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What changed in B&G Foods, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of B&G Foods, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+349 added−364 removedSource: 10-K (2023-02-28) vs 10-K (2022-03-01)

Top changes in B&G Foods, Inc.'s 2023 10-K

349 paragraphs added · 364 removed · 277 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

62 edited+14 added−10 removed75 unchanged
Biggest changeThe table below includes some of the acquisitions and the divestiture we have completed in recent years: Date Significant Event December 2020 ​ Acquisition of the Crisco brand of oils and shortening from The J. M.
Biggest changeThe table below includes some of the acquisitions and the divestitures we have completed in recent years: Date Significant Event January 2023 ​ Divestiture of the Back to Nature business, which was sold to Barilla America, referred to as the “ Back to Nature sale” in the remainder of this report. ​ May 2022 ​ Acquisition of the frozen vegetable manufacturing operations of Growers Express, LLC, referred to as the “Yuma acquisition” in the remainder of this report. ​ December 2020 ​ Acquisition of the Crisco brand of oils and shortening from The J.
The Bear Creek Country Kitchens brand is the leading brand of hearty dry soups in the United States. Bear Creek Country Kitchens also offers a line of savory pasta dishes and hearty rice dishes. The Las Palmas brand originated in 1922 and primarily includes authentic Mexican enchilada sauce, chili sauce and various pepper products.
The Las Palmas brand originated in 1922 and primarily includes authentic Mexican enchilada sauce, chili sauce and various pepper products. The Bear Creek Country Kitchens brand is the leading brand of hearty dry soups in the United States. Bear Creek Country Kitchens also offers a line of savory pasta dishes and hearty rice dishes.
Smucker Co., referred to as the “ Crisco acquisition” in the remainder of this report. ​ May 2019 ​ Acquisition of Clabber Girl Corporation, including the Clabber Girl , Rumford , Davis , Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes, from Hulman & Company, referred to as the “ Clabber Girl acquisition” in the remainder of this report. ​ October 2018 ​ Divestiture of Pirate Brands, including the Pirate’s Booty , Smart Puffs , and Original Tings brands, which was sold to The Hershey Company, referred to as the “Pirate Brands sale” in the remainder of this report. ​ July 2018 ​ Acquisition of the McCann’s brand of premium Irish oatmeal from TreeHouse Foods, Inc., referred to as the “ McCann’s acquisition” in the remainder of this report. ​ October 2017 ​ Acquisition of Back to Nature Foods Company, LLC and related entities, including the Back to Nature and SnackWell’s brands, from Brynwood Partners VI L.P., Mondelēz International and certain other sellers, referred to as the “ Back to Nature acquisition” in the remainder of this report. ​ December 2016 ​ Acquisition of Victoria Fine Foods, LLC, and a related entity, from Huron Capital Partners and certain other sellers, referred to as the “ Victoria acquisition” in the remainder of this report. ​ November 2016 ​ Acquisition of the spices & seasonings business of ACH Food Companies, Inc., including the Spice Islands , Tone’s , Durkee and Weber brands, referred to as the “spices & seasonings acquisition” in the remainder of this report.
Smucker Co., referred to as the “ Crisco acquisition” in the remainder of this report. ​ May 2019 ​ Acquisition of Clabber Girl Corporation, including the Clabber Girl , Rumford , Davis , Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes, from Hulman & Company, referred to as the “ Clabber Girl acquisition” in the remainder of this report. ​ October 2018 ​ Divestiture of Pirate Brands, including the Pirate’s Booty , Smart Puffs , and Original Tings brands, which was sold to The Hershey Company. ​ July 2018 ​ Acquisition of the McCann’s brand of premium Irish oatmeal from TreeHouse Foods, Inc. ​ October 2017 ​ Acquisition of Back to Nature Foods Company, LLC and related entities, including the Back to Nature and SnackWell’s brands, from Brynwood Partners VI L.P., Mondelēz International and certain other sellers. ​ December 2016 ​ Acquisition of Victoria Fine Foods, LLC, and a related entity, from Huron Capital Partners and certain other sellers. ​ November 2016 ​ Acquisition of the spices & seasonings business of ACH Food Companies, Inc., including the Spice Islands , Tone’s , Durkee and Weber brands, referred to as the “spices & seasonings acquisition” in the remainder of this report.
We experienced sudden and high cost inflation in fiscal 2021 and expect cost inflation to remain high and possibly continue to increase in fiscal 2022. We attempt to manage these risks by entering into short-term supply contracts and advance commodities purchase agreements, implementing cost saving measures and raising sales prices.
We experienced sudden and high cost inflation in fiscal 2021 and fiscal 2022 and expect cost inflation to remain high and possibly continue to increase in fiscal 2023. We attempt to manage these risks by entering into short-term supply contracts and advance commodities purchase agreements, implementing cost saving measures and raising sales prices.
Examples of our trademarks and registered trademarks include Ac’cent, Back to Nature, B&G, B&G Sandwich Toppers, B&M, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Clabber Girl , Cream of Rice, Cream of Wheat, Crisco, Dash, Devonsheer, Don Pepino, Durkee , Emeril’s, Grandma’s, Green Giant, Joan of Arc, Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, McCann’s , Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Regina, Sa-són, Sclafani, Spice Islands , Spring Tree, Static Guard, Sugar Twin, Tone’s , Trappey’s, TrueNorth, Underwood, Vermont Maid , Victoria , Weber and Wright’s .
Examples of our trademarks and registered trademarks include Ac’cent, B&G, B&G Sandwich Toppers, B&M, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Clabber Girl , Cream of Rice, Cream of Wheat, Crisco, Dash, Devonsheer, Don Pepino, Durkee , Emeril’s, Grandma’s, Green Giant, Joan of Arc, Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, McCann’s , Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Regina, Sa-són, Sclafani, Spice Islands , Spring Tree, Static Guard, Sugar Twin, Tone’s , Trappey’s, TrueNorth, Underwood, Vermont Maid , Victoria , Weber and Wright’s .
During the past three years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient - 10 - Table of Contents and packaging costs. To the extent we are unable to offset present and future cost increases, our operating results will be negatively impacted. Production Manufacturing.
During the past several years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging costs. To the extent we are unable to offset present and future cost increases, our operating results will be negatively impacted. - 10 - Table of Contents Production Manufacturing.
Certain of our brands, including Dash, Green Giant , Crisco, Cream of Wheat , Back to Nature , Ac’cent , Crock Pot ® seasoning mixes, Underwood , Polaner , Static Guard , New York Style , Sugar Twin and Victoria are also distributed to similar food channels in Canada.
Certain of our brands, including Dash, Green Giant , Crisco, Cream of Wheat , Ac’cent , Crock Pot ® seasoning mixes, Underwood , Polaner , Static Guard , New York Style , Sugar Twin and Victoria are also distributed to similar food channels in Canada.
We operate eleven manufacturing facilities for our products. See Item 2, “Properties” for a listing of our manufacturing facilities. Co-Packing Arrangements. In addition to our own manufacturing facilities, we source a significant portion of our products under “co-packing” arrangements, a common industry practice in which manufacturing is outsourced to other companies.
We operate twelve manufacturing facilities for our products. See Item 2, “Properties” for a listing of our manufacturing facilities. Co-Packing Arrangements. In addition to our own manufacturing facilities, we source a significant portion of our products under “co-packing” arrangements, a common industry practice in which manufacturing is outsourced to other companies.
Third parties located in U.S. and foreign locations produce our Back to Nature , Baker’s Joy , B&M , Bear Creek Country Kitchens , Canoleo , Cream of Rice , Crock Pot , Joan of Arc , Le Sueur , MacDonald’s , McCann’s , New York Flatbreads , Regina , Spring Tree , Static Guard , Sugar Twin , TrueNorth and Underwood products and a portion of our B&G , Cary’s , Cream of Wheat , Crisco , Emeril’s , Green Giant , Las Palmas and Ortega products under co-packing agreements or purchase orders.
Third parties located in U.S. and foreign locations produce our Baker’s Joy , B&M , Bear Creek Country Kitchens , Canoleo , Cream of Rice , Crock Pot , Joan of Arc , Le Sueur , MacDonald’s , McCann’s , New York Flatbreads , Regina , Spring Tree , Static Guard , Sugar Twin , TrueNorth and Underwood products and a portion of our B&G , Cary’s , Cream of Wheat , Crisco , Emeril’s , Green Giant , Las Palmas , Ortega and Victoria products under co-packing agreements or purchase orders.
Our fiscal year is the 52 or 53 week reporting period ending on the Saturday closest to December 31. Fiscal 2022 contains, and fiscal 2021, 2019, 2018 and 2017 each contained, 52 weeks. Fiscal 2020 contained 53 weeks.
Our fiscal year is the 52 or 53 week reporting period ending on the Saturday closest to December 31. Fiscal 2023 contains, and fiscal 2022, 2021, 2019 and 2018 each contained, 52 weeks. Fiscal 2020 contained 53 weeks.
The B&M line includes a variety of baked beans and brown bread. The B&M brand currently has a leading market share in the New England region. The McCann’s brand has been in existence since 1800 and offers classic traditional steel cut Irish oatmeal as well as convenience-oriented oatmeal products. The TrueNorth brand was introduced in 2008.
The B&M brand was introduced in 1927. The B&M line includes a variety of baked beans and brown bread. The B&M brand currently has a leading market share in the New England region. The McCann’s brand has been in existence since 1800 and offers classic traditional steel cut Irish oatmeal as well as convenience-oriented oatmeal products.
The address for the investor relations section of our website is https://www.bgfoods.com/investor-relations. The full text of the charters for each of the audit, compensation, corporate social responsibility, nominating and governance, and risk committees of our board of directors as well as our code of business conduct and ethics is available at the investor relations section of our website, https://www.bgfoods.com/investor-relations/governance/documents.
The address for the investor relations section of our website is https://www.bgfoods.com/investor-relations. - 15 - Table of Contents The full text of the charters for each of the audit, compensation, corporate social responsibility, nominating and governance, and risk committees of our board of directors as well as our code of business conduct and ethics is available at the investor relations section of our website, https://www.bgfoods.com/investor-relations/governance/documents.
We sell, - 8 - Table of Contents market and distribute our household brand, Static Guard , through the same sales, marketing and distribution system to many of the same customers who buy our food products as well as to other household product retailers and distributors.
We sell, market and distribute our household brand, Static Guard , through the same sales, marketing and distribution system to many of the same customers who buy our food products as well as to other household product retailers and distributors.
The tables also set forth our five-year goals to increase the representation of women and members of underrepresented groups in both our general employee population and our leadership. ​ ​ ​ ​ Female Talent as a Percentage of Employees ​ ​ ​ ​ ​ Fiscal Year Ended Goal ​ January, 1, 2022 January 2, 2021 By 2027 All Employees 34% 33% 50% Corporate 53% 53% ​ Manufacturing, Warehouse and Distribution 29% 29% ​ All Leadership Employees 28% 27% 38% Corporate Leadership (1) 34% 31% ​ Manufacturing, Warehouse and Distribution Leadership (2) 26% 26% ​ ​ - 12 - Table of Contents ​ ​ ​ ​ Underrepresented Talent (3) as a Percentage of Employees ​ ​ ​ ​ ​ Fiscal Year Ended Goal ​ January, 1, 2022 January 2, 2021 By 2027 All Employees 32% 30% 35% Corporate 21% 20% ​ Manufacturing, Warehouse and Distribution 35% 32% ​ All Leadership Employees 18% 17% 28% Corporate Leadership (1) 10% 10% ​ Manufacturing, Warehouse and Distribution Leadership (2) 21% 20% ​ (1) Corporate leadership includes corporate employees at director-level and above.
The tables also set forth our five-year goals (established in January 2022) to increase the representation of women and members of underrepresented groups in both our general employee population and our leadership. ​ Female Talent as a Percentage of Employees ​ Fiscal Year Ended Goal ​ December 31, 2022 January 1, 2022 January 2, 2021 By 2027 All Employees 33% 34% 33% 50% Corporate 54% 53% 53% ​ Manufacturing, Warehouse and Distribution 28% 29% 29% ​ All Leadership Employees 28% 28% 27% 38% Corporate Leadership (1) 39% 34% 31% ​ Manufacturing, Warehouse and Distribution Leadership (2) 24% 26% 26% ​ ​ ​ - 12 - Table of Contents Underrepresented Talent (3) as a Percentage of Employees ​ ​ Fiscal Year Ended Goal ​ December 31, 2022 January 1, 2022 January 2, 2021 By 2027 All Employees 38% 32% 30% 35% Corporate 21% 21% 20% ​ Manufacturing, Warehouse and Distribution 42% 35% 32% ​ All Leadership Employees 25% 18% 17% 28% Corporate Leadership (1) 6% 10% 10% ​ Manufacturing, Warehouse and Distribution Leadership (2) 31% 21% 20% ​ (1) Corporate leadership includes corporate employees at director-level and above.
Our core values: passion ; food safety and quality ; integrity and accountability ; customer and consumer focus ; safety and health at work ; collaboration ; and empowerment , have been critical to our success.
Our core values: passion ; food safety and quality ; diversity, equity and inclusion ; integrity and accountability ; customer and consumer focus ; safety and health at work ; collaboration ; and empowerment , have been critical to our success.
We have collective bargaining agreements covering employees at six of our facilities in the United States, which vary in term depending on the location: ​ ​ ​ ​ ​ Facility Location Union Effective Date Expiration Date No. of Employees Covered (1) Ankeny, IA International Brotherhood of Teamsters, Local No. 238 Apr. 5, 2020 Apr. 6, 2025 309 Brooklyn, NY United Food and Commercial Workers Union, Local No. 342 Jan. 1, 2020 Dec. 31, 2023 53 Cincinnati, OH The Employees Representation Association May 1, 2020 Apr. 30, 2023 119 Roseland, NJ International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 863 Apr. 1, 2020 Mar. 31, 2026 48 Stoughton, WI Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union, Local No. 695 Mar. 28, 2021 Mar. 26, 2026 143 Terre Haute, IN Chauffeurs, Teamsters, Warehousemen and Helpers Union, Local No. 135 Mar. 28, 2021 Mar. 30, 2024 111 (1) As of January 1, 2022.
We have collective bargaining agreements covering employees at six of our facilities in the United States, which vary in term depending on the location: ​ ​ ​ ​ ​ Facility Location Union Effective Date Expiration Date No. of Employees Covered (1) Ankeny, IA International Brotherhood of Teamsters, Local No. 238 Apr. 5, 2020 Apr. 6, 2025 298 Brooklyn, NY United Food and Commercial Workers Union, Local No. 342 Jan. 1, 2020 Dec. 31, 2023 53 Cincinnati, OH The Employees Representation Association May 1, 2020 Apr. 30, 2023 125 Roseland, NJ International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 863 Apr. 1, 2020 Mar. 31, 2026 49 Stoughton, WI Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union, Local No. 695 Mar. 28, 2021 Mar. 26, 2026 80 Terre Haute, IN Chauffeurs, Teamsters, Warehousemen and Helpers Union, Local No. 135 Mar. 28, 2021 Mar. 30, 2024 108 (1) As of December 31, 2022.
Nevertheless, there can be no assurance that we - 14 - Table of Contents are in full compliance with all such laws and regulations or that we will be able to comply with any future laws and regulations in a cost-effective manner.
Nevertheless, there can be no assurance that we are in full compliance with all such laws and regulations or that we will be able to comply with any future laws and regulations in a cost-effective manner.
Throughout this report, we refer to our fiscal years ended December 30, 2017, December 29, 2018, December 28, 2019, January 2, 2021, January 1, 2022 and December 31, 2022 as “fiscal 2017,” “fiscal 2018,” “fiscal 2019,” “fiscal 2020,” “fiscal 2021” and “fiscal 2022,” respectively.
Throughout this report, we refer to our fiscal years ended December 29, 2018, December 28, 2019, January 2, 2021, January 1, 2022, December 31, 2022 and December 30, 2023 as “fiscal 2018,” “fiscal 2019,” “fiscal 2020,” “fiscal 2021,” “fiscal 2022” and “fiscal 2023,” respectively.
To the extent that we are unable to offset present and future cost increases through pricing and cost savings initiatives, our operating results will be negatively impacted. Customers Our top ten customers accounted for approximately 60.8% of our net sales and approximately 59.8% of our end of the year receivables for fiscal 2021.
To the extent that we are unable to offset present and future cost increases through pricing and cost savings initiatives, our operating results will be negatively impacted. Customers Our top ten customers accounted for approximately 60.5% of our net sales and approximately 60.3% of our end of the year receivables for fiscal 2022.
There are two unions representing 937 employees at our facility in Mexico, (1) the Industrial Union of Stevedore Workers, Cargo Transport Operators and Similar from the Mexican Republic and (2) the Union of Agriculture Workers at the Service of the Region.
Historically, there were two unions representing 1,045 employees at our facility in Mexico, (1) the Industrial Union of Stevedore Workers, Cargo Transport Operators and Similar from the Mexican Republic and (2) the Union of Agriculture Workers at the Service of the Region.
Cary’s also offers sugar free syrup. The Regina brand, which has been in existence since 1949, includes vinegars and cooking wines. Regina products are most commonly used in the preparation of salad dressings as well as in a variety of recipe applications, including sauces, marinades and soups.
