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Date

Tuesday, May 12, 2026, at 4:30 p.m. ET

Call participants

  • President & Chief Executive Officer — Kenneth Charles Keller Jr.
  • Executive Vice President & Chief Financial Officer — Bruce C. Wacha

Takeaways

  • Divestiture and acquisition activity -- Completed sale of Green Giant U.S. frozen business effective March 2, offset by acquisition of College Inn and Kitchen Basics broth and stocks businesses on March 19.
  • Net sales -- $409 million, a decrease of $16.5 million or 3.9% due mainly to divestitures (Green Giant U.S. frozen, LeSueur U.S., Don Pepino), partially offset by $8.5 million from new contract manufacturing and $2.9 million from the College Inn and Kitchen Basics acquisition.
  • Base business net sales -- Increased $9.9 million, or 2.8%, to $365 million, driven by a $6.6 million or 1.9% volume increase, $1.6 million or 0.5% net pricing and mix, and $1.7 million (~0.5%) from foreign currency.
  • Adjusted EBITDA -- $57.6 million, or 14.1% of net sales, compared to $59.1 million (13.9%) for the prior year; segment adjusted EBITDA in Spices and Flavor Solutions grew 13.1% to $3.4 million.
  • Guidance update -- Fiscal 2026 net sales guidance raised to $1.74 billion–$1.77 billion; adjusted EBITDA expected in $275 million–$290 million range, with adjusted EBITDA margin 15.8%–16.3%.
  • Net loss GAAP -- $32.5 million, or $0.41 per diluted share, mainly due to a $36.3 million loss on sale of assets and $5.8 million in impairment and non-cash disposals.
  • Adjusted net income -- $6.8 million, or $0.08 per adjusted diluted share, compared with $3.4 million and $0.04 per share in the prior year.
  • Spices and Flavor Solutions business -- Net sales grew 9.1% to $100.1 million due to higher volumes and improved mix; segment adjusted EBITDA up 13.1%.
  • Segment performance—Meals -- Net sales rose $900,000 to $107 million; partial-month contribution of $2.9 million from acquired brands; segment adjusted EBITDA decreased by approximately $5 million due to cost pressure and investments in trade spending.
  • Leverage ratio -- Net debt to pro forma adjusted EBITDA before share-based comp and extraordinary tariffs lowered to 6.07x from 6.57x; further reduction expected after Canadian asset sale.
  • Dividend reduction -- Quarterly dividend cut 50% to $0.095 per share, for annualized $0.38 per share, effective July 2026; management expects to use resulting ~$30 million annual cash savings primarily to pay down debt.
  • Outlook for base business -- Company projects flat to slightly down net sales for the remainder of fiscal year, due in part to the 53rd week in 2025 not repeating.
  • Cost pressures -- Management explicitly highlighted oil and soybean oil costs as current elevated input risks, noting evaluation of "pricing actions to cover significantly higher input costs" if pressure persists.
  • Balance sheet -- Net interest expense declined $2 million to $35.8 million due to lower average long-term debt; depreciation and amortization expense totaled $15 million.
  • Canadian divestiture -- Sale of Green Giant Canada remains pending regulatory approval and is expected to close in 2026; guidance does not include impact, which management expects to be EBITDA neutral.

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Risks

  • Bruce C. Wacha stated, "input costs which excluding the impact of tariffs, were largely benign in 2025. Are beginning to show some signs of inflationary pressure in recent months," specifically citing oil and soybean oil as ongoing risks to margins and profitability.
  • Guidance does not factor in "significant changes in inflation, tariff policies, or the potential impact of escalation the conflicts in Eastern Europe The Middle East, or Latin America," introducing uncertainty to core assumptions.
  • Quarterly net loss of $32.5 million primarily attributable to $36.3 million loss on sale of assets and $5.8 million in impairments, indicating financial impact from portfolio restructuring.
  • The reduction in dividend reflects ongoing pressure to preserve cash and accelerate deleveraging, with management acknowledging "we need to be continuing to pay down debt. that is the right thing for us, and that is the right thing for shareholders."

Summary

B&G Foods (BGS 2.85%) delivered quarter results characterized by active portfolio reshaping, a revised capital return policy, and explicit cost containment measures. The acquisition of College Inn and Kitchen Basics and the divestiture of Green Giant U.S. frozen business mark a shift toward a higher-margin, shelf-stable product mix. The company lowered its leverage ratio on improved debt metrics, with management reaffirming intentions to further cut debt using cash freed up by reducing the dividend. Guidance was updated primarily to reflect the addition of acquired brands, but key input cost inflation — especially oil and soybean oil — is identified as a leading variable for full-year margins. The pending Green Giant Canada divestiture is expected to complete this year and is anticipated to be EBITDA-neutral once closed.

  • Bruce C. Wacha said, "we are proactively taking steps to reduce our ongoing SG&A commitments to better reflect the size of our business going forward," highlighting post-divestiture cost discipline.
  • Seven out of ten internal manufacturing facilities raised output during the quarter, with two others ahead of budgeted volume year-to-date.
  • Kenneth Charles Keller Jr. stated, "we have got some businesses that are performing very nicely. there is also you know, as I said before, our food service business has been growing. You know? Our channel our customer channel mix of food service has been positive," signaling channel diversification beyond tracked retail.
  • Management expects the contract manufacturing agreement for Green Giant U.S. frozen to "provide a modest but stable profit stream going forward."

Industry glossary

  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for specified nonrecurring items, used here as a performance and leverage metric.
  • Contract manufacturing agreement: A business arrangement where one company produces products for another under a cost-plus structure, as with B&G’s Green Giant U.S. frozen deal.
  • SG&A: Selling, general, and administrative expenses, a key cost category affecting operating margins.

