B&G Foods, Inc.

Good day, and welcome to the B&G Foods fourth quarter and fiscal 2025 earnings call. Today's call, which is being recorded, is scheduled to last about one hour, including remarks by B&G's food management and a question and answer session. I would 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 and full year 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 fiscal 2026 and beyond. Bruce will then discuss our financial results for the fourth quarter in fiscal 2025 and our guidance for fiscal 2026. 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 fourth quarter 2025 earnings call. Today, I will cover an update on our portfolio reshaping, including the recent divestiture and upcoming planned acquisition. An overview of fourth quarter performance, Bruce will cover more detailed financial results, And finally, the outlook for fiscal year 2026. Portfolio reshaping. Yesterday, we announced the divestiture of the green giant U.S. frozen business to Seneca Foods Corporation, a significant milestone in the reshaping and restructuring of the B&G Foods portfolio. This is the largest piece in our portfolio transformation that should result in stronger focus, simplification, greater synergies, and higher margins across the core shelf-stable business lines. The green giant frozen business simply has not been the right fit for P&G Foods, with seasonal production, a different temperature state, geographic complexity, and higher working capital intensity. Previously, we announced the divestiture of our Canadian green giant business in canned and frozen vegetables. That divestiture requires Canadian regulatory approval and is currently under review. Subject to regulatory approval and other customary closing conditions, we expect to close during Q2 fiscal year 26. Finally, we also recently announced the acquisition of the College Inn and Kitchen Basics broth and stock businesses from Del Monte Foods. That transaction is expected to close by the end of March. The broth and stock category is attractive, maintains good margins, and has grown low to mid single digits over the past year. Like the spices and seasoning category, broths have been propelled by the growth in the fresh perimeter of the store as a critical component for the preparation and cooking of fresh meals and soups. The collagen and kitchen basics brands have relevant, well-known equities, strong distribution presence, and high-quality products. The net result of these divestitures and acquisition, when completed, will deliver a more focused portfolio that is expected to generate positive adjusted EBITDA growth, stronger cash flows, lower working capital intensity, reduced leverage, and higher gross and adjusted EBITDA margins. Bruce will provide more details on each of these transactions later. Q4 results. The fourth quarter continued momentum from the third quarter with modest improvement in base business net sales trends. Q4 base business net sales which excludes the impact of divestitures in the 53rd week, were down approximately 2.4%, compared to down 2.7% in the third quarter. Fourth quarter adjusted EBITDA was $84.7 million, slightly down versus last year on a reported basis, driven by the impact of divestitures and tariff costs. Some of the key drivers. The divestiture of the Don Pepino and Sclafani businesses in May, and the Le Sur U.S. canned peas brand in August removed approximately $16.4 million of net sales and $1 million in adjusted EBITDA from Q4. The spices and flavor solutions business unit grew net sales plus 4.2% in Q4, benefiting from the growth in fresh food and proteins, as well as strength in our club and food service channels. Segment-adjusted EBITDA was impacted by tariffs which are now being recovered through pricing. Tariff costs were approximately 4.4 million in Q4 and 9.5 million throughout fiscal year 25. We announced pricing actions during Q3 to recover these costs beginning in Q4, although full pricing reflection with some customers took longer than expected within the quarter. The frozen and vegetables business unit delivered strong segment-adjusted EBITDA recovery, plus $2.8 million as new crop pack costs came in favorable to last year's wheat crop and our Mexico facility achieved productivity gains. Q4 also benefited from the implementation of our back half cost savings initiative. Cost of goods sold, COGS, as a percentage of net sales improved approximately 120 basis points versus last year behind incremental productivity efforts. Fiscal year 26 outlook. Our current outlook for fiscal year 26 reflects continued improvement in the core business trends and the impact of the Green Giant U.S. frozen divester. Lots of changes and more to come with the closing of the pending Green Giant Canada divester and collagen and kitchen basics acquisition. But we are creating a stronger, focused, more profitable B&G Foods. Our current guidance range for fiscal year 26 is $1.655 to $1.695 billion in net sales and $265 to $275 million in adjusted EBITDA. The key assumptions. We expect base business trends on the remaining core meals, spices and flavor solutions, and specialty businesses to improve plus 0.4% versus last year. So far, Q1 trends are off to a strong start, with year-to-date base business net sales performance through February growing roughly 4%. The green giant U.S. frozen divestiture removes approximately $203 million in net sales year-over-year. That will be partially offset by approximately $80 million in revenue from March through year-end from COPAC sales from our Mexico facility, based on our arrangement with Seneca to retain manufacturing in Irapuato. The adjusted EBITDA impact of this divestiture is expected to be at least neutral, as we restructure costs to reflect the exit of the business. We have also reflected the impact of both the 53rd week and the divestitures of Don Pepino-Slefani and LeSueur U.S. during fiscal year 25, representing approximately $38.4 million in net sales and $5.4 million in adjusted EBITDA. Further, the pending divestiture of Green Giant Canada and the pending acquisition of the College Inn and Kitchen Basics broth business have not been reflected in our guidance. We will update fiscal year 26 guidance after those transactions have closed, but expect Canada to be neutral from an adjusted EBITDA impact and the broth and stock acquisition to deliver incremental sales and adjusted EBITDA at healthy margins. Looking forward, fiscal year 26 is poised to be a transformational year with a more focused, higher margin, and stable portfolio. Once divesters and closing transaction services have been completed, we expect continued improvement in base business trends towards the long-term algorithm of 1%. Further, we will also become a less complex, more efficient, and leaner company behind a simpler portfolio, restructuring operations to right-size overheads and focus resources and investment behind the core categories and brands in spices and seasonings, meals, and baking staples. Thank you, and I will now turn the call over to Bruce for more detail on the quarterly performance and outlook for fiscal 2026.