B & G Foods (BGS) Q4 2018 Earnings Conference Call Transcript

BGS earnings call for the period ending December 31, 2018.

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Motley Fool Transcribing
Feb 27, 2019 at 3:20AM
Consumer Goods
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B & G Foods (NYSE:BGS)
Q4 2018 Earnings Conference Call
Feb. 26, 2019 4:30 p.m. ET

Contents:

Prepared Remarks:

Operator

Good day, and welcome to the B&G Foods fourth-quarter 2018 earnings call. Today's call is being recorded. You can access detailed financial information on the quarter and the full year in the company earnings release issued today, which is available at the investor relations section of bgfoods.com. Before the company begins its formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements.

These statements are not guarantees of future performance and, therefore, undue reliance should not be placed upon them. We refer you to the company's most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The company will also be making reference on today's call to the non-GAAP financial measures, EBITDA, adjusted EBITDA, adjusted net income, diluted earnings per share, adjusted diluted earnings per share and base business net sales.

Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Bob Cantwell, the company's current president and chief executive officer, will begin the call with opening remarks. Bruce Wacha, the company's chief financial officer, will then discuss the company's financial results for the quarter, as well as its guidance for 2019. After that, Ken Romanzi, the company's president and chief executive officer, effective April of this year, will discuss various factors that affected the company's results, selected business highlights and his thoughts concerning the outlook for 2019 and beyond.

I would like to turn the conference over to Bob.

Bob Cantwell -- President and Chief Executive Officer

Good afternoon. Thank you for joining us today. Believe it or not, today is my the 82nd consecutive earnings call with B&G Foods dating back to our initial bond offering in 1997. As some of you know, I joined B&G Foods 35 years ago.

Life was a lot simpler back then. We were basically a stand-alone pickle and pepper company owned by Sara Lee. Over time, our ownership changed several times and we ultimately were acquired by the private equity firm Bruckman, Rosser, Sherrill & Co, or BRS. And then life changed again when we went public in 2004.

We have grown tremendously over my time at B&G Foods and since the IPO, building through acquisitions a diverse portfolio of nearly 50 brands. We increased our net sales and adjusted EBITDA from 374.8 million and 67.7 million at the time of the IPO to 1.7 billion and 314.2 million today. Our market cap and enterprise value were 245.5 and 625.5 million when we went public compared to 1.7 and 3.3 billion today. We have also paid almost 830 million in dividends to shareholders during our time as a public company.

While there have been challenges over time, we have remained committed to our core financial principles of generating shareholder returns through accretive M&A and an unyielding focus on cash flows and a steady return of cash to our shareholders in the form of dividends. As we announced in late July -- in January, I will be retiring from my role as president, chief executive officer and director of B&G Foods in early April. In accordance with the succession plan established in 2017, B&G Foods' board of directors has appointed Ken Romanzi as my successor. We have been firmly committed to a smooth transition, and for all intents and purposes, Ken has been effectively in charge of B&G Foods' sales, marketing and operations since late 2017.

So in large part, the transition is already complete. And while I'm retiring as CEO, I expect to remain actively involved in the company both as a shareholder and in an advisory role on M&A and corporate finance transactions. I know that the company remains in good hands with its current management team, and I look forward to watching the company continue to grow for years to come. I now would like to turn the call over to Bruce and then to Ken, who will also lead the Q&A portion of the call.

Bruce Wacha -- Chief Financial Officer

Good afternoon. Thank you for your generous introduction, for hiring and mentoring me and for all that you have done to build this organization during your tenure. While there are many things that we did well in 2018, we missed on the margin side, which unfortunately depressed our adjusted EBITDA and adjusted EPS, two very important measures of our performance. Our net sales came in as expected.

We grew our base business a healthy 1.6% for the quarter and nearly 1% for the year despite a very challenging topline environment for our industry. We had a very strong year for cash generation, generating more than $200 million in net cash provided by operating activities for the year. We nailed our inventory reduction plan target, reducing inventory by more than 100 million during the year from approximately 502 million at the beginning of the year to approximately 401 million today. We also reduced our long-term debt by almost 600 million for the year from a little bit over $2.2 billion at the start of the year to $1.6 billion today.

In addition to our cash flows, over debt paydown efforts were also helped in large part by the sale of Pirate Brands during the year. As a reminder, this is a brand that we acquired in 2013 for $195 million and then sold in 2018 for $420 million, more than double the price we paid for the brand five years ago. In 2018, we generated company record net sales of $1.7 billion, company record EBITDA of $397.4 million and diluted earnings per share of $2.60. After adjusting for certain items affecting comparability, described in our earnings release, our adjusted EBITDA was 314.2 million, and our adjusted diluted earnings per share was $1.85.

While we are disappointed with these numbers, we have an action plan in place that Ken will walk you through shortly that makes us confident that our expectations to grow the business in 2019. In the fourth quarter of 2018, we generated net sales of $458.1 million, EBITDA of 188.6 million, diluted earnings per share of $1.70, adjusted EBITDA of $58.5 million and adjusted diluted earnings per share of $0.34. Our net sales of $458.1 million represents an increase of $9 million compared to the fourth quarter of 2017 after adjusting for the sale of Pirate Brands. Our core brands performed very well during the quarter, led by Green Giant, whose net sales increased by approximately $7.3 million or nearly 5% during the quarter, seeing growth in net sales of both frozen and shelf-stable products at the same time for the first time under our ownership.

Ortega net sales grew by approximately $2.4 million in the quarter, or 7.2%. New York Style grew by approximately $0.8 million or 8.8%. Cream of Wheat grew by approximately $8 billion or 4.3%. Maple Grove Farms grew by approximately $0.5 million or 2.8%.

Our spices & seasonings business in the aggregate, including brands like Mrs. Dash, Ac'cent and the spices and seasons business that we acquired in late 2016 had a strong turnaround in the fourth quarter, growing by $6.5 million or 8.4%. Back to Nature. During the quarter, we trend unprofitable SKUs such as cereal, juices and soups and we were negatively impacted by some distribution losses, which resulted in a decrease in net sales of $5.5 million or 27%.

Victoria was down $2.5 million, or 20.3% for the quarter, primarily due to the shift in timing of a key promotional event with one of the brand's largest customers to the third quarter of '18, where we benefited, from the fourth quarter of 2017. All other brands in the aggregate decreased by $8.6 million or 6.8%. Gross profit was $49.9 million for the fourth quarter of 2018 or $86.8 million after excluding the negative impact of 36.9 million of certain items affecting comparability described in our earnings release. Gross profit was 93.9 million for the fourth quarter of 2017.

