10-Q

As filed with the Securities and Exchange Commission on August 5, 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

	For the quarterly period ended July 3, 2021 or
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                to                .

Commission file number 001-32316

B&G FOODS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	13-3918742
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
Four Gatehall Drive, Parsippany, New Jersey	07054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (973) 401-6500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BGS	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2021, the registrant had 64,825,078 shares of common stock, par value $0.01 per share, issued and outstanding.

B&G Foods, Inc. and Subsidiaries

Index

r
		Page No.
PART I FINANCIAL INFORMATION		1
	Item 1. Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
	Item 4. Controls and Procedures	41
PART II OTHER INFORMATION		42
	Item 1. Legal Proceedings	42
	Item 1A. Risk Factors	42
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42
	Item 3. Defaults Upon Senior Securities	43
	Item 4. Mine Safety Disclosures	43
	Item 5. Other Information	43
	Item 6. Exhibits	43
SIGNATURE		44

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Forward-Looking Statements

This report includes forward-looking statements, including, without limitation, the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The words “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by any forward-looking statements. We believe important factors that could cause actual results to differ materially from our expectations include the following:

● the ultimate impact the COVID-19 pandemic will have on our business, which will depend on many factors, including, without limitation,

o the ability of our company and our supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption, and to procure ingredients, packaging and other raw materials when needed despite unprecedented demand in the food industry;

o the duration of social distancing and stay-at-home and work-from-home policies and recommendations, and whether, and the extent to which, additional waves or variants of COVID-19 will affect the United States and the rest of North America; and

o the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating and shopping habits;

● our substantial leverage;

● the effects of rising costs for our raw materials, packaging, ingredients and distribution;

● crude oil prices and their impact on distribution, packaging and energy costs;

● our ability to successfully implement sales price increases and cost saving measures to offset any cost increases;

● intense competition, changes in consumer preferences, demand for our products and local economic and market conditions;

● our continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity;

● the risks associated with the expansion of our business;

● our possible inability to identify new acquisitions or to integrate recent or future acquisitions, including the Crisco acquisition, or our failure to realize anticipated revenue enhancements, cost savings or other synergies from recent or future acquisitions;

● our ability to successfully complete the integration of recent or future acquisitions into our enterprise resource planning (ERP) system;

● tax reform and legislation, including the effects of the U.S. Tax Cuts and Jobs Act and the U.S. CARES Act;

● our ability to access the credit markets and our borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of our competitors;

● unanticipated expenses, including, without limitation, litigation or legal settlement expenses;

● the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar;

● the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on our international procurement, sales and operations;

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● future impairments of our goodwill and intangible assets;

● our ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption;

● our sustainability initiatives and changes to environmental laws and regulations;

● other factors that affect the food industry generally, including:

orecalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products;

ocompetitors’ pricing practices and promotional spending levels;

ofluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and

othe risks associated with third-party suppliers and co-packers, including the risk that any failure by one or more of our third-party suppliers or co-packers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and

● other factors discussed elsewhere in this report and in our other public filings with the Securities and Exchange Commission (SEC), including under Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K filed with the SEC on March 2, 2021, and Part, II, Item 1A, “Risk Factors,” in this report.

Developments in any of these areas could cause our results to differ materially from results that have been or may be projected by us or on our behalf.

All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this report.

We caution that the foregoing list of important factors is not exclusive. There may be other factors that may cause our actual results to differ materially from the forward-looking statements in this report, including factors disclosed under the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties. We urge investors not to unduly rely on forward-looking statements contained in this report.

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	July 3,		January 2,
	2021		2021
Assets
Current assets:
Cash and cash equivalents	$	40,322	$	52,182
Trade accounts receivable, net		121,849		132,935
Inventories		533,631		492,804
Prepaid expenses and other current assets		44,370		43,619
Income tax receivable		10,019		15,761
Total current assets		750,191		737,301
Property, plant and equipment, net of accumulated depreciation of $344,171 and $314,359 as of July 3, 2021 and January 2, 2021, respectively		355,833		371,854
Operating lease right-of-use assets		38,704		32,216
Goodwill		645,070		644,747
Other intangible assets, net		1,961,498		1,971,326
Other assets		5,598		5,948
Deferred income taxes		4,521		4,178
Total assets	$	3,761,415	$	3,767,570
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	119,578	$	126,537
Accrued expenses		58,120		77,460
Current portion of operating lease liabilities		9,801		11,034
Income tax payable		123		101
Dividends payable		30,792		30,520
Total current liabilities		218,414		245,652
Long-term debt		2,325,908		2,334,086
Deferred income taxes		305,013		293,121
Long-term operating lease liabilities, net of current portion		31,802		23,959
Other liabilities		38,673		38,875
Total liabilities		2,919,810		2,935,693
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding		—		—
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 64,825,078 and 64,252,859 shares issued and outstanding as of July 3, 2021 and January 2, 2021, respectively		648		643
Additional paid-in capital		—		—
Accumulated other comprehensive loss		(31,556)		(35,594)
Retained earnings		872,513		866,828
Total stockholders’ equity		841,605		831,877
Total liabilities and stockholders’ equity	$	3,761,415	$	3,767,570

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net sales	$	464,375	$	512,539	$	969,509	$	961,909
Cost of goods sold		352,785		378,438		740,125		722,892
Gross profit		111,590		134,101		229,384		239,017
Operating expenses:
Selling, general and administrative expenses		47,076		44,347		97,455		84,320
Amortization expense		5,399		4,739		10,835		9,462
Operating income		59,115		85,015		121,094		145,235
Other income and expenses:
Interest expense, net		26,713		24,849		53,682		50,888
Other income		(1,117)		(701)		(2,208)		(1,154)
Income before income tax expense		33,519		60,867		69,620		95,501
Income tax expense		8,968		15,956		18,191		22,498
Net income	$	24,551	$	44,911	$	51,429	$	73,003
Weighted average shares outstanding:
Basic		64,777		64,130		64,680		64,088
Diluted		65,410		64,410		65,310		64,247
Earnings per share:
Basic	$	0.38	$	0.70	$	0.80	$	1.14
Diluted	$	0.38	$	0.70	$	0.79	$	1.14
Cash dividends declared per share	$	0.475	$	0.475	$	0.950	$	0.950

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net income	$	24,551	$	44,911	$	51,429	$	73,003
Other comprehensive income (loss):
Foreign currency translation adjustments		3,896		1,671		3,400		(12,678)
Amortization of unrecognized prior service cost and pension deferrals, net of tax		304		219		638		515
Other comprehensive income (loss)		4,200		1,890		4,038		(12,163)
Comprehensive income	$	28,751	$	46,801	$	55,467	$	60,840

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

As of July 3, 2021

(In thousands, except share and per share data)

(Unaudited)

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Retained		Stockholders’
	Shares	Amount		Capital		Loss		Earnings		Equity
Balance at January 2, 2021	64,252,859	$	643	$	—	$	(35,594)	$	866,828	$	831,877
Foreign currency translation	—		—		—		(496)		—		(496)
Change in pension benefit (net of $108 of income taxes)	—		—		—		334		—		334
Net income	—		—		—		—		26,878		26,878
Share-based compensation	—		—		432		—		—		432
Issuance of common stock for share-based compensation	82,214		1		(1,087)		—		—		(1,086)
Cancellation of restricted stock for tax withholding upon vesting	(21,462)		—		(620)		—		—		(620)
Stock options exercised	438,900		4		14,048		—		—		14,052
Dividends declared on common stock, $0.475 per share	—		—		(12,773)		—		(17,984)		(30,757)
Balance at April 3, 2021	64,752,511	$	648	$	—	$	(35,756)	$	875,722	$	840,614
Foreign currency translation	—		—		—		3,896		—		3,896
Change in pension benefit (net of $99 of income taxes)	—		—		—		304		—		304
Net income	—		—		—		—		24,551		24,551
Share-based compensation	—		—		2,305		—		—		2,305
Issuance of common stock for share-based compensation	46,377		—		—		—		—		—
Cancellation of restricted stock for tax withholding upon vesting	(66)		—		(3)		—		—		(3)
Cancellation of restricted stock upon forfeiture	(956)		—		—		—		—		—
Stock options exercised	27,212		—		730		—		—		730
Dividends declared on common stock, $0.475 per share	—		—		(3,032)		—		(27,760)		(30,792)
Balance at July 3, 2021	64,825,078	$	648	$	—	$	(31,556)	$	872,513	$	841,605

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

As of June 27, 2020

(In thousands, except share and per share data)

(Unaudited)

						Accumulated
				Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Retained		Stockholders’
	Shares	Amount		Capital		Loss		Earnings		Equity
Balance at December 28, 2019	64,044,649	$	640	$	—	$	(31,894)	$	843,796	$	812,542
Foreign currency translation	—		—		—		(14,349)		—		(14,349)
Change in pension benefit (net of $104 of income taxes)	—		—		—		296		—		296
Net income	—		—		—		—		28,092		28,092
Share-based compensation	—		—		—		—		163		163
Issuance of common stock for share-based compensation	75,848		1		—		—		(1)		—
Dividends declared on common stock, $0.475 per share	—		—		—		—		(30,457)		(30,457)
Balance at March 28, 2020	64,120,497	$	641	$	—	$	(45,947)	$	841,593	$	796,287
Foreign currency translation	—		—		—		1,671		—		1,671
Change in pension benefit (net of $77 of income taxes)	—		—		—		219		—		219
Net income	—		—		—		—		44,911		44,911
Share-based compensation	—		—		—		—		4,601		4,601
Issuance of common stock for share-based compensation	39,956		1		—		—		(65)		(64)
Dividends declared on common stock, $0.475 per share	—		—		—		—		(30,476)		(30,476)
Balance at June 27, 2020	64,160,453	$	642	$	—	$	(44,057)	$	860,564	$	817,149

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Twenty-six Weeks Ended
	July 3,		June 27,
	2021		2020
Cash flows from operating activities:
Net income	$	51,429	$	73,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		40,529		30,919
Amortization of operating lease right-of-use assets		6,547		5,968
Amortization of deferred debt financing costs and bond discount/premium		2,289		1,799
Deferred income taxes		11,370		14,281
Net gain on sales and disposals of property, plant and equipment		(30)		(61)
Share-based compensation expense		2,125		4,244
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable		11,372		1,751
Inventories		(38,653)		110,038
Prepaid expenses and other current assets		(5)		(9,667)
Income tax receivable/payable		5,721		6,930
Other assets		(115)		(150)
Trade accounts payable		(912)		10,903
Accrued expenses		(26,343)		(25)
Other liabilities		641		(3,567)
Net cash provided by operating activities		65,965		246,366
Cash flows from investing activities:
Capital expenditures		(19,813)		(10,016)
Proceeds from sale of assets		126		303
Payments for acquisition of businesses, net of cash acquired		—		(3,227)
Net cash used in investing activities		(19,687)		(12,940)
Cash flows from financing activities:
Repayments of long-term debt		—		(2,250)
Repayments of borrowings under revolving credit facility		(85,000)		(160,000)
Borrowings under revolving credit facility		75,000		160,000
Dividends paid		(61,277)		(60,878)
Proceeds from exercise of stock options		14,782		—
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation		(1,708)		—
Payments of debt financing costs		(276)		(64)
Net cash used in financing activities		(58,479)		(63,192)
Effect of exchange rate fluctuations on cash and cash equivalents		341		(349)
Net (decrease) increase in cash and cash equivalents		(11,860)		169,885
Cash and cash equivalents at beginning of period		52,182		11,315
Cash and cash equivalents at end of period	$	40,322	$	181,200
Supplemental disclosures of cash flow information:
Cash interest payments	$	51,118	$	49,008
Cash income tax payments	$	1,065	$	1,256
Non-cash investing and financing transactions:
Dividends declared and not yet paid	$	30,792	$	30,476
Accruals related to purchases of property, plant and equipment	$	2,514	$	1,074
Right-of-use assets obtained in exchange for new operating lease liabilities	$	12,637	$	1,457

See Notes to Consolidated Financial Statements.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

(1) Nature of Operations

B&G Foods, Inc. is a holding company whose principal assets are the shares of capital stock of its subsidiaries. Unless the context requires otherwise, references in this report to “B&G Foods,” “our company,” “we,” “us” and “our” refer to B&G Foods, Inc. and its subsidiaries. Our financial statements are presented on a consolidated basis.

We operate in a single industry segment and manufacture, sell and distribute a diverse portfolio of high-quality shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Our products include frozen and canned vegetables, vegetable, canola and other cooking oils, vegetable shortening, cooking sprays, oatmeal and other hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, cookies and crackers, baking powder, baking soda, corn starch, nut clusters and other specialty products. Our products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Back to Nature, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Clabber Girl, Cream of Rice, Cream of Wheat, Crisco, Dash, Davis, Devonsheer, Don Pepino, Durkee, Emeril’s, Farmwise, Grandma’s Molasses, Green Giant, Joan of Arc, Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, McCann’s, Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Rumford, Sa-són, Sclafani, SnackWell’s, Spice Islands, Spring Tree, Sugar Twin, Tone’s, Trappey’s, TrueNorth, Underwood, Vermont Maid, Victoria, Weber and Wright’s. We also sell and distribute Static Guard, a household product brand. We compete in the retail grocery, foodservice, specialty, private label, club and mass merchandiser channels of distribution. We sell and distribute our products directly and via a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors.

(2) Summary of Significant Accounting Policies

Fiscal Year

Typically, our fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to December 31 in the case of our fiscal year and fourth fiscal quarter, and on the Saturday closest to the end of the corresponding calendar quarter in the case of our fiscal quarters. As a result, a 53^rd week is added to our fiscal year every five or six years. Our fiscal year ending January 1, 2022 (fiscal 2021) contains 52 weeks and each quarter of fiscal 2021 contains 13 weeks. Our fiscal year ended January 2, 2021 (fiscal 2020) contained 53 weeks and each quarter of fiscal 2020 contained 13 weeks, except the third quarter, which contained 14 weeks.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and twenty-six week periods ended July 3, 2021 (second quarter and first two quarters of 2021) and June 27, 2020 (second quarter and first two quarters of 2020) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of July 3, 2021, and the results of our operations, comprehensive income, changes in stockholders’ equity and cash flows for the second quarter and first two quarters of 2021 and 2020. Our results of operations for the second quarter and first two quarters of 2021 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2020 filed with the SEC on March 2, 2021.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Use of Estimates

The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions.

Accounting Standards Adopted in Fiscal 2020 or Fiscal 2021

In December 2019, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that removes certain exceptions for recognizing deferred taxes for certain investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. This guidance became effective during the first quarter of 2021. The adoption of this ASU did not have a material impact to our consolidated financial statements and related disclosures.

In May 2020, the SEC issued a final rule that amends the financial statement requirements for acquisitions and dispositions of businesses. The amendments primarily relate to disclosures required by Rule 3-05 and Article 11 of Regulation S-X. Among other things, the final rule modifies the tests provided in Rule 1-02(w) of Regulation S-X used to determine whether a subsidiary or an acquired or disposed business is significant and modifies the number of years of audited financial statements required for acquisitions with significance levels greater than specified percentages. We early adopted the rule in the fourth quarter of fiscal 2020 and we applied the rule to our financial statement disclosure requirements for the Crisco acquisition. See Note 3, “Acquisitions.”

In June 2016, the FASB issued a new ASU which modifies the measurement of expected credit losses of certain financial instruments. This ASU replaces the incurred loss methodology for recognizing credit losses with a current expected credit losses model and applies to all financial assets, including trade accounts receivables. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. This guidance became effective during the first quarter of 2020. The adoption of the new standard did not have a material impact to our consolidated financial statements and related disclosures.

In January 2017, the FASB issued an amendment to the standards of goodwill impairment testing. The new guidance simplifies the test for goodwill impairment, by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance became effective during the first quarter of 2020 and was applied during our annual goodwill impairment testing for fiscal 2020. The adoption of this ASU did not have an impact to our consolidated financial statements.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

In March 2020, the SEC adopted amendments to the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered in Rule 3-10 of Regulation S-X, and affiliates whose securities collateralize securities registered or being registered in Rule 3-16 of Regulation S-X (SEC Release No. 33-10762). We adopted the amendments to the disclosure requirements during the third quarter of 2020. This amendment did not have an impact on our consolidated financial statements as this amendment simplifies the financial disclosures required in our guarantor and non-guarantor financial information. The amendment replaces the requirement to present condensed consolidating financial statements, comprised of balance sheets and statements of operations, comprehensive income and cash flows for all periods presented, with summarized financial information of the guarantor only for the most recently completed fiscal year and any subsequent interim period. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”

In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. This guidance became effective during the fourth quarter of fiscal 2020 and we updated our defined benefit pension plan disclosures accordingly. The adoption of this ASU did not have an impact to our consolidated financial statements as this ASU only modified disclosure requirements. See Note 10, “Pension Benefits.”

