Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | B&G Foods, Inc. | |
Entity Central Index Key | 0001278027 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-28 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 65,329,666 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Trading Symbol | bgs |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 11,284 | $ 11,648 |
Trade accounts receivable, net | 162,774 | 151,707 |
Inventories | 375,393 | 401,355 |
Prepaid expenses and other current assets | 21,130 | 19,988 |
Income tax receivable | 1,521 | 1,398 |
Total current assets | 572,102 | 586,096 |
Property, plant and equipment, net of accumulated depreciation of $239,743 and $230,200 as of March 30, 2019 and December 29, 2018, respectively | 282,546 | 282,553 |
Operating lease right-of-use assets | 37,536 | |
Goodwill | 584,435 | 584,435 |
Other intangibles, net | 1,591,078 | 1,595,569 |
Other assets | 1,136 | 1,206 |
Deferred income taxes | 5,350 | 4,940 |
Total assets | 3,074,183 | 3,054,799 |
Current liabilities: | ||
Trade accounts payable | 126,208 | 140,000 |
Accrued expenses | 66,914 | 55,660 |
Operating lease liabilities, current portion | 9,124 | |
Income tax payable | 33,276 | 31,624 |
Dividends payable | 31,016 | 31,178 |
Total current liabilities | 266,538 | 258,462 |
Long-term debt | 1,636,754 | 1,635,881 |
Deferred income taxes | 239,881 | 235,902 |
Long-term operating lease liabilities, net of current portion | 31,304 | |
Other liabilities | 22,587 | 24,505 |
Total liabilities | 2,197,064 | 2,154,750 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding | ||
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 65,297,607 and 65,638,701 shares issued and outstanding as of March 30, 2019 and December 29, 2018, respectively | 653 | 656 |
Additional paid-in capital | 75,001 | 116,339 |
Accumulated other comprehensive loss | (21,882) | (23,502) |
Retained earnings | 823,347 | 806,556 |
Total stockholders' equity | 877,119 | 900,049 |
Total liabilities and stockholders' equity | $ 3,074,183 | $ 3,054,799 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Consolidated Balance Sheets | ||
Property, plant and equipment, accumulated depreciation (in dollars) | $ 239,743 | $ 230,200 |
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 | 65,297,607 | 65,638,701 |
Common stock, shares outstanding | 65,297,607 | 65,638,701 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Consolidated Statements of Operations | ||
Net sales | $ 412,734 | $ 431,729 |
Cost of goods sold | 324,655 | 328,373 |
Gross profit | 88,079 | 103,356 |
Operating expenses: | ||
Selling, general and administrative expenses | 38,297 | 42,568 |
Amortization expense | 4,491 | 4,609 |
Operating income | 45,291 | 56,179 |
Other income and expenses: | ||
Interest expense, net | 23,074 | 28,306 |
Loss on extinguishment of debt | 2,778 | |
Other income | (258) | (2,054) |
Income before income tax expense | 22,475 | 27,149 |
Income tax expense | 5,684 | 6,602 |
Net income | $ 16,791 | $ 20,547 |
Weighted average shares outstanding: | ||
Basic (in shares) | 65,586,572 | 66,517,652 |
Diluted (in shares) | 65,617,155 | 66,715,360 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.26 | $ 0.31 |
Diluted (in dollars per share) | 0.26 | 0.31 |
Cash dividends declared per share (in dollars per share) | $ 0.475 | $ 0.465 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 16,791 | $ 20,547 |
Other comprehensive income: | ||
Foreign currency translation adjustments | 1,458 | 3,132 |
Amortization of unrecognized prior service cost and pension deferrals, net of tax | 162 | 111 |
Other comprehensive income | 1,620 | 3,243 |
Comprehensive income | $ 18,411 | $ 23,790 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total |
Beginning balance at Dec. 30, 2017 | $ 665 | $ 266,789 | $ (20,756) | $ 634,121 | $ 880,819 |
Balance (in shares) at Dec. 30, 2017 | 66,499,044 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Foreign currency translation | 3,132 | 3,132 | |||
Change in pension benefit (net of income taxes) | 111 | 111 | |||
Net income | 20,547 | 20,547 | |||
Share-based compensation | 838 | 838 | |||
Issuance of common stock for share-based compensation | $ 1 | (1,834) | $ (1,833) | ||
Issuance of common stock for share-based compensation (in shares) | 94,076 | ||||
Repurchase of common stock (in shares) | 0 | ||||
Dividends declared on common stock | (30,966) | $ (30,966) | |||
Ending balance at Mar. 31, 2018 | $ 666 | 234,827 | (17,513) | 654,668 | 872,648 |
Balance (in shares) at Mar. 31, 2018 | 66,593,120 | ||||
Beginning balance at Dec. 29, 2018 | $ 656 | 116,339 | (23,502) | 806,556 | $ 900,049 |
Balance (in shares) at Dec. 29, 2018 | 65,638,701 | 65,638,701 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Foreign currency translation | 1,458 | $ 1,458 | |||
Change in pension benefit (net of income taxes) | 162 | 162 | |||
Net income | 16,791 | 16,791 | |||
Share-based compensation | 580 | 580 | |||
Issuance of common stock for share-based compensation | $ 1 | (906) | (905) | ||
Issuance of common stock for share-based compensation (in shares) | 65,928 | ||||
Repurchase of common stock | $ (4) | (9,996) | (10,000) | ||
Repurchase of common stock (in shares) | (407,022) | ||||
Dividends declared on common stock | (31,016) | (31,016) | |||
Ending balance at Mar. 30, 2019 | $ 653 | $ 75,001 | $ (21,882) | $ 823,347 | $ 877,119 |
Balance (in shares) at Mar. 30, 2019 | 65,297,607 | 65,297,607 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Consolidated Statements of Changes in Stockholders' Equity | ||
Change in pension benefit, income taxes | $ 53 | $ 37 |
Dividends declared on common stock, per share (in dollars per share) | $ 0.475 | $ 0.465 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 16,791 | $ 20,547 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,863 | 13,064 |
Amortization of operating lease right-of-use assets | 2,638 | |
Amortization of deferred debt financing costs and bond discount/premium | 873 | 1,545 |
Deferred income taxes | 3,575 | 4,821 |
Write-off of property, plant, and equipment | 1 | 21 |
Loss on extinguishment of debt | 2,778 | |
Share-based compensation expense | 580 | 838 |
Changes in assets and liabilities, net of effects of businesses acquired: | ||
Trade accounts receivable | (10,807) | (20,877) |
Inventories | 27,320 | 46,134 |
Prepaid expenses and other current assets | (1,085) | 2,572 |
Income tax receivable/payable | 1,553 | 910 |
Other assets | 70 | 109 |
Trade accounts payable | (14,444) | (11,405) |
Accrued expenses | 11,119 | 12,578 |
Other liabilities | (1,703) | 109 |
Net cash provided by operating activities | 50,344 | 73,744 |
Cash flows from investing activities: | ||
Capital expenditures | (8,648) | (4,972) |
Net cash used in investing activities | (8,648) | (4,972) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (125,000) | |
Repayments of borrowings under revolving credit facility | (40,000) | |
Borrowings under revolving credit facility | 40,000 | |
Dividends paid | (31,178) | (30,922) |
Payments for repurchase of common stock, net | (10,000) | |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (905) | (1,832) |
Net cash used in financing activities | (42,083) | (157,754) |
Effect of exchange rate fluctuations on cash and cash equivalents | 23 | 620 |
Net decrease in cash and cash equivalents | (364) | (88,362) |
Cash and cash equivalents at beginning of period | 11,648 | 206,506 |
Cash and cash equivalents at end of period | 11,284 | 118,144 |
Supplemental disclosures of cash flow information: | ||
Cash interest payments | 2,590 | 6,804 |
Cash income tax payments | 564 | 701 |
Non-cash investing and financing transactions: | ||
Dividends declared and not yet paid | 31,016 | 30,966 |
Accruals related to purchases of property, plant and equipment | 139 | $ 330 |
Non-cash lease liabilities arising from right-of-use-assets | $ 155 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 30, 2019 | |
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, oatmeal and other 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, cookies and crackers, nut clusters and other specialty products. Our products are marketed under many recognized brands, including Ac’cent , B&G , B&M , Back to Nature , 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 , McCann’s , Molly McButter , Mrs. Dash , New York Flatbreads , New York Style , Old London , Ortega , Polaner , Red Devil , Regina , Sa-són , Sclafani , SnackWell’s , Spice Islands , Spring Tree , Sugar Twin , Tone’s , Trappey’s , TrueNorth , Underwood , Vermont Maid , Victoria , Weber and Wright’s . 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 | 3 Months Ended |
Mar. 30, 2019 | |
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 28, 2019 (fiscal 2019) and our fiscal year ended December 29, 2018 (fiscal 2018) each contain 52 weeks. Each quarter of fiscal 2019 and 2018 contains 13 weeks. Basis of Presentation The accompanying unaudited consolidated interim financial statements for the thirteen week periods ended March 30, 2019 (first quarter of 2019) and March 31, 2018 (first quarter of 2018) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) 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 GAAP 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 March 30, 2019, and the results of our operations, comprehensive income and cash flows for the first quarter of 2019 and 2018. Our results of operations for the first quarter of 2019 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 2018 filed with the SEC on February 26, 2019. Use of Estimates The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; allowances for excess, obsolete and unsaleable inventories; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived 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 February 2018, the Financial Accounting Standards Board (FASB) issued a new Accounting Standards Update (ASU) related to the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act.” The ASU allows for a company to elect to make a one-time reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in corporate tax rate as a result of the U.S. Tax Act. The reclassification is the difference between the amount previously recorded in accumulated other comprehensive loss at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the U.S. Tax Act was effective and the amount that would have been recorded using the newly enacted rate. Additionally, the ASU requires a company to disclose whether or not it elects to make the reclassification. This guidance became effective during the first quarter of 2019. We elected to not make the optional one-time reclassification. 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 and to disclose key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. We adopted the new standard prospectively when it became effective in the first quarter of 2019 and applied the new standard to all leases existing at the date of initial application. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected all of the new standard’s available transition practical expedients that were applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We also elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases with a lease term of twelve months or less, we did not recognize ROU assets or lease liabilities. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. This standard did not have a material effect on our financial statements. Upon adoption, the most significant effects related to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our operating leases, which was $39.6 million and $42.6 million, respectively, as of the beginning of the period; and (2) providing additional new disclosures about our leasing activities. Recently Issued Accounting Standards In August 2018, the FASB issued a new ASU which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in software licensing arrangements under the internal-use software guidance. The update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. We currently do not expect the adoption of this ASU to have a material impact to our consolidated financial statements. In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The update is effective for fiscal years beginning after December 15, 2020. We expect to update our defined benefit pension plan disclosures when the new standard becomes effective. We do not expect the adoption of this ASU to have an impact to our consolidated financial statements as this ASU only modifies disclosure requirements. In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for fair value measurement. The update is effective for fiscal years beginning after December 15, 2019. We expect to update our fair value measurement disclosures when the new standard becomes effective. We do not expect the adoption of this ASU to have an impact to our consolidated financial statements as this ASU only modifies disclosure requirements. In January 2017, the FASB issued an amendment to the standards of goodwill impairment testing. The new guidance simplifies the test for goodwill impairment, by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The update is effective for fiscal years beginning after December 15, 2019. We expect to adopt the standards when they become effective. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 30, 2019 | |
Acquisitions And Divestitures | |
