B&g Foods, Inc. · NYSE:BGS
B&g Foods — Debt Investor Presentation (February 2007)
48 slides from B&g Foods's debt investor presentation, Feb 5, 2007
Slide 1: B&G Foods, Inc. Lenders' Presentation
B&G Foods, Inc. Lenders’ Presentation February 5, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this presentation include without limitation statements related to the planned acquisition of Cream of
Slide 3: Management Attendees
Management Attendees David L. Wenner B&G Foods, Inc. President and Chief Executive Officer Robert C. Cantwell B&G Foods, Inc. Executive Vice President and Chief Financial Officer
Slide 4: Agenda
Agenda Welcome and Introduction Evan Rothenberg, Lehman Brothers Transaction Overview David Wenner / Robert Cantwell Company Overview David Wenner Business Update David Wenner Key Credit Strengths David Wenner Financial Review Robert Cantwell Overview of Credit Facilities Chip Heflin, Lehman Brother
Slide 5: Transaction Overview
B&G Foods, Inc. Transaction Overview David Wenner / Robert Cantwell
Slide 6: Transaction Summary
Transaction Summary B&G Foods is expanding its portfolio of leading brands through the acquisition of Cream of Wheat from Kraft On January 22, 2007 B&G Foods agreed to acquire Cream of Wheat from Kraft The total purchase price for the transaction, excluding fees and expenses, will be $200 million, s
Slide 7: Transaction Sources & Uses
Transaction Sources & Uses Sources and Uses ___________________________ (1) $25 million, undrawn at closing. (2) Estimated. ($ in millions) Sources Uses Revolving Credit Facility (1) $0.0 Purchase Cream of Wheat Assets $200.0 New Term Loan C 225.0 Refinance Existing Term Loan 25.0 Cash 5.0 Fees and
Slide 8: B&G Foods Pro Forma Capitalization
(1) Equity value based on 2/1/07 EIS price of $21.40 per unit, $7.15 face value per senior subordinated note and implied valuation of $14.25 per Class A common share. For purposes of this presentation only, it is assumed that value of each share of Class A Common Stock equals the value of each share
Slide 9: Company Overview
B&G Foods, Inc. Company Overview David Wenner
Slide 10: B&G Foods Overview
B&G Foods Overview Branded shelf-stable food products in defensible categories Leading market positions and brand equities Large and stable operating platform Pro Forma 2006 Net Sales of $472.7 million (1) Pro Forma 2006 EBITDA of $104.5 million (2) Diversity enhances stability Brand portfolio Distr
Slide 11: B&G Foods History
B&G Foods History December 1996 Acquisition of B&G and Burns & Ricker from Specialty Foods January 2006 Acquisition of Grandma’s from Cadbury February 1999 Acquisition of Polaner Brand from IHF July 1998 Acquisition of Maple Grove Farms of Vermont August 2003 Acquisition of Ortega from Nestlé June 1
Slide 12: Cream of Wheat Overview
Cream of Wheat Overview Introduced in 1893, Cream of Wheat is a premier brand in American households Significant player in growing hot cereal category with leading presence in the wheat-based segment $61.4 million 2006 Net Revenue business with the majority of sales in U.S. Retail Enjoys a unique po
Slide 13: Cream of Wheat Products – U.S. Retail
Cream of Wheat Products – U.S. Retail 10-Minute 28 oz $0.7 million 2 ½-Minute 28 oz & 14 oz $23.2 million Cream of Rice 14oz $2.2 million 1-Minute 28 oz $6.6 million Plain 12 oz $11.7 million Maple Brown Sugar 12.5 oz $5.0 million All Other Flavors 12.3oz – 12.5oz $1.7 million Variety Pack 11.75 oz
Slide 14: Cream of Wheat: Attractive Acquisition Rationale
Unique, leading position in an attractive category Hot cereal category growth is driven by consumer focus on health and wellness Cream of Wheat is leading wheat hot cereal, with unique positioning versus oatmeal The brand has a long operating history and enjoys high brand awareness Attractive profit
Slide 15: Strategy for Re-Invigorating Cream of Wheat
Strategy for Re-Invigorating Cream of Wheat Cream of Wheat Trends B&G Foods’ Plan Additional brand promotion Increased trade spend, coupons Increased advertising / marketing spend Incremental ~$3 million in brand promotion Fill distribution holes Shift to focused sales organization Cream of Wheat’s
Slide 16: Business Update
B&G Foods, Inc. Business Update David Wenner
Slide 17: Summary of B&G Foods' 2006 Performance