Recently Issued Accounting Standards – Pending Adoption

In March 2020, the FASB issued a new ASU which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR. The update may be applied as of the beginning of the interim period that includes March 12, 2020 through December 31, 2022. We currently expect to adopt the standard during fiscal 2022. We are in the process of evaluating the impact of the adoption of this ASU. LIBOR is used to determine interest under our revolving credit facility and our tranche B term loans due 2026. Currently, however, we do not expect the adoption of this ASU to have a material impact to our consolidated financial statements.

(3) Acquisitions

Crisco Acquisition

On December 1, 2020, we completed the acquisition of the Crisco oils and shortening business from The J.M. Smucker Company and certain of its affiliates, for approximately $539.3 million in cash. We refer to this acquisition as the “Crisco acquisition” and the Crisco oils and shortening business as the “Crisco business.”

The following table sets forth the preliminary allocation of the Crisco acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during fiscal 2021.

Preliminary Purchase Price Allocation (in thousands):	December 1, 2020
Inventories	$	37,137
Prepaid expenses and other current assets		113
Property, plant and equipment, net		81,405
Operating lease right-of-use assets		1,477
Trademarks — indefinite-lived intangible assets		322,000
Customer relationships — finite-lived intangible assets		52,800
Current portion of operating lease liabilities		(565)
Long-term operating lease liabilities, net of current portion		(912)
Goodwill		45,806
Total purchase price (paid in cash)	$	539,261

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Farmwise Acquisition

On February 19, 2020, we acquired Farmwise LLC, maker of Farmwise Veggie Fries, Farmwise Veggie Tots and Farmwise Veggie Rings. We refer to this acquisition as the “Farmwise acquisition.”

Unaudited Pro Forma Summary of Operations

The following pro forma summary of operations presents our operations as if the Crisco acquisition had occurred as of the beginning of fiscal 2020. In addition to including the results of operations of this acquisition, the pro forma information gives effect to the interest on additional borrowings and the amortization of trademark and customer relationship intangibles. On an actual basis, Crisco contributed $116.5 million of our aggregate $969.5 million of consolidated net sales for the first two quarters of 2021 (in thousands, except per share data):

	Twenty-six Weeks Ended
	June 27,
	2020
Net sales(1)	$	1,113,331
Net income(1)	$	95,201
Basic earnings per share(1)	$	1.49
Diluted earnings per share(1)	$	1.48

(1) The pro forma financial information presented above does not purport to be indicative of the results that actually would have been attained had the Crisco acquisition occurred as of the beginning of fiscal 2020, and is not intended to be a projection of future results.

The Farmwise acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented.

(4) Inventories

Inventories are stated at the lower of cost or net realizable value and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales.

Inventories consist of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Raw materials and packaging	$	112,991	$	87,843
Work-in-process		46,386		95,207
Finished goods		374,254		309,754
Inventories	$	533,631	$	492,804

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(5) Goodwill and Other Intangible Assets

The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands):

	July 3, 2021						January 2, 2021
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Finite-Lived Intangible Assets
Trademarks	$	20,100	$	6,169	$	13,931	$	20,100	$	5,597	$	14,503
Customer relationships		407,033		157,641		249,392		406,901		147,378		259,523
Total finite-lived intangible assets	$	427,133	$	163,810	$	263,323	$	427,001	$	152,975	$	274,026
Indefinite-Lived Intangible Assets
Goodwill	$	645,070					$	644,747
Trademarks	$	1,698,175					$	1,697,300

Amortization expense associated with finite-lived intangible assets was $5.4 million and $10.8 million for the second quarter and first two quarters of 2021, respectively, and was $4.7 million and $9.5 million for the second quarter and first two quarters of 2020, respectively, and is recorded in operating expenses. We expect to recognize an additional $10.8 million of amortization expense associated with our finite-lived intangible assets during the remainder of fiscal 2021, and thereafter $21.6 million of amortization expense in fiscal 2022, $21.5 million in fiscal 2023, $21.4 million in each of fiscal 2024 and 2025, and $20.7 million in fiscal 2026.

(6) Long-Term Debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Revolving credit loans	$	225,000	$	235,000
Tranche B term loans due 2026		671,625		671,625
5.25% senior notes due 2025		900,000		900,000
5.25% senior notes due 2027		550,000		550,000
Unamortized deferred debt financing costs		(18,575)		(20,324)
Unamortized discount/premium		(2,142)		(2,215)
Total long-term debt, net of unamortized deferred debt financing costs and discount/premium		2,325,908		2,334,086

As of July 3, 2021, the aggregate contractual maturities of long-term debt were as follows (in thousands):

	Aggregate Contractual Maturities
Fiscal year:
2021 remaining	$	—
2022		—
2023		—
2024		—
2025		1,125,000
Thereafter		1,221,625
Total	$	2,346,625

Senior Secured Credit Agreement. Our senior secured credit agreement includes a term loan facility and a revolving credit facility.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

On December 16, 2020, we amended our amended and restated credit agreement, dated as of October 2, 2015, and previously amended on March 30, 2017, November 20, 2017 and October 10, 2019. Among other things, the amendment provides for a $300.0 million add-on tranche B term loan facility, which closed and funded on December 16, 2020. The add-on tranche B term loans were issued at a price equal to 99.00% of their face value. The add-on term loans have the same terms as, and are fungible with, $371.6 million of tranche B term loans. We used the net proceeds of the add-on term loans to repay a portion of the revolving credit facility borrowings used to finance the Crisco acquisition. As of July 3, 2021, $671.6 million of tranche B term loans remained outstanding. The tranche B term loans mature on October 10, 2026.

Interest under the tranche B term loan facility is determined based on alternative rates that we may choose in accordance with our credit agreement, including a base rate per annum plus an applicable margin of 1.00%, and LIBOR plus an applicable margin of 2.50%.

The December 2020 amendment also increased the revolver capacity from $700.0 million to $800.0 million and extended the maturity date of our revolving credit facility from November 21, 2022 to December 16, 2025. As of July 3, 2021, the available borrowing capacity under the revolving credit facility, net of outstanding letters of credit of $4.9 million, was $570.1 million. Proceeds of the revolving credit facility may be used for general corporate purposes, including acquisitions of targets in the same or a similar line of business as our company, subject to specified criteria. The revolving credit facility matures on December 16, 2025.

Interest under the revolving credit facility, including any outstanding letters of credit, is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin ranging from 0.25% to 0.75%, and LIBOR plus an applicable margin ranging from 1.25% to 1.75%, in each case depending on our consolidated leverage ratio.

We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility. The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans.

We may prepay term loans or permanently reduce the revolving credit facility commitment under the credit agreement at any time without premium or penalty (other than customary “breakage” costs with respect to the early termination of LIBOR loans). Subject to certain exceptions, the credit agreement provides for mandatory prepayment upon certain asset dispositions or casualty events and issuances of indebtedness.

Our obligations under the credit agreement are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries (other than a domestic subsidiary that is a holding company for one or more foreign subsidiaries). The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. The credit agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens.

The credit agreement also contains certain financial maintenance covenants, which, among other things, specify a maximum consolidated leverage ratio and a minimum interest coverage ratio, each ratio as defined in the credit agreement. Our consolidated leverage ratio (defined as the ratio, determined on a pro forma basis, of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA (as defined in the credit agreement) before share-based compensation for such period) may not exceed 7.00 to 1.00. We are also required to maintain a consolidated interest coverage ratio (defined as the ratio, determined on a pro forma basis, of our adjusted EBITDA (before share-based compensation) for any period of four consecutive fiscal quarters to our consolidated interest expense for such period payable in cash) of at least 1.75 to 1.00. As of July 3, 2021, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement.

- 12 -

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

The credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the credit agreement, and potentially other lenders, provide unlimited additional amounts of term loans or revolving loans or both on terms substantially consistent with those provided under the credit agreement. Among other things, the utilization of the incremental facility is conditioned on our ability to meet a maximum senior secured leverage ratio of 4.00 to 1.00, and a sufficient number of lenders or new lenders agreeing to participate in the facility.

5.25% Senior Notes due 2025. On April 3, 2017, we issued $500.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public of 100% of their face value. On November 20, 2017, we issued an additional $400.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public 101% of their face value plus accrued interest from October 1, 2017. The notes issued in November 2017 were issued as additional notes under the same indenture as our 5.25% senior notes due 2025 that were issued in April 2017, and, as such, form a single series and trade interchangeably with the previously issued 5.25% senior notes due 2025.

We used the net proceeds of the April 2017 offering to repay all of the then outstanding borrowings and amounts due under our revolving credit facility and tranche A term loans, to pay related fees and expenses and for general corporate purposes. We used the net proceeds of the November 2017 offering to repay all of the then outstanding borrowings and amounts due under our revolving credit facility, to pay related fees and expenses and for general corporate purposes.

Interest on the 5.25% senior notes due 2025 is payable on April 1 and October 1 of each year, commencing October 1, 2017. The 5.25% senior notes due 2025 will mature on April 1, 2025, unless earlier retired or redeemed as described below.

We may redeem some or all of the 5.25% senior notes due 2025 at a redemption price of 102.6250% beginning April 1, 2021, 101.3125% beginning April 1, 2022 and 100% on or after April 1, 2023, in each case plus accrued and unpaid interest to the date of redemption. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 5.25% senior notes due 2025 at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase.

We may also, from time to time, seek to retire the 5.25% senior notes due 2025 through cash repurchases of the 5.25% senior notes due 2025 and/or exchanges of the 5.25% senior notes due 2025 for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our obligations under the 5.25% senior notes due 2025 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The 5.25% senior notes due 2025 and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2025.

The indenture governing the 5.25% senior notes due 2025 contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of July 3, 2021, we were in compliance with all of the covenants in the indenture governing the 5.25% senior notes due 2025.

- 13 -

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

5.25% Senior Notes due 2027. On September 26, 2019, we issued $550.0 million aggregate principal amount of 5.25% senior notes due 2027 at a price to the public of 100% of their face value.

We used the proceeds of the offering, together with the proceeds of incremental term loans made during the fourth quarter of 2019, to redeem all of our outstanding 4.625% senior notes due 2021, repay a portion of our borrowings under our revolving credit facility, pay related fees and expenses and for general corporate purposes.

Interest on the 5.25% senior notes due 2027 is payable on March 15 and September 15 of each year, commencing March 15, 2020. The 5.25% senior notes due 2027 will mature on September 15, 2027, unless earlier retired or redeemed as described below.

We may redeem some or all of the 5.25% senior notes due 2027 at a redemption price of 103.938% beginning March 1, 2022 and thereafter at prices declining annually to 100% on or after March 1, 2025, in each case plus accrued and unpaid interest to the date of redemption. We may redeem up to 40% of the aggregate principal amount of the 5.25% senior notes due 2027 prior to March 1, 2022 with the net proceeds from certain equity offerings. We may also redeem some or all of the 5.25% senior notes due 2027 at any time prior to March 1, 2022 at a redemption price equal to the make-whole amount set forth in the tenth supplemental indenture. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 5.25% senior notes due 2027 at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase.

We may also, from time to time, seek to retire the 5.25% senior notes due 2027 through cash repurchases of the 5.25% senior notes due 2027 and/or exchanges of the 5.25% senior notes due 2027 for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our obligations under the 5.25% senior notes due 2027 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The 5.25% senior notes due 2027 and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2027.

The indenture governing the 5.25% senior notes due 2027 contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of July 3, 2021, we were in compliance with all of the covenants in the indenture governing the 5.25% senior notes due 2027.

Subsidiary Guarantees. We have no assets or operations independent of our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fully and unconditionally guarantee our long-term debt. There are no significant restrictions on our ability and the ability of our subsidiaries to obtain funds from our respective subsidiaries by dividend or loan. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”

Accrued Interest. At July 3, 2021 and January 2, 2021, accrued interest of $21.1 million and $20.9 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets.

- 14 -

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(7) Fair Value Measurements

The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value. Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature. The three levels are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.

Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses, income tax payable and dividends payable are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of July 3, 2021 and January 2, 2021 were as follows (in thousands):

		July 3, 2021						January 2, 2021
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	225,000		$	225,000	(1)	$	235,000		$	235,000	(1)
Tranche B term loans due 2026		667,461	(2)		667,461	(3)		667,118	(2)		665,450	(3)
5.25% senior notes due 2025		902,022	(4)		926,828	(3)		902,292	(4)		931,616	(3)
5.25% senior notes due 2027	$	550,000		$	573,788	(3)	$	550,000		$	580,250	(3)

(1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2) The carrying value of the tranche B term loans includes a discount. At July 3, 2021 and January 2, 2021, the face amount of the tranche B term loans was $671.6 million.

(3) Fair values are estimated based on quoted market prices.

(4) The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 3, 2021 and January 2, 2021, the face amount of the 5.25% senior notes due 2025 was $900.0 million.

There was no Level 3 activity during the second quarter or first two quarters of 2021 or 2020.

- 15 -

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(8) Accumulated Other Comprehensive Loss

The reclassifications from accumulated other comprehensive loss (AOCL) for the second quarter and first two quarters of 2021 and 2020 were as follows (in thousands):

	Amounts Reclassified from AOCL				Amounts Reclassified from AOCL
	Thirteen Weeks Ended				Twenty-six Weeks Ended				Affected Line Item in
	July 3,		June 27,		July 3,		June 27,		the Statement Where
Details about AOCL Components	2021		2020		2021		2020		Net Income is Presented
Defined benefit pension plan items
Amortization of unrecognized loss	$	403	$	296	$	845	$	696	See (1) below
Accumulated other comprehensive loss before tax		403		296		845		696	Total before tax
Tax expense		(99)		(77)		(207)		(181)	Income tax expense
Total reclassification	$	304	$	219	$	638	$	515	Net of tax

(1) These items are included in the computation of net periodic pension cost. See Note 10, “Pension Benefits,” for additional information.

Changes in AOCL for the first two quarters of 2021 were as follows (in thousands):

			Foreign Currency
	Defined Benefit		Translation
	Pension Plan Items		Adjustments		Total
Balance at January 2, 2021	$	(27,631)	$	(7,963)	$	(35,594)
Other comprehensive loss before reclassifications		—		3,400		3,400
Amounts reclassified from AOCL		638		—		638
Net current period other comprehensive income		638		3,400		4,038
Balance at July 3, 2021	$	(26,993)	$	(4,563)	$	(31,556)

(9)Stock Repurchase Program

On March 9, 2021, our board of directors authorized an extension of our stock repurchase program from March 15, 2021 to March 15, 2022. In extending the repurchase program, our board of directors also reset the repurchase authority to up to $50.0 million.

Under the authorization, we may purchase shares of common stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the SEC. The timing and amount of future stock repurchases, if any, under the program will be at the discretion of management, and will depend on a variety of factors, including price, available cash, general business and market conditions and other investment opportunities. Therefore, we cannot assure you as to the number or aggregate dollar amount of additional shares, if any, that will be repurchased under the program. We may discontinue the program at any time. Any shares repurchased pursuant to the program will be retired.

We did not repurchase any shares of our common stock during the first two quarters of 2021 or the first two quarters of 2020. As of July 3, 2021, we had $50.0 million available for future repurchases of common stock under the stock repurchase program.

- 16 -

B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(10) Pension Benefits

Company-Sponsored Defined Benefit Pension Plans. As of July 3, 2021, we had four company-sponsored defined benefit pension plans covering approximately 33% of our employees. Three of these defined benefit pension plans are for the benefit of certain of our union employees and one is for the benefit of salaried and certain hourly employees. The benefits in the salaried and hourly plan are based on each employee’s years of service and compensation, as defined. Newly hired employees are no longer eligible to participate in any of our four company-sponsored defined benefit pension plans. Net periodic pension cost for our four company-sponsored defined benefit pension plans for the second quarter and first two quarters of 2021 and 2020 includes the following components (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Service cost—benefits earned during the period	$	2,603	$	2,052	$	5,229	$	4,519
Interest cost on projected benefit obligation		1,208		1,322		2,433		2,699
Expected return on plan assets		(2,727)		(2,319)		(5,484)		(4,548)
Amortization of unrecognized loss		403		296		845		696
Net periodic pension cost	$	1,487	$	1,351	$	3,023	$	3,366

We made contributions to our company-sponsored defined benefit pension plans of $2.5 million and $8.0 million during the first two quarters of 2021 and 2020, respectively. During the remainder of fiscal 2021, we expect to make approximately $3.0 million of additional contributions.

Multi-Employer Defined Benefit Pension Plan. We also contribute to the Bakery and Confectionery Union and Industry International Pension Fund (EIN 52-6118572, Plan No. 001), a multi-employer defined benefit pension plan, sponsored by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) on behalf of certain employees at our Portland, Maine manufacturing facility. The plan provides multiple plan benefits with corresponding contribution rates that are collectively bargained between participating employers and their affiliated BCTGM local unions.

