B&G Foods, Inc. ($BGS)

Hello, and welcome to the Annual Meeting of Stockholders of B&G Foods. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Casey Keller, President, Chief Executive Officer and a Director of B&G Foods. Mr. Keller, the floor is yours.

Good morning. I'm Casey Keller, President, Chief Executive Officer and Director of B&G Foods. On behalf of the directors and officers of B&G Foods, I'd like to welcome you to our Annual Meeting of Stockholders. We appreciate your attendance, your interest and most importantly, your support of B&G Foods. We're holding this Annual Meeting of Stockholders in an audio-only virtual format, which has the benefit of improving meeting efficiency and reducing costs. I will act as Chairman of this meeting. And at this time, I would like to call this Annual Meeting of Stockholders to order. I would first like to introduce each of the other current directors of the company who are in attendance today. Steve Sherrill, the Chair of the Board; DeAnn Brunts; Debra Martin Chase; Chuck Marcy, Rob Mills; Dennis Mullen; Cheryl Palmer; Alf Poe; and Dave Wenner. Each of us is also standing for reelection. I would now like to introduce the following Executive Vice Presidents of B&G Foods, Bruce Wacha, Executive Vice President of Finance and Chief Financial Officer; Eric Hart, Executive Vice President of Human Resources and Chief Human Resources Officer; Scott Lerner, Executive Vice President and General Counsel, Secretary and Chief Compliance Officer; Martin Schoch, Executive Vice President of Supply Chain; John Ozgopoyan, Executive Vice President of Sales. Scott Lerner will act as the Secretary of this meeting. Also in attendance are Jay Green and Lauren Smith of KPMG, the company's independent registered public accounting firm. The stated items of business for this meeting are: one, the election of 10 directors to serve until the 2027 Annual Meeting of Stockholders; two, an advisory vote on the executive compensation commonly referred to as a say-on-pay vote; and three, the ratification of the appointment of KPMG as our independent registered public accounting firm. To have an orderly meeting, after the proposals are presented, I will ask if there are any questions or comments. I ask that you restrict your remarks to the proposals that are before us. Stockholders may submit questions by clicking on the Q&A tab on the meeting center site. Time has been allotted later in the meeting for any appropriate questions you may have concerning the company. Please review and adhere to the rules of conduct that are posted on the meeting center site. We will now proceed with the voting on the proposals. If you have voted your shares in advance of the meeting by one of the methods described in the proxy materials for the meeting, there is no need to vote those shares during the meeting. If you have not already voted your shares in advance of the meeting, you may vote by following the instructions on the meeting site. An industry solution has been agreed to that we expect will allow the vast majority of beneficial owners, those stockholders whose shares are held in the name of a broker, bank or other nominee, to vote their shares during the meeting using the control number received with their voting instructions form. Please note, however, that this option is not available to all beneficial owners, and the inability to provide this option to any or all beneficial owners in no way impacts the validity of today's meeting. For those beneficial owners who do not have this option, you will not be able to vote your shares electronically during the meeting today, unless you have obtained a proxy executed in your favor from the institution that holds your shares and have previously submitted a proxy to Computershare and received a confirmation of your registration with a control number from Computershare in accordance with procedures described in the proxy statement. Your vote must be cast before the polls are closed. The polls will be closed at the end of the general discussion and my CEO report to stockholders. Again, please be assured that there will be an opportunity later in the meeting for stockholders to ask general questions regarding the company. We will now begin the formal business of this meeting. Mr. Lerner, will you present -- will you please present the notice of meeting.

I present to this meeting an affidavit of Computershare, the transfer agent for the company's common stock, which states that the Notice of Annual Meeting was mailed on April 10, 2026, to all holders of record of the company's common stock as of the close of business on March 24, 2026. The notice of meeting and the affidavit will be filed with the records of the company. The report of the Inspector of Election certifies that there are in attendance at the annual meeting or by proxy, stockholders entitled to cast at least the majority of the votes which all stockholders are entitled to cast.