Gross profit as expressed as a percentage of net sales after excluding the items affecting comparability that I just mentioned was 19% for the quarter. Gross profit as a percentage of net sales was 20.1% in the fourth quarter of 2017. Gross profit as a percentage of net sales was negatively impacted by industrywide and anticipated increases in freight expenses, as well as negative product mix, which is partially offset by procurement savings, a decrease in warehousing expenses and an increase in net pricing. Selling, general and administrative expenses decreased by 4.4 million or 8.4% to 47.6 million in the fourth quarter of 2018 from 52 million in the fourth quarter of 2017 due to a decrease in acquisition and divesture-related expenses.

Expressed as a percentage of net sales, selling, general and administrative of expenses improved by 70 basis points to 10.4% from 11.1% in the fourth quarter of 2017. We generated a company record EBITDA of $188.6 million during the fourth quarter of 2018 with a large benefit from our gain on the sale of Pirate Brands in October. After adjusting for the sale of Pirate Brands net of certain other items affecting comparability detailed in our earnings release, we generated 58.5 million in adjusted EBITDA during the quarter, a decrease of approximately $10.4 million from 4Q 2017. The sale of Pirate Brands was the primary driver for this shortfall and accounted for a little bit more than $7 million of the decline in adjusted EBITDA.

Outside of Pirate Brands and similar to the first three quarters of the year, we witnessed elevated freight costs, as well as increased promotional costs associated with our canned vegetable business and some negative product mix that we were unable to offset entirely with our sales price increases and cost-savings initiatives. During our third quarter conference call, we outlined our expectations for an incremental 14 to $15 million or so of adjusted EBITDA benefit for the fourth quarter versus the prior-year period to achieve the bottom of our full-year adjusted EBITDA target of $338 million. Unfortunately, while our base business remained stable, we were able to achieve these incremental benefits. This was primarily due to five factors.

First, we achieved approximately $2.1 million in pricing in our base business during the quarter, a step in the right direction but less than the 10 million that we had hoped for. We captured the benefit that we expected to achieve from our list price increases that we implemented last April, but we were able to get sufficient benefit from our planned reduction to trade and promotional spending that was required to hit our full $10 million target for the quarter. Customer supported our trade deals very well, which illustrates their positive support for our brands, but we sold more on volume on promotion than we planned, which negatively impacted margins. Second, while we grew volumes sufficiently to achieve the bottom end of our sales guidance, some of these gains were driven by our Green Giant canned business, which tend to have higher promotional spend and a lower margin profile than the rest of the base business.

Our inability to hit the high end of our net sales target with volume gains, driven by our higher margin brands, further limited our ability to achieve our adjusted EBITDA targets for the quarter and contributed to our lower margin mix, costing us some $5 million in lost adjusted EBITDA opportunity. Third, procurement saving, primarily driven by tariffs, cost us 2 to $3 million more than anticipated. Fourth, while we managed to hold freight flat driven by some of our cost-savings initiatives, these costs remained elevated compared to historic levels, and we did not achieve the 3 to $5 million in benefit that we had hoped for in the quarter. And finally, during the course of our $100 million inventory reduction process, we identified and wrote down some $5 million or so in inventory that was a hit to our adjusted EBITDA in the fourth quarter.

As I mentioned previously, we finished the year with approximately 1.6 billion in net debt. We reduced our net debt to pro forma adjusted EBITDA to approximately 5.3 times at the end of the year. We remain firmly committed to maintaining our dividend policy, and we remain well-positioned to opportunistically pursue M&A. Our board of directors reaffirmed its commitment to our dividend policy yesterday by declaring our 58th consecutive quarterly dividend since our IPO in 2004.

At yesterday's closing stock price, our current dividend of $1.90 per share per year represents a dividend yield of 7.8%. During 2018, we paid our shareholders approximately $125 million in dividends. In addition, we repurchased and retired $8.4 million of common stock or 295,000 shares during the quarter at an average price per share of $28.39, bringing our total for the year to $26.9 million of common stock or approximately one million shares. We currently have $23.1 million of authorization to repurchase our common stock under the $50 million stock repurchase program approved by our board of directors last year.

Before we move to our guidance for fiscal 2019, I would like to remind everyone that our 2018 results include a little bit more than three quarters of Pirate Brands' net sales of $74.8 million. For 2019, we expect net sales to be in the range of 1.635 to 1.665 or in line with our zero to 2% long-term topline growth model. We expect adjusted EBITDA of 305 million to 320 million; adjusted earnings per share of $1.85 to $2; net interest expense of 87.5 to 91.5 million, including cash interest expense of 84 to 88 million and interest amortization expense of $3.5 million; depreciation expense of approximately 40 million; amortization expense of approximately 18 million; an effective tax rate of approximately 44.5%; cash taxes, excluding the tax effects from the gain on sale of Pirate Brands, to be less than 5 million; and finally, we anticipate CAPEX to be approximately 45 to $50 million for 2019, which is in line with last year. Based on the midpoint of our adjusted EBITDA guidance range, we expect that our adjusted EBITDA less CAPEX, cash taxes after excluding the tax effects from the gain on Pirate Brands sale and cash interest to be approximately $180 million.

Absent acquisitions, we expect our net debt to adjusted EBITDA to be 5.0 to 5.1 times at the end of next year. Although we typically provide only annual guidance and do not typically provide quarterly guidance, given the sale of Pirate Brands, we thought that it made sense to provide guidance for the first quarter of 2019. In addition to the impact of the divestiture of Pirate Brands, which produced for us net sales of $74.8 million and adjusted EBITDA of approximately $20 million during our three quarters plus of ownership in 2018, we also expect to see a couple million dollars of incremental inflationary pressure during the quarter, consistent with our outlook for the remainder of the year. Our sales price increases and the majority of our cost savings initiatives for 2019 will not be effective until after the end of the first quarter.

Additionally, due to the timing of Easter this year, we expect to see a small shift in some net sales from the first quarter of 2018 to the second quarter in 2019. Taking all of that into account, we expect a first-quarter 2019 net sales of 400 to $412 million, adjusted EBITDA of 78 to $82 million and adjusted diluted EPS of $0.47 to $0.52. As I mentioned earlier, we are disappointed with our 2018 margins and profits, and we expect better in 2019. However, our drop in adjusted EBITDA from 333 to $314 million in 2018 was $19 million, or just $12 million after excluding the estimated $7 million impact from the sale of Pirate Brands.

