Guarantor and Non-Guarantor Financial Information

3 Months Ended

Mar. 28, 2020

Guarantor and Non-Guarantor Financial Information

Guarantor and Non-Guarantor Financial Information

(18) Guarantor and Non-Guarantor Financial Information

As further discussed in Note 6, “Long-Term Debt,” our obligations under the 4.625% senior notes due 2021 were, and our obligations under the 5.25% senior notes due 2025 and the 5.25% senior notes due 2027 are, jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries, which we refer to in this note as the guarantor subsidiaries. Our foreign subsidiaries, which we refer to in this note as the non-guarantor subsidiaries, do not guarantee the 5.25% senior notes due 2025 or the 5.25% senior notes due 2027. We redeemed all of our 4.625% senior notes due 2021 on October 10, 2019. See Note 6, “Long-Term Debt.”

The following unaudited condensed consolidating financial information presents the condensed consolidating balance sheet as of March 28, 2020 and December 28, 2019, the related condensed consolidating statement of operations for the thirteen weeks ended March 28, 2020 and March 30, 2019 and the related condensed consolidating statement of cash flows for the thirteen weeks ended March 28, 2020 and March 30, 2019 for:

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

2.the guarantor subsidiaries,

3.the non-guarantor subsidiaries, and

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

The information includes elimination entries necessary to consolidate the Parent with the guarantor subsidiaries and non-guarantor subsidiaries. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and

transactions. Separate financial information for each of the guarantor subsidiaries and non-guarantor subsidiaries are not presented because management believes such financial statements would not be meaningful to investors.

Condensed Consolidating Balance Sheet

As of March 28, 2020

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	117,171	$	9,897	$	—	$	127,068
Trade accounts receivable, net		—		179,540		21,023		—		200,563
Inventories, net		—		344,207		54,982		—		399,189
Prepaid expenses and other current assets		—		19,815		6,000		—		25,815
Income tax receivable		—		18,470		617		—		19,087
Intercompany receivables		—		26,209		—		(26,209)		—
Total current assets		—		705,412		92,519		(26,209)		771,722
Property, plant and equipment, net		—		253,910		35,730		—		289,640
Operating lease right-of-use assets, net		—		38,260		53		—		38,313
Goodwill		—		599,557		—		—		599,557
Other intangible assets, net		—		1,610,404		—		—		1,610,404
Other assets		—		3,090		101		—		3,191
Deferred income taxes		—		—		5,957		—		5,957
Investments in subsidiaries		2,826,207		91,550		—		(2,917,757)		—
Total assets	$	2,826,207	$	3,302,183	$	134,360	$	(2,943,966)	$	3,318,784
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	—	$	91,778	$	10,851	$	—	$	102,629
Accrued expenses		—		55,218		3,961		—		59,179
Current portion of operating lease liabilities		—		10,763		43		—		10,806
Current portion of long-term debt		4,500		—		—		—		4,500
Income tax payable		—		—		1,728		—		1,728
Dividends payable		30,457		—		—		—		30,457
Intercompany payables		—		—		26,209		(26,209)		—
Total current liabilities		34,957		157,759		42,792		(26,209)		209,299
Long-term debt		1,994,963		(20,102)		—		—		1,974,861
Deferred income taxes		—		268,854		—		—		268,854
Long-term operating lease liabilities, net of current portion		—		30,495		18		—		30,513
Other liabilities		—		38,970		—		—		38,970
Total liabilities		2,029,920		475,976		42,810		(26,209)		2,522,497
Stockholders' equity:
Preferred stock		—		—		—		—		—
Common stock		641		—		—		—		641
Additional paid-in capital		—		1,963,342		68,253		(2,031,595)		—
Accumulated other comprehensive loss		(45,947)		(45,948)		(21,484)		67,432		(45,947)
Retained earnings		841,593		908,813		44,781		(953,594)		841,593
Total stockholders’ equity		796,287		2,826,207		91,550		(2,917,757)		796,287
Total liabilities and stockholders’ equity	$	2,826,207	$	3,302,183	$	134,360	$	(2,943,966)	$	3,318,784

Condensed Consolidating Balance Sheet

As of December 28, 2019

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	6,955	$	4,360	$	—	$	11,315
Trade accounts receivable, net		—		130,289		13,619		—		143,908
Inventories, net		—		399,935		72,252		—		472,187
Prepaid expenses and other current assets		—		18,393		7,056		—		25,449
Income tax receivable		—		8,311		623		—		8,934
Intercompany receivables		—		—		(12,609)		12,609		—
Total current assets		—		563,883		85,301		12,609		661,793
Property, plant and equipment, net		—		260,256		44,678		—		304,934
Operating lease right-of-use assets, net		—		38,632		66		—		38,698
Goodwill		—		596,391		—		—		596,391
Other intangible assets, net		—		1,615,126		—		—		1,615,126
Other assets		—		3,263		14		—		3,277
Deferred income taxes		—		—		7,371		—		7,371
Investments in subsidiaries		2,743,615		100,561		—		(2,844,176)		—
Total assets	$	2,743,615	$	3,178,112	$	137,430	$	(2,831,567)	$	3,227,590
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	—	$	100,488	$	14,448	$	—	$	114,936
Accrued expenses		—		51,951		3,708		—		55,659
Current portion of operating lease liabilities				9,768		45		—		9,813
Current portion of long-term debt		5,625		—		—		—		5,625
Income tax payable		—		125		329		—		454
Dividends payable		30,421		—		—		—		30,421
Intercompany payables		—		(30,917)		18,308		12,609		—
Total current liabilities		36,046		131,415		36,838		12,609		216,908
Long-term debt		1,895,027		(20,869)		—		—		1,874,158
Deferred income taxes		—		254,339		—		—		254,339
Long-term operating lease liabilities, net of current portion		—		31,966		31		—		31,997
Other liabilities		—		37,646		—		—		37,646
Total liabilities		1,931,073		434,497		36,869		12,609		2,415,048
Stockholders' equity:
Preferred stock		—		—		—		—		—
Common stock		640		—		—		—		640
Additional paid-in capital		—		1,894,788		68,253		(1,963,041)		—
Accumulated other comprehensive loss		(31,894)		(31,894)		(7,133)		39,027		(31,894)
Retained earnings		843,796		880,721		39,441		(920,162)		843,796
Total stockholders’ equity		812,542		2,743,615		100,561		(2,844,176)		812,542
Total liabilities and stockholders’ equity	$	2,743,615	$	3,178,112	$	137,430	$	(2,831,567)	$	3,227,590

