B&G Foods, Inc.

Please stand by, your program is about to begin. If you need operator assistance during your conference today, please press the drop zero. Good day and welcome to the B&G Foods, Inc. second quarter 2024 financial results conference 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 A.J. Schwab, Senior Associate, Corporate Strategy and Business Development for B&G Foods. AJ?

Good afternoon, and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer, and Bruce Wacca, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issue 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, under-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. B&G 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, segment adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted gross profit percentage, 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. Casey 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 2024. Bruce will then discuss our financial results for the second quarter of 2024 and our guidance for fiscal 2024. I would now like to turn the call over to Casey.

Good afternoon. Thank you, AJ, and thank you all for joining us today for our second quarter 2024 earnings call. Q2 results. Second quarter net sales of $444.6 million and adjusted EBITDA of $64 million were in line with expectations. Excluding Crisco, whose net sales were impacted by lower net pricing to reflect a decrease in soybean oil costs, base business net sales decreased by approximately 1.5% compared to the year-ago period. Base business trends improved relative to the first quarter, but we continue to experience softer trends in the center of the store, consistent with the rest of the industry. Food service sales also declined 3%, but much less than in Q1, and more consistent with overall restaurant traffic patterns. Net sales for the highest margin spices and flavor solutions business unit increased by 4.9% versus last year. Q2 adjusted EBITDA of $64 million decreased by $4.5 million compared to the second quarter of 2023. The Green Giant U.S. Shell Stable product line represented approximately $2 million of the year-over-year decline, with foreign exchange from Mexico operations on the Green Giant frozen business representing another $2 million decline. Adjusted EBITDA as a percentage of net sales for the second quarter was 14.4%, down slightly from the prior year period. In quarter two, we continued to see moderating inflation and some favorability in transportation and warehousing. Corporate central expenses were also down in quarter two versus last year, reflecting a moderation in insurance and other fixed costs. Segment reporting. As in the first quarter, B&G Foods is reporting results by operating segments, providing greater visibility into the underlying performance of the company's four operating business units. Spices and flavor solutions. Second quarter net sales increased 4.9%, with segment-adjusted EBITDA up 5.9% versus the second quarter of fiscal year 23%. This segment remains B&G Foods' highest segment adjusted EBITDA as a percentage of net sales. B&G Foods is a leader in spices and seasonings, and we continue to see healthy trends in the overall category. Food service sales declined moderated this quarter to reflect overall restaurant trends. We also launched a new line of licensed seasoning and grilling blends under the Four Sixes brand, featured in the Yellowstone TV franchise. Overall, customer service levels have been restored from some isolated issues in fiscal year 23. Meals. The key components of this business unit are Mexican meals, Ortega Las Palmas, and hot breakfast, cream of wheat, McCann's, Maple Grove Farm syrups. The meal segment increased quarter two segment adjusted EBITDA by 3.9%, although net sales were down approximately 5.5%. We have made good progress on controlling costs and driving productivity in this segment. Skinny girl salad dressings continued high growth behind new items, increased capacity, and expanded distribution. Ortega net sales were impacted by competitive activity from Taco Bell in the taco category, although we have a strong pipeline of channel and product innovation in the back half of this year. Food service sales in syrup were also down behind weak trends in a major syrup customer. Customer service levels have remained strong at over 99%. Specialty. The specialty segment's key objective is to maintain strong, stable cash flow and profit dollars with a primary focus on baking staples, about 70% of business unit sales, with leading number one brands such as Crisco Oil and Shortening, Clover Girl Baking Powder, Grandma's Molasses, et cetera. Based on our Crisco commodity pricing model, quarter two net sales for specialty were down mostly behind lower soybean oil pricing versus last year, reflected through to customers. We believe that soybean oil prices have largely stabilized in the near term and expect that the level of year-over-year decline will decrease in the back half. Specialty segment adjusted EBITDA was down modestly, 3%, reflecting slight delays in getting some customers to reflect lower oil pricing on all Crisco SKUs, which has now been rectified. The specialty segment continues to deliver strong customer service at 98.5%. Frozen and Vegetables. The frozen vegetables business unit includes the U.S. green giant frozen business, the Canadian green giant frozen and canned businesses, a major portion of our company's consolidated Canada sales, and Le Seur canned vegetable product line. Net sales, excluding the impact of the U.S. green giant canned divestiture, were down 2.3%, an improvement from the first quarter trend, but still sluggish behind negative overall category trends. The premium price Le Sur Petit Peas canned business is showing strong growth in Q2 and year-to-date versus last year. Frozen and vegetable segment-adjusted EBITDA was down significantly, but reflected the loss of the U.S. green giant shelf-stable business, $2 million, and the impact of foreign exchange, another $2 million, from the transfer of finished goods to the U.S. in Mexican pesos. This segment remains our lowest segment-adjusted EBITDA margin business. This fall, we plan to launch a strong innovation pipeline of veggie ramen and premium sides. Customer service levels have remained strong in this segment. Portfolio shaping. B&G Foods is continuing the reshaping and restructuring of our portfolios to sharpen focus, improve margins and cash flow, and maximize future value creation. The divestiture of the Green Giant U.S. canned vegetable business was completed last fall following the sale of the Back to Nature brand in January 2023. As discussed last quarter, we are conducting a strategic review of the frozen and remaining canned vegetable businesses for a possible divestiture and sale of some or all of the assets in the frozen vegetables business unit. Green Giant remains a strong brand with broad awareness and distribution, and the frozen vegetables category is on trend with health and dietary trends. It just may not be the right fit with B&G Foods' focus and capabilities, particularly since there are no plans to add more assets in the frozen portfolio given the opportunities in our core shelf-stable businesses and overall capital constraints. As previously disclosed, we have been evaluating working on other smaller divesters that represent around 10% of total company net sales. That process with some lesser brands is moving forward. Thank you, and I will now turn the call over to Bruce for more detail on the quarterly performance and outlook for the remainder of the year.