The Regina brand, which has been in existence since 1949, includes vinegars and cooking wines. Regina products are most commonly used in the preparation of salad dressings as well as in a variety of recipe applications, including sauces, marinades and soups.
November 2015 ​ Acquisition of the Green Giant and Le Sueur brands from General Mills, Inc., referred to as the “ Green Giant acquisition” in the remainder of this report. ​ ​ ​ - 5 - Table of Contents Products and Markets The following is a brief description of some of our brands and product lines: The Green Giant and Le Sueur brands trace their roots to Le Sueur, Minnesota in 1903, and the Minnesota Valley Canning Company.
November 2015 ​ Acquisition of the Green Giant and Le Sueur brands from General Mills, Inc. ​ ​ ​ - 5 - Table of Contents Products and Markets The following is a brief description of some of our brands and product lines: The Green Giant and Le Sueur brands trace their roots to Le Sueur, Minnesota in 1903, and the Minnesota Valley Canning Company.
We also license the Green Giant name and related intellectual property to General Mills for use with its sale of frozen and shelf stable products in parts of Europe, Asia and in various other locations outside of the United States and Canada. Human Capital As of January 1, 2022, our workforce consisted of 2,847 employees.
We also license the Green Giant name and related intellectual property to General Mills for use with its sale of frozen and shelf-stable products in parts of Europe, Asia and in various other locations outside of the United States and Canada. Human Capital As of December 31, 2022, our workforce consisted of 3,085 employees.
For example, we sell Weber seasonings and other flavor enhancers pursuant to a licensing agreement with Weber-Stephen Products LLC, Emeril’s brand products pursuant to a license agreement with Marquee Brands, Crock Pot seasoning mixes pursuant to a license agreement with Sunbeam Products, Inc. dba Jarden Consumer Solutions, Skinnygirl fat free and sugar free salad dressings and sugar free cocktail inspired preserves pursuant to a license agreement with Better Bites, LLC, Cinnamon Toast Crunch Cinnadust seasoning blend and Cinnamon Toast Crunch creamy cinnamon spread pursuant to a license agreements with General Mills, Inc., Twix shakers seasoning blend pursuant to a license agreement with Mars, Inc., and Cream of Wheat Cinnabon ® , a co-branded product, pursuant to a license agreement with Cinnabon, Inc.
For example, we sell Weber seasonings and other flavor enhancers pursuant to a licensing agreement with Weber-Stephen Products LLC, Emeril’s brand products pursuant to a license agreement with a subsidiary of Marquee Brands, Crockpot seasoning mixes pursuant to a license agreement with Sunbeam Products, Inc., Skinnygirl fat free and sugar free salad dressings and sugar free cocktail inspired preserves pursuant to a license agreement with Better Bites, LLC, Cinnamon Toast Crunch Cinnadust seasoning blend and Cinnamon Toast Crunch creamy cinnamon spread pursuant to a license agreements with a subsidiary of General Mills, Inc., Snickers and Twix shakers seasoning blends pursuant to a license agreement with a subsidiary of Mars, Inc., Einstein Bros. everything bagel seasoning blend pursuant to a license agreement with Einstein Noah Restaurant Group, Inc., and Cream of Wheat Cinnabon ® , a co-branded product, pursuant to a license agreement with a subsidiary of Cinnabon Franchisor SPV LLC.
We distribute our products through a multiple-channel system that covers every class of customer nationwide. Due to the different demands of distribution for frozen and shelf-stable products, we maintain separate distribution systems.
Radio, internet, social media and limited television advertising supplement this activity. Distribution. We distribute our products through a multiple-channel system that covers every class of customer nationwide. Due to the different demands of distribution for frozen and shelf-stable products, we maintain separate distribution systems.
Our shelf-stable distribution network consists of five primary distribution centers in the United States, four of which are leased by us and are operated for us by a third-party logistics provider, and one that is located at an owned manufacturing facility and is operated by us. We also ship to certain customers direct from some of our manufacturing facilities.
Our shelf-stable distribution network consists of six primary distribution centers in the United States, four of which are leased by us and are operated for us by a third-party logistics provider, one that is located at an owned manufacturing facility and is operated by us, and one that is located at an owned manufacturing facility and is operated by a third-party logistics provider.
Of that total, 2,441 employees were engaged in manufacturing, 147 were engaged in marketing and sales, 153 were engaged in warehouse and distribution and 106 were engaged in administration. Approximately 60.4% of our employees, located at six manufacturing facilities in the United States and one manufacturing facility in Mexico, are covered by collective bargaining agreements.
Of that total, 2,661 employees were engaged in manufacturing, 144 were engaged in marketing and sales, 165 were engaged in warehouse and distribution and 115 were engaged in administration. Approximately 57.0% of our employees, located at six manufacturing facilities in the United States and one manufacturing facility in Mexico, are covered by collective bargaining agreements.
We are also subject to the U.S. Bio-Terrorism Act of 2002 which imposes on us import and export regulations. Under the Bio-Terrorism Act we are required, among other things, to provide specific information about the food products we ship into the United States and to register our manufacturing, warehouse and distribution facilities with the FDA.
Under the Bio-Terrorism Act we are required, among other things, to provide specific information about the food products we ship into the United States and to register our manufacturing, warehouse and distribution facilities with the FDA.
The Ac’cent brand was introduced in 1947 as a flavor enhancer for meat preparation and is generally used on beef, poultry, fish and vegetables. We believe that Ac’cent is positioned as a unique flavor enhancer that provides food with the “umami” flavor sensation.
This line consists of shelf-stable pickles, peppers, relishes, olives and other related specialty items. The Ac’cent brand was introduced in 1947 as a flavor enhancer for meat preparation and is generally used on beef, poultry, fish and vegetables. We believe that Ac’cent is positioned as a unique flavor enhancer that provides food with the “umami” flavor sensation.
The Spice Islands brand, established in San Francisco in 1941, is a leading premium spices and extracts brand offering a diverse line of high quality products including spices, seasonings, dried herbs, extracts, flavorings and sauce blends.
The Spice Islands brand, established in San Francisco in 1941, is a leading premium spices and extracts brand offering a diverse line of high quality products including spices, seasonings, dried herbs, extracts, flavorings and sauce blends. The brand’s offerings include organic products. The Mama Mary’s brand was introduced in 1986 and is a leading brand of shelf-stable pizza crusts.
Our manufacturing facilities and products are subject to periodic inspection by federal, state, local and foreign authorities. We are subject to the Food, Drug and Cosmetic Act and the Food Safety Modernization Act and the regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, labeling, packaging and safety of food.
Our manufacturing facilities and products are subject to periodic inspection by federal, state, local and foreign authorities. We are subject to the Food, Drug and Cosmetic Act and the Food Safety Modernization Act and the regulations promulgated thereunder by the FDA.
We sell our products primarily through broker sales networks to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors. The broker sales network handles the sale of our products at the retail level. Sales. Our sales organization is aligned by distribution channels and consists of regional sales managers, key account managers and sales persons.
We sell our products primarily through broker sales networks to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors. The broker sales network handles the sale of our products at the retail level. - 8 - Table of Contents Sales.
Other than Walmart, which accounted for approximately 27.7% of our fiscal 2021 net sales, no single customer accounted for 10.0% or more of our fiscal 2021 net sales.
Other than Walmart, which accounted for approximately 27.3% of our fiscal 2022 net sales, no single customer accounted for 10.0% or more of our fiscal 2022 net sales. Other than Walmart, which accounted for approximately 30.6% of our receivables as of December 31, 2022, no single customer accounted for more than 10.0% of our receivables as of December 31, 2022.
We seek people with diverse backgrounds and talents, and believe different perspectives achieve strong results. The tables below provide information regarding the percentages of our employees who are female or from underrepresented groups as compared to our overall employee population and our leadership.
The tables below provide information regarding the percentages of our employees who are female or from underrepresented groups as compared to our overall employee population and our leadership.
Polaner Sugar Free preserves are the second leading brand of sugar free preserves nationally. The Tone’s brand started as a family business in 1873 and was responsible for many of the early advancements in the spice industry. The Tone’s brand sells predominantly in the club channel while also servicing traditional grocery.
The spreads are available in more than a dozen flavors. Polaner Sugar Free preserves are the second leading brand of sugar free preserves nationally. The Tone’s brand started as a family business in 1873 and was responsible for many of the early advancements in the spice industry.
The Polaner brand was introduced in 1880 and is comprised of a broad array of fruit-based spreads as well as jarred wet spices such as chopped garlic and oregano. Polaner All Fruit is a leading national brand of fruit-juice sweetened fruit spread. The spreads are available in more than a dozen flavors.
Mama Mary’s also offers pizza sauces and premium gourmet pepperoni slices. The Polaner brand was introduced in 1880 and is comprised of a broad array of fruit-based spreads as well as jarred wet spices such as chopped garlic and oregano. Polaner All Fruit is a leading national brand of fruit-juice - 6 - Table of Contents sweetened fruit spread.
Mild molasses is designed for table use and full-flavored molasses is typically used in baking, barbeque sauces and as a breakfast syrup. The Vermont Maid brand has been in existence since 1919 and offers maple-flavored syrups. Vermont Maid syrup is available in regular, sugar-free and sugar-free butter varieties.
The Brer Rabbit brand has been in existence since 1907 and currently offers mild and full-flavored molasses as well as blackstrap molasses. Mild molasses is designed for table use and full-flavored molasses is typically used in baking, barbeque sauces and as a breakfast syrup.
We attempt to offset all or a portion of these increases through price increases and cost savings initiatives. For example, despite higher rates for freight in 2019 and 2021, we were able to offset a portion of the freight cost increases through pricing, which included both list price increases and trade spend optimization.
For example, despite higher rates for freight in 2021 and 2022, we were able to offset a portion of the freight cost increases through pricing, which included both list price increases and trade spend optimization. Freight rates increased significantly during the fourth quarter of 2020, fiscal 2021 and fiscal 2022, and we expect freight rates to remain elevated in 2023.
We intend to disclose any amendment to, or waiver from, a provision of the code of business conduct and ethics that applies to our chief executive officer, chief financial officer or chief accounting officer in the investor relations section of our website. - 15 - Table of Contents Our supplier code of conduct, environmental, health and safety policy, human rights policy and water stewardship policy are available in the responsibility section of our website, https://www.bgfoods.com/about/responsibility.
We intend to disclose any amendment to, or waiver from, a provision of the code of business conduct and ethics that applies to our chief executive officer, chief financial officer or chief accounting officer in the investor relations section of our website.
The Joan of Arc brand, which originated in 1895, includes a full range of canned beans including kidney, chili and other varieties. The Static Guard brand, the number one brand name in static elimination sprays, created the anti-static spray category when it was launched in 1978 to fulfill a previously unmet consumer need.
The Static Guard brand, the number one brand name in static elimination sprays, created the anti-static spray category when it was launched in 1978 to fulfill a previously unmet consumer need.
We focus on deploying promotional dollars where we believe the spending will have the greatest impact on sales. Marketing and trade spending support, on a national basis, typically consists of advertising trade promotions, coupons and cross-promotions with supporting products. Radio, internet, social media and limited television advertising supplement this activity. Distribution.
Our marketing organization is aligned by brand and is responsible for the strategic planning for each of our brands. We focus on deploying promotional dollars where we believe the spending will have the greatest impact on sales. Marketing and trade spending support, on a national basis, typically consists of advertising trade promotions, coupons and cross-promotions with supporting products.
Regional sales managers sell our products nationwide through national and regional brokers, with separate organizations focusing on foodservice, grocery chain accounts and special markets. Our sales managers coordinate our broker sales efforts, make key account calls with buyers or distributors and supervise broker retail coverage of the products at the store level. Our sales strategy is centered on individual brands.
Our sales managers coordinate our broker sales efforts, make key account calls with buyers or distributors and supervise broker retail coverage of the products at the store level. Our sales strategy is centered on individual brands. We allocate promotional spending for each of our brands and our regional sales managers coordinate promotions with customers.
During fiscal 2021, 2020 and 2019, our net sales to foreign countries represented approximately 8.3%, 7.8% and 7.7%, respectively, of our total net sales. Our foreign sales are primarily to customers in Canada. Seasonality Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons/weather or certain other annual events.
Our foreign sales are primarily to customers in Canada. - 9 - Table of Contents Seasonality Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons/weather or certain other annual events. In general, our sales are higher in the first and fourth quarters.
The Dash brand, which was introduced in 1983 as the original brand in salt-free seasonings, is available in more than a dozen blends. In 2005, the leading brand in salt-free seasonings introduced salt-free marinades. Dash’s brand essence, “Salt-Free, Flavor-Full,” resonates with consumers and underscores the brand’s commitment to provide healthy products that fulfill consumers’ expectations for taste.
Dash’s brand essence, “Salt-Free, Flavor-Full,” resonates with consumers and underscores the brand’s commitment to provide healthy products that fulfill consumers’ expectations for taste. Prior to 2020, the brand was known as Mrs. Dash . Victoria Fine Foods is a Brooklyn-based business founded in 1929.
The Wright’s brand was introduced in 1895 and is a seasoning that reproduces the flavor and aroma of pit smoking in meats, chicken and fish. Wright’s is offered in three flavors: Hickory, Mesquite and Applewood. - 7 - Table of Contents The Cary’s brand originated in 1904 and is the oldest brand of pure maple syrup in the United States.
The Wright’s brand was introduced in 1895 and is a seasoning that reproduces the flavor and aroma of pit smoking in meats, chicken and fish. Wright’s is offered in three flavors: Hickory, Mesquite and Applewood. The Sugar Twin brand, primarily sold in Canada, was developed in 1968 and is a calorie free sugar substitute.
We believe that our distribution systems for shelf-stable and frozen products have sufficient capacity to accommodate incremental product volume. See Item 2, “Properties” for a listing of our owned and leased distribution centers and warehouses. In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates.
Our frozen distribution network consists of seven primary distribution centers in the United States and Canada, which are owned and operated by third-party logistics providers. We believe that our distribution systems for shelf-stable and frozen products have sufficient capacity to accommodate incremental product volume. See Item 2, “Properties” for a listing of our owned and leased distribution centers and warehouses.
We allocate promotional spending for each of our brands and our regional sales managers coordinate promotions with customers. Additionally, our marketing department works in conjunction with the sales department to coordinate special account activities and marketing support, such as couponing, public relations and media advertising.
Additionally, our marketing department works in conjunction with the sales department to coordinate special account activities and marketing support, such as couponing, public relations and media advertising. We have a national sales force that is capable of supporting our current brands and quickly integrating and supporting any newly acquired brands. Marketing.
Baker’s Joy ’s product proposition has been to “generate a perfect release from the pan every time,” making baking easier, faster and more successful for everyday bakers. The Durkee brand was established in 1850 and, like our Tone’s brand, started as a family business and was an early leader in the spice industry.
The Baker’s Joy brand was introduced in 1982 and is the original brand of no-stick baking spray with flour. Baker’s Joy ’s product proposition has been to “generate a perfect release from the pan every time,” making baking easier, faster and more successful for everyday bakers. The TrueNorth brand was introduced in 2008.
Prior to 2020, the brand was known as Mrs. Dash . The Cream of Wheat brand was introduced in 1893 and is among the leading brands and one of the most trusted and widely recognized brands of hot cereals sold in the United States.
The Cream of Wheat brand was introduced in 1893 and is among the leading brands and one of the most trusted and widely recognized brands of hot cereals sold in the United States. Cream of Wheat is available in Original, Whole Grain and Maple Brown Sugar stove top, and also in instant packets of Original and other flavors.
Food Industry The food industry is one of the United States’ largest industries. Historically, it has been characterized by relatively stable sales growth, based largely on price and population increases. In recent years, however, excluding the impact of the COVID-19 pandemic, many traditional center of store grocery brands in the industry have often experienced flat to modestly declining sales.
In recent years, however, excluding the impact of the COVID-19 pandemic, many traditional center of store grocery brands in the industry have often experienced flat to modestly declining sales.
The Emeril’s brand was introduced in 2000 under a licensing agreement with celebrity chef Emeril Lagasse. We offer a line of pasta sauces, seasonings, cooking stocks, mustards and cooking sprays under the Emeril’s brand name. The Sugar Twin brand, primarily sold in Canada, was developed in 1968 and is a calorie free sugar substitute.
The Emeril’s brand was introduced in 2000 under a licensing agreement with celebrity chef Emeril Lagasse. We offer a line of pasta sauces, seasonings, cooking stocks, mustards and cooking sprays under the Emeril’s brand name. The Joan of Arc brand, which originated in 1895, includes a full range of canned beans including kidney, chili and other varieties.
Other products under the Maple Grove Farms of Vermont label include a line of gourmet salad dressings, sugar free syrups, marinades, fruit syrups, confections, pancake mixes and organic products. Clabber Girl , which originated as a wholesale grocery company dating back to the 1850’s, is a leader in baking products, including baking powder, baking soda and corn starch.
The Maple Grove Farms of Vermont brand, which originated in 1915, is one of the leading brands of pure maple syrup sold in the United States. Other products under the Maple Grove Farms of Vermont label include a line of gourmet salad dressings, sugar free syrups, marinades, fruit syrups, confections, pancake mixes and organic products.
In Canada, Mexico and from time to time in the United States we also use public warehouse and distribution facilities for our shelf-stable products. Our frozen distribution network consists of seven primary distribution centers in the United States and Canada, which are owned and operated by third-party logistics providers.
