Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | B&G Foods, Inc. | |
Entity Central Index Key | 1,278,027 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 66,496,333 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
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 |
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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Property, plant and equipment, accumulated depreciation (in dollars) | $ 192,867 | $ 169,474 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 125,000,000 | 125,000,000 |
Common stock, shares issued | 66,496,333 | 66,406,314 |
Common stock, shares outstanding | 66,496,333 | 66,406,314 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Consolidated Statements of Operations | ||||
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 (in shares) | 66,496,333 | 64,757,962 | 66,484,105 | 62,134,846 |
Diluted (in shares) | 66,643,643 | 65,038,046 | 66,713,084 | 62,337,758 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.49 | $ 0.50 | $ 1.32 | $ 1.54 |
Diluted (in dollars per share) | 0.49 | 0.50 | 1.31 | 1.54 |
Cash dividends declared per share (in dollars per share) | $ 0.465 | $ 0.420 | $ 1.395 | $ 1.260 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 32,730 | $ 32,410 | $ 87,555 | $ 95,857 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 713 | (3,381) | 8,350 | (3,691) |
Amortization of unrecognized prior service cost and pension deferrals, net of tax | 120 | 66 | 222 | 244 |
Other comprehensive income (loss) | 833 | (3,315) | 8,572 | (3,447) |
Comprehensive income | $ 33,563 | $ 29,095 | $ 96,127 | $ 92,410 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 87,555 | $ 95,857 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 36,284 | 26,813 |
Amortization of deferred debt financing costs and bond discount | 4,263 | 4,101 |
Deferred income taxes | 35,079 | 45,555 |
Impairment of intangible assets | 5,405 | |
Write-off of property, plant, and equipment | 107 | |
Loss on sale of assets | 1,608 | |
Loss on disposal of inventory | 791 | |
Loss on extinguishment of debt | 1,163 | 2,836 |
Share-based compensation expense | 4,284 | 4,457 |
Excess tax benefits from share-based compensation | (343) | |
Changes in assets and liabilities, net of effects of businesses acquired: | ||
Trade accounts receivable | (52,044) | (20,551) |
Inventories | (127,052) | (29,922) |
Prepaid expenses and other current assets | (6,407) | (3,297) |
Income tax receivable/payable | (3,025) | (3,286) |
Other assets | (1,309) | (1,180) |
Trade accounts payable | 38,787 | 47,646 |
Accrued expenses | (8,130) | 17,389 |
Other liabilities | (3,626) | 507 |
Net cash provided by operating activities | 7,537 | 192,778 |
Cash flows from investing activities: | ||
Capital expenditures | (42,728) | (24,807) |
Proceeds from sale of assets | 2,229 | |
Payments for acquisition of businesses, net of cash acquired | (117) | |
Net cash used in investing activities | (40,616) | (24,807) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (233,640) | (150,000) |
Proceeds from issuance of long-term debt | 500,000 | |
Repayments of borrowings under revolving credit facility | (221,000) | (50,000) |
Borrowings under revolving credit facility | 85,000 | 10,000 |
Proceeds from issuance of common stock, net | 36 | 331,879 |
Dividends paid | (92,710) | (72,916) |
Excess tax benefits from share-based compensation | 820 | 343 |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,962) | (1,410) |
Debt financing costs | (8,637) | |
Net cash provided by financing activities | 27,087 | 67,896 |
Effect of exchange rate fluctuations on cash and cash equivalents | (226) | (533) |
Net (decrease) increase in cash and cash equivalents | (6,218) | 235,334 |
Cash and cash equivalents at beginning of period | 28,833 | 5,246 |
Cash and cash equivalents at end of period | 22,615 | 240,580 |
Supplemental disclosures of cash flow information: | ||
Cash interest payments | 41,824 | 44,387 |
Cash income tax payments | 15,084 | 15,406 |
Non-cash transactions: | ||
Dividends declared and not yet paid | $ 30,921 | 27,891 |
Accruals related to purchases of property, plant and equipment | $ 1,604 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2017 | |
Nature of Operations | |
Nature of Operations | (1) Nature of Operations B&G Foods, Inc. is a holding company whose principal assets are the shares of capital stock of its subsidiaries. Unless the context requires otherwise, references in this report to “B&G Foods,” “our company,” “we,” “us” and “our” refer to B&G Foods, Inc. and its subsidiaries. Our financial statements are presented on a consolidated basis. We operate in a single industry segment and manufacture, sell and distribute a diverse portfolio of high-quality shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Our products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters and other specialty products. Our products are marketed under many recognized brands, including Ac’cent , B&G , B&M , Baker’s Joy , Bear Creek Country Kitchens , Brer Rabbit , Canoleo , Cary’s , Cream of Rice , Cream of Wheat , Devonsheer , Don Pepino , Durkee , Emeril’s , Grandma’s Molasses , Green Giant , JJ Flats , Joan of Arc , Las Palmas , Le Sueur , MacDonald’s , Mama Mary’s , Maple Grove Farms of Vermont , Molly McButter , Mrs. Dash , New York Flatbreads , New York Style , Old London , Original Tings , Ortega , Pirate’s Booty , Polaner , Red Devil , Regina , Sa-són , Sclafani , Smart Puffs , Spice Islands , Spring Tree , Sugar Twin , Tone’s , Trappey’s , TrueNorth , Underwood , Vermont Maid , Victoria , Weber , and Wright’s . See Note 16, “Subsequent Event.” We also sell and distribute Static Guard , a household product brand . We compete in the retail grocery, foodservice, specialty, private label, club and mass merchandiser channels of distribution. We sell and distribute our products directly and via a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Fiscal Year Typically, our fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to December 31 in the case of our fiscal year and fourth fiscal quarter, and on the Saturday closest to the end of the corresponding calendar quarter in the case of our fiscal quarters. As a result, a 53 rd week is added to our fiscal year every five or six years. In a 53-week fiscal year our fourth fiscal quarter contains 14 weeks. Our fiscal year ending December 30, 2017 (fiscal 2017) and our fiscal year ended December 31, 2016 (fiscal 2016) each contain 52 weeks. Each quarter of fiscal 2017 and 2016 contains 13 weeks. Basis of Presentation The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended September 30, 2017 (third quarter and first three quarters of 2017) and October 1, 2016 (third quarter and first three quarters of 2016) have been prepared by our company in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of September 30, 2017, and the results of our operations, comprehensive income and cash flows for the third quarter and first three quarters of 2017 and 2016. Our results of operations for the third quarter and first three quarters of 2017 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2016 filed with the SEC on March 1, 2017. Certain prior year amounts have been reclassified to conform to the current year presentation. (2) Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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 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 trademark intangibles. Actual results could differ significantly from these estimates and assumptions. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions. Newly Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires that excess tax benefits (which represent the excess of actual tax benefits received at the date of vesting or settlement over the benefits recognized over the vesting period or upon issuance of share-based payments) and tax deficiencies (which represent the amount by which actual tax benefits received at the date of vesting or settlement is lower than the benefits recognized over the vesting period or upon issuance of share-based payments) be recorded in the income statement as a reduction of income taxes when the awards vest or are settled. The new guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than as a financing activity. We adopted the provisions of this ASU at the beginning of fiscal 2017 and applied the required changes in accounting principle on a prospective basis. As a result of this adoption, 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. We elected to adopt the cash flow presentation of the excess tax benefits prospectively, commencing with our statement of cash flows for the first quarter of 2017, where these benefits are classified along with other income tax cash flows as an operating activity. We excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of our diluted earnings per share for the first three quarters of 2017. In November 2015, the FASB issued a new ASU that requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The ASU is effective beginning with the first quarter of fiscal 2017. We adopted the provisions of this ASU at the beginning of fiscal 2017 and applied the required changes in accounting principle on a retrospective basis. Accordingly, in our consolidated balance sheet as of December 31, 2016, $7.9 million of deferred tax assets were reclassified from current assets to noncurrent assets. The update impacted presentation and disclosure only, and therefore, the adoption of this ASU did not have any impact on our results of operations or liquidity. In July 2015, the FASB issued a new ASU that simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. We adopted the provisions of this ASU at the beginning of fiscal 2017. The adoption of this ASU did not have any impact on our consolidated financial position, results of operations or liquidity. (2) Recently Issued Accounting Standards In March 2017, the FASB issued a new ASU that improves the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. The update is effective beginning with the first quarter of fiscal 2019. We have not yet determined the impact from adoption of the ASU on our financial statements. In January 2017, the FASB issued a new ASU which clarifies the definition of a business. The new guidance changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The update is effective beginning with the first quarter of 2018. We have not yet determined the impact from adoption of the ASU on our financial statements. In January 2017, the FASB issued a new ASU that simplifies the subsequent measurement of goodwill, including the elimination of the second step from the goodwill impairment test. The update is effective for annual or any interim impairment tests in fiscal 2020 or later. The adoption of this ASU will not have any impact on our consolidated financial position, results of operations or liquidity. In February 2016, the FASB issued a new ASU that requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current guidance. The update is effective beginning with the first quarter of fiscal 2019. We have not yet determined the impact from adoption of the ASU on our financial statements. In May 2014, the FASB issued guidance on revenue recognition, with final guidance issued in 2016. The guidance provides for a five-step model to determine the revenue to be recognized from the transfer of goods or services to customers. The guidance also requires improved disclosures to help users of the financial statements better understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. It also provides clarification for principal versus agent considerations, identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes. The two permitted transition methods under the guidance are the full retrospective approach or a cumulative effect adjustment to the opening retained earnings in the year of adoption (cumulative effect approach). We have not yet made a determination as to which transition method we will be using. We plan to adopt the new guidance when it becomes effective on December 31, 2017, the first day of our fiscal 2018. We have established a project plan and completed an initial review of our revenue contracts to assess the impact of the guidance on our revenue contracts by reviewing our current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts. We are also in the process of evaluating the impact, if any, on changes to our controls to support recognition and disclosures under the new guidance. Based on the foregoing, we do not expect the adoption of the new standard to have a material effect on our consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Acquisitions. | |