Full Conference Call Transcript

Casey will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and its thoughts concerning the outlook for the remainder of fiscal 26 and beyond. Bruce will then discuss our financial results for 2026 and our revised guidance for fiscal 26. I would now like to turn the call over to Casey.

Kenneth Charles Keller Jr.: Good afternoon. Thank you, AJ, and thank you for joining us today for our first quarter 26 earnings call. Today, I will cover an update on our portfolio reshaping, including the recent divestiture and acquisition. An overview of first quarter performance, Bruce will cover more detailed financial results, and finally, the outlook for fiscal year 26. Portfolio divestitures. The first quarter witnessed major progress in our efforts to reshape the B and G Foods portfolio. We completed the divestiture of the Green Giant US frozen business to Seneca Foods Corporation on March 2.

This is the largest piece in our portfolio transformation that is resulting in stronger focus simplification, greater synergies, and higher margins across the B and G Foods portfolio. The first quarter includes the final 2 months of the Green Giant U.S. Frozen business within B and G. In addition, we completed the acquisition of the College Inn and Kitchen Basics broth and stocks businesses from Del Monte Foods on March 19. These key brands are a much stronger fit with our current shelf stable portfolio and play in a growing category that is driven by the expansion of the fresh store perimeter. The impact of these 2 transactions will create positive EBITDA and higher margins on our portfolio.

Replacing the low margin Green Giant US frozen business with a more profitable and stable broth and stocks business. These transactions were also critical in reducing our pro forma net leverage ratio in Q1 to almost 6x. Further, we previously announced the divestiture of Green Giant Canada, the final component of the Green Giant divestitures. That transaction requires Canadian regulatory approval and remains under review. Subject to regulatory approval and other customary closing conditions, we expect to close during 2026. Q1 results. The first quarter demonstrated significant improvement in base business net sales trends. Relative to a lower Q1 in fiscal year 25 impacted by some trade inventory reductions. Q1 base business net sales grew +2.8% versus last year.

Some of the key drivers. The spices and flavor solutions business unit grew Q1 net sales +9.1% versus last year. Benefiting from the growth in fresh brewed and proteins as well as strength in the club and food service channels. Segment adjusted EBITDA was up +13.1% versus Quarter 1 fiscal year 2025 behind strong volume and pricing growth. The frozen and vegetables business unit in the first 2 months of Q1 delivered a recovery in segment adjusted EBITDA from a net loss in segment adjusted EBITDA in Q1 last year behind higher volumes lower trade spend and lower manufacturing costs. Q1 continued to benefit from the implementation of our cost savings and restructuring initiatives.

Unallocated central overheads were down ~$2 million from last year. We will continue to remove direct costs associated with the Green Giant business and restructure central cost to reflect divestitures. Fiscal year 26 outlook. The updated guidance range for fiscal year 2026 is increased to 1.735 billion to 1.775 billion in net sales and $275 million to $290 million in adjusted EBITDA. The key assumptions. The current outlook for fiscal year 26 reflects the addition of the College Inn and Kitchen Basics brands. The impact of the Green Giant US frozen divestiture was built into our previous guidance as well as the year over year impact of the Don Pepino and LeSueur U.S. divestitures in fiscal year 25.

We expect fiscal year 2026 base business and net sales trends on the remaining core meals, spices and flavor solutions and specialty businesses to modestly improve versus last year. Q1 trends were a strong start for the year against a lower base in Quarter 1 fiscal 2025 but are expected to be flat to slightly down for the remainder of fiscal year 26 recognizing the impact of the 53rd week in 2025. A key financial risk we are watching closely is the price of oil. Which impacts both transportation costs and the price of soybean oil given its market relationship to biofuels. We expect these costs to come down from current highs, but remain elevated year over year.

If oil and fuel costs continue at high levels, we will evaluate pricing actions to cover significantly higher input costs. Finally, the pending divestiture of Green Giant Canada, has not been reflected in our guidance. We will update fiscal year 26 guidance when that transaction closes. But expect the divestiture of Green Giant Canada to be relatively neutral from an adjusted EBITDA impact. Looking forward, fiscal year 26 is poised to be a transformational year with a more focused, higher margin and stable portfolio. Once divestitures and closing transition services have been completed. We expect continued improvement in base business net sales trends towards a long term algorithm of ~1%.

Further, we will also become a less complex, more efficient and leaner company behind a simplified portfolio. Restructuring operations to rightsize overheads and focus resources and investment behind the core categories and brands in spices and seasonings, meals, and baking staples. Thank you, and I will now turn the call over to Bruce for more detail on the quarterly performance and outlook for the remainder of fiscal 26.

Bruce C. Wacha: Thank you, Casey. Good afternoon, everyone. Thank you for joining us today. As we highlighted on our last call, we had a fast start to the year. Our financial performance was very strong in January, as we lapped prior year inventory destockings. And we then demonstrated continued momentum in the business throughout the remainder of the quarter. Particularly within our spices and flavor solutions business unit. Meanwhile, we remained active on the M&A front with the divestiture of our Green Giant US frozen business and the establishment of our Green Giant US frozen contract manufacturing business, at our frozen vegetable manufacturing facility in Mexico.