Acquisitions and Divestitures | (3) Acquisitions and Divestitures McCann’s Acquisition On July 16, 2018, we acquired the McCann’s brand of premium Irish oatmeal from TreeHouse Foods, Inc. for approximately $30.8 million in cash. We refer to this acquisition as the “ McCann’s acquisition.” The following table sets forth the preliminary allocation of the McCann’s 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 third quarter of fiscal 2019. McCann’s Acquisition (in thousands): Preliminary Allocation: July 16, 2018 Property, plant and equipment $ 12 Inventory 973 Trademarks — indefinite-lived intangible assets 24,800 Customer relationship intangibles — finite-lived intangible assets 2,000 Accrued expenses (292) Goodwill 3,294 Total purchase price (paid in cash) $ 30,787 The McCann’s acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented. Pirate Brands Divestiture On October 17, 2018, we completed the sale of Pirate Brands to The Hershey Company for a purchase price of $420.0 million in cash. Pirate Brands includes the Pirate’s Booty , Smart Puffs and Original Tings brands. We refer to this divestiture as the “Pirate Brands sale.” Net deferred tax liabilities associated with the Pirate Brands sale were $107.3 million. We recognized a pre-tax gain on the Pirate Brands sale of $176.4 million, as calculated below (in thousands): October 17, 2018 Cash received $ 420,002 Assets sold: Inventory (6,688) Property, plant and equipment (404) Customer relationships — finite-lived intangible assets (8,408) Trademarks — indefinite-lived intangible assets (152,800) Goodwill (70,952) Other (77) Total assets sold (239,328) Expenses (4,288) Gain on sale of assets $ 176,386 In December 2018, the compensation committee of our board of directors approved a special bonus pool of $6.0 million that was paid during the first quarter of 2019 to our executive officers and certain members of senior management to recognize their significant contributions to the successful operation of Pirate Brands during our company’s five years of ownership of Pirate Brands and to the successful completion of the Pirate Brands sale at a sale price more than double what our company paid for Pirate Brands in 2013. |
Inventories
Inventories | 3 Months Ended |
Mar. 30, 2019 | |
Inventories | |
Inventories | (4) Inventories are stated at the lower of cost or net realizable value 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): March 30, 2019 December 29, 2018 Raw materials and packaging $ 64,279 $ 61,905 Work-in-process 56,843 95,282 Finished goods 254,271 244,168 Inventories $ 375,393 $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 30, 2019 | |
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): March 30, 2019 December 29, 2018 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Finite-Lived Intangible Assets Trademarks $ 19,600 $ 3,642 $ 15,958 $ 19,600 $ 3,369 $ 16,231 Customer relationships 335,590 116,170 219,420 335,590 111,952 223,638 Total finite-lived intangible assets $ 355,190 $ 119,812 $ 235,378 $ 355,190 $ 115,321 $ 239,869 Indefinite-Lived Intangible Assets Goodwill $ 584,435 $ 584,435 Trademarks $ 1,355,700 $ 1,355,700 Amortization expense associated with finite-lived intangible assets for the first quarter of 2019 was $4.5 million, and is recorded in operating expenses. Amortization expense associated with finite-lived intangible assets for the first quarter of 2018 was $4.6 million. We expect to recognize an additional $13.5 million of amortization expense associated with our finite-lived intangible assets during the remainder of fiscal 2019, and thereafter $18.0 million of amortization expense in each of the fiscal years 2020, 2021 and 2022, respectively, and $17.8 million in each of fiscal 2023 and 2024. See Note 3, “Acquisitions and Divestitures.” |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 30, 2019 | |
Long-Term Debt | |
Long-Term Debt | (6) Long-term debt consists of the following, as of the dates indicated (in thousands): March 30, 2019 December 29, 2018 Revolving credit loans $ 50,000 $ 50,000 4.625% senior notes due 2021 700,000 700,000 5.25% senior notes due 2025 900,000 900,000 Unamortized deferred financing costs (16,482) (17,490) Unamortized premium 3,236 3,371 Total long-term debt, net of unamortized deferred financing costs and discount/premium $ 1,636,754 $ 1,635,881 As of March 30, 2019, the aggregate contractual maturities of long-term debt are as follows (in thousands): Fiscal year ending: 2019 $ — 2020 — 2021 700,000 2022 50,000 2023 — Thereafter 900,000 Total $ 1,650,000 Senior Secured Credit Agreement. In fiscal 2017, we refinanced our senior secured credit facility twice by amending and restating our senior secured credit agreement, first on March 30, 2017, and again on November 20, 2017. The first refinancing, on March 30, 2017, reduced by 0.75% the spread over LIBOR or the applicable base rate on the then-outstanding $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. On November 20, 2017, we again refinanced our senior secured credit facility. This second refinancing increased the principal amount of the tranche B term loans by $10.0 million to $650.1 million, reduced by 25 basis points the spread over LIBOR or the applicable base rate on the tranche B term loans and any revolving loans, increased the aggregate commitments under our revolving credit facility from $500.0 million to $700.0 million, and extended the maturity date applicable to our revolving credit facility from June 2019 to November 2022. We made optional prepayments of aggregate principal amount of our tranche B term loans of $125.0 million in the first quarter of 2018 and $25.0 million in the second quarter of 2018. On October 18, 2018, we made a mandatory prepayment of $352.2 million principal amount of tranche B term loans with the net proceeds of the Pirate Brands sale. On October 19, 2018, we made an optional prepayment of the remaining $147.9 million principal amount of tranche B term loans outstanding under our credit agreement from cash on hand and the proceeds of additional revolving loans under our credit agreement. As a result of the optional and mandatory prepayments of the tranche B term loans, we recognized a loss on extinguishment of debt of $13.1 million in fiscal 2018, including $2.8 million in the first quarter of 2018. At March 30, 2019, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.2 million, was $647.8 million. 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. At March 30, 2019, there was $50.0 million outstanding under our revolving credit facility 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 November 21, 2022. 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 0.25% to 0.75%, and LIBOR plus an applicable margin ranging from 1.25% to 1.75%, in each case depending on our consolidated leverage ratio. Interest under the tranche B term loan facility was determined based on alternative rates that we could choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin of 1.00%, and LIBOR plus an applicable margin of 2.00%. As of March 30, 2019, there were no tranche B term loans outstanding under our credit facility. 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 7.00 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 March 30, 2019, 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. 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 March 30, 2019, 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. On November 20, 2017, we issued an additional $400.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public 101% of their face value plus accrued interest from October 1, 2017, which equates to a yield to worst of 5.03%. The notes issued in November were issued as additional notes under the same indenture as our 5.25% senior notes due 2025 that were issued in April, and, as such, form a single series and trade interchangeably with the previously issued 5.25% senior notes. We used the net proceeds of the April 2017 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 used the net proceeds of the November 2017 offering to repay all of the then outstanding borrowings and amounts due under our revolving credit facility and to pay related fees and expenses. We have used a portion of, and intend to use the remaining portion of, the net proceeds of the April 2017 and November 2017 offerings for general corporate purposes, which have included and 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. As of March 30, 2019, we were in compliance with all of the covenants in the indenture governing the 5.25% senior notes. 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 18, “Guarantor and Non-Guarantor Financial Information.” Accrued Interest . At March 30, 2019 and December 29, 2018, accrued interest of $35.0 million and $15.6 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets. Loss on Extinguishment of Debt . We did not have a loss on extinguishment of debt during the first quarter of 2019. During the first quarter of 2018, we incurred a loss on extinguishment of debt in connection with the prepayment of our tranche B term loans, which includes the write-off of deferred debt financing costs of $2.4 million and the write-off of unamortized discount of $0.4 million. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 30, 2019 | |
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 GAAP, 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. The carrying values and fair values of our revolving credit loans, term loans, 4.625% senior notes and 5.25% senior notes as of March 30, 2019 and December 29, 2018 are as follows (in thousands): March 30, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans $ 50,000 $ 50,000 (1) $ 50,000 $ 50,000 (1) 4.625% senior notes due 2021 700,000 699,125 (2) 700,000 684,250 (2) 5.25% senior notes due 2025 $ 903,236 (3) $ 867,107 (2) $ 903,371 (3) $ 837,877 (2) (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) Fair values are estimated based on quoted market prices. (3) The carrying values of the 5.25% senior notes due 2025 include a premium. At March 30, 2019 and December 29, 2018 the face amount of the 5.25% senior notes due 2025 was $900.0 million. There was no Level 3 activity during the first quarter of 2019 or 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 30, 2019 | |
Accumulated Other Comprehensive Loss. | |
Accumulated Other Comprehensive Loss | (8) The reclassifications from accumulated other comprehensive loss (AOCL) for the first quarter of 2019 and 2018 are as follows (in thousands): Thirteen Weeks Ended Affected Line Item in March 30, March 31, the Statement Where Details about AOCL Components 2019 2018 Net Income is Presented Defined benefit pension plan items Amortization of unrecognized loss $ 215 $ 148 See (1) below Accumulated other comprehensive loss before tax 215 148 Total before tax Tax expense (53) (37) Income tax expense Total reclassification $ 162 $ 111 Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 10, “Pension Benefits,” for additional information. Changes in AOCL for the first quarter of 2019 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Balance at December 29, 2018 $ (12,224) $ (11,278) $ (23,502) Other comprehensive income before reclassifications — 1,458 1,458 Amounts reclassified from AOCL 162 — 162 Net current period other comprehensive income 162 1,458 1,620 Balance at March 30, 2019 $ (12,062) $ (9,820) $ (21,882) As a result of accounting guidance issued by the FASB in February 2018, we had the option to elect to make a one-time reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in corporate tax rate as a result of the U.S. Tax Act. This guidance became effective during the first quarter of 2019. We elected to not make the optional one-time reclassification. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 30, 2019 | |
Treasury Stock Value [Abstract] | |
Stock Repurchase Program | (9) On March 13, 2018, our board of directors authorized a stock repurchase program for the repurchase of up to $50.0 million of our company’s common stock through March 15, 2019. Under that authorization, we repurchased and retired 1,397,148 shares of common stock at an average price per share (excluding fees and commissions) of $26.41, or $36.9 million in the aggregate, including 407,022 shares of common stock at an average price per share (excluding fees and commissions) of $24.55, or $10.0 million in the aggregate, during the first quarter of 2019. We did not repurchase any shares of common stock during the first quarter of 2018. On March 12, 2019, our board of directors authorized an extension of our stock repurchase program from March 15, 2019 to March 15, 2020. In extending the repurchase program, our board of directors also reset the repurchase authority to up to $50.0 million. Therefore, as of March 30, 2019, we had $50.0 million available for future repurchases of common stock under the stock repurchase program. Under the authorization, we may purchase shares of common stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the SEC. The timing and amount of future stock repurchases, if any, under the program will be at the discretion of management, and will depend on a variety of factors, including price, available cash, general business and market conditions and other investment opportunities. Therefore, we cannot assure you as to the number or aggregate dollar amount of additional shares, if any, that will be repurchased under the program. We may discontinue the program at any time. Any shares repurchased pursuant to the program will be retired. |
Pension Benefits
Pension Benefits | 3 Months Ended |
Mar. 30, 2019 | |
Pension Benefits | |