This decline was largely driven by industrywide inflationary pressures that we were not able to fully offset with our price increases and cost-cutting initiatives in 2018. Despite the drop in adjusted EBITDA, we had a very strong cash flow year and generated nearly $210 million of net cash from operating activities, and we remain committed to our dividend, as well as our growth by acquisition strategy. And now I would like to turn the call over to Ken to give a little bit more perspective on our 2018 results, as well as the roadmap to get to our 2019 forecast. Ken?

Ken Romanzi -- Incoming President and Chief Executive Officer

Thank you, Bruce. And, Bob, thank you for your terrific leadership and all the wonderful things you've done for the B&G Foods over the past 35 years. And thank you so much for your confidence in me to take the reins of this great company you built. You've been a terrific partner and mentor to me as I assimilated into B&G Foods, and I'm excited for you to continue to advise us on M&A and capital market activity.

I'm truly honored to take the helm as CEO of B&G Foods. I was so very excited to come here when I joined a little over a year ago because of the company's well-known acquisition growth strategy, its best-in-class adjusted EBITDA margin profile and its reputation as a lean operator. And I have been pleasantly surprised by the extent of its can-do culture and the dedication of our employees to make a difference and drive real value for our shareholders. I am committed to nourish what's good about of B&G Foods and continue its successful strategies to build shareholder value.

We live in a challenging time for food companies, but I'm confident that B&G Foods is up to the task of succeeding in this environment. Simply put, we are very disappointed in our 2018 results. We had a great year on many fronts, highlighted by the reawakening of Green Giant and the entire frozen vegetable category with industry leading innovation, driving solid core brand sales and consumption growth, initiating a multiyear cost savings program, realizing significant value creation with the sale of Pirate's Booty and generating a lot of cash. But expectations are expectations.

Our earning results this past year were far from our expectations due to lower-than-expected margins. We were not able to overcome the resurgence in cost inflation across many input factors, way more than just freight. While we were among the leaders in taking list pricing last April, we were unable to gain the net price realization through trade promotion productivity we hoped for and our cost savings program was just too new to yield significant results last year. To drive results going forward, we're going to redouble our efforts across both of these fronts, and we're going to start at the top.

As you may have seen in the press release we issued earlier, together with our earnings release, we are restructuring our leadership and senior management team to be leaner and more focused against core functional disciplines as part of a companywide cost reduction program I will highlight later. The changes we're making are expected to reduce annual ongoing G&A expense by $7 million or approximately $4 million in 2019 to offset other inflationary inputs. The company announced today that Vanessa Maskal, our executive vice president of sales and marketing, plans to retire in April 2019. As many of you know, Vanessa has been a key member of our management team for nearly two decades.

During her time at the company, our sales have grown from roughly $411 million to more than $1.7 billion today. We thank Vanessa for all of her leadership, hard work and dedication over the years. Her presence at B&G Foods will certainly be missed. We've reorganized our leadership team leader following appointments: Ellen Schum will become our executive vice president and chief customer officer.

We hired Ellen last July, and she has been running our U.S. retail sales organizations since then. A long time Nabisco veteran, we are confident Ellen can pick up the reins of managing the solid customer relationships Vanessa and her team have built over the years. Jordan Greenberg, a longtime B&G Foods veteran and the key architect behind the reawakening Green Giant, will become our executive vice president and chief commercial officer responsible for all of our marketing, strategic and annual planning and key growth initiatives.

And finally, Erich Fritz will be joining B&G Foods as executive vice president and chief supply chain officer to oversee all of our operations, quality, research and development and acquisition integration efforts. Erich joins us from Ocean Spray and an industry veteran with whom I have worked over many years and will be a valuable addition to the team. Erich will partner with Bill Herbes, our executive vice president of operations, and his team as we continue to evolve and grow as a company. With these new leadership appointments, coupled with our existing strong operations, HR, legal and financial leadership, I am confident we have the right management team in place to be successful today and in the future.

This new leadership team will be intensely focused on delivering our 2019 plan, a plan rooted in a goal of solid core brand growth of 2%, more aggressive list pricing than last year and the ramp-up of our cost productivity program. Our biggest challenge in 2018 was on the cost side of the equation, and we expect 2019 to be no different. Following an outsized increase in freight costs of more than $30 million in 2018, we expect freight inflation to continue but at a more moderate pace in 2019, up 15 to $20 million before our cost-savings initiatives. We also expect input cost inflation of another approximately $10 million for the rest of our cost of goods driven by increases in wages, ingredients, packaging and pension expense.

To combat these inflationary pressures and position ourselves to grow adjusted EBITDA, two core pillars of our 2019 plan are pricing and the realization of cost-savings initiatives from the cost savings program we commenced in 2018. Last year, we benefited from approximately $10 million on price increases of our base business, successfully increasing list prices across much of our portfolio last spring, but we fell short of our targeted reduction in promotional trade spend. In 2019, we will have a small wraparound benefit from the 2018 increases over the first four to five months of the year. Further, we have implemented another price increase effective this April, much more weighted toward list pricing than trade reductions on more brands than last year, and we have included Canada as well, which we did not in 2018.

And while we are continuing to revise our promotional activity to become more efficient, we're not counting on much savings in our financial projections until we can prove to it to ourselves, we will improve our profitability. The good news this is that customers are still strongly supporting our set of store brands. The bad news, is the cost of these promotions limited our net pricing impact, but we remain convinced there are many productivity opportunities. They're not easy to get at, but they are there.

If we can get at them, we may have upside in our pricing model. All in, we expect to benefit by approximately 15 to $20 million in pricing this year, which includes the 20 to $25 million of annualized price increase that will go into effect this spring. Our second core assumption to combat inflation in 2019 is cost savings. After a complete review of our cost structure in 2018, we only just began to implement the first initiatives of the program late in the year that yielded some 3 to $5 million in the fourth quarter.

In 2019, we expect to drive another 15 to $20 million of cost savings, growing to 20 to $25 million in 2020, and these cost savings initiatives, which are expected to help offset cost inflation, fall into large buckets. One, logistics; two, procurement; three, manufacturing; four, product and packaging; and five, selling, general and administrative. In logistics, we expect to see the full-year benefit of our West Coast distribution center in Fontana, California that opened last September. In addition, we are now in process of realigning our frozen distribution network in a similar way with similar expected savings, relocating a frozen warehouse to move closer to our customers to reduce expensive freight miles while improving customer service.