Condensed Consolidating Statement of Operations and Comprehensive Income

Thirteen Weeks Ended March 28, 2020

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	495,892	$	59,499	$	(106,021)	$	449,370
Cost of goods sold		—		400,732		49,743		(106,021)		344,454
Gross profit		—		95,160		9,756		—		104,916
Operating expenses:
Selling, general and administrative expenses		—		37,940		2,033		—		39,973
Amortization expense		—		4,723		—		—		4,723
Operating income		—		52,497		7,723		—		60,220
Other income and expenses:
Interest expense, net		—		26,039		—		—		26,039
Other income		—		(453)		—		—		(453)
Income before income tax expense		—		26,911		7,723		—		34,634
Income tax expense		—		4,159		2,383		—		6,542
Equity in earnings of subsidiaries		28,092		5,340		—		(33,432)		—
Net income	$	28,092	$	28,092	$	5,340	$	(33,432)	$	28,092
Comprehensive income (loss)	$	14,039	$	27,796	$	(9,009)	$	(18,787)	$	14,039

Condensed Consolidating Statement of Operations and Comprehensive Income

Thirteen Weeks Ended March 30, 2019

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net sales	$	—	$	390,167	$	55,025	$	(32,458)	$	412,734
Cost of goods sold		—		306,300		50,813		(32,458)		324,655
Gross profit		—		83,867		4,212		—		88,079
Operating expenses:
Selling, general and administrative expenses		—		40,055		(1,758)		—		38,297
Amortization expense		—		4,491		—		—		4,491
Operating income		—		39,321		5,970		—		45,291
Other income and expenses:
Interest expense, net		—		23,074		—		—		23,074
Other income		—		(258)		—		—		(258)
Income before income tax expense		—		16,505		5,970		—		22,475
Income tax expense		—		5,772		(88)		—		5,684
Equity in earnings of subsidiaries		16,791		6,058		—		(22,849)		—
Net income	$	16,791	$	16,791	$	6,058	$	(22,849)	$	16,791
Comprehensive income	$	18,411	$	16,629	$	7,516	$	(24,145)	$	18,411

Condensed Consolidating Statement of Cash Flows

Thirteen Weeks Ended March 28, 2020

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	—	$	46,296	$	11,282	$	—	$	57,578
Cash flows from investing activities:
Capital expenditures		—		(5,827)		(314)		—		(6,141)
Payments for acquisition of businesses, net of cash acquired		—		(3,419)		—		—		(3,419)
Net cash used in investing activities		—		(9,246)		(314)		—		(9,560)
Cash flows from financing activities:
Repayments of long-term debt		(1,125)		—		—		—		(1,125)
Repayments of borrowings under revolving credit facility		(60,000)		—		—		—		(60,000)
Borrowings under revolving credit facility		160,000		—		—		—		160,000
Dividends paid		(30,421)		—		—		—		(30,421)
Intercompany transactions		(68,454)		73,166		(4,712)		—		—
Net cash provided by (used in) financing activities		—		73,166		(4,712)		—		68,454
Effect of exchange rate fluctuations on cash and cash equivalents		—		—		(719)				(719)
Net increase in cash and cash equivalents		—		110,216		5,537		—		115,753
Cash and cash equivalents at beginning of period		—		6,955		4,360		—		11,315
Cash and cash equivalents at end of period	$	—	$	117,171	$	9,897	$	—	$	127,068

Condensed Consolidating Statement of Cash Flows

Thirteen Weeks Ended March 30, 2019

(In thousands)

			Guarantor		Non-Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	—	$	43,330	$	7,014	$	—	$	50,344
Cash flows from investing activities:
Capital expenditures		—		(7,802)		(846)		—		(8,648)
Net cash used in investing activities		—		(7,802)		(846)		—		(8,648)
Cash flows from financing activities:
Repayments of borrowings under revolving credit facility		(40,000)		—		—		—		(40,000)
Borrowings under revolving credit facility		40,000		—		—		—		40,000
Dividends paid		(31,178)		—		—		—		(31,178)
Payments for the repurchase of common stock, net		(10,000)		—		—		—		(10,000)
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation		—		(905)		—		—		(905)
Intercompany transactions		41,178		(34,389)		(6,789)		—		—
Net cash used in financing activities		—		(35,294)		(6,789)		—		(42,083)
Effect of exchange rate fluctuations on cash and cash equivalents		—		—		23		—		23
Net increase (decrease) in cash and cash equivalents		—		234		(598)		—		(364)
Cash and cash equivalents at beginning of period		—		9,871		1,777		—		11,648
Cash and cash equivalents at end of period	$	—	$	10,105	$	1,179	$	—	$	11,284