preliminary Allocation:
Goodwill		120,108
Customer relationship intangibles—amortizable intangible assets		89,250
Trademarks—unamortizable intangible assets		65,200
Property, plant and equipment		62,193
Inventory		49,571
Other liabilities		(17,502)	(1)
Other working capital		(1,888)
Total	$	366,932


Cash received	$	51,414
Less:
Assets sold:
Trademarks — indefinite-lived intangible assets		109,900
Goodwill		29,500
Customer relationships — finite-lived intangible assets		11,025
Inventories		7,323
Impairment of assets held for sale		(106,434)
Total assets sold		51,314
Expenses of sale		185
Pre-tax loss on sale of assets	$	(85)


	September 30, 2017		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	22,615	$	28,833
Trade accounts receivable, net		171,343		119,265
Inventories		487,390		356,590
Prepaid expenses and other current assets		33,601		26,399
Income tax receivable		9,567		10,787
Total current assets		724,516		541,874

Property, plant and equipment, net of accumulated depreciation of $192,867 and $169,474		266,381		245,344
Goodwill		615,770		614,278
Other intangibles, net		1,615,528		1,629,482
Other assets		6,292		4,625
Deferred income taxes		984		7,902
Total assets	$	3,229,471	$	3,043,505

Liabilities and Stockholders’ Equity

Current liabilities:
Trade accounts payable	$	137,205	$	98,033
Accrued expenses		55,474		62,393
Current portion of long-term debt		—		10,515
Income tax payable		112		3,875
Dividends payable		30,921		30,879
Total current liabilities		223,712		205,695

Long-term debt		1,852,932		1,715,268
Other liabilities		17,779		21,405
Deferred income taxes		343,659		315,480
Total liabilities		2,438,082		2,257,848
Commitments and contingencies (Note 10)

Stockholders’ equity:
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding		—		—
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 66,496,333 and 66,406,314 shares issued and outstanding as of September 30, 2017 and December 31, 2016		665		664
Additional paid-in capital		297,303		387,699
Accumulated other comprehensive loss		(10,792)		(19,364)
Retained earnings		504,213		416,658
Total stockholders’ equity		791,389		785,657
Total liabilities and stockholders’ equity	$	3,229,471	$	3,043,505


						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Retained		Stockholders’
	Shares	Amount		Capital		Loss		Earnings		Equity
Balance at December 31, 2022	71,668,144	$	717	$	—	$	(9,349)	$	876,798	$	868,166
Foreign currency translation	—		—		—		5,160		—		5,160
Net income	—		—		—		—		3,415		3,415
Share-based compensation	—		—		664		—		—		664
Issuance of common stock for share-based compensation	557,558		5		(1,666)		—		—		(1,661)
Cancellation of restricted stock for tax withholding upon vesting	(13,488)		—		(205)		—		—		(205)
Cancellation of restricted stock upon forfeiture	(414)		—		—		—		—		—
Dividends declared on common stock, $0.19 per share	—		—		1,207		—		(14,927)		(13,720)
Balance at April 1, 2023	72,211,800	$	722	$	—	$	(4,189)	$	865,286	$	861,819
Foreign currency translation	—		—		—		4,579		—		4,579
Change in pension benefit (net of $5 of income taxes)	—		—		—		(6)		—		(6)
Net income	—		—		—		—		10,553		10,553
Share-based compensation	—		—		3,166		—		—		3,166
Issuance of common stock for share-based compensation	82,917		1		(1)		—		—		—
Cancellation of restricted stock for tax withholding upon vesting	(960)		—		(13)		—		—		(13)
Cancellation of restricted stock upon forfeiture	(2,184)		—		—		—		—		—
Dividends declared on common stock, $0.19 per share	—		—		(3,152)		—		(10,583)		(13,735)
Balance at July 1, 2023	72,291,573	$	723	$	—	$	384	$	865,256	$	866,363


	Thirteen Weeks Ended			Thirty-nine Weeks Ended
	October 1, 2016			October 1, 2016
	(dollars in thousands, except per share data)
Net sales	$	377,689	$	1,155,926
Net income	$	36,540	$	112,128
Basic earnings per share	$	0.63	$	1.75
Diluted earnings per share	$	0.63	$	1.74


	September 30, 2017						December 31, 2016
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Amortizable Intangible Assets

													July 1, 2023						December 31, 2022
													Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
													Amount		Amortization		Amount		Amount		Amortization		Amount
Finite-Lived Intangible Assets
Trademarks	$	6,800	$	2,002	$	4,798	$	6,800	$	1,662	$	5,138	$	6,800	$	4,609	$	2,191	$	6,800	$	4,382	$	2,418
Customer relationships		330,290		93,361		236,929		330,290		80,847		249,443		396,621		195,199		201,422		396,565		184,966		211,599
Seed technology(1)		—		—		—		2,000		900		1,100
	$	337,090	$	95,363	$	241,727	$	339,090	$	83,409	$	255,681
Unamortizable Intangible Assets
Total finite-lived intangible assets													$	403,421	$	199,808	$	203,613	$	403,365	$	189,348	$	214,017