We also ship to certain customers direct from some of our manufacturing facilities. In Canada, Mexico and from time to time in the United States we also use public warehouse and distribution facilities for our shelf-stable products.
The information contained on our website is not part of, and is not incorporated in, this or any other report we file with or furnish to the SEC.
Our supplier code of conduct, environmental, health and safety policy, human rights policy, water stewardship policy and philanthropy principles are available in the responsibility section of our website, https://www.bgfoods.com/about/responsibility. The information contained on our website is not part of, and is not incorporated in, this or any other report we file with or furnish to the SEC.
The New York Flatbreads brand is a line of thin, crispy, flavorful crispbread that is available in several toppings. The Molly McButter brand created the butter-flavored sprinkles category in 1987. Molly McButter is available in butter and cheese flavors. The Canoleo brand offers an all-purpose margarine used for spreading, cooking and baking.
The Vermont Maid brand has been in existence since 1919 and offers maple-flavored syrups. Vermont Maid syrup is available in regular, sugar-free and sugar-free butter varieties. The New York Flatbreads brand is a line of thin, crispy, flavorful crispbread that is available in several toppings. The Molly McButter brand created the butter-flavored sprinkles category in 1987.
The brand’s ability to consistently deliver on its promise to “instantly eliminate static cling” has resulted in a loyal consumer following. The Sa-són brand was introduced in 1947 as a flavor enhancer used primarily for Puerto Rican and Hispanic food preparation. The product is generally used on beef, poultry, fish and vegetables.
The Sa-són brand was introduced in 1947 as a flavor enhancer used primarily for Puerto Rican and Hispanic food preparation. The product is generally used on beef, poultry, fish and vegetables. The brand’s flavor enhancer is offered in four flavors: Original, Coriander and Achiote, Garlic and Onion, and Tomato. We also offer reduced sodium versions of Sa-són .
The Underwood brand’s “ Underwood Devil ” logo, which was registered in 1870, is believed to be the oldest registered trademark still in use for a prepackaged food product in the United States. Underwood meat spreads, which were introduced in the late 1860s, include deviled ham, white-meat chicken, roast beef, corned beef and liverwurst.
The Tone’s brand sells predominantly in the club channel while also servicing traditional grocery. The Underwood brand’s “ Underwood Devil ” logo, which was registered in 1870, is believed to be the oldest registered trademark still in use for a prepackaged food product in the United States.
TrueNorth nut cluster snacks combine freshly roasted nuts, a dash of sea salt and just a hint of sweetness. TrueNorth varieties include almond pecan crunch, chocolate nut crunch and cashew crunch. The Don Pepino and Sclafani brands originated in 1955 and 1900, respectively, and primarily include pizza and spaghetti sauces, whole and crushed tomatoes and tomato puree.
TrueNorth nut cluster snacks combine freshly roasted nuts, a dash of sea salt and just a hint of sweetness. TrueNorth varieties include almond pecan crunch, chocolate nut crunch and cashew crunch. The Cary’s brand originated in 1904 and is the oldest brand of pure maple syrup in the United States. Cary’s also offers sugar free syrup.
The Spring Tree brand originated in 1976 in Brattleboro, Vermont, and consists of pure maple syrup and sugar free syrup. The Trappey’s brand, which was introduced in 1898, has a Louisiana heritage. Trappey’s products fall into two major categories—high quality peppers and hot sauces, including Trappey’s Red Devil . The B&M brand was introduced in 1927.
The Old London brand was created in 1932 and offers a variety of flavors available in melba toast snacks. Old London also markets specialty snacks under the Devonsheer brand name. The Trappey’s brand, which was introduced in 1898, has a Louisiana heritage. Trappey’s products fall into two major categories—high quality peppers and hot sauces, including Trappey’s Red Devil .
Its products span the shelf-stable Mexican food segment including taco shells, tortillas, seasonings, dinner kits, taco sauces, peppers, refried beans, salsas and related food products. The Maple Grove Farms of Vermont brand, which originated in 1915, is one of the leading brands of pure maple syrup sold in the United States.
Its products span the shelf-stable Mexican food segment including taco shells, tortillas, seasonings, dinner kits, taco sauces, peppers, refried beans, salsas and related food products. Clabber Girl , which originated as a wholesale grocery company dating back to the 1850’s, is a leader in baking products, including baking powder, baking soda and corn starch.
The Bloch & Guggenheimer (B&G) brand originated in 1889, and its pickle, pepper and relish products are a leading brand in the New York metropolitan area. This line consists of shelf-stable pickles, peppers, relishes, olives and other related specialty items.
Underwood meat spreads, which were introduced in the late 1860s, include deviled ham, white-meat chicken, roast beef, corned beef and liverwurst. The Bloch & Guggenheimer (B&G) brand originated in 1889, and its pickle, pepper and relish products are a leading brand in the New York metropolitan area.
Our collective bargaining agreements with these two unions do not expire; however, certain terms of the agreements must be reviewed periodically. As noted in the table above, none of our collective bargaining agreements are scheduled to expire in the next twelve months. COVID-19.
As noted in the table and paragraph above, four of our collective bargaining agreements, covering employees at our Cincinnati, Brooklyn and Mexico facilities, are scheduled to expire in the next twelve months.
Removed
Cream of Wheat is available in Original, Whole Grain and Maple Brown Sugar stove top, and also in instant packets of Original and other flavors. We also offer Cream of Rice , a gluten-free, rice-based hot cereal. Victoria Fine Foods is a Brooklyn-based business founded in 1929.
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We also offer Cream of Rice , a gluten-free, rice-based hot cereal. The Dash brand, which was introduced in 1983 as the original brand in salt-free seasonings, is available in more than a dozen blends. In 2005, the leading brand in salt-free seasonings introduced salt-free marinades.
Removed
Back to Nature has been a pioneer in the better-for-you snack foods category and it is a leading cookie and cracker brand in the category. The Back to Nature brand’s product offerings include plant-based, Non-GMO Project Verified, organic and gluten free products.
Added
The Spring Tree brand originated in 1976 in Brattleboro, Vermont, and consists of pure maple syrup and sugar free syrup. The Don Pepino and Sclafani brands originated in 1955 and 1900, respectively, and primarily include pizza and spaghetti sauces, whole and crushed tomatoes and tomato puree.
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The brand’s offerings include organic products. - 6 - Table of Contents The Mama Mary’s brand was introduced in 1986 and is a leading brand of shelf-stable pizza crusts. Mama Mary’s also offers pizza sauces and premium gourmet pepperoni slices.
Added
The brand’s ability to consistently deliver on its promise to “instantly eliminate static cling” has resulted in a loyal consumer following. - 7 - Table of Contents The Durkee brand was established in 1850 and, like our Tone’s brand, started as a family business and was an early leader in the spice industry.
Removed
The Old London brand was created in 1932 and offers a variety of flavors available in melba toast snacks. Old London also markets specialty snacks under the Devonsheer brand name. The Baker’s Joy brand was introduced in 1982 and is the original brand of no-stick baking spray with flour.
Added
Molly McButter is available in butter and cheese flavors. The Canoleo brand offers an all-purpose margarine used for spreading, cooking and baking. Food Industry The food industry is one of the United States’ largest industries. Historically, it has been characterized by relatively stable sales growth, based largely on price and population increases.
Removed
The brand’s flavor enhancer is offered in four flavors: Original, Coriander and Achiote, Garlic and Onion, and Tomato. We also offer reduced sodium versions of Sa-són . The Brer Rabbit brand has been in existence since 1907 and currently offers mild and full-flavored molasses as well as blackstrap molasses.
Added
Our sales organization is aligned by distribution channels and consists of regional sales managers, key account managers and sales persons. Regional sales managers sell our products nationwide through national and regional brokers, with separate organizations focusing on foodservice, grocery chain accounts and special markets.
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We have a national sales force that is capable of supporting our current brands and quickly integrating and supporting any newly acquired brands. Marketing. Our marketing organization is aligned by brand and is responsible for the strategic planning for each of our brands.
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In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives.
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And in 2018 and 2019, we benefited from our distribution re-alignment efforts which have helped to optimize both our shelf-stable and our frozen distribution networks. Freight rates increased significantly during the fourth quarter of 2020 and fiscal 2021, and we expect freight rates to remain elevated in 2022.
Added
During fiscal 2022, 2021 and 2020, our net sales to foreign countries represented approximately 7.8%, 8.3% and 7.8%, respectively, of our total net sales.
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Other than Walmart, which accounted for approximately 28.9% of our receivables as of January 1, 2022, no single customer accounted for more than - 9 - Table of Contents 10.0% of our receivables as of January 1, 2022.
Added
We embrace diversity and value the similarities and differences of our employees. We leverage diverse backgrounds and perspectives to achieve outstanding results. We are committed to fostering an equitable and inclusive work environment where all employees have the opportunity to share their ideas, grow with our company, and realize their full potential.
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In general, our sales are higher in the first and fourth quarters.
Added
The collective bargaining agreements with the two unions did not have expiration dates but certain terms of the agreements were required to be reviewed periodically.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+21 added−14 removed130 unchanged
Biggest changeOur efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic or disease outbreak, as well as third-party actions taken to contain its spread and mitigate public health effects. - 16 - Table of Contents The ultimate impact of the COVID-19 pandemic on our business will depend on many factors, including, among others, the duration of social distancing and stay-at-home and work-from-home mandates, policies and recommendations and whether, and the extent to which, additional waves or variants of COVID-19 will affect the United States and the rest of North America, our ability and the ability of our suppliers to continue to operate our and their manufacturing facilities and maintain the supply chain without material disruption and procure ingredients, packaging and other raw materials when needed despite disruptions in the supply chain and labor shortages, our customers’ ability to adequately staff their distributions centers and stores, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating and shopping habits.
Biggest changeThe ultimate impact of any pandemic or disease outbreak on our business will depend on many factors, including, among others, the duration of social distancing and stay-at-home and work-from-home mandates, policies and recommendations and whether, and the extent to which, additional waves or variants of any such pandemic or disease outbreak affects the United States and the rest of North America, our ability and the ability of our suppliers to continue to operate our and their manufacturing facilities and maintain the supply chain without material disruption and procure ingredients, packaging and other raw materials when needed despite any disruptions in the supply chain or labor shortages, our customers’ ability to adequately staff their distributions centers and stores, and the extent to which macroeconomic conditions resulting from any such pandemic or disease outbreak and the pace of the subsequent recovery may impact consumer eating and shopping habits.
The mishandling or inappropriate disclosure of non‑public sensitive or protected information could lead to the loss of intellectual property, negatively impact planned corporate transactions or damage our reputation and brand image.
The mishandling or inappropriate disclosure of non‑public sensitive or protected information could also lead to the loss of intellectual property, negatively impact planned corporate transactions or damage our reputation and brand image.
Cyberattacks and other cyber incidents are occurring more frequently in the United States, are constantly evolving in nature, are becoming more sophisticated and are being made by groups and individuals (including criminal hackers, hacktivists, state-sponsored institutions, terrorist organizations and individuals or groups participating in organized crime) with a wide range of expertise and motives (including monetization of corporate, payment or other internal or personal data, theft of trade secrets and intellectual property for competitive advantage and leverage for - 24 - Table of Contents political, social, economic and environmental reasons).
Cyberattacks and other cyber incidents are occurring more frequently in the United States, are constantly evolving in nature, are becoming more sophisticated and are being made by groups and individuals (including criminal hackers, hacktivists, state-sponsored institutions, terrorist organizations and individuals or groups participating in organized crime) with a wide range of expertise and motives (including monetization of corporate, payment or other internal or personal data, theft of trade secrets and intellectual property for competitive advantage and leverage for political, social, economic and environmental reasons).
Most of our products are sourced from single manufacturing sites, which means disruptions in our or our co-packers’ operations for any number of reasons could have a material adverse effect on our business. Our products are manufactured at many different manufacturing facilities, including our eleven manufacturing facilities and manufacturing facilities operated by our co-packers.
Most of our products are sourced from single manufacturing sites, which means disruptions in our or our co-packers’ operations for any number of reasons could have a material adverse effect on our business. Our products are manufactured at many different manufacturing facilities, including our twelve manufacturing facilities and manufacturing facilities operated by our co-packers.
Our $900.0 million of 5.25% senior notes due 2025 mature on April 1, 2025, our $800.0 million revolving credit facility matures on December 16, 2025, our $671.6 million of tranche B term loans mature on October 10, 2026 and our $550.0 million of 5.25% senior notes due 2027 mature on September 15, 2027.
Our $900.0 million of 5.25% senior notes due 2025 mature on April 1, 2025, our $800.0 million revolving credit facility matures on December 16, 2025, our $610.6 million of tranche B term loans mature on October 10, 2026 and our $550.0 million of 5.25% senior notes due 2027 mature on September 15, 2027.
If the actions we take to establish and protect our trademarks and other proprietary rights are not adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as an alleged - 23 - Table of Contents violation of their trademarks and proprietary rights, it may be necessary for us to initiate or enter into litigation in the future to enforce our trademark rights or to defend ourselves against claimed infringement of the rights of others.
If the actions we take to establish and protect our trademarks and other proprietary rights are not adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as an alleged violation of their trademarks and proprietary rights, it may be necessary for us to initiate or enter into litigation in the future to enforce our trademark rights or to defend ourselves against claimed infringement of the rights of others.
The ability of our subsidiaries to pay dividends or make other payments or distributions to us depends on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends), agreements of those - 25 - Table of Contents subsidiaries, our credit agreement, our senior notes indentures and the covenants of any future outstanding indebtedness we or our subsidiaries incur.
The ability of our subsidiaries to pay dividends or make other payments or distributions to us depends on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends), agreements of those subsidiaries, our credit agreement, our senior notes indentures and the covenants of any future outstanding indebtedness we or our subsidiaries incur.
The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of holders of any class or series of preferred stock that may be issued in the future. - 28 - Table of Contents Item 1B. Unresolved Staff Comments. None.
The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of holders of any class or series of preferred stock that may be issued in the future. Item 1B. Unresolved Staff Comments. None. - 29 - Table of Contents
These restrictions prohibit or limit, among other things: ● the incurrence of additional indebtedness and the issuance of certain preferred stock or redeemable capital stock; ● the payment of dividends on, and purchase or redemption of, capital stock; ● a number of restricted payments, including investments; ● specified sales of assets; ● specified transactions with affiliates; ● the creation of certain types of liens; ● consolidations, mergers and transfers of all or substantially all of our assets; and ● entry into certain sale and leaseback transactions.
These restrictions prohibit or limit, among other things: ● the incurrence of additional indebtedness and the issuance of certain preferred stock or redeemable capital stock; ● the payment of dividends on, and purchase or redemption of, capital stock; ● a number of restricted payments, including investments; ● specified sales of assets; ● specified transactions with affiliates; ● the creation of certain types of liens; ● consolidations, mergers and transfers of all or substantially all of our assets; and - 18 - Table of Contents ● entry into certain sale and leaseback transactions.
In addition, certain of our customers have faced labor shortages as a result of the COVID-19 Omicron variant that have limited their ability to receive shipments of certain of our products, which has also negatively impacted our ability to fully satisfy consumer demand.
In addition, certain of our customers faced labor shortages as a result of the COVID-19 Omicron variant that limited their ability to receive shipments of certain of our products, which also negatively impacted our ability to fully satisfy consumer demand.
If we were not able to obtain alternate production capability in a timely manner or on satisfactory terms, this could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. Our operations are subject to numerous laws and governmental regulations, exposing us to potential claims and compliance costs that could adversely affect our business.
If we were not able to obtain alternate production capability in a timely manner or on satisfactory terms, this could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. - 21 - Table of Contents Our operations are subject to numerous laws and governmental regulations, exposing us to potential claims and compliance costs that could adversely affect our business.
Any changes in these laws and regulations, or any - 21 - Table of Contents changes in how existing or future laws or regulations will be enforced, administered or interpreted could increase the cost of developing, manufacturing and distributing our products or otherwise increase the cost of conducting our business, or expose us to additional risk of liabilities and claims, which could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.
Any changes in these laws and regulations, or any changes in how existing or future laws or regulations will be enforced, administered or interpreted could increase the cost of developing, manufacturing and distributing our products or otherwise increase the cost of conducting our business, or expose us to additional risk of liabilities and claims, which could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.
The continuing effects of the COVID-19 pandemic or any future pandemics may cause significant disruptions to our supply chain and operations, including disruptions in our ability to purchase raw materials, and delays in the manufacture and shipment of our products.
The continuing effects of the COVID-19 pandemic or any future pandemics or disease outbreaks may cause significant disruptions to our supply chain and operations, including disruptions in our ability to purchase raw materials, and delays in the manufacture and shipment of our products.
From time to time, we may enter into agreements that are intended to reduce the effects of our exposure to currency fluctuations, but these agreements may not be effective in significantly reducing our exposure. Litigation regarding our trademarks and any other proprietary rights and intellectual property infringement claims may have a significant negative impact on our business.
From time to time, we may enter into agreements that are intended to reduce the effects of our exposure to currency fluctuations, but these agreements may not be effective in significantly reducing our exposure. - 23 - Table of Contents Litigation regarding our trademarks and any other proprietary rights and intellectual property infringement claims may have a significant negative impact on our business.
