10-Q

As filed with the Securities and Exchange Commission on October 30, 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended October 3, 2015

or

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

For the transition period from           to          .

Commission file number 001-32316

B&G FOODS, INC.

(Exact name of Registrant as specified in its charter)

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

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

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

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

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

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

Large accelerated filer x Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

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

As of October 30, 2015, the registrant had 57,976,744 shares of common stock, par value $0.01 per share, issued and outstanding.

B&G Foods, Inc. and Subsidiaries
Index

			Page No.
PART I FINANCIAL INFORMATION			1
	Item 1.	Financial Statements (Unaudited)	1
		Consolidated Balance Sheets	1
		Consolidated Statements of Operations	2
		Consolidated Statements of Comprehensive Income (Loss)	3
		Consolidated Statements of Cash Flows	4
		Notes to Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
	Item 4.	Controls and Procedures	39
PART II OTHER INFORMATION			40
	Item 1. Legal Proceedings		40
	Item 1A. Risk Factors		40
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
	Item 3. Defaults Upon Senior Securities		40
	Item 4. Mine Safety Disclosures		40
	Item 5. Other Information		40
	Item 6. Exhibits		40
SIGNATURE			41

i

PART I
FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	October 3, 2015			January 3, 2015
Assets
Current assets:
Cash and cash equivalents	$	45,943		$	1,490
Trade accounts receivable, net	63,419			55,925
Inventories	133,209			106,557
Prepaid expenses and other current assets	9,389			14,830
Income tax receivable	3,057			14,442
Deferred income taxes	3,185			3,275
Total current assets	258,202			196,519
Property, plant and equipment, net of accumulated depreciation of $141,465 and $129,253	118,311			116,197
Goodwill	388,044			370,424
Other intangibles, net	982,622			947,895
Other assets	15,888			18,318
Total assets	$	1,763,067		$	1,649,353
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	34,163		$	38,052
Accrued expenses	27,066			17,644
Current portion of long-term debt	24,375			18,750
Dividends payable	20,292			18,246
Total current liabilities	105,896			92,692
Long-term debt	954,491			1,007,107
Other liabilities	5,339			7,352
Deferred income taxes	230,638			204,207
Total liabilities	1,296,364			1,311,358
Commitments and contingencies (Note 11)
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; 57,976,744 and 53,663,697 shares issued and outstanding as of October 3, 2015 and January 3, 2015	580			537
Additional paid-in capital	180,726			110,349
Accumulated other comprehensive loss	(10,876		)	(11,034		)
Retained earnings	296,273			238,143
Total stockholders’ equity	466,703			337,995
Total liabilities and stockholders’ equity	$	1,763,067		$	1,649,353

See Notes to Consolidated Financial Statements.

1

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Thirteen Weeks Ended					Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014			October 3, 2015		September 27, 2014
Net sales	$	213,300	$	208,998		$	624,067	$	610,027
Cost of goods sold	141,704		145,936			423,066		419,269
Gross profit	71,596		63,062			201,001		190,758
Operating expenses:
Selling, general and administrative expenses	27,307		21,173			69,352		69,065
Amortization expense	2,726		3,391			8,072		9,986
Impairment of intangible assets	—		34,154			—		34,154
Gain on change in fair value of contingent consideration	—		—			—		(8,206		)
Operating income	41,563		4,344			123,577		85,759
Other expenses:
Interest expense, net	11,272		11,587			33,873		34,532
Loss on extinguishment of debt	—		—			—		5,748
Income (loss) before income tax expense (benefit)	30,291		(7,243		)	89,704		45,479
Income tax expense (benefit)	10,476		(2,830		)	31,574		15,977
Net income (loss)	$	19,815	$	(4,413	)	$	58,130	$	29,502
Weighted average shares outstanding:
Basic	57,977		53,664			56,121		53,656
Diluted	58,057		53,664			56,180		53,730
Basic earnings (loss) per share	$	0.34	$	(0.08	)	$	1.04	$	0.55
Diluted earnings (loss) per share	$	0.34	$	(0.08	)	$	1.03	$	0.55
Cash dividends declared per share	$	0.35	$	0.34		$	1.03	$	1.02

See Notes to Consolidated Financial Statements.

2

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Net income (loss)	$	19,815		$	(4,413	)	$	58,130		$	29,502
Other comprehensive income (loss):
Foreign currency translation adjustments	(78		)	(41		)	(190		)	(45		)
Amortization of unrecognized prior service cost and pension deferrals, net of tax	111			7			348			21
Other comprehensive income (loss)	33			(34		)	158			(24		)
Comprehensive income (loss)	$	19,848		$	(4,447	)	$	58,288		$	29,478

See Notes to Consolidated Financial Statements.

3

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014
Cash flows from operating activities:
Net income	$	58,130		$	29,502
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,512			20,783
Amortization of deferred debt financing costs and bond discount	2,631			2,907
Deferred income taxes	13,638			5,083
Interest accretion on contingent consideration	—			432
Gain on change in fair value of contingent consideration	—			(8,206		)
Impairment of intangible assets	—			34,154
Loss on disposal of inventory	—			2,978
Loss on extinguishment of debt	—			5,748
Share-based compensation expense	3,704			2,128
Excess tax benefits from share-based compensation	(518		)	(2,356		)
Provision for doubtful accounts	70			140
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable	(5,186		)	(6,039		)
Inventories	(25,464		)	(32,412		)
Prepaid expenses and other current assets	5,557			83
Income tax receivable	13,060			(2,765		)
Other assets	12			(941		)
Trade accounts payable	(6,193		)	3,281
Accrued expenses	8,236			5,917
Other liabilities	(1,492		)	272
Net cash provided by operating activities	86,697			60,689
Cash flows from investing activities:
Capital expenditures	(12,719		)	(13,901		)
Payments for acquisition of businesses, net of cash acquired	(51,025		)	(154,277		)
Net cash used in investing activities	(63,744		)	(168,178		)
Cash flows from financing activities:
Repayments of long-term debt	(13,125		)	(131,250		)
Proceeds from issuance of long-term debt	—			299,250
Borrowings under revolving credit facility	10,000			252,500
Repayments of borrowings under revolving credit facility	(44,000		)	(246,500		)
Proceeds from issuance of common stock, net	126,230			—
Dividends paid	(56,236		)	(54,124		)
Excess tax benefits from share-based compensation	518			2,356
Debt financing costs	(12		)	(8,473		)
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation	(1,750		)	(4,374		)
Net cash provided by financing activities	21,625			109,385
Effect of exchange rate fluctuations on cash and cash equivalents	(125		)	(22		)
Net increase in cash and cash equivalents	44,453			1,874
Cash and cash equivalents at beginning of period	1,490			4,107
Cash and cash equivalents at end of period	$	45,943		$	5,981
Supplemental disclosures of cash flow information:
Cash interest payments	$	23,693		$	23,177
Cash income tax payments	$	4,898		$	13,629
Non-cash transactions:
Dividends declared and not yet paid	$	20,292		$	18,246

See Notes to Consolidated Financial Statements.

4

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

(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 foods across the United States, Canada and Puerto Rico.  Our products include hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters and other specialty products.  Our products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril’s, Grandma’s Molasses, JJ Flats, Joan of Arc, Las Palmas, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Flatbreads, New York Style, Old London, Original Tings, Ortega, Pirate’s Booty, Polaner, Red Devil, Regina, Rickland Orchards, Sa-són, Sclafani, Smart Puffs, Spring Tree, Sugar Twin, Trappey’s, TrueNorth, Underwood, Vermont Maid and Wright’s.  We also sell and distribute Static Guard, a household product brand.  We compete in the retail grocery, food service, 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, food service outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors.

(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 53rd 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 January 2, 2016 (fiscal 2015) contains 52 weeks and our fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks.  Each quarter of fiscal 2015 and 2014 contains 13 weeks, except the fourth quarter of 2014, which contained 14 weeks.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended October 3, 2015 (third quarter and first three quarters of 2015) and September 27, 2014 (third quarter and first three quarters of 2014) have been prepared by our company in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations.  However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading.  All intercompany balances and transactions have been eliminated.  The accompanying unaudited consolidated interim financial statements contain all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary to present fairly our consolidated financial position as of October 3, 2015, and the results of our operations and comprehensive income (loss) for the third quarter and first three quarters of 2015 and 2014 and cash flows for the first three quarters of 2015 and 2014.  Our results of operations for the third quarter and first three quarters of 2015 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

5

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(2)           Summary of Significant Accounting Policies (Continued)

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 2014 filed with the SEC on March 4, 2015.

Use of Estimates

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

Recently Issued Accounting Standards

In September 2015, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  We are currently evaluating the impact of this new standard.

In April 2015, the FASB issued a new ASU that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts.  The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The update impacts presentation and disclosure only, and therefore, we do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations or liquidity.

(3)Acquisitions

On July 10, 2015, we acquired Spartan Foods of America, Inc. dba Mama Mary’s and related entities from Linsalata Capital Partners and certain other sellers for a purchase price of $51.0 million in cash. We refer to this acquisition as the “Mama Mary’s acquisition.”

On April 23, 2014, we completed the acquisition of Specialty Brands of America, Inc. and related entities, including the Bear Creek Country Kitchens, Spring Tree, Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands, from affiliates of American Capital, Ltd. and certain individual sellers for a purchase price of $154.3 million in cash.  We refer to this acquisition as the “Specialty Brands acquisition.”

We have accounted for each of these acquisitions using the acquisition method of accounting and, accordingly, have included the assets acquired, liabilities assumed and results of operations in our consolidated

6

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(3)Acquisitions (Continued)

financial statements from the respective date of acquisition.  The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. Unamortizable trademarks are deemed to have an indefinite useful life and are not amortized. Customer relationship intangibles acquired are amortized over 20 years.  Inventory has been recorded at estimated selling price less costs of disposal and a reasonable profit and the property, plant and equipment and other intangible assets (including trademarks, customer relationships and other intangibles) acquired have been recorded at fair value as determined by our management with the assistance of a third-party valuation specialist.  See Note 5, “Goodwill and Other Intangible Assets.”

The following table sets forth the preliminary allocation of the Mama Mary’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 the liabilities assumed.  We anticipate completing the purchase price allocation before or during the second quarter of fiscal 2016.

Mama Mary’s Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	51,025
Total	$	51,025
Preliminary Allocation:
Trademarks—unamortizable intangible assets	38,000
Goodwill	17,455
Customer relationship intangibles—amortizable intangible assets	4,800
Property, Plant and Equipment	1,900
Short-term deferred income tax assets	1,222
Other working capital	383
Long-term deferred income tax liabilities, net	(12,735		)
Total	$	51,025

The following table sets forth the allocation of the Specialty Brands acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition.  During the first two quarters of fiscal 2015, we recorded a purchase price allocation adjustment by increasing goodwill and decreasing other working capital by $0.2 million due to a change in our valuation of inventory as of the date of acquisition. We completed the purchase price allocation during the second quarter of 2015.

Specialty Brands Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	154,277
Total	$	154,277
Allocation:
Income tax receivable	$	4,012
Short-term deferred income tax assets	1,786
Trademarks—unamortizable intangible assets	137,300
Goodwill	49,017
Customer relationship intangibles—amortizable intangible assets	13,300
Other working capital	(2,233		)
Long-term deferred income tax liabilities, net	(48,905		)
Total	$	154,277

7

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(3)Acquisitions (Continued)

On September 3, 2015, we entered into an agreement to acquire the Green Giant and La Sueur brands from General Mills, Inc. for approximately $765 million in cash plus an inventory adjustment at closing.  We expect the acquisition to close during the fourth quarter of 2015, subject to customary closing conditions.  We refer to this acquisition as the pending Green Giant acquisition. We expect to fund the pending Green Giant acquisition and related fees and expenses with borrowings from our revolving credit facility and a new term loan under our amended and restated credit facility. See Note 6, “Long-Term Debt.”

Unaudited Pro Forma Summary of Operations

The following pro forma summary of operations for the first three quarters of 2014 presents our operations as if the Specialty Brands acquisition had occurred as of the beginning of fiscal 2014.  In addition to including the results of operations of this acquisition, the pro forma information gives effect to the interest on additional borrowings and the amortization of customer relationship intangibles.  On an actual basis, Specialty Brands contributed $33.5 million of net sales for the first three quarters of 2014.

	Thirty-nine Weeks Ended September 27, 2014
	(dollars in thousands, except per share data)
Net sales	$	636,420
Net income	30,694
Basic and diluted earnings per share	$	0.57

The pro forma information presented above does not purport to be indicative of the results that actually would have been attained had the Specialty Brands acquisition occurred as of the beginning of fiscal 2014, and is not intended to be a projection of future results.

The Mama Mary’s acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented.

(4)Inventories

Inventories are stated at the lower of cost or market and include direct material, direct labor, overhead, warehousing and product transfer costs.  Cost is determined using the first-in, first-out and average cost methods.  Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories.  The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales.

Inventories consist of the following, as of the dates indicated (in thousands):

	October 3, 2015		January 3, 2015
Raw materials and packaging	$	29,843	$	23,795
Finished goods	103,366		82,762
Total	$	133,209	$	106,557

8

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(5)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):

	As of October 3, 2015						As of January 3, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable Intangible Assets
Trademarks	$	12,056	$	1,573	$	10,483	$	12,056	$	875	$	11,181
Customer relationships	197,713		65,774		131,939		192,913		58,400		134,513
	$	209,769	$	67,347	$	142,422	$	204,969	$	59,275	$	145,694
Unamortizable Intangible Assets
Goodwill	$	388,044					$	370,424
Trademarks	$	840,200					$	802,201

Note:The increase in the carrying amounts of unamortizable intangible assets during the first three quarters of fiscal 2015 are attributable to the Mama Mary’s acquisition and purchase accounting adjustments related to the Specialty Brands acquisition.

Amortization expense associated with amortizable trademarks and customer relationship intangibles for the third quarter and first three quarters of 2015 was $2.7 million and $8.1 million, respectively, and is recorded in operating expenses.  Amortization expense associated with amortizable trademarks and customer relationship intangibles for the third quarter and first three quarters of 2014 was $3.4 million and $10.0 million, respectively, and is recorded in operating expenses.  We expect to recognize an additional $2.8 million of amortization expense associated with our amortizable trademarks and customer relationship intangibles during the remainder of fiscal 2015, and thereafter $10.9 million per year for each of the next four fiscal years.

See Note 3, “Acquisitions.”

(6)Long-Term Debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	October 3, 2015			January 3, 2015
Amended and restated senior secured credit agreement:
Revolving credit facility	$	—		$	34,000
Tranche A term loans due 2019	279,375			292,500
4.625% senior notes due 2021	700,000			700,000
Unamortized discount	(509		)	(643		)
Total long-term debt, net of unamortized discount	978,866			1,025,857
Current portion of long-term debt	(24,375		)	(18,750		)
Long-term debt, net of unamortized discount and excluding current portion	$	954,491		$	1,007,107

9

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(6)Long-Term Debt (Continued)

As of October 3, 2015, the aggregate contractual maturities of long-term debt are as follows (in thousands):

Years ending December:
2015	$	5,625
2016	26,250
2017	24,375
2018	76,875
2019	146,250
Thereafter	700,000
Total	$	979,375

Amended and Restated Senior Secured Credit Agreement.  On October 2, 2015, we amended and restated our existing senior secured credit agreement dated as of June 5, 2014. The amendment provides for an incremental tranche B term loan facility to be made available under the amended and restated credit agreement to finance a portion of the purchase price for the pending Green Giant acquisition. Subject to the satisfaction of customary conditions precedent set forth in the amended and restated credit agreement, we expect that $750 million of incremental tranche B term loans will be funded at the closing of the acquisition, which we expect to occur during the fourth quarter of 2015. We expect to fund the remainder of the purchase price, the closing inventory adjustment, initial working capital requirements and related fees and expenses for the pending Green Giant acquisition with additional revolving loans under the amended and restated credit agreement. See Note 3, “Acquisitions.”

At October 3, 2015, $279.4 million of tranche A term loans were outstanding and no tranche B term loans or revolving loans were outstanding under our amended and restated senior secured credit agreement.

At October 3, 2015, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.0 million, was $498.0 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.  Proceeds of the tranche B term loans may be used to pay a portion of the purchase price and related costs and expenses for the pending Green Giant acquisition.  We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility.  The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans. The revolving credit facility matures on June 5, 2019.

The tranche A term loans are subject to principal amortization.  $7.5 million was due and paid in fiscal 2014, $18.8 million is due and payable in fiscal 2015, of which $13.2 million has been paid as of October 3, 2015, $26.2 million is due and payable in fiscal 2016, $24.4 million is due and payable in fiscal 2017 and $76.9 million is due and payable in fiscal 2018.  The balance of all borrowings under the tranche A term loan facility, or $146.2 million, is due and payable at maturity on June 5, 2019. The tranche B term loans will mature on the seventh anniversary of the date of funding of the tranche B term loans and will be subject to amortization at the rate of 1% per year with the balance due and payable on the maturity date.

If we prepay all or any portion of the tranche B term loans within six months of the funding of the tranche B term loans in connection with a financing that has a lower interest rate or weighted average yield than the tranche B term loans, we will owe a repayment fee equal to 1% of the amount prepaid. Otherwise, we may prepay the term loans or permanently reduce the revolving credit facility commitment under the amended and restated credit agreement at any time without premium or penalty (other than customary breakage costs

10

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(6)Long-Term Debt (Continued)

with respect to the early termination of LIBOR loans).  Subject to certain exceptions, the amended and restated 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, and under the tranche A term loan facility, is determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin ranging from 0.50% to 1.00%, and LIBOR plus an applicable margin ranging from 1.50% to 2.00%, in each case depending on our consolidated leverage ratio.  At October 3, 2015, the revolving credit facility and the tranche A term loan interest rates were each approximately 2.21%.  Interest under the tranche B term loan facility will be determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin to be determined prior to the funding date, and LIBOR plus an applicable margin to be determined prior to the funding date.  The applicable margin in effect for the tranche A term loans will not be increased as a result of the funding of the tranche B term loans.