Summary of B&G Foods’ 2006 Performance Strong sales growth through mix of organic and acquisition (Grandma’s, Ortega Food Service Cheese Sauce) growth, including some pricing Attractive new product and distribution initiatives Margin pressure from increased input costs Improved trade spending progra
Slide 18: Sales Growth is Coming from Several Factors
Sales Growth is Coming from Several Factors Total sales increase for fiscal 2006E - $32.0 million Acquisition growth (Grandma’s, Ortega Food Service Cheese Sauce) - $20.2 million Temporary co-pack arrangement - $3.0 million Organic growth / price - $8.8 million Thirteen of our seventeen brands are u
Slide 19: Attractive New Product & Distribution Initiatives
Attractive New Product & Distribution Initiatives 2005 / 2006 New Products Have Driven Growth $4.0 million (2006E) $8.5 million (2006E) $2.0 million (2006E)
Slide 20: Attractive 2007 New Product Growth Initiatives
Attractive 2007 New Product Growth Initiatives
Slide 21: Employee Productivity
Employee Productivity Net Sales Per Employee $421,000 $445,000 $482,000 $515,000 $580,000 $660,000 2002 2003 2004 2005 2006 PF 2007E
Slide 22: Price Increases & Cost Reductions Achieved
B&G Foods has Achieved Price Increases & Cost Reductions Price increases of approximately $6.5 million Pay-for-performance trade initiative Trade spending down 1.1% of gross sales Plant consolidation Full year of Hurlock / Trappey combination Grandma’s molasses production in-house Out-sourced DSO sa
Slide 23: Recent Acquisition Status
Recent Acquisition Status B&G Foods has made two successful acquisitions in the past fourteen months: Ortega Food Service Cheese Sauce Business from Nestlé Grandma’s Molasses Brand from Cadbury Schweppes Both acquisitions are performing better than expected Sales ahead of prior owners’ performance C
Slide 24: Key Credit Strengths
B&G Foods, Inc. Key Credit Strengths David Wenner
Slide 25: Key Credit Strengths
Key Credit Strengths Well positioned to capitalize on growing segments of the food industry Brands with leading market positions Industry leading margin structure and free cash flow profile Highly experienced management team Diversity of brands, customers, channels and geography Complete business pl
Slide 26: Well Positioned to Capitalize on Growing Food Industry Segments
Well Positioned to Capitalize on the Growing Segments of the Food Industry The Company is positioned to capitalize on the growth trends in the food industry Presence in Ethnic Mexican Segment. Combination of Ortega, Las Palmas and Trappey’s brands has positioned B&G Foods to capitalize on ethnic foo
Slide 27: Leading Market Positions
Leading Market Positions B&G Foods Retail Market Positions ___________________________ (1) Based on Information Resources, Inc. and for the 52 weeks ended December 31, 2006. Retail Market Share Brand Category Share Position (1) B&M Baked Beans #1 New England Bloch & Guggenheimer Pickles and Relish #
Slide 28: Leading EBITDA Margins & Cash Flow Profile
Leading EBITDA Margins & Cash Flow Profile EBITDA Margin EBITDA – CapEx as % of Net Sales (1) (1) ___________________________ (1) Represents average of ConAgra Foods, Dean Foods, Del Monte Foods, Flowers Foods, Hain Celestial, Hormel Foods, JM Smucker, Lancaster Colony, Lance Inc, McCormick, Ralcorp
Slide 29: Diverse Portfolio of Leading Brands
Diverse Portfolio of Leading Brands B&G Foods Portfolio: Recent Annual Brand Performance ($ in millions) ___________________________ (1) Includes net sales of approximately $12.0 million attributed to the Ortega Food service cheese sauce business acquired in December 2005. 2005 Net 2006E Net 2005 -
Slide 30: Diverse, High Quality Customer Base
Diverse, High Quality Customer Base B&G Foods sells products to a broad array of customers with a substantial presence in all major distribution channels The Company’s customers include many of the nation’s largest, most prominent retailers including Wal-Mart, SuperValu, Kroger and Albertsons Wal-Ma
Slide 31: Diversity of Sales by Channel
Diversity of Sales by Channel Q3 YTD 2006 B&G Foods Sales by Channel Foodservice 21% Special Markets 13% Exports / Other 3% Direct-Store- Organization 10% Traditional Supermarkets 43% Specialty 10%
Slide 32: Experienced Management Team
