B&G Foods, Inc.

Good day, everyone, and welcome to the B&G Foods second quarter 2025 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. At this time, I'd like to turn the call over to A.J. Schwab, senior associate, corporate strategy and business development for B&G Foods. A.J.?

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, base business net sales, and segment adjusted expenses. 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 2025. Bruce will then discuss our financial results for the second quarter of 2025 and our revised guidance for fiscal 2025. 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 2025 earnings call. Today, I will cover an overview of second quarter performance. Bruce will cover more detailed financial results, recent divestitures and portfolio shaping efforts, and the outlook for the remainder of fiscal year 2025. Q2 results. The second quarter demonstrated sequential improvement in trend and performance after a challenging quarter one. Q2 net sales of $424.4 million finished 4.5% down versus last year, with base business down 4.2%. Q2 adjusted EBITDA was $58 million, down $5.0 million, or 9.3% versus last year. Some of the key drivers. Almost all of the adjusted EBITDA decline was driven by the frozen and vegetables business unit, with segment adjusted EBITDA down 6.5 million versus last year, behind higher true-up costs on last year's wheat crop, specifically corn and peas, higher trade spend from Easter-April timing, and the end of the Walmart rollback to improve core velocities. These costs will lap and are expected to reverse in the second half. The specialty business unit experienced significant net sales declines, 8%, primarily behind lower Crisco oil pricing year-over-year, consistent with our pricing model. Segment-adjusted EBITDA improved by 3%. The divestiture of the Don Pepino and Scalfini brands during the latter part of the quarter removed approximately $1.4 million of net sales and some modest profit. Portfolio divestitures. B&G Foods is making good progress in reshaping and restructuring our portfolio to sharpen focus, simplify the business, improve margins and cash flow, and maximize future value creation. The end game is to create a more highly focused B&G Foods with adjusted EBITDA as a percentage of net sales approaching 20%, increased cash flow generation, lower leverage closer to five times, a more efficient cost structure, and clear synergies within the portfolio. During the second quarter, we completed two key divesters. First, the Don Paupino and Scalfani Divester signed and closed in May. This is a tomato processing business with about $14 million in annual net sales with a dedicated factory. Second, the LeSueur U.S. Canned Peas Divester signed and closed last Friday. LeSueur has approximately $36 million in annual net sales in the U.S. with a premium position in canned vegetables. Both businesses have relatively high working capital needs, highly seasonal production, and were isolated in terms of the rest of the B&G Foods portfolio, particularly after the divestiture of the green giant U.S. canned vegetable business in late 2023. We expect additional divestitures in the future to further focus the portfolio and reduce leverage. Beyond LeSueur, we continue to evaluate and pursue the presidential defense investor of the green giant branded business in U.S. frozen and Canadian frozen and shelf stable. The remaining businesses in the frozen and vegetables business unit. Fiscal year 25 outlook. We expect the back half of fiscal year 25, Q3-Q4, to show solid improvement versus the first half trend. flat to slightly positive in net sales with year-over-year growth in adjusted EBITDA. The key assumptions behind the latest estimate. The 53rd week is expected to add plus 2% to 3% net sales growth in Q4, a partial week benefit. Excluding the impact of the 53rd week, base business net sales are projected to be down approximately 1% to 2% in the second half. July and early August net sales are consistent with that expectation, improving from the Q2 trend. As discussed last quarter, additional savings and productivity efforts are on track to deliver an incremental $10 million in adjusted EBITDA growth in Q3 and Q4, with an annual run rate of approximately $15 to $20 million. These include additional productivity in COGS, trade and market spending efficiencies, accelerated SG&A savings, and discretionary spending cuts. The U.S. frozen vegetables business is expected to turn profitable, roughly a plus $8 to $10 million increase in segment-adjusted EBITDA versus last year, behind more favorable crop costs, foreign exchange benefit on the portion of the green giant business manufactured in Mexico, and strong productivity in the Iropuato manufacturing facility. We have assumed tariffs at current levels with some possible mitigation through U.S. trade negotiation deals, alternative sourcing, or classification of spices as unavailable natural resources. We are planning to execute targeted pricing to recover incremental tariffs with some lag until fully negotiated and implemented. The largest exposure remains China sourcing of garlic and onions. We are also adjusting guidance primarily to reflect the impact of our two recently completed divestors. Bruce will provide more detail. Finally, we are committed to reducing leverage and balance sheet risk. We expect to reduce leverage to six times within the next 12 months by using divestor proceeds and excess cash that we generate through improved adjusted EBITDA performance and lower working capital needs to repay or repurchase long-term debt. 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 fiscal 2025.