Our obligations under the amended and restated 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 (other than a domestic subsidiary that is a holding company for one or more of our foreign subsidiaries).  The credit facility is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property.  The amended and restated 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 amended and restated 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 amended and restated 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 through the fourth quarter of 2015; 6.75 to 1.00 for the first quarter of 2016 through the fourth quarter of 2016; and 6.50 to 1.00 for the first quarter of 2017 and thereafter.  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 October 3, 2015, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement.

The amended and restated credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the amended and restated 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 amended and restated 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% Senior Notes due 2021.  On June 4, 2013, we issued $700.0 million aggregate principal amount of 4.625% senior notes due 2021 at a price to the public of 100% of their face value.  Interest on the 4.625% senior notes is payable on June 1 and December 1 of each year.  The 4.625% senior notes will mature on June 1, 2021, unless earlier retired or redeemed.

On or after June 1, 2016, 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,

11

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(6)Long-Term Debt (Continued)

2019, in each case plus accrued and unpaid interest to the date of redemption.  We may redeem up to 35% of the aggregate principal amount of the 4.625% senior notes prior to June 1, 2016 with the net proceeds from certain equity offerings at a redemption price of 104.625% plus accrued and unpaid interest to the date of redemption.  We may also redeem some or all of the 4.625% senior notes at any time prior to June 1, 2016 at a redemption price equal to the make-whole amount set forth in the indenture governing the 4.625% senior notes.  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 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 October 3, 2015, we were in compliance with all of the covenants in the indenture governing the 4.625% 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, and management has determined that our Canadian and Mexican subsidiaries, which are our only subsidiaries that are not guarantors of our long-term debt, are “minor subsidiaries” as that term is used in Rule 3-10 of Regulation S-X promulgated by the SEC.  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.  Consequently, separate financial statements have not been presented for our subsidiaries because management has determined that they would not be material to investors.

Deferred Debt Financing Costs.  During the second quarter of 2014, we wrote-off and expensed $5.4 million of deferred debt financing costs relating to the termination of our prior credit agreement, which included the repayment of $121.9 million aggregate principal amount of our tranche A term loans and $215.0 million of revolving loans. During the second quarter of 2014, we also capitalized $5.7 million and $2.9 million of debt financing costs relating to our current revolving credit facility and tranche A term loans, respectively, which is being amortized over the five year scheduled term of the credit agreement. As of

12

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(6)Long-Term Debt (Continued)

October 3, 2015 and January 3, 2015, we had net deferred debt financing costs of $14.7 million and $17.2 million, respectively, included in other assets in the accompanying unaudited consolidated balance sheets.

Loss on Extinguishment of Debt.  During the second quarter of 2014, we incurred a loss on extinguishment of debt in connection with the termination of our prior credit agreement and the repayment of all outstanding obligations thereunder.  The loss on extinguishment includes the write-off of deferred debt financing costs of $5.4 million discussed above and the write-off of unamortized discount of $0.3 million.

Accrued Interest.  At October 3, 2015 and January 3, 2015, accrued interest of $11.0 million and $3.5 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets.

(7)Fair Value Measurements

The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under generally accepted accounting principles, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value.

Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature.  The three levels are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.

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

Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses 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 and senior notes as of October 3, 2015 and January 3, 2015 are as follows (in thousands):

	October 3, 2015				January 3, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving Credit Loans	—		—		34,000		34,000	(1)
Tranche A Term Loans due 2019	278,866	(2)	279,375	(1)	291,857	(2)	292,500	(1)
4.625% Senior Notes due 2021	700,000		675,500	(3)	700,000		675,500	(3)

(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.

13

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(7)Fair Value Measurements (Continued)

(2)The carrying values of the tranche A term loans are net of discount.  At October 3, 2015 and January 3, 2015, the face amounts of the tranche A term loans were $279.4 million and $292.5 million, respectively.

(3)Fair values are estimated based on quoted market prices.

In October 2013, we acquired Rickland Orchards, LLC.  In connection with that acquisition, additional purchase price payments ranging from zero to $15.0 million are contingent upon the achievement of certain revenue growth targets during fiscal 2014, 2015 and 2016 meant to achieve revenue growth in excess of base purchase price acquisition model assumptions.  We estimated the original fair value of the contingent consideration as the present value of the expected contingent payments, determined using the weighted probabilities of the possible payments.  As of the date of acquisition, we estimated the original fair value of the contingent consideration to be approximately $7.6 million.

During the first two quarters of 2014, we recorded interest accretion expense on the contingent consideration liability of $0.4 million. We are required to reassess the fair value of the contingent consideration at each reporting period.  At June 28, 2014, we remeasured the fair value of the contingent consideration using actual operating results through June 28, 2014 and revised our forecasted operating results for Rickland Orchards for the remainder of fiscal 2014, 2015 and 2016.  As a result of lower than expected net sales results for Rickland Orchards and the unlikelihood of Rickland Orchards achieving the revenue growth targets, the fair value of the contingent consideration was reduced to zero.  Therefore, during the first three quarters of 2015, we did not record interest accretion expense on the contingent consideration liability.  The significant inputs used in these estimates include numerous possible scenarios for the contingent earn-out payments based on the contractual terms of the contingent consideration, for which probabilities are assigned to each scenario, which are then discounted based on an individual risk analysis of the respective liabilities. Although we believe our assumptions are reasonable, different assumptions or changes in the future may result in different estimated amounts.

The following table summarized the Level 3 activity (in thousands):

	October 3, 2015		September 27, 2014
Balance at beginning of year	$	—	$	7,774
Contingent consideration accretion expense	—		432
Gain on change in fair value of contingent consideration	—		(8,206		)
Balance at end of quarter	$	—	$	—

(8)Stockholders’ Equity

Common Stock Offering.  In May 2015, we completed an underwritten public offering of 4,200,000 shares of our common stock at a price to the public of $30.60 per share. The proceeds of the offering were approximately $126.2 million, after deducting underwriting discounts and commissions and other offering expenses. The offering was made by means of a prospectus and related prospectus supplement included as part of an effective shelf registration statement previously filed with the SEC. We used the net proceeds of the offering to repay a portion of our long-term debt, to pay the purchase price and related transaction costs for the Mama Mary’s acquisition, see Note 3, “Acquisitions,” and for general corporate purposes.

14

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(9)Accumulated Other Comprehensive Loss

The reclassification from accumulated other comprehensive loss (AOCL) as of October 3, 2015 and September 27, 2014 are as follows (in thousands):

	Amount Reclassified from AOCL
	Thirteen Weeks Ended						Thirty-nine Weeks Ended						Affected Line Item in the
Details about AOCL Components	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014			Statement Where Net Income (Loss) is Presented
Defined benefit pension plan items
Amortization of prior service cost	$	11		$	11		$	33		$	33		See (1) below
Amortization of unrecognized loss	176			—			528			—			See (1) below
	187			11			561			33			Total before tax
	(76		)	(4		)	(213		)	(12		)	Income tax expense
Total reclassification	$	111		$	7		$	348		$	21		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 accumulated other comprehensive loss as of October 3, 2015 is as follows (in thousands):

	Defined Benefit Pension Plan Items			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(10,787	)	$	(247	)	$	(11,034	)
Other comprehensive loss before reclassifications	—			(190		)	(190		)
Amounts reclassified from AOCL	348			—			348
Net current period other comprehensive income (loss)	348			(190		)	158
Ending balance	$	(10,439	)	$	(437	)	$	(10,876	)

(10)Pension Benefits

Company Sponsored Defined Benefit Pension Plans.  Net periodic pension costs for company sponsored defined benefit pension plans for the third quarter and first three quarters of 2015 and 2014 include the following components (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Service cost—benefits earned during the period	$	1,001		$	768		$	3,003		$	2,173
Interest cost on projected benefit obligation	640			592			1,919			1,794
Expected return on plan assets	(1,042		)	(1,089		)	(3,124		)	(3,258		)
Amortization of unrecognized prior service cost	11			11			33			33
Amortization of unrecognized loss	176			—			528			—
Net periodic pension cost	$	786		$	282		$	2,359		$	742

During the first three quarters of 2015, we made $3.5 million of defined benefit pension plan contributions.  We do not plan to make additional contributions during the remainder of fiscal 2015.

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

15

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(10)Pension Benefits (Continued)

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.  A 5% surcharge payable on hours worked on and after June 1, 2012 until December 31, 2012 was charged for plan year 2012, the initial critical year.  A 10% surcharge payable on hours worked on and after January 1, 2013 was applicable for each succeeding plan year that the plan was in critical status until we agreed to a collective bargaining agreement that implements a rehabilitation plan.

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 above what we are currently contributing.

B&G Foods made contributions to the plan of $1.0 million in fiscal 2014. These contributions represented less than five percent of total contributions made to the plan.  In fiscal 2014, we paid less than $0.1 million in surcharges and expect to pay surcharges of less than $0.1 million in fiscal 2015 assuming consistent hours are worked.

(11)Commitments and Contingencies

Operating Leases.  As of October 3, 2015, future minimum lease payments under non-cancelable operating leases in effect at quarter-end (with initial lease terms in excess of one year) were as follows (in thousands):

Fiscal year ending:	Third Parties
2015	$	1,908
2016	7,683
2017	5,236
2018	5,137
2019	5,212
Thereafter	7,938
Total	$	33,114

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.

B&G Foods has been named as a defendant in a putative class action lawsuit filed by The Weston Firm on behalf of Troy Walker in August 2015 in the United States District Court for the Northern District of California.  The lawsuit alleges that our company has violated California’s Consumer Legal Remedies Act and

16

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(11)Commitments and Contingencies (Continued)

Unfair Competition Law, with respect to the advertising, marketing and labeling of certain Ortega taco shells.  Specifically, the plaintiff alleges, among other things, that the products are deceptively marketed because the products are labeled “0g trans fat” on the front of the package and contain partially hydrogenated oil.  The complaint seeks monetary damages, injunctive relief and attorneys’ fees.  We intend to vigorously defend this lawsuit and believe that the plaintiff’s claims are without merit and that the products are and have at all times been properly labeled in compliance with applicable law.  We also believe the claims are moot because, among other things, we began transitioning away from partially hydrogenated oil before first being contacted by The Weston Firm and we no longer use partially hydrogenated oil in these Ortega products.  No discovery has commenced in this lawsuit, and a motion to dismiss the claims is pending.  Based upon information currently available, we do not believe the ultimate resolution of this matter will have a material adverse effect on B&G Foods’ consolidated financial position, results of operations or liquidity.

Environmental.  We are subject to environmental laws and regulations in the normal course of business.  We did not make any material expenditures during the first three quarters of 2015 or 2014 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 described in Note 10, “Pension Benefits—Multi-Employer Defined Benefit Pension Plan” above, during the second quarter of 2015 we reached an agreement with the BCTGM, AFL-CIO (Local No. 334) to extend for an additional two-year period ending April 29, 2017, a collective bargaining agreement that covers approximately 92 employees at our Portland, Maine facility.

As of October 3, 2015, approximately 338 of our 964 employees, or 35%, were covered by collective bargaining agreements, of which approximately 195 were covered by a collective bargaining agreement expiring within the next 12 months. Our collective bargaining agreement with the Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union, Local No. 695, that covers certain employees at our Stoughton, Wisconsin manufacturing facility is scheduled to expire on March 31, 2016. We expect to begin negotiations for a new collective bargaining agreement during the fourth quarter of 2015 or the first quarter of 2016. While we believe that our relations with our union employees are good, we cannot be certain that we will be able to negotiate a new collective bargaining agreement for the Stoughton, Wisconsin manufacturing facility on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect the outcome of these negotiations to have a material adverse effect on our business, financial condition, or results of operations. None of our other collective bargaining agreements is scheduled to expire within the next 12 months.

Severance and Change of Control Agreements.  We have employment agreements with each of our seven 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.

17

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(11)Commitments and Contingencies (Continued)

Ortega and Las Palmas Recall.  On November 14, 2014, we announced a voluntary recall for certain Ortega and Las Palmas products after learning that one or more of the spice ingredients purchased from a third party supplier contained peanuts and almonds, allergens that are not declared on the products’ ingredient statements.  A significant majority of the costs of this recall were incurred in the fourth quarter of 2014.  The cost impact of this recall during the first three quarters of 2015 was $1.9 million, of which $1.2 million was recorded as a decrease in net sales related to customer refunds; $0.5 million was recorded as an increase in cost of goods sold primarily related to costs associated with product retrieval, destruction charges and customer fees; and $0.2 million was recorded as an increase in selling, general, and administrative expenses related to administrative costs.  The charges we recorded are based upon costs incurred to date and management’s estimates of costs that have yet to be incurred.  As of October 3, 2015, accounts receivables in our unaudited consolidated balance sheet includes a $0.3 million reserve relating to the recall.

(12)Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding.  Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method.  For the third quarter of 2015, 551,330 shares of common stock issuable upon the exercise of stock options have not been included in the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share.  For the third quarter of 2014, 101,428 shares of common stock issuable upon the achievement of performance goals in connection with share-based compensation awards have not been included in the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted loss per share.

	Thirteen Weeks Ended		Thirty-nine Weeks Ended
	October 3, 2015	September 27, 2014	October 3, 2015	September 27, 2014
Weighted average shares outstanding:
Basic	57,976,744	53,663,697	56,120,780	53,655,743
Net effect of potentially dilutive share-based compensation awards	79,979	—	58,929	74,638
Diluted	58,056,723	53,663,697	56,179,709	53,730,381

(13)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 51.9% of consolidated net sales for the first three quarters of 2015 and 2014.  Our top ten customers accounted for approximately 51.6% and 51.7% of our consolidated trade accounts receivables as of October 3, 2015 and January 3, 2015, respectively.  Other than Wal-Mart, which accounted for 19.3% and 18.6% of our consolidated net sales for the first three quarters of 2015 and 2014, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first three quarters of 2015 or 2014.  Other than Wal-Mart, which accounted for 15.6% and 16.7% of our consolidated trade accounts receivables as of October 3, 2015 and January 3, 2015, respectively, no single customer accounted for more than 10.0% of our consolidated

18

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(13)         Business Credit Concentrations and Geographic Information (Continued)

trade accounts receivables.  As of October 3, 2015, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivable with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Wal-Mart.

During the first three quarters of 2015 and 2014, our sales to foreign countries represented approximately 3.6% and 3.3%, respectively, of net sales.  Our foreign sales are primarily to customers in Canada.

(14)Share-Based Payments

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

Employee Stock Options.  The following table details our stock option activity for the first three quarters of fiscal 2015:

	Options	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (Years)	Aggregate Intrinsic Value
Outstanding at beginning of fiscal 2015	418,158	$	30.94
Granted	133,172	$	27.89
Exercised	—	N/A
Forfeited	—	N/A
Outstanding at end of third quarter of 2015	551,330	$	30.20	9.3	$	677
Exercisable at end of third quarter of 2015	—	—		—	—

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing certain assumptions.  Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is based on the “simplified method” in accordance with accounting guidance. We utilized the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options.

	2015	2014
Weighted average grant date fair value	$6.00	$6.74
Expected volatility	36%	34.8%
Expected term	6.5 years	6.5 years
Risk-free interest rate	1.6% - 1.9%	1.9%
Dividend yield	4.7% - 4.9%	4.4%

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments)

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(14)Share-Based Payments (Continued)

during the third quarter and first three quarters of 2015 and 2014 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
Consolidated Statements of Operations Location	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Compensation expense included in cost of goods sold	$	249	$	115	$	677	$	609
Compensation expense included in selling, general and administrative expenses	938		271		3,027		1,519
Total compensation expense for share-based payments	$	1,187	$	386	$	3,704	$	2,128

As of October 3, 2015, there was $2.7 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.25 years and $2.4 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.5 years.

The following table details the activity in our non-vested performance share LTIAs for the first three quarters of 2015:

	Number of Performance Shares		Weighted Average Grant Date Fair Value (per share)(2)
Beginning of fiscal 2015	380,977	(1)	$	24.82
Granted	171,622		$	23.86
Vested	(153,194	)	$	20.34
Forfeited	(4,541	)	$	27.63
End of first three quarters of 2015	394,864	(1)	$	26.11

(1)Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% of the target number of performance shares).

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

The following table details the number of shares of common stock issued by our company during the first three quarters of 2015 and 2014 upon the vesting of performance share long-term incentive awards and other share based compensation (dollars in thousands):

	Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014
Number of performance shares vested	153,194		342,576
Shares withheld to fund statutory minimum tax withholding	58,242		138,799
Shares of common stock issued for performance share long-term incentive awards	94,952		203,777
Shares of common stock issued to non-employee directors for annual equity grants	18,095		14,010
Total shares of common stock issued	113,047		217,787
Excess tax benefit recorded to additional paid in capital	$	518	$	2,356

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(15)Net Sales by Brand

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

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Brand:(1)
Ortega(2)	$	36,388	$	35,272	$	111,514	$	105,485
Pirate Brands	23,501		22,902		65,289		63,599
Maple Grove Farms of Vermont	18,425		19,272		57,266		56,447
Cream of Wheat	15,251		13,977		43,946		42,549
Mrs. Dash	14,542		15,259		48,053		48,027
Bear Creek Country Kitchens(3)	13,065		13,908		32,601		19,277
Mama Mary’s(4)	8,492		—		8,492		—
Las Palmas(2)	8,326		8,289		25,434		24,558
Polaner	8,096		8,433		24,938		25,811
Bloch & Guggenheimer	5,769		5,637		19,747		19,965
New York Style	5,570		5,770		17,177		21,321
Underwood	4,985		4,884		14,067		14,043
Spring Tree(3)	4,712		5,107		14,824		8,787
Ac’cent	4,470		4,088		13,255		13,053
TrueNorth	3,925		5,051		14,031		16,232
B&M	3,789		3,559		14,796		15,668
Rickland Orchards	1,057		4,461		3,172		20,250
All other brands(5)	32,937		33,129		95,465		94,955
Total	$	213,300	$	208,998	$	624,067	$	610,027

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

(2)During the first three quarters of 2015, net sales for Ortega and Las Palmas were negatively impacted by customer refunds of $1.2 million relating to the product recall announced in November 2014.  There was no impact during the third quarter of 2015.

