B&G Foods, Inc.

Good day and welcome to the B&G Foods second quarter 2021 earnings call. Today's call, which is being recorded, is scheduled to last about one hour, including remarks by B&G Foods management and the question and answer session. I would now like to turn the call over to Sarah Gerlum, Senior Director of Corporate Strategy and Business Development for B&G Foods. Sarah?

Good afternoon and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer, and Bruce Waka, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the investor relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you to B&G Foods' most recent annual report on Form 10-K, and subsequent SEC filings for a more detailed discussion of the risks that could impact our company's future operating results and financial condition. BNG Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We will also be making references on today's call to the non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA before COVID-19 expenses, adjusted net income, adjusted diluted earnings per share, and base business net sales. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Stacy will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and his thoughts concerning the outlook for the remainder of fiscal 2021. First, we'll then discuss our financial results for the second quarter, as well as expectations for 2021. I would now like to turn the call over to Casey.

Good afternoon. Thank you, Sarah. And thank you all for joining us today for our second quarter earnings call. We are pleased with the company's performance in the second quarter and our prospects for the remainder of the year. As we expected, the second quarter was the most challenging to lap from a comparative perspective given that Q2 2020 occurred at the height of pantry loading and stocking during the COVID-19 pandemic. However, performance remained elevated relative to 2019. As many of you know, this is my first earnings call at B&G Foods. I've now been in the role as CEO for about six weeks. So for the folks on the line that I haven't met yet, it is a pleasure to meet you, Day, over the phone. I'm certainly looking forward to meeting many of you in person over the coming months as we get back into the cadence of in-person investor conferences, industry events, and trade shows. While I am mostly in listen mode for now, I will be happy to share some of my observations so far and then come back over the coming quarters with a more detailed discussion around strategy, the portfolio, as well as our opportunities and challenges at B&G Foods. Obviously, one of the biggest drivers of industry performance for the past year and a half has been the COVID-19 pandemic. In many cases, this is a matter of portfolio DNA. What are the brands? What are the categories? Coupled with management's effectiveness in keeping employees safe, mitigating business risk, maintaining supply, and maximizing opportunity. Here at B&G Foods, we have done a pretty good job. At the height of the pandemic in Q2 last year, we generated some of the largest growth numbers in the packaged food industry. Today, COVID continues to be a concern in everyday life across the country and around the world. But with the passage of time and the increasing proportion of the population that has been vaccinated, we expect gradual, if uneven, recovery and normal economic activity. We do have opportunities coming out of the pandemic, though. When I look at the consumer trends that accelerated during the pandemic, e-commerce, comfort brands, baking, cooking, enhancers, flavorings, and seasonings, there are lots of opportunities for the B&G portfolios at the center of these trends. We clearly aren't going to match 2020's net sales on our base business, but we are a larger business than we were in 2019, driven by continued growth and interest in cooking, baking, and eating at home. B&G's base business is up 7% on a two-year stack from 2019. Within the portfolio, our spices and seasonings, baking, and meals brands are up 20% versus Q2 2019. And specifically on spices and seasonings, which is about 20% of our total company portfolio and aggregates to be the number two spices and seasonings business in the United States, net sales are up more than 20% from Q2 2019, and remains well positioned coming out of the pandemic as more consumers continue to cook more often at home. Also, the spices and seasoning portfolio is about 15 to 20% food service. So we are also benefiting as restaurants and eating establishments reopen and more Americans are dining out again. Our baking portfolio is also seeing positive trends in the post-pandemic world. Recent studies show that even in spring 2021, Approximately 65% of consumers were baking at home at least once per week, lifting the prospects of our growing list of baking brands that includes B&G food stalwarts such as Br'er Rabbit and Grandma's Molasses, as well as more recent additions such as Clabber Girls and Crisco. We will spend more time talking about Crisco, but so far after eight months of ownership, we are very encouraged by the category trends and the top-line performance of this business. Another significant impact coming out of the pandemic is inflation, and at unprecedented levels. We are seeing inflation on key cost inputs across the portfolio, particularly in many tradable commodities, packaging material, and freight. The impact on our base portfolio is approximately 3% to 4%, but much higher on the Crisco business, where soybean oil costs have doubled from last year. At B&G Foods, we identified the risks of inflation early and acted to raise prices to recover higher input costs. We will see more impact from both inflationary costs and pricing moving into the P&L through Q3 and Q4, with some lag effect on the timing of pricing implementation with customers. Finally, I wanted to give you my perspective on B&G Foods overall and some thoughts on how we move forward. This company has grown net sales and adjusted EBITDA at a greater than 10% compound annual growth rate over the last 17 years since its IPO in 2004. The company was built upon a successful track record of acquisition-related growth. We have successfully acquired and integrated more than 50 brands into our company since it was established in 1996. For sure, some of the brands are a little old and stodgy, but many of these generate significant cash. Many other brands and businesses that we have acquired, including spicings, spices, baking, and meals, still have incredible opportunities in front of them. Our goals are to continue to increase sales, profitability, and cash flows through organic growth and discipline acquisitions of complementary branded businesses. Going forward, What you should expect from me is stronger focus within the portfolio on where we will grow, invest, acquire, and create value. Much more to come on that in future meetings and calls. Thank you for joining us today. I will now turn the call over to Bruce for a more detailed discussion of the quarter. Bruce.