With about a month to go in the quarter, And then the closing of our acquisition of the College Inn and Kitchen Basics broths and stocks business. With about 2 weeks to go in the quarter. I will provide more details on the transactions later in the call, but in effect we use the net proceeds from the divestiture of the marginally profitable Green Giant U.S. Frozen business to partially fund the acquisition of the more profitable College Inn and Kitchen Basics business. And we are very pleased with our divestiture and acquisition counterparts on both of these transactions. I am happy to report that both transitions are proceeding relatively smoothly.

As we review our first-quarter 2026 results, we will highlight the comparative differences that result from this 2026 activity as well as from the divestitures of the Don Pepino and LeSueur brands. Which we own for only parts of fiscal 2025. Because the divestiture of Green Giant Canada has not yet closed, there was no impact to our net sales or adjusted EBITDA. However, because Green Giant Canada is classified as an asset held for sale for accounting purposes, the pending divestiture does impact how the Green Giant Canada assets are carried on our balance sheet and within certain line items of our P&L.

For the 2026, we generated $409 million in net sales, a net loss of $32.5 million or $0.41 per diluted share adjusted net income of $6.8 million or $0.08 per adjusted diluted share Adjusted EBITDA of $57.6 million and adjusted EBITDA as a percentage of net sales of 14.1%. The company's net loss for the first quarter was primarily attributable to a $36.3 million non-cash loss on sale of assets a $5.8 million non-cash loss on disposals, and impairment of PP&E, as well as certain acquisition, divestiture-related and non recurring expenses. Details regarding the impairments and other adjustments are included in our earnings release issued today and our 10-Q that will be filed later this week.

Net sales for the 2026 decreased by $16.5 million or 3.9% to $409 million from $425 million for 2025. The decrease was primarily attributable to the Green Giant US frozen LeSueur US, and Don Pepino divestitures partially offset by an increase in base business net sales, 1 month of net sales, from the contract manufacturing agreement, the company entered into on March 2, 2026 with the acquirer of the Green Giant US frozen business. And a partial month of net sales for the College Inn and Kitchen Basics brands. Net sales of our Green Giant US frozen business which we owned for only 2 months during 2026, contributed $27.2 million less net sales during 2026 compared to 2025.

Net sales of the Don Pepino and LeSueur businesses which we divested in 2025 and are, therefore, not part of our first-quarter 2026 results, were $10.6 million during 2025. Partially offsetting the impact of these divestitures were 1 month of sales for the new Green Giant US frozen contract manufacturing agreement which contributed $8.5 million of net sales in 2026. And a partial month of net sales for the College Inn and Kitchen Basics brands acquired on March 19, 2026. Which contributed $2.9 million. To the company's net sales for 2026. Base business net sales for 2026 increased by $9.9 million or 2.8% to $365 million as compared to $355 million for 2025.

The increase in base business net sales driven by increases in volume that contributed $6.6 million or 1.9%. An increase in net pricing and the impact of product mix of $1.6 million or 0.5%. And the impact of foreign currency of $1.7 million or 0.5 percentage points. Gross profit was $79.9 million for 2026 or 19.5% of net sales. And adjusted gross profit was $84.6 million or 20.7% of net sales. Gross profit was $90.1 million for 2025 or 21.2% of net sales. And adjusted gross profit was $90.6 million or 21.3% of net sales. The 2026 marked a somewhat different story than our experiences in 2025.

Today, we are seeing resiliency in our volumes with modest recovery in many of our brands as compared to the more negative sales trends that we experienced in 2025. Across our internal manufacturing network, our factory employees are working hard with 7 of our 10 internal manufacturing facilities increasing output during 2026. When compared to 2025 volumes. Additionally, 2 of the 3 facilities that did not increase year over year volumes during the first quarter are currently ahead of our budget volumes for those factories for the year to date period. However, input costs which excluding the impact of tariffs, were largely benign in 2025. Are beginning to show some signs of inflationary pressure in recent months.

We will be watching these trends for any signs of sustained inflationary pressures And when appropriate, we will consider implementing pricing actions to protect our profitability. Selling, general, and administrative expenses increased by $1.1 million or 2.2% to $50.2 million for 2026, from $49.1 million for 2025. The increase was comprised of an increase in acquisition, divestiture related and nonrecurring expenses of $6.4 million inclusive of an increase of $1.9 million for disposals and impairments of PP&E partially offset by decreases in general and administrative expenses of $3.9 million and warehousing expenses of $1.4 million.

Expressed as a percentage of net sales, selling, general and administrative expenses increased by 70 basis points to 12.3% for 2026 as compared to 11.6% for 2025. We are following these costs closely and we are proactively taking steps to reduce our ongoing SG&A commitments to better reflect the size of our business going forward. As we work to minimize the impact of any stranded costs on our ongoing overhead structure due to the impact of the recent divestitures. We generated $57.6 million in adjusted EBITDA or 14.1% of net sales in 2026 compared to $59.1 million or 13.9% in 2025. The LeSueur US and Don Pepino businesses contributed nearly $1 million to segment adjusted EBITDA during 2025.

Net interest expense decreased by $2 million or 5.1% to $35.8 million for 2026 from $37.8 million for 2025. The reduction of net interest expense was primarily attributable to a reduction in average long term debt outstanding during 2026 relative to average long term debt outstanding during 2025. Depreciation and amortization was $15 million in 2026 compared to $16.8 million in 2025. We had a net loss of $32.5 million per diluted share for 2026 compared to a net income of $800 thousand or $0.01 per diluted share for 2025.