Pension Benefits | (10) Company Sponsored Defined Benefit Pension Plans . Net periodic pension cost for company sponsored defined benefit pension plans for the first quarter of 2019 and 2018 includes the following components (in thousands): Thirteen Weeks Ended March 30, March 31, 2019 2018 Service cost—benefits earned during the period $ 1,937 $ Interest cost on projected benefit obligation 1,442 Expected return on plan assets (1,914) Amortization of unrecognized prior service cost — — Amortization of unrecognized loss 215 148 Net periodic pension cost $ 1,680 $ 1,394 During the first quarter of 2019, we did not make any defined benefit plan contributions. During the first quarter of 2018, we made $1.1 million of defined benefit pension plan contributions. 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 $0.2 million in the first quarter of 2019 and expects to pay surcharges of less than $0.1 million in fiscal 2019 assuming consistent hours are worked. B&G Foods contributed $0.2 million in fiscal 2018 and paid less than $0.1 million in surcharges. These contributions represented less than five percent of total contributions made to the plan. |
Leases
Leases | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
Leases | (11) Operating Leases . We adopted Accounting Standards Codification (ASC) Topic 842 at the beginning of the first quarter of 2019 and recognized an operating right-of-use (ROU) asset of $39.6 million and operating lease liabilities of $42.6 million at inception. Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items: March 30, 2019 Right-of-use assets: Operating lease right-of-use assets $ 37,536 Operating lease liabilities: Operating lease liabilities, current portion $ 9,124 Long-term operating lease liabilities, net of current portion 31,304 Total operating lease liabilities $ 40,428 We determine whether an arrangement is a lease at inception. We have operating leases for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of use assets and lease liabilities. Supplemental information related to leases: Thirteen Weeks Ended March 30, 2019 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 2,702 The components of lease costs were as follows: Cost of goods sold $ 668 Selling, general and administrative expenses 1,970 Total lease costs $ 2,638 Total rent expense for the first quarter of 2019 was $3.2 million, including the operating lease costs of $2.6 million stated above. Total rent expense for the first quarter of 2018 was $3.3 million. Because our operating leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component. See Note 2, “Summary of Significant Accounting Policies — Newly Adopted Accounting Standards ,” for further details. The following table shows the lease term and discount rate for our ROU assets: March 30, 2019 Weighted average remaining lease term (years) Weighted average discount rate As of March 30, 2019, the maturities of operating lease liabilities were as follows (in thousands): Fiscal year ending: 2019 $ 8,044 2020 9,759 2021 9,029 2022 4,771 2023 4,791 Thereafter 8,444 Total undiscounted future minimum lease payments 44,838 Less: Imputed interest (4,410) Total present value of future operating lease liabilities $ 40,428 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease standard (Topic 840), as of December 29, 2018, future minimum lease payments under non-cancelable operating leases in effect at year-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: 2019 $ 12,298 2020 10,953 2021 8,991 2022 4,733 2023 4,784 Thereafter 8,445 Total undiscounted future minimum lease payments $ 50,204 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (12) 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 quarter of 2019 or 2018 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 March 30, 2019, approximately 1,675 of our 2,679 employees, or 62.5%, were covered by collective bargaining agreements. Two of our collective bargaining agreements expire in the next twelve months. The collective bargaining agreement covering our Brooklyn facility, which covers approximately 60 employees, is scheduled to expire on December 31, 2019. In addition, the collective bargaining agreement covering our Roseland facility, which covers approximately 50 employees, is scheduled to expire on March 31, 2020. While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate a new collective bargaining agreement for our Brooklyn or Roseland facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect that the outcome of these negotiations will have a material adverse impact on our business, financial condition or results of operations. Severance and Change of Control Agreements. We have employment agreements with each of our executive officers. 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 | 3 Months Ended |
Mar. 30, 2019 | |
Earnings per Share | |
Earnings per Share | (13) 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 first quarter of 2019 and 2018, there were 1,167,297 and 727,311, respectively, shares of common stock issuable upon the exercise of stock options excluded from the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share. Thirteen Weeks Ended March 30, March 31, 2019 2018 Weighted average shares outstanding: Basic 65,586,572 66,517,652 Net effect of potentially dilutive share-based compensation awards 30,583 197,708 Diluted 65,617,155 66,715,360 |
Business and Credit Concentrati
Business and Credit Concentrations and Geographic Information | 3 Months Ended |
Mar. 30, 2019 | |
Business and Credit Concentrations and Geographic Information | |
Business and Credit Concentrations and Geographic Information | (14) Business and Credit Concentrations and Geographic Information Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top ten customers accounted for approximately 54.2% and 57.1% of consolidated net sales for the first quarter of 2019 and 2018, respectively. Our top ten customers accounted for approximately 54.5% and 54.8% of our consolidated trade accounts receivables as of March 30, 2019 and December 29, 2018, respectively. Other than Walmart, which accounted for 23.5% and 24.6% of our consolidated net sales for the first quarter of 2019 and 2018, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first quarter of 2019 or 2018. Other than Walmart, which accounted for 24.0% and 24.9% of our consolidated trade accounts receivables as of March 30, 2019 and December 29, 2018, respectively, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables. As of March 30, 2019, 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 Walmart. During the first quarter of 2019 and 2018, our sales to customers in foreign countries represented approximately 7.7% and 6.7%, respectively, of net sales. Our foreign sales are primarily to customers in Canada. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 30, 2019 | |
Share-Based Payments | |
Share-Based Payments | (15) The following table details our stock option activity for the first quarter of fiscal 2019 (dollars in thousands, except per share data): Weighted Weighted Average Average Contractual Life Aggregate Options Exercise Price Remaining (Years) Intrinsic Value Outstanding at December 29, 2018 1,194,105 $ 31.40 Granted — $ — Exercised — $ — Forfeited (24,950) $ 32.19 Cancelled — $ — Outstanding at March 30, 2019 1,169,155 $ 31.38 $ Exercisable at March 30, 2019 688,957 $ 31.96 $ — The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is 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. 2019 (1) 2018 Weighted average grant date fair value — $ Expected volatility — Expected term — 6.5 years Risk-free interest rate — Dividend yield — (1) Not applicable, as no stock options were granted during the first quarter of 2019. The following table sets forth the compensation expense recognized for share-based payments (performance share long-term incentive awards (LTIAs), stock options, non-employee director stock grants and other share based payments) during the first quarter of 2019 and 2018 and where that expense is reflected in our consolidated statements of operations (in thousands): Thirteen Weeks Ended March 30, March 31, Consolidated Statements of Operations Location 2019 2018 Compensation expense included in cost of goods sold $ 173 $ Compensation expense included in selling, general and administrative expenses 407 Total compensation expense for share-based payments $ 580 $ 838 As of March 30, 2019, there was $3.3 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.75 years, and $1.0 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.0 years. The following table details the activity in our non-vested performance share LTIAs for the first quarter of 2019: Weighted Average Number of Grant Date Fair Value Performance Shares (1) (per share) (2) Outstanding at December 29, 2018 509,317 $ 27.30 Granted 380,392 $ 18.89 Vested (102,893) $ 29.04 Forfeited (61,193) $ 28.56 Outstanding at March 30, 2019 725,623 $ 22.54 (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 quarter of 2019 and 2018 upon the vesting of performance share LTIAs, the exercise of stock options and other share-based payments (dollars in thousands): March 30, March 31, 2019 2018 Number of performance shares vested 102,893 150,255 Shares withheld to fund statutory minimum tax withholding 36,965 57,298 Shares of common stock issued for performance share LTIAs 65,928 92,957 Shares of common stock issued to non-employee directors for annual equity grants — 1,119 Total shares of common stock issued 65,928 94,076 |
Workforce Reduction
Workforce Reduction | 3 Months Ended |
Mar. 30, 2019 | |
Workforce Reduction | |
Workforce Reduction | (16) Workforce Reduction Expenses . During the first quarter of 2019, we implemented a reduction in workforce. On a pre-tax basis, we expect that the reduction in workforce will save our company an estimated $2.4 million on an annualized basis. During the first quarter of 2019, we recorded charges of $1.6 million related to the workforce reduction. We expect to record additional charges of approximately $0.8 million relating to the workforce reduction during the remainder of 2019. Substantially all of these charges have resulted or will result in cash payments, $0.9 million of which were made during the first quarter of 2019 and approximately $1.4 of which will continue through 2020. Retirement Expenses . As previously disclosed, we entered into retirement agreements with two of our executive vice presidents during the first quarter of 2019. The retirement and other benefits payable under the agreements are included in the estimated charges set forth above. |
Net Sales by Brand
Net Sales by Brand | 3 Months Ended |
Mar. 30, 2019 | |
Net Sales by Brand | |
Net Sales by Brand | (17) The following table sets forth net sales by brand (in thousands): Thirteen Weeks Ended March 30, March 31, 2019 2018 Brand: (1) Green Giant - frozen $ 100,863 $ 94,889 Spices & Seasonings (2) 63,226 62,760 Ortega 37,252 37,854 Green Giant - shelf stable (3) 26,439 25,683 Maple Grove Farms of Vermont 17,897 16,965 Cream of Wheat 17,410 18,424 Back to Nature 16,662 20,040 Mrs. Dash 15,208 16,736 Pirate Brands (4) — 20,996 All other brands 117,777 117,382 Total $ 412,734 $ 431,729 (1) Table includes net sales for each of our brands whose net sales for the first quarter of 2019 or fiscal 2018 represent 3% or more of our total net sales for those periods, 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) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016, including French’s ® seasoning mixes, which we discontinued during the third quarter of 2018 following the expiration of a licensing agreement. Does not include net sales for Mrs. Dash and our other legacy spices & seasonings brands. (3) Does not include net sales of the Le Sueur brand. Net sales of the Le Sueur brand are included below in “All other brands.” (4) See Note 3, “Acquisitions and Divestitures.” |
Guarantor and Non-Guarantor Fin
Guarantor and Non-Guarantor Financial Information | 3 Months Ended |
Mar. 30, 2019 | |
Guarantor and Non-Guarantor Financial Information | |