Acquisitions | (3) Acquisitions On December 2, 2016, we acquired Victoria Fine Foods, LLC, and a related entity, from Huron Capital Partners and certain other sellers for a purchase price of $72.0 million in cash. We refer to this acquisition as the “ Victoria acquisition.” On November 21, 2016, we completed the acquisition of the spices & seasonings business of ACH Food Companies, Inc. for a purchase price of $366.9 million. We refer to this acquisition as the “spices & seasonings acquisition.” In connection with the acquisition, as of September 30, 2017, we had receivables related to a transition services agreement with ACH Food Companies of $1.0 million included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. As of December 31, 2016, we had payables related to the transition services agreement of $12.6 million included in accrued expenses in the accompanying consolidated balance sheets. (3) Acquisitions (Continued) We have accounted for each of these acquisitions using the acquisition method of accounting and, accordingly, have included the assets acquired, liabilities assumed and results of operations in our consolidated financial statements from the respective date of acquisition. The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. Unamortizable trademarks are deemed to have an indefinite useful life and are not amortized. Customer relationship intangibles and amortizable trademarks acquired are amortized over 10 to 20 years. Goodwill and other intangible assets, except in the case of the Victoria acquisition, are deductible for income tax purposes. Inventory has been recorded at estimated selling price less costs of disposal and a reasonable selling profit and the property, plant and equipment and other intangible assets (including trademarks, customer relationships and other intangibles) acquired have been recorded at fair value as determined by our management with the assistance of a third-party valuation specialist. See Note 5, “Goodwill and Other Intangible Assets.” The following table sets forth the preliminary allocation of the Victoria acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during the fourth quarter of fiscal 2017. 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 (3) Acquisitions (Continued) The following table sets forth the preliminary allocation of the spices & seasonings acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during the fourth quarter of fiscal 2017. 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 ________________________________________ (1) In connection with the spices & seasonings acquisition, we agreed to establish a defined benefit plan for certain employees transferred to B&G Foods and certain former employees of the acquired spices & seasonings business. We also agreed to assume certain liabilities relating to the underfunded status of the former plan that such employees participated in prior to the acquisition. At September 30, 2017 and December 31, 2016, we recognized $13.7 million and $17.5 million, respectively, in “other liabilities” in the accompanying consolidated balance sheet to reflect our obligations with respect to the underfunded status of the defined benefit plan assets and liabilities transferred to us. On August 19, 2017, we entered into an agreement to acquire 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 completed the acquisition on October 2, 2017. We funded the acquisition and related fees and expenses with additional revolving loans under our existing credit facility See Note 16, “Subsequent Event.” We refer to this acquisition as the “ Back to Nature acquisition.” (3) Acquisitions (Continued) Unaudited Pro Forma Summary of Operations The following pro forma summary of operations for the third quarter and first three quarters of 2016 presents our operations as if the spices & seasonings acquisition had occurred as of the beginning of fiscal 2016. In addition to including the results of operations of this acquisition, the pro forma information gives effect to the interest on additional borrowings and the amortization of customer relationship intangibles. On an actual basis, the spices & seasonings business contributed $70.4 million and $200.9 million, respectively, of consolidated net sales for the third quarter and first three quarters of 2017. 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 The pro forma information presented above does not purport to be indicative of the results that actually would have been attained had the spices & seasonings acquisition occurred as of the beginning of fiscal 2016, and is not intended to be a projection of future results. The Victoria acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Inventories | (4) Inventories are stated at the lower of cost or market and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales. Inventories consist of the following, as of the dates indicated (in thousands): September 30, 2017 December 31, 2016 Raw materials and packaging $ 73,508 $ 60,532 Work-in-process 124,676 98,664 Finished goods 289,206 197,394 Total $ $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (5) The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands): 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 Trademarks $ 6,800 $ 2,002 $ 4,798 $ 6,800 $ 1,662 $ 5,138 Customer relationships 330,290 93,361 236,929 330,290 80,847 249,443 Seed technology (1) — — — 2,000 900 1,100 $ 337,090 $ 95,363 $ 241,727 $ 339,090 $ 83,409 $ 255,681 Unamortizable Intangible Assets Goodwill $ 615,770 $ 614,278 Trademarks $ 1,373,801 $ 1,373,801 ________________________________________ (1) During the first quarter of 2017, we sold to a third-party co-packer our Le Sueur, Minnesota research center, including the seed technology assets and property, plant and equipment, that we acquired in 2015 as part of the Green Giant acquisition, resulting in a $1.6 million loss on sale of assets. Amortization expense associated with amortizable intangible assets for the third quarter and first three quarters of 2017 was $4.3 million and $13.0 million, respectively, and is recorded in operating expenses. Amortization expense associated with amortizable intangible assets for the third quarter and first three quarters of 2016 was $3.3 million and $10.0 million, respectively. We expect to recognize an additional $4.3 million of amortization expense associated with our amortizable intangible assets during the remainder of fiscal 2017, and thereafter $17.1 million of amortization expense in each of the fiscal years 2018 through 2021. See Note 3, “Acquisitions.” |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt | |
Long-Term Debt | (6) Long-term debt consists of the following, as of the dates indicated (in thousands): September 30, 2017 December 31, 2016 Revolving credit loans $ 40,000 $ 176,000 Tranche A term loans due 2019 — 233,640 Tranche B term loans due 2022 640,110 640,110 4.625% senior notes due 2021 700,000 700,000 5.25% senior notes due 2025 500,000 — Unamortized deferred financing costs (24,790) (20,986) Unamortized discount (2,388) (2,981) Total long-term debt, net of unamortized deferred financing costs and discount 1,852,932 1,725,783 Current portion of long-term debt — (10,515) Long-term debt, net of unamortized deferred financing costs and discount, and excluding current portion $ 1,852,932 $ 1,715,268 As of September 30, 2017, the aggregate contractual maturities of long-term debt are as follows (in thousands): Years ending December: 2017 $ — 2018 — 2019 40,000 2020 — 2021 700,000 Thereafter 1,140,110 Total $ 1,880,110 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 a portion of 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. 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.” 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. We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility. The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans. 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. (6) We may prepay the term loans or permanently reduce the revolving credit facility commitment under the credit agreement at any time without premium or penalty (other than customary “breakage” costs with respect to the early termination of LIBOR loans). Subject to certain exceptions, the credit agreement provides for mandatory prepayment upon certain asset dispositions or casualty events and issuances of indebtedness. 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%. Our obligations under the credit agreement are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. The credit agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens. The credit agreement also contains certain financial maintenance covenants, which, among other things, specify a maximum consolidated leverage ratio and a minimum interest coverage ratio, each ratio as defined in the credit agreement. Our consolidated leverage ratio (defined as the ratio of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA for such period), may not exceed 6.50 to 1.00. We are also required to maintain a consolidated interest coverage ratio of at least 1.75 to 1.00 as of the last day of any period of four consecutive fiscal quarters. As of September 30, 2017, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement. The credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the credit agreement, and potentially other lenders, provide unlimited additional amounts of term loans or revolving loans or both on terms substantially consistent with those provided under the credit agreement. Among other things, the utilization of the incremental facility is conditioned on our ability to meet a maximum senior secured leverage ratio of 4.00 to 1.00, and a sufficient number of lenders or new lenders agreeing to participate in the facility. 4.625% S enior 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. We may redeem some or all of the 4.625% senior notes at a redemption price of 103.469% beginning June 1, 2016 and thereafter at prices declining annually to 100% on or after June 1, 2019, in each case plus accrued and unpaid interest to the date of redemption. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 4.625% senior notes at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase. We may also, from time to time, seek to retire the 4.625% senior notes through cash repurchases of the 4.625% senior notes and/or exchanges of the 4.625% senior notes for equity securities, 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. (6) Our obligations under the 4.625% 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. The 4.625% senior notes and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ 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 guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 4.625% senior notes. The indenture governing the 4.625% senior notes contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of September 30, 2017, we were in compliance with all of the covenants in the indenture governing the 4.625% 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 under our revolving credit facility and tranche A term loans, and to pay related fees and expenses. We intend to use the remaining net proceeds for general corporate purposes, which could include, among other things, repayment of other long term debt or possible acquisitions. Interest on the 5.25% senior notes is payable on April 1 and October 1 of each year, commencing October 1, 2017. The 5.25% senior notes will mature on April 1, 2025, unless earlier retired or redeemed. On or after April 1, 2020, we may redeem some or all of the 5.25% senior notes at a redemption price of 103.9375% beginning April 1, 2020 and thereafter at prices declining annually to 100% on or after April 1, 2023, in each case plus accrued and unpaid interest to the date of redemption. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 5.25% senior notes at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase. We may also, from time to time, seek to retire the 5.25% senior notes through cash repurchases of the 5.25% senior notes and/or exchanges of the 5.25% senior notes for equity securities, 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. Our obligations under 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. The 5.25% senior notes and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ 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 guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. 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. The indenture governing the 5.25% senior notes contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. (6) Subsidiary Guarantees. We have no assets or operations independent of our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fully and unconditionally guarantee our long-term debt. There are no significant restrictions on our ability and the ability of our subsidiaries to obtain funds from our respective subsidiaries by dividend or loan. See Note 15, “Guarantor and Non-Guarantor Financial Information.” Accrued Interest . At September 30, 2017 and December 31, 2016, accrued interest of $23.9 million and $5.0 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets. Deferred Debt Financing Costs . During the first three quarters of 2017, we capitalized $7.4 million of debt financing costs relating to our issuance of the 5.25% senior notes and $1.2 million of debt financing costs relating to the refinancing of our tranche B term loans. Loss on Extinguishment of Debt . During the second quarter of 2017, the repayment of all outstanding borrowings under the tranche A term loans resulted in a loss on extinguishment of debt, which includes the write-off of deferred debt financing costs of $0.9 million and the write-off of unamortized discount of $0.2 million. During the first quarter of 2017, we incurred a loss on extinguishment of debt in connection with the refinancing of our tranche B term loans, which includes the write-off of deferred debt financing costs and the write-off of unamortized discount of less than $0.1 million. During the first quarter of 2016, we incurred a loss on extinguishment of debt in connection with the repayment of $40.1 million aggregate principal amount of our tranche A term loans and $109.9 million aggregate principal amount of our tranche B term loans. The loss on extinguishment includes the write-off of deferred debt financing costs of $2.2 million and the write-off of unamortized discount of $0.6 million. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | (7) The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under generally accepted accounting principles, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value. Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature. The three levels are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived 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. (7) The carrying values and fair values of our revolving credit loans, term loans and senior notes as of September 30, 2017 and December 31, 2016 are as follows (in thousands): 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) 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) 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 of the tranche B term loans are net of discount. At September 30, 2017 and December 31, 2016, the face amounts of the tranche B term loans were $640.1 million. (4) Fair values are estimated based on quoted market prices. There was no Level 3 activity during the third quarter or first three quarters of 2017 or 2016. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss. | |
Accumulated Other Comprehensive Loss | (8) The reclassifications from accumulated other comprehensive loss (AOCL) for the third quarter and first three quarters of 2017 and 2016 are as follows (in thousands): 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) These items are included in the computation of net periodic pension cost. See Note 9, “Pension Benefits” for additional information. (8) Changes in AOCL for the first three quarters of 2017 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Beginning balance $ (7,200) $ (12,164) $ (19,364) Other comprehensive income before reclassifications — 8,350 8,350 Amounts reclassified from AOCL 222 — 222 Net current period other comprehensive income 222 8,350 8,572 Ending balance $ (6,978) $ (3,814) $ (10,792) |
Pension Benefits
Pension Benefits | 9 Months Ended |
Sep. 30, 2017 | |
Pension Benefits | |
Pension Benefits | (9) Company Sponsored Defined Benefit Pension Plans . Net periodic pension cost for company sponsored defined benefit pension plans for the third quarter and first three quarters of 2017 and 2016 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 $ $ 4,538 $ Interest cost on projected benefit obligation 1,284 3,714 Expected return on plan assets (1,771) (5,271) Amortization of unrecognized prior service cost 9 27 Amortization of unrecognized loss 185 95 331 359 Net periodic pension cost $ 1,505 $ 441 $ 3,339 $ 1,665 During the first three quarters of 2017, we made $8.5 million of defined benefit pension plan contributions. We do not plan to make additional contributions during the remainder of fiscal 2017. Multi-Employer Defined Benefit Pension Plan . We also contribute 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 with corresponding contribution rates that are collectively bargained between participating employers and their affiliated BCTGM local unions. We were notified that for the plan year beginning January 1, 2012, the plan was in critical status and classified in the Red Zone. As of the date of the accompanying unaudited consolidated interim financial statements, the plan remains in critical status. The law requires that all contributing employers pay to the plan a surcharge to help correct the plan’s financial situation. The amount 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 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 the plan are expected to increase by at least 5.0% per year. B&G Foods made contributions to the plan of $0.7 million in the first three quarters of 2017 and expects to pay surcharges of less than $0.1 million in fiscal 2017 assuming consistent hours are worked. B&G Foods contributed $0.8 million in fiscal 2016 and paid less than $0.1 million in surcharges. These contributions represented less than five percent of total contributions made to the plan. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | (10) Operating Leases . As of September 30, 2017, future minimum 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 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 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 quarters of 2017 or 2016 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. As of September 30, 2017, approximately 1,550 of our 2,548 employees, or 60.8%, were covered by collective bargaining agreements. None of our collective bargaining agreements is scheduled to expire within one year. Severance and Change of Control Agreements. We have employment agreements with each of our executive officers except for our interim chief financial officer. 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, accelerated vesting under compensation plans and, in certain cases, potential gross up payments for excise tax liability. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings per Share | |
Earnings per Share | (11) 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 quarter of 2017 there were 349,015 and for the third quarter of 2016 there were 22,692 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 |
Business and Credit Concentrati
Business and Credit Concentrations and Geographic Information | 9 Months Ended |
Sep. 30, 2017 | |
Business and Credit Concentrations and Geographic Information | |
Business and Credit Concentrations and Geographic Information | (12) 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% and 55.3% of consolidated net sales for the first three quarters of 2017 and 2016, respectively. Our top ten customers accounted for approximately 47.9% 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% of our consolidated net sales for the first three quarters of 2017 and 2016, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first three quarters of 2017 or 2016. Other than Wal-Mart, which accounted for 23.6% and 21.2% of our consolidated trade accounts receivables as of September 30, 2017 and December 31, 2016, respectively, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables. As of September 30, 2017, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivable with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Wal-Mart. During the first three quarters of 2017 and 2016, our sales to customers in foreign countries represented approximately 6.4% and 8.4%, respectively, of net sales. Our foreign sales are primarily to customers in Canada. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Payments | |