(3)We completed the Specialty Brands acquisition on April 23, 2014, including the Bear Creek Country Kitchens and Spring Tree brands.

(4)We completed the Mama Mary’s acquisition on July 10, 2015.

(5)Net sales for “All other brands” has been impacted by the acquisition of Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands acquired as part of the Specialty Brands acquisition, which was completed on April 23, 2014.

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

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.  Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Forward-Looking Statements” below and elsewhere in this report.  The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the thirteen and thirty-nine weeks ended October 3, 2015 (third quarter and first three quarters of 2015) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended January 3, 2015 (fiscal 2014) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 4, 2015 (which we refer to as our 2014 Annual Report on Form 10-K).

General

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

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

Since 1996, we have successfully acquired and integrated more than 40 brands into our company.  Most recently, on July 10, 2015, we acquired Spartan Foods of America, Inc., including the Mama Mary’s brand, from Linsalata Capital Partners and certain other sellers.  On April 23, 2014, we completed the acquisition of Specialty Brands of America, Inc., including the Bear Creek Country Kitchens, Spring Tree, Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands, from affiliates of American Capital, Ltd. and certain individuals.  We refer to these acquisitions in this report as the “Mama Mary’s acquisition” and the “Specialty Brands acquisition,” respectively.  Each of these acquisitions has been accounted for using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired businesses are included in our consolidated financial statements from the respective dates of acquisition.  These acquisitions and the application of the acquisition method of accounting affect comparability between periods.

On September 3, 2015, we entered into an agreement to acquire the Green Giant and La Sueur brands from General Mills, Inc. We expect the acquisition to close during the fourth quarter of 2015, subject to customary closing conditions.  We refer to the acquisition in this report as the pending Green Giant acquisition.

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

Fluctuations in Commodity Prices and Production and Distribution Costs.  We purchase raw materials, including agricultural products, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S. and foreign locations.  Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price

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attributable to a number of factors.  Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns.  The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.

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

We have seen and expect to continue to see cost increases for raw materials in the marketplace during 2015.  However, we are currently locked into our supply and prices for a majority of our most significant commodities (excluding, among others, maple syrup) through the second quarter of fiscal 2016 and expect these costs to be relatively flat for us as compared to fiscal 2014.  During fiscal 2014, we had a minimal cost decrease. To the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially adversely affected.  In addition, should input costs begin to decline further, customers may look for price reductions in situations where we have locked into purchases at higher costs.

Consolidation in the Retail Trade and Consequent Inventory Reductions.  As the retail grocery trade continues to consolidate and our retail customers grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs.  These customers are also reducing their inventories and increasing their emphasis on private label products.

Changing Customer Preferences.  Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences.

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

Fluctuations in Currency Exchange Rates.  Our foreign sales are primarily to customers in Canada.  Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars.  During the first three quarters of 2015 and 2014, our net sales to foreign countries represented approximately 3.6% and 3.3%, respectively, of our total net sales.  We purchase the majority of our maple syrup requirements from suppliers located in Québec, Canada.  Any weakening of the U.S. dollar against the Canadian dollar could significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars in advance of any such weakening of the U.S. dollar or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar.  These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada.  Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars.

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

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Critical Accounting Policies; Use of Estimates

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

In our 2014 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated financial statements. There have been no significant changes to these policies from those disclosed in our 2014 Annual Report on Form 10-K.

Results of Operations

The following table sets forth the percentages of net sales represented by selected items for the third quarter and first three quarters of each of 2015 and 2014 reflected in our consolidated statements of operations.  The comparisons of financial results are not necessarily indicative of future results:

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Statement of Operations Data:
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	66.4	%	69.8	%	67.8	%	68.7	%
Gross profit	33.6	%	30.2	%	32.2	%	31.3	%
Selling, general and administrative expenses	12.8	%	10.1	%	11.1	%	11.3	%
Amortization expense	1.3	%	1.7	%	1.3	%	1.6	%
Impairment of intangible assets	0.0	%	16.3	%	—		5.6	%
Gain on change in fair value of contingent consideration	—		—		—		(1.3	)%
Operating income	19.5	%	2.1	%	19.8	%	14.1	%
Interest expense, net	5.3	%	5.6	%	5.4	%	5.7	%
Loss on extinguishment of debt	—		—		—		0.9	%
Income (loss) before income tax expense (benefit)	14.2	%	(3.5	)%	14.4	%	7.5	%
Income tax expense (benefit)	4.9	%	(1.4	)%	5.1	%	2.7	%
Net income (loss)	9.3	%	(2.1	)%	9.3	%	4.8	%

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

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

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

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

Amortization Expense. Amortization expense includes the amortization expense associated with customer relationships, amortizable trademarks and other intangibles.

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

Gain on Change in Fair Value of Contingent Consideration.  Gain on change in fair value of contingent consideration represents decreases in the fair value of the contingent consideration liability relating to additional purchase price earn-out payments that are contingent upon the achievement of certain operating results by acquired businesses.

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

Loss on Extinguishment of Debt.  Loss on extinguishment of debt includes costs relating to the retirement of indebtedness, including repurchase premium, if any, and write-off of deferred debt financing costs and unamortized discounts, if any.

Non-GAAP Financial Measures

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

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

Comparable Base Business Net Sales.  Comparable base business net sales is a non-GAAP financial measure used by management to measure operating performance.  We define comparable base business net sales as our base business net sales, excluding the impact of the Rickland Orchards shortfall described below and customer refunds relating to the Ortega and Las Palmas recall announced in November 2014.

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A reconciliation of base business net sales and comparable base business net sales to reported net sales for the third quarter and first three quarters of 2015 and 2014 follows (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Reported net sales	$	213,300		$	208,998		$	624,067		$	610,027
Net sales from acquisitions(1)	(8,492		)	—			(31,545		)	—
Base business net sales	204,808			208,998			592,522			610,027
Net sales of Rickland Orchards(2)	(1,057		)	(4,461		)	(3,172		)	(20,250		)
Customer refunds related to recall(3)	—			—			1,225			—
Comparable base business net sales	$	203,751		$	204,537		$	590,575		$	589,777

(1)Reflects net sales for Mama Mary’s and Specialty Brands for the portion of the third quarter and first three quarters of 2015 for which there is no comparable period of net sales during the same period in 2014. Mama Mary’s was acquired in July 2015 and Specialty Brands was acquired in April 2014.

(2)Net sales were negatively impacted by the Rickland Orchards shortfall in the third quarter and first three quarters of 2015, a continuation of the weakness that caused the Company to impair the brand’s trademark and customer relationship intangible assets in 2014.

(3)Reflects customer refunds relating to the Ortega and Las Palmas recall announced in November 2014.

EBITDA and Adjusted EBITDA.  EBITDA and adjusted EBITDA are non-GAAP financial measures used by management to measure operating performance.  We define EBITDA as net income (loss) before net interest expense (as defined above), income taxes, depreciation and amortization and loss on extinguishment of debt (as defined above). We define adjusted EBITDA as EBITDA adjusted for cash and non-cash acquisition-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses), intangible asset impairment charges and related asset write-offs; gains or losses related to changes in the fair value of contingent liabilities from earn-outs; loss on product recalls, including customer refunds, selling, general and administrative expenses and the impact on cost of sales; and distribution restructuring expenses. Management believes that it is useful to eliminate net interest expense, income taxes, depreciation and amortization, loss on extinguishment of debt, acquisition-related expenses, gains and losses, non-cash intangible asset impairment charges and related asset write-offs, gains or losses related to changes in the fair value of contingent liabilities from earn-outs, loss on product recalls and distribution restructuring expenses because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. We use EBITDA and adjusted EBITDA in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indenture contain ratios based on these measures.  As a result, internal management reports used during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.

EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income, net income (loss) or any other GAAP measure as an indicator of operating performance. EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income

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taxes and dividends. Rather, EBITDA and adjusted EBITDA are two potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include costs and expenses for depreciation and amortization, interest and related expenses, loss on extinguishment of debt, acquisition-related expenses, gains and losses and income taxes, intangible asset impairment charges and related asset write-offs, gains or losses related to changes in the fair value of contingent liabilities from earn-outs, loss on product recalls and distribution restructuring expenses. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.

A reconciliation of EBITDA and adjusted EBITDA to net income (loss) and to net cash provided by operating activities for the third quarter and first three quarters of each of 2015 and 2014 along with the components of EBITDA and adjusted EBITDA follows (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Net income (loss)	$	19,815		$	(4,413	)	$	58,130		$	29,502
Income tax expense (benefit)	10,476			(2,830		)	31,574			15,977
Interest expense, net	11,272			11,587			33,873			34,532
Depreciation and amortization	7,136			6,838			20,512			20,783
Loss on extinguishment of debt	—			—			—			5,748
EBITDA	48,699			11,182			144,089			106,542
Acquisition-related expenses	3,239			1,141			3,301			6,524
Impairment of intangible assets	—			34,154			—			34,154
Loss on disposal of inventory	—			2,978			—			2,978
Loss on product recall	—			—			1,868			—
Distribution restructuring expenses	1,172			—			1,172			—
Gain on change in fair value of contingent consideration	—			—			—			(8,206		)
Adjusted EBITDA	53,110			49,455			150,430			141,992
Income tax (expense) benefit	(10,476		)	2,830			(31,574		)	(15,977		)
Interest expense, net	(11,272		)	(11,587		)	(33,873		)	(34,532		)
Acquisition-related expenses	(3,239		)	(1,141		)	(3,301		)	(6,524		)
Loss on product recall	—			—			(1,868		)	—
Distribution restructuring expenses	(1,172		)	—			(1,172		)	—
Deferred income taxes	4,405			(3,511		)	13,638			5,083
Amortization of deferred financing costs and bond discount	875			879			2,631			2,907
Share-based compensation expense	1,187			386			3,704			2,128
Excess tax benefits from share-based compensation	—			27			(518		)	(2,356		)
Acquisition-related contingent consideration expense, including interest accretion	—			—			—			432
Changes in assets and liabilities	(4,283		)	(12,790		)	(11,400		)	(32,464		)
Net cash provided by operating activities	$	29,135		$	24,548		$	86,697		$	60,689

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Third quarter of 2015 compared to the third quarter of 2014

Net Sales.  Net sales for the third quarter of 2015 increased $4.3 million, or 2.1%, to $213.3 million from $209.0 million for the third quarter of 2014. Net sales of the Mama Mary’s brand, acquired in July 2015, contributed $8.5 million to our net sales for the quarter.  Negatively impacting our net sales for the quarter was a $3.4 million decrease in net sales for Rickland Orchards compared to the third quarter of 2014, a continuation of the weakness that caused us to impair the brand’s trademark and customer relationship intangible assets in fiscal 2014.

Comparable base business net sales, which excludes the impact of the Mama Mary’s acquisition and the Rickland Orchards shortfall, decreased $0.8 million, or 0.4%, in the third quarter of 2015.  The $0.8 million decrease was attributable to a decrease in unit volume of $4.5 million, partially offset by an increase in net pricing of $3.7 million (due to increases in list prices and reduced promotional activity).

Approximately 79% of the net price increase was attributable to net price increases for our Ortega, Bear Creek, Mrs. Dash and Pirate Brands products of $1.5 million, $0.6 million, $0.4 million and $0.4 million, respectively.  See Note 15, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales by brand for the third quarter of 2015 and the third quarter of 2014 for each of our brands that exceed approximately 2% of our fiscal 2015 or fiscal 2014 net sales and for all other brands in the aggregate.  The following chart sets forth the most significant net sales increases and decreases by brand for our base business for the third quarter of 2015 as compared to the third quarter of 2014:

	Base Business and Comparable Base Business Net Sales Increase (Decrease)
	Dollars			Percentage
	(in millions)
Brand:
Cream of Wheat	$	1.3		9.1	%
Ortega	1.1			3.2	%
Grandma’s	0.7			23.3	%
Pirate Brands	0.6			2.6	%
Rickland Orchards	(3.4		)	(76.3	)%
TrueNorth	(1.1		)	(22.3	)%
Bear Creek	(0.8		)	(6.1	)%
Maple Grove Farms of Vermont	(0.8		)	(4.4	)%
Mrs. Dash	(0.7		)	(4.7	)%
All other brands	(1.1		)	(1.2	)%
Base business net sales	$	(4.2	)	(2.0	)%
Rickland Orchards	3.4
Comparable base business net sales	$	(0.8	)	(0.4	)%

Gross Profit.  Gross profit for the third quarter of 2015 increased $8.5 million, or 13.5%, to $71.6 million from $63.1 million for the third quarter of 2014.  Gross profit expressed as a percentage of net sales increased to 33.6% in the third quarter of 2015 from 30.2% in the third quarter of 2014.  The 3.4 percentage point increase resulted primarily from price increases and lower delivery costs, partially offset by minor cost increases in commodities and packaging and the negative impact of the Canadian exchange rate on our net sales to Canada.  The increase in gross profit percentage year over year was also favorably impacted by the

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third quarter 2014 charge to cost of goods sold of approximately $3.0 million relating to a write-off of certain raw material and finished goods inventory used in the production of Rickland Orchards products.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased $6.1 million, or 29.0%, to $27.3 million for the third quarter of 2015 from $21.2 million for the third quarter of 2014.  This increase was primarily due to increases in acquisition-related expenses of $2.1million, warehousing expenses of $1.8 million (primarily related to restructuring activity), selling expenses of $0.8 million (including an increase of $0.9 million for salesperson compensation, slightly offset by a decrease in brokerage expenses) and other expenses of $1.5 million (primarily related to compensation).  These increases were slightly offset by a decrease of $0.1 million of consumer marketing expenses.  Expressed as a percentage of net sales, selling, general and administrative expenses increased 2.7 percentage points to 12.8% for the third quarter of 2015 from 10.1% for the third quarter of 2014.

Impairment of Intangible Assets. We did not have any impairment of intangible assets during the third quarter of 2015.  During the third quarter of 2014, we recognized non-cash impairment charges to intangible assets of $34.2 million relating to Rickland Orchards, including a $26.9 million charge for the impairment of amortizable trademarks and a $7.3 million charge for the impairment of customer relationship intangibles, due primarily to our reduced projections for net sales to the club channel for the core products of Rickland Orchards.

Amortization Expense.  Amortization expense decreased $0.7 million to $2.7 million for the third quarter of 2015 from $3.4 million for the third quarter of 2014.  The decrease was due to a reduction in the Rickland Orchards amortizable intangible assets recorded resulting from the impairment of the Rickland Orchards brand and customer relationship assets in fiscal 2014.

Operating Income.  As a result of the foregoing, including the significant impact of the non-cash impairment charges to intangible assets of $34.2 million relating to Rickland Orchards we recorded in the third quarter of 2014, operating income increased $37.2 million, or 856.8%, to $41.5 million for the third quarter of 2015 from $4.3 million for the third quarter of 2014.  Operating income expressed as a percentage of net sales increased to 19.5% in the third quarter of 2015 from 2.1% in the third quarter of 2014.

Net Interest Expense.  Net interest expense for the third quarter of 2015 decreased $0.3 million, or 2.7%, to $11.3 million from $11.6 million in the third quarter of 2014.  The decrease was primarily attributable to a decrease in our average debt outstanding.  See “—Liquidity and Capital Resources—Debt” below.

Income Tax Expense.  Income tax expense increased $13.3 million to $10.5 million for the third quarter of 2015 from an income tax benefit of $2.8 million for the third quarter of 2014. Our effective tax rate was 34.6% for the third quarter of 2015 and 39.1% for the third quarter of 2014.

First three quarters of 2015 compared to the first three quarters of 2014

Net Sales.  Net sales for the first three quarters of 2015 increased $14.1 million, or 2.3%, to $624.1 million from $610.0 million for the first three quarters of 2014.  Net sales of the Mama Mary’s brand, which we acquired in July 2015, contributed $8.5 million to the overall increase. Net sales of Specialty Brands, which we acquired in April 2014, contributed $23.1 million to the overall increase. Net sales were negatively impacted by the Rickland Orchards brand, whose net sales decreased by $17.1 million compared to the first three quarters of 2014, a continuation of the weakness that caused us to impair the brand’s trademark and customer relationship intangible assets in fiscal 2014.

Net sales of our Ortega products increased $6.0 million, or 5.7%.  The increase was attributable to an increase in net pricing of $3.7 million and an increase in unit volume due in part to customers restocking inventory of products affected by the Ortega and Las Palmas recall announced in November 2014, partially

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offset by $1.2 million of customer refunds relating to the recall.  Excluding the customer refunds relating to the recall, net sales of Ortega products increased $7.2 million, or 6.9%.

Comparable base business net sales, which excludes the impact of acquisitions, the Rickland Orchards shortfall and the Ortega and Las Palmas recall, increased $0.8 million, or 0.1%, for the first three quarters of 2015.  The $0.8 million increase was attributable to an increase in net pricing of $11.2 million (due to increases in list prices and reduced promotional activity), offset by a decrease in unit volume of $10.4 million.