If consumption rates and sales in our mature food product categories decline, our revenue and operating income may be adversely affected, and we may not be able to offset this decrease in business with increased trade spending or an increase in sales or profitability of other products and product categories. We may have difficulties integrating acquisitions or identifying new acquisitions.
If consumption rates and sales in our mature food product categories decline, our revenue and operating income may be adversely affected, and we may not be able to offset this decrease in business with increased trade spending or an increase in sales or profitability of other products and product categories. - 17 - Table of Contents We may have difficulties integrating acquisitions or identifying new acquisitions.
If there is a change in U.S. federal tax law or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise results in an increase in our corporate tax rate, our cash taxes payable would increase, which could significantly reduce our future cash and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity. - 26 - Table of Contents Likewise, the ultimate impact of the U.S.
If there is a change in U.S. federal tax law or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise results in an increase in our corporate tax rate, our cash taxes payable would increase, which could significantly reduce our future cash and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.
The outcome of litigation is often difficult to predict, and the outcome of pending or future litigation may have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. - 22 - Table of Contents Consumer concern regarding the safety and quality of food products or health concerns could adversely affect sales of certain of our products.
The outcome of litigation is often difficult to predict, and the outcome of pending or future litigation may have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. Consumer concern regarding the safety and quality of food products or health concerns could adversely affect sales of certain of our products.
We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic and financial information, to manage a variety of business processes and activities, including manufacturing, financial, logistics, sales, marketing and administrative functions. We depend on our information technology infrastructure to communicate internally and externally with employees, customers, suppliers and others.
We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic and financial information, to manage a variety of business processes and activities, including manufacturing, financial, logistics, sales, marketing and administrative functions. - 24 - Table of Contents We depend on our information technology infrastructure to communicate internally and externally with employees, customers, suppliers and others.
In addition, we may incur significant costs related to developing and marketing new products or expanding our existing product lines in reaction to what we perceive to be increased consumer preference or demand. Such development or marketing may not result in the volume of sales or profitability anticipated.
In addition, we may incur significant costs related to developing and marketing new products or expanding our existing product lines in reaction to what we perceive to be increased - 16 - Table of Contents consumer preference or demand. Such development or marketing may not result in the volume of sales or profitability anticipated.
A decrease in these ratings could increase our cost of borrowing or make it more difficult for us to obtain financing. - 19 - Table of Contents Future disruptions in the credit markets or other factors, could impair our ability to refinance our debt upon terms acceptable to us or at all.
A decrease in these ratings could increase our cost of borrowing or make it more difficult for us to obtain financing. Future disruptions in the credit markets or other factors, could impair our ability to refinance our debt upon terms acceptable to us or at all.
The spread of pandemics or disease outbreaks such as COVID-19 may also disrupt our third-party business partners’ ability to meet their obligations to us, which may negatively affect our operations. These third parties include those who supply our ingredients, packaging, and other necessary operating materials, contract manufacturers, distributors, and logistics and transportation providers.
The spread of pandemics or disease outbreaks such as COVID-19 may disrupt our third-party business partners’ ability to meet their obligations to us, which may negatively affect our operations. These third parties include those who supply our ingredients, packaging, and other necessary operating materials, contract manufacturers who supply certain finished goods, distributors, and logistics and transportation providers.
During the past three years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient, packaging and distribution costs. Moreover, during fiscal 2022 and possibly beyond, we expect to face continued industry-wide cost inflation for various inputs, including commodities, ingredients, packaging materials, other raw materials, transportation and labor.
During the past several years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient, packaging and distribution costs. Moreover, during fiscal 2023 and possibly beyond, we expect to face continued industry-wide cost inflation for various inputs, including commodities, ingredients, packaging materials, other raw materials, transportation and labor.
For example, our foreign sales are primarily to customers in Canada. Net sales in Canada accounted for approximately 6.5%, 6.4% and 5.7% of our total net sales in fiscal 2021, 2020 and 2019, respectively. Although our sales for export to other countries are generally denominated in U.S. dollars, our sales to Canada are generally denominated in Canadian dollars.
For example, our foreign sales are primarily to customers in Canada. Net sales in Canada accounted for approximately 6.4%, 6.5% and 6.4% of our total net sales in fiscal 2022, 2021 and 2020, respectively. Although our sales for export to other countries are generally denominated in U.S. dollars, our sales to Canada are generally denominated in Canadian dollars.
In the event that such regulation is enacted and is more aggressive than the sustainability measures that we are currently undertaking to monitor our emissions and improve our energy and resource efficiency, we may experience significant increases in our manufacturing and distribution costs.
In the event that such regulation is enacted and is more aggressive than the sustainability measures that we are currently undertaking to monitor our emissions, improve our energy and resource efficiency and report such efforts, we may experience significant increases in manufacturing and distribution and administrative costs.
Any legal proceedings could result in an adverse determination that could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. We face risks associated with our defined benefit pension plans. We maintain four company-sponsored defined benefit pension plans that cover approximately 32.7% of our employees.
Any legal proceedings could result in an adverse determination that could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. We face risks associated with our defined benefit pension plans. We maintain four company-sponsored defined benefit pension plans that cover approximately 23.9% of our employees.
A major part of our strategy is to grow through acquisitions. For example, we completed the Crisco acquisition in December 2020 and we expect to pursue additional acquisitions of food product lines and businesses.
A major part of our strategy is to grow through acquisitions. For example, we completed the Yuma acquisition in May 2022 and we completed the Crisco acquisition in December 2020 and we expect to pursue additional acquisitions of food product lines and businesses.
If we are - 20 - Table of Contents not able to anticipate, identify or develop and market products that respond to these changes in consumer preferences, whether resulting from changing consumer demographics or otherwise, demand for our products may decline and our operating results may be adversely affected.
If we are not able to anticipate, identify or develop and market products that respond to these changes in consumer preferences, whether resulting from changing consumer demographics or otherwise, demand for our products may decline and our operating results may be adversely affected.
While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate future collective bargaining agreements for our facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages.
While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate new collective bargaining agreements for our Cincinnati, Brooklyn or Mexico facilities on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages.
Beginning with fiscal 2022, our adjusted taxable income as computed for purposes of the interest expense deduction limitation will be computed after any deduction allowable for depreciation and amortization.
Beginning with fiscal 2022, our adjusted taxable income as computed for purposes of the interest expense deduction limitation is computed after any deduction allowable for depreciation and amortization.
A sustained labor shortage or increased turnover rates within our workforce caused by COVID-19 or related policies and mandates, or as a result of general macroeconomic factors, have led and could in the future lead to production or shipping delays, increased costs, including increased wages to attract and retain employees and increased overtime to meet demand.
A sustained labor shortage or increased turnover rates within our workforce caused by a public health crisis or related policies and mandates, or as a result of general macroeconomic or other factors, have led and could in the future lead to production or shipping delays, increased costs, including increased wages to attract and retain employees and increased overtime to meet demand.
Even when not merited, the defense of these lawsuits may divert our management’s attention, and we may incur significant expenses in defending these lawsuits.
Even when not merited, the defense of these lawsuits may divert our management’s attention, and we may incur significant expenses in - 22 - Table of Contents defending these lawsuits.
However, our annual impairment tests for fiscal 2021 resulted in our company recording non-cash impairment charges to trademarks for the Static Guard , SnackWell’s , Molly McButter and Farmwise brands of $23.1 million in the aggregate during the fourth quarter of fiscal 2021, which is recorded in “Impairment of intangible assets” in the accompanying consolidated statement of operations for fiscal 2021.
In addition, our annual impairment tests for fiscal 2021 resulted in our company recording non-cash impairment charges to intangible trademark assets for the SnackWell’s , Static Guard , Molly McButter and Farmwise brands of $23.1 million in the aggregate during the fourth quarter of fiscal 2021, which is recorded in “Impairment of intangible assets” in our consolidated statement of operations for fiscal 2021.
We attempt to manage these risks by entering into short-term supply contracts and advance commodities purchase agreements from - 17 - Table of Contents time to time, by implementing cost saving measures and by raising sales prices.
We attempt to manage these risks by entering into short-term supply contracts and advance commodities purchase agreements from time to time, by implementing cost saving measures and by raising sales prices.
If, prior to the expiration of any of our existing collective bargaining agreements, we are unable to reach new agreements without union action or any such new agreements are not on terms satisfactory to us, our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.
If, prior to the expiration of the collective bargaining agreements for the Cincinnati, Brooklyn or Mexico facilities or prior to the expiration of any of our other existing collective bargaining agreements, we are unable to reach new agreements without union action or any such new agreements are not on terms satisfactory to us, our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.
Tax Cuts and Jobs Act and the U.S. CARES Act on our reported results in fiscal 2022 and beyond may differ from the estimates provided in this report, possibly materially, due to guidance that may be issued and other actions we may take as a result of the new tax law different from that currently contemplated.
CARES Act on our reported results in fiscal 2023 and beyond may differ from the estimates provided in this report, possibly materially, due to guidance that may be issued and other actions we may take as a result of the new tax law different from that currently contemplated.
Any future financial market disruptions or tightening of the credit markets, may make it more difficult for us to obtain financing for acquisitions or increase the cost of obtaining financing.
Financial market conditions may impede our access to, or increase the cost of, financing for acquisitions. Any future financial market disruptions or tightening of the credit markets, may make it more difficult for us to obtain financing for acquisitions or increase the cost of obtaining financing.
If we were unable to repay those amounts, the credit agreement lenders could proceed against the security granted to them to secure that indebtedness. If the lenders accelerate the payment of the indebtedness, our assets may not be sufficient to repay in full this indebtedness and our other indebtedness. To service our indebtedness, we require a significant amount of cash.
If we were unable to repay those amounts, the credit agreement lenders could proceed against the security granted to them to secure that indebtedness. If the lenders accelerate the payment of the indebtedness, our assets may not be sufficient to repay in full this indebtedness and our other indebtedness.
In addition, any significant decline in our market capitalization, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill.
In addition, any significant decline in our market capitalization or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill.
We may be unable to maintain our profitability in the face of a consolidating retail environment. Our largest customer, Walmart, accounted for approximately 27.7% of our fiscal 2021 net sales, and our ten largest customers together accounted for approximately 60.8% of our fiscal 2021 net sales.
We may be unable to maintain our profitability in the face of a consolidating retail environment. Our largest customer, Walmart, accounted for approximately 27.3% of our fiscal 2022 net sales, and our ten largest customers together accounted for approximately 60.5% of our fiscal 2022 net sales.
We have substantial indebtedness, which could restrict our ability to pay dividends and impact our financing options and liquidity position. At January 1, 2022, we had total long-term indebtedness of $2,286.6 million (before debt discount/premium), including $836.6 million principal amount of senior secured indebtedness and $1,450.0 million principal amount of senior unsecured indebtedness.
We have substantial indebtedness, which could restrict our ability to pay dividends and impact our financing options and liquidity position. At December 31, 2022, we had total long-term indebtedness of $2,404.1 million (before debt discount/premium), including $954.1 million principal amount of senior secured indebtedness and $1,450.0 million principal amount of senior unsecured indebtedness.
A prolonged work stoppage or strike at any of our facilities with union employees or a significant work disruption from other labor disputes in the food or related industries could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.
A prolonged work stoppage or strike at any of our facilities with union employees or a significant work disruption from other labor disputes in the food or related industries could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. Four of our collective bargaining agreements expire in the next twelve months.
If we were to use working capital or permanent borrowings to fund dividends, we would have less cash and/or borrowing capacity available for future dividends and other purposes, which could negatively impact our financial condition, results of operations, liquidity and ability to maintain or expand our business.
If we were to use working capital or permanent borrowings to fund dividends, we would have less cash and/or borrowing capacity available for future dividends and other purposes, which could negatively impact our financial condition, results of operations, liquidity and ability to maintain or expand our business. - 28 - Table of Contents Our dividend policy may negatively impact our ability to finance capital expenditures, operations or acquisition opportunities.
We are able to amortize goodwill and certain intangible assets in accordance with Section 197 of the Internal Revenue Code of 1986. We expect to be able to amortize for tax purposes approximately $1,164.7 million between 2022 and 2035.
We are able to amortize goodwill and certain intangible assets in accordance with Section 197 of the Internal Revenue Code of 1986. We expect to be able to amortize for tax purposes approximately $1,055.2 million between 2023 and 2037.
We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which are being discontinued.
We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which have been discontinued.
For example, we have experienced supply chain constraints for certain of our products, which have negatively impacted our ability to fully satisfy customer and consumer demand for certain of our products.
For example, during the COVID-19 pandemic we experienced supply chain constraints for certain of our products, which negatively impacted our ability to fully satisfy customer and consumer demand for certain of our products.
The degree to which we are leveraged on a consolidated basis could have important consequences to the holders of our securities, including: ● our ability in the future to obtain additional financing for working capital, capital expenditures or acquisitions may be limited; ● we may not be able to refinance our indebtedness on terms acceptable to us or at all; ● a significant portion of our cash flow is likely to be dedicated to the payment of interest on our indebtedness, thereby reducing funds available for future operations, capital expenditures, acquisitions and/or dividends on our common stock; and ● we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures. - 18 - Table of Contents We are subject to restrictive debt covenants and other requirements related to our debt that limit our business flexibility by imposing operating and financial restrictions on our operations.
The degree to which we are leveraged on a consolidated basis could have important consequences to the holders of our securities, including: ● our ability in the future to obtain additional financing for working capital, capital expenditures or acquisitions may be limited; ● we may not be able to refinance our indebtedness on terms acceptable to us or at all; ● a significant portion of our cash flow is likely to be dedicated to the payment of interest on our indebtedness, thereby reducing funds available for future operations, capital expenditures, acquisitions and/or dividends on our common stock; and ● we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures.
In addition, in accordance with our current dividend policy we intend to continue distributing a significant portion of any remaining cash flow to our stockholders as dividends.
A significant portion of our cash flow from operations is dedicated to servicing our debt requirements. In addition, in accordance with our current dividend policy we intend to continue distributing a significant portion of any remaining cash flow to our stockholders as dividends.
In addition, the unprecedented demand for food and other consumer packaged goods products as a result of the COVID-19 pandemic or any future pandemic may limit the availability of ingredients, packaging and other raw materials necessary to produce our products, and our operations may be negatively impacted.
In addition, a significant increase in demand for food and other consumer packaged goods products as a result of pandemics or disease outbreaks may limit the availability of ingredients, packaging and other raw materials necessary to produce our products, and our operations may be negatively impacted.
Our success depends in part on our ability to anticipate and offer products that appeal to the changing tastes, dietary habits and product packaging preferences of consumers in the market categories in which we compete.
We may be unable to anticipate changes in consumer preferences and consumer demographics, which may result in decreased demand for our products. Our success depends in part on our ability to anticipate and offer products that appeal to the changing tastes, dietary habits and product packaging preferences of consumers in the market categories in which we compete.
If our interest expense deduction becomes limited or if we are unable to fully utilize our interest expense deductions in future periods, our cash taxes will increase. We were not subject to an interest expense deduction limitation in fiscal 2020 but are subject to the limitation in fiscal 2021.
If we are unable to fully utilize our interest expense deductions in future periods, our cash taxes will increase. We were not subject to an interest expense deduction limitation in fiscal 2020 but were subject to the limitation in fiscal 2021, which increased our taxable income by $6.7 million.
Our financial well-being could be jeopardized by unforeseen changes in our employees’ collective bargaining agreements, shifts in union policy or labor disruptions in the food industry. As of January 1, 2022, approximately 60.4% of our 2,847 employees were covered by collective bargaining agreements.
Our financial well-being could be jeopardized by unforeseen changes in our employees’ collective bargaining agreements, shifts in union policy or labor disruptions in the food industry. As of December 31, 2022, approximately 57.0% of our 3,085 employees were covered by collective bargaining agreements.
Risks Specific to Our Company Pandemics or disease outbreaks, such as the COVID-19 pandemic, may disrupt our business, including among other things, our supply chain, our manufacturing operations and customer and consumer demand for our products, and could have a material adverse impact on our business.
It is also possible that our customers may replace our branded products with private label products. Pandemics or disease outbreaks, such as the COVID-19 pandemic, may disrupt our business, including among other things, our supply chain, our manufacturing operations and customer and consumer demand for our products, and could have a material adverse impact on our business.
If a significant percentage of our workforce or the workforce of our third-party business partners or customers is unable to work, including because of illness or travel or government restrictions in connection with the COVID-19 pandemic or any future pandemic or disease outbreak, our operations may be negatively impacted.
In addition, we rely on customers to be able to receive shipments and stock store shelves. If a significant percentage of our workforce or the workforce of our third-party business partners or customers is unable to work, including because of illness or travel or government restrictions in connection with a pandemic or disease outbreak, our operations may be negatively impacted.
Misuse, leakage or falsification of legally protected information could also result in a violation of data privacy laws and regulations and have a negative impact on our reputation, business, financial condition and results of operations.
Misuse, leakage or falsification of legally protected information could also result in a violation of data privacy laws and regulations and have a negative impact on our reputation, business, financial condition and results of operations. Failure to Comply with Data Privacy and Data Breach Laws May Subject Our Company to Fines, Administrative Actions and Reputational Harm.
Our ability to continue to expand our business is, to a certain extent, dependent upon our ability to borrow funds under our credit agreement and to obtain other third-party financing, including through the issuance and sale of additional debt or equity securities. Financial market conditions may impede our access to, or increase the cost of, financing for acquisitions.