We were notified that for the plan year beginning January 1, 2012, the plan was in critical status and classified in the Red Zone, and for the plan year beginning January 1, 2018, the plan was in critical and declining status. As of the date of the accompanying unaudited consolidated interim financial statements, the plan remains in critical and declining status. The law requires that all contributing employers pay to the plan a surcharge to help correct the plan’s financial situation. The amount of the surcharge is equal to a percentage of the amount an employer is otherwise required to contribute to the plan under the applicable collective bargaining agreement. During the second quarter of 2015, we agreed to a collective bargaining agreement that, among other things, implemented a rehabilitation plan. As a result, our contributions to the plan had been increasing by at least 5% per year, assuming consistent hours were worked. Effective December 31, 2020, the annual 5% contribution rate increases have been suspended.

B&G Foods made contributions to the plan of approximately $0.3 million and $0.4 million during the first two quarters of 2021 and the first two quarters of 2020, respectively. During the remainder of fiscal 2021, we expect to make approximately $0.3 million of additional contributions and we expect to pay surcharges of approximately $0.2 million assuming consistent hours are worked. These contributions represent less than 5% of total contributions made to the plan.

In the event that we withdraw from participation in the plan or substantially reduce our participation in this plan (such as due to a workforce reduction), or if a mass withdrawal were to occur, applicable law could require us to make withdrawal liability payments to the plan, and we would have to reflect that liability on our balance sheet. The amount of our withdrawal liability, which would be material, would depend on the extent of this plan’s funding of vested benefits at the time of our withdrawal. As discussed above, the plan is severely underfunded. Furthermore, our withdrawal liability could increase as the number of employers participating in this plan decreases. As of July 3, 2021, we estimate that if we were to voluntarily withdraw from participation in the plan, we would trigger a withdrawal liability with a present value

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

of approximately $14.1 million, which liability would be payable over 20 years in annual installments of approximately $0.9 million.

(11) Leases

Operating Leases. Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items:

	July 3,		January 2,
	2021		2021
Right-of-use assets:
Operating lease right-of-use assets	$	38,704	$	32,216
Operating lease liabilities:
Current portion of operating lease liabilities	$	9,801	$	11,034
Long-term operating lease liabilities, net of current portion		31,802		23,959
Total operating lease liabilities	$	41,603	$	34,993

We determine whether an arrangement is a lease at inception. We have operating leases for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of use assets and lease liabilities.

The following table shows supplemental information related to leases:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,073	$	3,095	$	6,423	$	6,182
The components of lease costs were as follows:
Cost of goods sold	$	1,158	$	1,012	$	2,342	$	2,016
Selling, general and administrative expenses		2,231		1,975		4,205		3,952
Total lease costs	$	3,389	$	2,987	$	6,547	$	5,968

Total rent expense was $4.1 million, including the operating lease costs of $3.4 million stated above, for the second quarter of 2021, and $8.1 million, including the operating lease costs of $6.5 million stated above, for the first two quarters of 2021. Total rent expense was $3.8 million, including the operating lease costs of $3.0 million stated above, for the second quarter of 2020, and $7.3 million, including the operating lease costs of $6.0 million stated above, for the first two quarters of 2020.

Because our operating leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:

	July 3,		January 2,
	2021		2021
Weighted average remaining lease term (years)		5.2		4.8
Weighted average discount rate		3.20%		3.94%

As of July 3, 2021, the maturities of operating lease liabilities were as follows (in thousands):

	Maturities of Operating Lease Liabilities
Fiscal year:
2021 remaining	$	6,648
2022		8,472
2023		8,154
2024		7,210
2025		6,675
Thereafter		8,091
Total undiscounted future minimum lease payments		45,250
Less: Imputed interest		(3,647)
Total present value of future operating lease liabilities	$	41,603

(12) Commitments and Contingencies

Legal Proceedings. We are from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving product liability claims, product labeling claims, worker’s compensation and other employee claims, and tort and other general liability claims, as well as trademark, copyright, patent infringement and related claims and legal actions. While we cannot predict with certainty the results of these claims and legal actions in which we are currently, or in the future may be, involved, we do not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Environmental. We are subject to environmental laws and regulations in the normal course of business. We did not make any material expenditures during the first two quarters of 2021 or 2020 in order to comply with environmental laws and regulations. Based on our experience to date, management believes that the future cost of compliance with existing environmental laws and regulations (and liability for any known environmental conditions) will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.

Collective Bargaining Agreements. As of July 3, 2021, 1,966 of our 3,071 employees, or approximately 64.0%, were covered by collective bargaining agreements.

As of the date of this report, we have only one collective bargaining agreement that is scheduled to expire in the next twelve months. The collective bargaining agreement covering employees at our Portland, Maine facility, which covers approximately 80 employees, is scheduled to expire on April 30, 2022.

While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate a new collective bargaining agreements for our Portland facility on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect that the outcome of the negotiations will have a material adverse impact on our business, financial condition or results of operations.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Severance and Change of Control Agreements. We have employment agreements with each of our executive officers. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain circumstances, including termination by us without cause (as defined in the agreements) or as a result of the employee’s death or disability, or termination by us or a deemed termination upon a change of control (as defined in the agreements). Severance benefits generally include payments for salary continuation, continuation of health care and insurance benefits, present value of additional pension credits and, in certain cases, accelerated vesting under compensation plans. See Note 16, “Separation Expenses.”

(13) Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method. For the second quarter of 2021 and 2020, there were 498,963 and 1,124,416, respectively, shares of common stock issuable upon the exercise of stock options excluded from the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share.

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Weighted average shares outstanding:
Basic		64,776,532		64,129,778		64,679,761		64,088,464
Net effect of potentially dilutive share-based compensation awards		633,312		280,035		630,019		158,555
Diluted		65,409,844		64,409,813		65,309,780		64,247,019

(14) Business and Credit Concentrations and Geographic Information

Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top ten customers accounted for approximately 60.8% and 61.2% of consolidated net sales for the first two quarters of 2021 and 2020, respectively. Other than Walmart, which accounted for approximately 28.8% and 25.9% of our consolidated net sales for the first two quarters of 2021 and 2020, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first two quarters of 2021 or 2020.

Our top ten customers accounted for approximately 64.8% and 62.6% of our consolidated trade accounts receivables as of July 3, 2021 and January 2, 2021, respectively. Other than Walmart, which accounted for approximately 32.5% and 32.6% of our consolidated trade accounts receivables as of July 3, 2021 and January 2, 2021, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables. As of July 3, 2021, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivables with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Walmart.

During the first two quarters of 2021 and 2020, our sales to customers in foreign countries represented approximately 7.7% and 7.9%, respectively, of net sales. Our foreign sales are primarily to customers in Canada.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(15) Share-Based Payments

The following table details our stock option activity for the first two quarters of fiscal 2021 (dollars in thousands, except per share data):

		Weighted		Weighted Average
		Average		Contractual Life	Aggregate
	Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at January 2, 2021	1,030,667	$	31.41	5.50	$	591
Granted	246,911	$	33.79
Exercised	(466,112)	$	31.71
Forfeited	(37,627)	$	26.80
Expired	(2,171)	$	32.59
Outstanding at July 3, 2021	771,668	$	32.21	6.67	$	1,209
Exercisable at July 3, 2021	524,757	$	31.47	5.14	$	1,194

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is based on the “simplified method” in accordance with accounting guidance. We utilized the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The assumptions used in the Black-Scholes option-pricing model during the first two quarters of 2021 and 2020 were as follows:

	2021		2020
Weighted average grant date fair value	$	6.48	$	4.51
Expected volatility		37.3% - 38.8%		45.4%
Expected term		5.5 - 6.5 years		5.5 years
Risk-free interest rate		0.9% - 1.1%		0.4%
Dividend yield		5.6% - 6.3%		7.9%

The following table details the activity in our performance share long-term incentive awards (LTIAs) for the first two quarters of 2021:

		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares(1)	(per share)(2)
Outstanding at January 2, 2021	986,223	$	15.56
Granted	450,104	$	28.71
Vested	(86,523)	$	21.36
Forfeited	(207,950)	$	16.75
Outstanding at July 3, 2021	1,141,854	$	20.08

(1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% to 233% of the target number of performance shares).

(2) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

The following table details the activity in our restricted stock for the first two quarters of 2021:

		Weighted Average
	Number of Shares	Grant Date Fair Value
	of Restricted Stock	(per share)(1)
Outstanding at January 2, 2021	97,359	$	18.22
Granted	38,098	$	32.86
Vested	(59,867)	$	19.30
Forfeited	(956)	$	20.94
Outstanding at July 3, 2021	74,634	$	24.79

(1) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes).

The following table details the net number of shares of common stock issued by our company during the second quarter and first two quarters of 2021 and 2020 upon the vesting of performance share LTIAs, the exercise of stock options, the issuance of restricted stock and other share-based compensation:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Number of performance shares vested		—		—		86,523		—
Shares withheld for tax withholding		—		—		(35,281)		—
Shares of common stock issued for performance share LTIAs		—		—		51,242		—
Shares of common stock issued upon the exercise of stock options		27,212		—		466,112		—
Shares of common stock issued to non-employee directors for annual equity grants		39,251		43,024		39,251		43,024
Shares of restricted common stock issued to employees		7,126		592		38,098		76,440
Shares of restricted stock withheld and cancelled for tax withholding upon vesting		(66)		(3,660)		(21,528)		(3,660)
Shares of restricted stock cancelled upon forfeiture		(956)		—		(956)		—
Net shares of common stock issued		72,567		39,956		572,219		115,804

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the second quarter and first two quarters of 2021 and 2020 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
Consolidated Statements of Operations Location	2021		2020		2021		2020
Compensation expense included in cost of goods sold	$	322	$	1,157	$	458	$	1,174
Compensation expense included in selling, general and administrative expenses		1,080		2,664		1,667		3,070
Total compensation expense for share-based payments	$	1,402	$	3,821	$	2,125	$	4,244

During the second quarter of 2020, we recognized additional pre-tax share-based compensation expense of $2.3 million for our performance share LTIAs because of the increased likelihood of achieving performance goals in light of our improved operating performance and profitability as a result of increased demand for our products due to the COVID-19 pandemic.

As of July 3, 2021, there was $7.3 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.5 years, $1.6 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over the next 3.0 years, and less than $1.6 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.8 years.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(16) Separation Expenses

During the fourth quarter of 2020, we recorded separation costs of $4.2 million for severance and other benefits payable pursuant to the terms of a separation agreement entered into in November 2020 with our former president and chief executive officer. Of this amount, approximately $1.7 million has resulted or will result in cash payments, of which $0.8 million were made during the first two quarters of 2021 and most of the remainder of which will be paid during the remainder of fiscal 2021. The remaining $2.5 million of non-cash separation costs relate to share-based compensation expense for shares that have vested in fiscal 2021 or may vest at the end of fiscal 2021 and fiscal 2022 if certain company performance goals are achieved.

(17) Net Sales by Brand

The following table sets forth net sales by brand (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Brand:(1)
Green Giant - frozen	$	74,061	$	105,262	$	172,676	$	213,401
Spices & Seasonings(2)		71,584		68,492		147,997		120,287
Crisco(3)		58,442		—		116,498		—
Ortega		40,850		46,797		79,801		85,578
Green Giant - shelf-stable(4)		23,767		49,032		49,232		86,962
Maple Grove Farms of Vermont		20,154		18,044		40,831		36,485
Dash		20,033		20,839		38,216		35,338
Clabber Girl(5)		17,580		26,453		34,993		45,132
Cream of Wheat		14,236		17,985		32,396		36,911
All other brands		123,668		159,635		256,869		301,815
Total	$	464,375	$	512,539	$	969,509	$	961,909

(1) Table includes net sales for each of our brands whose net sales for the first two quarters of 2021 or fiscal 2020 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand.

(2) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(3) We completed the Crisco acquisition on December 1, 2020. See Note 3, “Acquisitions.”

(4) Does not include net sales of the Le Sueur brand. Net sales of the Le Sueur brand are included below in “All other brands.”

(5) Includes net sales for multiple brands acquired as part of the Clabber Girl acquisition that we completed on May 15, 2019, including, among others, the Clabber Girl, Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Forward-Looking Statements” before Part I of this report and elsewhere in this report. The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the thirteen and twenty-six weeks ended July 3, 2021 (second quarter and first two quarters of 2021) included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended January 2, 2021 (fiscal 2020) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 2, 2021 (which we refer to as our 2020 Annual Report on Form 10-K).

General

We manufacture, sell and distribute a diverse portfolio of branded, high quality, shelf-stable and frozen foods and household products, many of which have leading regional or national market shares. In general, we position our branded products to appeal to the consumer desiring a high quality and reasonably priced product. We complement our branded product retail sales with institutional and foodservice sales and private label sales.

Our company has been built upon a successful track record of acquisition-driven growth. Our goal is to continue to increase sales, profitability and cash flows through strategic acquisitions, new product development and organic growth. We intend to implement our growth strategy through the following initiatives: expanding our brand portfolio with disciplined acquisitions of complementary branded businesses, continuing to develop new products and delivering them to market quickly, leveraging our multiple channel sales and distribution system and continuing to focus on higher growth customers and distribution channels.

Since 1996, we have successfully acquired and integrated more than 50 brands into our company. Most recently, on December 1, 2020, we acquired the Crisco oils and shortening business from The J.M. Smucker Company and certain of its affiliates. As part of the acquisition, we also acquired a manufacturing facility and warehouse in Cincinnati, Ohio. The asset purchase agreement includes an agreement for Smucker to provide certain transition services associated with the acquired business for up to nine to twelve months following closing. On February 19, 2020, we acquired Farmwise LLC, maker of Farmwise Veggie Fries, Farmwise Veggie Tots and Farmwise Veggie Rings. We refer to these acquisitions in this report as the “Crisco acquisition” and the “Farmwise acquisition,” respectively. These acquisitions have been accounted for using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired businesses are included in our consolidated financial statements from the date of acquisition. These acquisitions and the application of the acquisition method of accounting affect comparability between periods.

We are subject to a number of challenges that may adversely affect our businesses. These challenges, which are discussed below and under the heading “Forward-Looking Statements,” include:

Fluctuations in Commodity Prices and Production and Distribution Costs. We purchase raw materials, including agricultural products, oils, meat, poultry, ingredients and packaging materials from growers, commodity processors, other food companies and packaging suppliers located in U.S. and foreign locations. Raw materials and other input costs, such as fuel and transportation, are subject to fluctuations in price attributable to a number of factors. Fluctuations in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.

We attempt to manage cost inflation risks by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers generally lag behind rising input costs. Competitive pressures also may limit our ability to quickly raise prices in response to rising costs.

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We experienced material net cost increases for raw materials during the second quarter and first two quarters of 2021 and fiscal 2020 and anticipate higher raw materials cost increases for the remainder of fiscal 2021 and into fiscal 2022. We are currently locked into our supply and prices for a majority of our most significant raw material commodities (excluding, among others, maple syrup) through the remainder of fiscal 2021.

In recent years, we have been negatively impacted by industry-wide increases in the cost of distribution, primarily driven by increased freight rates. We attempt to offset all or a portion of these increases through price increases and cost savings initiatives. For example, despite higher rates for freight in 2019, we were able to offset a portion of the freight cost increase through pricing, which included both list price increases and trade spend optimization. And in 2018 and 2019, we benefited from our distribution re-alignment efforts which have helped to optimize both our shelf-stable and our frozen distribution networks. Freight rates increased significantly during the fourth quarter of 2020 and we expect freight rates to remain elevated in 2021 and into fiscal 2022.

We plan to continue managing inflation risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and, when necessary, by raising prices. To the extent we are unable to avoid or offset any present or future cost increases by locking in our costs, implementing cost saving measures or increasing prices to our customers, our operating results could be materially adversely affected. In addition, if input costs begin to decline, customers may look for price reductions in situations where we have locked into purchases at higher costs. During the past three years, our cost saving measures and sales price increases have not been sufficient to fully offset increases to our raw material, ingredient and packaging and distribution costs.

Consolidation in the Retail Trade and Consequent Inventory Reductions. As customers, such as supermarkets, discounters, e-commerce merchants, warehouse clubs and food distributors, continue to consolidate and grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs. These customers are also reducing their inventories and increasing their emphasis on private label products.

Changing Consumer Preferences and Channel Shifts. Consumers in the market categories in which we compete frequently change their taste preferences, dietary habits and product packaging preferences. In addition, the rapid growth of some channels and changing consumer preferences for these channels, in particular in e-commerce, which has expanded significantly following the outbreak of COVID-19, may impact our current operations or strategies more quickly than we planned for, create consumer price deflation, alter the buying behavior of consumers or disrupt our retail customer relationships. As a result of changing consumer preferences for products and channels, we may need to increase or reallocate spending on existing and new distribution channels and technologies, marketing, advertising and new product innovation to protect or increase revenues, market share and brand significance. These expenditures may not be successful, including those related to our e-commerce and other technology-focused efforts, and might not result in trade and consumer acceptance of our efforts. If we are unable to effectively and timely adapt to changes in consumer preferences and channel shifts, our products may lose market share or we may face significant price erosion, and our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

Consumer Concern Regarding Food Safety, Quality and Health. The food industry is subject to consumer concerns regarding the safety and quality of certain food products. If consumers in our principal markets lose confidence in the safety and quality of our food products, even as a result of a product liability claim or a product recall by a food industry competitor, our business could be adversely affected.