Approximately 67% of the net price increase was attributable to net price increases for our Ortega, Cream of Wheat, Mrs. Dash and Polaner products of $3.7 million, $1.5 million, $1.3 million and $0.9 million, respectively.  See Note 15, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales by brand for the first three quarters of 2015 and the first three quarters of 2014 for each of our brands that exceed approximately 2% of our fiscal 2015 or fiscal 2014 net sales and for all other brands in the aggregate.  The following chart sets forth the most significant net sales increases and decreases by brand for our base business for the first three quarters of 2015 as compared to the first three quarters of 2014:

	Base Business and Comparable Base Business Net Sales Increase (Decrease)
	Dollars			Percentage
	(in millions)
Brand:
Ortega	$	6.0		5.7	%
Pirate Brands	1.7			2.7	%
Cream of Wheat	1.4			3.3	%
Rickland Orchards	(17.1		)	(84.3	)%
New York Style	(4.1		)	(19.4	)%
TrueNorth	(2.2		)	(13.6	)%
Old London	(1.0		)	(11.4	)%
All other brands	(2.2		)	(0.7	)%
Base business net sales	$	(17.5	)	(2.9	)%
Rickland Orchards	17.1
Customer refunds relating to recall	1.2
Comparable base business net sales	$	0.8		0.1	%

Gross Profit.  Gross profit for the first three quarters of 2015 increased $10.2 million, or 5.4%, to $201.0 million from $190.8 million for the first three quarters of 2014.  Gross profit expressed as a percentage of net sales increased to 32.2% in the first three quarters of 2015 from 31.3% in the first three quarters of 2014.  The 0.9 percentage point increase resulted primarily from price increases and lower delivery costs, partially offset by minor cost increases in commodities and packaging and the negative impact of the Canadian exchange rate.  The increase in gross profit percentage year over year was also favorably impacted by the third quarter 2014 charge to cost of goods sold of approximately $3.0 million relating to a write-off of certain raw material and finished goods inventory used in the production of Rickland Orchards products.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased $0.3 million, or 0.4%, to $69.4 million for the first three quarters of 2015 from $69.1 million for the first three quarters of 2014.  The increase was primarily due to increases in warehousing expenses of $3.2 million, selling expenses of $0.9 million (including an increase of $1.9 million for salesperson compensation, partially offset by a decrease in brokerage expenses of $1.2 million) and other expenses of $2.9 million (primarily related to

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compensation), partially offset by decreases in consumer marketing of $3.5 million (primarily related to a reduction in demo spending) and acquisition-related expenses of $3.2 million.  Expressed as a percentage of net sales, our selling, general and administrative expenses decreased 0.2 percentage points to 11.1% for the first three quarters of 2015 from 11.3% for the first three quarters of 2014.

Impairment of Intangible Assets. We did not have any impairment of intangible assets during the first three quarters of 2015.  During the first three quarters of 2014, we recognized non-cash impairment charges to intangible assets of $34.2 million relating to Rickland Orchards, including a $26.9 million charge for the impairment of amortizable trademarks and a $7.3 million charge for the impairment of customer relationship intangibles, due primarily to our reduced projections for net sales to the club channel for the core products of Rickland Orchards.

Gain on Change in Fair Value of Contingent Consideration.  In addition to the base purchase price consideration paid at closing, the acquisition agreement for Rickland Orchards requires that we pay additional purchase price earn-out consideration contingent upon the achievement of revenue growth targets during fiscal 2014, 2015 and 2016.  At the time of the acquisition, we established the fair value of the contingent consideration using revenue growth targets meant to achieve operating results in excess of base purchase price acquisition model assumptions.  As required, at June 28, 2014 we remeasured the fair value of the contingent consideration using actual operating results through June 28, 2014 and revised forecasted operating results for the remainder of fiscal 2014, 2015 and 2016, and reduced the probability of achievement and the fair value of the contingent consideration to zero.  This resulted in a non-cash gain of $8.2 million that is included in gain on change in fair value of contingent consideration in the accompanying unaudited consolidated statements of operations for the first three quarters of 2014.

Amortization Expense.  Amortization expense decreased $1.9 million to $8.1 million for the first three quarters of 2015 from $10.0 million for the first three quarters of 2014 due to a reduction in the Rickland Orchards amortizable intangible assets recorded resulting from the impairment of the Rickland Orchards brand and customer relationship assets in fiscal 2014.

Operating Income.  As a result of the foregoing, including the significant impact of the non-cash impairment charges to intangible assets of $34.2 million relating to Rickland Orchards we recorded in the first three quarters of 2014, operating income increased $37.8 million, or 44.1%, to $123.6 million for the first three quarters of 2015 from $85.8 million for the first three quarters of 2014.  Operating income expressed as a percentage of net sales increased to 19.8% in the first three quarters of 2015 from 14.1% in the first three quarters of 2014.

Net Interest Expense.  Net interest expense for the first three quarters of 2015 decreased $0.6 million, or 1.9%, to $33.9 million from $34.5 million in the first three quarters of 2014.  The decrease was primarily attributable to a decrease in our average debt outstanding.  See “—Liquidity and Capital Resources—Debt” below.

Loss on Extinguishment of Debt.  We did not incur a loss on extinguishment of debt for the first three quarters of 2015. Loss on extinguishment of debt for the first three quarters of 2014 includes costs relating to the termination of our prior credit agreement and the repayment of all outstanding obligations thereunder, including the write-off of deferred debt financing costs and unamortized discount of $5.4 million and $0.3 million, respectively.

Income Tax Expense.  Income tax expense increased $15.6 million to $31.6 million for the first three quarters of 2015 from $16.0 million for the first three quarters of 2014.  Our effective tax rate was 35.2% for the first three quarters of 2015 and 35.1% for the first three quarters of 2014.

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Liquidity and Capital Resources

Our primary liquidity requirements include debt service, capital expenditures and working capital needs.  See also, “Dividend Policy” and “Commitments and Contractual Obligations” below.  We fund our liquidity requirements, as well as our dividend payments and financing for acquisitions, primarily through cash generated from operations and external sources of financing, including our revolving credit facility.

Cash Flows.  Net cash provided by operating activities increased $26.0 million to $86.7 million for the first three quarters of 2015 from $60.7 million for the first three quarters of 2014.  The increase in net cash provided by operating activities in the first three quarters of 2015 as compared to the first three quarters of 2014 was due to higher net income and the favorable impact of a decrease in cash required to fund working capital in the first three quarters of 2015, as compared to the same period in 2014.

Net cash used in investing activities for the first three quarters of 2015 decreased $104.5 million to $63.7 million from $168.2 million for the first three quarters of 2014.  The decrease was primarily attributable to the net decrease in cash used to fund acquisitions, namely the Specialty Brands acquisition in the second quarter of 2014 and the Mama Mary’s acquisition in third quarter of 2015. A slight decrease in capital spending for the first three quarters of 2015 from the first three quarters of 2014 also contributed to the overall decrease.  Capital expenditures in the first three quarters of 2015 and 2014 included expenditures for building improvements, purchases of manufacturing and computer equipment and capitalized interest.

Net cash provided by financing activities for the first three quarters of 2015 decreased $87.8 million to $21.6 million from $109.4 million for the first three quarters of 2014.  The decrease was primarily attributable to differences in the net effects of the issuance of common stock in the second quarter of 2015 and the refinancing of long-term debt completed during the second quarter of 2014.  See “—Debt” below.

Based on a number of factors, including amortization for tax purposes of our trademarks, goodwill and other intangible assets acquired in prior acquisitions, we realized a significant reduction in cash taxes in fiscal 2014 as compared to our tax expense for financial reporting purposes.  We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years 2015 through 2029.  If there is a change in U.S. federal tax policy that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments.

Dividend Policy

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

For the first three quarters of 2015 and 2014, we had cash flows provided by operating activities of $86.7 million and $60.7 million, respectively, and distributed as dividends $56.2 million and $54.1 million, respectively. Beginning with the quarterly dividend declared on July 23, 2015 and payable on October 30, 2015, our board of directors increased the current dividend rate to $0.35 per share per quarter (or $1.40 per share per annum). We expect our aggregate dividend payments in fiscal 2015 to be approximately $76.5 million.

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

Acquisitions

Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions.  As discussed elsewhere in this report, as part of our growth strategy we plan to expand our brand portfolio with disciplined acquisitions of complementary brands.  We have historically financed acquisitions with borrowings and cash flows from operating activities.  As a result, our interest expense has in the past increased as a result of additional indebtedness we have incurred in connection with acquisitions and will increase with any additional indebtedness we may incur to finance future acquisitions.

We financed our most recent acquisition, the Mama Mary’s acquisition completed in July 2015, with cash on hand from the proceeds of the public offering of common stock we completed in May 2015.  We expect to finance the pending Green Giant acquisition, which we expect to close in the fourth quarter of 2015, with additional indebtedness as described below.  The impact of future acquisitions, whether financed with additional indebtedness or otherwise, may have a material impact on our liquidity.

Debt

Amended and Restated Senior Secured Credit Agreement.  On October 2, 2015, we amended and restated our existing senior secured credit agreement dated as of June 5, 2014. The amendment provides for an incremental tranche B term loan facility to be made available under the amended and restated credit agreement to finance a portion of the purchase price for the pending Green Giant acquisition.  Subject to the satisfaction of customary conditions precedent set forth in the amended and restated credit agreement, we expect that $750 million of incremental tranche B term loans will be funded at the closing of the acquisition, which we expect to occur during the fourth quarter of 2015. We expect to fund the remainder of the purchase price, the closing inventory adjustment, initial working capital requirements and related fees and expenses for the pending Green Giant acquisition with additional revolving loans under the amended and restated credit agreement.

At October 3, 2015, $279.4 million of tranche A term loans were outstanding and no tranche B term loans or revolving loans were outstanding under our amended and restated senior secured credit agreement. The amended and restated credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property.  At October 3, 2015, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.0 million, was $498.0 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.  The revolving credit facility matures on June 5, 2019.

The tranche A term loans are subject to principal amortization.  $7.5 million was due and paid in fiscal 2014, $18.8 million is due and payable in fiscal 2015, of which $13.2 million has been paid as of October 3, 2015, $26.2 million is due and payable in fiscal 2016, $24.4 million is due and payable in fiscal 2017 and $76.9 million is due and payable in fiscal 2018.  The balance of all borrowings under the tranche A term loan facility, or $146.2 million, is due and payable at maturity on June 5, 2019.  The tranche B term loans will mature on the seventh anniversary of the date of funding of the tranche B term loans and will be subject to amortization at the rate of 1% per year with the balance due and payable on the maturity date.

Interest under the revolving credit facility, including any outstanding letters of credit, and under the tranche A term loan facility, is determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin ranging

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from 0.50% to 1.00%, and LIBOR plus an applicable margin ranging from 1.50% to 2.00%, in each case depending on our consolidated leverage ratio.  At the end of the third quarter of 2015, the revolving credit facility and the tranche A term loan interest rates were each approximately 2.21%.  Interest under the tranche B term loan facility will be determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin to be determined prior to the funding date, and LIBOR plus an applicable margin to be determined prior to the funding date.

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

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

Future Capital Needs

On October 3, 2015, our total long-term debt of $978.9 million, net of our cash and cash equivalents of $45.9 million, was $933.0 million.  Stockholders’ equity as of that date was $466.7 million.

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

We expect to make capital expenditures of approximately $20.0 million in the aggregate during fiscal 2015, $12.7 million of which were made during the first three quarters.

Seasonality

Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons or certain other annual events.  In the aggregate, however, sales of our products are not heavily weighted to any particular quarter due to the offsetting nature of demands for our diversified product portfolio.  Sales during the fourth quarter are generally greater than those of the preceding three quarters.

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

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Inflation

We are currently locked into pricing and supply for a majority of our most significant commodities, other than maple syrup, through the second quarter of 2016 and expect these costs to be relatively flat for us as compared to fiscal 2014.  We expect to continue to manage inflation risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and, if necessary, by raising prices.  To the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially and adversely affected.  In addition, should input costs decline, customers may look for price reductions in situations where we have locked into purchases at higher costs.

Contingencies

See Note 11, “Commitments and Contingencies,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Recent Accounting Pronouncements

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

Off-balance Sheet Arrangements

As of October 3, 2015, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Commitments and Contractual Obligations

Our contractual obligations and commitments principally include obligations associated with our outstanding indebtedness, future minimum operating lease obligations and future pension obligations.  During the first three quarters of 2015, there were no material changes outside the ordinary course of business in the specified contractual obligations set forth in the Commitments and Contractual Obligations table in our 2014 Annual Report on Form 10-K.

Forward-Looking Statements

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

·our substantial leverage;

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

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

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

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

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

·the risks associated with the expansion of our business;

·our possible inability to integrate any businesses we acquire;

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

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

·the effects of currency movements of the Canadian dollar as compared to the U.S. dollar;

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

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

·competitors’ pricing practices and promotional spending levels;

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

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

·other factors discussed elsewhere in this report and in our other public filings with the SEC, including under Item 1A, “Risk Factors,” in our 2014 Annual Report on Form 10-K.

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

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

We caution that the foregoing list of important factors is not exclusive.  We urge investors not to unduly rely on forward-looking statements contained in this report.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

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

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

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

Changes in interest rates impact our fixed and variable rate debt differently.  For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows.  At October 3, 2015, we had $700.0 million of fixed rate debt and $279.4 million of variable rate debt.

Based upon our principal amount of long-term debt outstanding at October 3, 2015, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately $2.8 million.

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of October 3, 2015 and January 3, 2015 are as follows (in thousands):

	October 3, 2015				January 3, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving Credit Loans	—		—		34,000		34,000	(1)
Tranche A Term Loans due 2019	278,866	(2)	279,375	(1)	291,857	(2)	292,500	(1)
4.625% Senior Notes due 2021	700,000		675,500	(3)	700,000		675,500	(3)

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

(2)The carrying values of the tranche A term loans are net of discount.  At October 3, 2015 and January 3, 2015, the face amounts of the tranche A term loans were $279.4 million and $292.5 million, respectively.

(3)Fair values are estimated based on quoted market prices.

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

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

Foreign Currency Risk.  Our foreign sales are primarily to customers in Canada.  Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars.  During the first three quarters of 2015, our net sales to foreign countries represented approximately 3.6% of our total net sales.  During the first three quarters of 2014, our net sales to foreign countries represented approximately 3.3% of our total net sales.  We also purchase certain raw materials from foreign suppliers.  For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada.  These purchases are made in Canadian dollars.  A weakening of the U.S. dollar in relation to the Canadian dollar would significantly increase our future costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar.  Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars.

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

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Market Fluctuation Risks Relating to our Defined Benefit Pension Plans.  See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates” and Note 10, “Pension Benefits,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations.

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Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, our management, including our chief executive officer and our chief financial officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures that we use that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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

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

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

39

PART II
OTHER INFORMATION

Item 1.Legal Proceedings

The information set forth under the heading “Legal Proceedings” in Note 11 to our unaudited consolidated financial statements in Part I, Item 1 of this quarterly report on Form 10-Q is incorporated herein by reference.

Item 1A.  Risk Factors

We do not believe there have been any material changes in our risk factors as previously disclosed in our 2014 Annual Report on Form 10-K.

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

Not applicable.

Item 3.Defaults Upon Senior Securities

Not applicable.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

Not applicable.

Item 6.Exhibits

EXHIBIT NO.	DESCRIPTION
31.1	Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer.
31.2	Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer and Chief Financial Officer.
101.1	The following financial information from B&G Foods’ Quarterly Report on Form 10-Q for the quarter ended October 3, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) Notes to Consolidated Financial Statements, and (vi) document and entity information.