Our ability to continue to fund our working capital needs and capital expenditures and to expand our business is, to a certain extent, dependent upon our ability to borrow funds under our credit agreement and to obtain other third-party financing, including through the issuance and sale of additional debt or equity securities.
Our total assets include substantial goodwill and indefinite-lived intangible assets (trademarks). These assets are tested for impairment at least annually and whenever events or circumstances occur indicating that goodwill or indefinite-lived intangible assets might be impaired. The annual goodwill impairment testing is performed by comparing our company’s market capitalization with our company’s carrying value, including goodwill.
Our total assets include substantial goodwill and indefinite-lived intangible assets (trademarks). These assets are tested for impairment through qualitative and quantitative assessments at least annually and whenever events or circumstances occur indicating that goodwill or indefinite-lived intangible assets might be impaired.
Our ability to generate cash depends on many factors beyond our control. Our ability to make interest payments on and to refinance our indebtedness, and to fund planned capital expenditures and potential acquisitions depends on our ability to generate cash flow from operations in the future.
Our ability to make interest payments on and to refinance our indebtedness, and to fund working capital needs, planned capital expenditures and potential acquisitions depends on our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
Future dividends with respect to shares of our capital stock, if any, depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions (including restrictions in our credit agreement and senior notes indentures), business opportunities, provisions of applicable law (including certain provisions of the Delaware General Corporation Law) and other factors that our board of directors may deem relevant. - 27 - Table of Contents If our cash flows from operating activities were to fall below our minimum expectations (or if our assumptions as to capital expenditures or interest expense were too low or our assumptions as to the sufficiency of our revolving credit facility to finance our working capital needs were to prove incorrect), we may need either to reduce or eliminate dividends or, to the extent permitted under our credit agreement and senior notes indentures, fund a portion of our dividends with borrowings or from other sources.
If our cash flows from operating activities were to fall below our minimum expectations (or if our assumptions as to capital expenditures or interest expense were too low or our assumptions as to the sufficiency of our revolving credit facility to finance our working capital needs were to prove incorrect), we may need either to reduce or eliminate dividends or, to the extent permitted under our credit agreement and senior notes indentures, fund a portion of our dividends with borrowings or from other sources.
As a result, we expect our adjusted taxable income (used to compute the limitation) to further decrease and that we will be subject to the interest expense deduction limitation in fiscal 2022 and future years.
As a result, our adjusted taxable income (used to compute the limitation) decreased and we are subject to the interest expense deduction limitation in fiscal 2022, resulting in an increase to taxable income of $90.2 million. We may continue to be subject to the interest deduction limitation in future years.
If we are unable to refinance our indebtedness at or prior to maturity on commercially reasonable terms or at all, we would be forced to seek other alternatives, including: ● sales of assets; ● sales of equity; and ● negotiations with our lenders or noteholders to restructure the applicable debt.
Any of these risks could impair our ability to fund our operations or limit our ability to expand our business or increase our interest expense, which could have a material adverse effect on our financial results. - 19 - Table of Contents If we are unable to refinance our indebtedness at or prior to maturity on commercially reasonable terms or at all, we would be forced to seek other alternatives, including: ● sales of assets; ● sales of equity; and ● negotiations with our lenders or noteholders to restructure the applicable debt.
Based upon current assumptions, the increase in our cash taxes resulting from the interest expense deduction limitation is expected to be in the range of approximately $9 million to $11 million per year beginning in fiscal 2022, without a valuation allowance established for the deferred tax assets from the disallowed interest expense that may be carried forward indefinitely.
We have recorded a deferred tax asset of $22.2 million related to the interest deduction carryover, without a valuation allowance, as the disallowed interest may be carried forward indefinitely. The increase in our cash taxes resulting from the interest expense deduction limitation is approximately $20.6 million for fiscal 2022.
If the carrying value of our company exceeds our market capitalization, an impairment charge is recognized for the difference, not to exceed the amount of goodwill. We test our indefinite-lived intangible assets by comparing the fair value with the carrying value and recognize a loss for the difference.
We test our goodwill and indefinite-lived intangible assets by comparing the fair values with the carrying values and recognize a loss for the difference.
The expected annual deductions are approximately $124.1 million for fiscal 2022, approximately $121.9 million for each year fiscal 2023 through fiscal 2024, approximately $121.6 million for fiscal 2025, approximately $117.7 million for fiscal 2026, approximately $97.8 million for fiscal 2027, approximately $95.3 million for fiscal 2028, approximately $94.6 million for fiscal 2029, approximately $88.5 million for fiscal 2030, approximately $55.9 million for fiscal 2031, approximately $37.7 million for fiscal 2032, approximately $32.7 million for fiscal 2033, approximately $29.4 million for fiscal 2034 and approximately $25.7 million for fiscal 2035.
The expected annual deductions are approximately $122.9 million for each year fiscal 2023 through fiscal 2024, approximately $122.6 million for fiscal 2025, approximately $118.7 million for fiscal 2026, approximately $98.8 million for fiscal 2027, approximately $96.3 million for fiscal 2028, approximately $95.7 million for fiscal 2029, approximately $89.6 million for fiscal 2030, approximately $56.9 million for fiscal 2031, approximately $38.7 million - 26 - Table of Contents for fiscal 2032, approximately $33.8 million for fiscal 2033, approximately $30.4 million for fiscal 2034, approximately $26.7 million for fiscal 2035, approximately $1.0 million for fiscal 2036 and approximately $0.3 million for fiscal 2037.
Conversely, pandemics or disease outbreaks could result in a widespread health crisis that could adversely affect economies and financial markets, consumer spending and confidence levels resulting in an economic downturn that could affect customer and consumer demand for our products.
Conversely, pandemics or disease outbreaks could result in a widespread health crisis that could adversely affect economies and financial markets, consumer spending and confidence levels resulting in an economic downturn that could affect customer and consumer demand for our products. - 20 - Table of Contents Our efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic or disease outbreak, as well as third-party actions taken to contain its spread and mitigate public health effects.
We cannot predict the duration or scope of the disruption. Therefore, the financial impact cannot be reasonably estimated at this time. The packaged food industry is highly competitive and we face risks related to the execution of our strategy and our ability to respond to channel shifts and other competitive pressures. The packaged food industry is highly competitive.
In that case, holders of our securities may lose all or part of their investment. Risks Specific to Our Company and Industry The packaged food industry is highly competitive and we face risks related to the execution of our strategy and our ability to respond to channel shifts and other competitive pressures. The packaged food industry is highly competitive.
CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years beginning in 2019 and 2020 and the limitation reverts back to 30% beginning with fiscal 2021. This modification increased the allowable interest expense deduction and resulted in a net operating loss (NOL) for the year 2019.
CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years 2019 and 2020 and the limitation reverted back to 30% beginning in 2021. See Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report.
The agreements governing our indebtedness impose significant operating and financial restrictions on us.
We are subject to restrictive debt covenants and other requirements related to our debt that limit our business flexibility by imposing operating and financial restrictions on our operations. The agreements governing our indebtedness impose significant operating and financial restrictions on us.
We estimate the fair value of our indefinite-lived intangible assets based on discounted cash flows that reflect certain third-party market value indicators. Estimating our fair value for these purposes requires significant estimates and assumptions by management. We completed our annual impairment tests for fiscal 2020 and 2019 with no adjustments to the carrying values of goodwill and indefinite-lived intangible assets.
We completed our annual impairment tests for fiscal 2022 and fiscal 2020 with no adjustments to the carrying values of - 27 - Table of Contents indefinite-lived intangible assets.
Removed
In that case, holders of our securities may lose all or part of their investment.
Added
To service our indebtedness and fund our working capital needs, capital expenditures and any future acquisitions, we require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.
Removed
The ultimate impact that the COVID-19 pandemic or any future pandemic or disease outbreak will have on our business and our consolidated results of operations is uncertain.
Added
The collective bargaining agreement covering our Cincinnati facility, which covers approximately 125 employees, is scheduled to expire on April 30, 2023, and the collective bargaining agreement covering our Brooklyn facility, which covers approximately 53 employees, is scheduled to expire on December 31, 2023.
Removed
To date we have seen increased customer and consumer demand for our products as the COVID-19 pandemic reached the United States and consumers initially began pantry loading and have increased their at-home consumption as a result of social distancing and stay-at-home and work-from-home mandates, policies and recommendations.
Added
In addition, under the new Mexican labor law, we are required to negotiate a new collective bargaining agreement for our Mexico facility to replace the existing collective bargaining agreements, which cover approximately 1,045 employees. The new collective bargaining agreement for our Mexico facility must be subjected to a vote of the union employees by May 1, 2023.
Removed
Increases in net sales by our company to supermarkets, mass merchants, warehouse clubs, wholesalers and e-commerce customers have more than offset declines at foodservice customers.
Added
Cyberattacks, such as ransomware attacks, if successful, could interfere with our ability to access and use systems and records that are necessary to operate our business. Such attacks could materially adversely affect our reputation, relationships with customers, and operations and could require us to expend significant resources to resolve such issues.
Removed
However, this increased customer and consumer demand decreased in fiscal 2021 as compared to fiscal 2020 and may continue to decrease in the coming months as the need for social distancing and stay-at-home and work-from-home mandates, policies and recommendations appears to be decreasing, and we are unable to predict the nature and timing of when that impact may occur.
Added
We and third-parties with which we have shared personal information have been subject to attempts to breach the security of networks, IT infrastructure, and controls through cyberattack, malware, computer viruses, social engineering attacks, ransomware attacks, and other means of unauthorized access.
Removed
In addition, we rely on customers to be able to receive shipments and stock store shelves.
Added
For example, in February 2023, we experienced a cyberbreach resulting from a global ransomware attack that impacted thousands of network servers around the world and which encrypted certain of our network servers.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−2 removed1 unchanged
Biggest changeJohnsbury, Vermont Owned Manufacturing/Warehouse Stoughton, Wisconsin Owned Manufacturing/Warehouse Terre Haute, Indiana ​ Owned/Leased ​ Manufacturing/Warehouse Williamstown, New Jersey Owned Manufacturing/Warehouse Yadkinville, North Carolina Owned Manufacturing/Warehouse Brooklyn, New York ​ Leased ​ Manufacturing/Warehouse Roseland, New Jersey Leased Manufacturing/Warehouse Cincinnati, Ohio ​ Owned/Leased ​ Manufacturing/Warehouse Easton, Pennsylvania Leased Distribution Center Fontana, California ​ Leased ​ Distribution Center Romeoville, Illinois ​ Leased ​ Distribution Center Union City, Georgia Leased Distribution Center St.
Biggest changeJohnsbury, Vermont Owned Manufacturing/Warehouse Stoughton, Wisconsin Owned Manufacturing/Warehouse Williamstown, New Jersey Owned Manufacturing/Warehouse Yadkinville, North Carolina Owned Manufacturing/Warehouse Brooklyn, New York ​ Leased ​ Manufacturing/Warehouse Roseland, New Jersey Leased Manufacturing/Warehouse Yuma, Arizona ​ Leased ​ Manufacturing/Warehouse Cincinnati, Ohio ​ Owned/Leased ​ Manufacturing/Warehouse Terre Haute, Indiana ​ Owned/Leased ​ Manufacturing/Warehouse Easton, Pennsylvania Leased Distribution Center Fontana, California ​ Leased ​ Distribution Center Romeoville, Illinois ​ Leased ​ Distribution Center Union City, Georgia Leased Distribution Center St.
Listed below are our manufacturing facilities and the principal warehouses, distribution centers and offices that we own or lease. ​ ​ ​ ​ ​ Facility Location (1) Owned/Leased Description Parsippany, New Jersey Leased Corporate Headquarters Mississauga, Ontario ​ Leased ​ Canadian Headquarters Ankeny, Iowa ​ Owned ​ Manufacturing/Warehouse Hurlock, Maryland Owned Manufacturing/Warehouse Irapuato, Mexico Owned Manufacturing/Warehouse St.
Listed below are our manufacturing facilities and the principal warehouses, distribution centers and offices that we own or lease. ​ ​ ​ ​ ​ Facility Location Owned/Leased Description Parsippany, New Jersey Leased Corporate Headquarters Mississauga, Ontario ​ Leased ​ Canadian Headquarters Ankeny, Iowa ​ Owned ​ Manufacturing/Warehouse Hurlock, Maryland Owned Manufacturing/Warehouse Irapuato, Mexico Owned Manufacturing/Warehouse St.
Item 2. Properties. Our corporate headquarters are located at Four Gatehall Drive, Parsippany, NJ 07054. Our manufacturing facilities are generally located near major customer markets and raw materials. Of our eleven active manufacturing facilities, seven are owned, two are leased and two consist of multiple buildings, some of which are owned and some of which are leased.
Item 2. Properties. Our corporate headquarters are located at Four Gatehall Drive, Parsippany, NJ 07054. Our manufacturing facilities are generally located near major customer markets and raw materials. Of our twelve active manufacturing facilities, seven are owned, three are leased and two consist of multiple buildings, some of which are owned and some of which are leased.
Removed
Evariste, Québec Owned Storage Facility Bentonville, Arkansas Leased Sales Office ​ ​ (1) Table does not include our manufacturing facility in Portland, Maine, which ceased operations during the fourth quarter of 2021. A sale of the facility, which is subject to customary closing conditions, is expected to close during the first quarter of 2022.
Added
Evariste, Québec Owned Storage Facility Bentonville, Arkansas Leased Sales Office ​ ​ ​ ​ ​ ​ ​
Removed
See Note 18, “Assets Held for Sale and Related Severance and Other Expenses,” to our consolidated financial statements in Part II, Item 8 of this report. ​ ​ ​ ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. The information set forth under the heading “ Legal Proceedings” in Note 14 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. - 29 - Table of Contents PART II
Biggest changeItem 3. Legal Proceedings. The information set forth under the heading “ Legal Proceedings” in Note 14 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. - 30 - Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

15 edited+1 added−0 removed11 unchanged
Biggest changeIn addition, our credit agreement does not permit us to pay dividends unless we maintain: ● a “consolidated interest coverage ratio” (defined as the ratio on a pro forma basis of our adjusted EBITDA for any period of four consecutive fiscal quarters to our consolidated interest expense for such period payable in cash) of not less than 1.75 to 1.00; and ● a “consolidated leverage ratio” (defined as the ratio on a pro forma basis of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA for such period) of not more than 7.00 to 1.00.
Biggest changeIn addition, our credit agreement does not permit us to pay dividends unless we maintain: ● a “consolidated interest coverage ratio” (defined as the ratio on a pro forma basis of our adjusted EBITDA before share-based compensation for any period of four consecutive fiscal quarters to our consolidated interest expense for such period payable in cash) of not less than 1.75 to 1.00; and ● a “consolidated leverage ratio” (defined as the ratio on a pro forma basis of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA before share-based compensation for such period) of not more than 8.00 to 1.00 for the quarter ended October 1, 2022 through the quarter ending September 30, 2023; 7.50 to 1.00 for the quarter ending December 30, 2023; and 7.00 to 1.00 for the quarters ending March 30, 2024 and thereafter.
Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us.
Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness and capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us.
In general, our senior notes indentures restrict our ability to declare and pay dividends on our common stock as follows: ● we may use up to 100% of our excess cash (as defined below) for the period (taken as one accounting period) from and including March 31, 2013 to the end of our most recent fiscal quarter for which internal financial statements are available at the time of such payments, plus certain incremental funds described in the indentures for the payment of dividends so long as the fixed charge coverage ratio for the four most recent fiscal quarters for which internal financial statements are available is not less than 1.6 to 1.0; and - 31 - Table of Contents ● we may not pay any dividends on any dividend payment date if a default or event of default under our indentures has occurred or is continuing.
In general, our senior notes indentures restrict our ability to declare and pay dividends on our common stock as follows: ● we may use up to 100% of our excess cash (as defined below) for the period (taken as one accounting period) from and including March 31, 2013 to the end of our most recent fiscal quarter for which internal - 32 - Table of Contents financial statements are available at the time of such payments, plus certain incremental funds described in the indentures for the payment of dividends so long as the fixed charge coverage ratio for the four most recent fiscal quarters for which internal financial statements are available is not less than 1.6 to 1.0; and ● we may not pay any dividends on any dividend payment date if a default or event of default under our indentures has occurred or is continuing.
Common Stock, the Russell 2000 Index and the S&P Packaged Foods & Meats Index ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/2016 * 12/30/2017 12/29/2018 12/28/2019 1/2/2021 1/1/2022 B&G Foods, Inc.
Common Stock, the Russell 2000 Index and the S&P Packaged Foods & Meats Index ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/30/2017 * 12/29/2018 12/28/2019 1/2/2021 1/1/2022 12/31/2022 B&G Foods, Inc.
Indexes calculated on month-end basis. - 30 - Table of Contents Dividend Policy General Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business.
Indexes calculated on month-end basis. - 31 - Table of Contents Dividend Policy General Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business.
The following table sets forth the dividends per share we have declared in each of the quarterly periods of 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2021 Fiscal 2020 Fourth Quarter ​ $ 0.475 ​ $ 0.475 Third Quarter ​ $ 0.475 ​ $ 0.475 Second Quarter ​ $ 0.475 ​ $ 0.475 First Quarter ​ $ 0.475 ​ $ 0.475 Under U.S. federal income tax law, distributions to holders of our common stock are taxable to the extent they are paid out of current or accumulated earnings and profits.