Fluctuations in Currency Exchange Rates. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. During the first two quarters of 2021 and 2020, our net sales to customers in foreign countries represented approximately 7.7% and 7.9%, respectively, of our total net sales. We also purchase a significant majority of our maple syrup requirements from suppliers located in Québec, Canada. Any weakening of the U.S. dollar against the Canadian dollar could significantly increase our costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars in advance of any such weakening of the U.S. dollar or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. These increased costs would not be fully offset by the positive impact the change in the relative strength of the Canadian dollar versus the U.S. dollar would have on our net sales in Canada. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars. We also operate a manufacturing facility in Irapuato, Mexico for the manufacture of Green Giant frozen products and are as a result exposed to fluctuations in the Mexican peso. Our results of operations could be adversely impacted by changes in foreign currency exchange rates. Costs and expenses in Mexico are

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recognized in local foreign currency, and therefore we are exposed to potential gains or losses from the translation of those amounts into U.S. dollars for consolidation into our consolidated financial statements.

To confront these challenges, we continue to take steps to build the value of our brands, to improve our existing portfolio of products with new product and marketing initiatives, to reduce costs through improved productivity, to address consumer concerns about food safety, quality and health and to favorably manage currency fluctuations.

Update Regarding Impact and Expected Future Impact of COVID-19 on Our Company

Business Impact. Consistent with B&G Foods’ core values, the health and safety of our employees and the quality and safety of our products are our highest priorities. Commencing at the onset of the pandemic, we implemented a wide range of precautionary measures at our manufacturing facilities and other work locations in response to COVID-19. We have also been working closely with our supply chain partners and our customers to ensure that we can continue to provide uninterrupted service. Thanks to the tremendous efforts of our employees, especially those throughout our supply chain, our ability to serve our customers has not, to date, been materially impacted, although, as discussed below, we have faced supply chain constraints for certain of our products.

We continue to monitor the latest guidance from the CDC, FDA and other federal, state and local authorities regarding COVID-19 and will continue to support our employees and our communities and do our part to keep our nation supplied with food during this difficult time.

Precautionary measures that we have taken to protect our employees, customers, suppliers and other business partners, and to maintain our ability to supply food products, include, among many others, the following, some of which are no longer in effect as vaccination rates have risen:

● the establishment of a COVID-19 task force consisting of our executives and other members of senior management;

● social distancing and the required wearing of face masks at all manufacturing locations and the installation of plexiglass barriers at spots where line workers must work in close proximity;

● enhanced sanitization procedures at all manufacturing and other work locations;

● screening of all employees, including temperature checks, before entering manufacturing facilities;

● quarantining (with pay) of employees who may have been exposed to COVID-19 or who are exhibiting any symptoms of COVID-19;

● manufacturing plant shutdowns for sanitization when necessary upon a COVID-19 positive test;

● the notification of manufacturing employees of any COVID-19 positive tests at their manufacturing location and the quarantining (with pay) of employees who may have had contact with the employee who tested positive;

● where available, facilitating the vaccination of employees at our manufacturing facilities or locations nearby;

● instituting a work from home policy for office workers, and reducing office capacity and implementing social distancing and other precautionary measures for those workers returning to the office; and

● constant communication with our customers and supply chain partners.

We also rewarded our dedicated employees at our manufacturing facilities by temporarily increasing compensation for our hourly employees, supervisors and managers from March 30, 2020 through February 15, 2021. This is in addition to the continued pay we provided to workers while in quarantine (as described in the bullet points above).

Financial Impact to Date. As previously disclosed, the pandemic has had a positive impact on our operating results, and significantly improved our net sales, net income, adjusted EBITDA and net cash provided by operating activities in fiscal 2020. For the first two quarters of 2021, significant year-over-year base business net sales gains in January and February were offset by a year-over-year decrease in base business net sales in March through June, primarily due to the extraordinary demand for our products in March through June 2020 as the COVID-19 pandemic reached the United States and consumers began pantry loading and increasing their at-home consumption as a result of

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increased social distancing and stay-at-home and work-from-home mandates and recommendations. Although demand remains strong and base business net sales are expected to continue to outpace fiscal 2019 levels, we expect base business net sales to decline year-over-year in fiscal 2021 given the extraordinary demand and pantry loading at the height of the pandemic.

We estimate we have spent approximately $4.1 million and $4.4 million on COVID-19-related costs for the first two quarters of 2021 and the first two quarters of 2020, respectively. This includes our estimated costs to take the precautionary health and safety measures described above, to provide our manufacturing employees the temporary enhanced compensation described above and to pay employees while they were in quarantine. Most of these costs impact our costs of goods sold and the remaining portion impacts our selling, general and administrative expenses.

Expectations and Risk Factors in Light of the Ongoing COVID-19 Pandemic and Input Cost Inflation. B&G Foods continues to see strong consumer demand for our products and expects to see commensurate elevated levels of net sales relative to pre-pandemic fiscal 2019 throughout the remainder of fiscal 2021. The ultimate impact of the COVID-19 pandemic on our business will depend on many factors, including, among others: how long social distancing and stay-at-home and work-from home policies and recommendations remain in effect; whether, and the extent to which, additional waves or variants of COVID-19 will affect the United States and the rest of North America; our ability to continue to operate our manufacturing facilities, maintain our supply chain without material disruption, procure ingredients, packaging and other raw materials when needed despite unprecedented demand in the food industry; the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating and shopping habits; and the extent to which consumers continue to work remotely even after the pandemic subsides and how that may impact consumer habits.

We have also seen and expect to continue to see significant cost inflation for various inputs, including ingredients, packaging and transportation. We have initiated various revenue enhancing activities (including list price increases and trade spending initiatives) and cost savings initiatives to offset these costs but there can be no assurance at this point of the ultimate effectiveness of these activities and initiatives. See “—General—Fluctuations in Commodity Prices and Production and Distribution Costs” above.

Critical Accounting Policies; Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve: revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment, and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.

In our 2020 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our unaudited consolidated interim financial statements. There have been no material changes to these policies from those disclosed in our 2020 Annual Report on Form 10-K.

U.S. Tax Act and U.S. CARES Act

On December 22, 2017, the Tax Cuts and Jobs Act, which we refer to as the “U.S. Tax Act,” was signed into law. The U.S. Tax Act provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. The changes in the U.S. Tax Act are broad and complex and we continue to examine the impact the U.S. Tax Act may have on our business and financial results. The U.S. Tax Act contains provisions with separate effective dates but was generally effective for taxable years beginning after December 31, 2017.

Under FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, we are required to revalue any deferred tax assets or liabilities in the period of enactment of change in tax rates. Beginning on January 1, 2018, the U.S. Tax Act lowered the U.S. federal corporate income tax rate from 35% to 21% on our U.S. earnings from that date and beyond. The reduction in the corporate income tax rate from 35% to 21% was effective for our fiscal 2018 and subsequent years. Our consolidated effective tax rate was approximately 26.1% and 23.6% for the first two quarters of

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2021 and 2020, respectively. We also expect to realize a cash tax benefit for future bonus depreciation on certain business additions, which, together with the reduced income tax rate, we expect to reduce our cash income tax payments.

The U.S. Tax Act also limits the deduction for net interest expense (including the treatment of depreciation and other deductions in arriving at adjusted taxable income) incurred by a corporate taxpayer to 30% of the taxpayer’s adjusted taxable income.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which we refer to as the “U.S. CARES Act,” was signed into law. The U.S. CARES Act, among other things, includes provisions related to net operating loss carryback periods, modifications to the interest deduction limitation and technical corrections to tax depreciation for qualified improvement property. The U.S. CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years beginning in 2019 and 2020 and the limitation will revert back to 30% in future periods. This modification increased the allowable interest expense deduction and resulted in a net operating loss (NOL) for the year 2019. We were able to carryback the 2019 NOL and receive a tax refund of $7.2 million in fiscal 2020. The NOL carryback to the 2014 and 2015 tax years generated a refund of previously paid income taxes at an approximate 35% federal tax rate. This resulted in a benefit related to tax rate differential of $2.6 million in fiscal 2020, $2.3 million of which was recorded as a discrete item in the first quarter of 2020. We were not subject to an interest expense deduction limitation in fiscal 2020 and do not expect a significant interest deduction limitation in fiscal 2021.

The U.S. Treasury issued several regulations supplementing the U.S. Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, application of the existing foreign tax credit rules to newly created categories and expanding details for application of the base erosion tax on affiliate payments. These regulations are to be applied retroactively and did not materially impact our tax rates in fiscal 2020 or first two quarters of 2021.

Results of Operations

The following table sets forth the percentages of net sales represented by selected items for the second quarter and first two quarters of 2021 and 2020 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Statement of Operations Data:
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	76.0	%	73.8	%	76.3	%	75.2	%
Gross profit	24.0	%	26.2	%	23.7	%	24.8	%
Operating expenses:
Selling, general and administrative expenses	10.1	%	8.7	%	10.1	%	8.8	%
Amortization expense	1.2	%	0.9	%	1.1	%	0.9	%
Operating income	12.7	%	16.6	%	12.5	%	15.1	%
Other income and expenses:
Interest expense, net	5.7	%	4.8	%	5.5	%	5.3	%
Other income	(0.2)	%	(0.1)	%	(0.2)	%	(0.1)	%
Income before income tax expense	7.2	%	11.9	%	7.2	%	9.9	%
Income tax expense	1.9	%	3.1	%	1.9	%	2.3	%
Net income	5.3	%	8.8	%	5.3	%	7.6	%

As used in this section, the terms listed below have the following meanings:

Net Sales. Our net sales represents gross sales of products shipped to customers plus amounts charged to customers for shipping and handling, less cash discounts, coupon redemptions, slotting fees and trade promotional spending, including marketing development funds.

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Gross Profit. Our gross profit is equal to our net sales less cost of goods sold. The primary components of our cost of goods sold are cost of internally manufactured products, purchases of finished goods from co-packers, a portion of our warehousing expenses plus freight costs to our distribution centers and to our customers.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses include costs related to selling our products, as well as all other general and administrative expenses. Some of these costs include administrative, marketing and internal sales force employee compensation and benefits costs, consumer advertising programs, brokerage costs, a portion of our warehousing expenses, information technology and communication costs, office rent, utilities, supplies, professional services, severance, acquisition/divestiture-related and non-recurring expenses and other general corporate expenses.

Amortization Expense. Amortization expense includes the amortization expense associated with customer relationships, finite-lived trademarks and other intangible assets.

Net Interest Expense. Net interest expense includes interest relating to our outstanding indebtedness, amortization of bond discount/premium and amortization of deferred debt financing costs (net of interest income).

Other Income. Other income includes income or expense resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes and the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs.

Non-GAAP Financial Measures

Certain disclosures in this report include non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of our financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in our consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.

Base Business Net Sales. Base business net sales is a non-GAAP financial measure used by management to measure operating performance. We define base business net sales as our net sales excluding (1) the net sales of acquisitions until the net sales from such acquisitions are included in both comparable periods and (2) net sales of discontinued or divested brands. The portion of current period net sales attributable to recent acquisitions for which there is no corresponding period in the comparable period of the prior year is excluded. For each acquisition, the excluded period starts at the beginning of the most recent fiscal period being compared and ends on the first anniversary of the acquisition date. For discontinued or divested brands, the entire amount of net sales is excluded from each fiscal period being compared. We have included this financial measure because our management believes it provides useful and comparable trend information regarding the results of our business without the effect of the timing of acquisitions and the effect of discontinued or divested brands.

2021 Compared to 2020

A reconciliation of base business net sales to net sales for the second quarter and first two quarters of 2021 and 2020 follows (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net sales	$	464,375	$	512,539	$	969,509	$	961,909
Net sales from acquisitions(1)		(58,442)		—		(116,698)		—
Base business net sales	$	405,933	$	512,539	$	852,811	$	961,909

(1) Primarily reflects $58.4 million and $116.5 million of net sales for Crisco for the second quarter and first two quarters of 2021, respectively, for which there is no comparable period of net sales during the second quarter and first two quarters of 2020, respectively. The Crisco acquisition closed on December 1, 2020.

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2021 Compared to 2019

A reconciliation of base business net sales to net sales for the second quarter and first two quarters of 2021 and 2019 follows (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 29,		July 3,		June 29,
	2021		2019		2021		2019
Net sales	$	464,375	$	371,197	$	969,509	$	783,931
Net sales from acquisitions(2)		(66,731)		—		(142,534)		—
Base business net sales	$	397,644	$	371,197	$	826,975	$	783,931

(2) Primarily reflects (a) $58.4 million and $116.5 million of net sales for Crisco for the second quarter and first two quarters of 2021, respectively, and (b) $8.1 million, or one and one-half months of net sales for Clabber Girl in the second quarter of 2021, and $25.5 million, or four and one-half months of net sales for Clabber Girl in the first two quarters of 2021, in case for which there is no comparable period of net sales during the second quarter and first two quarters of 2019, respectively. The Crisco acquisition closed on December 1, 2020 and the Clabber Girl acquisition closed on May 15, 2019.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Before COVID-19 Expenses. EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are non-GAAP financial measures used by management to measure operating performance. We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt. We define adjusted EBITDA as EBITDA adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up, and gains and losses on the sale of assets); and non-recurring expenses, gains and losses, including severance and other expenses relating to the separation of our former chief executive officer in fiscal 2020 and a workforce reduction in fiscal 2019. We define adjusted EBITDA before COVID-19 expenses as adjusted EBITDA adjusted for COVID-19 expenses. Management believes that it is useful to eliminate these items because it allows management to focus on what it deems to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. We use EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses in our business operations to, among other things, evaluate our operating performance, develop budgets and measure our performance against those budgets, determine employee bonuses and evaluate our cash flows in terms of cash needs. We also present EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses because we believe they are useful indicators of our historical debt capacity and ability to service debt and because covenants in our credit agreement and our senior notes indentures contain ratios based on these measures. As a result, reports used by internal management during monthly operating reviews feature the EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses metrics. However, management uses these metrics in conjunction with traditional GAAP operating performance and liquidity measures as part of its overall assessment of company performance and liquidity, and therefore does not place undue reliance on these measures as its only measures of operating performance and liquidity.

EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are not recognized terms under GAAP and do not purport to be alternatives to operating income, net income or any other GAAP measure as an indicator of operating performance. EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are not complete net cash flow measures because EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends. Rather, EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are two potential indicators of an entity’s ability to fund these cash requirements. EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above. Because not all companies use identical calculations, this presentation of EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses may not be comparable to other similarly titled measures of other companies. However, EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses can still be useful in evaluating our performance against our peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.

A reconciliation of EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses to net income and to net cash provided by operating activities for the second quarter and first two quarters of 2021 and 2020

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along with the components of EBITDA, adjusted EBITDA and adjusted EBITDA before COVID-19 expenses follows (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net income	$	24,551	$	44,911	$	51,429	$	73,003
Income tax expense		8,968		15,956		18,191		22,498
Interest expense, net		26,713		24,849		53,682		50,888
Depreciation and amortization		20,238		15,385		40,529		30,919
EBITDA		80,470		101,101		163,831		177,308
Acquisition/divestiture-related and non-recurring expenses(1)		3,319		1,497		7,829		5,980
Amortization of acquisition-related inventory step-up(2)		—		—		5,054		—
Adjusted EBITDA		83,789		102,598		176,714		183,288
COVID-19 expenses(3)		1,199		4,289		4,090		4,439
Adjusted EBITDA before COVID-19 expenses		84,988		106,887		180,804		187,727
Income tax expense		(8,968)		(15,956)		(18,191)		(22,498)
Interest expense, net		(26,713)		(24,849)		(53,682)		(50,888)
Acquisition/divestiture-related and non-recurring expenses(1)		(3,319)		(1,497)		(7,829)		(5,980)
Amortization of acquisition-related inventory step-up(2)		—		—		(5,054)		—
Net gain on sales and disposals of property, plant and equipment		(4)		(63)		(30)		(61)
Deferred income taxes		5,182		(116)		11,370		14,281
Amortization of deferred debt financing costs and bond discount/premium		1,148		901		2,289		1,799
Share-based compensation expense		1,402		3,821		2,125		4,244
Changes in assets and liabilities, net of effects of business combinations		(12,572)		123,949		(41,747)		122,181
Net cash provided by operating activities	$	39,945	$	188,788	$	65,965	$	246,366

(1) Acquisition/divestiture-related and non-recurring expenses for the second quarter and first two quarters of 2021 of $3.3 million and $7.8 million, respectively, primarily includes acquisition and integration expenses for the Crisco and Clabber Girl acquisitions, and certain cost savings initiatives. Acquisition/divestiture-related and non-recurring expenses for the second quarter and first two quarters of 2020 of $1.5 million and $6.0 million, respectively, primarily includes acquisition and integration expenses for the Clabber Girl and Farmwise acquisitions, and severance and other expenses primarily relating to a workforce reduction in fiscal 2019 and certain cost savings initiatives.