Share-Based Payments | (13) 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. (13) The following table details our stock option activity for the first three quarters of fiscal 2017 (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 Granted 159,385 $ 41.31 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 The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing certain 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 based on the “simplified method” in accordance with accounting guidance. We utilized 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. The risk-free interest rate for the expected term of the option 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 the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments) during the third quarter and first three quarters of 2017 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 $ $ 689 $ Compensation expense included in selling, general and administrative expenses 865 3,595 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. (13) The following table details the activity in our non-vested performance share LTIAs for the first three quarters of 2017: 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) 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% of the target number of performance shares). (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. The following table details the number of shares of common stock issued by our company during the first three quarters of 2017 and 2016 upon the vesting of performance share LTIAs, the exercise of stock options and other share based payments (dollars 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 .” |
Net Sales by Brand
Net Sales by Brand | 9 Months Ended |
Sep. 30, 2017 | |
Net Sales by Brand | |
Net Sales by Brand | (14) The following table sets forth net sales by brand (in thousands): 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) Table includes net sales for each of our brands whose first three quarters of 2017 or fiscal 2016 net sales were equal to or exceeded 2% of our total first three quarters of 2017 or fiscal 2016 net sales and for “all other brands” in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand. (2) We acquired the Tone’s and Weber brands on November 21, 2016 as part of the spices & seasonings acquisition. (3) We completed the Victoria acquisition on December 2, 2016. (4) Net sales for “all other brands” for the third quarter and first three quarters of 2017 has been impacted by the acquisition of the Spice Islands, Durkee and certain other brands acquired as part of the spices & seasonings acquisition, which was completed on November 21, 2016. |
Guarantor and Non-Guarantor Fin
Guarantor and Non-Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Guarantor and Non-Guarantor Financial Information | |
Guarantor and Non-Guarantor Financial Information | (15) 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. 2. 3. 4. (15) The information includes elimination entries necessary to consolidate 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 each of the guarantor subsidiaries and non-guarantor subsidiaries are not presented because management believes such financial statements would not be meaningful to investors. 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 (15) 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 (15) 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 (15) 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 (15) 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 (15) 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 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Event. | |
Subsequent Event | (16) 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. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Fiscal Year | Fiscal Year Typically, our fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to December 31 in the case of our fiscal year and fourth fiscal quarter, and on the Saturday closest to the end of the corresponding calendar quarter in the case of our fiscal quarters. As a result, a 53 rd week is added to our fiscal year every five or six years. In a 53-week fiscal year our fourth fiscal quarter contains 14 weeks. Our fiscal year ending December 30, 2017 (fiscal 2017) and our fiscal year ended December 31, 2016 (fiscal 2016) each contain 52 weeks. Each quarter of fiscal 2017 and 2016 contains 13 weeks. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended September 30, 2017 (third quarter and first three quarters of 2017) and October 1, 2016 (third quarter and first three quarters of 2016) have been prepared by our company in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of September 30, 2017, and the results of our operations, comprehensive income and cash flows for the third quarter and first three quarters of 2017 and 2016. Our results of operations for the third quarter and first three quarters of 2017 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2016 filed with the SEC on March 1, 2017. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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 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 trademark intangibles. Actual results could differ significantly from these estimates and assumptions. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions. |
Newly Adopted and Recently Issued Accounting Standards | Newly Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires that excess tax benefits (which represent the excess of actual tax benefits received at the date of vesting or settlement over the benefits recognized over the vesting period or upon issuance of share-based payments) and tax deficiencies (which represent the amount by which actual tax benefits received at the date of vesting or settlement is lower than the benefits recognized over the vesting period or upon issuance of share-based payments) be recorded in the income statement as a reduction of income taxes when the awards vest or are settled. The new guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than as a financing activity. We adopted the provisions of this ASU at the beginning of fiscal 2017 and applied the required changes in accounting principle on a prospective basis. As a result of this adoption, 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. We elected to adopt the cash flow presentation of the excess tax benefits prospectively, commencing with our statement of cash flows for the first quarter of 2017, where these benefits are classified along with other income tax cash flows as an operating activity. We excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of our diluted earnings per share for the first three quarters of 2017. In November 2015, the FASB issued a new ASU that requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The ASU is effective beginning with the first quarter of fiscal 2017. We adopted the provisions of this ASU at the beginning of fiscal 2017 and applied the required changes in accounting principle on a retrospective basis. Accordingly, in our consolidated balance sheet as of December 31, 2016, $7.9 million of deferred tax assets were reclassified from current assets to noncurrent assets. The update impacted presentation and disclosure only, and therefore, the adoption of this ASU did not have any impact on our results of operations or liquidity. In July 2015, the FASB issued a new ASU that simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. We adopted the provisions of this ASU at the beginning of fiscal 2017. The adoption of this ASU did not have any impact on our consolidated financial position, results of operations or liquidity. (2) Recently Issued Accounting Standards In March 2017, the FASB issued a new ASU that improves the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance revises how employers that sponsor defined benefit pension and other postretirement plans present the net periodic benefit cost in their income statement and requires that the service cost component of net periodic benefit cost be presented in the same income statement line items as other employee compensation costs from services rendered during the period. The update is effective beginning with the first quarter of fiscal 2019. We have not yet determined the impact from adoption of the ASU on our financial statements. In January 2017, the FASB issued a new ASU which clarifies the definition of a business. The new guidance changes the definition of a business to assist entities in evaluating when a set of transferred assets and activities constitutes a business. The update is effective beginning with the first quarter of 2018. We have not yet determined the impact from adoption of the ASU on our financial statements. In January 2017, the FASB issued a new ASU that simplifies the subsequent measurement of goodwill, including the elimination of the second step from the goodwill impairment test. The update is effective for annual or any interim impairment tests in fiscal 2020 or later. The adoption of this ASU will not have any impact on our consolidated financial position, results of operations or liquidity. In February 2016, the FASB issued a new ASU that requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current guidance. The update is effective beginning with the first quarter of fiscal 2019. We have not yet determined the impact from adoption of the ASU on our financial statements. In May 2014, the FASB issued guidance on revenue recognition, with final guidance issued in 2016. The guidance provides for a five-step model to determine the revenue to be recognized from the transfer of goods or services to customers. The guidance also requires improved disclosures to help users of the financial statements better understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. It also provides clarification for principal versus agent considerations, identifying performance obligations and the accounting of intellectual property licenses. In addition, the FASB introduced practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes. The two permitted transition methods under the guidance are the full retrospective approach or a cumulative effect adjustment to the opening retained earnings in the year of adoption (cumulative effect approach). We have not yet made a determination as to which transition method we will be using. We plan to adopt the new guidance when it becomes effective on December 31, 2017, the first day of our fiscal 2018. We have established a project plan and completed an initial review of our revenue contracts to assess the impact of the guidance on our revenue contracts by reviewing our current accounting policies and practices to identify potential differences that would result from applying the new requirements to our revenue contracts. We are also in the process of evaluating the impact, if any, on changes to our controls to support recognition and disclosures under the new guidance. Based on the foregoing, we do not expect the adoption of the new standard to have a material effect on our consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Victoria Acquisition | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | 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 |
Spices and seasonings Acquisition | |