The net loss for 2026 was primarily driven by a loss on sale of assets of $36.3 million in connection with the divestiture of the Green Giant US frozen business. $5.8 million for non-cash disposals and impairments of PP&A as well as an increase in acquisition divestiture related, other nonrecurring costs. We had adjusted net income of $6.8 million or 8 cents per adjusted diluted share in 2026. In 2025, we had adjusted net income of $3.4 million or 4 cents per adjusted diluted share. Adjustments to our EBITDA and net income are described further in our earnings release. I would now like to touch on results by business unit for the first quarter.

Net sales for Spices and Flavor Solutions increased by $8.3 million or 9.1% in 2026 to $100.1 million from $91.7 million in 2025. The increase was primarily due to higher volumes across spices and flavor solutions business unit, coupled with higher net pricing and product mix. Spices and flavor solutions segment EBITDA increased by $3.4 million or 13.1% in 2026 compared to 2025. The increase in segment adjusted EBITDA was largely driven by increased volumes and to a lesser extent by increased pricing that largely offset the impact of increased tariff costs.

And other input costs as well as increased allocations to spices' cost of goods that were driven in part by the divestiture of the Green Giant US frozen business. Net sales for meals increased by $900 thousand or 0.9% in 2026 to $107 million from $106 million for 2025. The acquisition of the College Inn and Kitchen Basics brands added approximately $2.9 million of net sales during our first 2 weeks of ownership in the business. Meals' net sales also benefited from the higher net pricing and improved product mix. Which were offset in part by modestly lower volumes across the business unit.

Meals segment adjusted EBITDA decreased by approximately $5 million primarily driven by the impact of unfavorable cost comparisons certain raw materials and manufacturing expenses as well as increased allocations to meals cost of goods, that were driven in part by the divestiture of the Green Giant US frozen business. These incremental costs were offset in part by increased net pricing and the impact of product mix. We also made investments in certain brands in the meals portfolio such as Ortega, where we increased trade spending and marketing expenses during 2026. To help drive improved sales performance throughout the remainder of the year.

Net sales for specialty decreased by $3.6 million or 2.7% in 2026 to $131 million from $134 million in 2025. The decrease was primarily due to the divestiture of the Don Pepino business which generated $3.5 million of net sales in 2025. Base business net sales for specialty were essentially flat for the quarter. Specialty segment EBITDA decreased by $7.4 million in 2026 compared to 2025. The decrease was primarily due to the Don Pepino divestiture, unfavorable cost comparisons in certain raw materials, manufacturing expenses, the impact of tariffs, and increased allocations to specialty cost of goods that were driven in part by the divestiture of the Green Giant US frozen business.

Financial performance for the frozen and vegetables unit during 2026 and 2025 are not comparable due to the impact of the LeSueur US and Green Giant US frozen divestitures and the impact of our new contract manufacturing agreements for the Green Giant US frozen business. We are pleased to report that net sales of Green Giant Canada remained strong and increased by $4.2 million or 16.4% to $30.1 million for 2026 compared to $25.9 million for 2005. Separately, the new contract manufacturing agreements for Green Giant US frozen generated $8.5 million in net sales for the quarter during its first month of operation following our sale of the Green Giant US frozen business.

This contract manufacturing arrangement has a cost plus structure and is expected to provide a modest but stable profit stream going forward. Now I will spend a little time on our balance sheet. Which has also improved in 2026. Net debt to pro forma adjusted EBITDA before share based compensation and extraordinary tariffs was 6.07x at the end of the first quarter of 2026 compared to 6.57x at the end of 2025. As discussed on previous earnings calls, we are continuing to reduce leverage. We expect to remain on track to reduce net debt to pro forma adjusted EBITDA before share-based compensation and extraordinary tariffs to approximately 6x or less by the midpoint of this year.

Supported in part by the divestiture of the Green Giant Canada business which subject to regulatory approval in Canada we expect to be completed during the second quarter and which we expect will reduce net leverage by another 0.25x of a turn or so once it closes. Additionally, as announced by press release, today and beginning with the dividend declared today, and payable on July 30, 2026 to record holders as of June 30, 2026. Our board of directors has reduced our dividend by 50% to $0.095 per quarter or $0.38 per share per annum.

In our 21 years as a publicly held company, we have proven our commitment to creating stockholder value by consistently returning a meet meaningful portion of our excess cash to stockholders in the form of a cash dividend. Following the completion of the Don Pepino, LeSueur U.S., and Green Giant US divestitures, and the College Inn and Kitchen Basics acquisition, our board has concluded that an adjustment to our intended dividend rate was appropriate. On an annualized basis, the reduction in dividend is expected to provide an additional $30 million or so which we intend to use to repay long term debt and for other business purposes, which we expect will further accelerate the reduction in our leverage ratio.

Before I get to our updated 2026 guidance, I would like to remind the audience that we continue to live in unpredictable times. Our 2026 guidance reflects what we know today, and, for example, does not factor in significant changes in inflation, tariff policies, or the potential impact of escalation the conflicts in Eastern Europe The Middle East, or Latin America could have on our results. Please note that our guidance reflects the expected impacts only of acquisitions and divestitures that have already closed. In other words, our guidance reflects the expected impacts of the Don Pepino, LeSueur U.S., and Green Giant US frozen divestitures.

The commencement of the Green Giant US frozen contract manufacturing agreement, and the College Inn and Kitchen Basics acquisition. But our guidance does not reflect the expected impact from the pending Green Giant Canada divestiture because that divestiture has not yet closed. Our guidance also does not take into account any upcoming potential refinancing or other capital markets transactions. Also as a reminder, our guidance reflects that fiscal 2026 has 1 fewer week than fiscal 2025, which had a 53rd week. While we love the benefit of the 53rd week and our fiscal 2025 results, we will lap that benefit or approximately $18 million of net sales during fiscal 2026.