The following table sets forth the dividends per share we have declared in each of the quarterly periods of 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Fourth Quarter ​ $ 0.190 ​ $ 0.475 Third Quarter ​ $ 0.475 ​ $ 0.475 Second Quarter ​ $ 0.475 ​ $ 0.475 First Quarter ​ $ 0.475 ​ $ 0.475 Under U.S. federal income tax law, distributions to holders of our common stock are taxable to the extent they are paid out of current or accumulated earnings and profits.
Excess cash is calculated as “consolidated cash flow,” as defined in the indentures and under the terms of our credit agreement (which, in each case, allows for certain adjustments and which is equivalent to the term adjusted EBITDA), minus the sum of cash tax expense, cash interest expense, certain capital expenditures, excess tax benefit from issuance of performance share long-term incentive award (LTIA) shares, certain repayment of indebtedness and the cash portion of restructuring charges.
Excess cash is calculated as “consolidated cash flow,” as defined in the indentures and under the terms of our credit agreement (which, in each case, allows for certain adjustments and which is generally equivalent to the term adjusted EBITDA before share-based compensation), minus the sum of cash tax expense, cash interest expense, certain capital expenditures, excess tax benefit from issuance of performance share long-term incentive award (LTIA) shares, certain repayment of indebtedness and the cash portion of restructuring charges.
Performance Graph Set forth below is a line graph comparing the change in the cumulative total shareholder return on our company’s common stock with the cumulative total return of the Russell 2000 Index and the S&P Packaged Foods & Meats Index for the period from December 31, 2016 to January 1, 2022, assuming the investment of $100 on December 31, 2016 and the reinvestment of dividends.
Performance Graph Set forth below is a line graph comparing the change in the cumulative total shareholder return on our company’s common stock with the cumulative total return of the Russell 2000 Index and the S&P Packaged Foods & Meats Index for the period from December 30, 2017 to December 31, 2022, assuming the investment of $100 on December 30, 2017 and the reinvestment of dividends.
Based on U.S. federal income tax laws, B&G Foods has determined that for fiscal 2021 and fiscal 2020, approximately 83.0% and 25.0%, respectively, of distributions paid on common stock were treated as a return of capital and approximately 17.0% and 75.0%, respectively, were treated as a taxable dividend paid from earnings and profits.
Based on U.S. federal income tax laws, B&G Foods has determined that for fiscal 2022 and fiscal 2021, 100.0% and approximately 83.0%, respectively, of distributions paid on common stock were treated as a return of capital and 0.0% and approximately 17.0%, respectively, were treated as a taxable dividend paid from earnings and profits.
According to the records of our transfer agent, we had 425 holders of record of our common stock as of February 24, 2022, including Cede & Co. as nominee for The Depository Trust Company (DTC).
According to the records of our transfer agent, we had 489 holders of record of our common stock as of February 23, 2023, including Cede & Co. as nominee for The Depository Trust Company (DTC).
Recent Sales of Unregistered Securities We did not issue any unregistered securities in fiscal 2021. Issuer Purchases of Equity Securities Not applicable. ​ Item 6. [Reserved]
Recent Sales of Unregistered Securities We did not issue any unregistered securities in fiscal 2022. Issuer Purchases of Equity Securities Not applicable. ​ Item 6. [Reserved] - 33 - Table of Contents
We have paid dividends every quarter since our initial public offering in October 2004. For fiscal 2021 and fiscal 2020, we had cash flows from operating activities of $93.9 million and $281.5 million, respectively, and distributed $122.9 million and $121.9 million as dividends, respectively.
We have paid dividends every quarter since our initial public offering in October 2004. For fiscal 2022 and fiscal 2021, we had cash flows from operating activities of $6.0 million and $93.9 million, respectively, and distributed $133.4 million and $122.9 million as dividends, respectively.
Our board of directors is free to depart from or change our dividend policy at any time and could do so, for example, if it was to determine that we have insufficient cash to take advantage of growth opportunities.
Our board of directors is free to depart from or change our dividend policy at any time and could do so, for example, if it was to determine that we have insufficient cash to fund capital expenditure or working capital needs, reduce leverage or ensure compliance with our maximum consolidated leverage ratio under our credit agreement, or take advantage of growth opportunities.
At our current dividend rate of $1.90 per share per annum, we expect our aggregate dividend payments in 2022 to be approximately $130.6 million.
Based on our current intended dividend rate of $0.76 per share per annum and our current number of shares outstanding, we expect our aggregate dividend payments in 2023 to be approximately $54.5 million.
(NYSE: BGS) ​ $ 100.00 ​ 84.52 ​ 77.00 ​ 50.04 ​ 84.79 ​ 99.75 Russell 2000 Index ​ $ 100.00 ​ 114.65 ​ 102.02 ​ 128.06 ​ 153.62 ​ 176.39 S&P Packaged Foods & Meats Index ​ $ 100.00 ​ 101.35 ​ 82.30 ​ 107.66 ​ 112.54 ​ 127.26 * $100 invested on December 31, 2016 in B&G Foods’ common stock or index, including reinvestment of dividends.
(NYSE: BGS) ​ $ 100.00 ​ 91.10 ​ 59.20 ​ 100.32 ​ 118.02 ​ 46.50 Russell 2000 Index ​ $ 100.00 ​ 88.99 ​ 111.70 ​ 134.00 ​ 153.85 ​ 122.41 S&P Packaged Foods & Meats Index ​ $ 100.00 ​ 81.20 ​ 106.23 ​ 111.04 ​ 125.56 ​ 137.34 * $100 invested on December 30, 2017 in B&G Foods’ common stock or index, including reinvestment of dividends.
Added
Beginning with the dividend payment declared on November 8, 2022 and paid on January 30, 2023, the current intended dividend rate for our common stock was reduced from $1.90 per share per annum to $0.76 per share per annum.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. ​ [ Reserved] ​ 32 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 32 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk ​ 51 Item 8. ​ Financial Statements and Supplementary Data ​ 53
Biggest changeItem 6. ​ [ Reserved] ​ 33 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 34 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk ​ 50 Item 8. ​ Financial Statements and Supplementary Data ​ 52

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

120 edited+34 added−61 removed69 unchanged
Biggest changeA reconciliation of EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses to net income and to net cash provided by operating activities for fiscal 2021 and fiscal 2020, along with the components of EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses, follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2021 Fiscal 2020 Net income ​ $ 67,363 ​ $ 131,988 Income tax expense ​ 26,291 ​ 45,374 Interest expense, net ​ 106,889 ​ 101,634 Depreciation and amortization ​ 82,888 ​ 63,701 EBITDA ​ 283,431 ​ 342,697 Acquisition/divestiture-related and non-recurring expenses (1) ​ 32,504 ​ 17,227 Amortization of acquisition-related inventory step-up (2) ​ 5,054 ​ 1,323 Accrual for multi-employer pension plan withdrawal liability (3) ​ ​ 13,907 ​ ​ — Impairment of intangible assets (4) ​ 23,088 ​ — Adjusted EBITDA ​ 357,984 ​ 361,247 COVID-19 expenses (5) ​ ​ 4,650 ​ 13,521 Adjusted EBITDA before COVID-19 expenses ​ ​ 362,634 ​ ​ 374,768 Income tax expense ​ (26,291) ​ (45,374) Interest expense, net ​ (106,889) ​ (101,634) Acquisition/divestiture-related and non-recurring expenses (1) ​ (32,504) ​ (17,227) Amortization of acquisition-related inventory step-up (2) ​ (5,054) ​ (1,323) Accrual for multi-employer pension plan withdrawal liability (3) ​ ​ (13,907) ​ — Net loss/(gain) on sales and disposals of property, plant and equipment ​ 775 ​ (50) Deferred income taxes ​ 7,269 ​ 42,613 Amortization of deferred debt financing costs and bond discount/premium ​ 4,606 ​ 4,691 Share-based compensation expense ​ 5,383 ​ 10,618 Changes in assets and liabilities, net of effects of business combinations ​ (97,494) ​ 27,916 Net cash provided by operating activities ​ $ 93,878 ​ $ 281,477 (1) Acquisition/divestiture-related and non-recurring expenses for fiscal 2021 of $32.5 million primarily includes acquisition and integration expenses for the Crisco acquisition, expenses for the closure and pending sale of our Portland, Maine manufacturing facility, the re-alignment of certain distribution facilities and other cost savings initiatives, expenses related to the transition of our chief executive officer, and other non-recurring expenses.
Biggest changeReconciliations of net (loss) income and net cash provided by operating activities to EBITDA and adjusted EBITDA for fiscal 2022 and fiscal 2021 along with the components of EBITDA and adjusted EBITDA follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Net (loss) income ​ $ (11,370) ​ $ 67,363 Income tax (benefit) expense ​ ​ (7,537) ​ ​ 26,291 Interest expense, net ​ ​ 124,915 ​ ​ 106,889 Depreciation and amortization ​ ​ 80,528 ​ ​ 82,888 EBITDA ​ ​ 186,536 ​ ​ 283,431 Acquisition/divestiture-related and non-recurring expenses (1) ​ ​ 12,921 ​ ​ 32,504 Gain on sales of assets, net of facility closure costs (2) ​ ​ (4,928) ​ ​ — Amortization of acquisition-related inventory step-up (3) ​ ​ — ​ ​ 5,054 Accrual for multi-employer pension plan withdrawal liability (4) ​ ​ — ​ ​ 13,907 Impairment of assets held for sale (5) ​ ​ 106,434 ​ ​ — Impairment of intangible assets (6) ​ ​ — ​ ​ 23,088 Adjusted EBITDA ​ $ 300,963 ​ $ 357,984 ​ - 42 - Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Net cash provided by operating activities ​ $ 5,963 ​ $ 93,878 Income tax (benefit) expense ​ ​ (7,537) ​ ​ 26,291 Interest expense, net ​ ​ 124,915 ​ ​ 106,889 Net gain/(loss) on sales and disposals of property, plant and equipment ​ ​ 7,086 ​ ​ (775) Deferred income taxes ​ ​ 26,897 ​ ​ (7,269) Amortization of deferred debt financing costs and bond discount/premium ​ ​ (4,723) ​ ​ (4,606) Share-based compensation expense ​ ​ (3,917) ​ ​ (5,383) Changes in assets and liabilities, net of effects of business combinations ​ ​ 144,286 ​ ​ 97,494 Impairment of assets held for sale (5) ​ ​ (106,434) ​ ​ — Impairment of intangible assets (6) ​ ​ — ​ ​ (23,088) EBITDA ​ ​ 186,536 ​ ​ 283,431 Acquisition/divestiture-related and non-recurring expenses (1) ​ ​ 12,921 ​ ​ 32,504 Gain on sales of assets, net of facility closure costs (2) ​ ​ (4,928) ​ ​ — Amortization of acquisition-related inventory step-up (3) ​ ​ — ​ ​ 5,054 Accrual for multi-employer pension plan withdrawal liability (4) ​ ​ — ​ ​ 13,907 Impairment of assets held for sale (5) ​ ​ 106,434 ​ ​ — Impairment of intangible assets (6) ​ ​ — ​ ​ 23,088 Adjusted EBITDA ​ $ 300,963 ​ $ 357,984 ​ Adjusted Net Income and Adjusted Diluted Earnings Per Share.
The U.S. Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on affiliate payments.
Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on affiliate payments.
Other Income. Other income includes income or expense resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes and the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs. Non-GAAP Financial Measures Certain disclosures in this report include non-GAAP financial measures.
Other income includes income or expense resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes and the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs. Non-GAAP Financial Measures Certain disclosures in this report include non-GAAP financial measures.
Adjusted Net Income and Adjusted Diluted Earnings Per Share. Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. We define adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share adjusted for certain items that affect comparability.
Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. We define adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share adjusted for certain items that affect comparability.
In addition, if there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.
If there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.
We recognize the benefit of an uncertain tax position that we have taken or expect to take on the income tax returns we file if it is more likely than not that such tax position will be sustained based upon its technical merits. See “U.S. Tax Act and U.S. CARES Act” below for a discussion of the U.S.
We recognize the benefit of an uncertain tax position that we have taken or expect to take on the income tax returns if it is more likely than not that such tax position will be sustained based upon its technical merits. See “U.S. Tax Act and U.S. CARES Act” below for a discussion of the U.S.
Excluding the negative impact of a $13.9 million accrual for the present value of a multi-employer pension plan withdrawal liability in connection with the closure and pending sale of our Portland, Maine manufacturing facility, $14.6 million of acquisition/divestiture-related and non-recurring expenses, and $5.1 million of amortization of acquisition-related inventory fair value step-up included in cost of goods sold during fiscal 2021, our gross profit would have been $470.6 million, or 22.9% of net sales.
Excluding the negative impact of a $13.9 million accrual for the estimated present value of a multi-employer pension plan withdrawal liability in connection with the sale and closure of our Portland, Maine manufacturing facility, $14.6 million of acquisition/divestiture-related expenses, and $5.1 million of amortization of acquisition-related inventory fair value step-up and non-recurring expenses included in cost of goods sold during fiscal 2021, our gross profit would have been $470.6 million, or 22.9% of net sales.
In addition, if input costs begin to decline, customers may look for price reductions in situations where we have locked into purchases at higher costs. During the past three years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs.
In addition, if input costs begin to decline, customers may look for price reductions in situations where we have locked into purchases at higher costs. During the past several years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs.
However, our annual impairment tests for fiscal 2021 resulted in our company recording non-cash impairment charges to intangible trademark assets for the SnackWell’s , Static Guard , Molly McButter and Farmwise brands of $23.1 million in the aggregate during the fourth quarter of fiscal 2021, which is recorded in “Impairment of intangible assets” in the accompanying consolidated statement of operations for fiscal 2021.
In addition, our annual impairment tests for fiscal 2021 resulted in our company recording non-cash impairment charges to intangible trademark assets for the SnackWell’s , Static Guard , Molly McButter and Farmwise brands of $23.1 million in the aggregate during the fourth quarter of fiscal 2021, which is recorded in “Impairment of intangible assets” in the accompanying consolidated statement of operations for fiscal 2021.
During fiscal 2021 and fiscal 2020, our net sales to customers in foreign countries represented approximately 8.3% and 7.8%, respectively, of our total net sales. We also purchase a significant majority of our maple syrup requirements from suppliers located in Québec, Canada.
During fiscal 2022 and fiscal 2021, our net sales to customers in foreign countries represented approximately 7.8% and 8.3%, respectively, of our total net sales. We also purchase a significant majority of our maple syrup requirements from suppliers located in Québec, Canada.
These regulations are to be applied retroactively and did not materially impact our 2021, 2020 or 2019 tax rates. See Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report.
These regulations are to be applied retroactively and did not materially impact our 2022, 2021 or 2020 tax rates. See Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report.
Changes in interest rates and the market value of the securities held by the plans could materially change, positively or negatively, the funded status of the plans and affect the level of pension expense and required contributions in fiscal 2022 and beyond.
Changes in interest rates and the market value of the securities held by the plans could materially change, positively or negatively, the funded status of the plans and affect the level of pension expense and required contributions in fiscal 2023 and beyond.
Critical Accounting Policies; Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial - 35 - Table of Contents statements and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Policies; Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2021 and fiscal 2020 and is expected to have in fiscal 2022 and beyond on our interest expense deductions and our cash taxes.
Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2022 and fiscal 2021 and is expected to have in fiscal 2023 and beyond on our interest expense deductions and our cash taxes.
We refer to these acquisitions in this report as the “ Crisco acquisition” and the “ Clabber Girl acquisition.” These acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired businesses are included in our consolidated financial statements from the date of acquisition.
We refer to these acquisitions in this report as the “Yuma acquisition” and the “ Crisco acquisition.” These acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired businesses are included in our consolidated financial statements from the date of acquisition.
Dividend Policy For a discussion of our dividend policy, see the information set forth under the heading “Dividend Policy” in Part II, Item 5 of this report. Acquisitions Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions.
Dividend Policy For a discussion of our dividend policy, see the information set forth under the heading “Dividend Policy” in Part II, Item 5 of this report. - 47 - Table of Contents Acquisitions Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions.
There are various factors that may cause tax assumptions to change in the future, and we may have to record a valuation allowance against these deferred tax assets. See “—Liquidity and Capital Resources – Cash Flows – Cash Income Tax Payments ” and Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report.
There are various factors that may cause tax assumptions to change in the future, and we may have to record a valuation allowance against these deferred tax assets. See “—Liquidity and Capital Resources— Cash Flows–Cash Income Tax Payments” and Note 10, “Income Taxes,” to our consolidated financial statements in Part II, Item 8 of this report. The U.S.
Results of Operations The following table sets forth the percentages of net sales represented by selected items for fiscal 2021 and fiscal 2020 reflected in our consolidated statements of operations.
Results of Operations The following table sets forth the percentages of net sales represented by selected items for fiscal 2022 and fiscal 2021 reflected in our consolidated statements of operations.
During fiscal 2021, our gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials and transportation. We expect input cost inflation will continue to have a significant industry-wide impact during fiscal 2022.
During fiscal 2022, our gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials and transportation. We expect input cost inflation will continue to have a significant industry-wide impact into fiscal 2023.
Other income for fiscal 2021 primarily includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $4.4 million and the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars of $0.1 million.