40

SIGNATURE

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

Dated: October 30, 2015	B&G FOODS, INC.
	By:	/s/ Thomas P. Crimmins
		Thomas P. Crimmins Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer and Authorized Officer)

41

EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, Robert C. Cantwell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B&G Foods, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2015

/s/ Robert C. Cantwell

Robert C. Cantwell

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Thomas P. Crimmins, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B&G Foods, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2015

/s/ Thomas P. Crimmins

Thomas P. Crimmins

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of B&G Foods, Inc. (the “Company”) on Form 10-Q for the period ending October 3, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert C. Cantwell, Chief Executive Officer of the Company, and I, Thomas P. Crimmins, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert C. Cantwell

Robert C. Cantwell

Chief Executive Officer

October 30, 2015

/s/ Thomas P. Crimmins

Thomas P. Crimmins

Chief Financial Officer

October 30, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	6 Months Ended	9 Months Ended
	Jun. 28, 2014	Sep. 27, 2014	Oct. 03, 2015	Jul. 04, 2015	Jan. 03, 2015	Oct. 31, 2013	Jun. 04, 2013
Financial assets and liabilities at fair value
Interest accretion on contingent consideration		$ 432
Changes in contingent consideration measured at level 3
Gain on change in fair value of contingent consideration		(8,206)
Rickland Orchards acquisition
Financial assets and liabilities at fair value
Minimum earn-out consideration payable upon achievement of growth targets						$ 0
Maximum consideration payable upon achievement of specified operating results						15,000
Original fair value of contingent consideration				$ 0		$ 7,600
Interest accretion on contingent consideration	$ 400
Level 3 | Rickland Orchards acquisition
Changes in contingent consideration measured at level 3
Balance at beginning of year	$ 7,774	7,774
Contingent consideration expense, including interest accretion		432
Gain on change in fair value of contingent consideration		$ (8,206)
4.625% Senior notes due 2021
Financial assets and liabilities at fair value
Face amount of senior notes							$ 700,000
Interest rate (as a percent)			4.625%		4.625%		4.625%
Fair value measured on recurring basis | Tranche A term loans due 2019
Financial assets and liabilities at fair value
Face amount of senior notes			$ 279,400		$ 292,500
Fair value measured on recurring basis | Carrying Value | Revolving credit loans
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes					34,000
Fair value measured on recurring basis | Carrying Value | Tranche A term loans due 2019
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes			278,866		291,857
Fair value measured on recurring basis | Carrying Value | 4.625% Senior notes due 2021
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes			700,000		700,000
Fair value measured on recurring basis | Fair Value | Revolving credit loans | Level 2
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes					34,000
Fair value measured on recurring basis | Fair Value | Tranche A term loans due 2019 | Level 2
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes			279,375		292,500
Fair value measured on recurring basis | Fair Value | 4.625% Senior notes due 2021 | Level 2
Financial assets and liabilities at fair value
Fair values and carrying amount of revolving credit loans, term loan and senior notes			$ 675,500		$ 675,500

XML

Business and Credit Concentrations and Geographic Information (Details) - item	9 Months Ended			12 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Sep. 27, 2014	Jan. 03, 2015	Jan. 03, 2015
Business and Credit Concentrations
Number of top customers	10
Net sales | Consolidated net sales
Business and Credit Concentrations
Number of customers other than Wal-Mart accounting for more than 10%	0		0
Maximum percentage of net sales to foreign countries	3.60%	3.30%
Net sales | Consolidated net sales | Wal-Mart
Business and Credit Concentrations
Percentage of concentration risk	19.30%	18.60%
Net sales | Consolidated net sales | Top ten customers
Business and Credit Concentrations
Percentage of concentration risk	51.90%	51.90%
Accounts receivable | Trade accounts receivables
Business and Credit Concentrations
Number of customers other than Wal-Mart accounting for more than 10%	0			0
Accounts receivable | Trade accounts receivables | Wal-Mart
Business and Credit Concentrations
Percentage of concentration risk	15.60%				16.70%
Accounts receivable | Trade accounts receivables | Top ten customers
Business and Credit Concentrations
Percentage of concentration risk	51.60%				51.70%

XML

Commitments and Contingencies (Details 2) $ in Millions	3 Months Ended	9 Months Ended
	Jul. 04, 2015 item	Oct. 03, 2015 USD ($) item
Information related to Collective Bargaining Agreements
Number of other collective bargaining agreements expiring within one year		0
Number of executive officers with employment agreements		7
Information related to Ortega and Las Palmas recall
Cost impact of recall, net of expected insurance recoveries | $		$ 1.9
Reduction of net sales | $		1.2
Cost of sales | $		0.5
Administrative costs | $		0.2
Accounts receivable reserves | $		$ 0.3
Number of employees covered under collective bargaining agreements
Information related to Collective Bargaining Agreements
Number of employees		338
Percentage of total employees covered under collective bargaining agreements		35.00%
Total number of employees
Information related to Collective Bargaining Agreements
Number of employees		964
Number of employees covered under collective bargaining agreements expiring with next 12 months
Information related to Collective Bargaining Agreements
Number of employees		195
Collective bargaining agreements expiration period		12 months
Number of employees covered under collective bargaining agreements with additional term
Information related to Collective Bargaining Agreements
Collective bargaining agreements, additional term	2 years
Number of employees	92

XML

Net Sales by Brand (Tables)

9 Months Ended

Oct. 03, 2015

Net Sales by Brand

Schedule of net sales by brand

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

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Brand:(1)
Ortega(2)	$	36,388	$	35,272	$	111,514	$	105,485
Pirate Brands	23,501		22,902		65,289		63,599
Maple Grove Farms of Vermont	18,425		19,272		57,266		56,447
Cream of Wheat	15,251		13,977		43,946		42,549
Mrs. Dash	14,542		15,259		48,053		48,027
Bear Creek Country Kitchens(3)	13,065		13,908		32,601		19,277
Mama Mary’s(4)	8,492		—		8,492		—
Las Palmas(2)	8,326		8,289		25,434		24,558
Polaner	8,096		8,433		24,938		25,811
Bloch & Guggenheimer	5,769		5,637		19,747		19,965
New York Style	5,570		5,770		17,177		21,321
Underwood	4,985		4,884		14,067		14,043
Spring Tree(3)	4,712		5,107		14,824		8,787
Ac’cent	4,470		4,088		13,255		13,053
TrueNorth	3,925		5,051		14,031		16,232
B&M	3,789		3,559		14,796		15,668
Rickland Orchards	1,057		4,461		3,172		20,250
All other brands(5)	32,937		33,129		95,465		94,955
Total	$	213,300	$	208,998	$	624,067	$	610,027

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

(2) During the first three quarters of 2015, net sales for Ortega and Las Palmas were negatively impacted by customer refunds of $1.2 million relating to the product recall announced in November 2014.  There was no impact during the third quarter of 2015.

(3) We completed the Specialty Brands acquisition on April 23, 2014, including the Bear Creek Country Kitchens and Spring Tree brands.

(4) We completed the Mama Mary’s acquisition on July 10, 2015.

(5) Net sales for “All other brands” has been impacted by the acquisition of Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands acquired as part of the Specialty Brands acquisition, which was completed on April 23, 2014.

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Oct. 03, 2015

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):

	As of October 3, 2015						As of January 3, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable Intangible Assets
Trademarks	$	12,056	$	1,573	$	10,483	$	12,056	$	875	$	11,181
Customer relationships	197,713		65,774		131,939		192,913		58,400		134,513
	$	209,769	$	67,347	$	142,422	$	204,969	$	59,275	$	145,694
Unamortizable Intangible Assets
Goodwill	$	388,044					$	370,424
Trademarks	$	840,200					$	802,201

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Share-Based Payments (Details 2) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Weighted Average Grant Date Fair Value
Total shares of common stock issued	113,047	217,787
Other disclosure
Excess tax benefit recorded to additional paid in capital	$ 518	$ 2,356
Performance share long Term incentive awards
Number of Shares
Balance at the beginning of the period (in shares)	380,977
Granted (in shares)	171,622
Vested (in shares)	(153,194)	(342,576)
Forfeited (in shares)	(4,541)
Balance at the end of the period (in shares)	394,864
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 24.82
Granted (in dollars per share)	23.86
Vested (in dollars per share)	20.34
Forfeited (in dollars per share)	27.63
Balance at the end of the period (in dollars per share)	$ 26.11
Percentage of target number of shares that may be earned scenario 1, maximum	200.00%
Number of performance shares vested	153,194	342,576
Shares withheld to fund statutory minimum tax withholding	58,242	138,799
Total shares of common stock issued	94,952	203,777
Other disclosure
Excess tax benefit recorded to additional paid in capital	$ 518	$ 2,356
Non-Employee Directors
Weighted Average Grant Date Fair Value
Total shares of common stock issued	18,095	14,010

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Accumulated Other Comprehensive Loss (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Changes in accumulated other comprehensive loss
Beginning balance			$ (11,034)
Other comprehensive loss before reclassifications			(190)
Amounts reclassified from AOCL			348
Other comprehensive income (loss)	$ 33	$ (34)	158	$ (24)
Ending balance	(10,876)		(10,876)
Defined Benefit Pension Plan Items
Changes in accumulated other comprehensive loss
Beginning balance			(10,787)
Amounts reclassified from AOCL			348
Other comprehensive income (loss)			348
Ending balance	(10,439)		(10,439)
Foreign Currency Translation Adjustments
Changes in accumulated other comprehensive loss
Beginning balance			(247)
Other comprehensive loss before reclassifications			(190)
Other comprehensive income (loss)			(190)
Ending balance	$ (437)		$ (437)

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014	Jan. 03, 2015
Amortizable Intangible Assets
Gross Carrying Amount	$ 209,769		$ 209,769		$ 204,969
Accumulated Amortization	67,347		67,347		59,275
Net Carrying Amount	142,422		142,422		145,694
Amortization expense	2,726	$ 3,391	8,072	$ 9,986
Unamortizable Intangible Assets
Goodwill	388,044		388,044		370,424
Future amortization expense
Remainder of fiscal 2015	2,800		2,800
2016	10,900		10,900
2017	10,900		10,900
2018	10,900		10,900
2019	10,900		10,900
Trademarks
Unamortizable Intangible Assets
Unamortizable intangible assets excluding goodwill	840,200		840,200		802,201
Trademarks
Amortizable Intangible Assets
Gross Carrying Amount	12,056		12,056		12,056
Accumulated Amortization	1,573		1,573		875
Net Carrying Amount	10,483		10,483		11,181
Customer Relationship Intangibles
Amortizable Intangible Assets
Gross Carrying Amount	197,713		197,713		192,913
Accumulated Amortization	65,774		65,774		58,400
Net Carrying Amount	$ 131,939		$ 131,939		$ 134,513

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Earnings per Share (Details) - shares	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Earnings per Share
Anti Dilutive Securities Excluded From Computation Of Weighted Average Shares Outstanding	551,330	101,428
Weighted average shares outstanding:
Basic (in shares)	57,977,000	53,664,000	56,121,000	53,656,000
Net effect of potentially dilutive share-based compensation awards (in shares)	79,979		58,929	74,638
Diluted (in shares)	58,057,000	53,664,000	56,180,000	53,730,000

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Acquisitions

9 Months Ended

Oct. 03, 2015

Acquisitions.

Acquisitions

(3)Acquisitions

On July 10, 2015, we acquired Spartan Foods of America, Inc. dba Mama Mary’s and related entities from Linsalata Capital Partners and certain other sellers for a purchase price of $51.0 million in cash. We refer to this acquisition as the “Mama Mary’s acquisition.”

On April 23, 2014, we completed the acquisition of Specialty Brands of America, Inc. and related entities, including the Bear Creek Country Kitchens, Spring Tree, Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands, from affiliates of American Capital, Ltd. and certain individual sellers for a purchase price of $154.3 million in cash.  We refer to this acquisition as the “Specialty Brands acquisition.”

We have accounted for each of these acquisitions using the acquisition method of accounting and, accordingly, have included the assets acquired, liabilities assumed and results of operations in our consolidated financial statements from the respective date of acquisition.  The excess of the purchase price over the fair value of identifiable net assets acquired represents goodwill. Unamortizable trademarks are deemed to have an indefinite useful life and are not amortized. Customer relationship intangibles acquired are amortized over 20 years.  Inventory has been recorded at estimated selling price less costs of disposal and a reasonable profit and the property, plant and equipment and other intangible assets (including trademarks, customer relationships and other intangibles) acquired have been recorded at fair value as determined by our management with the assistance of a third-party valuation specialist.  See Note 5, “Goodwill and Other Intangible Assets.”

The following table sets forth the preliminary allocation of the Mama Mary’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 the liabilities assumed.  We anticipate completing the purchase price allocation before or during the second quarter of fiscal 2016.

Mama Mary’s Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	51,025
Total	$	51,025
Preliminary Allocation:
Trademarks—unamortizable intangible assets	38,000
Goodwill	17,455
Customer relationship intangibles—amortizable intangible assets	4,800
Property, Plant and Equipment	1,900
Short-term deferred income tax assets	1,222
Other working capital	383
Long-term deferred income tax liabilities, net	(12,735		)
Total	$	51,025

The following table sets forth the allocation of the Specialty Brands acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition.  During the first two quarters of fiscal 2015, we recorded a purchase price allocation adjustment by increasing goodwill and decreasing other working capital by $0.2 million due to a change in our valuation of inventory as of the date of acquisition. We completed the purchase price allocation during the second quarter of 2015.

Specialty Brands Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	154,277
Total	$	154,277
Allocation:
Income tax receivable	$	4,012
Short-term deferred income tax assets	1,786
Trademarks—unamortizable intangible assets	137,300
Goodwill	49,017
Customer relationship intangibles—amortizable intangible assets	13,300
Other working capital	(2,233		)
Long-term deferred income tax liabilities, net	(48,905		)
Total	$	154,277

On September 3, 2015, we entered into an agreement to acquire the Green Giant and La Sueur brands from General Mills, Inc. for approximately $765 million in cash plus an inventory adjustment at closing.  We expect the acquisition to close during the fourth quarter of 2015, subject to customary closing conditions.  We refer to this acquisition as the pending Green Giant acquisition. We expect to fund the pending Green Giant acquisition and related fees and expenses with borrowings from our revolving credit facility and a new term loan under our amended and restated credit facility. See Note 6, “Long-Term Debt.”

Unaudited Pro Forma Summary of Operations

The following pro forma summary of operations for the first three quarters of 2014 presents our operations as if the Specialty Brands acquisition had occurred as of the beginning of fiscal 2014.  In addition to including the results of operations of this acquisition, the pro forma information gives effect to the interest on additional borrowings and the amortization of customer relationship intangibles.  On an actual basis, Specialty Brands contributed $33.5 million of net sales for the first three quarters of 2014.

	Thirty-nine Weeks Ended September 27, 2014
	(dollars in thousands, except per share data)
Net sales	$	636,420
Net income	30,694
Basic and diluted earnings per share	$	0.57

The pro forma information presented above does not purport to be indicative of the results that actually would have been attained had the Specialty Brands acquisition occurred as of the beginning of fiscal 2014, and is not intended to be a projection of future results.

The Mama Mary’s acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented.

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Pension Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Components of net periodic pension cost
Service cost-benefits earned during the period	$ 1,001	$ 768	$ 3,003	$ 2,173
Interest cost on projected benefit obligation	640	592	1,919	1,794
Expected return on plan assets	(1,042)	(1,089)	(3,124)	(3,258)
Amortization of unrecognized prior service cost	11	11	33	33
Amortization of unrecognized loss	176		528
Net periodic pension cost	$ 786	$ 282	$ 2,359	$ 742

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Pension Benefits (Tables)

9 Months Ended

Oct. 03, 2015

Pension Benefits

Schedule of defined benefit pension plans' benefit obligation, fair value of plans assets and funded status recognized in the consolidated balance sheets

Company Sponsored Defined Benefit Pension Plans.  Net periodic pension costs for company sponsored defined benefit pension plans for the third quarter and first three quarters of 2015 and 2014 include the following components (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Service cost—benefits earned during the period	$	1,001		$	768		$	3,003		$	2,173
Interest cost on projected benefit obligation	640			592			1,919			1,794
Expected return on plan assets	(1,042		)	(1,089		)	(3,124		)	(3,258		)
Amortization of unrecognized prior service cost	11			11			33			33
Amortization of unrecognized loss	176			—			528			—
Net periodic pension cost	$	786		$	282		$	2,359		$	742

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Oct. 03, 2015

Accumulated Other Comprehensive Loss.

Schedule of reclassification from accumulated other comprehensive loss (AOCL )

The reclassification from accumulated other comprehensive loss (AOCL) as of October 3, 2015 and September 27, 2014 are as follows (in thousands):

	Amount Reclassified from AOCL
	Thirteen Weeks Ended						Thirty-nine Weeks Ended						Affected Line Item in the
Details about AOCL Components	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014			Statement Where Net Income (Loss) is Presented
Defined benefit pension plan items
Amortization of prior service cost	$	11		$	11		$	33		$	33		See (1) below
Amortization of unrecognized loss	176			—			528			—			See (1) below
	187			11			561			33			Total before tax
	(76		)	(4		)	(213		)	(12		)	Income tax expense
Total reclassification	$	111		$	7		$	348		$	21		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 accumulated other comprehensive loss as of October 3, 2015 is as follows (in thousands):

	Defined Benefit Pension Plan Items			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(10,787	)	$	(247	)	$	(11,034	)
Other comprehensive loss before reclassifications	—			(190		)	(190		)
Amounts reclassified from AOCL	348			—			348
Net current period other comprehensive income (loss)	348			(190		)	158
Ending balance	$	(10,439	)	$	(437	)	$	(10,876	)

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Pension Benefits (Details 2) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Jul. 04, 2015	Oct. 03, 2015 USD ($)	Jan. 02, 2016 USD ($)	Jan. 03, 2015 USD ($)
Pension Benefits
Employer contributions		$ 3.5
Multi-Employer Defined Benefit Pension Plan
Surcharge payable on hours worked applicable for initial critical year of plan (as a percent)		5.00%
Surcharge payable on hours worked applicable for succeeding plan years (as a percent)		10.00%
Contribution to the multi-employer plan				$ 1.0
Maximum contribution to multi-employer plan (as a percent)				5.00%
Minimum
Multi-Employer Defined Benefit Pension Plan
Plan expected to increase (as a percent)	5.0
Maximum
Multi-Employer Defined Benefit Pension Plan
Surcharges paid or expected to be paid				$ 0.1
Forecast | Maximum
Multi-Employer Defined Benefit Pension Plan
Surcharges paid or expected to be paid			$ 0.1

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Commitments and Contingencies (Tables)

9 Months Ended

Oct. 03, 2015

Commitments and Contingencies

Summary of future minimum lease payments under non-cancelable operating leases

Operating Leases.  As of October 3, 2015, future minimum lease payments under non-cancelable operating leases in effect at quarter-end (with initial lease terms in excess of one year) were as follows (in thousands):

Fiscal year ending:	Third Parties
2015	$	1,908
2016	7,683
2017	5,236
2018	5,137
2019	5,212
Thereafter	7,938
Total	$	33,114

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Earnings per Share (Tables)

9 Months Ended

Oct. 03, 2015

Earnings per Share

Schedule of calculations related to basic and diluted earning per share

	Thirteen Weeks Ended		Thirty-nine Weeks Ended
	October 3, 2015	September 27, 2014	October 3, 2015	September 27, 2014
Weighted average shares outstanding:
Basic	57,976,744	53,663,697	56,120,780	53,655,743
Net effect of potentially dilutive share-based compensation awards	79,979	—	58,929	74,638
Diluted	58,056,723	53,663,697	56,179,709	53,730,381

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Summary of Significant Accounting Policies

9 Months Ended

Oct. 03, 2015

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 53rd 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 January 2, 2016 (fiscal 2015) contains 52 weeks and our fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks.  Each quarter of fiscal 2015 and 2014 contains 13 weeks, except the fourth quarter of 2014, which contained 14 weeks.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended October 3, 2015 (third quarter and first three quarters of 2015) and September 27, 2014 (third quarter and first three quarters of 2014) have been prepared by our company in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations.  However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading.  All intercompany balances and transactions have been eliminated.  The accompanying unaudited consolidated interim financial statements contain all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary to present fairly our consolidated financial position as of October 3, 2015, and the results of our operations and comprehensive income (loss) for the third quarter and first three quarters of 2015 and 2014 and cash flows for the first three quarters of 2015 and 2014.  Our results of operations for the third quarter and first three quarters of 2015 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 2014 filed with the SEC on March 4, 2015.