Guarantor and Non-Guarantor Financial Information | (18) 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 March 30, 2019 and December 29, 2018, the related condensed consolidating statement of operations for the thirteen weeks ended March 30, 2019 and March 31, 2018 and the related condensed consolidating statement of cash flows for the thirteen weeks ended March 30, 2019 and March 31, 2018 for: 1. 2. 3. 4. 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 March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ 10,105 $ 1,179 $ — $ 11,284 Trade accounts receivable, net — 152,063 10,711 — 162,774 Inventories, net — 313,307 62,086 — 375,393 Prepaid expenses and other current assets — 17,133 3,997 — 21,130 Income tax receivable — 1 1,520 — 1,521 Total current assets — 492,609 79,493 — 572,102 Property, plant and equipment, net — 238,180 44,366 — 282,546 Operating lease right-of-use assets — 37,443 93 — 37,536 Goodwill — 584,435 — — 584,435 Other intangibles, net — 1,591,078 — — 1,591,078 Other assets — 1,122 14 — 1,136 Deferred income taxes — — 5,350 — 5,350 Investments in subsidiaries 2,561,372 100,585 — (2,661,957) — Total assets $ 2,561,372 $ 3,045,452 $ 129,316 $ (2,661,957) $ 3,074,183 Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ 110,941 $ 15,267 $ — $ 126,208 Accrued expenses — 63,349 3,565 — 66,914 Operating lease liabilities, current portion — 9,081 43 — 9,124 Income tax payable — 33,276 — — 33,276 Dividends payable 31,016 — — — 31,016 Intercompany payables — (9,791) 9,791 — — Total current liabilities 31,016 206,856 28,666 — 266,538 Long-term debt 1,653,237 (16,483) — — 1,636,754 Deferred income taxes — 239,881 — — 239,881 Long-term operating lease liabilities, net of current portion — 31,240 64 — 31,304 Other liabilities — 22,587 — — 22,587 Total liabilities 1,684,253 484,081 28,730 — 2,197,064 Stockholders' Equity: Preferred stock — — — — — Common stock 653 — — — 653 Additional paid-in capital 75,001 1,762,131 68,253 (1,830,384) 75,001 Accumulated other comprehensive loss (21,882) (21,882) (9,820) 31,702 (21,882) Retained earnings 823,347 821,122 42,153 (863,275) 823,347 Total stockholders’ equity 877,119 2,561,371 100,586 (2,661,957) 877,119 Total liabilities and stockholders’ equity $ 2,561,372 $ 3,045,452 $ 129,316 $ (2,661,957) $ 3,074,183 Condensed Consolidating Balance Sheet As of December 29, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ 9,871 $ 1,777 $ — $ 11,648 Trade accounts receivable, net — 140,464 11,243 — 151,707 Inventories, net — 332,774 68,581 — 401,355 Prepaid expenses and other current assets — 15,995 3,993 — 19,988 Income tax receivable — — 1,398 — 1,398 Total current assets — 499,104 86,992 — 586,096 Property, plant and equipment, net — 238,128 44,425 — 282,553 Goodwill — 584,435 — — 584,435 Other intangibles, net — 1,595,569 — — 1,595,569 Other assets — 1,193 13 — 1,206 Deferred income taxes — — 4,940 — 4,940 Investments in subsidiaries 2,584,598 93,069 — (2,677,667) — Total assets $ 2,584,598 $ 3,011,498 $ 136,370 $ (2,677,667) $ 3,054,799 Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ 115,946 $ 24,054 $ — $ 140,000 Accrued expenses — 53,386 2,274 — 55,660 Income tax payable — 31,247 377 — 31,624 Dividends payable 31,178 — — — 31,178 Intercompany payables — (16,581) 16,581 — — Total current liabilities 31,178 183,998 43,286 — 258,462 Long-term debt 1,653,371 (17,490) — — 1,635,881 Deferred income taxes — 235,902 — — 235,902 Other liabilities — 24,490 15 — 24,505 Total liabilities 1,684,549 426,900 43,301 — 2,154,750 Stockholders' Equity: Preferred stock — — — — — Common stock 656 — — — 656 Additional paid-in capital 116,339 1,803,769 68,253 (1,872,022) 116,339 Accumulated other comprehensive loss (23,502) (23,502) (11,279) 34,781 (23,502) Retained earnings 806,556 804,331 36,095 (840,426) 806,556 Total stockholders’ equity 900,049 2,584,598 93,069 (2,677,667) 900,049 Total liabilities and stockholders’ equity $ 2,584,598 $ 3,011,498 $ 136,370 $ (2,677,667) $ 3,054,799 Condensed Consolidating Statement of Operations and Comprehensive Income Thirteen Weeks Ended March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 390,167 $ 55,025 $ (32,458) $ 412,734 Cost of goods sold — 306,300 50,813 (32,458) 324,655 Gross profit — 83,867 4,212 — 88,079 Operating expenses: Selling, general and administrative expenses — 40,055 (1,758) — 38,297 Amortization expense — 4,491 — — 4,491 Operating income — 39,321 5,970 — 45,291 Other income and expenses: Interest expense, net — 23,074 — — 23,074 Other income — (258) — — (258) Income before income tax expense — 16,505 5,970 — 22,475 Income tax expense — 5,772 (88) — 5,684 Equity in earnings of subsidiaries 16,791 6,058 — (22,849) — Net income $ 16,791 $ 16,791 $ 6,058 $ (22,849) $ 16,791 Comprehensive income (loss) $ 18,411 $ 16,629 $ 7,516 $ (24,145) $ 18,411 Condensed Consolidating Statement of Operations and Comprehensive Income Thirteen Weeks Ended March 31, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 407,848 $ 52,315 $ (28,434) $ 431,729 Cost of goods sold — 311,225 45,582 (28,434) 328,373 Gross profit — 96,623 6,733 — 103,356 Operating expenses: Selling, general and administrative expenses — 39,139 3,429 — 42,568 Amortization expense — 4,609 — — 4,609 Operating income — 52,875 3,304 — 56,179 Other income and expenses: Interest expense, net — 28,306 — — 28,306 Loss on extinguishment of debt — 2,778 — — 2,778 Other income — (2,054) — — (2,054) Income before income tax expense — 23,845 3,304 — 27,149 Income tax expense — 5,498 1,104 — 6,602 Equity in earnings of subsidiaries 20,547 2,200 — (22,747) — Net income $ 20,547 $ 20,547 $ 2,200 $ (22,747) $ 20,547 Comprehensive income (loss) $ 23,790 $ 20,436 $ 5,332 $ (25,768) $ 23,790 Condensed Consolidating Statement of Cash Flows Thirteen Weeks Ended March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ 43,330 $ 7,014 $ — $ 50,344 Cash flows from investing activities: Capital expenditures — (7,802) (846) — (8,648) Net cash used in investing activities — (7,802) (846) — (8,648) Cash flows from financing activities: Repayments of borrowings under revolving credit facility (40,000) — — — (40,000) Borrowings under revolving credit facility 40,000 — — — 40,000 Dividends paid (31,178) — — — (31,178) Payments for the repurchase of common stock, net (10,000) — — — (10,000) Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — (905) — — (905) Intercompany transactions 41,178 (34,389) (6,789) — — Net cash used in financing activities — (35,294) (6,789) — (42,083) Effect of exchange rate fluctuations on cash and cash equivalents — — 23 23 Net increase (decrease) in cash and cash equivalents — 234 (598) — (364) Cash and cash equivalents at beginning of period — 9,871 1,777 — 11,648 Cash and cash equivalents at end of period $ — $ 10,105 $ 1,179 $ — $ 11,284 Condensed Consolidating Statement of Cash Flows Thirteen Weeks Ended March 31, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ 69,554 $ 4,190 $ — $ 73,744 Cash flows from investing activities: Capital expenditures — (4,504) (468) — (4,972) Net cash used in investing activities — (4,504) (468) — (4,972) Cash flows from financing activities: Repayments of long-term debt (125,000) — — — (125,000) Dividends paid (30,922) — — — (30,922) Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — (1,832) — — (1,832) Intercompany transactions 155,922 (161,300) 5,378 — — Net cash (used in) provided by financing activities — (163,132) 5,378 — (157,754) Effect of exchange rate fluctuations on cash and cash equivalents — — 620 — 620 Net (decrease) increase in cash and cash equivalents — (98,082) 9,720 — (88,362) Cash and cash equivalents at beginning of period — 204,815 1,691 — 206,506 Cash and cash equivalents at end of period $ — $ 106,733 $ 11,411 $ — $ 118,144 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 30, 2019 | |
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 28, 2019 (fiscal 2019) and our fiscal year ended December 29, 2018 (fiscal 2018) each contain 52 weeks. Each quarter of fiscal 2019 and 2018 contains 13 weeks. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated interim financial statements for the thirteen week periods ended March 30, 2019 (first quarter of 2019) and March 31, 2018 (first quarter of 2018) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) 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 GAAP 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 March 30, 2019, and the results of our operations, comprehensive income and cash flows for the first quarter of 2019 and 2018. Our results of operations for the first quarter of 2019 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 2018 filed with the SEC on February 26, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; allowances for excess, obsolete and unsaleable inventories; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived 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 February 2018, the Financial Accounting Standards Board (FASB) issued a new Accounting Standards Update (ASU) related to the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act.” The ASU allows for a company to elect to make a one-time reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in corporate tax rate as a result of the U.S. Tax Act. The reclassification is the difference between the amount previously recorded in accumulated other comprehensive loss at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the U.S. Tax Act was effective and the amount that would have been recorded using the newly enacted rate. Additionally, the ASU requires a company to disclose whether or not it elects to make the reclassification. This guidance became effective during the first quarter of 2019. We elected to not make the optional one-time reclassification. 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 and to disclose key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. We adopted the new standard prospectively when it became effective in the first quarter of 2019 and applied the new standard to all leases existing at the date of initial application. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected all of the new standard’s available transition practical expedients that were applicable to us. The new standard also provides practical expedients for an entity’s ongoing accounting. We also elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases with a lease term of twelve months or less, we did not recognize ROU assets or lease liabilities. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. This standard did not have a material effect on our financial statements. Upon adoption, the most significant effects related to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our operating leases, which was $39.6 million and $42.6 million, respectively, as of the beginning of the period; and (2) providing additional new disclosures about our leasing activities. Recently Issued Accounting Standards In August 2018, the FASB issued a new ASU which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in software licensing arrangements under the internal-use software guidance. The update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period. We currently do not expect the adoption of this ASU to have a material impact to our consolidated financial statements. In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The update is effective for fiscal years beginning after December 15, 2020. We expect to update our defined benefit pension plan disclosures when the new standard becomes effective. We do not expect the adoption of this ASU to have an impact to our consolidated financial statements as this ASU only modifies disclosure requirements. In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for fair value measurement. The update is effective for fiscal years beginning after December 15, 2019. We expect to update our fair value measurement disclosures when the new standard becomes effective. We do not expect the adoption of this ASU to have an impact to our consolidated financial statements as this ASU only modifies disclosure requirements. In January 2017, the FASB issued an amendment to the standards of goodwill impairment testing. The new guidance simplifies the test for goodwill impairment, by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The update is effective for fiscal years beginning after December 15, 2019. We expect to adopt the standards when they become effective. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Acquisitions and divestitures | |
Schedule of divestiture | We recognized a pre-tax gain on the Pirate Brands sale of $176.4 million, as calculated below (in thousands): October 17, 2018 Cash received $ 420,002 Assets sold: Inventory (6,688) Property, plant and equipment (404) Customer relationships — finite-lived intangible assets (8,408) Trademarks — indefinite-lived intangible assets (152,800) Goodwill (70,952) Other (77) Total assets sold (239,328) Expenses (4,288) Gain on sale of assets $ 176,386 |
McCann's brand of premium Irish oatmeal | |
Acquisitions and divestitures | |
Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired | McCann’s Acquisition (in thousands): Preliminary Allocation: July 16, 2018 Property, plant and equipment $ 12 Inventory 973 Trademarks — indefinite-lived intangible assets 24,800 Customer relationship intangibles — finite-lived intangible assets 2,000 Accrued expenses (292) Goodwill 3,294 Total purchase price (paid in cash) $ 30,787 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Inventories | |
Summary of Inventories | Inventories consist of the following, as of the dates indicated (in thousands): March 30, 2019 December 29, 2018 Raw materials and packaging $ 64,279 $ 61,905 Work-in-process 56,843 95,282 Finished goods 254,271 244,168 Inventories $ 375,393 $ |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
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): March 30, 2019 December 29, 2018 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Finite-Lived Intangible Assets Trademarks $ 19,600 $ 3,642 $ 15,958 $ 19,600 $ 3,369 $ 16,231 Customer relationships 335,590 116,170 219,420 335,590 111,952 223,638 Total finite-lived intangible assets $ 355,190 $ 119,812 $ 235,378 $ 355,190 $ 115,321 $ 239,869 Indefinite-Lived Intangible Assets Goodwill $ 584,435 $ 584,435 Trademarks $ 1,355,700 $ 1,355,700 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consists of the following, as of the dates indicated (in thousands): March 30, 2019 December 29, 2018 Revolving credit loans $ 50,000 $ 50,000 4.625% senior notes due 2021 700,000 700,000 5.25% senior notes due 2025 900,000 900,000 Unamortized deferred financing costs (16,482) (17,490) Unamortized premium 3,236 3,371 Total long-term debt, net of unamortized deferred financing costs and discount/premium $ 1,636,754 $ 1,635,881 |
Schedule of aggregate contractual maturities of long-term debt | March 30, 2019 December 29, 2018 Revolving credit loans $ 50,000 $ 50,000 4.625% senior notes due 2021 700,000 700,000 5.25% senior notes due 2025 900,000 900,000 Unamortized deferred financing costs (16,482) (17,490) Unamortized premium 3,236 3,371 Total long-term debt, net of unamortized deferred financing costs and discount/premium $ 1,636,754 $ 1,635,881 As of March 30, 2019, the aggregate contractual maturities of long-term debt are as follows (in thousands): Fiscal year ending: 2019 $ — 2020 — 2021 700,000 2022 50,000 2023 — Thereafter 900,000 Total $ 1,650,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