Indefinite-Lived Intangible Assets
Goodwill	$	615,770					$	614,278									$	619,399					$	619,241
Trademarks	$	1,373,801					$	1,373,801										1,574,484						1,574,140
Total indefinite-lived intangible assets																	$	2,193,883					$	2,193,381

Total goodwill and other intangible assets																	$	2,397,496					$	2,407,398


Years ending December:
2017	$	—
2018		—
2019		40,000
2020		—
2021		700,000
Thereafter		1,140,110
Total	$	1,880,110


	Aggregate Contractual Maturities
Fiscal year:
2023 remaining	$	—
2024		—
2025		1,155,610
2026		550,625
2027		550,000
Thereafter		—
Total	$	2,256,235


		September 30, 2017						December 31, 2016
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans		40,000			40,000	(1)		176,000			176,000	(1)
Tranche A term loans due 2019		—			—			233,378	(2)		232,795	(1)
Tranche B term loans due 2022		637,722	(3)		641,707	(1)		637,391	(3)		645,358	(1)
4.625% senior notes due 2021		700,000			713,125	(4)		700,000			714,000	(4)
5.25% senior notes due 2025		500,000			509,375	(4)		—			—


Fiscal year ending:
2017	$	2,643
2018		9,645
2019		8,632
2020		8,163
2021		6,106
Thereafter		8,060
Total	$	43,249


		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares (1)	(per share)(2)
Beginning of fiscal 2017	436,554	$	26.81
Granted	132,000	$	36.15
Vested	(110,528)	$	27.50
Forfeited	(19,456)	$	28.08
End of third quarter of 2017	438,570	$	29.38


			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	—	$	19,133	$	3,482	$	—	$	22,615
Trade accounts receivable, net		—		158,101		13,242		—		171,343
Inventories, net		—		422,291		65,099		—		487,390
Prepaid expenses and other current assets		—		29,168		4,433		—		33,601
Income tax receivable		—		8,698		869		—		9,567
Total current assets		—		637,391		87,125		—		724,516

Property, plant and equipment, net		—		221,173		45,208		—		266,381
Goodwill		—		615,770		—		—		615,770
Other intangibles, net		—		1,615,528		—		—		1,615,528
Other assets		—		6,278		14		—		6,292
Deferred income taxes		—		—		984		—		984
Investments in subsidiaries		2,700,032		89,846		—		(2,789,878)		—
Total assets	$	2,700,032	$	3,185,986	$	133,331	$	(2,789,878)	$	3,229,471

Liabilities and Stockholders' Equity

Current Liabilities:
Trade accounts payable	$	—	$	104,376	$	32,829	$	—	$	137,205
Accrued expenses		—		52,539		2,935		—		55,474
Income tax payable		—		—		112		—		112
Dividends payable		30,921		—		—		—		30,921
Intercompany payables		—		(7,609)		7,609		—		—
Total current liabilities		30,921		149,306		43,485		—		223,712

Long-term debt		1,877,722		(24,790)		—		—		1,852,932
Other liabilities		—		17,779		—		—		17,779
Deferred income taxes		—		343,659		—		—		343,659
Total liabilities		1,908,643		485,954		43,485		—		2,438,082

Stockholders' Equity:
Preferred stock		—		—		—		—		—
Common stock		665		—		—		—		665
Additional paid-in capital		297,303		2,208,836		68,253		(2,277,089)		297,303
Accumulated other comprehensive loss		(10,792)		(10,792)		(3,814)		14,606		(10,792)
Retained earnings		504,213		501,988		25,407		(527,395)		504,213
Total stockholders’ equity		791,389		2,700,032		89,846		(2,789,878)		791,389
Total liabilities and stockholders’ equity	$	2,700,032	$	3,185,986	$	133,331	$	(2,789,878)	$	3,229,471



	Base Business
	Net Sales Increase (Decrease)
	Dollars		Percentage
	(in millions)
Brand:
Green Giant	$	7.3	6.4	%
Pirate Brands		4.7	21.0	%
Polaner		1.2	15.4	%
Underwood		1.0	20.6	%
New York Style		1.0	11.8	%
Cream of Wheat		0.6	4.3	%

Ortega		(1.6)	(4.6)	%
Mama Mary's		(1.1)	(12.3)	%
Maple Grove Farms of Vermont		(0.9)	(5.3)	%
Bear Creek Country Kitchens		(0.7)	(5.3)	%

All other brands		(1.4)	(2.0)	%
Base business net sales decrease	$	10.1	3.2	%