Other income for fiscal 2021 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $4.4 million and the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars of $0.1 million. Income Tax (Benefit) Expense.
As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and - 33 - Table of Contents new product innovation to protect or increase revenues, market share and brand significance.
As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance.
All assumptions used in our impairment evaluations for goodwill and indefinite-lived intangible assets, such as forecasted growth rates and discount rate, are based on the best available market information and are consistent with our - 37 - Table of Contents internal forecasts and operating plans. We believe these assumptions to be reasonable, but they are inherently uncertain.
All assumptions used in our impairment evaluations for goodwill and indefinite-lived intangible assets, such as forecasted growth rates and discount rate, are based on the best available market information and are consistent with our internal forecasts and operating plans. We believe these assumptions to be reasonable, but they are inherently uncertain.
We completed our annual impairment tests for fiscal 2020 with no adjustments to the carrying values of goodwill and indefinite-lived intangible assets.
We completed our annual impairment tests for fiscal 2022 and fiscal 2020 with no adjustments to the carrying values of indefinite-lived intangible assets.
CARES Act,” and the impact both have had, and may have, on our business and financial results. Pension Expense We maintain four company-sponsored defined benefit pension plans covering approximately 32.7% of our employees. Our funding policy for company-sponsored defined benefit pension plans is to contribute annually not less than the amount recommended by our actuaries.
CARES Act,” and the impact both have had, and may have, on our business and financial results. Pension Expense We maintain four company-sponsored defined benefit pension plans covering approximately 23.9% of our employees. Our funding policy for company-sponsored defined benefit pension plans is to contribute annually not less than the amount recommended by our actuaries.
The timing and amount of any sales will be determined by a variety of factors considered by us. We used the net proceeds from shares sold under the ATM equity offering program during fiscal 2021 to repay revolving credit loans, to pay offering fees and expenses, and for general corporate purposes.
The timing and amount of any sales will be determined by a variety of factors considered by us. - 48 - Table of Contents We used the net proceeds from shares sold under the ATM equity offering program during fiscal 2022 and fiscal 2021 to repay revolving credit loans, to pay offering fees and expenses, and for general corporate purposes.
Rather, EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are potential indicators of an entity’s ability to fund these cash requirements. EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above.
Rather, EBITDA and adjusted EBITDA are potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above.
EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are not complete net cash flow measures because EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends.
EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends.
We also present EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures.
We also present EBITDA and adjusted EBITDA because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures.
We intend to use the net proceeds from any future sales of our common stock under the ATM offering for general corporate purposes, which could include, among other things, repayment, refinancing, redemption or repurchase of long-term debt or possible acquisitions.
We intend to use the net proceeds from any future sales of our common stock under the ATM offering for general corporate purposes, which could include, among other things, repayment, refinancing, redemption or repurchase of long-term debt or possible acquisitions. Future Capital Needs We are highly leveraged.
We use EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs.
We use EBITDA and adjusted EBITDA in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs.
Includes trademark values for multiple brands acquired as part of the acquisition. (2) The Clabber Girl acquisition was completed on May 15, 2019. Includes trademark values for multiple brands acquired as part of the acquisition.
Includes trademark values for multiple brands acquired as part of the acquisition. - 37 - Table of Contents (2) The Clabber Girl acquisition was completed on May 15, 2019. Includes trademark values for multiple brands acquired as part of the acquisition.
Our consolidated effective tax rate was approximately 28.1% and 25.6% for fiscal 2021 and fiscal 2020, respectively. We also expect to realize a cash tax benefit for future bonus depreciation on certain business additions, which, together with the reduced income tax rate, we expect to reduce our cash income tax payments. The U.S.
Our consolidated effective tax rate was approximately 39.9% and 28.1% for fiscal 2022 and fiscal 2021, respectively. We also expect to realize a cash tax benefit for future bonus depreciation on certain business additions, which, together with the reduced income tax rate, we expect to reduce our cash income tax payments. The U.S.
We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which are being discontinued. Certain Farmwise branded products have been transitioned to the Green Giant brand. As of January 1, 2022, we had $1,685.1 million of indefinite-lived intangible assets recorded in our consolidated balance sheet.
We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which have been discontinued. Certain Farmwise branded products have been transitioned to the Green Giant brand. As of December 31, 2022, we had $1,574.1 million of indefinite-lived intangible assets recorded in our consolidated balance sheet.
In addition, any significant decline in our market capitalization, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill.
In addition, any significant decline in our market capitalization or changes in discount rates or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of our goodwill.
We financed the Crisco acquisition, completed in December 2020, with revolving loans under our existing credit facility, a portion of which we subsequently refinanced with add-on tranche B term loans. We financed the Farmwise acquisition, completed in February 2020, with cash on hand.
We financed the Yuma acquisition, completed in May 2022, with cash on hand and revolving loans under our existing credit facility. We financed the Crisco acquisition, completed in December 2020, with revolving loans under our existing credit facility, a portion of which we subsequently refinanced with add-on tranche B term loans.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, filed with the SEC on March 2, 2021. Liquidity and Capital Resources Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, “Dividend Policy” below.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, filed with the SEC on March 1, 2022. - 46 - Table of Contents Liquidity and Capital Resources Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, “Dividend Policy” below.
The table below sets forth the book value as of January 1, 2022 of the indefinite-lived trademarks for each of our brands whose net sales equaled or exceeded 3% of our fiscal 2021 or fiscal 2020 net sales and for “all other brands” in the aggregate (in thousands): ​ ​ ​ ​ ​ January 1, 2022 Brand: ​ ​ Green Giant ​ $ 422,000 Crisco ​ ​ 322,445 Dash ​ ​ 189,000 Spices & Seasonings (1) ​ ​ 65,200 Ortega ​ ​ 32,339 Cream of Wheat ​ 27,000 Clabber Girl (2) ​ ​ 19,600 Maple Grove Farms of Vermont ​ 11,627 All other brands ​ 595,934 Total indefinite-lived trademarks ​ $ 1,685,145 (1) The spices & seasonings acquisition was completed on November 21, 2016.
The table below sets forth the book value as of December 31, 2022 of the indefinite-lived trademarks for each of our brands whose net sales equaled or exceeded 3% of our fiscal 2022 or fiscal 2021 net sales and for “all other brands” in the aggregate (in thousands): ​ ​ ​ ​ ​ December 31, 2022 Brand: ​ ​ Green Giant ​ $ 422,000 Crisco ​ ​ 321,340 Dash ​ ​ 189,000 Spices & Seasonings (1) ​ ​ 65,200 Ortega ​ ​ 32,339 Cream of Wheat ​ 27,000 Clabber Girl (2) ​ ​ 19,600 Maple Grove Farms of Vermont ​ 11,627 All other brands ​ 486,034 Total indefinite-lived trademarks ​ $ 1,574,140 (1) The spices & seasonings acquisition was completed on November 21, 2016.
As a result, reports used by internal management during monthly operating reviews feature the EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses metrics.
As a result, reports used by internal management during monthly operating reviews feature the EBITDA and adjusted EBITDA metrics.
Tax Act are broad and complex and we continue to examine the impact the U.S. Tax Act may have on our business and financial results. The U.S. Tax Act contains provisions with separate effective dates but was generally effective for taxable years beginning after December 31, 2017.
Internal Revenue Code of 1986, as amended. The changes in the U.S. Tax Act are broad and complex and we continue to examine the impact the U.S. Tax Act may have on our business and financial results. The U.S. Tax Act contains provisions with separate effective dates but was generally effective for taxable years beginning after December 31, 2017.
The comparisons of financial results are not necessarily indicative of future results: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2021 ​ Fiscal 2020 Statement of Operations Data: ​ ​ ​ ​ ​ ​ Net sales 100.0 % ​ 100.0 % Cost of goods sold 78.7 % ​ 75.5 % Gross profit 21.3 % ​ 24.5 % ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ Selling, general and administrative expenses 9.5 % ​ 9.5 % Amortization expense ​ 1.1 % ​ 1.0 % Impairment of intangible assets ​ 1.2 % ​ — % Operating income 9.5 % ​ 14.0 % ​ ​ ​ ​ ​ ​ ​ Other income and expenses: ​ ​ ​ ​ ​ ​ Interest expense, net 5.1 % ​ 5.1 % Other income ​ (0.2) % ​ (0.1) % Income before income tax expense 4.6 % ​ 9.0 % Income tax expense 1.3 % ​ 2.3 % Net income 3.3 % ​ 6.7 % As used in this section, the terms listed below have the following meanings: Net Sales.
The comparisons of financial results are not necessarily indicative of future results: ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 ​ Fiscal 2021 Statement of Operations Data: ​ ​ ​ ​ ​ ​ Net sales 100.0 % ​ 100.0 % Cost of goods sold 81.1 % ​ 78.7 % Gross profit 18.9 % ​ 21.3 % ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ Selling, general and administrative expenses 8.8 % ​ 9.5 % Amortization expense ​ 0.9 % ​ 1.1 % Gain on sales of assets ​ (0.3) % ​ — % Impairment of assets held for sale ​ 4.9 % ​ — % Impairment of intangible assets ​ — % ​ 1.2 % Operating income 4.6 % ​ 9.5 % ​ ​ ​ ​ ​ ​ ​ Other (income) and expenses: ​ ​ ​ ​ ​ ​ Interest expense, net 5.8 % ​ 5.1 % Other income ​ (0.3) % ​ (0.2) % (Loss) income before income tax (benefit) expense (0.9) % ​ 4.6 % Income tax (benefit) expense (0.4) % ​ 1.3 % Net (loss) income (0.5) % ​ 3.3 % As used in this section, the terms listed below have the following meanings: Net Sales.
Other income for fiscal 2020 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $2.6 million and the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars of less than $0.1 million. Income Tax Expense.
Other income for fiscal 2022 primarily includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $7.4 million and the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars of less than $0.1 million.
In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives.
In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. Freight rates increased significantly during the fourth quarter of 2020 throughout fiscal 2021 and fiscal 2022. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives.
(4) During the fourth quarter of 2021, we recorded impairment charges of $23.1 million related to intangible trademark assets for the SnackWell’s , Static Guard , Molly McButter and Farmwise brands. We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which are being discontinued.
(6) During the fourth quarter of 2021, we recorded impairment charges of $23.1 million (or $17.4 million, net of tax) related to intangible trademark assets for the SnackWell’s , Static Guard , Molly McButter and Farmwise brands. We partially impaired the Static Guard and Molly McButter brands, and we fully impaired the SnackWell’s and Farmwise brands, which have been discontinued.
We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt.
We define EBITDA as net income (loss) before net interest expense, income taxes, and depreciation and amortization.
CARES Act, among other things, includes provisions related to net operating loss carryback periods, modifications to the interest deduction limitation and technical corrections to tax depreciation for qualified improvement property. The U.S.
CARES Act,” was signed into law. The U.S. CARES Act, among other things, includes provisions related to net - 39 - Table of Contents operating loss carryback periods, modifications to the interest deduction limitation and technical corrections to tax depreciation for qualified improvement property. The U.S.
CARES Act” above for a discussion of the impact of the tax legislation on income tax expense. Fiscal 2020 Compared to Fiscal 2019 For a discussion of fiscal 2020 compared to fiscal 2019, please refer to our 2020 Annual Report on Form 10-K, Part II, Item 7.
See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact of the tax legislation on income tax (benefit) expense. Fiscal 2021 Compared to Fiscal 2020 For a discussion of fiscal 2021 compared to fiscal 2020, please refer to our 2021 Annual Report on Form 10-K, Part II, Item 7.
We define adjusted EBITDA before COVID-19 expenses as adjusted EBITDA adjusted for COVID-19 expenses. Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations.
Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations.
See Note 16, “Net Sales by Brand,” to our consolidated financial statements in Part II, Item 8 of this report, for detailed information regarding total net sales by brand for fiscal 2021 and fiscal 2020 for each of our brands whose net sales equaled or exceeded 3% of our total net sales for those periods and for all other brands in the aggregate. - 45 - Table of Contents The following table sets forth the most significant base business net sales increases and decreases by brand for those brands for fiscal 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 vs. 2020 ​ ​ ​ 2021 vs. 2019 ​ ​ ​ Base Business ​ ​ ​ Base Business ​ ​ ​ Net Sales Increase (Decrease) ​ ​ ​ Net Sales Increase (Decrease) ​ ​ Dollars (in millions) Percentage ​ ​ ​ Dollars (in millions) Percentage ​ Brand: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Spices & Seasonings (1) ​ $ 8.0 3.1 % ​ ​ $ 20.1 ​ 8.1 % Maple Grove Farms of Vermont ​ ​ 4.5 ​ 5.9 % ​ ​ ​ 10.6 ​ 15.1 % Dash ​ ​ 0.4 0.5 % ​ ​ ​ 13.8 ​ 23.6 % Green Giant - frozen ​ (57.6) (14.0) % ​ ​ ​ (10.2) ​ (2.8) % Green Giant - shelf stable (2) ​ ​ (37.5) (16.4) % ​ ​ ​ 27.3 ​ 16.7 % Clabber Girl (3) ​ ​ (17.9) (18.4) % ​ ​ ​ 0.4 ​ 0.7 % Ortega ​ ​ (7.1) (4.5) % ​ ​ ​ 10.8 ​ 7.6 % Cream of Wheat ​ ​ (5.5) (7.6) % ​ ​ ​ 7.4 ​ 12.4 % All other brands ​ (49.4) (8.5) % ​ ​ 5.7 ​ 1.1 % Base business net sales (decrease) increase $ (162.1) (8.3) % ​ ​ $ 85.9 5.2 % (1) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016.
See Note 16, “Net Sales by Brand,” to our consolidated financial statements in Part II, Item 8 of this report, for detailed information regarding total net sales by brand for fiscal 2022 and fiscal 2021 for each of our brands whose net sales equaled or exceeded 3% of our total net sales for those periods and for all other brands in the aggregate. - 44 - Table of Contents The following table sets forth the most significant base business net sales increases and decreases by brand for those brands for fiscal 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 vs. 2021 ​ ​ ​ Base Business ​ ​ ​ Net Sales Increase (Decrease) ​ ​ Dollars (in millions) Percentage ​ Brand: ​ ​ ​ ​ ​ ​ Crisco ​ $ 78.5 ​ 26.8 % Clabber Girl ​ ​ 17.5 22.0 % Cream of Wheat ​ ​ 14.1 21.0 % Maple Grove Farms of Vermont ​ ​ 3.2 ​ 4.0 % Ortega ​ ​ 3.1 2.0 % Green Giant - shelf-stable (1) ​ ​ (18.8) (9.9) % Spices & Seasonings (2) ​ ​ (10.6) (3.9) % Dash ​ ​ (6.8) (9.5) % Green Giant - frozen (3) ​ (0.7) (0.2) % All other brands ​ 27.5 5.6 % Base business net sales increase $ 107.0 5.2 % (1) Includes net sales of the Le Sueur brand.
These challenges, which are discussed above before Part I of this report under the heading “Forward-Looking Statements” and in Part I, Item 1A, “Risk Factors” include: Fluctuations in Commodity Prices and Production and Distribution Costs.
We are subject to a number of challenges that may adversely affect our businesses. These challenges, which are discussed above before Part I of this report under the heading “Forward-Looking Statements” and in Part I, Item 1A, “Risk Factors” include: Fluctuations in Commodity Prices and Production and Distribution Costs.
(2) Current liabilities includes amounts due to non-guarantor subsidiaries of less than $0.1 million and $0.2 million as of January 1, 2022 and January 2, 2021, respectively. ​ ​ ​ ​ ​ Fiscal 2021 Net sales $ 1,933,665 Gross profit ​ 424,501 Operating income ​ 197,831 Income before income tax expense ​ 95,406 Net income $ 68,951 ​
(2) Current liabilities includes amounts due to non-guarantor subsidiaries of $7.7 million and less than $0.1 million as of December 31, 2022 and January 1, 2022, respectively. ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2022 Fiscal 2021 Net sales ​ $ 2,038,048 ​ $ 1,933,665 Gross profit ​ ​ 396,830 ​ ​ 424,501 Operating income ​ ​ 84,431 ​ ​ 197,831 (Loss) income before income tax (benefit) expense ​ ​ (33,104) ​ ​ 95,406 Net (loss) income ​ $ (21,292) ​ $ 68,951 ​
We did not have any impairment of intangible assets during fiscal 2020. See Note 6, “Goodwill and Other Intangible Assets” to our consolidated financial statements for a more detailed description of the impairment of intangible assets in fiscal 2021. Operating Income.
See Note 6, “Goodwill and Other Intangible Assets” to our consolidated financial statements for a more detailed description of the impairment of intangible assets in fiscal 2021.
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services.
The core principle of authoritative guidance from the Financial Accounting Standards Board (FASB) related to the recognition of revenue from contracts with customers is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for the goods or services.
Since 1996, we have successfully acquired and integrated more than 50 brands into our company. Over the last three years, we have completed two material acquisitions. Most recently, on December 1, 2020, we acquired the Crisco oils and shortening business from The J.M. Smucker Company and certain of its affiliates.
Since 1996, we have successfully acquired and integrated more than 50 brands into our company. Over the last three years, we have completed two material acquisitions. Most recently, on May 5, 2022, we acquired the frozen vegetable manufacturing operations of Growers Express, LLC. On December 1, 2020, we acquired the Crisco oils and shortening business from The J.M.