(2) For the second quarter and first two quarters of 2021, amortization of acquisition-related inventory step-up of $5.1 million relates to the purchase accounting adjustments made during the first quarter of 2021 to inventory acquired in the Crisco acquisition.

(3) COVID-19 expenses of $1.2 million and $4.1 million for the second quarter and first two quarters of 2021, respectively, and $4.3 million and $4.4 million for the second quarter and first two quarters of 2020, respectively, primarily included temporary enhanced compensation for our manufacturing employees; compensation we continued to pay manufacturing employees while in quarantine (which was incremental to the compensation we paid to the manufacturing employees who produced our products while others were in quarantine); and expenses relating to other precautionary health and safety measures.

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Adjusted Net Income and Adjusted Diluted Earnings Per Share. Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures used by management to measure operating performance. We define adjusted net income and adjusted diluted earnings per share as net income and diluted earnings per share adjusted for certain items that affect comparability. These non-GAAP financial measures reflect adjustments to net income and diluted earnings per share to eliminate the items identified in the reconciliation below. This information is provided in order to allow investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because we cannot predict the timing and amount of these items, management does not consider these items when evaluating our company’s performance or when making decisions regarding allocation of resources.

A reconciliation of adjusted net income and adjusted diluted earnings per share to net income for the second quarter and first two quarters of 2021 and 2020 along with the components of adjusted net income and adjusted diluted earnings per share follows (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net income	$	24,551	$	44,911	$	51,429	$	73,003
Acquisition/divestiture-related and non-recurring expenses, net of tax(1)		2,506		1,130		5,911		4,515
Tax benefit(2)		—		—		—		(2,258)
Amortization of acquisition-related inventory step-up, net of tax(3)		—		—		3,816		—
Adjusted net income	$	27,057	$	46,041	$	61,156	$	75,260
Adjusted diluted earnings per share	$	0.41	$	0.71	$	0.94	$	1.17

(1) Acquisition/divestiture-related and non-recurring expenses for the second quarter and first two quarters of 2021 primarily includes acquisition and integration expenses for the Crisco and Clabber Girl acquisitions, and certain cost savings initiatives. Acquisition/divestiture-related and non-recurring expenses for the second quarter and first two quarters of 2020 primarily includes acquisition and integration expenses for the Clabber Girl and Farmwise acquisitions, and severance and other expenses primarily relating to a workforce reduction in fiscal 2019 and certain cost savings initiatives.

(2) The first two quarters of 2020 includes a $2.3 million tax benefit associated with the U.S. CARES Act, which was recorded during the first quarter of 2020. See “— U.S. Tax Act and U.S. CARES Act” above.

(3) For the first two quarters of 2021, amortization of acquisition-related inventory step-up of $5.1 million (or $3.8 million, net of tax) relates to the purchase accounting adjustments made during the first quarter of 2021 to inventory acquired in the Crisco acquisition.

Second quarter of 2021 compared to the second quarter of 2020

Net Sales. Net sales for the second quarter of 2021 decreased $48.1 million, or 9.4%, to $464.4 million from $512.5 million for the second quarter of 2020. The decrease was primarily due to comparisons against the extraordinary demand and pantry loading at the height of the COVID-19 pandemic during the second quarter of 2020, partially offset by the Crisco acquisition. Net sales of Crisco, acquired on December 1, 2020, contributed $58.4 million to our net sales for the quarter. Net sales for the second quarter of 2021 were 25.1% higher than pre-pandemic net sales for the second quarter of 2019. On a two-year compound annual growth basis, relative to pre-pandemic levels, second quarter net sales increased 11.8%.

Base business net sales for the second quarter of 2021 decreased $106.6 million, or 20.8%, to $405.9 million from $512.5 million for the second quarter of 2020. The decrease in base business net sales for the second quarter of 2021 reflected a decrease in unit volume of $115.4 million, partially offset by an increase in net pricing and the impact of product mix of $6.2 million and the positive impact of foreign currency of $2.6 million. Base business net sales for the second quarter of 2021 were 7.1% higher than pre-pandemic base business net sales for the second quarter of 2019. On a two-year compound annual growth basis, relative to pre-pandemic levels, second quarter base business net sales increased 3.5%.

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Despite continued strong demand for Green Giant products during the second quarter of 2021, sales of Green Giant products in the aggregate (including Le Sueur) decreased $58.4 million, or 35.6%, in the second quarter of 2021, as compared to the second quarter of 2020. Net sales of Green Giant frozen decreased $31.2 million, or 29.6%, for the quarter. Net sales of Green Giant shelf-stable (including Le Sueur) decreased $27.3 million, or 46.3%, for the second quarter of 2021. The decrease in Green Giant net sales was primarily attributable to two factors. First, Green Giant was one of our brands that benefited the most from COVID-related demand during fiscal 2020. Second, Green Giant, as well as certain of its competitor brands, have faced supply chain constraints that we expect will continue until we reach the new pack season later this year. As a result, we made the difficult decision during the fourth quarter of 2020 to place certain of the brands’ products on allocation with our customers to avoid running out of products prior to the start of the new pack season, which has negatively impacted and is expected to continue to negatively impact net sales of Green Giant products through the early part of the third quarter of 2021.

See Note 17, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales for each of our brands whose net sales for the first two quarters of 2021 or fiscal 2020 equaled or exceeded 3% of our total net sales for those periods, and for “all other brands” in the aggregate. The following table sets forth the most significant base business net sales increases and decreases by brand for those brands for the second quarter of 2021:

	2021 vs. 2020				2021 vs. 2019
	Base Business				Base Business
	Net Sales Increase (Decrease)				Net Sales Increase (Decrease)
	Dollars (in millions)		Percentage		Dollars (in millions)		Percentage
Brand:
Spices & Seasonings(1)	$	3.1	4.5	%	$	10.6	17.3	%
Maple Grove Farms of Vermont		2.2	11.7	%		2.4	13.4	%
Green Giant - frozen		(31.2)	(29.6)	%		(13.6)	(15.5)	%
Green Giant - shelf-stable(2)		(27.3)	(46.3)	%		6.4	25.3	%
Clabber Girl(3)		(8.9)	(33.5)	%		1.1	12.5	%
Ortega		(5.9)	(12.7)	%		6.9	20.0	%
Cream of Wheat		(3.8)	(20.8)	%		2.5	21.9	%
Dash		(0.8)	(3.9)	%		5.6	38.9	%
All other brands		(34.0)	(22.7)	%		4.5	4.2	%
Base business net sales (decrease) increase	$	(106.6)	(20.8)	%	$	26.4	7.1	%

(1) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(2) Includes net sales of the Le Sueur brand.

(3) For the second quarter and first two quarters of 2021, includes net sales of Clabber Girl from May 15, 2021 through July 3, 2021, as net sales prior to May 15, 2021 are not included in base business net sales. Clabber Girl was acquired on May 15, 2019.

Gross Profit. Gross profit was $111.6 million for the second quarter of 2021, or 24.0% of net sales. Excluding the negative impact of $0.4 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the second quarter of 2021, our gross profit would have been $112.0 million, or 24.1% of net sales. Gross profit was $134.1 million for the second quarter of 2020, or 26.2% of net sales. Excluding the negative impact of $0.5 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the second quarter of 2020, our gross profit would have been $134.6 million, or 26.3% of net sales.

During the second quarter of 2021, our gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials and transportation. We expect input cost inflation to be materially higher in the second half of 2021 than it was in the second half of 2020. As discussed above, we are attempting to mitigate the impact of inflation on our gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We have also announced list price increases and have reduced trade promotions to our customers for certain of our products. However, increases in the prices we charge our customers generally lag behind rising input costs. As such, we do not expect to fully offset the incremental costs that we are facing in fiscal 2021 and we expect continued cost inflation in fiscal 2022.

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Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $2.8 million, or 6.2%, to $47.1 million for the second quarter of 2021 from $44.3 million for the second quarter of 2020. The increase was composed of increases in warehousing expenses of $4.6 million, acquisition/divestiture-related and non-recurring expenses of $1.9 million and consumer marketing expenses of $0.3 million, partially offset by decreases in selling expenses of $2.5 million and general and administrative expenses of $1.5 million. The increase in warehousing expenses was primarily driven by the Crisco acquisition and customer fines related to COVID-19 shortages and delays. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 1.4 percentage points to 10.1% for the second quarter of 2021, compared to 8.7% for the second quarter of 2020.

Amortization Expense. Amortization expense increased $0.7 million to $5.4 million for the second quarter of 2021 from $4.7 million for the second quarter of 2020 due to the Crisco acquisition completed in the fourth quarter of 2020.

Operating Income. As a result of the foregoing, operating income decreased $25.9 million, or 30.5%, to $59.1 million for the second quarter of 2021 from $85.0 million for the second quarter of 2020. Operating income expressed as a percentage of net sales decreased to 12.7% in the second quarter of 2021 from 16.6% in the second quarter of 2020.

Net Interest Expense. Net interest expense increased $1.9 million, or 7.5%, to $26.7 million for the second quarter of 2021 from $24.8 million in the second quarter of 2020. The increase was primarily attributable to an increase in average long-term debt outstanding during the second quarter of 2021 as compared to the second quarter of 2020, primarily as a result of incremental borrowings we made in the fourth quarter of 2020 to fund the Crisco acquisition and related fees and expenses. The increase in net interest expense was partially offset by a lower effective cost of borrowing during the second quarter of 2021. See “—Liquidity and Capital Resources — Debt” below.

Other Income. Other income for the second quarter of 2021 and 2020 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs, in the amount of $1.1 million and $0.7 million, respectively. Other income for the second quarter of 2021 and 2020 also includes remeasurement of monetary assets denominated in a foreign currency into U.S. dollars of less than $0.1 million in both periods.

Income Tax Expense. Income tax expense decreased $7.0 million to $9.0 million for the second quarter of 2021 from $16.0 million for the second quarter of 2020, primarily due to decreased operating income, as described above. Our effective tax rate was 26.8% for the second quarter of 2021 and 26.2% for the second quarter of 2020. See “U.S. Tax Act and U.S. CARES Act” above.

First two quarters of 2021 compared to the first two quarters of 2020

Net Sales. Net sales for the first two quarters of 2021 increased $7.6 million, or 0.8%, to $969.5 million from $961.9 million for the first two quarters of 2020. The increase was primarily due to the Crisco acquisition, largely offset by comparisons against the extraordinary demand and pantry loading at the height of the COVID-19 pandemic during the last four months of the first two quarters of 2020. Net sales of Crisco, acquired on December 1, 2020, contributed $116.5 million to our net sales for the first two quarters. Net sales for the first two quarters of 2021 were 23.7% higher than pre-pandemic net sales for the first two quarters of 2019. On a two-year compound annual growth basis, relative to pre-pandemic levels, net sales for the first two quarters of 2021 increased 11.2%.

Base business net sales for the first two quarters of 2021 decreased $109.1 million, or 11.3%, to $852.8 million from $961.9 million for the first two quarters of 2020. The decrease in base business net sales for the first two quarters of 2021 reflected a decrease in unit volume of $125.2 million, partially offset by an increase in net pricing and the impact of product mix of $12.8 million and the positive impact of foreign currency of $3.3 million. Base business net sales for the first two quarters of 2021 were 5.5% higher than pre-pandemic base business net sales for the first two quarters of 2019. On a two-year compound annual growth basis, relative to pre-pandemic levels, base business net sales for the first two quarters of 2021 increased 2.7%.

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Despite continued strong demand for Green Giant products during the first quarter of 2021, sales of Green Giant products in the aggregate (including Le Sueur) decreased $84.4 million, or 26.2%, in the first two quarters of 2021, as compared to the first two quarters of 2020. Net sales of Green Giant shelf-stable (including Le Sueur) decreased $43.7 million, or 40.0%, for the first two quarters of 2021. Net sales of Green Giant frozen decreased $40.7 million, or 19.1%, for the first two quarters of 2021. The decrease in Green Giant net sales was primarily attributable to two factors. First, Green Giant was one of our brands that benefited the most from COVID-related demand during fiscal 2020. Second, Green Giant, as well as certain of its competitor brands, have faced supply chain constraints that we expect will continue until we reach the new pack season later this year. As a result, we made the difficult decision during the fourth quarter of 2020 to place certain of the brands’ products on allocation with our customers to avoid running out of products prior to the start of the new pack season, which has negatively impacted and is expected to continue to negatively impact net sales of Green Giant products through the early part of the third quarter of 2021.

See Note 17, “Net Sales by Brand,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, for detailed information regarding total net sales by brand for each of our brands whose net sales for the first two quarters of 2021 or fiscal 2020 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate. The following table sets forth the most significant base business net sales increases and decreases by brand for those brands for the first two quarters of 2021:

	2021 vs. 2020				2021 vs. 2019
	Base Business				Base Business
	Net Sales Increase (Decrease)				Net Sales Increase (Decrease)
	Dollars (in millions)		Percentage		Dollars (in millions)		Percentage
Brand:
Spices & Seasonings(1)	$	27.7	23.0	%		23.8	19.1	%
Maple Grove Farms of Vermont		4.3	11.9	%		5.1	14.5	%
Dash		2.9	8.1	%		8.6	29.0	%
Green Giant - shelf-stable(2)		(43.7)	(40.0)	%		4.9	8.1	%
Green Giant - frozen		(40.7)	(19.1)	%		(15.8)	(8.4)	%
Clabber Girl(3)		(10.1)	(22.5)	%		1.1	12.5	%
Ortega		(5.8)	(6.8)	%		8.5	11.9	%
Cream of Wheat		(4.5)	(12.2)	%		3.3	11.4	%
All other brands		(39.2)	(14.0)	%		3.6	1.5	%
Base business net sales (decrease) increase	$	(109.1)	(11.3)	%		43.1	5.5	%

(1) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(2) Includes net sales of the Le Sueur brand.

(3) For the second quarter and first two quarters of 2021, includes net sales of Clabber Girl from May 15, 2021 through July 3, 2021, as net sales prior to May 15, 2021 are not included in base business net sales. Clabber Girl was acquired on May 15, 2019.

Gross Profit. Gross profit was $229.4 million for the first two quarters of 2021, or 23.7% of net sales. Excluding the negative impact of $5.9 million of acquisition/divestiture-related expenses, the amortization of acquisition-related inventory fair value step-up and non-recurring expenses included in cost of goods sold during the first two quarters of 2021, our gross profit would have been $235.3 million, or 24.3% of net sales. Gross profit was $239.0 million for the first two quarters of 2020, or 24.8% of net sales. Excluding the negative impact of $2.8 million of acquisition/divestiture-related expenses and non-recurring expenses included in cost of goods sold during the first two quarters of 2020, our gross profit would have been $241.8 million, or 25.1% of net sales.

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During the first two quarters of 2021, our gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials and transportation. We expect input cost inflation to be materially higher in the second half of 2021 than it was in the second half of 2020. As discussed above, we are attempting to mitigate the impact of inflation on our gross profit by locking in prices through short-term supply contracts and advance commodities purchase agreements and by implementing cost saving measures. We have also announced list price increases and have reduced trade promotions to our customers for certain of our products. However, increases in the prices we charge our customers generally lag behind rising input costs. As such, we do not expect to fully offset the incremental costs that we are facing in fiscal 2021 and we expect continued cost inflation in fiscal 2022.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $13.2 million, or 15.6%, to $97.5 million for the first two quarters of 2021 from $84.3 million for the first two quarters of 2020. The increase was composed of increases in warehousing expenses of $8.7 million, consumer marketing expenses of $4.3 million and acquisition/divestiture-related and non-recurring expenses of $3.8 million, partially offset by decreases in selling expenses of $3.3 million and general and administrative expenses of $0.3 million. The increase in warehousing expenses was primarily driven by the Crisco acquisition and customer fines related to COVID-19 shortages and delays. Expressed as a percentage of net sales, selling, general and administrative expenses increased by 1.3 percentage points to 10.1% for the first two quarters of 2021, compared to 8.8% for the first two quarters of 2020.

Amortization Expense. Amortization expense increased $1.3 million to $10.8 million for the first two quarters of 2021 from $9.5 million for the first two quarters of 2020 due to the Crisco acquisition completed in the fourth quarter of 2020.

Operating Income. As a result of the foregoing, operating income decreased $24.1 million, or 16.6%, to $121.1 million for the first two quarters of 2021 from $145.2 million for the first two quarters of 2020. Operating income expressed as a percentage of net sales decreased to 12.5% in the first two quarters of 2021 from 15.1% in the first two quarters of 2020.

Net Interest Expense. Net interest expense increased $2.8 million, or 5.5%, to $53.7 million for the first two quarters of 2021 from $50.9 million in the first two quarters of 2020. The increase was primarily attributable to an increase in average long-term debt outstanding during the first two quarters of 2021 as compared to the first two quarters of 2020, primarily as a result of incremental borrowings we made in the fourth quarter of 2020 to fund the Crisco acquisition and related fees and expenses. The increase in net interest expense was partially offset by a lower effective cost of borrowing during the first two quarters of 2021. See “—Liquidity and Capital Resources — Debt” below.