Use of Estimates

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

Recently Issued Accounting Standards

In September 2015, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  We are currently evaluating the impact of this new standard.

In April 2015, the FASB issued a new ASU that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts.  The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The update impacts presentation and disclosure only, and therefore, we do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations or liquidity.

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Share-Based Payments (Tables)

9 Months Ended

Oct. 03, 2015

Share-Based Payments

Schedule of stock option activity

	Options	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (Years)	Aggregate Intrinsic Value
Outstanding at beginning of fiscal 2015	418,158	$	30.94
Granted	133,172	$	27.89
Exercised	—	N/A
Forfeited	—	N/A
Outstanding at end of third quarter of 2015	551,330	$	30.20	9.3	$	677
Exercisable at end of third quarter of 2015	—	—		—	—

Schedule of stock options, valuation assumption

	2015	2014
Weighted average grant date fair value	$6.00	$6.74
Expected volatility	36%	34.8%
Expected term	6.5 years	6.5 years
Risk-free interest rate	1.6% - 1.9%	1.9%
Dividend yield	4.7% - 4.9%	4.4%

Schedule of compensation expense recognized for share-based payments

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments) during the third quarter and first three quarters of 2015 and 2014 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
Consolidated Statements of Operations Location	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Compensation expense included in cost of goods sold	$	249	$	115	$	677	$	609
Compensation expense included in selling, general and administrative expenses	938		271		3,027		1,519
Total compensation expense for share-based payments	$	1,187	$	386	$	3,704	$	2,128

Schedule of non-vested performance share LTIAs

The following table details the activity in our non-vested performance share LTIAs for the first three quarters of 2015:

	Number of Performance Shares		Weighted Average Grant Date Fair Value (per share)(2)
Beginning of fiscal 2015	380,977	(1)	$	24.82
Granted	171,622		$	23.86
Vested	(153,194	)	$	20.34
Forfeited	(4,541	)	$	27.63
End of first three quarters of 2015	394,864	(1)	$	26.11

(1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% of the target number of performance shares).

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

Schedule of number of shares of common stock issued by entity upon the vesting of performance share long-term incentive awards other share based compensation

The following table details the number of shares of common stock issued by our company during the first three quarters of 2015 and 2014 upon the vesting of performance share long-term incentive awards and other share based compensation (dollars in thousands):

	Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014
Number of performance shares vested	153,194		342,576
Shares withheld to fund statutory minimum tax withholding	58,242		138,799
Shares of common stock issued for performance share long-term incentive awards	94,952		203,777
Shares of common stock issued to non-employee directors for annual equity grants	18,095		14,010
Total shares of common stock issued	113,047		217,787
Excess tax benefit recorded to additional paid in capital	$	518	$	2,356

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Stockholder's Equity (Details) $ / shares in Units, $ in Millions	1 Months Ended
	May. 31, 2015 USD ($) $ / shares shares
Stockholders' Equity
Issuance of stock (in shares) | shares	4,200,000
Share price (in dollars per share) | $ / shares	$ 30.60
Net proceeds from public offering	$ 126.2

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Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Current assets:
Cash and cash equivalents	$ 45,943	$ 1,490
Trade accounts receivable, net	63,419	55,925
Inventories	133,209	106,557
Prepaid expenses and other current assets	9,389	14,830
Income tax receivable	3,057	14,442
Deferred income taxes	3,185	3,275
Total current assets	258,202	196,519
Property, plant and equipment, net of accumulated depreciation of $141,465 and $129,253	118,311	116,197
Goodwill	388,044	370,424
Other intangibles, net	982,622	947,895
Other assets	15,888	18,318
Total assets	1,763,067	1,649,353
Current liabilities:
Trade accounts payable	34,163	38,052
Accrued expenses	27,066	17,644
Current portion of long-term debt	24,375	18,750
Dividends payable	20,292	18,246
Total current liabilities	105,896	92,692
Long-term debt	954,491	1,007,107
Other liabilities	5,339	7,352
Deferred income taxes	230,638	204,207
Total liabilities	$ 1,296,364	$ 1,311,358
Commitments and contingencies (Note 11)
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; 57,976,744 and 53,663,697 shares issued and outstanding as of October 3, 2015 and January 3, 2015	$ 580	$ 537
Additional paid-in capital	180,726	110,349
Accumulated other comprehensive loss	(10,876)	(11,034)
Retained earnings	296,273	238,143
Total stockholders' equity	466,703	337,995
Total liabilities and stockholders' equity	$ 1,763,067	$ 1,649,353

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Commitments and Contingencies (Details) $ in Thousands	Oct. 03, 2015 USD ($)
Future minimum lease payments under non-cancelable operating leases
2015	$ 1,908
2016	7,683
2017	5,236
2018	5,137
2019	5,212
Thereafter	7,938
Total	$ 33,114

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Cash flows from operating activities:
Net income	$ 58,130	$ 29,502
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,512	20,783
Amortization of deferred debt financing costs and bond discount	2,631	2,907
Deferred income taxes	13,638	5,083
Interest accretion on contingent consideration		432
Gain on change in fair value of contingent consideration		(8,206)
Impairment of intangible assets		34,154
Loss on disposal of inventory		2,978
Loss on extinguishment of debt		5,748
Share-based compensation expense	3,704	2,128
Excess tax benefits from share-based compensation	(518)	(2,356)
Provision for doubtful accounts	70	140
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable	(5,186)	(6,039)
Inventories	(25,464)	(32,412)
Prepaid expenses and other current assets	5,557	83
Income tax receivable	13,060	(2,765)
Other assets	12	(941)
Trade accounts payable	(6,193)	3,281
Accrued expenses	8,236	5,917
Other liabilities	(1,492)	272
Net cash provided by operating activities	86,697	60,689
Cash flows from investing activities:
Capital expenditures	(12,719)	(13,901)
Payments for acquisition of businesses, net of cash acquired	(51,025)	(154,277)
Net cash used in investing activities	(63,744)	(168,178)
Cash flows from financing activities:
Repayments of long-term debt	(13,125)	(131,250)
Proceeds from issuance of long-term debt		299,250
Borrowings under revolving credit facility	10,000	252,500
Repayments of borrowings under revolving credit facility	(44,000)	(246,500)
Proceeds from issuance of common stock, net	126,230
Dividends paid	(56,236)	(54,124)
Excess tax benefits from share-based compensation	518	2,356
Debt financing costs	(12)	(8,473)
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation	(1,750)	(4,374)
Net cash provided by financing activities	21,625	109,385
Effect of exchange rate fluctuations on cash and cash equivalents	(125)	(22)
Net increase in cash and cash equivalents	44,453	1,874
Cash and cash equivalents at beginning of period	1,490	4,107
Cash and cash equivalents at end of period	45,943	5,981
Supplemental disclosures of cash flow information:
Cash interest payments	23,693	23,177
Cash income tax payments	4,898	13,629
Non-cash transactions:
Dividends declared and not yet paid	$ 20,292	$ 18,246

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Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands				6 Months Ended	9 Months Ended
	Sep. 03, 2015	Jul. 10, 2015	Apr. 23, 2014	Jul. 04, 2015	Oct. 03, 2015	Sep. 27, 2014	Jan. 03, 2015
Preliminary Allocation:
Goodwill					$ 388,044		$ 370,424
Unaudited Pro Forma Summary of Operations
Net sales						$ 636,420
Net income						$ 30,694
Basic and diluted earnings per share						$ 0.57
Customer Relationship Intangibles
Business Acquisition
Estimated useful life					20 years
Specialty Brands acquisition
Purchase Price:
Cash paid			$ 154,277
Total			154,277
Preliminary Allocation:
Income tax receivable			4,012
Goodwill			49,017
Short-term deferred income tax assets			1,786
Other working capital			(2,233)
Long-term deferred income tax liabilities, net			(48,905)
Total			154,277
Goodwill and other working capital purchase accounting adjustment				$ 200
Unaudited Pro Forma Summary of Operations
Net sales						$ 33,500
Specialty Brands acquisition | Customer Relationship Intangibles
Preliminary Allocation:
Customer relationship intangibles-amortizable intangible assets			13,300
Specialty Brands acquisition | Trademarks
Preliminary Allocation:
Trademarks - unamortizable intangible assets			$ 137,300
Mama Mary's
Purchase Price:
Cash paid		$ 51,025
Total		51,025
Preliminary Allocation:
Goodwill		17,455
Property, Plant and Equipment		1,900
Short-term deferred income tax assets		1,222
Other working capital		383
Long-term deferred income tax liabilities, net		(12,735)
Total		51,025
Mama Mary's | Customer Relationship Intangibles
Preliminary Allocation:
Customer relationship intangibles-amortizable intangible assets		4,800
Mama Mary's | Trademarks
Preliminary Allocation:
Trademarks - unamortizable intangible assets		$ 38,000
Green Giant Acquisition
Purchase Price:
Cash paid	$ 765,000

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Oct. 03, 2015

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 53rd 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 January 2, 2016 (fiscal 2015) contains 52 weeks and our fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks.  Each quarter of fiscal 2015 and 2014 contains 13 weeks, except the fourth quarter of 2014, which contained 14 weeks.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and thirty-nine week periods ended October 3, 2015 (third quarter and first three quarters of 2015) and September 27, 2014 (third quarter and first three quarters of 2014) have been prepared by our company in accordance with accounting principles generally accepted in the United States of America pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations.  However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading.  All intercompany balances and transactions have been eliminated.  The accompanying unaudited consolidated interim financial statements contain all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary to present fairly our consolidated financial position as of October 3, 2015, and the results of our operations and comprehensive income (loss) for the third quarter and first three quarters of 2015 and 2014 and cash flows for the first three quarters of 2015 and 2014.  Our results of operations for the third quarter and first three quarters of 2015 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 2014 filed with the SEC on March 4, 2015.

Use of Estimates

Use of Estimates

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

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In September 2015, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  We are currently evaluating the impact of this new standard.

In April 2015, the FASB issued a new ASU that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts.  The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The update impacts presentation and disclosure only, and therefore, we do not expect the adoption of this ASU to have a material impact on our consolidated financial position, results of operations or liquidity.

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Inventories (Details) - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Inventories
Raw materials and packaging	$ 29,843	$ 23,795
Finished goods	103,366	82,762
Total	$ 133,209	$ 106,557

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Inventories (Tables)

9 Months Ended

Oct. 03, 2015

Inventories

Summary of Inventories

Inventories consist of the following, as of the dates indicated (in thousands):

	October 3, 2015		January 3, 2015
Raw materials and packaging	$	29,843	$	23,795
Finished goods	103,366		82,762
Total	$	133,209	$	106,557

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Nature of Operations

9 Months Ended

Oct. 03, 2015

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 foods across the United States, Canada and Puerto Rico.  Our products include hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters and other specialty products.  Our products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril’s, Grandma’s Molasses, JJ Flats, Joan of Arc, Las Palmas, MacDonald’s, Mama Mary’s,  Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Flatbreads, New York Style, Old London, Original Tings, Ortega, Pirate’s Booty, Polaner, Red Devil, Regina, Rickland Orchards,  Sa-són, Sclafani, Smart Puffs, Spring Tree, Sugar Twin, Trappey’s, TrueNorth, Underwood, Vermont Maid and Wright’s.  We also sell and distribute Static Guard, a household product brand.  We compete in the retail grocery, food service, 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, food service outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors.

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Consolidated Balance Sheets
Property, plant and equipment, accumulated depreciation (in dollars)	$ 141,465	$ 129,253
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	57,976,744	53,663,697
Common stock, shares outstanding	57,976,744	53,663,697

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Commitments and Contingencies

9 Months Ended

Oct. 03, 2015

Commitments and Contingencies

Commitments and Contingencies

(11)Commitments and Contingencies

Operating Leases.  As of October 3, 2015, future minimum lease payments under non-cancelable operating leases in effect at quarter-end (with initial lease terms in excess of one year) were as follows (in thousands):

Fiscal year ending:	Third Parties
2015	$	1,908
2016	7,683
2017	5,236
2018	5,137
2019	5,212
Thereafter	7,938
Total	$	33,114

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.

B&G Foods has been named as a defendant in a putative class action lawsuit filed by The Weston Firm on behalf of Troy Walker in August 2015 in the United States District Court for the Northern District of California.  The lawsuit alleges that our company has violated California’s Consumer Legal Remedies Act and Unfair Competition Law, with respect to the advertising, marketing and labeling of certain Ortega taco shells.  Specifically, the plaintiff alleges, among other things, that the products are deceptively marketed because the products are labeled “0g trans fat” on the front of the package and contain partially hydrogenated oil.  The complaint seeks monetary damages, injunctive relief and attorneys’ fees.  We intend to vigorously defend this lawsuit and believe that the plaintiff’s claims are without merit and that the products are and have at all times been properly labeled in compliance with applicable law.  We also believe the claims are moot because, among other things, we began transitioning away from partially hydrogenated oil before first being contacted by The Weston Firm and we no longer use partially hydrogenated oil in these Ortega products.  No discovery has commenced in this lawsuit, and a motion to dismiss the claims is pending.  Based upon information currently available, we do not believe the ultimate resolution of this matter will have a material adverse effect on B&G Foods’ consolidated financial position, results of operations or liquidity.

Environmental.  We are subject to environmental laws and regulations in the normal course of business.  We did not make any material expenditures during the first three quarters of 2015 or 2014 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 described in Note 10, “Pension Benefits—Multi-Employer Defined Benefit Pension Plan” above, during the second quarter of 2015 we reached an agreement with the BCTGM, AFL-CIO (Local No. 334) to extend for an additional two-year period ending April 29, 2017, a collective bargaining agreement that covers approximately 92 employees at our Portland, Maine facility.

As of October 3, 2015, approximately 338 of our 964 employees, or 35%, were covered by collective bargaining agreements, of which approximately 195 were covered by a collective bargaining agreement expiring within the next 12 months. Our collective bargaining agreement with the Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union, Local No. 695, that covers certain employees at our Stoughton, Wisconsin manufacturing facility is scheduled to expire on March 31, 2016. We expect to begin negotiations for a new collective bargaining agreement during the fourth quarter of 2015 or the first quarter of 2016. While we believe that our relations with our union employees are good, we cannot be certain that we will be able to negotiate a new collective bargaining agreement for the Stoughton, Wisconsin manufacturing facility on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect the outcome of these negotiations to have a material adverse effect on our business, financial condition, or results of operations. None of our other collective bargaining agreements is scheduled to expire within the next 12 months.

Severance and Change of Control Agreements.  We have employment agreements with each of our seven 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.

Ortega and Las Palmas Recall.  On November 14, 2014, we announced a voluntary recall for certain Ortega and Las Palmas products after learning that one or more of the spice ingredients purchased from a third party supplier contained peanuts and almonds, allergens that are not declared on the products’ ingredient statements.  A significant majority of the costs of this recall were incurred in the fourth quarter of 2014.  The cost impact of this recall during the first three quarters of 2015 was $1.9 million, of which $1.2 million was recorded as a decrease in net sales related to customer refunds; $0.5 million was recorded as an increase in cost of goods sold primarily related to costs associated with product retrieval, destruction charges and customer fees; and $0.2 million was recorded as an increase in selling, general, and administrative expenses related to administrative costs.  The charges we recorded are based upon costs incurred to date and management’s estimates of costs that have yet to be incurred.  As of October 3, 2015, accounts receivables in our unaudited consolidated balance sheet includes a $0.3 million reserve relating to the recall.

XML

Document and Entity Information - shares	9 Months Ended
	Oct. 03, 2015	Oct. 30, 2015
Document and Entity Information
Entity Registrant Name	B&G Foods, Inc.
Entity Central Index Key	0001278027
Document Type	10-Q
Document Period End Date	Oct. 03, 2015
Amendment Flag	false
Current Fiscal Year End Date	--01-02
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,976,744
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

XML

Earnings per Share

9 Months Ended

Oct. 03, 2015

Earnings per Share

Earnings per Share

(12)Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding.  Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method.  For the third quarter of 2015, 551,330 shares of common stock issuable upon the exercise of stock options have not been included in the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share.  For the third quarter of 2014, 101,428 shares of common stock issuable upon the achievement of performance goals in connection with share-based compensation awards have not been included in the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted loss per share.