As a result, and as noted in our earnings release, we expect fiscal 26 net sales in the range of $1.74 billion to $1.77 billion, Adjusted EBITDA in the range of $275 million to $290 million. And adjusted EBITDA as a percentage of net sales in the range of approximately 15.8% to 16.3%. And based on this guidance, we expect adjusted diluted earnings per share to be in a range of $0.575 to $0.675 per share. Additionally, we expect for full year 2026 interest expense of $153 million to $158 million including cash interest of $145 million to $150 million.

Depreciation expense of $40 million to $45 million, amortization expense of $17 million to $19 million cash taxes of approximately $5 million or less and effective tax rate of 26% to 27%, and CapEx will likely be at the lower end of our $30 million to $35 million target. Now I will turn the call back over to Casey for further remarks.

Kenneth Charles Keller Jr.: Thank you, Bruce. In closing, B&G Foods is making real progress against our long term goals. Improving the base business net sales trends of the core business to the long term range of flat to +1% reshaping the portfolio through divestitures and acquisitions for future growth, stability, higher margins, and cash flows. And reducing our net leverage ratio below 5.5x through divestitures and excess cash flow to facilitate strategic acquisitions. This concludes our remarks, and now we would like to begin the Q&A portion of our call. Operator?

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove the questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. 1 moment, while we poll for questions. The first question comes from the line of Andrew Lazar with Barclays. Please go ahead.

Analyst (Andrew Lazar): Great. Thanks so much. Good afternoon.

Kenneth Charles Keller Jr.: Andrew, how are you?

Analyst (Andrew Lazar): Good. Good. First thing, excluding the portfolio changes since the last time you provided guidance, I am curious how the outlook changes for the year, if at all, because it is just it is harder to track that. Then still seems like underlying consumption per the tracked channel data was down, you know, close to maybe mid single digit in the quarter. And I think you mentioned you are expecting it to be flat to slightly down for the rest of the year. Just trying to get a sense for those things first off.

Bruce C. Wacha: Yeah. So, yeah. Basically, guidance is updated just to reflect the College Inn and Kitchen Basics acquisition. Our prior guidance included the other divestitures around that Green Giant US Frozen, Don Pepino, Sclafani, and the LeSueur brand. So the really only change is the result of adding in the College Inn and Kitchen Basics acquisition. What when we talk about base business, net sales or organic net sales, it is not just tracked consumption data, it is our total portfolio. Which would include our business and food service, and private label brand business, in Canada. Our Canada business is on track. And that is probably our track channels now represent <60% of our portfolio.

We have seen pretty strong growth in our spices private label business, our spices' foodservice business, or other foodservice businesses. Canada's been Canada's growing. Our industrial business has performed well. We also have private label business in baking powder and other things. So when we say our organic business is going to be roughly flat, we mean the composite of both our measured channels and our tracked channels-- I mean, our track channels and our unmeasured channels.

Analyst (Andrew Lazar): Okay. And then to the portfolio changes you have made the past few quarters, do you think make it harder or easier or neither to sort of execute pricing if and when needed should the industry have to deal with another round of inflation going forward?

Bruce C. Wacha: And maybe you can get into a little bit where you are sort of covered and for how long on some of your key inputs. Yeah, so we do not break out all of that publicly. I mean, we are we are covered for a decent portion of this year on input costs just through our normal forward purchases. From a from an ability to take price, the divestitures you know, we have eliminated the Green Giant US frozen business, which we think is a great business, just not the right 1 for us. Does not really impact 1 way or the other, the rest of the business. It was a different business for us.

You know, we still have about 50 brands. We are still very relevant. We think our brands are relevant. You know, we will continue to take action as needed.

Analyst (Andrew Lazar): Thank you.

Kenneth Charles Keller Jr.: I mean, I think I think, Andrew, the key input we are watching is oil. And soybean oil because there is a real relationship between soybean oil and crude oil because of its use as biofuels. So that is the 1 we are watching pretty closely. it is up you know, north of $0.70 a pound. So very high. And, you know, we are covered reasonably long, but obviously, if oil prices stay where they are, we are gonna need to take some action as I expect the industry will because of the rising input costs.

Analyst (Andrew Lazar): Yep. Makes sense. Thanks so much.

Operator: Thank you. Next question comes from the line of Scott Michael Marks with Jefferies. Please go ahead.

Analyst (Scott Marks): Wanted to just follow-up quickly on something that Andrew just in terms of you know, the kind of flattish outlook for the rest of the year. Can you just help us understand a little bit how you are thinking about that in terms of price versus volume versus mix? And know, across the different segments, just what we should be thinking about.

Bruce C. Wacha: Yeah. We have not really broken out price mix on a forward basis before. You know, we are encouraged with the progress that we made in the first quarter in terms of stabilizing volumes whether you see that in our net sales with a little bit of net sales growth driven by volumes even in our consumption data where the for the portion that does track, those channels where it is improved. You know, we think this year is gonna be a little bit less forgiving from a top line standpoint than the prior year. Okay.

When you look at the base business, organic sales, you also have to take into account that we did have a 53rd week in the fourth quarter last year. So, you know, we will we will obviously have 1 less week in this year's fourth quarter than last year.

Analyst (Scott Marks): Okay. Understood. Thanks for that. And then just in terms of the decision around the dividend, just wondering if you can help us understand why was the 50% reduction the right number? And how do you feel just in terms of the flexibility it gives you to do what you need to do with some of that, increased cash?