Furthermore, while we will miss our beloved Pirate, plus the sales and earnings that went along with him when we sold Pirate's Booty to Hershey, we also expect a side benefit in our logistics cost model as the cost of storing and transporting these bulky products were significantly higher than the remainder of our dry grocery product portfolio. In total, we expect 5 to $6 million in logistics benefits during the year. In procurement, our team has renegotiated many of our material supply arrangements and several of our co-manufacturing arrangements, which is expected to yield savings of 4 to $5 million this year. In manufacturing, we have added some automation to several facilities and are relocating production of some products to more cost-effective locations.

One example of a real win-win is the relocation of where we will produce our flagship SnackWell's product, Devil's Food Cookie Cakes. The relocation from one manufacturing partner to another is expected to not only yield a million and a half dollars in cost savings but also result in a consumer preferred product improvement and the ability to add innovation to the product lineup. We've also taken a serious look at savings within our product and packaging costs and have rightsized packaging, reducing weight where appropriate in our Green Giant frozen portfolio. These benefits are expected to yield 4 to $5 million in 2019.

And lastly, as I mentioned before, we've taken a hard look at G&A expenses and have begun rightsizing our organization, in part due to Pirate Brands divestiture. With some recent retirements at the senior management level, we will operate with a leaner management structure, and we've also eliminated positions that were dedicated to supporting the Pirate Booty business. As I previously mentioned, we expect these actions will reduce our G&A cost structure by approximately $7 million on an annual basis. In 2019, these expected savings should offset increased expenses from year-on-year salary merit increases, the full year cost of employees added midyear in 2019 and pension expenses.

Now our attention is not to shrink business over the long-term, rather we believe our new, leaner structure will make us more effective, as well as more efficient. In fact, we're investing in our sales organization with some key hires to support our direct selling efforts in the club channel and with several key grocery customers, relying less on third-party brokers. So our 2019 plan is rooted in list pricing and cost savings initiatives that are more aggressive in 2019 than in 2018, to tame the higher inflationary pressures we expect. Both of these pillars are supported by sales growth consistent with our long-term objective of zero to 2% top line growth.

Our sales expectations in 2019 build from strong momentum and consumption in 2018, up 1.9% for the year and 1.7% in the fourth quarter, evidence that our retail partners are not giving up on our set of store brands and that consumers are continuing to fill their shopping baskets with our products on a regular basis. In January, consumption maintained good momentum, up 4.2%. Much of our growth in 2019 will be driven by the continued momentum in Green Giant, where consistent frozen innovation since the fall of 2016 has now surpassed $200 million in annual retail sales. Fourth-quarter consumption's range remains strong at double-digit growth, a fifth consecutive quarter of that double-digit growth.

As we discussed before, we see Green Giant as the vegetable brand of the future, not only innovating in the frozen vegetable category but also helping consumers get more vegetables in their diet by launching new products made with vegetables outside of traditional frozen vegetables. We began shipping Green Giant cauliflower pizza crusts, Green Giant protein bowls and Little Green Sprout organic vegetables last fall and we'll continue their rollout in the first half of this year. We expect to follow that with another round of innovations slated for the fall of 2019 to get a head start on 2020. So that's our 2019 plan.

Sales growth consistent with our long-term stated objective of zero to 2% growth, a broader and more reliable pricing strategy and the ramp-up of our multiyear cost-savings program. In summary, as the next CEO of B&G Foods, I would also like to emphasize, we remain very focused on M&A as a key lever to create shareholder value, and we remain committed to our current policy of paying a substantial portion of our cash available to pay dividends to our shareholders. Our major transaction in 2018 was the opportunistic sale of Pirate Brands for $420 million, providing a terrific return and allowing us to better position our balance sheet for more acquisitions. But we were also able to remain active on the buy side with the acquisition of McCann's Irish Oatmeal.

Now, while McCann's was on the smaller size for us, it was strategic, adding to our already strong hot breakfast portfolio of Cream of Wheat, the largest lineup of the pure maple syrup in the U.S. led by Maple Grove Farms and Spring Tree and the two leaders in molasses, Brer Rabbit and Grandma's. With leverage of a little over five times today, we are actively looking for accretive acquisitions, and we are very excited that we will retain Bob as a key advisor to the company, working closely with myself, Bruce, Scott Lerner, our long-term general counsel, to assist in our M&A efforts and hopefully win us many more new and exciting brands for years to come. This concludes our remarks.

And now I would like to begin the Q&A portion of our call. Operator?


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Questions and Answers:

Operator

[Operator instructions] We will take our first question from Cornell Burnette with Citi Research. Please go ahead.

Cornell Burnette -- Citi Research -- Analyst

Just wanted to jump in here, just get a little insight on the fourth quarter. It seems kind of similar to last year, kind of death by 1,000 cuts when you look at the different pieces that went against you and really drove the wide delta in terms of where EBITDA was supposed to be. And I just wanted to know, when you look back and look at this postmortem, is there perhaps somewhere down the line where you thought maybe just you got a little bit ahead of your skis in terms of the way the guidance was laid out for the year? And then secondly, when you talk about kind of having some negative impacts from mix, were the sales of the canned Green Giant products negative margin and that's what happened? Or is it just that those sales kind of did a little bit better than what you expected but also when I look at the rest of the base, perhaps there wasn't as much growth as you thought the rest of the base could have achieved when you went into the quarter?

Bruce Wacha -- Chief Financial Officer

Yes. So first on your Green Giant question, I think that's the right answer. They were profitable sales. The issue is we hit kind of the low end of our target for net sales in the fourth quarter.

And unfortunately, the way that worked is we hit it with the Green Giant canned business as opposed to our higher margin base core B&G brands that have higher margins. Had we done that, we would have had a couple of extra million dollars of EBITDA for the quarter, or had we gotten all of them to fire all on all cylinders, that would have been much better. I think an answer to your first question, really our fourth quarter this year looked a lot like the fourth quarter last year, with the exception of Pirate coming out. So if we were off $10 million, a little bit more than $7 million of that was Pirate's.