Experienced Management Team DAVID L. WENNER President and Chief Executive Officer 18 Years B&G Foods Experience VANESSA MASKAL Executive Vice President Sales 4 Years B&G Foods Experience ROBERT C. CANTWELL Chief Financial Officer 24 Years B&G Foods Experience JAMES H. BROWN Executive Vice President
Slide 33: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Acquired and integrated 17 shelf-stable brands since 1996 Acquisition criteria: Annual net sales under $100 million Leading shelf-stable market positions with strong brand names Similar manufacturing, sales, marketing and distribution High and sustainable margins Ide
Slide 34: Track Record of Successful Acquisitions
Track Record of Successful Acquisitions Performance of Recent Acquisitions ($ in millions) Ortega Ortega Cheese Sauce Grandma's Acquisition Date Aug-03 Dec-05 Jan-06 Purchase Price $116.0 $2.5 $30.0 Net Sales Performance LTM at Close $75.7 $9.9 $9.6 2006 84.0 12.0 9.8 % CAGR 3.2% 21.2% 1.8%
Slide 35: Financial Review
B&G Foods, Inc. Financial Review Robert Cantwell
Slide 36: Historical & Pro Forma Financial Summary
Historical & Pro Forma Financial Summary ($ in millions) ($ in millions) Adjusted EBITDA Margin 19.2% 18.9% 18.8% 17.3% 16.8% 22.1% Net Sales Adjusted EBITDA $472.7 $104.5 ___________________________ Represents net sales for Cream of Wheat on a historical basis. This is not intended to be a projecti
Slide 37: Summary Historical Data
Summary Historical Data B&G Foods Historical Summary Financials ($ in millions) Historical, FY 2004A 2005A 2006E Net Sales $372.8 $379.3 $411.3 % Growth 13.5% 1.7% 8.4% Total COGS 260.8 271.9 (2) % of Net Sales 70.0% 71.7% Gross Profit $111.9 $107.3 (2) % Margin 30.0% 28.3% Adj. EBIT $63.5 (1) $58.8
Slide 38: Strong Current Liquidity
Current cash balance at December 30, 2006 is $29.6 million ($24.6 million Pro Forma) Current Revolving Credit Facility of $25.0 million Availability of $24.0 million (net of outstanding letters of credit) Company will continue to generate significant free cash flow from operations High EBITDA margin
Slide 39: Overview of Credit Facilities
B&G Foods, Inc. Overview of Credit Facilities Chip Heflin
Slide 40: Summary Terms
Summary Terms R/C: December 22, 2010, TL: 6 years If existing 8% Senior Notes due 2011 are not refinanced within 6 months prior to maturity (October 1, 2011), the TLC is to become immediately due Maturity: A perfected first priority security interest in all of the Company’s tangible and intangible a
Slide 41: Summary Timeline
Summary Timeline February 5, 2007 Lenders’ Meeting January 23, 2007 Acquisition Announced February 23, 2007 / February 26, 2007 Expected Pre Closing / Funding (1) February 16, 2007 February 21, 2007 Commitments Due & Credit Documentation Distributed Comments Due on Credit Documentation Date Event __
Slide 42: Summary and Q&A
B&G Foods, Inc. Summary and Q&A David Wenner
Slide 43: Key Credit Strengths
Key Credit Strengths Well positioned to capitalize on growing segments of the food industry Brands with leading market positions Industry leading margin structure and free cash flow profile Highly experienced management team Diversity of brands, customers, channels and geography Complete business pl
Slide 44: Appendix
Be& B&G Foods, Inc. Appendix
Slide 45: EIS Structure
EIS Structure EIS $15.00 Offering Price in October 2004 Class A Common Stock One Share $7.85 Offering Price 12% Senior Subordinated Note $7.15 Principal Amount All Values Based on the October 2004 $15.00 IPO EIS Price
Slide 46: EIS Unit Summary Valuation
EIS Unit Summary Valuation Valuation As of 2/1/07. 46 At Issue Current EIS Value (1) - Notes at Face Value Interest / Pre-Tax Value Interest / Pre-Tax ($) Dividend Yield ($) Dividend Yield Senior Subordinated Note $7.15 $0.858 12.00% $7.15 $0.858 12.00% Class A Common Stock 7.85 0.848 10.80% 14.25 0
Slide 47: EIS & Common Stock Overview
EIS & Common Stock Overview 20,000,000 EIS units outstanding; each EIS consisting of one share of Class A Common Stock and $7.15 principal amount of 12% Senior Subordinated Notes due 2016. Class A Common Stock: Current dividend policy provides for the payment of quarterly dividends at the intended d
Slide 48: B&G Foods, Inc.
BG B&G Foods, Inc.
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