Thank you, Secretary. In view of that report, I declare that a quorum is present and the meeting is duly constituted. We are now ready to proceed with the transaction of business. The Board of Directors has appointed Kerri Shenkin of Computershare to act as inspector of election for this meeting. The inspector is in attendance and has taken her oath of office, which I direct to be filed with the minutes of this meeting. Inspector has a list of stockholders of the company indicating the name, address and number of shares held by each holder of the company's common stock as of the record date certified by the company's transfer agent. The secretary will file a copy of the list of stockholders with the records of the company. We will now have the presentation of the 3 proposals before the meeting, each of the proposals described in the proxy statement previously made available to you. Stockholders who have questions specifically relating to the 3 proposals may submit them now. And after I finish summarizing the proposals, we will answer those questions. Proposal #1 is the election of 10 directors to serve until the 2027 Annual Meeting of Stockholders. The company has an advanced notice bylaw provision. Accordingly, all nominations are closed. As set forth in the proxy statement, the Board of Directors has previously nominated for reelection each of the current members of the Board. Proposal #2 concerns an advisory vote on executive compensation, commonly referred to as a say-on-pay vote. And Proposal #3 concerns the ratification of the selection of KPMG as the company's independent registered public accounting firm for the year ending January 2, 2027.

As we have received no questions specifically relating to the proposals, we will proceed to the opening of the polls. Mr. Keller?

I declare the polls now open for voting on all proposals. If you have voted your shares in advance of the meeting by one of the methods described in the proxy materials for the meeting, there is no need to vote those shares during the meeting. If you have not already voted your shares or wish to change your vote, you may do so now by clicking on the Vote tab on the meeting center site. [Voting]