And the rest was really similar to the story that we saw a year where, as you said, just nickels and dimes that came off and unfortunately added up. That is probably the fourth quarter that people should expect from a cadence in terms of fourth quarter as a lower margin quarter. We did think we were going to do better. We outlined earlier in to call some of those areas in terms of expecting to get better pricing.

We held the line at freight, but we were hoping to do a little bit better than that. We were hit with some of the tariffs that came through on the procurement side, and these limited the upside. But as far as the stability of the business, pretty flat to last year after removing Pirate's and then just a couple million dollars' shortfall after that.

Cornell Burnette -- Citi Research -- Analyst

And then on the pricing side, I know part of what you've kind of outlined here is that, hey, list prices were fine but you didn't do so well on the promoted side. Kind of when you go forward and you look at 2019, how do you guard against that? And what type of risk does that pose to your pricing guidance? Because you have more pricing coming along the way in 2019 and just wonder if you kind of set up to see something similar happen where maybe it doesn't come through the way you would have anticipated. So what's different in 2019 verses '18?

Ken Romanzi -- Incoming President and Chief Executive Officer

Yes. Hi. This is Ken. A couple of points.

No. 1, the reason why we felt we'd get $10 million in the fourth quarter is we were starting to see traction on trade promotion savings earlier in the year, as well as list price, so we thought we could continue that. We didn't see the continued trade. So as you might expect, there's a lot of variability in trying to get trade promotion savings.

For 2019, in order not to repeat that, as I mentioned, what we're saying we're going to get in pricing is all due to lift. We are taking trade promotion actions but the benefits we think we can get there, we don't even have in our projection. So we're going to rely on the lift to deliver on our financials and we're going to continue to try to get more efficient in trade. Like -- so for instance, in this past second quarter, we saw some nice pricing on trade promotion reductions.

We just weren't able to replicate in the fourth quarter. So until we can more replicate a reliable savings in trade, we're not going to put it into our projections.

Cornell Burnette -- Citi Research -- Analyst

OK. Thank you, I'll pass it along.

Ken Romanzi -- Incoming President and Chief Executive Officer

And we're also adding more business. Like, for instance, this past year, we didn't take pricing on back to nature and spices. We are going to do that this year, and we didn't take pricing in Canada, and we're going to do that. So we're taking more lift than we even did last year because -- against more business.

Operator

[Operator instructions] We will take our next question from Karru Martinson with Jefferies. Please go ahead.

Karru Martinson -- Jefferies -- Analyst

Good evening. Bob, I wish you well in your transition. It's been a long time covering you guys with you in the role there. I just wanted to ask about the promotions and the pricing action.

Was this in response to a competitive landscape that changed? Or was there just pushback from the retailers?

Ken Romanzi -- Incoming President and Chief Executive Officer

It's not necessarily pushback from the retailer. When you reduce trade promotion, you're really saying how much volume am I really going to sell on deal and at what rate. And so while we change rates, it's always an estimate as to how much volume you sell at full price versus how much volume you're going to sell on deal. And we just sold a lot more volume on deal than what we projected.

So as I said until we can really get a more reliable model, because this isn't the first time we're really trying -- as a company, we're really trying to dive into trade. We know that there are efficiencies there. We started to experience some, which is what gave us -- we were bullish in the fourth quarter after what we saw earlier in the year, but it proved elusive to us. So we're going to continue with a plan to find the productivity in trade.

But again, we're not going to rely on it until we can prove it and see in the bottom line results.

Karru Martinson -- Jefferies -- Analyst

OK. And how do you feel that the environment is out there in terms of trying to pass through some of this inflation that we're seeing?

Ken Romanzi -- Incoming President and Chief Executive Officer

Pricing is never easy, but we see it this year a little bit easier for us because we kind of led with our chin last year. We were among the first or maybe even the first food company to announce, as we got on a very early. We -- we're now in among of everybody -- just about everybody talking about pricing and so it's never easy, but we've got a lot of company this year. And because the cost inputs are up across the board where last year early in the year mostly it was freight.

Now everybody is seeing it across all the inputs, including our retail partners who see it in their private label goods because it's cardboard and it's packaging materials and it's steel and it's all of those cost inputs so everybody is experiencing it, including our retailers with their own brands.

Karru Martinson -- Jefferies -- Analyst

OK. And then just lastly, on the M&A front, certainly there's been a lot of expected divestitures coming from some of the big guys. You've talked about wanting to be accretive. But is there a thought process as to the size and where you guys will be willing to take leverage to secure some of these assets?

Bruce Wacha -- Chief Financial Officer

So we're typically in that four and a half to five and a half times target net debt to EBITDA. There have been instances when we've been willing to go higher for the right deal, but it's got to be the right deal. And so we're going to continue to be opportunistic and look. We're encouraged by the stories of -- of rumored divestitures and we're out there looking.

Ken Romanzi -- Incoming President and Chief Executive Officer

Overall, we're all going to be continue to be very disciplined in what valuations, so some of the things we hear out there are whether the valuation expectations will be there, because this company's -- and I will be committed to that, this company is very committed for us to be accretive and for us not to overpay for businesses.

Bruce Wacha -- Chief Financial Officer

At the end of the day, the math has to work and it's got be cash flow accretive, and that's how we've always run the business.

Operator

We will take our next question from Bryan Hunt with Wells Fargo. Please go ahead.

Steve Cook -- Wells Fargo -- Analyst

Good afternoon. Steve Cook on for Bryan. Just wanted to touch on the promotional trade support again. I guess any fear that you have that this is more indicative of a structural change in the packaged food environment where you have to promote these brands more heavily to compete with private label and niche-ier brands? Or just kind of too early to tell at this point?

Bruce Wacha -- Chief Financial Officer

The one thing maybe Ken can talk a little bit more picture but just to remind people, last year at this point in time, we told the investment community we were going to raise price. There were some skepticism because nobody had really raised price in five, seven years. We benefited from price increases about 10, $12 million in 2018. So I don't know that I'd say there's a structural issue that's preventing us from doing so.

We just didn't get as much as we wanted to.

Ken Romanzi -- Incoming President and Chief Executive Officer

Yes. And I would say to add to that, a list price increase is that -- our customers put us a lot of paces to prove that we deserve that price increase by showing a breakdown of what our cost structure is and we go through a tremendous amount of paperwork and a tremendous amount of justification. So while there's so much work to be done, we prove it out because it's pretty simple. It showed cost input and placements.