Business Acquisition | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | 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 ________________________________________ (1) In connection with the spices & seasonings acquisition, we agreed to establish a defined benefit plan for certain employees transferred to B&G Foods and certain former employees of the acquired spices & seasonings business. We also agreed to assume certain liabilities relating to the underfunded status of the former plan that such employees participated in prior to the acquisition. At September 30, 2017 and December 31, 2016, we recognized $13.7 million and $17.5 million, respectively, in “other liabilities” in the accompanying consolidated balance sheet to reflect our obligations with respect to the underfunded status of the defined benefit plan assets and liabilities transferred to us. |
Schedule of unaudited pro forma summary of operations | 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 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Summary of Inventories | Inventories consist of the following, as of the dates indicated (in thousands): September 30, 2017 December 31, 2016 Raw materials and packaging $ 73,508 $ 60,532 Work-in-process 124,676 98,664 Finished goods 289,206 197,394 Total $ $ |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill and other intangible assets | The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands): 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 Trademarks $ 6,800 $ 2,002 $ 4,798 $ 6,800 $ 1,662 $ 5,138 Customer relationships 330,290 93,361 236,929 330,290 80,847 249,443 Seed technology (1) — — — 2,000 900 1,100 $ 337,090 $ 95,363 $ 241,727 $ 339,090 $ 83,409 $ 255,681 Unamortizable Intangible Assets Goodwill $ 615,770 $ 614,278 Trademarks $ 1,373,801 $ 1,373,801 ________________________________________ (1) During the first quarter of 2017, we sold to a third-party co-packer our Le Sueur, Minnesota research center, including the seed technology assets and property, plant and equipment, that we acquired in 2015 as part of the Green Giant acquisition, resulting in a $1.6 million loss on sale of assets. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt | |
Schedule of Long-term debt | Long-term debt consists of the following, as of the dates indicated (in thousands): September 30, 2017 December 31, 2016 Revolving credit loans $ 40,000 $ 176,000 Tranche A term loans due 2019 — 233,640 Tranche B term loans due 2022 640,110 640,110 4.625% senior notes due 2021 700,000 700,000 5.25% senior notes due 2025 500,000 — Unamortized deferred financing costs (24,790) (20,986) Unamortized discount (2,388) (2,981) Total long-term debt, net of unamortized deferred financing costs and discount 1,852,932 1,725,783 Current portion of long-term debt — (10,515) Long-term debt, net of unamortized deferred financing costs and discount, and excluding current portion $ 1,852,932 $ 1,715,268 |
Schedule of aggregate contractual maturities of long-term debt | As of September 30, 2017, the aggregate contractual maturities of long-term debt are as follows (in thousands): Years ending December: 2017 $ — 2018 — 2019 40,000 2020 — 2021 700,000 Thereafter 1,140,110 Total $ 1,880,110 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Summary of carrying values and fair values of our revolving credit loans, term loans and senior notes | The carrying values and fair values of our revolving credit loans, term loans and senior notes as of September 30, 2017 and December 31, 2016 are as follows (in thousands): 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) 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) 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 of the tranche B term loans are net of discount. At September 30, 2017 and December 31, 2016, the face amounts of the tranche B term loans were $640.1 million. (4) Fair values are estimated based on quoted market prices. |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss. | |
Schedule of reclassification from accumulated other comprehensive loss | The reclassifications from accumulated other comprehensive loss (AOCL) for the third quarter and first three quarters of 2017 and 2016 are as follows (in thousands): 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) These items are included in the computation of net periodic pension cost. See Note 9, “Pension Benefits” for additional information. |
Schedule of changes in accumulated other comprehensive loss | Changes in AOCL for the first three quarters of 2017 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Beginning balance $ (7,200) $ (12,164) $ (19,364) Other comprehensive income before reclassifications — 8,350 8,350 Amounts reclassified from AOCL 222 — 222 Net current period other comprehensive income 222 8,350 8,572 Ending balance $ (6,978) $ (3,814) $ (10,792) |
Pension Benefits (Tables)
Pension Benefits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Pension Benefits | |
Schedule of components of net periodic pension costs | Net periodic pension cost for company sponsored defined benefit pension plans for the third quarter and first three quarters of 2017 and 2016 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 $ $ 4,538 $ Interest cost on projected benefit obligation 1,284 3,714 Expected return on plan assets (1,771) (5,271) Amortization of unrecognized prior service cost 9 27 Amortization of unrecognized loss 185 95 331 359 Net periodic pension cost $ 1,505 $ 441 $ 3,339 $ 1,665 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Summary of future minimum lease payments under non-cancelable operating leases | As of September 30, 2017, future minimum 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 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 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings per Share | |
Schedule of calculations related to basic and diluted earning 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 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Payments | |
Schedule of stock option activity | The following table details our stock option activity for the first three quarters of fiscal 2017 (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 Granted 159,385 $ 41.31 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 |
Schedule of stock options, valuation assumption | 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% |
Schedule of compensation expense recognized for share-based payments | The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments) during the third quarter and first three quarters of 2017 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 $ $ 689 $ Compensation expense included in selling, general and administrative expenses 865 3,595 Total compensation expense for share-based payments $ 1,082 $ 1,341 $ 4,284 $ 4,457 |
Schedule of non-vested performance share LTIAs | 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) 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% of the target number of performance shares). (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. |
Schedule of number of shares of common stock issued by entity upon the vesting of performance share long-term incentive awards other share based compensation | The following table details the number of shares of common stock issued by our company during the first three quarters of 2017 and 2016 upon the vesting of performance share LTIAs, the exercise of stock options and other share based payments (dollars 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 .” |
Net Sales by Brand (Tables)
Net Sales by Brand (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Sales by Brand | |
Schedule of net sales by brand | The following table sets forth net sales by brand (in thousands): 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) Table includes net sales for each of our brands whose first three quarters of 2017 or fiscal 2016 net sales were equal to or exceeded 2% of our total first three quarters of 2017 or fiscal 2016 net sales and for “all other brands” in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand. (2) We acquired the Tone’s and Weber brands on November 21, 2016 as part of the spices & seasonings acquisition. (3) We completed the Victoria acquisition on December 2, 2016. (4) Net sales for “all other brands” for the third quarter and first three quarters of 2017 has been impacted by the acquisition of the Spice Islands, Durkee and certain other brands acquired as part of the spices & seasonings acquisition, which was completed on November 21, 2016. |
Guarantor and Non-Guarantor F35
Guarantor and Non-Guarantor Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Guarantor and Non-Guarantor Financial Information | |
Condensed Consolidating Balance Sheet | 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 (15) 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 |
Condensed Consolidating Statement of Operations and Comprehensive Income | 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 (15) 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 |
Condensed Consolidating Statement of Cash Flows | 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 (15) 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 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fiscal year | ||
Number of weeks in fiscal period | 364 days | |
Number of weeks in each fiscal quarter | 91 days | 91 days |
Minimum | ||
Fiscal year | ||
Number of years between 53 week fiscal years | 5 years | |
Maximum | ||
Fiscal year | ||
Number of weeks in fiscal period | 371 days | |
Number of weeks in fourth fiscal quarter | 98 days | |
Number of years between 53 week fiscal years | 6 years |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Newly Adopted Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Newly Adopted Accounting Standards | |||||
Income tax benefit | $ 19,772 | $ 19,181 | $ 50,938 | $ 57,568 | |
Deferred income taxes | 984 | 984 | $ 7,902 | ||
Other assets | 6,292 | 6,292 | 4,625 | ||
Long-term debt | $ 1,852,932 | 1,852,932 | 1,715,268 | ||
ASU 2016-09 | |||||
Newly Adopted Accounting Standards | |||||
Income tax benefit | $ (800) | ||||
ASU 2015-17 | |||||
Newly Adopted Accounting Standards | |||||
Deferred income taxes | 7,900 | ||||
Deferred income taxes | $ (7,900) |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 02, 2017 | Dec. 02, 2016 | Nov. 21, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 |
Business Acquisition | ||||||||
Accounts payable | $ 137,205 | $ 137,205 | $ 98,033 | |||||
Preliminary Allocation: | ||||||||
Goodwill | 615,770 | 615,770 | 614,278 | |||||
Unaudited Pro Forma Summary of Operations | ||||||||
Net sales | 408,364 | $ 318,247 | $ 1,194,372 | $ 977,601 | ||||
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 | ||||||
Customer Relationship and Amortizable Trademarks | Minimum | ||||||||
Business Acquisition | ||||||||
Estimated useful life | 10 years | |||||||
Customer Relationship and Amortizable Trademarks | Maximum | ||||||||
Business Acquisition | ||||||||
Estimated useful life | 20 years | |||||||
Victoria Acquisition | ||||||||
Purchase Price: | ||||||||
Cash paid | $ 71,972 | |||||||
Total | 71,972 | |||||||
Preliminary Allocation: | ||||||||
Goodwill | 12,745 | |||||||
Property, plant and equipment | 9,298 | |||||||
Inventory | 5,729 | |||||||
Long-term deferred income tax liabilities, net | (5,653) | |||||||
Other working capital | (2,047) | |||||||
Total | 71,972 | |||||||
Victoria Acquisition | Customer relationship | ||||||||
Preliminary Allocation: | ||||||||
Amortizable intangible assets | 6,400 | |||||||
Victoria Acquisition | Trademarks | ||||||||
Preliminary Allocation: | ||||||||