While stockholders are voting, I will now present the Chief Executive Officer's report to the stockholders. Before I begin my remarks, I would like to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. I refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial condition. The company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise. I will also refer to the non-GAAP financial measures, adjusted EBITDA, base business net sales and segment adjusted EBITDA. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in the earnings press release that we issued for fiscal year 2025 and the first quarter of 2026, both of which may be found in the Investor Relations section of our website, bgfoods.com. Having dispensed with that, thank you all for joining us this morning. We very much appreciate your interest and continued investment in B&G Foods. Fiscal 2025 was a challenging year for both B&G Foods and the broader packaged foods industry. We continue to see softness in center store categories evolving consumer purchasing patterns and the negative impact of tariffs. Despite these headwinds, we made meaningful progress towards our long-term goals of reshaping our portfolio and reducing leverage. In fiscal 2025, net sales were $1.829 billion, a decrease of 5.4%. The year-over-year decline primarily reflects lower base business net sales and the divestitures of Don Pepino and Sclafani in the second quarter of fiscal 2025 and Le Sueur U.S. in the third quarter of fiscal 2025, partially offset by the impact of a 53rd week in the fourth quarter of fiscal 2025. Adjusted EBITDA declined 7.9% to $272.2 million, driven by lower base business net sales, higher raw material costs, including tariffs, and the divestitures I just mentioned. These pressures were partially offset by lower net interest expense and continued cost discipline. Our fourth quarter 2025 results showed improving underlying trends. Base business net sales increased 0.8% versus the fourth quarter of 2024, driven by net pricing, volume growth, product mix and the 53rd week. Fourth quarter adjusted EBITDA was $84.7 million, slightly down versus last year due to the impact of divestitures and tariff costs. Our Spices & Flavor Solutions business delivered the strongest performance, with net sales up 4.2% in the quarter versus the fourth quarter of fiscal 2024. Our first quarter 2026 results demonstrated continued improvement in base business net sales trends. Q1 2026 base business and sales grew 2.8% versus last year to $365.2 million as compared to $355.2 million for the first quarter of 2025. Net sales for the first quarter of 2026 decreased by $16.5 million or 3.9% to $408.9 million from $425.4 million for the first quarter of 2025. The decrease was primarily attributable to the Green Giant U.S. frozen, Le Sueur U.S. and Don Pepino divestitures, partially offset by an increase in base business net sales, 1 month of net sales from the co-manufacturing agreement the company entered into on March 2, 2026, with the acquirer of the Green Giant U.S. frozen business and a partial month of net sales for the College Inn and Kitchen Basics brands. Adjusted EBITDA for the first quarter was $57.6 million or 14.1% of net sales compared to $59.1 million or 13.9% in the first quarter of 2025. We remain committed to reshaping and restructuring our portfolio to sharpen focus, simplify our portfolio, improve margins and cash flow and maximize future value creation. This is a very high priority for our company and critical to our future strategic direction and risk profile. The endgame is to create a more highly focused B&G Foods with adjusted EBITDA as a percentage of net sales approaching 20%, increase cash flow generation, lower net leverage, a more efficient cost structure and clear synergies within the portfolio, and ultimately, to build a stable platform that can be the foundation for future-focused M&A growth. We reached a major milestone in March 2026 with the sale of the Green Giant U.S. frozen business to Seneca Foods. As previously announced, B&G Foods maintains ownership of its frozen vegetable manufacturing operations in Irapuato, Mexico, and has entered into a co-pack agreement with the acquirer of the Green Giant U.S. frozen business pursuant to which B&G Foods will continue to produce certain Green Giant frozen vegetable products in Irapuato, Mexico. This divestiture is the largest step in our portfolio transformation to date. We also entered into an agreement to sell our Green Giant and Le Sueur frozen and shelf-stable product lines in Canada to Nortera Foods, which is expected to close in the second quarter of 2026, subject to regulatory approval in Canada and customary closing conditions. We continue to review our remaining portfolio for potential divestitures of noncore assets. At the same time, we recently closed the acquisition of the College Inn and Kitchen Basics broth and stock businesses from Del Monte Foods. The broth and stock category is attractive, maintains good margins and has grown low to mid-single digits over the past year. Like the spices & seasonings category, broth have been propelled by the growth in the fresh perimeter of the store as a critical component for the preparation and cooking of fresh meals and soups. The College Inn and Kitchen Basics brands have relevant well-known brand equity, strong distribution presence and high-quality products. The net results of the divestitures in fiscal 2025 and Q1 2026 and acquisition will deliver a more focused portfolio that is expected to generate positive EBITDA growth, stronger cash flows, lower working capital intensity, reduced leverage and higher gross and adjusted EBITDA margins. We are committed to reducing leverage and balance sheet risk. And in fiscal 2025, we took decisive steps to advance this priority. In addition to the divestitures noted above, we also amended our credit agreement in fiscal 2025 to enhance covenant flexibility and repaid and repurchased a portion of our long-term debt to improve our consolidated leverage ratio. Through these steps, combined with disciplined capital allocation and improved cash generation, we reduced our net debt to $1.912 billion at the end of the fourth quarter of 2025 compared to $1.994 billion at the end of the fourth quarter of 2024 and $2.023 billion at the end of the fourth quarter of 2023. In our 21 years as a publicly held company, we have proven our commitment to creating stockholder value by consistently paying a cash dividend. We have paid a dividend every quarter since our initial public offering. We have been able to maintain our dividend policy year after year by growing net sales and adjusted EBITDA over the past 21 years at compound annual growth rates of 7.9% and 6.7%, respectively. During 2025, we returned $60.6 million of cash to our stockholders in the form of dividends. Following the completion of the Don Pepino, Le Sueur U.S. and Green Giant U.S. divestitures and the College Inn and Kitchen Basics acquisition, our Board has concluded that adjustment to our intended dividend rate was appropriate. As previously announced during our earnings call, and beginning with the dividend declared on May 11, 2026, and payable on July 30, 2026, to record holders as of June 30, 2026, our Board reduced our dividend by 50% to $0.095 per quarter or $0.38 per share per annum. On an annualized basis, reduction in dividend is expected to make available an additional $30 million of cash that we intend to use to repay long-term debt and for other business purposes, and which we expect will further accelerate the reduction in our leverage ratio. Although Board has reduced the dividend rate under B&G Foods' dividend policy, the Board reaffirmed the policy itself. B&G Foods' dividend policy reflects a basic judgment that its stockholders are better served when B&G Foods distributes a substantial portion of its cash available to pay dividends instead of retaining it in the business. We continue to advance our corporate social responsibility efforts and sustainability goals. Our corporate social responsibility report, which is available on the responsibility page of our website, bgfoods.com, includes disclosures regarding the steps we have been taking over the years to enhance our corporate social responsibility efforts and to minimize our impact on the environment, including our sustainability goals and the progress we have been making to achieve those goals. A highlight of our CSR program is our philanthropic partnership with America's Grow-a-Row, a not-for-profit organization that grows and gleans fresh, healthy fruits and vegetables that are donated to those suffering from hunger or living in areas that lack reliable access to fresh, affordable produce. As a leading manufacturer of high-quality, well-known brand -- food brands, we believe we can make a difference in the community by supporting causes and organizations that promote food security and education to ensure those in need have safe access to nutritious foods. Beginning in 2023, we have made annual donations of $250,000 to America's Grow-a-Row, which results in the planting, growing, harvesting and distribution of 1.25 million servings per year of fresh produce to communities in need across the United States. In addition, during the harvest season in New Jersey, we hold volunteer days at America's Grow-a-Row, in which our employees help harvest fresh produce that is donated to those in need. Looking ahead, fiscal 2026 is poised to be a transformational year for B&G Foods. With a more focused, higher margin and more stable portfolio, we expect continued improvement in base business trends towards our long-term objective of 1% annual base business growth, supplemented by acquisition growth. We will also become a less complex, more efficient and leaner company as we simplify our portfolio and rightsize operations to focus resources on our core categories. Our long-term priorities remain clear: improving base business net sales trends of the core business to the long-term objective of plus 1%, reshaping the portfolio for future growth, stability, higher margins and cash flows, and reducing our net leverage below 5.5x through divestitures and excess cash flow to facilitate strategic acquisitions. Overall, the B&G Foods team responded well to the challenges of 2025, and we remain focused on our critical priorities. As we execute our transformation, we remain guided by our core values: passion for what we do, our commitment to food safety and quality, diversity and inclusion, integrity and accountability, our customer and consumer focus, our commitment to the safety and health of our employees and our belief in collaboration and empowerment. With a more focused portfolio, a stronger balance sheet and improving base business trends, we are confident in the path ahead and committed to driving our business forward in 2026. Thank you very much for attending our Annual Meeting of Stockholders today and for your continued support of B&G Foods. This concludes my prepared remarks. Now we will return to the business of the meeting. Since everyone has had the opportunity to vote, the polls are now closed. While the votes cast and proxies are being counted, I now invite stockholders to ask any questions you may have about the company.