So it's relatively -- not easy but it's relatively simple to understand a list price increase. Trade promotion, like I said before, is much more of a forecasting exercise of how much am I going to pay -- or how much am I going to sell at full price versus promoted price, and how much does the customer buy on promotion. That gets much more delicate in terms of being able to forecast that. And like I said before, we were able to garner savings on reducing some very heavy trade deals we were doing out of two of our brands, and we garnered the savings, and we tried to do that again in the fourth quarter and if the customers support a promotion better than you think they would, you're going to sell a lot more promotion.

So promotion is almost easier to adjust because if you don't want the hot price point and you don't want the secondary display and the front page ad because you think it's too costly, you can give that up. And while the retailer won't be tremendously happy, it's not like they can force you to do a promotion. The problem is it's harder to forecast, almost, than list price increases because we have very good elasticity models to tell us what's going to happen on the list. What we can't find out is how much is a customer going to buy on promotion versus non-promotion, in the midst of changing a promotional strategy or reducing promotional allowances.

I can reduce the promotional allowances by 10%, but if they buy 30% more on deal, that could almost wipe out promotion allowance savings. So it's more of forecasting exercise that, quite frankly, we as a company have to get better at. Because again, it's the first time we're really trying to make significant savings on a pretty big line item, trade promotion is a big part of our pricing model.

Steve Cook -- Wells Fargo -- Analyst

OK, and then the turnaround Green Giant shelf stable, I guess is that -- do you think that's mostly innovation or easy comparisons or what -- I guess what do you think is driving that?

Ken Romanzi -- Incoming President and Chief Executive Officer

Simple answer on Green Giant is that we overlapped their loss of distribution on Walmart. But as we mentioned in previous calls, outside of Walmart, consumption on Green Giant cans was basically up. Partly because we believe there is still some brand value in Green Giant, so if people couldn't find it at Walmart, they found it in someplace else. And we were effective in our promotional plans with our retailers.

So, our business was up outside of Walmart. And so, when we started to overlap the loss in Walmart distribution, the business grew and we expect our canned business to grow this year since we're not overlapping any losses and in fact are gaining distribution in some channels on our Green Giant can business. Now that's double-edged sword because that is a lower margin business, but it's still positive margin and we just got to forecast the mix right in terms of growing that business. So, we expect Green Giant's going to grow nicely at 2019 on both the frozen and shelf stable side.

And it's also distribution on shelf-stable, not innovation.

Steve Cook -- Wells Fargo -- Analyst

OK. And then lastly on acquisitions. I guess with everything you guys have on your plate, leadership changes, aggressive cost savings you're rolling out, is it fair to assume you're looking more heavily at smaller acquisitions? Or are you equally looking at small versus large acquisitions?

Bruce Wacha -- Chief Financial Officer

I would say we're looking and the math has to work.

Ken Romanzi -- Incoming President and Chief Executive Officer

Yes, our leadership changes are not going to slow that down. We have people that are -- one person is really new, other people are already in existence and we have a good stable people that are existing that have worked on acquisitions. So, from a leadership standpoint, we've already had people involved at looking acquisitions who are among the new leadership team that I outlined earlier.

Operator

We will take our next question from William Reuter with Bank of America. Please go ahead.

William Reuter -- Bank of America -- Analyst

Firstly, you guys have talked about the second-quarter price increases that should help your margins. When you've talk to your customers about those, what have they talked to you about some of your competitors in terms of them pushing through price increases? Do you think that's going to be a consistent message among your competitors as well?

Bruce Wacha -- Chief Financial Officer

So without getting into specific conversations with customers, I think you can follow other public companies, for example, or what's out there in the press, and I think that the majority of package food companies and possible personal-care companies, people who are shipping and selling things in grocery stores, most people are talking about price increases.

William Reuter -- Bank of America -- Analyst

OK. And then so it sounds like these strong sales of the Green Giant canned products really helped your fourth-quarter sales, but that would mean I guess other product sales were a little bit weaker. I guess, to -- I'm not share if I heard in the prepared remarks, to what do you attribute the weakness in some of those higher margin products?

Bruce Wacha -- Chief Financial Officer

I don't know I'd say that it's weakness. Again, we grew sales. We grew our base business. We just didn't get the incremental growth over and above.

So when you think about our base business, fourth quarter to full year, we were up a point and a half and a point, so good solid performance. We just didn't get the incremental growth that we were hoping for.

William Reuter -- Bank of America -- Analyst

And then just lastly for me, as you've talked to, I guess, some e-commerce customers, I would imagine that will continue to try and work selling some of your products. How do you think that's going to evolve over the next, let's say, year or two years in terms of them increasing your product sales?

Bruce Wacha -- Chief Financial Officer

I think it's going to take time. We're certainly focused on e-commerce. It's less than a couple percent of business for most people that do things like we do. It's going to grow over time and our job is to continue to grow our position as well.

Ken Romanzi -- Incoming President and Chief Executive Officer

And the only thing I'd add is that we work very closely with some of the big mainline retailers who actually -- they're offering a very good solution. I mean, all you have to do is turn on the TV and see all that great advertising from Walmart in terms of go online and pickup and not -- it's not all about delivery, and they provide the full shopping basket solution. So we'll continue to work with the big player in Amazon but we're also going to continue to work with some of the very large retailers like Walmart and Kroger on their online solutions. And we're -- it's still a very small piece and we're playing a little bit of catch-up on that in terms of getting all of our digital assets ready to do business with them and are committed to doing that in a much more aggressive way, so that where -- when it does -- when the full shopping basket does take off online, we're going to be right there available with the key players in the business.

William Reuter -- Bank of America -- Analyst

Great. That's all for me. Thank you.

Operator

We will take our next question from Ken Zaslow with Bank of Montreal. Please go ahead.

Ken Zaslow -- Bank of Montreal -- Analyst

Bob, I wish you well and congrats on your semiretirement, I guess. When I think about the cost savings -- Ken, look, it looks like your big initiative to start off is let's rework the cost structure of B&G Foods. When you think about doing all these projects, and I have to go through the transcript again, but when I go through all this, what does -- how does it change the growth algorithm beyond '19? And is this just to offset the challenges or is there a business case to say, "hey, look, our growth algorithm previously was muted, and we can actually now accelerate that?"

Ken Romanzi -- Incoming President and Chief Executive Officer

Well, right now, so we're pretty consistent with what we've been saying in terms of our achievement of top line growth, and that -- if you look at the past, the company's value accretion has come from double-digit top line and bottom line growth through accretive acquisitions and not trying to overreach n the base business. So modest top line growth. The cost savings, you're exactly right. We're in that -- we ramped up cost savings because right now, we just have the input -- inflation is back in food.