Other Income. Other income for the first two quarters of 2021 and 2020 includes the non-service portion of net periodic pension cost and net periodic post-retirement benefit costs of $2.2 million and $1.2 million, respectively. Other income for the first two quarters of 2021 and 2020 also includes income resulting from the remeasurement of monetary assets denominated in a foreign currency into U.S. dollars for financial reporting purposes of less than $0.1 million in both periods.

Income Tax Expense. Income tax expense decreased $4.3 million to $18.2 million for the first two quarters of 2021 from $22.5 million for the first two quarters of 2020, primarily due to decreased operating income, as described above, partially offset by the impact of a $2.3 million tax benefit that reduced our income tax expense in the first quarter of 2020, resulting from the U.S. CARES Act, which increased the adjusted taxable income limitation from 30% to 50%. Our effective tax rate was 26.1% for the first two quarters of 2021 and 23.6% for the first two quarters of 2020. See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact of the tax legislation on income tax expense.

Liquidity and Capital Resources

Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, “Dividend Policy” and “Commitments and Contractual Obligations” below. We fund our liquidity requirements, as well as our dividend payments and financing for acquisitions, primarily through cash generated from operations and external sources of financing, including our revolving credit facility.

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Cash Flows

Net Cash Provided by Operating Activities. Net cash provided by operating activities decreased $180.4 million to $66.0 million for the first two quarters of 2021 from $246.4 million for the first two quarters of 2020. The decrease in net cash provided by operating activities was primarily due to unfavorable working capital comparisons in the first two quarters of 2021 compared to the first two quarters of 2020, primarily comprised of inventories, accrued expenses and trade accounts payable, partially offset by favorable working capital comparisons related to trade accounts receivable and prepaid expenses and other current assets. The decrease was also due to lower net income in the first two quarters of 2021 compared to the first two quarters of 2020, as well as an additional $12.6 million of incentive compensation paid in cash during the first quarter of 2021 as compared to the first quarter of 2020, primarily as a result of our company’s extraordinary performance during fiscal 2020 as compared to fiscal 2019.

Net Cash Used in Investing Activities. Net cash used in investing activities increased $6.8 million to $19.7 million for the first two quarters of 2021 from $12.9 million for the first two quarters of 2020. The increase was primarily attributable to higher capital expenditures during the first two quarters of 2021 compared to the first two quarters of 2020, partially offset by the purchase price payment for the Farmwise acquisition in the first quarter of 2020.

Net Cash Used in Financing Activities. Cash flows used in financing activities decreased $4.7 million to $58.5 million for the first two quarters of 2021 as compared to $63.2 million for the first two quarters of 2020. The decrease was primarily driven by $14.8 million of proceeds we received from the exercise of stock options during the first two quarters of 2021 compared to no proceeds from the exercise of stock options during the first two quarters of 2020, partially offset by a $10.0 million increase in net repayments under our revolving credit facility during the first two quarters of 2021 compared to the first two quarters of 2020.

Cash Income Tax Payments. We believe that we will realize a benefit to our cash taxes payable from amortization of our trademarks, goodwill and other intangible assets for the taxable years 2021 through 2036. In fiscal 2020, our cash taxes were positively impacted by the U.S. CARES Act, which allowed us to carryback our 2019 net operating loss and receive a tax refund of $7.2 million in fiscal 2020. In fiscal 2019, our cash taxes were negatively impacted by the U.S. Tax Act’s limitations on the deductibility of interest expense. See “U.S. Tax Act and U.S. CARES Act” above for a discussion of the impact and expected impact of the U.S. CARES Act and the U.S. Tax Act on our cash income tax payments, including the impact the U.S. Tax Act had in fiscal 2019 and is expected to have in fiscal 2021 and beyond on our interest expense deductions. If there is a change in U.S. federal tax policy or, in the case of the interest deduction, a change in our net interest expense relative to our adjusted taxable income that eliminates, limits or reduces our ability to amortize and deduct goodwill and certain intangible assets or the interest deduction we receive on our substantial indebtedness, or otherwise that reduces any of these available deductions or results in an increase in our corporate tax rate, our cash taxes payable may increase further, which could significantly reduce our future liquidity and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity.

Dividend Policy

Our dividend policy reflects a basic judgment that our stockholders are better served when we distribute a substantial portion of our cash available to pay dividends to them instead of retaining it in our business. Under this policy, a substantial portion of the cash generated by our company in excess of operating needs, interest and principal payments on indebtedness, capital expenditures sufficient to maintain our properties and other assets is distributed as regular quarterly cash dividends to the holders of our common stock and not retained by us. We have paid dividends every quarter since our initial public offering in October 2004.

For the first two quarters of 2021 and 2020, we had net cash provided by operating activities of $66.0 million and $246.4 million, respectively, and distributed as dividends $61.3 million and $60.9 million, respectively. Based upon our current dividend rate of $1.90 per share per annum and our current number of outstanding shares, we expect our aggregate dividend payments in fiscal 2021 to be approximately $122.9 million.

Our dividend policy is based upon our current assessment of our business and the environment in which we operate, and that assessment could change based on competitive or other developments (which could, for example, increase our need for capital expenditures or working capital), new acquisition opportunities or other factors. Our board of directors is free to depart from or change our dividend policy at any time and could do so, for example, if it was to determine that we have insufficient cash to take advantage of growth opportunities.

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Acquisitions

Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions. As discussed elsewhere in this report, as part of our growth strategy we plan to expand our brand portfolio with disciplined acquisitions of complementary brands. We have historically financed acquisitions by incurring additional indebtedness, issuing equity and/or using cash flows from operating activities. Our interest expense has over time increased as a result of additional indebtedness we have incurred in connection with acquisitions and will increase with any additional indebtedness we may incur to finance future acquisitions. Although we may subsequently issue equity and use the proceeds to repay all or a portion of the additional indebtedness incurred to finance an acquisition and reduce our interest expense, the additional shares of common stock would increase the amount of cash flows from operating activities necessary to fund dividend payments.

We financed the Crisco acquisition, completed in December 2020, with revolving loans under our existing credit facility, a portion of which we subsequently refinanced with add-on tranche B term loans. We financed the Farmwise acquisition, completed in February 2020, with cash on hand. The impact of future acquisitions, whether financed with additional indebtedness or otherwise, may have a material impact on our liquidity and capital resources.

Debt

See Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report for a description of our senior secured credit agreement, including our revolving credit facility and tranche B term loans; our 5.25% senior notes due 2025; and our 5.25% senior notes due 2027. See also “—Acquisitions” above regarding the long-term debt incurred in connection with the Crisco acquisition.

Stock Repurchase Program

On March 9, 2021, our board of directors authorized an extension of our stock repurchase program from March 15, 2021 to March 15, 2022. In extending the repurchase program, our board of directors also reset the repurchase authority to up to $50.0 million.

Under the authorization, we may purchase shares of common stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the SEC. The timing and amount of future stock repurchases, if any, under the program will be at the discretion of management, and will depend on a variety of factors, including price, available cash, general business and market conditions and other investment opportunities. Therefore, we cannot assure you as to the number or aggregate dollar amount of additional shares, if any, that will be repurchased under the program. We may discontinue the program at any time. Any shares repurchased pursuant to the program will be retired.

We did not repurchase any shares of our common stock during the first two quarters of 2021 or the first two quarters of 2020. As of July 3, 2021, we had $50.0 million available for future repurchases of common stock under the stock repurchase program.

Future Capital Needs

On July 3, 2021, our total long-term debt of $2,325.9 million, net of our cash and cash equivalents of $40.3 million, was $2,285.6 million. Stockholders’ equity as of that date was $841.6 million.

Our ability to generate sufficient cash to fund our operations depends generally on our results of operations and the availability of financing. Our management believes that our cash and cash equivalents on hand, cash flow from operating activities and available borrowing capacity under our revolving credit facility will be sufficient for the foreseeable future to fund operations, meet debt service requirements, fund capital expenditures, make future acquisitions, if any, and pay our anticipated quarterly dividends on our common stock.

We expect to make capital expenditures of approximately $50.0 million in the aggregate during fiscal 2021. During the first two quarters of 2021, we made capital expenditures of $22.3 million, of which $19.8 million were paid in cash. Our projected capital expenditures for fiscal 2021 primarily relate to productivity and cost saving initiatives, asset sustainability projects, information technology (hardware and software), and the Crisco integration.

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Seasonality

Sales of a number of our products tend to be seasonal and may be influenced by holidays, changes in seasons or certain other annual events. In general, our sales are higher during the first and fourth quarters.

We purchase most of the produce used to make our frozen and shelf-stable vegetables, shelf-stable pickles, relishes, peppers, tomatoes and other related specialty items during the months of June through October, and we generally purchase the majority of our maple syrup requirements during the months of April through August. Consequently, our liquidity needs are greatest during these periods.

Inflation

See “—General—Fluctuations in Commodity Prices and Production and Distribution Costs” above.

Contingencies

See Note 12, “Commitments and Contingencies,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Recent Accounting Pronouncements

See Note 2, “Summary of Significant Accounting Policies — Accounting Standards Adopted in Fiscal 2020 or Fiscal 2021” and “—Recently Issued Accounting Standards – Pending Adoption,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Off-balance Sheet Arrangements

As of July 3, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Commitments and Contractual Obligations

Our contractual obligations and commitments principally include obligations associated with our outstanding indebtedness, future purchase obligations, future operating lease obligations and future pension obligations. During the first two quarters of 2021, there were no material changes outside the ordinary course of business in the specified contractual obligations set forth in the Commitments and Contractual Obligations table in our 2020 Annual Report on Form 10-K.

Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries

As further discussed in Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report, our obligations under the 5.25% senior notes due 2025 and the 5.25% senior notes due 2027 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries, which we refer to in this section as the guarantor subsidiaries. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2025 or the 5.25% senior notes due 2027. In this section, we refer to these foreign subsidiaries and future foreign or partially owned domestic subsidiaries as the non-guarantor subsidiaries. See Note 6, “Long-Term Debt” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

The senior notes and the subsidiary guarantees are our and the guarantor subsidiaries’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantor subsidiaries’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantor subsidiaries’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantor subsidiaries’ future subordinated debt.

Each guarantee contains a provision intended to limit the guarantor subsidiary’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. However, we cannot assure you that this provision will be effective to protect the subsidiary guarantees from being voided under fraudulent transfer laws.

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A guarantor subsidiary’s guarantee will be automatically released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that guarantor subsidiary (including by way of merger or consolidation) to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods under the applicable indenture, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (2) in connection with any sale or other disposition of all of the capital stock of that guarantor subsidiary to a person or entity that is not (either before or after giving effect to such transaction) B&G Foods or a “restricted subsidiary” of B&G Foods, if the sale or other disposition complies with the asset sale provisions of the applicable indenture; (3) if B&G Foods designates any “restricted subsidiary” that is a guarantor subsidiary to be an “unrestricted subsidiary” in accordance with the applicable provisions of the indenture; (4) upon legal defeasance, covenant defeasance or satisfaction and discharge of the applicable indenture; (5) if such guarantor subsidiary no longer constitutes a domestic subsidiary; or (6) if it is determined in good faith by B&G Foods that a liquidation, dissolution or merger out of existence of such guarantor subsidiary is in the best interests of B&G Foods and is not materially disadvantageous to the holders of the senior notes.

The following tables present summarized unaudited financial information on a combined basis for B&G Foods and each of the guarantor subsidiaries of the senior notes described above after elimination of (1) intercompany transactions and balances among B&G Foods and the guarantor subsidiaries and (2) investments in any subsidiary that is a non-guarantor (in thousands):

	July 3,		January 2,
	2021		2021
Current assets(1)	$	672,212	$	648,850
Non-current assets		2,939,092		2,979,902
Current liabilities(2)	$	211,925	$	223,644
Non-current liabilities		2,701,365		2,960,040

(1) Current assets includes amounts due from non-guarantor subsidiaries of $23.1 million and $21.5 million as of July 3, 2021 and January 2, 2021, respectively.

(2) Current liabilities includes amounts due to non-guarantor subsidiaries of $12.4 million and $0.2 million as of July 3, 2021 and January 2, 2021, respectively.

	Twenty-six Weeks Ended
	July 3,
	2021
Net sales	$	918,946
Gross profit		227,327
Operating income		119,125
Income before income tax expense		67,651
Net income	$	49,617

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our principal market risks are exposure to changes in commodity prices, interest rates on borrowings and foreign currency exchange rates and market fluctuation risks related to our defined benefit pension plans.

Commodity Prices and Inflation. The information under the heading “General—Fluctuations in Commodity Prices and Production and Distribution Costs” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is incorporated herein by reference.

Interest Rate Risk. In the normal course of operations, we are exposed to market risks relating to our long-term debt arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates.

Changes in interest rates impact our fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows. At July 3, 2021, we had $1,450.0 million of fixed rate debt and $896.6 million of variable rate debt.

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Based upon our principal amount of long-term debt outstanding at July 3, 2021, a hypothetical 1.0% increase or decrease in interest rates would have affected our annual interest expense by approximately $9.0 million.

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of July 3, 2021 and January 2, 2021 were as follows (in thousands):

		July 3, 2021						January 2, 2021
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	225,000		$	225,000	(1)  ​	$	235,000		$	235,000	(1)  ​
Tranche B term loans due 2026		667,461	(2)  ​		667,461	(3)  ​		667,118	(2)  ​		665,450	(3)  ​
5.25% senior notes due 2025		902,022	(4)  ​		926,828	(3)  ​		902,292	(4)  ​		931,616	(3)  ​
5.25% senior notes due 2027	$	550,000		$	573,788	(3)  ​	$	550,000		$	580,250	(3)  ​

(1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2) The carrying value of the tranche B term loans includes a discount. At July 3, 2021 and January 2, 2021, the face amount of the tranche B term loans was $671.6 million.

(3) Fair values are estimated based on quoted market prices.

(4) The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 3, 2021 and January 2, 2021, the face amount of the 5.25% senior notes due 2025 was $900.0 million.

Cash and cash equivalents, trade accounts receivable, income tax receivable/payable, trade accounts payable, accrued expenses and dividends payable are reflected on our consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.

For more information, see Note 6, “Long-Term Debt,” to our unaudited consolidated interim financial statements in Part I, Item 1 of this report.

Foreign Currency Risk. Our foreign sales are primarily to customers in Canada. Our sales to Canada are generally denominated in Canadian dollars and our sales for export to other countries are generally denominated in U.S. dollars. Our net sales to customers in foreign countries represented approximately 7.7% and 7.9% of our total net sales during the first two quarters of 2021 and 2020, respectively. We also purchase certain raw materials from foreign suppliers. For example, we purchase a significant majority of our maple syrup requirements from suppliers in Québec, Canada. These purchases are made in Canadian dollars. A weakening of the U.S. dollar in relation to the Canadian dollar would significantly increase our future costs relating to the production of our maple syrup products to the extent we have not purchased Canadian dollars or otherwise entered into a currency hedging arrangement in advance of any such weakening of the U.S. dollar. Our purchases of raw materials from other foreign suppliers are generally denominated in U.S. dollars, but certain purchases of raw materials in Mexico are denominated in Mexican pesos. In addition, we operate a frozen vegetable manufacturing facility in Irapuato, Mexico. A weakening of the U.S. dollar in relation to the Mexican peso would significantly increase our costs relating to the production of frozen vegetable products to the extent we have not purchased Mexican pesos or otherwise entered into hedging arrangements in advance of the weakening of the U.S. dollar.

As a result, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an adverse impact on operating results.