Trademarks - unamortizable intangible assets | $ 45,500 | |||||||
Spices and seasonings Acquisition | ||||||||
Purchase Price: | ||||||||
Cash paid | $ 366,932 | |||||||
Total | 366,932 | |||||||
Preliminary Allocation: | ||||||||
Goodwill | 120,108 | |||||||
Property, plant and equipment | 62,193 | |||||||
Inventory | 49,571 | |||||||
Other liabilities | (17,502) | |||||||
Other working capital | (1,888) | |||||||
Total | 366,932 | |||||||
Unaudited Pro Forma Summary of Operations | ||||||||
Net sales - actual | 70,400 | $ 200,900 | ||||||
Spices and seasonings Acquisition | Prepaid Expenses and Other Current Assets | ||||||||
Business Acquisition | ||||||||
Receivables related to an ongoing transition services agreement | 1,000 | 1,000 | ||||||
Spices and seasonings Acquisition | Accrued Expenses | ||||||||
Business Acquisition | ||||||||
Accounts payable | 12,600 | |||||||
Spices and seasonings Acquisition | Other liabilities | ||||||||
Business Acquisition | ||||||||
Other liabilities relating to underfunded status of defined benefit plan assets and liabilities transferred to us | $ 13,700 | $ 13,700 | $ 17,500 | |||||
Spices and seasonings Acquisition | Customer relationship | ||||||||
Preliminary Allocation: | ||||||||
Amortizable intangible assets | 89,250 | |||||||
Spices and seasonings Acquisition | Trademarks | ||||||||
Preliminary Allocation: | ||||||||
Trademarks - unamortizable intangible assets | $ 65,200 | |||||||
Back To Nature Foods Company, LLC | Subsequent event | ||||||||
Purchase Price: | ||||||||
Cash paid | $ 162,500 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Raw materials and packaging | $ 73,508 | $ 60,532 |
Work-in-process | 124,676 | 98,664 |
Finished goods | 289,206 | 197,394 |
Total | $ 487,390 | $ 356,590 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Apr. 01, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | ||||||
Amortization expense | $ 4,265 | $ 3,269 | $ 13,002 | $ 10,039 | ||
Amortizable Intangible Assets | ||||||
Gross Carrying Amount | 337,090 | 337,090 | $ 339,090 | |||
Accumulated Amortization | 95,363 | 95,363 | 83,409 | |||
Net Carrying Amount | 241,727 | 241,727 | 255,681 | |||
Unamortizable Intangible Assets | ||||||
Goodwill | 615,770 | 615,770 | 614,278 | |||
Loss on sale of assets | 1,608 | |||||
Future amortization expense | ||||||
Remainder of fiscal 2017 | 4,300 | 4,300 | ||||
2,018 | 17,100 | 17,100 | ||||
2,019 | 17,100 | 17,100 | ||||
2,020 | 17,100 | 17,100 | ||||
2,021 | 17,100 | 17,100 | ||||
2,022 | 17,100 | 17,100 | ||||
Acquisitions. | ||||||
Impairment of intangible assets | 5,405 | |||||
Write-off of certain raw material and finished goods inventory | $ 791 | |||||
Green Giant | ||||||
Unamortizable Intangible Assets | ||||||
Loss on sale of assets | $ 1,600 | |||||
Trademarks | ||||||
Unamortizable Intangible Assets | ||||||
Unamortizable intangible assets excluding goodwill | 1,373,801 | 1,373,801 | 1,373,801 | |||
Trademarks | ||||||
Amortizable Intangible Assets | ||||||
Gross Carrying Amount | 6,800 | 6,800 | 6,800 | |||
Accumulated Amortization | 2,002 | 2,002 | 1,662 | |||
Net Carrying Amount | 4,798 | 4,798 | 5,138 | |||
Customer relationship | ||||||
Amortizable Intangible Assets | ||||||
Gross Carrying Amount | 330,290 | 330,290 | 330,290 | |||
Accumulated Amortization | 93,361 | 93,361 | 80,847 | |||
Net Carrying Amount | $ 236,929 | $ 236,929 | 249,443 | |||
Seed technology | ||||||
Amortizable Intangible Assets | ||||||
Gross Carrying Amount | 2,000 | |||||
Accumulated Amortization | 900 | |||||
Net Carrying Amount | $ 1,100 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | Apr. 03, 2017USD ($) | Mar. 30, 2017 | Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Apr. 02, 2016USD ($) | Sep. 30, 2017USD ($)item | Oct. 01, 2016USD ($) | Dec. 31, 2016USD ($) | Jun. 04, 2013USD ($) |
Information related to long-term debt | |||||||||
Total | $ 1,880,110 | ||||||||
Unamortized deferred financing costs | (24,790) | $ (20,986) | |||||||
Unamortized discount | (2,388) | (2,981) | |||||||
Total long-term debt, net of unamortized discount | 1,852,932 | 1,725,783 | |||||||
Current portion of long-term debt | (10,515) | ||||||||
Long-term debt | 1,852,932 | 1,715,268 | |||||||
Aggregate contractual maturities of long-term debt | |||||||||
2,019 | 40,000 | ||||||||
2,021 | 700,000 | ||||||||
Thereafter | 1,140,110 | ||||||||
Long-term debt agreements | |||||||||
Proceeds from issuance of long-term debt | 500,000 | ||||||||
Information related to senior notes | |||||||||
Accrued interest | 23,900 | 5,000 | |||||||
Write-off of deferred debt financing costs | $ 2,200 | ||||||||
Write-off of unamortized discount | 600 | ||||||||
Repayments of debt | 233,640 | $ 150,000 | |||||||
Revolving credit loans | |||||||||
Information related to long-term debt | |||||||||
Total | 40,000 | 176,000 | |||||||
Long-term debt agreements | |||||||||
Outstanding letters of credit | 2,000 | ||||||||
Available borrowing capacity | $ 458,000 | ||||||||
Commitment fees (as a percent) | 0.50% | ||||||||
Interest rate at period end (as a percent) | 3.24% | ||||||||
Number of quarters consolidated leverage ratio to be maintained | item | 4 | ||||||||
Number of quarters consolidated interest coverage ratio to be maintained | item | 4 | ||||||||
Revolving credit loans | Minimum | |||||||||
Long-term debt agreements | |||||||||
Consolidated interest leverage ratio | 1.75 | ||||||||
Revolving credit loans | Maximum | |||||||||
Long-term debt agreements | |||||||||
Maximum permissible consolidated leverage ratio | 6.50 | ||||||||
Revolving credit loans | Base rate | Minimum | |||||||||
Information related to senior notes | |||||||||
Interest rate added to variable base rate (as a percent) | 0.50% | ||||||||
Revolving credit loans | Base rate | Maximum | |||||||||
Information related to senior notes | |||||||||
Interest rate added to variable base rate (as a percent) | 1.00% | ||||||||
Revolving credit loans | LIBOR | Minimum | |||||||||
Information related to senior notes | |||||||||
Interest rate added to variable base rate (as a percent) | 1.50% | ||||||||
Revolving credit loans | LIBOR | Maximum | |||||||||
Information related to senior notes | |||||||||
Interest rate added to variable base rate (as a percent) | 2.00% | ||||||||
Letters of credit facility | |||||||||
Long-term debt agreements | |||||||||
Maximum capacity available | $ 50,000 | ||||||||
Fronting fee (as a percent) | 0.25% | ||||||||
Incremental term loan | Maximum | |||||||||
Long-term debt agreements | |||||||||
Senior secured leverage ratio after utilization of incremental facility | 4 | ||||||||
4.625% Senior notes due 2021 | |||||||||
Information related to long-term debt | |||||||||
Total | $ 700,000 | $ 700,000 | |||||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | ||||||
Long-term debt agreements | |||||||||
Principal amount of notes | $ 700,000 | ||||||||
Information related to senior notes | |||||||||
Debt issuance price (as a percent) | 100.00% | ||||||||
4.625% Senior notes due 2021 | Redemption period beginning June 1, 2016 | |||||||||
Information related to senior notes | |||||||||
Redemption price (as a percent) | 103.469% | ||||||||
4.625% Senior notes due 2021 | Redemption period on or after June 1, 2019 | |||||||||
Information related to senior notes | |||||||||
Redemption price (as a percent) | 100.00% | ||||||||
5.25% Senior Notes due 2025 | |||||||||
Information related to long-term debt | |||||||||
Total | $ 500,000 | $ 500,000 | |||||||
Interest rate (as a percent) | 5.25% | 5.25% | |||||||
Long-term debt agreements | |||||||||
Principal amount of notes | $ 500,000 | ||||||||
Information related to senior notes | |||||||||
Redemption price (as a percent) | 100.00% | ||||||||
Deferred debt financing costs capitalized during the period | $ 7,400 | ||||||||
5.25% Senior Notes due 2025 | Redemption period beginning April 1, 2020 | |||||||||
Information related to senior notes | |||||||||
Redemption price (as a percent) | 103.9375% | ||||||||
5.25% Senior Notes due 2025 | Redemption period on or after April 1, 2023 | |||||||||
Information related to senior notes | |||||||||
Redemption price (as a percent) | 100.00% | ||||||||
Tranche A Term Loans | |||||||||
Information related to senior notes | |||||||||
Write-off of deferred debt financing costs | $ 900 | ||||||||
Write-off of unamortized discount | $ 200 | ||||||||
Repayments of debt | 40,100 | ||||||||
Tranche A term loans due 2019 | |||||||||
Information related to long-term debt | |||||||||
Total | $ 233,640 | ||||||||
Tranche B Term Loans due 2022 | |||||||||
Information related to long-term debt | |||||||||
Total | $ 640,110 | $ 640,110 | |||||||
Long-term debt agreements | |||||||||
Interest rate at period end (as a percent) | 3.49% | ||||||||
Information related to senior notes | |||||||||
Deferred financing costs capitalized | $ 1,200 | ||||||||
Repayments of debt | $ 109,900 | ||||||||
Write-off of deferred debt financing costs and unamortized discount | $ 100 | ||||||||
Tranche B Term Loans due 2022 | Base rate | |||||||||
Information related to senior notes | |||||||||
Interest rate added to variable base rate (as a percent) | 1.25% | ||||||||
Tranche B Term Loans due 2022 | LIBOR | |||||||||
Information related to senior notes | |||||||||
Percentage reduction in spread from refinancing | 0.75% | ||||||||
Interest rate added to variable base rate (as a percent) | 2.25% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Apr. 03, 2017 | Dec. 31, 2016 | Jun. 04, 2013 | |
Changes in level 3 | |||||||
Level 3 activity | $ 0 | $ 0 | $ 0 | $ 0 | |||
4.625% Senior notes due 2021 | |||||||
Financial assets and liabilities at fair value | |||||||
Face amount of senior notes | $ 700,000 | ||||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | 4.625% | |||
5.25% Senior Notes due 2025 | |||||||
Financial assets and liabilities at fair value | |||||||
Face amount of senior notes | $ 500,000 | ||||||
Interest rate (as a percent) | 5.25% | 5.25% | 5.25% | ||||
Carrying Value | Revolving credit loans | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | $ 40,000 | $ 40,000 | $ 176,000 | ||||
Carrying Value | Tranche A term loans due 2019 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 233,378 | ||||||
Carrying Value | Tranche B term loan due 2022 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 637,722 | 637,722 | 637,391 | ||||
Carrying Value | 4.625% Senior notes due 2021 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 700,000 | 700,000 | 700,000 | ||||
Carrying Value | 5.25% Senior Notes due 2025 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 500,000 | 500,000 | |||||
Fair value measured on recurring basis | Tranche A term loans due 2019 | |||||||
Financial assets and liabilities at fair value | |||||||
Face amount of senior notes | 233,600 | ||||||
Fair value measured on recurring basis | Tranche B term loan due 2022 | |||||||
Financial assets and liabilities at fair value | |||||||
Face amount of senior notes | 640,100 | 640,100 | |||||
Fair value measured on recurring basis | Fair Value | Revolving credit loans | Level 2 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 40,000 | 40,000 | 176,000 | ||||
Fair value measured on recurring basis | Fair Value | Tranche A term loans due 2019 | Level 2 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 232,795 | ||||||