There was deflation for many years, both in terms of cost, as well as pricing at the retail level. So, inflation is back. But it's never a bad idea to reduce our cost structure because when inflation gets under control, we'll now have a more efficient cost structure where we can work on improving our margins. So, in the short term, we're doing all this to just maintain our margins.

In the longer term, we hope to improve our margin. And again, we have a multiyear effort, and we will be sharing with more ideas of what we're going to be preventing down the road in terms of asset rationalization and some of the more heavy lifting cost savings ideas. They just take longer to get at.

Ken Zaslow -- Bank of Montreal -- Analyst

My second question is, how do you justify making an acquisition when your stock is at these levels? When I would argue that repurchasing your stock is -- how do you get a return even close to what you would believe that your stock would get by buying back stock. It doesn't seem like a close second here.

Bruce Wacha -- Chief Financial Officer

So I think the answer is we're looking at both. We have a share buyback authorization in place. We bought shares when we could during open windows, and we're also continuing to look at M&A. And so I get the point from a value accretion and accretion on share buybacks.

That is part of it. We're also focused on growing the business. We're not going to stretch or do an acquisition that doesn't make sense but if there's an opportunity to buy something that does make sense, we will also take that into consideration.

Operator

We will take our next question from Michael Gallo with CL King. Please go ahead.

Michael Gallo -- C.L. King and Associates -- Analyst

Bigger picture question, Ken. When you look at your overall portfolio, obviously, you had the opportunity to divest Pirate at a very good price this year. Your small brands have clearly underperformed and there's quite a few of them. Is there a bucket of brands that you look at that perhaps used to make sense in the portfolio, don't make sense of the portfolio today where you might think about the divestiture? Or are you 100% happy with all the brands that you have and you'll just kind of continue to bolt on and move along?

Ken Romanzi -- Incoming President and Chief Executive Officer

Yes, I mean, win we look at our brands -- hey, listen, nothing's for sale. But there's some -- like Pirate's wasn't for sale either, but if someone wants to come and pay us 19 times earnings, we're ready to listen. So, in some of these brands, we don't want to be decretive by selling a brand below what we're trading at. So, we have to be very careful about selling off EBITDA.

And so, if someone is willing pay for that, we'll do it. But that's why we don't have outsized growth. We have fantastic Green Giant, we believe there's upside in Victoria. We believe there's upside in McCann's and Back to Nature.

But there are some brands that aren't in growth categories and that's why we have a very modest zero to 2% growth algorithm at the top line. So, we don't -- it's not like -- and we've been through this with the board. We had a strategic planning session and me being new, they wanted to really test my conviction on how -- where are we going to take the portfolio and it's like, we have to manage this portfolio among a bunch -- several brands that will grow, nicely, like Green Giant. Many brands will be kind of stable, and there will be some declining brands and it's a portfolio for us to manage forward in our long term zero to 2% algorithm.

Operator

We will take our next question from Carla Casella with JP Morgan. Please go ahead.

Carla Casella -- J.P. Morgan -- Analyst

Hi. Most of my questions have been answered but just to clarify, on your cost savings, the 15 to 20 million, is that what should fall to the bottom line this year? Or is that you should have on a run rate basis when you -- by the time you finish the year?

Ken Romanzi -- Incoming President and Chief Executive Officer

So that's what we're planning on actually hitting this year. Again, offsetting a lot of inflationary pressures, that's just this year and it builds from there. Because those aren't annual, because there are many programs implemented throughout the year so they're not full year -- they're not all 12-month savings.

Carla Casella -- J.P. Morgan -- Analyst

OK. And is that the net number, net of the increased cost?

Bruce Wacha -- Chief Financial Officer

Sorry, so the way you should look at it is we outlined what the benefit for pricing should be this year, what the cost savings should be this year. We also outlined where we see inflationary pressure both in freight, as well as in our input costs and some of that should take us to the 305, the 320 in adjusted EBITDA guidance that we provided. Does that make sense?

Carla Casella -- J.P. Morgan -- Analyst

Yes, it does. That's great.

Operator

We will take our next question from Eric Larson with Buckingham Research Group. Please go ahead.

Eric Larson -- Buckingham Research Group -- Analyst

Good luck to you, Bob. We've both been together a long time. So, my first question here is when you look at the fourth quarter, you talk about a 10 to $12 million benefit from pricing. I don't think that's a net benefit.

So, when I look at the fourth quarter particularly on the promotion side, it looks like you went into the quarter with a little bit too much heat. When the bills started coming in, your checkbook was empty. You had to pay them. You didn't get the lift on some of the brands that you probably promoted which is interesting.

But I guess the question here is, this sounds like -- this piece of it is more of a self-inflicted problem and --

Bruce Wacha -- Chief Financial Officer

Eric, I'm just going to cut off for one second. So maybe we weren't clear earlier. We got a benefit from pricing, combination of list and promotion in the fourth quarter just a little bit over $2 million. We anticipated and where we missed on our forecast, we had hoped that that benefit was going to be $10 million so we missed our forecast by $8 million but we actually benefited from a pricing all-in of $2 million.

Does that make sense?

Eric Larson -- Buckingham Research Group -- Analyst

Yes. OK. So then, the next question is, as Ken was referring to earlier that promotion is -- it's a forecasting issue and it generally requires kind of annual planning and you announce it to the trade a year in advance and you work through it annualized basis. So why -- is this -- how could -- is this -- could this happen again in 2019? I mean what are the procedures you have put in place so that you don't run your promotion numbers too high? I guess the best way to frame it.

Bruce Wacha -- Chief Financial Officer

Yes. So when you think about it, when we laid out our pricing plan last year, we anticipated like a 15 to $20 million benefit. We got 12 million of that. As the year rolled along, we felt pretty good and we felt we were going to come out better in the fourth quarter and so we missed on that.

What Ken explained earlier is as we were going through our budget process for 2019, we have a price plan that is much more heavily benefit or based on list price increases. And what we're looking at from a trade and promotional spend basis is actually not in that budgeted number. So, it will be a list heavy plan as supposed to a combo plan. So, to avoid that risk that you are referring to.

I guess I say we hear you, we thought through that, and that's the plan that we created.