	Thirteen Weeks Ended		Thirty-nine Weeks Ended
	October 3, 2015	September 27, 2014	October 3, 2015	September 27, 2014
Weighted average shares outstanding:
Basic	57,976,744	53,663,697	56,120,780	53,655,743
Net effect of potentially dilutive share-based compensation awards	79,979	—	58,929	74,638
Diluted	58,056,723	53,663,697	56,179,709	53,730,381

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Consolidated Statements of Operations
Net sales	$ 213,300	$ 208,998	$ 624,067	$ 610,027
Cost of goods sold	141,704	145,936	423,066	419,269
Gross profit	71,596	63,062	201,001	190,758
Operating expenses:
Selling, general and administrative expenses	27,307	21,173	69,352	69,065
Amortization expense	2,726	3,391	8,072	9,986
Impairment of intangible assets		34,154		34,154
Gain on change in fair value of contingent consideration				(8,206)
Operating income	41,563	4,344	123,577	85,759
Other expenses:
Interest expense, net	$ 11,272	$ 11,587	$ 33,873	34,532
Loss on extinguishment of debt				$ 5,748
Weighted average shares outstanding:
Basic	57,977	53,664	56,121	53,656
Diluted	58,057	53,664	56,180	53,730
Basic earnings (loss) per share	$ 0.34	$ (0.08)	$ 1.04	$ 0.55
Diluted earnings (loss) per share	0.34	(0.08)	1.03	0.55
Cash dividends declared per share	$ 0.35	$ 0.34	$ 1.03	$ 1.02
Income (loss) before income tax expense (benefit)	$ 30,291	$ (7,243)	$ 89,704	$ 45,479
Income tax expense (benefit)	10,476	(2,830)	31,574	15,977
Net income (loss)	$ 19,815	$ (4,413)	$ 58,130	$ 29,502

XML

Long-Term Debt

9 Months Ended

Oct. 03, 2015

Long-Term Debt

Long-Term Debt

(6)Long-Term Debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	October 3, 2015			January 3, 2015
Amended and restated senior secured credit agreement:
Revolving credit facility	$	—		$	34,000
Tranche A term loans due 2019	279,375			292,500
4.625% senior notes due 2021	700,000			700,000
Unamortized discount	(509		)	(643		)
Total long-term debt, net of unamortized discount	978,866			1,025,857
Current portion of long-term debt	(24,375		)	(18,750		)
Long-term debt, net of unamortized discount and excluding current portion	$	954,491		$	1,007,107

As of October 3, 2015, the aggregate contractual maturities of long-term debt are as follows (in thousands):

Years ending December:
2015	$	5,625
2016	26,250
2017	24,375
2018	76,875
2019	146,250
Thereafter	700,000
Total	$	979,375

Amended and Restated Senior Secured Credit Agreement.  On October 2, 2015, we amended and restated our existing senior secured credit agreement dated as of June 5, 2014. The amendment provides for an incremental tranche B term loan facility to be made available under the amended and restated credit agreement to finance a portion of the purchase price for the pending Green Giant acquisition. Subject to the satisfaction of customary conditions precedent set forth in the amended and restated credit agreement, we expect that $750 million of incremental tranche B term loans will be funded at the closing of the acquisition, which we expect to occur during the fourth quarter of 2015. We expect to fund the remainder of the purchase price, the closing inventory adjustment, initial working capital requirements and related fees and expenses for the pending Green Giant acquisition with additional revolving loans under the amended and restated credit agreement. See Note 3, “Acquisitions.”

At October 3, 2015, $279.4 million of tranche A term loans were outstanding and no tranche B term loans or revolving loans were outstanding under our amended and restated senior secured credit agreement.

At October 3, 2015, the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $2.0 million, was $498.0 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.  Proceeds of the tranche B term loans may be used to pay a portion of the purchase price and related costs and expenses for the pending Green Giant acquisition.  We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility.  The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans. The revolving credit facility matures on June 5, 2019.

The tranche A term loans are subject to principal amortization.  $7.5 million was due and paid in fiscal 2014, $18.8 million is due and payable in fiscal 2015, of which $13.2 million has been paid as of October 3, 2015, $26.2 million is due and payable in fiscal 2016, $24.4 million is due and payable in fiscal 2017 and $76.9 million is due and payable in fiscal 2018.  The balance of all borrowings under the tranche A term loan facility, or $146.2 million, is due and payable at maturity on June 5, 2019. The tranche B term loans will mature on the seventh anniversary of the date of funding of the tranche B term loans and will be subject to amortization at the rate of 1% per year with the balance due and payable on the maturity date.

If we prepay all or any portion of the tranche B term loans within six months of the funding of the tranche B term loans in connection with a financing that has a lower interest rate or weighted average yield than the tranche B term loans, we will owe a repayment fee equal to 1% of the amount prepaid. Otherwise, we may prepay the term loans or permanently reduce the revolving credit facility commitment under the amended and restated 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 amended and restated 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, and under the tranche A term loan facility, is determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin ranging from 0.50% to 1.00%, and LIBOR plus an applicable margin ranging from 1.50% to 2.00%, in each case depending on our consolidated leverage ratio.  At October 3, 2015, the revolving credit facility and the tranche A term loan interest rates were each approximately 2.21%.  Interest under the tranche B term loan facility will be determined based on alternative rates that we may choose in accordance with the amended and restated credit agreement, including a base rate per annum plus an applicable margin to be determined prior to the funding date, and LIBOR plus an applicable margin to be determined prior to the funding date.  The applicable margin in effect for the tranche A term loans will not be increased as a result of the funding of the tranche B term loans.

Our obligations under the amended and restated 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 (other than a domestic subsidiary that is a holding company for one or more of our foreign subsidiaries).  The credit facility is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property.  The amended and restated 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 amended and restated 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 amended and restated 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 through the fourth quarter of 2015; 6.75 to 1.00 for the first quarter of 2016 through the fourth quarter of 2016; and 6.50 to 1.00 for the first quarter of 2017 and thereafter.  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 October 3, 2015, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement.

The amended and restated credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the amended and restated 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 amended and restated 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% Senior Notes due 2021.  On June 4, 2013, we issued $700.0 million aggregate principal amount of 4.625% senior notes due 2021 at a price to the public of 100% of their face value.  Interest on the 4.625% senior notes is payable on June 1 and December 1 of each year.  The 4.625% senior notes will mature on June 1, 2021, unless earlier retired or redeemed.

On or after June 1, 2016, 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.  We may redeem up to 35% of the aggregate principal amount of the 4.625% senior notes prior to June 1, 2016 with the net proceeds from certain equity offerings at a redemption price of 104.625% plus accrued and unpaid interest to the date of redemption.  We may also redeem some or all of the 4.625% senior notes at any time prior to June 1, 2016 at a redemption price equal to the make-whole amount set forth in the indenture governing the 4.625% senior notes.  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 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 October 3, 2015, we were in compliance with all of the covenants in the indenture governing the 4.625% 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, and management has determined that our Canadian and Mexican subsidiaries, which are our only subsidiaries that are not guarantors of our long-term debt, are “minor subsidiaries” as that term is used in Rule 3-10 of Regulation S-X promulgated by the SEC.  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.  Consequently, separate financial statements have not been presented for our subsidiaries because management has determined that they would not be material to investors.

Deferred Debt Financing Costs.  During the second quarter of 2014, we wrote-off and expensed $5.4 million of deferred debt financing costs relating to the termination of our prior credit agreement, which included the repayment of $121.9 million aggregate principal amount of our tranche A term loans and $215.0 million of revolving loans. During the second quarter of 2014, we also capitalized $5.7 million and $2.9 million of debt financing costs relating to our current revolving credit facility and tranche A term loans, respectively, which is being amortized over the five year scheduled term of the credit agreement. As of October 3, 2015 and January 3, 2015, we had net deferred debt financing costs of $14.7 million and $17.2 million, respectively, included in other assets in the accompanying unaudited consolidated balance sheets.

Loss on Extinguishment of Debt.  During the second quarter of 2014, we incurred a loss on extinguishment of debt in connection with the termination of our prior credit agreement and the repayment of all outstanding obligations thereunder.  The loss on extinguishment includes the write-off of deferred debt financing costs of $5.4 million discussed above and the write-off of unamortized discount of $0.3 million.

Accrued Interest.  At October 3, 2015 and January 3, 2015, accrued interest of $11.0 million and $3.5 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets.

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Goodwill and Other Intangible Assets

9 Months Ended

Oct. 03, 2015

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(5)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):

	As of October 3, 2015						As of January 3, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizable Intangible Assets
Trademarks	$	12,056	$	1,573	$	10,483	$	12,056	$	875	$	11,181
Customer relationships	197,713		65,774		131,939		192,913		58,400		134,513
	$	209,769	$	67,347	$	142,422	$	204,969	$	59,275	$	145,694
Unamortizable Intangible Assets
Goodwill	$	388,044					$	370,424
Trademarks	$	840,200					$	802,201

Note:The increase in the carrying amounts of unamortizable intangible assets during the first three quarters of fiscal 2015 are attributable to the Mama Mary’s acquisition and purchase accounting adjustments related to the Specialty Brands acquisition.

Amortization expense associated with amortizable trademarks and customer relationship intangibles for the third quarter and first three quarters of 2015 was $2.7 million and $8.1 million, respectively, and is recorded in operating expenses.  Amortization expense associated with amortizable trademarks and customer relationship intangibles for the third quarter and first three quarters of 2014 was $3.4 million and $10.0 million, respectively, and is recorded in operating expenses.  We expect to recognize an additional $2.8 million of amortization expense associated with our amortizable trademarks and customer relationship intangibles during the remainder of fiscal 2015, and thereafter $10.9 million per year for each of the next four fiscal years.

See Note 3, “Acquisitions.”

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Acquisitions (Tables)

9 Months Ended

Oct. 03, 2015

Business Acquisition

Schedule of unaudited pro forma summary of operations

	Thirty-nine Weeks Ended September 27, 2014
	(dollars in thousands, except per share data)
Net sales	$	636,420
Net income	30,694
Basic and diluted earnings per share	$	0.57

Mama Mary's

Business Acquisition

Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired

Mama Mary’s Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	51,025
Total	$	51,025
Preliminary Allocation:
Trademarks—unamortizable intangible assets	38,000
Goodwill	17,455
Customer relationship intangibles—amortizable intangible assets	4,800
Property, Plant and Equipment	1,900
Short-term deferred income tax assets	1,222
Other working capital	383
Long-term deferred income tax liabilities, net	(12,735		)
Total	$	51,025

Specialty Brands acquisition

Business Acquisition

Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired

Specialty Brands Acquisition (dollars in thousands):
Purchase Price:
Cash paid	$	154,277
Total	$	154,277
Allocation:
Income tax receivable	$	4,012
Short-term deferred income tax assets	1,786
Trademarks—unamortizable intangible assets	137,300
Goodwill	49,017
Customer relationship intangibles—amortizable intangible assets	13,300
Other working capital	(2,233		)
Long-term deferred income tax liabilities, net	(48,905		)
Total	$	154,277

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Business and Credit Concentrations and Geographic Information

9 Months Ended

Oct. 03, 2015

Business and Credit Concentrations and Geographic Information

Business and Credit Concentrations and Geographic Information

(13)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 51.9% of consolidated net sales for the first three quarters of 2015 and 2014.  Our top ten customers accounted for approximately 51.6% and 51.7% of our consolidated trade accounts receivables as of October 3, 2015 and January 3, 2015, respectively.  Other than Wal-Mart, which accounted for 19.3% and 18.6% of our consolidated net sales for the first three quarters of 2015 and 2014, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first three quarters of 2015 or 2014.  Other than Wal-Mart, which accounted for 15.6% and 16.7% of our consolidated trade accounts receivables as of October 3, 2015 and January 3, 2015, respectively, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables.  As of October 3, 2015, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivable with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Wal-Mart.

During the first three quarters of 2015 and 2014, our sales to foreign countries represented approximately 3.6% and 3.3%, respectively, of net sales.  Our foreign sales are primarily to customers in Canada.

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Accumulated Other Comprehensive Loss

9 Months Ended

Oct. 03, 2015

Accumulated Other Comprehensive Loss.

Accumulated Other Comprehensive Loss

(9)Accumulated Other Comprehensive Loss

The reclassification from accumulated other comprehensive loss (AOCL) as of October 3, 2015 and September 27, 2014 are as follows (in thousands):

	Amount Reclassified from AOCL
	Thirteen Weeks Ended						Thirty-nine Weeks Ended						Affected Line Item in the
Details about AOCL Components	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014			Statement Where Net Income (Loss) is Presented
Defined benefit pension plan items
Amortization of prior service cost	$	11		$	11		$	33		$	33		See (1) below
Amortization of unrecognized loss	176			—			528			—			See (1) below
	187			11			561			33			Total before tax
	(76		)	(4		)	(213		)	(12		)	Income tax expense
Total reclassification	$	111		$	7		$	348		$	21		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 accumulated other comprehensive loss as of October 3, 2015 is as follows (in thousands):

	Defined Benefit Pension Plan Items			Foreign Currency Translation Adjustments			Total
Beginning balance	$	(10,787	)	$	(247	)	$	(11,034	)
Other comprehensive loss before reclassifications	—			(190		)	(190		)
Amounts reclassified from AOCL	348			—			348
Net current period other comprehensive income (loss)	348			(190		)	158
Ending balance	$	(10,439	)	$	(437	)	$	(10,876	)

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Fair Value Measurements

9 Months Ended

Oct. 03, 2015

Fair Value Measurements

Fair Value Measurements

(7)Fair Value Measurements

The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under generally accepted accounting principles, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value.

Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature.  The three levels are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.

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

Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses 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 and senior notes as of October 3, 2015 and January 3, 2015 are as follows (in thousands):

	October 3, 2015				January 3, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving Credit Loans	—		—		34,000		34,000	(1)
Tranche A Term Loans due 2019	278,866	(2)	279,375	(1)	291,857	(2)	292,500	(1)
4.625% Senior Notes due 2021	700,000		675,500	(3)	700,000		675,500	(3)

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

(2) The carrying values of the tranche A term loans are net of discount.  At October 3, 2015 and January 3, 2015, the face amounts of the tranche A term loans were $279.4 million and $292.5 million, respectively.

(3) Fair values are estimated based on quoted market prices.

In October 2013, we acquired Rickland Orchards, LLC.  In connection with that acquisition, additional purchase price payments ranging from zero to $15.0 million are contingent upon the achievement of certain revenue growth targets during fiscal 2014, 2015 and 2016 meant to achieve revenue growth in excess of base purchase price acquisition model assumptions.  We estimated the original fair value of the contingent consideration as the present value of the expected contingent payments, determined using the weighted probabilities of the possible payments.  As of the date of acquisition, we estimated the original fair value of the contingent consideration to be approximately $7.6 million.

During the first two quarters of 2014, we recorded interest accretion expense on the contingent consideration liability of $0.4 million. We are required to reassess the fair value of the contingent consideration at each reporting period.  At June 28, 2014, we remeasured the fair value of the contingent consideration using actual operating results through June 28, 2014 and revised our forecasted operating results for Rickland Orchards for the remainder of fiscal 2014, 2015 and 2016.  As a result of lower than expected net sales results for Rickland Orchards and the unlikelihood of Rickland Orchards achieving the revenue growth targets, the fair value of the contingent consideration was reduced to zero.  Therefore, during the first three quarters of 2015, we did not record interest accretion expense on the contingent consideration liability.  The significant inputs used in these estimates include numerous possible scenarios for the contingent earn-out payments based on the contractual terms of the contingent consideration, for which probabilities are assigned to each scenario, which are then discounted based on an individual risk analysis of the respective liabilities. Although we believe our assumptions are reasonable, different assumptions or changes in the future may result in different estimated amounts.

The following table summarized the Level 3 activity (in thousands):

	October 3, 2015		September 27, 2014
Balance at beginning of year	$	—	$	7,774
Contingent consideration accretion expense	—		432
Gain on change in fair value of contingent consideration	—		(8,206		)
Balance at end of quarter	$	—	$	—

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Stockholders' Equity

9 Months Ended

Oct. 03, 2015

Stockholders' Equity

Stockholder's Equity

(8)Stockholders’ Equity

Common Stock Offering.  In May 2015, we completed an underwritten public offering of 4,200,000 shares of our common stock at a price to the public of $30.60 per share. The proceeds of the offering were approximately $126.2 million, after deducting underwriting discounts and commissions and other offering expenses. The offering was made by means of a prospectus and related prospectus supplement included as part of an effective shelf registration statement previously filed with the SEC. We used the net proceeds of the offering to repay a portion of our long-term debt, to pay the purchase price and related transaction costs for the Mama Mary’s acquisition, see Note 3, “Acquisitions,” and for general corporate purposes.

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Pension Benefits

9 Months Ended

Oct. 03, 2015

Pension Benefits

Pension Benefits

(10)Pension Benefits

Company Sponsored Defined Benefit Pension Plans.  Net periodic pension costs for company sponsored defined benefit pension plans for the third quarter and first three quarters of 2015 and 2014 include the following components (in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 3, 2015			September 27, 2014			October 3, 2015			September 27, 2014
Service cost—benefits earned during the period	$	1,001		$	768		$	3,003		$	2,173
Interest cost on projected benefit obligation	640			592			1,919			1,794
Expected return on plan assets	(1,042		)	(1,089		)	(3,124		)	(3,258		)
Amortization of unrecognized prior service cost	11			11			33			33
Amortization of unrecognized loss	176			—			528			—
Net periodic pension cost	$	786		$	282		$	2,359		$	742

During the first three quarters of 2015, we made $3.5 million of defined benefit pension plan contributions.  We do not plan to make additional contributions during the remainder of fiscal 2015.

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.  A 5% surcharge payable on hours worked on and after June 1, 2012 until December 31, 2012 was charged for plan year 2012, the initial critical year.  A 10% surcharge payable on hours worked on and after January 1, 2013 was applicable for each succeeding plan year that the plan was in critical status until we agreed to a collective bargaining agreement that implements a rehabilitation plan.

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 above what we are currently contributing.

B&G Foods made contributions to the plan of $1.0 million in fiscal 2014. These contributions represented less than five percent of total contributions made to the plan.  In fiscal 2014, we paid less than $0.1 million in surcharges and expect to pay surcharges of less than $0.1 million in fiscal 2015 assuming consistent hours are worked.