Market Fluctuation Risks Relating to our Defined Benefit Pension Plans. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies; Use of Estimates” and Note 12, “Pension Benefits,” to our consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K filed with the SEC on March 2, 2021 for a discussion of the exposure of our defined benefit pension plan assets to risks related to market fluctuations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, our management, including our chief executive officer and our chief financial officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. As defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controls and procedures are controls and other procedures that we use that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is

- 41 -

recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting. As required by Rule 13a-15(d) under the Exchange Act, our management, including our chief executive officer and our chief financial officer, also conducted an evaluation of our internal control over financial reporting to determine whether any change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our chief executive officer and our chief financial officer concluded that there has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We transitioned the spices & seasonings business that we acquired in late 2016 to a new enterprise resource planning (ERP) system during the third quarter of 2017. Implementation, integration and transition efforts for the remainder of our business (other than our Mexican operations) continued thereafter and was substantially completed during the second quarter of 2019. We continued to implement additional modules and transition recently acquired businesses to the ERP system during fiscal 2020 and the first two quarters of 2021. In connection with the implementation, integration and transition, and resulting business process changes, we continue to review and enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting following the completion of the implementation, integration and transition. To date, the implementation, integration and transition have not materially affected our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls. Our company’s management, including the chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth under the heading “Legal Proceedings” in Note 12 to our unaudited consolidated interim financial statements in Part I, Item 1 of this quarterly report on Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

We do not believe there have been any material changes in our risk factors as previously disclosed in our 2020 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

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Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

EXHIBIT NO.	DESCRIPTION
10.1	Form of Special One-Time Stock Option Agreement (Non-Qualified Stock Option).
22.1	Guarantor Subsidiaries. (Filed as Exhibit 22.1 to B&G Foods’ Quarterly Report on Form 10-Q filed on November 9, 2020, and incorporated by reference herein).
31.1	Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Executive Officer.
31.2	Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer and Chief Financial Officer.
101	The following unaudited financial information from B&G Foods’ Quarterly Report on Form 10-Q for the quarter ended July 3, 2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended July 3, 2021, formatted in iXBRL and contained in Exhibit 101.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 5, 2021	B&G FOODS, INC.
	By:	/s/ Bruce C. Wacha
		Bruce C. Wacha Executive Vice President of Finance and Chief Financial Officer (Principal Financial Officer and Authorized Officer)

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EX-10.1

Exhibit 10.1

[FORM OF] STOCK OPTION AGREEMENT

(this “Agreement”)

Pursuant to the B&G Foods Omnibus Incentive Compensation Plan

(Non-Qualified Stock Option)

B&G Foods, Inc. (“B&G Foods” or the “Company”) has granted to you an option (the “Option”) to purchase the number of shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”) shown in Section 1(b) below (the “Shares”) at the Exercise Price per Share shown in Section 1(e) below. The Option has been granted pursuant to the B&G Foods Omnibus Incentive Compensation Plan (as amended, supplemented or otherwise modified from time to time, the “Plan”) and is subject to the terms and conditions of the Plan and this Agreement made pursuant to the Plan. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to them in the Plan.

The details of your Option are as follows:

1.General Grant Information.

(a)Grant Date: [__________].

(b)Shares: The number of Shares that may be purchased pursuant to this Agreement is set forth on the cover page to this Agreement and is incorporated herein by reference.

(c)Vesting Date: [__________].

(d)Expiration Date: [__________].

(e)Exercise Price: $[_____] per Share.

(f)Option Type: Non-Qualified Stock Option (NQSO).

2.Term. The term of the Option commences on the Grant Date set forth in Section 1(a) above and, unless it expires earlier due to your Separation from Service as provided in Section 5 below, the Option will expire at the close of business on the Expiration Date set forth in Section 1(d) above.

3.Vesting. The Option will become vested and exercisable with respect to all Shares on the Vesting Date set forth in Section 1(c).

4.Manner of Exercising Option.

(a)In order to exercise the Option with respect to all or any part of the Shares for which the Option is at the time exercisable, you (or in the case of exercise after your death, your executor, administrator, heir or beneficiary, as the case may be) must take the following actions:

(i)provide the Company, or such third party involved in administering the Plan as the Company may designate from time to time, with written or electronic notice of exercise in the manner specified from time to time by the Company, specifying the number of Shares with respect to which the Option is being exercised;

(ii)pay the Exercise Price for each purchased Share in one or more of the following alternative forms to the extent permitted by applicable laws and regulations:

(A)full payment at the time the Option is exercised in cash or by certified or bank check payable to the Company’s order;

(B)by delivery to the Company of other shares of Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby you identify for delivery specific shares that have a Fair Market Value on the date of attestation equal to the Exercise Price (or portion thereof) and receive a number of shares equal to the difference between the number of shares thereby purchased and the number of identified attestation shares (a “Stock for Stock Exchange”);

(C)through a “cashless exercise program” established with a broker;

(D)by reduction in the number of shares otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Exercise Price at the time of exercise;

(E)by any combination of the foregoing methods; or

(F)in any other form of legal consideration that may be acceptable to the Committee; and

(iii)furnish to the Company appropriate documentation that the person or persons exercising the Option, if other than you, have the right to exercise the Option.

(b)In no event may the Option be exercised for any fractional Share.

(c)Notwithstanding anything in this Agreement to the contrary, in the event of your death within ninety (90) days before the Expiration Date, if your estate or designated beneficiary does not exercise the vested portion of your Option, if any, then, provided the Exercise Price of the vested portion of your Option is less than the then Fair Market Value of a share of Common Stock on the first business day immediately preceding the Expiration Date, your estate or designated beneficiary will be deemed to have exercised the vested portion of your Option on such date and given permission to the Company to effectuate a “cashless exercise” through a broker-dealer sale procedure pursuant to which a broker selected by the Company will be provided irrevocable written instructions to effect the immediate sale of all of the Shares underlying the vested portion of your Option and remit to the Company, out of the sale proceeds, an amount equal to the Exercise Price multiplied by the number of Shares purchased through the exercise of the Option, plus all applicable federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase. The remaining sales proceeds will be transferred to your estate or beneficiary, as applicable.

5.Effect of Separation from Service.

(a)Retirement, Disability or Death; Termination Without Cause. If you have a Separation from Service due to retirement, Disability or death, or termination of your employment by the Company without Cause (as determined under your employment agreement), the unexercised and vested portion of the Option will remain exercisable by you or your successors, as the case may be, until the earlier of (i) the end of the 180-day period (three-year

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period if you were terminated without Cause) immediately following your Separation from Service and (ii) the Expiration Date. Such portion of the Option shall terminate to the extent not exercised within such period. Any unvested portion of the Option will immediately terminate and be forfeited upon such Separation from Service, provided, however, that if (i) your employment is terminated by the Company without Cause, (ii) you retire at age 62 or older, or (iii) if you die or become Disabled, a pro rata portion of the Option shall immediately vest upon your Separation from Service, with such pro rata portion being based on a fraction the numerator of which is the number of full months that have elapsed from the Grant Date until the date of your Separation from Service and the denominator of which is the number of months in the period from the Grant Date to the original Vesting Date. Such vested portion of the Option shall remain exercisable until the earlier of (i) the end of the 180-day period (three-year period if you were terminated without Cause) immediately following your Separation from Service and (ii) the Expiration Date. If you die after your Separation from Service and at a time when all or a portion of the Option remains exercisable, your estate or designated beneficiary can exercise that portion of the option that remains exercisable for the 180-day period following your death (but not beyond the Expiration Date). Any portion of the Option that is not exercised by the end of the 180-day period will automatically terminate and be forfeited. Notwithstanding the foregoing, special exercise provisions will apply (in accordance with Section 4(c) above) if your death occurs within ninety (90) days before the Expiration Date and your estate or designated beneficiary does not elect to exercise the vested portion of your Option, if any, on or before the first business day immediately preceding the Expiration Date.

(b)Termination for Cause. If you have a Separation from Service due to a termination by the Company for Cause, the vested and unvested portions of the Option will immediately expire on the date of such Separation from Service.

(c)Other Separation from Service. If you have a Separation from Service as a result of any reason other than retirement, Disability, death or termination without Cause or for Cause, any unexercised and vested portion of the Option will remain exercisable until the earlier of the end of the 90-day period immediately following such Separation from Service or the last day of the term of the Option. Such portion of the Option shall terminate to the extent not exercised within such 90-day period. Any unvested portion of the Option will terminate and will be forfeited upon such Separation from Service.

6.Effect of Change of Control.

(a)Accelerated Vesting. If a Change in Control should occur, then, notwithstanding any provision of the Plan or this Agreement to the contrary, the Option shall become immediately vested and exercisable with respect to 100% of the Shares subject to the Option. To the extent practicable, such acceleration of vesting and exercisability shall occur in a manner and at a time which allows you the ability to participate in the Change in Control with respect to the shares of Common Stock received.

(b)Cash-Out. If a Change in Control should occur, the Committee may, in its discretion, cancel the Option and pay to you an amount equal to the excess, if any, of the Fair Market Value of the Common Stock as of the date of the Change in Control over the Exercise Price of the Option. Notwithstanding the foregoing, if at the time of a Change in Control the Exercise Price of the Option equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor.

7.Other Conditions of Plan Apply. This Agreement and the Option evidenced hereby is subject to all of the remaining terms and conditions of the Plan, including but not limited to the provisions

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relieving the Company of any obligation to issue Shares until all applicable securities laws have been complied with. Any inconsistency between this Agreement and the Plan will be resolved in favor of the Plan. The Plan is administered and interpreted by the Committee, whose determinations are final and binding on all persons concerned.

8.Taxes and Tax Withholding. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains your responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any Shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate your liability for Tax-Related Items. Prior to the issuance of Shares upon the exercise of the Option, you must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. You may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by any of the following means:

(a)tendering a cash payment;

(b)authorizing the Company to withhold shares of Common Stock from the Shares otherwise issuable to you as a result of the exercise of the Option; provided, however, that no Shares are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or

(c)delivering to the Company previously owned and unencumbered shares of Common Stock.

The Company has the right to withhold from any compensation paid to you.

9.No Employment Contract. This Agreement is not an employment contract, and it does not create or evidence any right to continued employment by B&G Foods. Unless you have a separate, specific agreement, in writing, expressly on the subject, you remain employed at will, which means that either you or B&G Foods can terminate your employment at any time.

10.Discretionary Nature of Plan; No Guarantee of Future Awards. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of your employment with the Company.

11.No Rights as Stockholder. You will not be considered a stockholder of the Company with respect to the Shares unless and until you have exercised the Option, paid the Exercise Price for each Share being purchased through the exercise of the Option, and the Shares have been duly issued to you.

12.Transfer Restrictions. You may not sell, give or otherwise transfer any interest in the Option, except that the Option may be assigned or otherwise transferred by you in the following circumstances: (i) by will or the laws of descent and distribution; (ii) by valid beneficiary designation taking effect at death made in accordance with procedures established by the Committee; or (iii) by gift to members of your immediate family. Any Option held by a transferee will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to the transfer, except that the Option will be transferable by the transferee only by will or the laws of descent and distribution and may be exercised only by the transferee. For purposes of the above, “immediate family” means your children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half

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brothers and sisters), nieces, nephews, in-laws, including adoptive relationships, any person sharing your household (other than a tenant or employee), a trust in which these persons have the sole beneficial ownership, a foundation in which you or these persons control the management of assets, and any other entity in which you or these persons own 100% of the voting interests. In addition, any transfer of the Option to an immediate family member is subject to the following conditions: (a) you must immediately provide notice to the Company of such transfer and provide such information about the transferee as the Company may request (including, but not limited to, name of transferee, address of transferee, and taxpayer identification number); (b) the transferee may not make any subsequent transfer (except by will or the laws of descent and distribution); (c) any Shares issued to a transferee upon exercise may bear such legends as deemed appropriate by the Company; (d) the Company has no obligation to deliver any Shares following an exercise until all applicable withholding taxes are satisfied; (e) you agree to deliver a copy of this Agreement, including any amendments thereto, to the transferee. Any attempted assignment or other transfer by you or your successor in interest after your death of any interests in the Option other than as permitted above may immediately become null and void and of no further validity, at the discretion of the Committee.

13.Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Corporate Secretary of the Company at the Company’s principal corporate offices. Any notice required to be delivered to you under this Agreement shall be in writing and addressed to you at your address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

14.Governing Law. To the extent that federal laws do not otherwise control, the validity and construction of this Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to the choice of law principles thereof.

15.Electronic Delivery and Acceptance. You hereby consent and agree to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents. You hereby consent to any and all procedures that the Company has established or may establish for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan), and agree that your electronic signature is the same as, and shall have the same force and effect as, your manual signature. You hereby consent and agree that any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan.

16.Data Privacy. You hereby acknowledge and consent to the collection, use, processing and transfer of personal information and data as described in this Section 16. You are not obliged to consent to such collection, use, processing and transfer of personal information and data. However, failure to provide the consent may affect your ability to participate in the Plan. The Company holds certain personal information and data about you, that may include your name, home address and telephone number, date of birth, social security number or other employee identification number, salary grade, hire data, salary, nationality, job title, any shares of Common Stock, or details of all options, performance shares, restricted stock units or any other entitlement to shares of stock awarded, canceled, purchased, vested, or unvested, for the purpose of managing and administering the Plan (“Data”). The Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company and/or any of its subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located throughout the world, including the United States. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on your behalf to a broker or other third party with whom you may elect to deposit any shares of Common Stock acquired

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pursuant to the Plan. You may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect your ability to participate in the Plan.

17.Severability and Interpretation. If any provision of this Agreement is held invalid by a court of competent jurisdiction, then the remaining provisions shall nonetheless be enforceable in accordance with their terms. Further, if any provision is held to be overbroad as written, then such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and shall be enforced as amended.

18.Acceptance; Counterparts. This Agreement may be executed in one or more counterparts all of which together shall constitute but one instrument. By pressing “I accept” you agree to accept the Option grant, and will be deemed to have executed this Agreement.

B&G FOODS, INC.		YOU
By:
	Name:	You will be deemed to have executed this
	Title:	Agreement by clicking “I accept”

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EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, Kenneth C. Keller, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B&G Foods, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2021

/s/ Kenneth C. Keller

Kenneth C. Keller

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Bruce C. Wacha, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B&G Foods, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2021

/s/ Bruce C. Wacha

Bruce C. Wacha

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of B&G Foods, Inc. (the “Company”) on Form 10-Q for the period ended July 3, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth C. Keller, Chief Executive Officer of the Company, and I, Bruce C. Wacha, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kenneth C. Keller

Kenneth C. Keller

Chief Executive Officer

August 5, 2021

/s/ Bruce C. Wacha

Bruce C. Wacha

Chief Financial Officer

August 5, 2021

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 03, 2021	Jul. 30, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jul. 03, 2021
Entity File Number	001-32316
Entity Registrant Name	B&G FOODS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3918742
Entity Address, Address Line One	Four Gatehall Drive
Entity Address, City or Town	Parsippany
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07054
City Area Code	973
Local Phone Number	401-6500
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	BGS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		64,825,078
Entity Central Index Key	0001278027
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 40,322	$ 52,182
Trade accounts receivable, net	121,849	132,935
Inventories	533,631	492,804
Prepaid expenses and other current assets	44,370	43,619
Income tax receivable	10,019	15,761
Total current assets	750,191	737,301
Property, plant and equipment, net of accumulated depreciation of $344,171 and $314,359 as of July 3, 2021 and January 2, 2021, respectively	355,833	371,854
Operating lease right-of-use assets	38,704	32,216
Goodwill	645,070	644,747
Other intangible assets, net	1,961,498	1,971,326
Other assets	5,598	5,948
Deferred income taxes	4,521	4,178
Total assets	3,761,415	3,767,570
Current liabilities:
Trade accounts payable	119,578	126,537
Accrued expenses	58,120	77,460
Current portion of operating lease liabilities	9,801	11,034
Income tax payable	123	101
Dividends payable	30,792	30,520
Total current liabilities	218,414	245,652
Long-term debt	2,325,908	2,334,086
Deferred income taxes	305,013	293,121
Long-term operating lease liabilities, net of current portion	31,802	23,959
Other liabilities	38,673	38,875
Total liabilities	2,919,810	2,935,693
Commitments and contingencies (Note 12)
Stockholders'equity:
Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding
Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 64,825,078 and 64,252,859 shares issued and outstanding as of July 3, 2021 and January 2, 2021, respectively	648	643
Accumulated other comprehensive loss	(31,556)	(35,594)
Retained earnings	872,513	866,828
Total stockholders' equity	841,605	831,877
Total liabilities and stockholders' equity	$ 3,761,415	$ 3,767,570

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Consolidated Balance Sheets
Property, plant and equipment, accumulated depreciation (in dollars)	$ 344,171	$ 314,359
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Authorized shares	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, Authorized shares	125,000,000	125,000,000
Common stock, shares issued	64,825,078	64,252,859
Common stock, shares outstanding	64,825,078	64,252,859

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Consolidated Statements of Operations
Net sales	$ 464,375	$ 512,539	$ 969,509	$ 961,909
Cost of goods sold	352,785	378,438	740,125	722,892
Gross profit	111,590	134,101	229,384	239,017
Operating expenses:
Selling, general and administrative expenses	47,076	44,347	97,455	84,320
Amortization expense	5,399	4,739	10,835	9,462
Operating income	59,115	85,015	121,094	145,235
Other income and expenses:
Interest expense, net	26,713	24,849	53,682	50,888
Other income	(1,117)	(701)	(2,208)	(1,154)
Total	33,519	60,867	69,620	95,501
Income tax expense	8,968	15,956	18,191	22,498
Net income	$ 24,551	$ 44,911	$ 51,429	$ 73,003
Weighted average shares outstanding:
Basic	64,776,532	64,129,778	64,679,761	64,088,464
Diluted	65,409,844	64,409,813	65,309,780	64,247,019
Earnings per share:
Basic	$ 0.38	$ 0.70	$ 0.80	$ 1.14
Diluted	0.38	0.70	0.79	1.14
Cash dividends declared per share	$ 0.475	$ 0.475	$ 0.950	$ 0.950