Bruce C. Wacha: Sure. It certainly generates, you know, another $30 million on an annualized basis. In cash from you know, excess cash relative to where we were before. As we have said all along, as we went down the journey, through evaluating the Green Giant business and the disposal of it, you know, we would continue to reevaluate the dividend on a go forward basis. it is very important to the company. it is something that we have been doing for a long period of time, and we think it is the right thing for shareholders. It just has to be the right level reflecting, you know, where we are from a cash generation standpoint.

I think the important principle for us is, you know, in today's interest rate environment, we would like to have excess cash, you know, 50% of least 50% of that going towards debt reduction. And the, you know, the remaining 50% for the dividend. So this is trying to get that in balance because we believe that in the interest rate environment that we are in now, we need to be continuing to pay down debt. that is the right thing for us, and that is the right thing for shareholders.

Analyst (Scott Marks): Understood. Thanks very much. I will pass it on.

Operator: Thank you. Next question comes from the line of Robert Moskow with TD Cowen. Please go ahead.

Analyst (Robert Moskow): Hey. I just wanted to make sure I understood the comments on cost. It sounds like soybean oil is really the only thing that is really jumping on you. But are there other elements? You mentioned oil cost. Does that flow through your logistics, your packaging? And is your pricing power on those elements of your structure you know, less clear?

Kenneth Charles Keller Jr.: Yes. It does flow through both on logistics and on some packaging. And just like everybody else, in the industry, we are we are waiting and watching to see did these higher more elevated costs for energy stick? Right? And probably just like everybody else in the industry, you know, we are evaluating and determining whether or not it makes sense to protect margins with pricing initiatives to offset that. Okay. And I think our biggest right now is the is the price of soybean oil. it is quite elevated on a historical level. So that is the 1 we are watching closely because it is largely in from a critical oil standpoint, it is the majority of the cost.

Analyst (Robert Moskow): Yeah. And I think you have you have changed the business effectively to be able to price up and down for that. But the other elements, I think, are a little trickier because you know, passing through logistics costs is sometimes tougher, I think, with retailers historically.

Bruce C. Wacha: Maybe that is changing, but is there any way to put some numbers to this, Bruce, where, like, you have a $100 per barrel oil, like, how much inflation would you expect to be incremental to your business? And if you can tell it to me without soybean oil, maybe that is even simpler. Yeah. We do not, but you know, I would point out in despite some skepticism, I think in 2017 or 2018, when transportation costs went haywire. We took price based on fuel cost and transportation logistics. And then again in 2022, 2023. And so, yeah, it will not be perfect.

You know, we are we are also you know, looking deep into, productivity initiatives and continuous improvement. To help cover costs. But, yeah, our expectation would be if these costs stay elevated, you know, permanently or relatively permanently, you know, we would expect to take price to cover, you know, a significant portion of that.

Analyst (Robert Moskow): Okay. Thanks. Last question. You have the College Inn business now and kitchen basics. Any surprises in your first couple of weeks of owning it positive or negative?

Kenneth Charles Keller Jr.: Yeah. I think right now we have been very focused on ensuring that the in the business are solid. You know, we had some visibility of that before. We have kind of taken over most of the selling of that as quickly as possible, even within the first month now. So it is key that we have the right plans for, you know, promotion, customer support, in the fall, and that is what we have been really focused on. You can imagine that Del Monte bankruptcy and transition, you know, obviously, probably did not get the highest attention from the business. So we are just trying to shore that up. So I do not think there is any big surprises.

You know, we have we are act you know, we are we are also launching a couple of SKUs that were sort of holes in the portfolio and trying to accelerate that process as well. But so far, so good. But as you can imagine, getting our hands around it quickly is really our goal.

Bruce C. Wacha: And, Robert, the other thing just to keep in mind, I do not I do not know if we talked about this after our last call, You know, when we first looked at this business, it is like College Inn, you know, number 2 Northeast regional brand, generates cash, stable, We were that is what first intrigued us. And as we spent time on the acquisition, learned a little bit more about the category and the category dynamics. Casey talked about this. On our last call. This is actually a category that is been doing pretty well.

Despite some of the other center store trends and some of the appeal of what is going on in the perimeter is helping driving sales here. And then also with this kitchen basics business, it is a grower. Right? This was the innovator brand of you know, 10, 20 years ago, but it is continuing to travel down on that path and growing and we are we are really excited to get both of these businesses into the portfolio.

Analyst (Robert Moskow): Yep. Makes sense. Thank you. Yep. Thank you.

Operator: Next question comes from the line of William Michael Reuter with Bank of America.

Analyst (William Reuter): Please go ahead.

Kenneth Charles Keller Jr.: Hey, Bill.

Bruce C. Wacha: Good afternoon.

Analyst (William Reuter): Hey. So on the price increases, that you potentially would take, I am wondering if you have kind of alerted some customers that you know, that this may have to take place. And I guess I feel like when we are in a situation like this where clear well, the war is unlikely or the conflict is unlikely to go on in perpetuity. Know, when some when a price rises for a short period of time, I think those discussions maybe are a little more challenging. So I guess have you started to alert them, and what is the feedback then?

Kenneth Charles Keller Jr.: Like, we certainly have discussed, yeah, soybean oil. So, you know, I mean, I think that is and we have had those discussions with the volatility in that commodity over the last, you know, 5 years. So that is that is not something that is new to us. You know, looking at, you know, how do we move the cost of soybean oil and vegetable oil up and down with the price. So we have that kind of agreement you know, with the marketplace and how we move. And, you know, that is that is been the pattern too in that in that market. So, yes, that those discussions have taken place.