Fair value measured on recurring basis | Fair Value | Tranche B term loan due 2022 | Level 2 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 641,707 | 641,707 | 645,358 | ||||
Fair value measured on recurring basis | Fair Value | 4.625% Senior notes due 2021 | Level 2 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | 713,125 | 713,125 | $ 714,000 | ||||
Fair value measured on recurring basis | Fair Value | 5.25% Senior Notes due 2025 | Level 2 | |||||||
Financial assets and liabilities at fair value | |||||||
Fair values and carrying amount of revolving credit loans, term loan and senior notes | $ 509,375 | $ 509,375 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Changes in accumulated other comprehensive loss | ||||
Beginning balance | $ 785,657 | |||
Net current period other comprehensive income | $ 833 | $ (3,315) | 8,572 | $ (3,447) |
Ending balance | 791,389 | 791,389 | ||
Amount Reclassified from AOCL | ||||
Reclassification from AOCL | ||||
Total before tax | 194 | 106 | 358 | 392 |
Income tax expense | (74) | (40) | (136) | (148) |
Net of tax | 120 | 66 | 222 | 244 |
Defined Benefit Pension Plan Items | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning balance | (7,200) | |||
Amounts reclassified from AOCL | 222 | |||
Net current period other comprehensive income | 222 | |||
Ending balance | (6,978) | (6,978) | ||
Amortization of unrecognized prior service cost | Amount Reclassified from AOCL | ||||
Reclassification from AOCL | ||||
Total before tax | 9 | 11 | 27 | 33 |
Amortization of unrecognized loss | Amount Reclassified from AOCL | ||||
Reclassification from AOCL | ||||
Total before tax | 185 | $ 95 | 331 | $ 359 |
Foreign Currency Translation Adjustments | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning balance | (12,164) | |||
Other comprehensive income before reclassifications | 8,350 | |||
Net current period other comprehensive income | 8,350 | |||
Ending balance | (3,814) | (3,814) | ||
Accumulated Other Comprehensive Loss | ||||
Changes in accumulated other comprehensive loss | ||||
Beginning balance | (19,364) | |||
Other comprehensive income before reclassifications | 8,350 | |||
Amounts reclassified from AOCL | 222 | |||
Net current period other comprehensive income | 8,572 | |||
Ending balance | $ (10,792) | $ (10,792) |
Pension Benefits - Net Periodic
Pension Benefits - Net Periodic Pension Cost, AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Components of net periodic pension cost | ||||
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 |
Pension Benefits - Expected Cas
Pension Benefits - Expected Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 04, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | |
Pension Benefits | |||
Defined benefit pension plan contribution | $ 8.5 | ||
Multi-Employer Defined Benefit Pension Plan | |||
Maximum contribution to multi-employer plan (as a percent) | 5.00% | ||
Contribution to the multi-employer plan | 0.7 | $ 0.8 | |
Maximum | |||
Multi-Employer Defined Benefit Pension Plan | |||
Surcharges expected to be paid | $ 0.1 | ||
Surcharges paid | $ 0.1 | ||
Plan | Minimum | |||
Multi-Employer Defined Benefit Pension Plan | |||
Plan expected to increase (as a percent) | 5.00% |
Commitments and Contingencies46
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Future minimum lease payments under non-cancelable operating leases | |
2,017 | $ 2,643 |
2,018 | 9,645 |
2,019 | 8,632 |
2,020 | 8,163 |
2,021 | 6,106 |
Thereafter | 8,060 |
Total | $ 43,249 |
Commitments and Contingencies -
Commitments and Contingencies - Collective Bargaining (Details) | 9 Months Ended |
Sep. 30, 2017itemagreement | |
Information related to Collective Bargaining Agreements | |
Number of employees | 2,548 |
Number of collective bargaining agreements expiring within one year | agreement | 0 |
Collective bargaining agreements expiration period | 1 year |
Collective bargaining agreement | |
Information related to Collective Bargaining Agreements | |
Number of employees | 1,550 |
Percentage of total employees covered under collective bargaining agreements | 60.80% |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Earnings per Share | ||||
Antidilutive securities excluded from computation of loss per share | 349,015 | 22,692 | ||
Weighted average shares outstanding: | ||||
Basic (in shares) | 66,496,333 | 64,757,962 | 66,484,105 | 62,134,846 |
Net effect of potentially dilutive share-based compensation awards (in shares) | 147,310 | 280,084 | 228,979 | 202,912 |
Diluted (in shares) | 66,643,643 | 65,038,046 | 66,713,084 | 62,337,758 |
Business and Credit Concentra49
Business and Credit Concentrations and Geographic Information (Details) - item | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Business and Credit Concentrations | |||
Number of top customers | 10 | ||
Net sales | Consolidated net sales | |||
Business and Credit Concentrations | |||
Maximum percentage of net sales to foreign countries | 6.40% | 8.40% | |
Net sales | Consolidated net sales | Other than Wal-Mart | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 24.70% | 24.30% | |
Net sales | Consolidated net sales | Top ten customers | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 53.80% | 55.30% | |
Accounts receivable | Trade accounts receivables | Other than Wal-Mart | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 23.60% | 21.20% | |
Accounts receivable | Trade accounts receivables | Top ten customers | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 47.90% | 53.40% |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Options | |||||
Exercised (in shares) | (1,300) | ||||
Assumptions: | |||||
Compensation expense recognized for share-based payments | $ 1,082 | $ 1,341 | $ 4,284 | $ 4,457 | |
Maximum | |||||
Assumptions: | |||||
Dividend yield (as a percent) | 5.22% | ||||
Cost of Goods Sold | |||||
Assumptions: | |||||
Compensation expense recognized for share-based payments | 217 | 273 | $ 689 | 785 | |
Selling, General and Administrative Expenses | |||||
Assumptions: | |||||
Compensation expense recognized for share-based payments | $ 865 | $ 1,068 | $ 3,595 | $ 3,672 | |
Stock Option | |||||
Options | |||||
Outstanding at beginning of fiscal period (in shares) | 714,580 | ||||
Granted (in shares) | 159,385 | ||||
Exercised (in shares) | (1,300) | ||||
Forfeited (in shares) | (35,758) | ||||
Outstanding at end of quarter (in shares) | 836,907 | 836,907 | 714,580 | ||
Exercisable at end of quarter (in shares) | 24,396 | 24,396 | |||
Weighted Average Exercise Price | |||||
Outstanding at beginning of fiscal period (in dollar per share) | $ 31.65 | ||||
Granted (in dollars per share) | 41.31 | ||||
Exercised (in dollars per share) | 27.77 | ||||
Forfeited (in dollars per share) | 28.31 | ||||
Outstanding at end of quarter (in dollar per share) | $ 33.42 | $ 33.42 | $ 31.65 | ||
Additional disclosures | |||||
Weighted Average Contractual Life Remaining (Years) | 7 years 10 months 13 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Stock Option Activity [Abstract] | |||||
Outstanding at end of quarter, Aggregate Intrinsic Value | $ 4,227 | $ 4,227 | |||
Exercisable at end of quarter (in shares) | 24,396 | 24,396 | |||
Exercisable at end of quarter ( in dollars per share) | $ 42.62 | $ 42.62 | |||
Exercisable, Weighted Average Contractual Life Remaining (Years) | 8 years 7 months 10 days | ||||
Exercisable, Aggregate Intrinsic Value | $ 12 | $ 12 | |||
Assumptions: | |||||
Weighted average grant date fair value (in dollars per share) | $ 7.29 | $ 5.26 | |||
Expected volatility (as a percent) | 27.70% | ||||
Share based compensation expense related to long-term incentive plans | |||||
Unrecognized compensation expense | 1,400 | $ 1,400 | |||
Period over which unrecognized compensation expense is expected to be recognized | 2 years 6 months | ||||
Stock Option | Minimum | |||||
Assumptions: | |||||
Expected volatility (as a percent) | 27.50% | ||||
Expected term | 5 years 6 months | 5 years 6 months | |||
Risk-free interest rate (as a percent) | 1.80% | 1.50% | |||
Dividend yield (as a percent) | 4.50% | 3.90% | |||
Stock Option | Maximum | |||||
Assumptions: | |||||
Expected volatility (as a percent) | 29.20% | ||||
Expected term | 6 years 6 months | 6 years 6 months | |||
Risk-free interest rate (as a percent) | 2.40% | 1.70% | |||
Dividend yield (as a percent) | 4.90% | ||||
Performance shares | |||||
Share based compensation expense related to long-term incentive plans | |||||
Unrecognized compensation expense | $ 2,200 | $ 2,200 | |||
Period over which unrecognized compensation expense is expected to be recognized | 2 years 3 months |
Share-Based Payments - Weighted
Share-Based Payments - Weighted-Average Grant Date Fair Value (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Other disclosure | ||
Total shares of common stock issued | 90,019 | 79,570 |
Shares of common stock issued upon the exercise of stock options | 1,300 | |
Excess tax (deficiency) benefit | $ 820 | $ 343 |
Performance shares | ||
Number of Shares | ||
Balance at the beginning of the period (in shares) | 436,554 | |
Granted (in shares) | 132,000 | |
Vested (in shares) | (110,528) | (101,094) |
Forfeited (in shares) | (19,456) | |
Balance at the end of the period (in shares) | 438,570 | |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per share) | $ 26.81 | |
Granted (in dollars per share) | 36.15 | |
Vested (in dollars per share) | 27.50 | |
Forfeited (in dollars per share) | 28.08 | |
Balance at the end of the period (in dollars per share) | $ 29.38 | |
Percentage of target number of shares that may be earned scenario 1, maximum | 200.00% | |
Other disclosure | ||
Number of performance shares vested | 110,528 | 101,094 |
Shares withheld to fund statutory minimum tax withholding | 42,368 | 37,596 |
Total shares of common stock issued | 68,160 | 63,498 |
Non-Employee Directors | ||
Other disclosure | ||
Total shares of common stock issued | 20,559 | 16,072 |
Share-Based Payments, ASU 2016-
Share-Based Payments, ASU 2016-09 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Income tax benefit | $ 19,772 | $ 19,181 | $ 50,938 | $ 57,568 |
ASU 2016-09 | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Income tax benefit | $ (800) |
Net Sales by Brand (Details)
Net Sales by Brand (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Brand | |||||
Net sales | $ 408,364 | $ 318,247 | $ 1,194,372 | $ 977,601 | |
Specific brand sale to total sale (as a percent) | 2.00% | 2.00% | |||
Green Giant | |||||
Brand | |||||
Net sales | 121,118 | 113,780 | $ 351,771 | 351,157 | |
Ortega | |||||
Brand | |||||
Net sales | 33,461 | 35,090 | 105,429 | 106,709 | |
Tone's | |||||
Brand | |||||
Net sales | 30,484 | 79,127 | |||
Pirate Brands | |||||
Brand | |||||
Net sales | 27,159 | 22,447 | 70,099 | 66,941 | |
Maple Grove Farms of Vermont | |||||
Brand | |||||
Net sales | 15,776 | 16,667 | 50,887 | 53,990 | |
Mrs. Dash | |||||
Brand | |||||
Net sales | 14,791 | 14,655 | 46,532 | 47,247 | |
Cream of Wheat | |||||
Brand | |||||
Net sales | 14,732 | 14,126 | 43,789 | 43,608 | |
Victoria | |||||
Brand | |||||
Net sales | 9,708 | 30,073 | |||
Weber | |||||
Brand | |||||
Net sales | 7,342 | 29,888 | |||
Bear Creek Country Kitchens | |||||
Brand | |||||
Net sales | 12,907 | 13,633 | 29,584 | 32,611 | |
Las Palmas | |||||
Brand | |||||
Net sales | 8,843 | 8,913 | 26,292 | 27,017 | |