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, 4.625% senior notes and 5.25% senior notes as of March 30, 2019 and December 29, 2018 are as follows (in thousands): March 30, 2019 December 29, 2018 Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans $ 50,000 $ 50,000 (1) $ 50,000 $ 50,000 (1) 4.625% senior notes due 2021 700,000 699,125 (2) 700,000 684,250 (2) 5.25% senior notes due 2025 $ 903,236 (3) $ 867,107 (2) $ 903,371 (3) $ 837,877 (2) (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) Fair values are estimated based on quoted market prices. (3) The carrying values of the 5.25% senior notes due 2025 include a premium. At March 30, 2019 and December 29, 2018 the face amount of the 5.25% senior notes due 2025 was $900.0 million. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Accumulated Other Comprehensive Loss. | |
Schedule of reclassification from accumulated other comprehensive loss | The reclassifications from accumulated other comprehensive loss (AOCL) for the first quarter of 2019 and 2018 are as follows (in thousands): Thirteen Weeks Ended Affected Line Item in March 30, March 31, the Statement Where Details about AOCL Components 2019 2018 Net Income is Presented Defined benefit pension plan items Amortization of unrecognized loss $ 215 $ 148 See (1) below Accumulated other comprehensive loss before tax 215 148 Total before tax Tax expense (53) (37) Income tax expense Total reclassification $ 162 $ 111 Net of tax (1) These items are included in the computation of net periodic pension cost. See Note 10, “Pension Benefits,” for additional information. |
Schedule of changes in accumulated other comprehensive loss | Changes in AOCL for the first quarter of 2019 are as follows (in thousands): Foreign Currency Defined Benefit Translation Pension Plan Items Adjustments Total Balance at December 29, 2018 $ (12,224) $ (11,278) $ (23,502) Other comprehensive income before reclassifications — 1,458 1,458 Amounts reclassified from AOCL 162 — 162 Net current period other comprehensive income 162 1,458 1,620 Balance at March 30, 2019 $ (12,062) $ (9,820) $ (21,882) |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Pension Benefits | |
Schedule of components of net periodic pension costs | Net periodic pension cost for company sponsored defined benefit pension plans for the first quarter of 2019 and 2018 includes the following components (in thousands): Thirteen Weeks Ended March 30, March 31, 2019 2018 Service cost—benefits earned during the period $ 1,937 $ Interest cost on projected benefit obligation 1,442 Expected return on plan assets (1,914) Amortization of unrecognized prior service cost — — Amortization of unrecognized loss 215 148 Net periodic pension cost $ 1,680 $ 1,394 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
Operating leases on the Balance Sheets | Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items: March 30, 2019 Right-of-use assets: Operating lease right-of-use assets $ 37,536 Operating lease liabilities: Operating lease liabilities, current portion $ 9,124 Long-term operating lease liabilities, net of current portion 31,304 Total operating lease liabilities $ 40,428 |
Supplemental information related to leases | Supplemental information related to leases: Thirteen Weeks Ended March 30, 2019 Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 2,702 The components of lease costs were as follows: Cost of goods sold $ 668 Selling, general and administrative expenses 1,970 Total lease costs $ 2,638 |
Schedule of weighted average remaining lease term and weighted average discount rate | The following table shows the lease term and discount rate for our ROU assets: March 30, 2019 Weighted average remaining lease term (years) Weighted average discount rate |
Future minimum lease payments under operating leases | As of March 30, 2019, the maturities of operating lease liabilities were as follows (in thousands): Fiscal year ending: 2019 $ 8,044 2020 9,759 2021 9,029 2022 4,771 2023 4,791 Thereafter 8,444 Total undiscounted future minimum lease payments 44,838 Less: Imputed interest (4,410) Total present value of future operating lease liabilities $ 40,428 As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease standard (Topic 840), as of December 29, 2018, future minimum lease payments under non-cancelable operating leases in effect at year-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: 2019 $ 12,298 2020 10,953 2021 8,991 2022 4,733 2023 4,784 Thereafter 8,445 Total undiscounted future minimum lease payments $ 50,204 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Earnings per Share | |
Schedule of calculations related to basic and diluted earning per share | Thirteen Weeks Ended March 30, March 31, 2019 2018 Weighted average shares outstanding: Basic 65,586,572 66,517,652 Net effect of potentially dilutive share-based compensation awards 30,583 197,708 Diluted 65,617,155 66,715,360 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Share-Based Payments | |
Schedule of stock option activity | The following table details our stock option activity for the first quarter of fiscal 2019 (dollars in thousands, except per share data): Weighted Weighted Average Average Contractual Life Aggregate Options Exercise Price Remaining (Years) Intrinsic Value Outstanding at December 29, 2018 1,194,105 $ 31.40 Granted — $ — Exercised — $ — Forfeited (24,950) $ 32.19 Cancelled — $ — Outstanding at March 30, 2019 1,169,155 $ 31.38 $ Exercisable at March 30, 2019 688,957 $ 31.96 $ — |
Schedule of stock options, valuation assumption | 2019 (1) 2018 Weighted average grant date fair value — $ Expected volatility — Expected term — 6.5 years Risk-free interest rate — Dividend yield — (1) Not applicable, as no stock options were granted during the first quarter of 2019. |
Schedule of compensation expense recognized for share-based payments | The following table sets forth the compensation expense recognized for share-based payments (performance share long-term incentive awards (LTIAs), stock options, non-employee director stock grants and other share based payments) during the first quarter of 2019 and 2018 and where that expense is reflected in our consolidated statements of operations (in thousands): Thirteen Weeks Ended March 30, March 31, Consolidated Statements of Operations Location 2019 2018 Compensation expense included in cost of goods sold $ 173 $ Compensation expense included in selling, general and administrative expenses 407 Total compensation expense for share-based payments $ 580 $ 838 |
Schedule of non-vested performance share LTIAs | Weighted Average Number of Grant Date Fair Value Performance Shares (1) (per share) (2) Outstanding at December 29, 2018 509,317 $ 27.30 Granted 380,392 $ 18.89 Vested (102,893) $ 29.04 Forfeited (61,193) $ 28.56 Outstanding at March 30, 2019 725,623 $ 22.54 (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 | (15) The following table details our stock option activity for the first quarter of fiscal 2019 (dollars in thousands, except per share data): Weighted Weighted Average Average Contractual Life Aggregate Options Exercise Price Remaining (Years) Intrinsic Value Outstanding at December 29, 2018 1,194,105 $ 31.40 Granted — $ — Exercised — $ — Forfeited (24,950) $ 32.19 Cancelled — $ — Outstanding at March 30, 2019 1,169,155 $ 31.38 $ Exercisable at March 30, 2019 688,957 $ 31.96 $ — The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is 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. 2019 (1) 2018 Weighted average grant date fair value — $ Expected volatility — Expected term — 6.5 years Risk-free interest rate — Dividend yield — (1) Not applicable, as no stock options were granted during the first quarter of 2019. The following table sets forth the compensation expense recognized for share-based payments (performance share long-term incentive awards (LTIAs), stock options, non-employee director stock grants and other share based payments) during the first quarter of 2019 and 2018 and where that expense is reflected in our consolidated statements of operations (in thousands): Thirteen Weeks Ended March 30, March 31, Consolidated Statements of Operations Location 2019 2018 Compensation expense included in cost of goods sold $ 173 $ Compensation expense included in selling, general and administrative expenses 407 Total compensation expense for share-based payments $ 580 $ 838 As of March 30, 2019, there was $3.3 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.75 years, and $1.0 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.0 years. The following table details the activity in our non-vested performance share LTIAs for the first quarter of 2019: Weighted Average Number of Grant Date Fair Value Performance Shares (1) (per share) (2) Outstanding at December 29, 2018 509,317 $ 27.30 Granted 380,392 $ 18.89 Vested (102,893) $ 29.04 Forfeited (61,193) $ 28.56 Outstanding at March 30, 2019 725,623 $ 22.54 (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 quarter of 2019 and 2018 upon the vesting of performance share LTIAs, the exercise of stock options and other share-based payments (dollars in thousands): March 30, March 31, 2019 2018 Number of performance shares vested 102,893 150,255 Shares withheld to fund statutory minimum tax withholding 36,965 57,298 Shares of common stock issued for performance share LTIAs 65,928 92,957 Shares of common stock issued to non-employee directors for annual equity grants — 1,119 Total shares of common stock issued 65,928 94,076 |
Net Sales by Brand (Tables)
Net Sales by Brand (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Net Sales by Brand | |
Schedule of net sales by brand | The following table sets forth net sales by brand (in thousands): Thirteen Weeks Ended March 30, March 31, 2019 2018 Brand: (1) Green Giant - frozen $ 100,863 $ 94,889 Spices & Seasonings (2) 63,226 62,760 Ortega 37,252 37,854 Green Giant - shelf stable (3) 26,439 25,683 Maple Grove Farms of Vermont 17,897 16,965 Cream of Wheat 17,410 18,424 Back to Nature 16,662 20,040 Mrs. Dash 15,208 16,736 Pirate Brands (4) — 20,996 All other brands 117,777 117,382 Total $ 412,734 $ 431,729 (1) Table includes net sales for each of our brands whose net sales for the first quarter of 2019 or fiscal 2018 represent 3% or more of our total net sales for those periods, 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) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016, including French’s ® seasoning mixes, which we discontinued during the third quarter of 2018 following the expiration of a licensing agreement. Does not include net sales for Mrs. Dash and our other legacy spices & seasonings brands. (3) Does not include net sales of the Le Sueur brand. Net sales of the Le Sueur brand are included below in “All other brands.” (4) See Note 3, “Acquisitions and Divestitures.” |
Guarantor and Non-Guarantor F_2
Guarantor and Non-Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Guarantor and Non-Guarantor Financial Information | |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ 10,105 $ 1,179 $ — $ 11,284 Trade accounts receivable, net — 152,063 10,711 — 162,774 Inventories, net — 313,307 62,086 — 375,393 Prepaid expenses and other current assets — 17,133 3,997 — 21,130 Income tax receivable — 1 1,520 — 1,521 Total current assets — 492,609 79,493 — 572,102 Property, plant and equipment, net — 238,180 44,366 — 282,546 Operating lease right-of-use assets — 37,443 93 — 37,536 Goodwill — 584,435 — — 584,435 Other intangibles, net — 1,591,078 — — 1,591,078 Other assets — 1,122 14 — 1,136 Deferred income taxes — — 5,350 — 5,350 Investments in subsidiaries 2,561,372 100,585 — (2,661,957) — Total assets $ 2,561,372 $ 3,045,452 $ 129,316 $ (2,661,957) $ 3,074,183 Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ 110,941 $ 15,267 $ — $ 126,208 Accrued expenses — 63,349 3,565 — 66,914 Operating lease liabilities, current portion — 9,081 43 — 9,124 Income tax payable — 33,276 — — 33,276 Dividends payable 31,016 — — — 31,016 Intercompany payables — (9,791) 9,791 — — Total current liabilities 31,016 206,856 28,666 — 266,538 Long-term debt 1,653,237 (16,483) — — 1,636,754 Deferred income taxes — 239,881 — — 239,881 Long-term operating lease liabilities, net of current portion — 31,240 64 — 31,304 Other liabilities — 22,587 — — 22,587 Total liabilities 1,684,253 484,081 28,730 — 2,197,064 Stockholders' Equity: Preferred stock — — — — — Common stock 653 — — — 653 Additional paid-in capital 75,001 1,762,131 68,253 (1,830,384) 75,001 Accumulated other comprehensive loss (21,882) (21,882) (9,820) 31,702 (21,882) Retained earnings 823,347 821,122 42,153 (863,275) 823,347 Total stockholders’ equity 877,119 2,561,371 100,586 (2,661,957) 877,119 Total liabilities and stockholders’ equity $ 2,561,372 $ 3,045,452 $ 129,316 $ (2,661,957) $ 3,074,183 Condensed Consolidating Balance Sheet As of December 29, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Assets Current Assets: Cash and cash equivalents $ — $ 9,871 $ 1,777 $ — $ 11,648 Trade accounts receivable, net — 140,464 11,243 — 151,707 Inventories, net — 332,774 68,581 — 401,355 Prepaid expenses and other current assets — 15,995 3,993 — 19,988 Income tax receivable — — 1,398 — 1,398 Total current assets — 499,104 86,992 — 586,096 Property, plant and equipment, net — 238,128 44,425 — 282,553 Goodwill — 584,435 — — 584,435 Other intangibles, net — 1,595,569 — — 1,595,569 Other assets — 1,193 13 — 1,206 Deferred income taxes — — 4,940 — 4,940 Investments in subsidiaries 2,584,598 93,069 — (2,677,667) — Total assets $ 2,584,598 $ 3,011,498 $ 136,370 $ (2,677,667) $ 3,054,799 Liabilities and Stockholders' Equity Current Liabilities: Trade accounts payable $ — $ 115,946 $ 24,054 $ — $ 140,000 Accrued expenses — 53,386 2,274 — 55,660 Income tax payable — 31,247 377 — 31,624 Dividends payable 31,178 — — — 31,178 Intercompany payables — (16,581) 16,581 — — Total current liabilities 31,178 183,998 43,286 — 258,462 Long-term debt 1,653,371 (17,490) — — 1,635,881 Deferred income taxes — 235,902 — — 235,902 Other liabilities — 24,490 15 — 24,505 Total liabilities 1,684,549 426,900 43,301 — 2,154,750 Stockholders' Equity: Preferred stock — — — — — Common stock 656 — — — 656 Additional paid-in capital 116,339 1,803,769 68,253 (1,872,022) 116,339 Accumulated other comprehensive loss (23,502) (23,502) (11,279) 34,781 (23,502) Retained earnings 806,556 804,331 36,095 (840,426) 806,556 Total stockholders’ equity 900,049 2,584,598 93,069 (2,677,667) 900,049 Total liabilities and stockholders’ equity $ 2,584,598 $ 3,011,498 $ 136,370 $ (2,677,667) $ 3,054,799 |