Eric Larson -- Buckingham Research Group -- Analyst

So the final question is, let's talk to cash flow build for a second again. Again, you got $125 million commitment annually to your dividend. Last year, you benefited from a lot of inventory reduction. What should be the free cash flow this year right now? Again, walk through it for me because there are a lot of issues that -- at hand when you were going through your prepared comments and your ability to really pay the dividend.

Bruce Wacha -- Chief Financial Officer

Yes. So we should benefit this year from about $180 million of excess cash before dividends with $125 million dividend payments.

Eric Larson -- Buckingham Research Group -- Analyst

OK. I'll take that off line and we'll just figure out how I'll get to the details of that later.

Bruce Wacha -- Chief Financial Officer

All right, thanks.

Operator

We will take our next question from Andrew Lazar with Barclays. Please go ahead.

Andrew Lazar -- Barclays -- Analyst

Good afternoon everybody. Right, Ken, let me start with, as CEO elect, one would think you've got to balance number of actions here. One is of course, that the sense of urgency around a lot of things you discussed today on pricing, cost structures and such, as well as some senior management changes. With putting out I would think some goals for the year that you will be kind of on the hook for, if you will, that are achievable, right, reasonable and -- but achievable and one where you've built in some flexibility.

Because last couple of years, we've seen that as the year's gone on, any number of things have happened, whether it's things outside your control or within, that haven't played out the way you wanted. Is that a right way to think about it? And if it is, can you take us through a little bit around, maybe it's a bridge to -- from '18 to '19, or how do you think you're building in that sort of flexibility to be able to have a -- what I would call a better-than-average line of sight to the EBITDA sort of range that you're talking about for '19?

Ken Romanzi -- Incoming President and Chief Executive Officer

What we're trying not to do is put -- bake in everything we feel we can achieve. I think we baked in a lot in the past. So, like I said, on pricing, we're not taking in anything from trade promotion savings and we feel we can get it some but we're not baking that in. On cost savings, we are actually going after more than what we shared.

So, our internal numbers would show up more than that. But in some of these things, there's slippage. So, we tried to give a slippage of the number. And so those are really the two areas.

I can't say that there's a huge upside beyond the range we shared on sales. And more sales doesn't combat inflation. So that's why we want to grow the business, and we're going to grow but that's not going to solve our inflation, which is why pricing trade promotion and cost savings are the two big buckets and three when you break out pricing between list and trade growth. So, I would say that way we're doing is we're executing on things that total up more than what we're sharing in our financial bridge so that we can deliver -- I am a believer in overpromise -- underpromise and overdeliver, it's not like I'm totally new here so I have been able to learn what we can achieve, what we can't achieve now.

We'll have a more realistic fourth-quarter forecast. And I think we're understanding the margin side of the business, particularly when you think about Green Giant cans. One year -- I wasn't here, but one year we lost Walmart and that hurt us. The next year now we have it back in and so forecasting the margin implications on all of that, we're learning how to do that and now I think we have a more stable business going forward and we can be I think a little bit more reliable on our forecast.

Bruce Wacha -- Chief Financial Officer

And the other thing, just add to that just as a reminder when you think about the last two years, beginning of 2017, I don't think anybody in the packaged food industry was suggesting that there was going to be a fourth quarter that was going to come in the aftermath of two major hurricanes that were going to knock freight up industrywide, so that was kind of a big unknown. And that was the beginning of inflation, as Ken was talking earlier. We were in a deflationary environment for some time. Even at the beginning of last year, folks were talking about inflationary pressures on freight but not really across the board and still deflation and there was still that concept of you need to lower price because the costs are coming down.

So, there's been a lot of changes over the last two years from an industrywide phenomenon, it's our job to anticipate that and as Ken said, we're working to do that as best as we can. But I don't think the inflationary pressures that we felt in the last two years, people were predicting in 2016.

Andrew Lazar -- Barclays -- Analyst

I apologize if I missed this but as you well know, the largest competitor in -- right, in frozen veg is going through some of its own rejiggering, right, of its portfolio. Taking another look at what innovation they plan to bring to the market going forward and maybe much of that won't happen really until that fall timeframe, around freezer case resets and things that you mentioned around your next wave of innovation. No doubt you're expecting that and anticipating it. But again, with this notion of flexibility, do you feel like you're building in an ample level of prudence in the way you're also budgeting specifically around Green Giant frozen with the likelihood and knowledge that you will have a stronger competitive response going forward than maybe you had more recently?

Bruce Wacha -- Chief Financial Officer

Yes. Our feeling is that our largest competitor in that category from a brands standpoint was owned by a company that was bigger than us and very much into frozen. And while there's the change on the name on the door, it is still owned by a larger competitive company that's more focused on that category. So, I don't know that a lot's changed in that standpoint.

They were a formidable competitor before; our assumption is they are going to continue to be a formidable competitor.

Ken Romanzi -- Incoming President and Chief Executive Officer

But in answer to your question, we are trying to be very realistic. Forecasting new products is not an easy task either but we have a few lead retailers that want our new products early, and so what we're planning to launch in the fourth quarter of 2019 has already been embedded by them and we're actually trying to hold them back and not introduce as many things as we want them -- as they want to. So, it's always a gamble on what new products are going to deliver but we're trying to be as reasonable as we can with as much as the forecasting ability that we have on new products and it's all based on the endorsement that we feel we got from lead retailers.

Operator

That's all the time we have for questions. Mr. Romanzi, I'd like to turn the conference back over to you for any additional or closing remarks.

Ken Romanzi -- Incoming President and Chief Executive Officer

Thank you all for joining. Again, it's an honor and a privilege to lead B&G, and we will look forward to reporting on our progress throughout the year. Thank you.

Operator

[Operator signoff]

Duration: 74 minutes

Call Participants:

Bob Cantwell -- President and Chief Executive Officer

Bruce Wacha -- Chief Financial Officer

Ken Romanzi -- Incoming President and Chief Executive Officer

Cornell Burnette -- Citi Research -- Analyst

Karru Martinson -- Jefferies -- Analyst

Steve Cook -- Wells Fargo -- Analyst

William Reuter -- Bank of America -- Analyst

Ken Zaslow -- Bank of Montreal -- Analyst

Michael Gallo -- C.L. King and Associates -- Analyst

Carla Casella -- J.P. Morgan -- Analyst

Eric Larson -- Buckingham Research Group -- Analyst

Andrew Lazar -- Barclays -- Analyst

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