You know, in terms of fuel, and transportation logistics, you know, we are not really having those conversations yet. I think there are, you know, there they are feeling it themselves. Our customers. So I think we will start having those conversations, but, you know, we wanted to see how where this played out before we would have any further conversations because we have you know, we have this is not something that we would this these fuel costs move so much on a spot basis that wanna make sure that we have got a longer term trend before we do anything.

But, you know, again, we have covered some of that increase in our forecast, in our outlook So we have already expected that fuel is gonna be higher it is just a question of how high it stays, to be honest. So and that is what we are watching pretty closely. Packaging, honestly, longer term packaging resin contracts that like, we really have not seen increases hit us yet because those are sort of, you know, sticks 6-month, 12-month contracts. So we will need to see where, you know, oil shakes out longer term as an input cost in our packaging.

Analyst (William Reuter): Got it. Yeah. I guess does your guidance in that raw materials kind of remain where they are, or does it imply that they come down to more you know, reasonable or rational levels over a longer period of time?

Kenneth Charles Keller Jr.: I guess what we have done is we have you know, let's take let's take, you know, fuel We have assumed that it comes down a little bit from where it is today. But certainly higher than what we initially entered our year with. Our assumptions ending the year.

Analyst (William Reuter): Got it. Okay. I guess just 1 last 1 for me. Your organic sales growth, which has been solid, I guess, how much of this is driven by new product innovations versus just underlying growth of some of the products or the categories that you are participating in there?

Kenneth Charles Keller Jr.: I mean, we do not I do not really have a split on that. There is some element of there is some element of innovation that is that is driving that, some new items that have gone in, you know, so instance, on cream of wheat, we have launched protein varieties. So there is some growth coming from that. there is also, you know, growth coming just from volume increases or category, you know, growth You know, we have got some businesses that are performing very nicely. there is also you know, as I said before, our food service business has been growing. You know? Our channel our customer channel mix of food service has been positive.

You know, we do have some private label business, you know, predominantly in spices and in baking powder and have been performing very well. So, yeah, I think it is a combination of things that is driving our growth.

Bruce C. Wacha: Yeah. And the other thing to throw in there so as Casey's saying, spices, we are seeing some nice category growth. We are seeing some nice channel growth. We also have a, you know, think 1 of the best spice manufacturing facilities in North America, and we have been investing in that. And building out our capabilities. So we have got incremental capacity that we did not have a couple years ago that is helping to support some of this growth as well. So not necessarily product innovation, but the ability to manufacture and produce product and sell it.

Analyst (William Reuter): Great. I will pass it on there. Thank you.

Operator: Thank you. Next question comes from the line of David Palmer with Evercore ISI. Please go ahead.

Analyst (David Palmer): Just wanted to ask you a follow-up question on consumption. Data versus what you are seeing in your all channel consumption, and maybe what we should be assuming to see in the we use in terms of if we use Circana, includes supposedly Costco and Amazon. Pretty broad set Right now, I see down 4% for the quarter. Down 7.5 percent for April. For B and G Foods. And I am just wondering, like, when we are looking forward, and trying to match up in that this consumption, what would equate to your flat consumption assumption, you know, what sort of gap should we be thinking about there?

And do you need the this consumption that we are tracking to get better? To get to that? Know? How should we think about that?

Kenneth Charles Keller Jr.: Yeah. I think look. The and I know this is hard for you guys to see and track, but you know, post Green Giant, US frozen Green Giant, we are even less measured than we were before. So if you think about our business, you know, you look at the tracked measured data, if you are using Surcana or you are using Nielsen or whatever, IRI, you know, that is probably covering <60% of our universe right now. There are big swaths that are not just untracked channels, but they are different channels. So foods our food service business has been positive. And that is that is probably in the neighborhood of 13% to 15% of our portfolio right now.

Total sales. You know, our private label businesses are probably over are well >10% approaching, I do not know, 12% to 13%. Of our portfolio, and those have been growing nicely. Our Canadian business, which is not in, obviously, most of The US databases, is also growing in the first quarter. So it you know, what when you try and, you know, project it out, we need our measured channels to get better. By some amount but we do not need them to flip totally to positive that we expect them to gradually improve. You know, over time. So we do not need I mean, we continue to see know, strong growth in those other unmeasured channels that should continue.

Food service, our private label businesses, etcetera. But we do wanna see some improvement in our measured channel data, and that is what we are working against. Just roughly speaking, it may be you know, the decline rate in the consumption that we see would be down low single digits, and you can get a few points from nonmeasured or you think the gap We are getting we are probably getting we are probably getting mid single digit growth from the those some of the non measured channels. Yeah.

Bruce C. Wacha: And the other the other the other thing that is really messy in the most recent consumption data is the shift in Easter timing year over year. Yeah. So No doubt. that is that is also a complexity, I think, you have to factor in because the most recent data would be comparing against the Easter period last year.

Analyst (David Palmer): By the way, when you are saying mid single digit from the nonmeasured, are you talking about mid single digit contribution to growth from the 40%? Are you talking about that nonmeasured of 40 growing at mid single digit?

Kenneth Charles Keller Jr.: Rate. I am talking about the nonmeasured 40 growing at mid single digit rate. Yeah. that is pretty good. I and then I guess 1 of the like, just philosophical things is that, you know, you have you have seen multiple cycles before, very experienced executive in dealing with energy related inflation.

Analyst (David Palmer): I wonder-- I remember these periods of energy related inflation. In its many forms in packaging, distribution, and what have you that it just there was a it was particularly tough with it came to pricing power and those discussions with retailers. It felt it felt different, weirder that they were dealing with the same type of pressures. And those-- do you think that is the case? Do you feel like that is that is that something we should brace for? it is just a much different type of pricing discussion with that type of inflation?