Condensed Consolidating Statement of Operations and Comprehensive Income | Condensed Consolidating Statement of Operations and Comprehensive Income Thirteen Weeks Ended March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 390,167 $ 55,025 $ (32,458) $ 412,734 Cost of goods sold — 306,300 50,813 (32,458) 324,655 Gross profit — 83,867 4,212 — 88,079 Operating expenses: Selling, general and administrative expenses — 40,055 (1,758) — 38,297 Amortization expense — 4,491 — — 4,491 Operating income — 39,321 5,970 — 45,291 Other income and expenses: Interest expense, net — 23,074 — — 23,074 Other income — (258) — — (258) Income before income tax expense — 16,505 5,970 — 22,475 Income tax expense — 5,772 (88) — 5,684 Equity in earnings of subsidiaries 16,791 6,058 — (22,849) — Net income $ 16,791 $ 16,791 $ 6,058 $ (22,849) $ 16,791 Comprehensive income (loss) $ 18,411 $ 16,629 $ 7,516 $ (24,145) $ 18,411 Condensed Consolidating Statement of Operations and Comprehensive Income Thirteen Weeks Ended March 31, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 407,848 $ 52,315 $ (28,434) $ 431,729 Cost of goods sold — 311,225 45,582 (28,434) 328,373 Gross profit — 96,623 6,733 — 103,356 Operating expenses: Selling, general and administrative expenses — 39,139 3,429 — 42,568 Amortization expense — 4,609 — — 4,609 Operating income — 52,875 3,304 — 56,179 Other income and expenses: Interest expense, net — 28,306 — — 28,306 Loss on extinguishment of debt — 2,778 — — 2,778 Other income — (2,054) — — (2,054) Income before income tax expense — 23,845 3,304 — 27,149 Income tax expense — 5,498 1,104 — 6,602 Equity in earnings of subsidiaries 20,547 2,200 — (22,747) — Net income $ 20,547 $ 20,547 $ 2,200 $ (22,747) $ 20,547 Comprehensive income (loss) $ 23,790 $ 20,436 $ 5,332 $ (25,768) $ 23,790 |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Thirteen Weeks Ended March 30, 2019 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ 43,330 $ 7,014 $ — $ 50,344 Cash flows from investing activities: Capital expenditures — (7,802) (846) — (8,648) Net cash used in investing activities — (7,802) (846) — (8,648) Cash flows from financing activities: Repayments of borrowings under revolving credit facility (40,000) — — — (40,000) Borrowings under revolving credit facility 40,000 — — — 40,000 Dividends paid (31,178) — — — (31,178) Payments for the repurchase of common stock, net (10,000) — — — (10,000) Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — (905) — — (905) Intercompany transactions 41,178 (34,389) (6,789) — — Net cash used in financing activities — (35,294) (6,789) — (42,083) Effect of exchange rate fluctuations on cash and cash equivalents — — 23 23 Net increase (decrease) in cash and cash equivalents — 234 (598) — (364) Cash and cash equivalents at beginning of period — 9,871 1,777 — 11,648 Cash and cash equivalents at end of period $ — $ 10,105 $ 1,179 $ — $ 11,284 Condensed Consolidating Statement of Cash Flows Thirteen Weeks Ended March 31, 2018 (In thousands) Guarantor Non-Guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ — $ 69,554 $ 4,190 $ — $ 73,744 Cash flows from investing activities: Capital expenditures — (4,504) (468) — (4,972) Net cash used in investing activities — (4,504) (468) — (4,972) Cash flows from financing activities: Repayments of long-term debt (125,000) — — — (125,000) Dividends paid (30,922) — — — (30,922) Payments of tax withholding on behalf of employees for net share settlement of share-based compensation — (1,832) — — (1,832) Intercompany transactions 155,922 (161,300) 5,378 — — Net cash (used in) provided by financing activities — (163,132) 5,378 — (157,754) Effect of exchange rate fluctuations on cash and cash equivalents — — 620 — 620 Net (decrease) increase in cash and cash equivalents — (98,082) 9,720 — (88,362) Cash and cash equivalents at beginning of period — 204,815 1,691 — 206,506 Cash and cash equivalents at end of period $ — $ 106,733 $ 11,411 $ — $ 118,144 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Fiscal Year and Business and Credit Concentrations (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2019 | Dec. 28, 2019 | Dec. 29, 2018 | |
Fiscal Year | |||
Number of weeks in each fiscal quarter | 91 days | 91 days | |
Number of weeks in fiscal period | 364 days | 364 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 Accoun_4
Summary of Significant Accounting Policies - ASU Share-based payments to employees (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Jan. 01, 2019 |
Newly Adopted Accounting Standards | ||
Operating lease right-of-use assets | $ 37,536 | $ 39,600 |
Total present value of future operating lease payments | 40,428 | 42,600 |
ASU 2016-02 | ||
Newly Adopted Accounting Standards | ||
Operating lease right-of-use assets | $ 39,600 | |
Total present value of future operating lease payments | $ 42,600 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures (Details) $ in Thousands | Jul. 16, 2018USD ($) |
McCann's brand of premium Irish oatmeal | |
Acquisitions and divestitures | |
Cash paid | $ 30,800 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - McCann's (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Mar. 30, 2019 | Dec. 29, 2018 |
Preliminary Allocation: | |||
Goodwill | $ 584,435 | $ 584,435 | |
McCann's brand of premium Irish oatmeal | |||
Purchase Price: | |||
Cash paid | $ 30,800 | ||
Preliminary Allocation: | |||
Property, plant and equipment | 12 | ||
Inventory | 973 | ||
Accrued expenses | (292) | ||
Goodwill | 3,294 | ||
Total | 30,787 | ||
McCann's brand of premium Irish oatmeal | Customer relationship | |||
Preliminary Allocation: | |||
Customer relationship intangibles—amortizable intangible assets | 2,000 | ||
McCann's brand of premium Irish oatmeal | Trademarks | |||
Preliminary Allocation: | |||
Trademarks - unamortizable intangible assets | $ 24,800 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Pirate (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 17, 2018 |
Special bonus | ||
Period of ownership | 5 years | |
Executive officers and certain members of senior management | ||
Special bonus | ||
Special bonus amount | $ 6,000 | |
Pirate Brands | ||
Acquisitions and divestitures | ||
Cash received | $ 420,002 | |
Net deferred tax liabilities | 107,300 | |
Assets sold: | ||
Inventory | (6,688) | |
Property, plant and equipment | (404) | |
Goodwill | (70,952) | |
Other | (77) | |
Total assets sold | (239,328) | |
Expenses | (4,288) | |
Gain on sale of assets | 176,386 | |
Pirate Brands | Trademarks | ||
Assets sold: | ||
Intangible assets | (152,800) | |
Pirate Brands | Customer relationship | ||
Assets sold: | ||
Intangible assets | $ (8,408) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Inventories | ||
Raw materials and packaging | $ 64,279 | $ 61,905 |
Work-in-process | 56,843 | 95,282 |
Finished goods | 254,271 | 244,168 |
Inventories | $ 375,393 | $ 401,355 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Goodwill and Other Intangible Assets | |||
Amortization expense | $ 4,491 | $ 4,609 | |
Amortizable Intangible Assets | |||
Gross Carrying Amount | 355,190 | $ 355,190 | |
Accumulated Amortization | 119,812 | 115,321 | |
Net Carrying Amount | 235,378 | 239,869 | |
Unamortizable Intangible Assets | |||
Goodwill | 584,435 | 584,435 | |
Future amortization expense | |||
Remainder of fiscal 2019 | 13,500 | ||
2020 | 18,000 | ||
2021 | 18,000 | ||
2022 | 18,000 | ||
2023 | 17,800 | ||
2024 | 17,800 | ||
Trademarks | |||
Unamortizable Intangible Assets | |||
Unamortizable intangible assets excluding goodwill | 1,355,700 | 1,355,700 | |
Trademarks | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | 19,600 | 19,600 | |
Accumulated Amortization | 3,642 | 3,369 | |
Net Carrying Amount | 15,958 | 16,231 | |
Customer relationship | |||
Amortizable Intangible Assets | |||
Gross Carrying Amount | 335,590 | 335,590 | |
Accumulated Amortization | 116,170 | 111,952 | |
Net Carrying Amount | $ 219,420 | $ 223,638 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 | Nov. 20, 2017 | Apr. 03, 2017 | Jun. 04, 2013 |
Information related to long-term debt | |||||
Outstanding principal | $ 1,650,000 | ||||
Unamortized deferred financing costs | (16,482) | $ (17,490) | |||
Unamortized premium | 3,236 | 3,371 | |||
Total long-term debt, net of unamortized financing costs and discount/premium | 1,636,754 | 1,635,881 | |||
Revolving credit loans | |||||
Information related to long-term debt | |||||
Outstanding principal | 50,000 | 50,000 | |||
4.625% Senior notes due 2021 | |||||
Information related to long-term debt | |||||
Outstanding principal | $ 700,000 | 700,000 | |||
Interest rate (as a percent) | 4.625% | 4.625% | |||
5.25% Senior Notes due 2025 | |||||
Information related to long-term debt | |||||
Outstanding principal | $ 900,000 | $ 900,000 | |||
Interest rate (as a percent) | 5.25% | 5.25% | 5.25% | 5.25% |
Long-Term Debt, Activity (Detai
Long-Term Debt, Activity (Details) $ in Thousands | Oct. 19, 2018USD ($) | Oct. 18, 2018USD ($) | Nov. 20, 2017USD ($) | Mar. 30, 2017USD ($) | Mar. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 29, 2018USD ($) | Nov. 19, 2017USD ($) | Apr. 03, 2017USD ($) | Jun. 04, 2013USD ($) |
Information related to senior notes | |||||||||||
Outstanding principal | $ 1,650,000 | ||||||||||
Long-term debt | 1,636,754 | $ 1,635,881 | |||||||||
Repayments of long-term debt | $ 125,000 | ||||||||||
Loss on extinguishment of debt | 2,778 | ||||||||||
Accrued Interest | |||||||||||
Accrued interest | 35,000 | 15,600 | |||||||||
Tranche B Term Loans due 2022 | |||||||||||
Information related to senior notes | |||||||||||
Outstanding principal | $ 650,100 | $ 640,100 | $ 0 | ||||||||
Increase in principal of debt | $ 10,000 | ||||||||||
Repayments of long-term debt | $ 147,900 | $ 352,200 | $ 25,000 | 125,000 | |||||||
Loss on extinguishment of debt | 2,800 | 13,100 | |||||||||
Extinguishment of Debt | |||||||||||
Write-off of deferred debt financing costs | 2,400 | ||||||||||
Write-off of unamortized discount | $ 400 | ||||||||||
Tranche B Term Loans due 2022 | LIBOR | |||||||||||
Information related to senior notes | |||||||||||
Percentage reduction in spread from refinancing | 0.25% | 0.75% | |||||||||
Interest rate added to variable base rate (as a percent) | 2.00% | ||||||||||
Tranche B Term Loans due 2022 | Base rate | |||||||||||
Information related to senior notes | |||||||||||
Interest rate added to variable base rate (as a percent) | 1.00% | ||||||||||
Revolving credit loans | |||||||||||
Information related to senior notes | |||||||||||
Outstanding principal | $ 50,000 | 50,000 | |||||||||
Maximum capacity available | $ 700,000 | $ 500,000 | |||||||||
Outstanding letters of credit | 2,200 | ||||||||||
Available borrowing capacity | $ 647,800 | ||||||||||
Commitment fees (as a percent) | 0.50% | ||||||||||
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 | |||||||||||
Information related to senior notes | |||||||||||
Consolidated interest leverage ratio | 1.75 | ||||||||||
Revolving credit loans | Maximum | |||||||||||
Information related to senior notes | |||||||||||
Consolidated leverage ratio | 7 | ||||||||||
Revolving credit loans | LIBOR | Minimum | |||||||||||
Information related to senior notes | |||||||||||
Interest rate added to variable base rate (as a percent) | 1.25% | ||||||||||
Revolving credit loans | LIBOR | Maximum | |||||||||||
Information related to senior notes | |||||||||||
Interest rate added to variable base rate (as a percent) | 1.75% | ||||||||||
Revolving credit loans | Base rate | Minimum | |||||||||||
Information related to senior notes | |||||||||||
Interest rate added to variable base rate (as a percent) | 0.25% | ||||||||||
Revolving credit loans | Base rate | Maximum | |||||||||||
Information related to senior notes | |||||||||||
Interest rate added to variable base rate (as a percent) | 0.75% | ||||||||||
Letters of credit facility | |||||||||||
Information related to senior notes | |||||||||||
Maximum capacity available | $ 50,000 | ||||||||||
Fronting fee (as a percent) | 0.25% | ||||||||||
Incremental term loan | Maximum | |||||||||||
Information related to senior notes | |||||||||||
Senior secured leverage ratio | 4 | ||||||||||
4.625% Senior notes due 2021 | |||||||||||
Information related to senior notes | |||||||||||
Outstanding principal | $ 700,000 | 700,000 | |||||||||
Interest rate (as a percent) | 4.625% | 4.625% | |||||||||
Principal amount of notes | $ 700,000 | ||||||||||