The increase was composed of increases in warehousing expenses of $12.0 million, acquisition/divestiture-related and non-recurring expenses of $4.3 million, and consumer marketing expenses of $2.7 million, partially offset by decreases in selling expenses of $6.0 million and general and administrative expenses of $3.0 million.
The decrease was composed of decreases in acquisition/divestiture-related and non-recurring expenses of $11.9 million and consumer marketing expenses of $2.2 million, partially offset by increases in selling expenses of $5.0 million, general and administrative expenses of $3.1 million and warehousing expenses of $0.2 million.
Calculating our fair value for these purposes requires significant estimates and assumptions by management, including future cash flows consistent with management’s expectations, annual sales growth rates, and certain assumptions underlying a discount rate based on available market data.
Calculating the fair values of goodwill and indefinite-lived intangible assets for these purposes requires significant estimates and assumptions by management, including future cash flows consistent with management’s - 36 - Table of Contents expectations, annual sales growth rates, and certain assumptions underlying a discount rate based on available market data.
We generated $112.5 million in gross proceeds, or $30.44 per share from the sales and paid commissions to the sales agents of approximately $2.2 million and incurred other fees and expenses of approximately $0.4 million.
We generated $66.6 million in gross proceeds, or $23.33 per share, from the sales, paid commissions to the sales agents of approximately $1.3 million and incurred other fees and expenses of approximately $0.2 million.
We anticipate higher raw materials cost increases for fiscal 2022. We are currently locked into our supply and prices for a majority of our most significant raw material commodities (excluding, among others, maple syrup and oils) through fiscal 2022 and for most of our needs for maple syrup and oils through the first quarter of 2022.
We are currently locked into our supply and prices for a majority of our most significant raw material - 34 - Table of Contents commodities (excluding, among others, oils) through the first half of fiscal 2023, and for most of our needs for oils through the first quarter of fiscal 2023.
The decrease in base business net sales reflected a decrease in unit volume of $222.6 million, partially offset by an increase in net pricing and the impact of product mix of $54.3 million, or 2.8% of base business net sales, and the positive impact of foreign currency of $6.2 million.
The increase in base business net sales reflected an increase in net pricing and the impact of product mix of $231.4 million, or 11.3% of base business net sales, partially offset by a decrease in unit volume of $119.9 million and the negative impact of foreign currency of $4.5 million.
Tax Act also limits the deduction for net interest expense (including the treatment of depreciation and other deductions in arriving at adjusted taxable income) incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income.
Tax Act also limits the deduction for net interest expense (including the treatment of depreciation and other deductions in arriving at adjusted taxable income) incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which we refer to as the “U.S.
The impact of future acquisitions, whether financed with additional indebtedness or otherwise, may have a material impact on our liquidity and capital resources. - 48 - Table of Contents Debt See Note 7, “Long-Term Debt,” to our consolidated financial statements in Part II, Item 8 of this report for a description of our senior secured credit agreement, including our revolving credit facility and tranche B term loans, our 5.25% senior notes due 2025, and our 5.25% senior notes due 2027.
Debt See Note 7, “Long-Term Debt,” to our consolidated financial statements in Part II, Item 8 of this report for a description of our senior secured credit agreement, including our revolving credit facility and tranche B term loans, our 5.25% senior notes due 2025, and our 5.25% senior notes due 2027.
However, EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.
Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.
As a result of the foregoing, operating income decreased $80.3 million, or 29.1%, to $196.1 million for fiscal 2021 from $276.4 million for fiscal 2020. Operating income expressed as a percentage of net sales decreased to9.5% in fiscal 2021 from 14.0% in fiscal 2020. Net Interest Expense.
As a result of the foregoing, operating income decreased $97.5 million, or 49.7%, to $98.6 million for fiscal 2022 from $196.1 million for fiscal 2021. Operating income expressed as a percentage of net sales decreased to 4.6% in fiscal 2022 from 9.5% in fiscal 2021. Net Interest Expense.
We are attempting to mitigate the impact of inflation on our gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures.
We are attempting to mitigate the impact of inflation on our gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We also announced several rounds of list price increases in 2021 and 2022. However, increases in the prices we charge our customers generally lag behind rising input costs.
We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S. and foreign locations. Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price attributable to a number of factors.
We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S. and foreign locations.
Goodwill and Other Intangible Assets Our total assets include substantial goodwill and indefinite-lived intangible assets (trademarks). These assets are tested for impairment at least annually and whenever events or circumstances occur indicating that goodwill or indefinite-lived intangible assets might be impaired. We perform the annual impairment tests as of the last day of each fiscal year.
Goodwill and Other Intangible Assets Our total assets include substantial goodwill and indefinite-lived intangible assets (trademarks). Goodwill and indefinite-lived intangible assets and goodwill are not amortized. As a result, these assets are tested for impairment through qualitative and quantitative assessments at least annually and whenever events or circumstances occur indicating that goodwill or indefinite-lived intangible assets might be impaired.
A guarantor subsidiary’s guarantee will be automatically released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that guarantor subsidiary (including by way of merger or consolidation) to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods under the applicable indenture, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (2) in connection with any sale or other disposition of all of the capital stock of that guarantor subsidiary to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (3) if B&G Foods designates any “restricted subsidiary” that is a guarantor subsidiary to be an “unrestricted subsidiary” in accordance with the applicable provisions of the indenture; (4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the applicable indenture; (5) if such guarantor subsidiary no longer constitutes a domestic subsidiary; or (6) if it is determined in good faith by B&G Foods that a liquidation, dissolution or merger out of existence of such guarantor subsidiary is in the best interests of B&G Foods and is not materially disadvantageous to the holders of the senior notes. - 50 - Table of Contents The following tables present summarized unaudited financial information on a combined basis for B&G Foods and each of the guarantor subsidiaries of the senior notes described above after elimination of (1) intercompany transactions and balances among B&G Foods and the guarantor subsidiaries and (2) investments in any subsidiary that is a non-guarantor (in thousands): ​ ​ ​ ​ ​ ​ ​ January 1, January 2, ​ 2022 ​ 2021 Current assets (1) $ 752,685 ​ $ 648,850 Non-current assets ​ 2,921,036 ​ ​ 2,979,902 Current liabilities (2) ​ 225,554 ​ ​ 223,644 Non-current liabilities $ 2,663,841 ​ $ 2,960,040 (1) Current assets includes amounts due from non-guarantor subsidiaries of $46.6 million and $21.5 million as of January 1, 2022 and January 2, 2021, respectively.
A guarantor subsidiary’s guarantee will be automatically released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that guarantor subsidiary (including by way of merger or consolidation) to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods under the applicable indenture, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (2) in connection with any sale or other disposition of all of the capital stock of that guarantor subsidiary to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (3) if B&G Foods designates any “restricted subsidiary” that is a guarantor subsidiary to be an “unrestricted subsidiary” in accordance with the applicable provisions of the indenture; (4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the applicable indenture; (5) if such guarantor subsidiary no longer constitutes a domestic subsidiary; or (6) if it is determined in good faith by B&G Foods that a liquidation, dissolution or merger out of existence of such guarantor subsidiary is in the best interests of B&G Foods and is not materially disadvantageous to the holders of the senior notes.
Selling, general and administrative expenses increased $10.0 million, or 5.4%, to $196.2 million for fiscal 2021 from $186.2 million for fiscal 2020.
Selling, general and administrative expenses decreased $5.8 million, or 2.9%, to $190.4 million for fiscal 2022 from $196.2 million for fiscal 2021.
Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors to estimate the future levels of sales and cash flows. We complete our annual impairment tests during the fourth quarter of each fiscal year.
Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors to estimate the future levels of sales and cash flows. We completed our annual impairment tests for fiscal 2022, fiscal 2021 and fiscal 2020 with no adjustments to the carrying values of goodwill.
Gross profit was $481.7 million for fiscal 2020, or 24.5% of net sales. Excluding the negative impact of $5.0 million of acquisition/divestiture-related expenses, the amortization of acquisition-related inventory fair value step-up and non-recurring expenses included in cost of goods sold during fiscal 2020, our gross profit would have been $486.7 million, or 24.7% of net sales.
Excluding the negative impact of $9.1 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during fiscal 2022, our gross profit would have been $418.7 million, or 19.4% of net sales. Gross profit was $437.0 million for fiscal 2021, or 21.3% of net sales.
CARES Act On December 22, 2017, the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act,” was signed into law. The U.S. Tax Act provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. The changes in the U.S.
See Note 3, “Acquisitions and Divestitures,” to our consolidated financial statements in Part II, Item 8 of this report. U.S. Tax Act and U.S. CARES Act On December 22, 2017, the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act,” was signed into law. The U.S. Tax Act provides for significant changes in the U.S.
As a result, we expect our adjusted taxable income (used to compute the limitation) to further decrease and that we will be subject to the interest expense deduction limitation in fiscal 2022 and future years.
As a result, our adjusted taxable income (used to compute the limitation) decreased and we are subject to the interest expense deduction limitation in fiscal 2022, resulting in an increase to taxable income of $90.2 million. We may continue to be subject to the interest deduction limitation in future years.
During the fourth quarter of fiscal 2021, we closed our manufacturing facility in Portland, Maine and withdrew from participation in a multi-employer defined benefit pension plan maintained by the labor union that represented certain of our employees at the facility. Prior to the withdrawal, we made periodic contributions to this plan pursuant to the terms of a collective bargaining agreement.
During fiscal 2023 we expect to make contributions of approximately $2.5 million for our four company-sponsored defined benefit pension plans. - 38 - Table of Contents During the fourth quarter of fiscal 2021, we closed our manufacturing facility in Portland, Maine and withdrew from participation in a multi-employer defined benefit pension plan maintained by the labor union that represented certain of our employees at the facility.
Net cash provided by financing activities decreased $397.8 million from $328.0 million cash provided by financing activities for fiscal 2020 to $69.8 million cash used in financing activities for fiscal 2021.
Net Cash Provided by (Used in) Financing Activities . Net cash provided by financing activities increased $115.1 million to $45.3 million cash provided by financing activities for fiscal 2022 from $69.8 million net cash used in financing activities for fiscal 2021.
To confront these challenges, we continue to take steps to build the value of our brands, to improve our existing portfolio of products with new product and marketing initiatives, to reduce costs through improved productivity, to address consumer concerns about food safety, quality and health and to favorably manage currency fluctuations.
Costs and expenses in Mexico are recognized in local foreign currency, and therefore we are exposed to potential gains or losses from the translation of those amounts into U.S. dollars for consolidation into our consolidated financial statements. - 35 - Table of Contents To confront these challenges, we continue to take steps to build the value of our brands, to improve our existing portfolio of products with new product and marketing initiatives, to reduce costs through improved productivity, to address consumer concerns about food safety, quality and health and to favorably manage currency fluctuations.
Freight rates increased significantly during the fourth quarter of 2020 and throughout fiscal 2021. We expect freight rates to remain elevated in 2022. We plan to continue managing inflation risk by entering into short term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices.
We plan to continue managing inflation risk by entering into short term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices.
Despite continued strong demand for Green Giant products during fiscal 2021, sales of Green Giant products in the aggregate (including Le Sueur ) decreased $95.1 million, or 14.9%, in fiscal 2021, as compared to fiscal 2020. Net sales of Green Giant shelf-stable (including Le Sueur ) decreased $37.5 million, or 16.4%, for fiscal 2021.
Net sales of Green Giant products in the aggregate (including Le Sueur ) decreased $19.5 million, or 3.6%, in fiscal 2022, as compared to fiscal 2021. Net sales of Green Giant shelf-stable (including Le Sueur ) decreased $18.8 million, or 9.9%, for fiscal 2022.
Competitive pressures also may limit our ability to quickly raise prices in response to rising costs. We experienced material net cost increases for raw materials during fiscal 2021 and the second half of fiscal 2020 and moderate net cost increase increases for the first half of fiscal 2020 and fiscal 2019.
Competitive pressures also may limit our ability to quickly raise prices in response to rising costs. We experienced material net cost increases for raw materials during fiscal 2022 and fiscal 2021 due to a number of factors, including the COVID-19 pandemic and the war in Ukraine, and anticipate higher raw materials cost increases into fiscal 2023.
Following the impairments, none of our indefinite-lived intangible assets had a book value in excess of their calculated fair values and the percentage excess of the aggregate calculated fair value over the aggregate book value was approximately 214.2%. However, materially different assumptions regarding the future performance of our businesses could result in significant additional impairment losses.
Following the impairments recorded in fiscal 2021 and fiscal 2022, none of our indefinite-lived intangible assets had a book value in excess of their calculated fair values and the percentage excess of the aggregate calculated fair value over the aggregate book value was approximately 201.2%.
Amortization expense includes the amortization expense associated with customer relationships, finite-lived trademarks and other intangible assets. Impairment of Intangible Assets . Impairment on intangible assets represents a reduction of the carrying value of intangible assets to fair value when the carrying value of the assets is no longer recoverable. Net Interest Expense.
Impairment on intangible assets represents a reduction of the carrying value of intangible assets to fair value when the carrying value of the assets is no longer recoverable. Net Interest Expense. Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond discount/premium and amortization of deferred debt financing costs (net of interest income). Other Income.
We made total contributions to our company-sponsored pension plans of $2.5 million and $11.0 million during fiscal 2021 and fiscal 2020, respectively.
We did not make any contributions to our company-sponsored defined benefit pension plans in fiscal 2022. We made total contributions to our company-sponsored pension plans of $2.5 million during fiscal 2021.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed8 unchanged
Biggest changeBased upon our principal amount of long-term debt outstanding at January 1, 2022, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately $8.4 million. - 51 - Table of Contents The carrying values and fair values of our revolving credit loans, term loans and senior notes as of January 1, 2022 and January 2, 2021 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1, 2022 ​ ​ January 2, 2021 ​ Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans ​ $ 165,000 ​ $ 165,000 (1) ​ $ 235,000 ​ $ 235,000 ​ Tranche B term loans due 2026 ​ ​ 667,811 (2) ​ ​ 666,141 (3) ​ ​ 667,118 (2) ​ ​ 665,450 (3) ​ 5.25% senior notes due 2025 ​ ​ 901,753 (4) ​ ​ 920,915 (3) ​ ​ 902,292 (4) ​ ​ 931,616 (3) ​ 5.25% senior notes due 2027 ​ $ 550,000 ​ $ 567,875 (3) ​ $ 550,000 ​ $ 580,250 (3) ​ (1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.
Biggest changeThe carrying values and fair values of our revolving credit loans, term loans and senior notes as of December 31, 2022 and January 1, 2022 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ January 1, 2022 ​ Carrying Value Fair Value Carrying Value Fair Value Revolving credit loans ​ $ 282,500 ​ $ 282,500 (1) ​ $ 165,000 ​ $ 165,000 (1) ​ Tranche B term loans due 2026 ​ ​ 668,532 (2) ​ ​ 636,777 (3) ​ ​ 667,811 (2) ​ ​ 666,141 (3) ​ 5.25% senior notes due 2025 ​ ​ 901,213 (4) ​ ​ 790,625 (3) ​ ​ 901,753 (4) ​ ​ 920,915 (3) ​ 5.25% senior notes due 2027 ​ $ 550,000 ​ $ 420,558 (3) ​ $ 550,000 ​ $ 567,875 (3) ​ (1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.
See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates – Pension Plans ” and Note 12, “Pension Benefits,” to our consolidated financial statements in Part II, Item 8 of this report for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations. - 52 - Table of Contents
See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates – Pension Plans ” and Note 12, “Pension Benefits,” to our consolidated financial statements in Part II, Item 8 of this report for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations. - 51 - Table of Contents
During fiscal 2021, 2020 and 2019, our net sales to customers in foreign countries represented approximately 8.3%, 7.8% and 7.7%, respectively, of our total net sales. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars.
During fiscal 2022, 2021 and 2020, our net sales to customers in foreign countries represented approximately 7.8%, 8.3% and 7.8%, respectively, of our total net sales. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars.
Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates. Changes in interest rates impact our fixed and variable rate debt differently.
Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates. - 50 - Table of Contents Changes in interest rates impact our fixed and variable rate debt differently.
For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows. At January 1, 2022, we had $1,450.0 million of fixed rate debt and $836.6 million of variable rate debt.
For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows. At December 31, 2022, we had $1,450.0 million of fixed rate debt and $954.1 million of variable rate debt.
(2) The carrying value of the tranche B term loans includes a discount. At January 1, 2022, and January 2, 2021, the face amount of the tranche B term loans was $671.6 million. (3) Fair values are estimated based on quoted market prices. (4) The carrying value of the 5.25% senior notes due 2025 includes a premium.
(2) The carrying value of the tranche B term loans includes a discount. At December 31, 2022, and January 1, 2022, the face amount of the tranche B term loans was $671.6 million. See Note 18, “Subsequent Events.” (3) Fair values are estimated based on quoted market prices.
At January 1, 2022 and January 2, 2021, the face amount of the 5.25% senior notes due 2025 was $900.0 million.
(4) The carrying value of the 5.25% senior notes due 2025 includes a premium. At December 31, 2022 and January 1, 2022, the face amount of the 5.25% senior notes due 2025 was $900.0 million.
Added
Based upon our principal amount of long-term debt outstanding at December 31, 2022, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately $9.5 million.

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