We received a question from a stockholder noting the share price performance over the last 2 years and looking to know what the company is doing to return the stock price to growth?

Thank you for the question. I think, primarily, we are focused on some of the priorities that we talked about. First and foremost, strengthening our core brands and our core businesses back to a 1% base business net sales growth in the first quarter of 2026. We were able to get to a 2.8% growth. So we're making progress towards that goal. We expect to be -- to have a positive net base sales growth in the full year of 2026. The second thing that we're focused on is reshaping our portfolio to ensure that we have brands and businesses that are achieving that kind of 1% net sales base business growth and also provide stable cash flow, stable EBITDA margins, stable EBITDA delivery over time. You just saw us execute what I would consider one of our portfolio-shaping efforts, which was selling the Green Giant U.S. frozen business, which was extremely low margin, high working capital intensity, very complex, and use the proceeds from that transaction to partially fund the transaction of the acquisition of College Inn and Kitchen Basics broth and stock businesses, which are nicely profitable, good EBITDA margins, reasonable working capital intensity, and we expect -- and are in growing categories within the center store grocery business.

As we have received no further questions, the next item on the agenda is the report of the inspector. The Inspector of Election has tabulated the votes cast at this meeting electronically or by proxy with respect to the election of directors and has preliminarily reported that the director nominees have received between 85% and 94% of the votes cast, and accordingly, they are elected as directors of the company. In addition, the say-on-pay proposal received approximately 85% of the votes cast. And the proposal to ratify the appointment of KPMG has received approximately 96% of the votes cast. Accordingly, all of these proposals are approved. The full and final details of the votes cast will be contained in the written report of the inspector, which may be examined by any stockholder and will be filed with the records of the company. In addition, as required by SEC rules, the company will file a current report on Form 8-K later this week or early next week to report the details of the votes cast. Mr. Keller?

I want to thank all of you for attending today's meeting and for the interest you have shown in B&G Foods. There being nothing further to come before the meeting, I declare this meeting adjourned.

This concludes the meeting. You may now disconnect.