Kenneth Charles Keller Jr.: Never easy. Yeah. I mean, it and it is a hard discussion. it is a hard discussion with retailers, but that is why I think what you are hearing from us is that we have covered you know, a fair amount of increase in energy inputs. We have been able to cover that through productivity, cost savings, other efforts. If it stays-- let's say if oil stays north of a $100, you know, a barrel or whatever, I mean, that we are gonna have to think about it. I think that is gonna be an impact for our customers. it is gonna be an impact for us, the industry.

So we are expecting it to stay higher. it is a question of how high it stays. Before it becomes, you know, a really, really serious issue in terms of cost. But so far, we have been able to kind of manage it and manage an increase. But I think we would expect it to come down below a $100 over time assuming that, you know, Iran and Strait of our moves and Hormuz open. You know, oil flows again and, you know, the market sees.

I mean, I think there was a lag effect on all those things happening, but you know, we just need to keep watching it, because it stays at well over a $100 a barrel, I think everybody has a problem. Everybody. Yep. Thanks for the thoughts.

Analyst (David Palmer): Yep.

Operator: Thank you. Next question comes from the line of Carla Martinson with Jefferies Company. Please go ahead.

Analyst (Karru Martinson): Good afternoon. 1 of your competitors talks about the consumer, especially on the low end, running out of money by the end of the month. I am wondering how do we square that with you know, ability to take price in this environment?

Bruce C. Wacha: I do not know about all consumers running out of money. I guess you are just talking about pressure on them. But there is a balancing act. I mean, we think with our portfolio, we are mass mainstream you know, regular way grocery, for a good portion of our business, and we may see some trade down there. But we also expect to see some trade down benefit of people going out to eat less. As well, which pushes them into the categories that we are selling, you know, where meals were affordable. We think this plays to our strength, but that does not mean that it is easy. it is a tough world.

Kenneth Charles Keller Jr.: You know, I think we are not really talking about pricing, you know, we would only look at pricing related to any oil cost. Take soybean oil aside. If we believe that it was gonna stay this elevated for an extended period of time. So, I mean, my hope is that we can cover, you know, the increase we got that we have that we have planned We I hope we can cover that with our own internal cost savings, productivity, and other efforts. Soybean oil is a different conversation that, you know, we need we you know, the commodity is up dramatically from a year ago. We as an industry, you know, we will just have to take price.

And every I am expecting that the industry will see that. But beyond that beyond those 2 things, I mean, we are not really we do not really see the need to take pricing on our portfolio. it is really those 2 components. How high does energy stay which, you know, would not be as significant increase in price. Or on the soybean oil, if it stays where it is in the 75¢ a pound range, that is dramatically higher than where we are buying it last year in at 50. So that is a so you know, so that 1, but we already have that kind of peg as a commodity that has to go up and down.

So I do not really think you should think about broad actions on our portfolio right now unless we see energy costs staying elevated for a really extended period of time.

Analyst (Karru Martinson): Okay. And just lastly, in terms of the portfolio, certainly pruning some here adding some stronger performers. Do you feel like that we are where we wanna be with the portfolio? Are there still opportunities to take some brands out or to add others?

Kenneth Charles Keller Jr.: Yeah. I think, you know, we do not normally comment on M&A activity, but I think the concept of what you are talking about, we will continue to evaluate. As you know-- as you know, as we reshape our portfolio, you know, we want to have strong businesses that generate higher margins, stronger cash flows. So we will always look at opportunities in our portfolio to make shifts like we just did. To, you know, take Green Giant, divest it to a to a buyer that it is a better fit with their capabilities and everything. And then buy businesses with those proceeds that generate higher cash flow, higher margins, and, frankly, just fit better within our capabilities.

So yes, we will continue to look at those opportunities. Thank you very much, guys. Appreciate it.

Operator: Thank you. We have time for 1 more question.

Analyst (Carla Casella): Next question comes from the line of Carla Casella with JPMorgan. Please go ahead. Hi. Thanks for taking my question. I know you have had a lot of questions on soybean costs, but I am just trying to dial back to, like, February 2022-2023 when we saw the spikes you talked about a resistance level where consumers really change their buying behaviors. Are we I think it was, like, a $5 level that you gave at retail, and I am just wondering kinda how close we are to that now and if you are seeing any resistance already, or is this more just a fear as we go into the back half?

Kenneth Charles Keller Jr.: Well, we have not taken any pricing moves yet, but, you know, you are right, we would try and stay below key price thresholds if we took pricing action. We would we would work towards that on you know, how we could price and effectively manage the key thresholds because we know consumers have a response. Like, on the core size, $5 threshold is something we try and manage to. So we will look at that consideration and try and manage the price element and work with our customers to try and keep the prices at the right threshold so that we do not get a high elasticity effect. If we cross those. But we have not taken pricing yet.

You know, we are so we were looking at we are we are looking at where soybean oil stays. And right now, it is at it is close to the levels that it reached at in 2022.

Analyst (Carla Casella): Okay. Great. And then on the 2027 bond maturity, how far ahead of maturity do you typically like to be in terms of refinancing? Are you okay going current? Do you think that could hurt your ratings? Any thoughts there?

Bruce C. Wacha: I think as we typically have, we generally expect to refinance our debt before it goes current. I do not think where we are today in this cycle is vastly different from you know, probably 4 or 5 other maturities that we have refinanced since I have been here.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Thank you. A lot of questions We are starting to think about EBITDA.