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Summary of Significant Accounting Policies (Details)	3 Months Ended			9 Months Ended	12 Months Ended
	Oct. 03, 2015	Jan. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Jan. 02, 2016	Jan. 03, 2015
Fiscal Year
Number of weeks in fiscal year					364 days	371 days
Number of weeks in each fiscal quarter	91 days		91 days
Number of weeks in fourth fiscal quarter		98 days
Maximum
Fiscal Year
Number of weeks in fiscal year				371 days
Number of years between 53 week fiscal years				6 years
Minimum
Fiscal Year
Number of weeks in fiscal year				364 days
Number of years between 53 week fiscal years				5 years

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Net Sales by Brand (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Net Sales by Brand
Net sales	$ 213,300	$ 208,998	$ 624,067	$ 610,027
Customer refunds related to product recall			1,200
Ortega
Net Sales by Brand
Net sales	36,388	35,272	111,514	105,485
Pirate Brands
Net Sales by Brand
Net sales	23,501	22,902	65,289	63,599
Maple Grove Farms of Vermont
Net Sales by Brand
Net sales	18,425	19,272	57,266	56,447
Cream of Wheat
Net Sales by Brand
Net sales	15,251	13,977	43,946	42,549
Mrs. Dash
Net Sales by Brand
Net sales	14,542	15,259	48,053	48,027
Bear Creek Country Kitchens
Net Sales by Brand
Net sales	13,065	13,908	32,601	19,277
Mama Mary's
Net Sales by Brand
Net sales	8,492		8,492
Las Palmas
Net Sales by Brand
Net sales	8,326	8,289	25,434	24,558
Polaner
Net Sales by Brand
Net sales	8,096	8,433	24,938	25,811
Bloch & Guggenheimer
Net Sales by Brand
Net sales	5,769	5,637	19,747	19,965
New York Style
Net Sales by Brand
Net sales	5,570	5,770	17,177	21,321
Underwood
Net Sales by Brand
Net sales	4,985	4,884	14,067	14,043
Spring Tree
Net Sales by Brand
Net sales	4,712	5,107	14,824	8,787
Ac'cent
Net Sales by Brand
Net sales	4,470	4,088	13,255	13,053
TrueNorth
Net Sales by Brand
Net sales	3,925	5,051	14,031	16,232
B&M
Net Sales by Brand
Net sales	3,789	3,559	14,796	15,668
Rickland Orchards
Net Sales by Brand
Net sales	1,057	4,461	3,172	20,250
All other brands
Net Sales by Brand
Net sales	$ 32,937	$ 33,129	95,465	$ 94,955
Ortega and Las Palmas Brands
Net Sales by Brand
Customer refunds related to product recall			$ 1,200

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Net Sales by Brand

9 Months Ended

Oct. 03, 2015

Net Sales by Brand

Net Sales by Brand

(15)Net Sales by Brand

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

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Brand:(1)
Ortega(2)	$	36,388	$	35,272	$	111,514	$	105,485
Pirate Brands	23,501		22,902		65,289		63,599
Maple Grove Farms of Vermont	18,425		19,272		57,266		56,447
Cream of Wheat	15,251		13,977		43,946		42,549
Mrs. Dash	14,542		15,259		48,053		48,027
Bear Creek Country Kitchens(3)	13,065		13,908		32,601		19,277
Mama Mary’s(4)	8,492		—		8,492		—
Las Palmas(2)	8,326		8,289		25,434		24,558
Polaner	8,096		8,433		24,938		25,811
Bloch & Guggenheimer	5,769		5,637		19,747		19,965
New York Style	5,570		5,770		17,177		21,321
Underwood	4,985		4,884		14,067		14,043
Spring Tree(3)	4,712		5,107		14,824		8,787
Ac’cent	4,470		4,088		13,255		13,053
TrueNorth	3,925		5,051		14,031		16,232
B&M	3,789		3,559		14,796		15,668
Rickland Orchards	1,057		4,461		3,172		20,250
All other brands(5)	32,937		33,129		95,465		94,955
Total	$	213,300	$	208,998	$	624,067	$	610,027

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

(2) During the first three quarters of 2015, net sales for Ortega and Las Palmas were negatively impacted by customer refunds of $1.2 million relating to the product recall announced in November 2014.  There was no impact during the third quarter of 2015.

(3) We completed the Specialty Brands acquisition on April 23, 2014, including the Bear Creek Country Kitchens and Spring Tree brands.

(4) We completed the Mama Mary’s acquisition on July 10, 2015.

(5) Net sales for “All other brands” has been impacted by the acquisition of Cary’s, MacDonald’s, New York Flatbreads and Canoleo brands acquired as part of the Specialty Brands acquisition, which was completed on April 23, 2014.

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Long-Term Debt (Tables)

9 Months Ended

Oct. 03, 2015

Long-Term Debt

Schedule of Long-term debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	October 3, 2015			January 3, 2015
Amended and restated senior secured credit agreement:
Revolving credit facility	$	—		$	34,000
Tranche A term loans due 2019	279,375			292,500
4.625% senior notes due 2021	700,000			700,000
Unamortized discount	(509		)	(643		)
Total long-term debt, net of unamortized discount	978,866			1,025,857
Current portion of long-term debt	(24,375		)	(18,750		)
Long-term debt, net of unamortized discount and excluding current portion	$	954,491		$	1,007,107

Schedule of aggregate contractual maturities of long-term debt

As of October 3, 2015, the aggregate contractual maturities of long-term debt are as follows (in thousands):

Years ending December:
2015	$	5,625
2016	26,250
2017	24,375
2018	76,875
2019	146,250
Thereafter	700,000
Total	$	979,375

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Share-Based Payments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014	Sep. 27, 2014
Assumptions:
Compensation expense recognized for share-based payments	$ 1,187,000	$ 386,000	$ 3,704,000	$ 2,128,000
Cost of Goods Sold.
Assumptions:
Compensation expense recognized for share-based payments	249,000	115,000	677,000	609,000
Selling, General and Administrative Expenses
Assumptions:
Compensation expense recognized for share-based payments	$ 938,000	$ 271,000	$ 3,027,000	$ 1,519,000
Stock Option
Options
Outstanding at beginning of fiscal 2015 (in shares)			418,158
Granted (in shares)			133,172
Outstanding at end of third quarter of 2015 (in shares)	551,330		551,330
Weighted Average Exercise Price
Outstanding at beginning of fiscal 2015 (in dollar per share)			$ 30.94
Granted (in dollars per share)			27.89
Outstanding at end of third quarter of 2015 (in dollar per share)	$ 30.20		$ 30.20
Additional disclosures
Outstanding at end of third quarter of 2015			9 years 3 months 18 days
Outstanding at end of third quarter of 2015	$ 677		$ 677
Assumptions:
Weighted average grant date fair value (in dollars per share)			$ 6.00	$ 6.74
Expected volatility (as a percent)			36.00%	34.80%
Expected term			6 years 6 months	6 years 6 months
Risk-free interest rate (as a percent)				1.90%
Dividend yield (as a percent)				4.40%
Share based compensation expense related to long-term incentive plans
Unrecognized compensation expense	2,400,000		$ 2,400,000
Period over which unrecognized compensation expense is expected to be recognized			2 years 6 months
Stock Option | Minimum
Assumptions:
Risk-free interest rate (as a percent)			1.60%
Dividend yield (as a percent)			4.70%
Stock Option | Maximum
Assumptions:
Risk-free interest rate (as a percent)			1.90%
Dividend yield (as a percent)			4.90%
Performance share long Term incentive awards
Options
Exercised (in shares)			153,194		342,576
Forfeited (in shares)			4,541
Weighted Average Exercise Price
Exercised (in dollars per share)			$ 20.34
Forfeited (in dollars per share)			$ 27.63
Share based compensation expense related to long-term incentive plans
Unrecognized compensation expense	$ 2,700,000		$ 2,700,000
Period over which unrecognized compensation expense is expected to be recognized			2 years 3 months

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Reclassification from accumulated other comprehensive loss
Amortization of prior service cost	$ 11	$ 11	$ 33	$ 33
Amortization of unrecognized loss	176		528
Income tax expense	10,476	(2,830)	31,574	15,977
Net of tax			(348)
Amount Reclassified from AOCL
Reclassification from accumulated other comprehensive loss
Amortization of prior service cost	11	11	33	33
Amortization of unrecognized loss	176		528
Total before tax	187	11	561	33
Income tax expense	(76)	(4)	(213)	(12)
Net of tax	$ 111	$ 7	$ 348	$ 21

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ 19,815	$ (4,413)	$ 58,130	$ 29,502
Other comprehensive income (loss):
Foreign currency translation adjustments	(78)	(41)	(190)	(45)
Amortization of unrecognized prior service cost and pension deferrals, net of tax	111	7	348	21
Other comprehensive income (loss)	33	(34)	158	(24)
Comprehensive income (loss)	$ 19,848	$ (4,447)	$ 58,288	$ 29,478

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Inventories

9 Months Ended

Oct. 03, 2015

Inventories

Inventories

(4)Inventories

Inventories are stated at the lower of cost or market and include direct material, direct labor, overhead, warehousing and product transfer costs.  Cost is determined using the first-in, first-out and average cost methods.  Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories.  The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales.

Inventories consist of the following, as of the dates indicated (in thousands):

	October 3, 2015		January 3, 2015
Raw materials and packaging	$	29,843	$	23,795
Finished goods	103,366		82,762
Total	$	133,209	$	106,557

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Fair Value Measurements (Tables)

9 Months Ended

Oct. 03, 2015

Fair Value Measurements

Summary of carrying values and fair values of revolving credit loan borrowings, term loan borrowings and senior notes

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of October 3, 2015 and January 3, 2015 are as follows (in thousands):

	October 3, 2015				January 3, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
Revolving Credit Loans	—		—		34,000		34,000	(1)
Tranche A Term Loans due 2019	278,866	(2)	279,375	(1)	291,857	(2)	292,500	(1)
4.625% Senior Notes due 2021	700,000		675,500	(3)	700,000		675,500	(3)

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

(2) The carrying values of the tranche A term loans are net of discount.  At October 3, 2015 and January 3, 2015, the face amounts of the tranche A term loans were $279.4 million and $292.5 million, respectively.

(3) Fair values are estimated based on quoted market prices.

Summary of changes in contingent consideration measured at level 3

The following table summarized the Level 3 activity (in thousands):

	October 3, 2015		September 27, 2014
Balance at beginning of year	$	—	$	7,774
Contingent consideration accretion expense	—		432
Gain on change in fair value of contingent consideration	—		(8,206		)
Balance at end of quarter	$	—	$	—

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Long-Term Debt (Details) $ in Thousands		3 Months Ended	9 Months Ended
	Oct. 02, 2015 USD ($)	Jun. 28, 2014 USD ($)	Oct. 03, 2015 USD ($) item	Sep. 27, 2014 USD ($)	Jan. 03, 2015 USD ($)	Jun. 04, 2013 USD ($)
Information related to long-term debt
Total long-term debt, net of unamortized discount			$ 978,866		$ 1,025,857
Current portion of long-term debt			(24,375)		(18,750)
Long-term debt			954,491		1,007,107
Unamortized discount			(509)		(643)
Aggregate contractual maturities of long-term debt
2015			5,625
2016			26,250
2017			24,375
2018			76,875
2019			146,250
Thereafter			700,000
Total			$ 979,375
Amended and Restated Senior secured credit facility
Loss on extinguishment of debt				$ (5,748)
Number of quarters senior secured leverage ratio to be maintained | item			4
Number of quarters consolidated leverage ratio to be maintained | item			4
Information related to senior notes
Accrued interest			$ 11,000		3,500
Write-off of deferred debt financing costs		$ 5,400
Prepayments and repurchases of long-term debt			13,125	$ 131,250
Net deferred debt financing costs			$ 14,700		17,200
Write-off of unamortized discount		300
Second quarter ending June 28, 2014 through the fourth quarter of 2015
Amended and Restated Senior secured credit facility
Maximum permissible consolidated leverage ratio			7.00
First quarter of 2016 through the fourth quarter of 2016
Amended and Restated Senior secured credit facility
Maximum permissible consolidated leverage ratio			6.75
First quarter of 2017 and thereafter
Amended and Restated Senior secured credit facility
Maximum permissible consolidated leverage ratio			6.50
Minimum
Amended and Restated Senior secured credit facility
Consolidated interest leverage ratio			1.75
Revolving credit loans
Information related to long-term debt
Commitment fees (as a percent)			0.50%
Aggregate contractual maturities of long-term debt
Total					$ 34,000
Amended and Restated Senior secured credit facility
Available borrowing capacity			$ 498,000
Information related to senior notes
Principal amount of debt repurchased		215,000
Write-off of deferred debt financing costs		5,400
Deferred financing costs capitalized		$ 5,700
Debt financing costs, amortization period		5 years
Revolving credit loans | LIBOR
Amended and Restated Senior secured credit facility
Interest rate, description of reference rate			LIBOR
Letters of credit facility
Information related to long-term debt
Fronting fee (as a percent)			0.25%
Amended and Restated Senior secured credit facility
Outstanding letters of credit			$ 2,000
Maximum capacity available			$ 50,000
Incremental term loan | Maximum
Amended and Restated Senior secured credit facility
Senior secured leverage ratio after utilization of incremental facility			4.00
4.625% Senior notes due 2021
Information related to long-term debt
Interest rate (as a percent)			4.625%		4.625%	4.625%
Aggregate contractual maturities of long-term debt
Total			$ 700,000		$ 700,000
Information related to senior notes
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%
4.625% Senior notes due 2021 | Redemption period prior to June 1, 2016
Information related to senior notes
Redemption price (as a percent)			104.625%
4.625% Senior notes due 2021 | Maximum | Redemption period prior to June 1, 2016
Information related to senior notes
Percentage of principal amount redeemed or which may redeem			35.00%
Tranche B Term Loan
Information related to long-term debt
Outstanding amount of debt			$ 0
Amended and Restated Senior secured credit facility
Maximum capacity available	$ 750,000
Annual rate of amortization of loan (as a percent)			1.00%
Prepayment fees (as a percent)	1.00%
Tranche A Term Loan
Information related to senior notes
Principal amount of debt repurchased		$ 121,900
Deferred financing costs capitalized		$ 2,900
Debt financing costs, amortization period		5 years
Tranche A term loans due 2019
Information related to long-term debt
Outstanding amount of debt			$ 279,400
Aggregate contractual maturities of long-term debt
2014			7,500
2015			18,800
2016			26,200
2017			24,400
2018			76,900
2019			146,200
Total			$ 279,375		$ 292,500
Amended and Restated Senior secured credit facility
Interest rate at period end (as a percent)			2.21%
Information related to senior notes
Interest rate at period end (as a percent)			2.21%
Prepayments and repurchases of long-term debt			$ 13,200
Tranche A term loans due 2019 | Base rate
Amended and Restated Senior secured credit facility
Interest rate, description of reference rate			base rate
Tranche A term loans due 2019 | Base rate | Minimum
Information related to senior notes
Interest rate added to variable base rate (as a percent)			0.50%
Tranche A term loans due 2019 | Base rate | Maximum
Information related to senior notes
Interest rate added to variable base rate (as a percent)			1.00%
Tranche A term loans due 2019 | LIBOR
Amended and Restated Senior secured credit facility
Interest rate, description of reference rate			LIBOR
Tranche A term loans due 2019 | LIBOR | Minimum
Information related to senior notes
Interest rate added to variable base rate (as a percent)			1.50%
Tranche A term loans due 2019 | LIBOR | Maximum
Information related to senior notes
Interest rate added to variable base rate (as a percent)			2.00%

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Share-Based Payments

9 Months Ended

Oct. 03, 2015

Share-Based Payments

Share-Based Payments

(14)Share-Based Payments

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

Employee Stock Options.  The following table details our stock option activity for the first three quarters of fiscal 2015:

	Options	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (Years)	Aggregate Intrinsic Value
Outstanding at beginning of fiscal 2015	418,158	$	30.94
Granted	133,172	$	27.89
Exercised	—	N/A
Forfeited	—	N/A
Outstanding at end of third quarter of 2015	551,330	$	30.20	9.3	$	677
Exercisable at end of third quarter of 2015	—	—		—	—

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing certain assumptions.  Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is based on the “simplified method” in accordance with accounting guidance. We utilized the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options.

	2015	2014
Weighted average grant date fair value	$6.00	$6.74
Expected volatility	36%	34.8%
Expected term	6.5 years	6.5 years
Risk-free interest rate	1.6% - 1.9%	1.9%
Dividend yield	4.7% - 4.9%	4.4%

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, stock options, non-employee director stock grants and other share based payments) during the third quarter and first three quarters of 2015 and 2014 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
Consolidated Statements of Operations Location	October 3, 2015		September 27, 2014		October 3, 2015		September 27, 2014
Compensation expense included in cost of goods sold	$	249	$	115	$	677	$	609
Compensation expense included in selling, general and administrative expenses	938		271		3,027		1,519
Total compensation expense for share-based payments	$	1,187	$	386	$	3,704	$	2,128

As of October 3, 2015, there was $2.7 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.25 years and $2.4 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.5 years.

The following table details the activity in our non-vested performance share LTIAs for the first three quarters of 2015:

	Number of Performance Shares		Weighted Average Grant Date Fair Value (per share)(2)
Beginning of fiscal 2015	380,977	(1)	$	24.82
Granted	171,622		$	23.86
Vested	(153,194	)	$	20.34
Forfeited	(4,541	)	$	27.63
End of first three quarters of 2015	394,864	(1)	$	26.11

(1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% of the target number of performance shares).

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

The following table details the number of shares of common stock issued by our company during the first three quarters of 2015 and 2014 upon the vesting of performance share long-term incentive awards and other share based compensation (dollars in thousands):

	Thirty-nine Weeks Ended
	October 3, 2015		September 27, 2014
Number of performance shares vested	153,194		342,576
Shares withheld to fund statutory minimum tax withholding	58,242		138,799
Shares of common stock issued for performance share long-term incentive awards	94,952		203,777
Shares of common stock issued to non-employee directors for annual equity grants	18,095		14,010
Total shares of common stock issued	113,047		217,787
Excess tax benefit recorded to additional paid in capital	$	518	$	2,356