uploads/2016/03/bgs-pm.jpg

B&G Foods Offers Common Stock to Repay Debt and Acquisitions

By

Updated

Price movement 

B&G Foods (BGS) has a market cap of $2.0 billion. It fell by 0.54%. It closed at $34.70 per share as of March 9, 2016. The price movement on a weekly, monthly, and YTD (year-to-date) basis is -0.74%, -0.12%, -0.91%, respectively.

Currently, B&G Foods is trading 5.0% below its 20-day moving average, 2.6% below its 50-day moving average, and 4.2% above its 200-day moving average.

The Guggenheim Multi-Asset Income ETF (CVY) invests 0.35% of its holdings in B&G Foods. CVY tracks the Zacks Multi-Asset Income Index. The index aims to outperform the Dow Jones US Select Dividend Index using US stocks, ADRs, REITs, MLPs, CEFs, preferred stocks, royalty trusts. CVY’s YTD price movement was -1.2% as of March 8, 2016.

The iShares Russell 2000 ETF (IWM) invests 0.10% of its holdings in B&G Foods. IWM tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked 1,001–3,000 by market cap.

The market caps of B&G Foods’ competitors are as follows:

  • General Mills (GIS) – $35.9 billion
  • J.M. Smucker (SJM) – $15.2 billion
  • TreeHousse Foods (THS) – $4.7 billion
Article continues below advertisement

B&G Foods offers common stock

B&G Foods will offer 4,000,000 shares of its common stock—pursuant to an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. It expects to grant the underwriter an option for a period of 30 days to purchase up to an additional 600,000 shares of common stock.

The company will use the proceeds from the offering to repay outstanding borrowings under its revolving credit facility and for corporate purposes, which could include repayments of other long-term debt or possible acquisitions. Barclays Capital is acting as the underwriter for this offering.

Performance in fiscal 4Q15 and 2015

B&G Foods reported fiscal 4Q15 net sales of $342.3 million—a rise of 43.8% compared to net sales of $238.0 million in fiscal 4Q14. The company’s cost of goods sold as a percentage of net sales fell by 2.6%. Its operating income rose by 61.1% in fiscal 4Q15—compared to fiscal 4Q14.

Its net income and EPS (earnings per share) fell to $11.0 million and $0.19, respectively, in fiscal 4Q15—compared to $11.5 million and $0.21, respectively, in fiscal 4Q14.

Article continues below advertisement

Fiscal 2015 results

In fiscal 2015, B&G Foods reported net sales of $966.4 million—a rise of 14.0% year-over-year. Its net income and EPS rose to $69.1 million and $1.22, respectively, in fiscal 2015—compared to $41.0 million and $0.76, respectively, in fiscal 2014.

It reported cash and cash equivalents and inventories of $5.2 million and $312.9 million, respectively, in fiscal 2015—compared to $1.5 million and $106.6 million, respectively, in fiscal 2014. Its current ratio and debt-to-equity ratio rose to 3.4x and 4.6x, respectively, in fiscal 2015—compared to 2.1x and 3.9x, respectively, in fiscal 2014.

The price-to-earnings and price-to-book value ratios of B&G Foods are 28.4x and 4.4x, respectively, as of March 9, 2016.

Projections

The company made the following projections for fiscal 2016:

  • net sales of ~$1.38 million–$1.42 billion
  • adjusted earnings before interest, tax, depreciation, and amortization of ~$294.0 million–$304.0 million
  • adjusted EPS of $1.98–$2.09
Advertisement

More From Market Realist