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 senior notes | |||||||||||
Outstanding principal | $ 900,000 | $ 900,000 | |||||||||
Principal amount of debt repurchased | $ 500,000 | ||||||||||
Interest rate (as a percent) | 5.25% | 5.25% | 5.25% | 5.25% | |||||||
Interest rate at period end (as a percent) | 5.03% | ||||||||||
Principal amount of notes | $ 400,000 | $ 500,000 | |||||||||
Debt issuance price (as a percent) | 101.00% | 100.00% | |||||||||
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% |
Long-Term Debt - Contractual Ma
Long-Term Debt - Contractual Maturities (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Aggregate contractual maturities of long-term debt | |
2021 | $ 700,000 |
2022 | 50,000 |
Thereafter | 900,000 |
Outstanding principal | $ 1,650,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Financial assets and liabilities at fair value | |||
Term loans and senior notes, carrying value | $ 1,636,754 | $ 1,635,881 | |
Changes in level 3 | |||
Level 3 activity | $ 0 | $ 0 | |
4.625% Senior notes due 2021 | |||
Financial assets and liabilities at fair value | |||
Interest rate (as a percent) | 4.625% | 4.625% | |
5.25% Senior Notes due 2025 | |||
Financial assets and liabilities at fair value | |||
Interest rate (as a percent) | 5.25% | 5.25% | |
Face amount of senior notes | $ 900,000 | $ 900,000 | |
Carrying Value | |||
Financial assets and liabilities at fair value | |||
Long-term Line of Credit | 50,000 | 50,000 | |
Carrying Value | 4.625% Senior notes due 2021 | |||
Financial assets and liabilities at fair value | |||
Term loans and senior notes, carrying value | 700,000 | 700,000 | |
Carrying Value | 5.25% Senior Notes due 2025 | |||
Financial assets and liabilities at fair value | |||
Term loans and senior notes, carrying value | 903,236 | 903,371 | |
Fair value measured on recurring basis | Fair Value | Level 2 | |||
Financial assets and liabilities at fair value | |||
Term loans and senior notes, fair value | 50,000 | 50,000 | |
Fair value measured on recurring basis | Fair Value | 4.625% Senior notes due 2021 | Level 2 | |||
Financial assets and liabilities at fair value | |||
Term loans and senior notes, fair value | 699,125 | 684,250 | |
Fair value measured on recurring basis | Fair Value | 5.25% Senior Notes due 2025 | Level 2 | |||
Financial assets and liabilities at fair value | |||
Term loans and senior notes, fair value | $ 867,107 | $ 837,877 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Reclassification from AOCL | ||
Income tax expense | $ 5,684 | $ 6,602 |
Net income | (16,791) | (20,547) |
Defined Benefit Pension Plan Items | Amount Reclassified from AOCL | ||
Reclassification from AOCL | ||
Total before tax | 215 | 148 |
Income tax expense | (53) | (37) |
Net income | 162 | 111 |
Amortization of unrecognized loss | Amount Reclassified from AOCL | ||
Reclassification from AOCL | ||
Total before tax | $ 215 | $ 148 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Changes in accumulated other comprehensive income (loss) | ||
Beginning balance | $ 900,049 | $ 880,819 |
Net current period other comprehensive income | 1,620 | 3,243 |
Ending balance | 877,119 | 872,648 |
Defined Benefit Pension Plan Items | ||
Changes in accumulated other comprehensive income (loss) | ||
Beginning balance | (12,224) | |
Amounts reclassified from AOCL | 162 | |
Net current period other comprehensive income | 162 | |
Ending balance | (12,062) | |
Foreign Currency Translation Adjustments | ||
Changes in accumulated other comprehensive income (loss) | ||
Beginning balance | (11,278) | |
Other comprehensive income before reclassifications | 1,458 | |
Net current period other comprehensive income | 1,458 | |
Ending balance | (9,820) | |
Accumulated Other Comprehensive Loss | ||
Changes in accumulated other comprehensive income (loss) | ||
Beginning balance | (23,502) | (20,756) |
Other comprehensive income before reclassifications | 1,458 | |
Amounts reclassified from AOCL | 162 | |
Net current period other comprehensive income | 1,620 | |
Ending balance | $ (21,882) | $ (17,513) |
Stock Repurchases Program (Deta
Stock Repurchases Program (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | May 13, 2018 | |
Stock repurchase program | |||
Value of stock authorized for repurchase | $ 50 | ||
Stock repurchased and retired (in shares) | 407,022 | 1,397,148 | |
Average price per share (in dollars per share) | $ 24.55 | $ 26.41 | |
Stock repurchased and retired (in dollars) | $ 10 | $ 36.9 | |
Available for future repurchases (in dollars) | $ 50 | ||
Stock repurchased (in shares) | 0 | ||
Maximum | |||
Stock repurchase program | |||
Value of stock authorized for repurchase | $ 50 |
Pension Benefits - Net Periodic
Pension Benefits - Net Periodic Pension Cost, AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Components of net periodic pension cost | ||
Service cost-benefits earned during the period | $ 1,937 | $ 1,985 |
Interest cost on projected benefit obligation | 1,442 | 1,262 |
Expected return on plan assets | (1,914) | (2,001) |
Amortization of unrecognized loss | 215 | 148 |
Net periodic pension cost | $ 1,680 | 1,394 |
Employer contributions | $ 1,100 |
Pension Benefits - Multi-Employ
Pension Benefits - Multi-Employer Defined Benefit Pension Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 30, 2019 | Dec. 29, 2018 | |
Multi-Employer Defined Benefit Pension Plan | ||
Contribution to the multi-employer plan | $ 0.2 | $ 0.2 |
Maximum contribution to multi-employer plan (as a percent) | 5.00% | |
Maximum | ||
Multi-Employer Defined Benefit Pension Plan | ||
Surcharges paid | $ 0.1 | |
Surcharges expected to be paid | $ 0.1 | |
Plan | Minimum | ||
Multi-Employer Defined Benefit Pension Plan | ||
Maximum contribution to multi-employer plan (as a percent) | 5.00% |
Leases (Details)
Leases (Details) | 3 Months Ended |
Mar. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |
option to terminate | true |
operating lease existence of option To terminate | true |
Lessee, Operating Lease, Terminate Term | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
remaining lease term | 7 years |
operating lease renewal term | 5 years |
Leases - Operating Leases on Ba
Leases - Operating Leases on Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 37,536 | $ 39,600 |
Operating lease liabilities, current portion | 9,124 | |
Long-term operating lease liabilities, net of current portion | 31,304 | |
Total operating lease liabilities | $ 40,428 | $ 42,600 |
Leases - Supplemental informati
Leases - Supplemental information related to leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 2,702 | |
Cost of goods sold | 668 | |
Selling, general and administrative expenses | 1,970 | |
Total lease costs | 2,638 | |
Rent expense | $ 3,200 | $ 3,300 |
Leases - Lease term and discoun
Leases - Lease term and discount rate for our ROU (Details) | Mar. 30, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 5 years 2 months 12 days |
Weighted average discount rate | 4.05% |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Topic 842) (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 | $ 8,044 | |
2020 | 9,759 | |
2021 | 9,029 | |
2022 | 4,771 | |
2023 | 4,791 | |
Thereafter | 8,444 | |
Total undiscounted future minimum lease payments | 44,838 | |
Less: Imputed interest | (4,410) | |
Total present value of future operating lease payments | $ 40,428 | $ 42,600 |
Leases - Maturity of lease li_2
Leases - Maturity of lease liabilities (Topic 840) (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 12,298 |
2020 | 10,953 |
2021 | 8,991 |
2022 | 4,733 |
2023 | 4,784 |
Thereafter | 8,445 |
Total undiscounted future minimum lease payments | $ 50,204 |
Commitments and Contingencies -
Commitments and Contingencies - Collective Bargaining (Details) | 3 Months Ended |
Mar. 30, 2019employeeagreement | |
Information related to Collective Bargaining Agreements | |
Number of employees | 2,679 |
Covered under collective bargaining agreements | |
Information related to Collective Bargaining Agreements | |
Number of employees | 1,675 |
Percentage of total employees covered under collective bargaining agreements | 62.50% |
Number of collective bargaining agreements expiring within one year | agreement | 2 |
Covered under collective bargaining agreements | Collective Bargaining Agreement Covering Brooklyn Facility [Member] | |
Information related to Collective Bargaining Agreements | |
Number of employees | 60 |
Covered under collective bargaining agreements | Collective Bargaining Agreement Covering Roseland Facility [Member] | |
Information related to Collective Bargaining Agreements | |
Number of employees | 50 |
Collective bargaining agreements expiring with next 12 months | |
Information related to Collective Bargaining Agreements | |
Collective bargaining agreements expiration period | 12 months |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Earnings per Share | ||
Antidilutive securities excluded from computation of loss per share | 1,167,297 | 727,311 |
Weighted average shares outstanding: | ||
Basic (in shares) | 65,586,572 | 66,517,652 |
Net effect of potentially dilutive share-based compensation awards (in shares) | 30,583 | 197,708 |
Diluted (in shares) | 65,617,155 | 66,715,360 |
Business and Credit Concentra_2
Business and Credit Concentrations and Geographic Information (Details) - customer | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Net sales | Consolidated net sales | Top ten customers | |||
Business and Credit Concentrations | |||
Number of top customers | 10 | 10 | |
Percentage of concentration risk | 54.20% | 57.10% | |
Net sales | Consolidated net sales | Other than Walmart | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 23.50% | 24.60% | |
Accounts receivable | Trade accounts receivables | Top ten customers | |||
Business and Credit Concentrations | |||
Number of top customers | 10 | 10 | |
Percentage of concentration risk | 54.50% | 54.80% | |
Accounts receivable | Trade accounts receivables | Other than Walmart | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 24.00% | 24.90% | |
Foreign | Net sales | Consolidated net sales | |||
Business and Credit Concentrations | |||
Percentage of concentration risk | 7.70% | 6.70% |
Share Based Payments - Stock Op
Share Based Payments - Stock Options (Details) - Stock Option - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Options | ||
Outstanding at beginning of fiscal period (in shares) | 1,194,105 | |
Forfeited (in shares) | (24,950) | |
Outstanding at end of quarter (in shares) | 1,169,155 | |
Exercisable at end of quarter (in shares) | 688,957 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of fiscal period (in dollar per share) | $ 31.40 | |
Forfeited (in dollars per share) | 32.19 | |
Outstanding at end of quarter (in dollar per share) | 31.38 | |
Exercisable at end of quarter ( in dollars per share) | $ 31.96 | |
Weighted Average Contractual Life Remaining (Years) | ||
Weighted Average Contractual Life Remaining (Years) | 7 years 2 months 9 days | |
Exercisable, Weighted Average Contractual Life Remaining (Years) | 6 years 1 month 17 days | |
Aggregate Intrinsic Value | ||
Outstanding at end of quarter, Aggregate Intrinsic Value | $ 6 | |
Assumptions: | ||
Weighted average grant date fair value (in dollars per share) | $ 3.65 | |
Expected volatility (as a percent) | 30.60% | |
Risk-free interest rate (as a percent) | 2.70% | |
Dividend yield (as a percent) | 6.90% | |
Minimum | ||
Assumptions: | ||
Expected volatility (as a percent) | 30.60% | |
Expected term | 6 years 6 months | |
Risk-free interest rate (as a percent) | 2.70% | |
Dividend yield (as a percent) | 6.90% |
Share Based Payments - Share-ba
Share Based Payments - Share-based payments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Compensation expense | ||
Total compensation expense for share-based payments | $ 580 | $ 838 |
Performance shares | ||
Compensation expense | ||
Unrecognized compensation expense | $ 3,300 | |
Period over which unrecognized compensation expense is expected to be recognized | 2 years 9 months | |
Stock Option | ||
Compensation expense | ||
Unrecognized compensation expense | $ 1,000 | |
Period over which unrecognized compensation expense is expected to be recognized | 2 years | |
Cost of Goods Sold | ||
Compensation expense | ||
Total compensation expense for share-based payments | $ 173 | 269 |
Selling, General and Administrative Expenses | ||
Compensation expense | ||
Total compensation expense for share-based payments | $ 407 | $ 569 |
Share Based Payments - Performa
Share Based Payments - Performance (Details) - Performance shares - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Number of Shares | ||
Balance at the beginning of the period (in shares) | 509,317 | |
Granted (in shares) | 380,392 | |
Vested (in shares) | (102,893) | (150,255) |
Forfeited (in shares) | (61,193) | |
Balance at the end of the period (in shares) | 725,623 | |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per share) | $ 27.30 | |
Granted (in dollars per share) | 18.89 | |
Vested (in dollars per share) | 29.04 | |
Forfeited (in dollars per share) | 28.56 | |
Balance at the end of the period (in dollars per share) | $ 22.54 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Percentage of target number of shares that may be earned | 200.00% |
Share Based Payments - Other Ve
Share Based Payments - Other Vested (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Share based compensation expense related to long-term incentive plans | ||
Total shares of common stock issued | 65,928 | 94,076 |
Non-Employee Directors | ||
Share based compensation expense related to long-term incentive plans | ||