Polaner | |||||
Brand | |||||
Net sales | 8,663 | 7,506 | 26,219 | 25,058 | |
New York Style | |||||
Brand | |||||
Net sales | 9,293 | 8,313 | 25,843 | 24,792 | |
Mama Mary's | |||||
Brand | |||||
Net sales | 8,207 | 9,355 | 25,374 | 28,733 | |
All other brands | |||||
Brand | |||||
Net sales | $ 85,880 | $ 53,762 | $ 253,465 | $ 169,738 |
Guarantor and Non-Guarantor F54
Guarantor and Non-Guarantor Financial Information (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Apr. 03, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jan. 02, 2016 | Jun. 04, 2013 |
Current assets: | ||||||
Cash and cash equivalents | $ 22,615 | $ 28,833 | $ 240,580 | $ 5,246 | ||
Trade accounts receivable, net | 171,343 | 119,265 | ||||
Inventories, net | 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 | ||||
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 | ||||
Stockholders' equity: | ||||||
Preferred stock | ||||||
Common Stock | 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 | ||||
4.625% Senior notes due 2021 | ||||||
Interest rate (as a percent) | 4.625% | 4.625% | 4.625% | |||
5.25% Senior Notes due 2025 | ||||||
Interest rate (as a percent) | 5.25% | 5.25% | ||||
Reportable Legal Entities | Parent | ||||||
Current assets: | ||||||
Investments in subsidiaries | $ 2,700,032 | $ 2,563,305 | ||||
Total assets | 2,700,032 | 2,563,305 | ||||
Current liabilities: | ||||||
Current portion of long-term debt | 10,515 | |||||
Dividends payable | 30,921 | 30,879 | ||||
Total current liabilities | 30,921 | 41,394 | ||||
Long-term debt | 1,877,722 | 1,736,254 | ||||
Total liabilities | 1,908,643 | 1,777,648 | ||||
Stockholders' equity: | ||||||
Preferred stock | ||||||
Common Stock | 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 | 2,700,032 | 2,563,305 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | ||||||
Current assets: | ||||||
Cash and cash equivalents | 19,133 | 25,119 | 231,357 | 1,964 | ||
Trade accounts receivable, net | 158,101 | 111,350 | ||||
Inventories, net | 422,291 | 309,584 | ||||
Prepaid expenses and other current assets | 29,168 | 20,296 | ||||
Income tax receivable | 8,698 | 10,780 | ||||
Total current assets | 637,391 | 477,129 | ||||
Property, plant and equipment, net of accumulated depreciation of $192,867 and $169,474 | 221,173 | 211,843 | ||||
Goodwill | 615,770 | 614,278 | ||||
Other intangibles, net | 1,615,528 | 1,629,482 | ||||
Other assets | 6,278 | 4,612 | ||||
Deferred income taxes | 7,036 | |||||
Investments in subsidiaries | 89,846 | 96,187 | ||||
Total assets | 3,185,986 | 3,040,567 | ||||
Current liabilities: | ||||||
Trade accounts payable | 104,376 | 88,668 | ||||
Accrued expenses | 52,539 | 60,957 | ||||
Intercompany payables | (7,609) | 11,738 | ||||
Total current liabilities | 149,306 | 161,363 | ||||
Long-term debt | (24,790) | (20,986) | ||||
Other liabilities | 17,779 | 21,405 | ||||
Deferred income taxes | 343,659 | 315,480 | ||||
Total liabilities | 485,954 | 477,262 | ||||
Stockholders' equity: | ||||||
Preferred stock | ||||||
Additional paid-in capital | 2,208,836 | 2,168,236 | ||||
Accumulated other comprehensive loss | (10,792) | (19,364) | ||||
Retained earnings | 501,988 | 414,433 | ||||
Total stockholders' equity | 2,700,032 | 2,563,305 | ||||
Total liabilities and stockholders' equity | 3,185,986 | 3,040,567 | ||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||||
Current assets: | ||||||
Cash and cash equivalents | 3,482 | 3,714 | $ 9,223 | $ 3,282 | ||
Trade accounts receivable, net | 13,242 | 7,915 | ||||
Inventories, net | 65,099 | 47,006 | ||||
Prepaid expenses and other current assets | 4,433 | 6,103 | ||||
Income tax receivable | 869 | 7 | ||||
Intercompany receivables | 12,183 | |||||
Total current assets | 87,125 | 76,928 | ||||
Property, plant and equipment, net of accumulated depreciation of $192,867 and $169,474 | 45,208 | 33,501 | ||||
Other assets | 14 | 13 | ||||
Deferred income taxes | 984 | 866 | ||||
Total assets | 133,331 | 111,308 | ||||
Current liabilities: | ||||||
Trade accounts payable | 32,829 | 9,365 | ||||
Accrued expenses | 2,935 | 1,436 | ||||
Income tax payable | 112 | 3,875 | ||||
Intercompany payables | 7,609 | 445 | ||||
Total current liabilities | 43,485 | 15,121 | ||||
Total liabilities | 43,485 | 15,121 | ||||
Stockholders' equity: | ||||||
Preferred stock | ||||||
Additional paid-in capital | 68,253 | 86,833 | ||||
Accumulated other comprehensive loss | (3,814) | (12,164) | ||||
Retained earnings | 25,407 | 21,518 | ||||
Total stockholders' equity | 89,846 | 96,187 | ||||
Total liabilities and stockholders' equity | 133,331 | 111,308 | ||||
Eliminations | ||||||
Current assets: | ||||||
Intercompany receivables | (12,183) | |||||
Total current assets | (12,183) | |||||
Investments in subsidiaries | (2,789,878) | (2,659,492) | ||||
Total assets | (2,789,878) | (2,671,675) | ||||
Current liabilities: | ||||||
Intercompany payables | (12,183) | |||||
Total current liabilities | (12,183) | |||||
Total liabilities | (12,183) | |||||
Stockholders' equity: | ||||||
Preferred stock | ||||||
Additional paid-in capital | (2,277,089) | (2,255,069) | ||||
Accumulated other comprehensive loss | 14,606 | 31,528 | ||||
Retained earnings | (527,395) | (435,951) | ||||
Total stockholders' equity | (2,789,878) | (2,659,492) | ||||
Total liabilities and stockholders' equity | $ (2,789,878) | $ (2,671,675) |
Guarantor and Non-Guarantor F55
Guarantor and Non-Guarantor Financial Information - Operating Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 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 benefit | 19,772 | 19,181 | 50,938 | 57,568 |
Net income | 32,730 | 32,410 | 87,555 | 95,857 |
Comprehensive income (loss) | 33,563 | 29,095 | 96,127 | 92,410 |
Eliminations | ||||
Net sales | (11,847) | (7,197) | (52,420) | (21,638) |
Cost of goods sold | (11,847) | (7,197) | (52,420) | (21,638) |
Other income and expenses: | ||||
Equity in earnings of subsidiaries | (37,049) | (37,009) | (91,444) | (108,382) |
Net income | (37,049) | (37,009) | (91,444) | (108,382) |
Comprehensive income (loss) | (37,640) | (33,562) | (99,572) | (104,447) |
Parent | Reportable Legal Entities | ||||
Other income and expenses: | ||||
Equity in earnings of subsidiaries | 32,730 | 32,410 | 87,555 | 95,857 |
Net income | 32,730 | 32,410 | 87,555 | 95,857 |
Comprehensive income (loss) | 33,563 | 29,095 | 96,127 | 92,410 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Net sales | 374,514 | 294,871 | 1,121,897 | 912,945 |
Cost of goods sold | 260,077 | 188,720 | 776,312 | 593,688 |
Gross profit | 114,437 | 106,151 | 345,585 | 319,257 |
Operating expenses: | ||||
Selling, general and administrative expenses | 39,877 | 39,619 | 136,921 | 111,538 |
Amortization expense | 4,265 | 3,269 | 13,002 | 10,039 |
Impairment of intangible assets | 5,405 | |||
Operating income | 70,295 | 63,263 | 195,662 | 192,275 |
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 | 46,826 | 45,162 | 132,345 | 136,077 |
Income tax benefit | 18,415 | 17,351 | 48,679 | 52,745 |
Equity in earnings of subsidiaries | 4,319 | 4,599 | 3,889 | 12,525 |
Net income | 32,730 | 32,410 | 87,555 | 95,857 |
Comprehensive income (loss) | 32,609 | 32,344 | 87,333 | 95,613 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Net sales | 45,697 | 30,573 | 124,895 | 86,294 |
Cost of goods sold | 36,879 | 21,298 | 109,424 | 64,495 |
Gross profit | 8,818 | 9,275 | 15,471 | 21,799 |
Operating expenses: | ||||
Selling, general and administrative expenses | 3,142 | 2,846 | 9,323 | 4,451 |
Operating income | 5,676 | 6,429 | 6,148 | 17,348 |
Other income and expenses: | ||||
Income before income tax expense | 5,676 | 6,429 | 6,148 | 17,348 |
Income tax benefit | 1,357 | 1,830 | 2,259 | 4,823 |
Net income | 4,319 | 4,599 | 3,889 | 12,525 |
Comprehensive income (loss) | $ 5,031 | $ 1,218 | $ 12,239 | $ 8,834 |
Guarantor and Non-Guarantor F56
Guarantor and Non-Guarantor Financial Information - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 7,537 | $ 192,778 |
Cash flows from investing activities: | ||
Capital expenditures | (42,728) | (24,807) |
Proceeds from sale of assets | 2,229 | |
Payments for acquisition of businesses, net of cash acquired | (117) | |
Net cash used in investing activities | (40,616) | (24,807) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (233,640) | (150,000) |
Proceeds from issuance of long-term debt | 500,000 | |
Repayments of borrowings under revolving credit facility | (221,000) | (50,000) |
Borrowings under revolving credit facility | 85,000 | 10,000 |
Proceeds from issuance of common stock, net | 36 | 331,879 |
Dividends paid | (92,710) | (72,916) |
Excess tax benefits from share-based compensation | 820 | 343 |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,962) | (1,410) |
Debt financing costs | (8,637) | |
Net cash provided by financing activities | 27,087 | 67,896 |
Effect of exchange rate fluctuations on cash and cash equivalents | (226) | (533) |
Net (decrease) increase in cash and cash equivalents | (6,218) | 235,334 |
Cash and cash equivalents at beginning of period | 28,833 | 5,246 |
Cash and cash equivalents at end of period | 22,615 | 240,580 |
Parent | Reportable Legal Entities | ||
Cash flows from financing activities: | ||
Repayments of long-term debt | (233,640) | (150,000) |
Proceeds from issuance of long-term debt | 500,000 | |
Repayments of borrowings under revolving credit facility | (221,000) | (50,000) |
Borrowings under revolving credit facility | 85,000 | 10,000 |
Proceeds from issuance of common stock, net | 36 | 331,879 |
Dividends paid | (92,710) | (72,916) |
Intercompany transactions | (37,686) | (68,963) |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | (2,069) | 165,362 |
Cash flows from investing activities: | ||
Capital expenditures | (32,348) | (20,557) |
Proceeds from sale of assets | 2,229 | |
Payments for acquisition of businesses, net of cash acquired | (117) | |
Net cash used in investing activities | (30,236) | (20,557) |
Cash flows from financing activities: | ||
Excess tax benefits from share-based compensation | 343 | |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (1,962) | (1,410) |
Debt financing costs | (8,637) | |
Intercompany transactions | 36,918 | 85,655 |
Net cash provided by financing activities | 26,319 | 84,588 |
Net (decrease) increase in cash and cash equivalents | (5,986) | 229,393 |
Cash and cash equivalents at beginning of period | 25,119 | 1,964 |
Cash and cash equivalents at end of period | 19,133 | 231,357 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by operating activities | 9,606 | 27,416 |
Cash flows from investing activities: | ||
Capital expenditures | (10,380) | (4,250) |
Net cash used in investing activities | (10,380) | (4,250) |
Cash flows from financing activities: | ||
Intercompany transactions | 768 | (16,692) |
Net cash provided by financing activities | 768 | (16,692) |
Effect of exchange rate fluctuations on cash and cash equivalents | (226) | (533) |
Net (decrease) increase in cash and cash equivalents | (232) | 5,941 |
Cash and cash equivalents at beginning of period | 3,714 | 3,282 |
Cash and cash equivalents at end of period | $ 3,482 | $ 9,223 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 02, 2017USD ($) |
Subsequent event | Back To Nature Foods Company, LLC | |
Subsequent events | |
Cash paid | $ 162.5 |