Total shares of common stock issued | 1,119 | |
Performance shares | ||
Share based compensation expense related to long-term incentive plans | ||
Number of performance shares vested | 102,893 | 150,255 |
Shares withheld to fund statutory minimum tax withholding | 36,965 | 57,298 |
Total shares of common stock issued | 65,928 | 92,957 |
Share-Based Payments, ASU 2016-
Share-Based Payments, ASU 2016-09 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Share-Based Payments | ||
Income tax expense (benefit) | $ 5,684 | $ 6,602 |
Workforce Reduction (Details)
Workforce Reduction (Details) $ in Millions | 3 Months Ended |
Mar. 30, 2019USD ($)item | |
Restructuring Cost and Reserve [Line Items] | |
Severance and related charges | $ 1.6 |
Severance and related charges, expected additional charges | 0.8 |
Severance additional charges | 1.4 |
Severance Costs | 0.9 |
Employee severance and other employee costs | $ 1.6 |
Number of employees retirement agreements | item | 2 |
Reduced employee expenses | |
Restructuring Cost and Reserve [Line Items] | |
Pre-tax annual effect on future earnings | $ 2.4 |
Net Sales by Brand (Details)
Net Sales by Brand (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Brand | ||
Net sales | $ 412,734 | $ 431,729 |
Specific brand sale to total sale (as a percent) | 3.00% | |
Green Giant - frozen | ||
Brand | ||
Net sales | $ 100,863 | 94,889 |
Spices and Seasonings | ||
Brand | ||
Net sales | 63,226 | 62,760 |
Ortega | ||
Brand | ||
Net sales | 37,252 | 37,854 |
Green Giant - shelf stable | ||
Brand | ||
Net sales | 26,439 | 25,683 |
Pirate Brands | ||
Brand | ||
Net sales | 20,996 | |
Back To Nature | ||
Brand | ||
Net sales | 16,662 | 20,040 |
Maple Grove Farms of Vermont | ||
Brand | ||
Net sales | 17,897 | 16,965 |
Cream of Wheat | ||
Brand | ||
Net sales | 17,410 | 18,424 |
Mrs. Dash | ||
Brand | ||
Net sales | 15,208 | 16,736 |
All other brands | ||
Brand | ||
Net sales | $ 117,777 | $ 117,382 |
Guarantor and Non-Guarantor F_3
Guarantor and Non-Guarantor Financial Information (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Jan. 01, 2019 | Dec. 29, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Nov. 20, 2017 | Apr. 03, 2017 | Jun. 04, 2013 |
Current assets: | ||||||||
Cash and cash equivalents | $ 11,284 | $ 11,648 | ||||||
Trade accounts receivable, net | 162,774 | 151,707 | ||||||
Inventories, net | 375,393 | 401,355 | ||||||
Prepaid expenses and other current assets | 21,130 | 19,988 | ||||||
Income tax receivable | 1,521 | 1,398 | ||||||
Total current assets | 572,102 | 586,096 | ||||||
Property, plant and equipment, net | 282,546 | 282,553 | ||||||
Operating lease right-of-use assets | 37,536 | $ 39,600 | ||||||
Goodwill | 584,435 | 584,435 | ||||||
Other intangibles, net | 1,591,078 | 1,595,569 | ||||||
Other assets | 1,136 | 1,206 | ||||||
Deferred income taxes | 5,350 | 4,940 | ||||||
Total assets | 3,074,183 | 3,054,799 | ||||||
Current liabilities: | ||||||||
Trade accounts payable | 126,208 | 140,000 | ||||||
Accrued expenses | 66,914 | 55,660 | ||||||
Operating lease liabilities, current portion | 9,124 | |||||||
Income tax payable | 33,276 | 31,624 | ||||||
Dividends payable | 31,016 | 31,178 | ||||||
Total current liabilities | 266,538 | 258,462 | ||||||
Long-term debt | 1,636,754 | 1,635,881 | ||||||
Deferred income taxes | 239,881 | 235,902 | ||||||
Long-term operating lease liabilities, net of current portion | 31,304 | |||||||
Other liabilities | 22,587 | 24,505 | ||||||
Total liabilities | 2,197,064 | 2,154,750 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Common Stock | 653 | 656 | ||||||
Additional paid-in capital | 75,001 | 116,339 | ||||||
Accumulated other comprehensive loss | (21,882) | (23,502) | ||||||
Retained earnings | 823,347 | 806,556 | ||||||
Total stockholders' equity | 877,119 | 900,049 | $ 872,648 | $ 880,819 | ||||
Total liabilities and stockholders' equity | $ 3,074,183 | $ 3,054,799 | ||||||
4.625% Senior notes due 2021 | ||||||||
Interest rate (as a percent) | 4.625% | 4.625% | ||||||
5.25% Senior Notes due 2025 | ||||||||
Interest rate (as a percent) | 5.25% | 5.25% | 5.25% | 5.25% | ||||
Reportable Legal Entities | Parent | ||||||||
Current assets: | ||||||||
Investments in subsidiaries | $ 2,561,372 | $ 2,584,598 | ||||||
Total assets | 2,561,372 | 2,584,598 | ||||||
Current liabilities: | ||||||||
Dividends payable | 31,016 | 31,178 | ||||||
Total current liabilities | 31,016 | 31,178 | ||||||
Long-term debt | 1,653,237 | 1,653,371 | ||||||
Total liabilities | 1,684,253 | 1,684,549 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Common Stock | 653 | 656 | ||||||
Additional paid-in capital | 75,001 | 116,339 | ||||||
Accumulated other comprehensive loss | (21,882) | (23,502) | ||||||
Retained earnings | 823,347 | 806,556 | ||||||
Total stockholders' equity | 877,119 | 900,049 | ||||||
Total liabilities and stockholders' equity | 2,561,372 | 2,584,598 | ||||||
Reportable Legal Entities | Guarantor Subsidiaries | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 10,105 | 9,871 | ||||||
Trade accounts receivable, net | 152,063 | 140,464 | ||||||
Inventories, net | 313,307 | 332,774 | ||||||
Prepaid expenses and other current assets | 17,133 | 15,995 | ||||||
Income tax receivable | 1 | |||||||
Total current assets | 492,609 | 499,104 | ||||||
Property, plant and equipment, net | 238,180 | 238,128 | ||||||
Operating lease right-of-use assets | 37,443 | |||||||
Goodwill | 584,435 | 584,435 | ||||||
Other intangibles, net | 1,591,078 | 1,595,569 | ||||||
Other assets | 1,122 | 1,193 | ||||||
Investments in subsidiaries | 100,585 | 93,069 | ||||||
Total assets | 3,045,452 | 3,011,498 | ||||||
Current liabilities: | ||||||||
Trade accounts payable | 110,941 | 115,946 | ||||||
Accrued expenses | 63,349 | 53,386 | ||||||
Operating lease liabilities, current portion | 9,081 | |||||||
Income tax payable | 33,276 | 31,247 | ||||||
Intercompany payables | (9,791) | (16,581) | ||||||
Total current liabilities | 206,856 | 183,998 | ||||||
Long-term debt | (16,483) | (17,490) | ||||||
Deferred income taxes | 239,881 | 235,902 | ||||||
Long-term operating lease liabilities, net of current portion | 31,240 | |||||||
Other liabilities | 22,587 | 24,490 | ||||||
Total liabilities | 484,081 | 426,900 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Additional paid-in capital | 1,762,131 | 1,803,769 | ||||||
Accumulated other comprehensive loss | (21,882) | (23,502) | ||||||
Retained earnings | 821,122 | 804,331 | ||||||
Total stockholders' equity | 2,561,371 | 2,584,598 | ||||||
Total liabilities and stockholders' equity | 3,045,452 | 3,011,498 | ||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 1,179 | 1,777 | ||||||
Trade accounts receivable, net | 10,711 | 11,243 | ||||||
Inventories, net | 62,086 | 68,581 | ||||||
Prepaid expenses and other current assets | 3,997 | 3,993 | ||||||
Income tax receivable | 1,520 | 1,398 | ||||||
Total current assets | 79,493 | 86,992 | ||||||
Property, plant and equipment, net | 44,366 | 44,425 | ||||||
Operating lease right-of-use assets | 93 | |||||||
Other assets | 14 | 13 | ||||||
Deferred income taxes | 5,350 | 4,940 | ||||||
Total assets | 129,316 | 136,370 | ||||||
Current liabilities: | ||||||||
Trade accounts payable | 15,267 | 24,054 | ||||||
Accrued expenses | 3,565 | 2,274 | ||||||
Operating lease liabilities, current portion | 43 | |||||||
Income tax payable | 377 | |||||||
Intercompany payables | 9,791 | 16,581 | ||||||
Total current liabilities | 28,666 | 43,286 | ||||||
Long-term operating lease liabilities, net of current portion | 64 | |||||||
Other liabilities | 15 | |||||||
Total liabilities | 28,730 | 43,301 | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Additional paid-in capital | 68,253 | 68,253 | ||||||
Accumulated other comprehensive loss | (9,820) | (11,279) | ||||||
Retained earnings | 42,153 | 36,095 | ||||||
Total stockholders' equity | 100,586 | 93,069 | ||||||
Total liabilities and stockholders' equity | 129,316 | 136,370 | ||||||
Eliminations | ||||||||
Current assets: | ||||||||
Investments in subsidiaries | (2,661,957) | (2,677,667) | ||||||
Total assets | (2,661,957) | (2,677,667) | ||||||
Stockholders' equity: | ||||||||
Preferred stock | ||||||||
Additional paid-in capital | (1,830,384) | (1,872,022) | ||||||
Accumulated other comprehensive loss | 31,702 | 34,781 | ||||||
Retained earnings | (863,275) | (840,426) | ||||||
Total stockholders' equity | (2,661,957) | (2,677,667) | ||||||
Total liabilities and stockholders' equity | $ (2,661,957) | $ (2,677,667) |
Guarantor and Non-Guarantor F_4
Guarantor and Non-Guarantor Financial Information - Operating Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Net sales | $ 412,734 | $ 431,729 |
Cost of goods sold | 324,655 | 328,373 |
Gross profit | 88,079 | 103,356 |
Operating expenses: | ||
Selling, general and administrative expenses | 38,297 | 42,568 |
Amortization expense | 4,491 | 4,609 |
Operating income | 45,291 | 56,179 |
Other income and expenses: | ||
Interest expense, net | 23,074 | 28,306 |
Loss on extinguishment of debt | 2,778 | |
Other expense (income) | (258) | (2,054) |
Income before income tax expense | 22,475 | 27,149 |
Income tax expense | 5,684 | 6,602 |
Net income | 16,791 | 20,547 |
Comprehensive income (loss) | 18,411 | 23,790 |
Eliminations | ||
Net sales | (32,458) | (28,434) |
Cost of goods sold | (32,458) | (28,434) |
Other income and expenses: | ||
Equity in earnings of subsidiaries | (22,849) | (22,747) |
Net income | (22,849) | (22,747) |
Comprehensive income (loss) | (24,145) | (25,768) |
Parent | Reportable Legal Entities | ||
Other income and expenses: | ||
Equity in earnings of subsidiaries | 16,791 | 20,547 |
Net income | 16,791 | 20,547 |
Comprehensive income (loss) | 18,411 | 23,790 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Net sales | 390,167 | 407,848 |
Cost of goods sold | 306,300 | 311,225 |
Gross profit | 83,867 | 96,623 |
Operating expenses: | ||
Selling, general and administrative expenses | 40,055 | 39,139 |
Amortization expense | 4,491 | 4,609 |
Operating income | 39,321 | 52,875 |
Other income and expenses: | ||
Interest expense, net | 23,074 | 28,306 |
Loss on extinguishment of debt | 2,778 | |
Other expense (income) | (258) | (2,054) |
Income before income tax expense | 16,505 | 23,845 |
Income tax expense | 5,772 | 5,498 |
Equity in earnings of subsidiaries | 6,058 | 2,200 |
Net income | 16,791 | 20,547 |
Comprehensive income (loss) | 16,629 | 20,436 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Net sales | 55,025 | 52,315 |
Cost of goods sold | 50,813 | 45,582 |
Gross profit | 4,212 | 6,733 |
Operating expenses: | ||
Selling, general and administrative expenses | (1,758) | 3,429 |
Operating income | 5,970 | 3,304 |
Other income and expenses: | ||
Income before income tax expense | 5,970 | 3,304 |
Income tax expense | (88) | 1,104 |
Net income | 6,058 | 2,200 |
Comprehensive income (loss) | $ 7,516 | $ 5,332 |
Guarantor and Non-Guarantor F_5
Guarantor and Non-Guarantor Financial Information - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | $ 50,344 | $ 73,744 |
Cash flows from investing activities: | ||
Capital expenditures | (8,648) | (4,972) |
Net cash used in investing activities | (8,648) | (4,972) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (125,000) | |
Repayments of borrowings under revolving credit facility | (40,000) | |
Borrowings under revolving credit facility | 40,000 | |
Dividends paid | (31,178) | (30,922) |
Payments for repurchase of common stock, net | (10,000) | |
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (905) | (1,832) |
Net cash used in financing activities | (42,083) | (157,754) |
Effect of exchange rate fluctuations on cash and cash equivalents | 23 | 620 |
Net decrease in cash and cash equivalents | (364) | (88,362) |
Cash and cash equivalents at beginning of period | 11,648 | 206,506 |
Cash and cash equivalents at end of period | 11,284 | 118,144 |
Parent | Reportable Legal Entities | ||
Cash flows from financing activities: | ||
Repayments of long-term debt | (125,000) | |
Repayments of borrowings under revolving credit facility | (40,000) | |
Borrowings under revolving credit facility | 40,000 | |
Dividends paid | (31,178) | (30,922) |
Payments for repurchase of common stock, net | (10,000) | |
Intercompany transactions | 41,178 | 155,922 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 43,330 | 69,554 |
Cash flows from investing activities: | ||
Capital expenditures | (7,802) | (4,504) |
Net cash used in investing activities | (7,802) | (4,504) |
Cash flows from financing activities: | ||
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation | (905) | (1,832) |
Intercompany transactions | (34,389) | (161,300) |
Net cash used in financing activities | (35,294) | (163,132) |
Net decrease in cash and cash equivalents | 234 | (98,082) |
Cash and cash equivalents at beginning of period | 9,871 | 204,815 |
Cash and cash equivalents at end of period | 10,105 | 106,733 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 7,014 | 4,190 |
Cash flows from investing activities: | ||
Capital expenditures | (846) | (468) |
Net cash used in investing activities | (846) | (468) |
Cash flows from financing activities: | ||
Intercompany transactions | (6,789) | 5,378 |
Net cash used in financing activities | (6,789) | 5,378 |
Effect of exchange rate fluctuations on cash and cash equivalents | 23 | 620 |
Net decrease in cash and cash equivalents | (598) | 9,720 |
Cash and cash equivalents at beginning of period | 1,777 | 1,691 |
Cash and cash equivalents at end of period | $ 1,179 | $ 11,411 |