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Consolidated Statements of Comprehensive Income
Net income	$ 24,551	$ 44,911	$ 51,429	$ 73,003
Other comprehensive income (loss):
Foreign currency translation adjustments	3,896	1,671	3,400	(12,678)
Amortization of unrecognized prior service cost and pension deferrals, net of tax	304	219	638	515
Other comprehensive income (loss)	4,200	1,890	4,038	(12,163)
Comprehensive income	$ 28,751	$ 46,801	$ 55,467	$ 60,840

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Total
Beginning balance at Dec. 28, 2019	$ 640		$ (31,894)	$ 843,796	$ 812,542
Balance (in shares) at Dec. 28, 2019	64,044,649
Increase (Decrease) in Stockholders' Equity
Foreign currency translation			(14,349)		(14,349)
Change in pension benefit (net of of income taxes)			296		296
Net income				28,092	28,092
Share-based compensation				163	163
Net issuance of common stock for share-based compensation	$ 1			(1)
Net issuance of common stock for share-based compensation (in shares)	75,848
Dividends declared on common stock				(30,457)	(30,457)
Ending balance at Mar. 28, 2020	$ 641		(45,947)	841,593	796,287
Balance (in shares) at Mar. 28, 2020	64,120,497
Beginning balance at Dec. 28, 2019	$ 640		(31,894)	843,796	812,542
Balance (in shares) at Dec. 28, 2019	64,044,649
Increase (Decrease) in Stockholders' Equity
Foreign currency translation					(12,678)
Change in pension benefit (net of of income taxes)					515
Net income					73,003
Ending balance at Jun. 27, 2020	$ 642		(44,057)	860,564	817,149
Balance (in shares) at Jun. 27, 2020	64,160,453
Beginning balance at Mar. 28, 2020	$ 641		(45,947)	841,593	796,287
Balance (in shares) at Mar. 28, 2020	64,120,497
Increase (Decrease) in Stockholders' Equity
Foreign currency translation			1,671		1,671
Change in pension benefit (net of of income taxes)			219		219
Net income				44,911	44,911
Share-based compensation				4,601	4,601
Net issuance of common stock for share-based compensation	$ 1			(65)	(64)
Net issuance of common stock for share-based compensation (in shares)	39,956
Dividends declared on common stock				(30,476)	(30,476)
Ending balance at Jun. 27, 2020	$ 642		(44,057)	860,564	817,149
Balance (in shares) at Jun. 27, 2020	64,160,453
Beginning balance at Jan. 02, 2021	$ 643		(35,594)	866,828	$ 831,877
Balance (in shares) at Jan. 02, 2021	64,252,859				64,252,859
Increase (Decrease) in Stockholders' Equity
Foreign currency translation			(496)		$ (496)
Change in pension benefit (net of of income taxes)			334		334
Net income				26,878	26,878
Share-based compensation		$ 432			432
Net issuance of common stock for share-based compensation	$ 1	(1,087)			(1,086)
Net issuance of common stock for share-based compensation (in shares)	82,214
Cancellation of restricted stock for tax withholding upon vesting		(620)			(620)
Cancellation of restricted stock for tax withholding upon vesting (in shares)	(21,462)
Stock options exercised	$ 4	14,048			14,052
Stock options exercised (in shares)	438,900
Dividends declared on common stock		(12,773)		(17,984)	(30,757)
Ending balance at Apr. 03, 2021	$ 648		(35,756)	875,722	840,614
Balance (in shares) at Apr. 03, 2021	64,752,511
Beginning balance at Jan. 02, 2021	$ 643		(35,594)	866,828	$ 831,877
Balance (in shares) at Jan. 02, 2021	64,252,859				64,252,859
Increase (Decrease) in Stockholders' Equity
Foreign currency translation					$ 3,400
Change in pension benefit (net of of income taxes)					638
Net income					51,429
Ending balance at Jul. 03, 2021	$ 648		(31,556)	872,513	$ 841,605
Balance (in shares) at Jul. 03, 2021	64,825,078				64,825,078
Beginning balance at Apr. 03, 2021	$ 648		(35,756)	875,722	$ 840,614
Balance (in shares) at Apr. 03, 2021	64,752,511
Increase (Decrease) in Stockholders' Equity
Foreign currency translation			3,896		3,896
Change in pension benefit (net of of income taxes)			304		304
Net income				24,551	24,551
Share-based compensation		2,305			2,305
Net issuance of common stock for share-based compensation (in shares)	46,377
Cancellation of restricted stock for tax withholding upon vesting		(3)			(3)
Cancellation of restricted stock for tax withholding upon vesting (in shares)	(66)
Cancellation of restricted stock upon forfeiture (in shares)	(956)
Stock options exercised		730			730
Stock options exercised (in shares)	27,212
Dividends declared on common stock		$ (3,032)		(27,760)	(30,792)
Ending balance at Jul. 03, 2021	$ 648		$ (31,556)	$ 872,513	$ 841,605
Balance (in shares) at Jul. 03, 2021	64,825,078				64,825,078

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Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jul. 03, 2021	Apr. 03, 2021	Jun. 27, 2020	Mar. 28, 2020
Consolidated Statements of Changes in Stockholders' Equity
Change in pension benefit, income taxes	$ 99	$ 108	$ 77	$ 104
Dividends declared on common stock, per share (in dollars per share)	$ 0.475	$ 0.475	$ 0.475	$ 0.475

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020
Cash flows from operating activities:
Net income	$ 51,429	$ 73,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	40,529	30,919
Amortization of operating lease right-of-use assets	6,547	5,968
Amortization of deferred debt financing costs and bond discount/premium	2,289	1,799
Deferred income taxes	11,370	14,281
Net gain on sales and disposals of property, plant and equipment	(30)	(61)
Share-based compensation expense	2,125	4,244
Changes in assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable	11,372	1,751
Inventories	(38,653)	110,038
Prepaid expenses and other current assets	(5)	(9,667)
Income tax receivable/payable	5,721	6,930
Other assets	(115)	(150)
Trade accounts payable	(912)	10,903
Accrued expenses	(26,343)	(25)
Other liabilities	641	(3,567)
Net cash provided by operating activities	65,965	246,366
Cash flows from investing activities:
Capital expenditures	(19,813)	(10,016)
Proceeds from sale of assets	126	303
Payments for acquisition of businesses, net of cash acquired		(3,227)
Net cash used in investing activities	(19,687)	(12,940)
Cash flows from financing activities:
Repayments of long-term debt		(2,250)
Repayments of borrowings under revolving credit facility	(85,000)	(160,000)
Borrowings under revolving credit facility	75,000	160,000
Dividends paid	(61,277)	(60,878)
Proceeds from exercise of stock options	14,782
Payments of tax withholding on behalf of employees for net share settlement of share-based compensation	(1,708)
Payments of debt financing costs	(276)	(64)
Net cash used in financing activities	(58,479)	(63,192)
Effect of exchange rate fluctuations on cash and cash equivalents	341	(349)
Net (decrease) increase in cash and cash equivalents	(11,860)	169,885
Cash and cash equivalents at beginning of period	52,182	11,315
Cash and cash equivalents at end of period	40,322	181,200
Supplemental disclosures of cash flow information:
Cash interest payments	51,118	49,008
Cash income tax payments	1,065	1,256
Non-cash investing and financing transactions:
Dividends declared and not yet paid	30,792	30,476
Accruals related to purchases of property, plant and equipment	2,514	1,074
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 12,637	$ 1,457

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Nature of Operations

6 Months Ended

Jul. 03, 2021

Nature of Operations

Nature of Operations

(1) Nature of Operations

B&G Foods, Inc. is a holding company whose principal assets are the shares of capital stock of its subsidiaries. Unless the context requires otherwise, references in this report to “B&G Foods,” “our company,” “we,” “us” and “our” refer to B&G Foods, Inc. and its subsidiaries. Our financial statements are presented on a consolidated basis.

We operate in a single industry segment and manufacture, sell and distribute a diverse portfolio of high-quality shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Our products include frozen and canned vegetables, vegetable, canola and other cooking oils, vegetable shortening, cooking sprays, oatmeal and other hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, cookies and crackers, baking powder, baking soda, corn starch, nut clusters and other specialty products. Our products are marketed under many recognized brands, including Ac’cent, B&G, B&M, Back to Nature, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Clabber Girl, Cream of Rice, Cream of Wheat, Crisco, Dash, Davis, Devonsheer, Don Pepino, Durkee, Emeril’s, Farmwise, Grandma’s Molasses, Green Giant, Joan of Arc, Las Palmas, Le Sueur, MacDonald’s, Mama Mary’s, Maple Grove Farms of Vermont, McCann’s, Molly McButter, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Rumford, Sa-són, Sclafani, SnackWell’s, Spice Islands, Spring Tree, Sugar Twin, Tone’s, Trappey’s, TrueNorth, Underwood, Vermont Maid, Victoria, Weber and Wright’s. We also sell and distribute Static Guard, a household product brand. We compete in the retail grocery, foodservice, specialty, private label, club and mass merchandiser channels of distribution. We sell and distribute our products directly and via a network of independent brokers and distributors to supermarket chains, foodservice outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors.

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Summary of Significant Accounting Policies

6 Months Ended

Jul. 03, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Fiscal Year

Typically, our fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to December 31 in the case of our fiscal year and fourth fiscal quarter, and on the Saturday closest to the end of the corresponding calendar quarter in the case of our fiscal quarters. As a result, a 53^rd week is added to our fiscal year every five or six years. Our fiscal year ending January 1, 2022 (fiscal 2021) contains 52 weeks and each quarter of fiscal 2021 contains 13 weeks. Our fiscal year ended January 2, 2021 (fiscal 2020) contained 53 weeks and each quarter of fiscal 2020 contained 13 weeks, except the third quarter, which contained 14 weeks.

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and twenty-six week periods ended July 3, 2021 (second quarter and first two quarters of 2021) and June 27, 2020 (second quarter and first two quarters of 2020) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of July 3, 2021, and the results of our operations, comprehensive income, changes in stockholders’ equity and cash flows for the second quarter and first two quarters of 2021 and 2020. Our results of operations for the second quarter and first two quarters of 2021 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2020 filed with the SEC on March 2, 2021.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions.

Accounting Standards Adopted in Fiscal 2020 or Fiscal 2021

In December 2019, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that removes certain exceptions for recognizing deferred taxes for certain investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. This guidance became effective during the first quarter of 2021. The adoption of this ASU did not have a material impact to our consolidated financial statements and related disclosures.

In May 2020, the SEC issued a final rule that amends the financial statement requirements for acquisitions and dispositions of businesses. The amendments primarily relate to disclosures required by Rule 3-05 and Article 11 of Regulation S-X. Among other things, the final rule modifies the tests provided in Rule 1-02(w) of Regulation S-X used to determine whether a subsidiary or an acquired or disposed business is significant and modifies the number of years of audited financial statements required for acquisitions with significance levels greater than specified percentages. We early adopted the rule in the fourth quarter of fiscal 2020 and we applied the rule to our financial statement disclosure requirements for the Crisco acquisition. See Note 3, “Acquisitions.”

In June 2016, the FASB issued a new ASU which modifies the measurement of expected credit losses of certain financial instruments. This ASU replaces the incurred loss methodology for recognizing credit losses with a current expected credit losses model and applies to all financial assets, including trade accounts receivables. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. This guidance became effective during the first quarter of 2020. The adoption of the new standard did not have a material impact to our consolidated financial statements and related disclosures.

In January 2017, the FASB issued an amendment to the standards of goodwill impairment testing. The new guidance simplifies the test for goodwill impairment, by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance became effective during the first quarter of 2020 and was applied during our annual goodwill impairment testing for fiscal 2020. The adoption of this ASU did not have an impact to our consolidated financial statements.

In March 2020, the SEC adopted amendments to the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered in Rule 3-10 of Regulation S-X, and affiliates whose securities collateralize securities registered or being registered in Rule 3-16 of Regulation S-X (SEC Release No. 33-10762). We adopted the amendments to the disclosure requirements during the third quarter of 2020. This amendment did not have an impact on our consolidated financial statements as this amendment simplifies the financial disclosures required in our guarantor and non-guarantor financial information. The amendment replaces the requirement to present condensed consolidating financial statements, comprised of balance sheets and statements of operations, comprehensive income and cash flows for all periods presented, with summarized financial information of the guarantor only for the most recently completed fiscal year and any subsequent interim period. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”

In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. This guidance became effective during the fourth quarter of fiscal 2020 and we updated our defined benefit pension plan disclosures accordingly. The adoption of this ASU did not have an impact to our consolidated financial statements as this ASU only modified disclosure requirements. See Note 10, “Pension Benefits.”

Recently Issued Accounting Standards – Pending Adoption

In March 2020, the FASB issued a new ASU which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR. The update may be applied as of the beginning of the interim period that includes March 12, 2020 through December 31, 2022. We currently expect to adopt the standard during fiscal 2022. We are in the process of evaluating the impact of the adoption of this ASU. LIBOR is used to determine interest under our revolving credit facility and our tranche B term loans due 2026. Currently, however, we do not expect the adoption of this ASU to have a material impact to our consolidated financial statements.

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Acquisitions

6 Months Ended

Jul. 03, 2021

Acquisitions

Acquisitions

(3) Acquisitions

Crisco Acquisition

On December 1, 2020, we completed the acquisition of the Crisco oils and shortening business from The J.M. Smucker Company and certain of its affiliates, for approximately $539.3 million in cash. We refer to this acquisition as the “Crisco acquisition” and the Crisco oils and shortening business as the “Crisco business.”

The following table sets forth the preliminary allocation of the Crisco acquisition purchase price to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. We anticipate completing the purchase price allocation during fiscal 2021.

Preliminary Purchase Price Allocation (in thousands):	December 1, 2020
Inventories	$	37,137
Prepaid expenses and other current assets		113
Property, plant and equipment, net		81,405
Operating lease right-of-use assets		1,477
Trademarks — indefinite-lived intangible assets		322,000
Customer relationships — finite-lived intangible assets		52,800
Current portion of operating lease liabilities		(565)
Long-term operating lease liabilities, net of current portion		(912)
Goodwill		45,806
Total purchase price (paid in cash)	$	539,261

Farmwise Acquisition

On February 19, 2020, we acquired Farmwise LLC, maker of Farmwise Veggie Fries, Farmwise Veggie Tots and Farmwise Veggie Rings. We refer to this acquisition as the “Farmwise acquisition.”

Unaudited Pro Forma Summary of Operations

The following pro forma summary of operations presents our operations as if the Crisco acquisition had occurred as of the beginning of fiscal 2020. In addition to including the results of operations of this acquisition, the pro forma information gives effect to the interest on additional borrowings and the amortization of trademark and customer relationship intangibles. On an actual basis, Crisco contributed $116.5 million of our aggregate $969.5 million of consolidated net sales for the first two quarters of 2021 (in thousands, except per share data):

	Twenty-six Weeks Ended
	June 27,
	2020
Net sales(1)	$	1,113,331
Net income(1)	$	95,201
Basic earnings per share(1)	$	1.49
Diluted earnings per share(1)	$	1.48

(1) The pro forma financial information presented above does not purport to be indicative of the results that actually would have been attained had the Crisco acquisition occurred as of the beginning of fiscal 2020, and is not intended to be a projection of future results.

The Farmwise acquisition was not material to our consolidated results of operations or financial position and, therefore, pro forma financial information is not presented.

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Inventories

6 Months Ended

Jul. 03, 2021

Inventories

Inventories

(4) Inventories

Inventories are stated at the lower of cost or net realizable value and include direct material, direct labor, overhead, warehousing and product transfer costs. Cost is determined using the first-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on management’s review of inventories on hand compared to estimated future usage and sales.

Inventories consist of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Raw materials and packaging	$	112,991	$	87,843
Work-in-process		46,386		95,207
Finished goods		374,254		309,754
Inventories	$	533,631	$	492,804

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Goodwill and Other Intangible Assets

6 Months Ended

Jul. 03, 2021

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

(5) Goodwill and Other Intangible Assets

The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands):

	July 3, 2021						January 2, 2021
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Finite-Lived Intangible Assets
Trademarks	$	20,100	$	6,169	$	13,931	$	20,100	$	5,597	$	14,503
Customer relationships		407,033		157,641		249,392		406,901		147,378		259,523
Total finite-lived intangible assets	$	427,133	$	163,810	$	263,323	$	427,001	$	152,975	$	274,026
Indefinite-Lived Intangible Assets
Goodwill	$	645,070					$	644,747
Trademarks	$	1,698,175					$	1,697,300

Amortization expense associated with finite-lived intangible assets was $5.4 million and $10.8 million for the second quarter and first two quarters of 2021, respectively, and was $4.7 million and $9.5 million for the second quarter and first two quarters of 2020, respectively, and is recorded in operating expenses. We expect to recognize an additional $10.8 million of amortization expense associated with our finite-lived intangible assets during the remainder of fiscal 2021, and thereafter $21.6 million of amortization expense in fiscal 2022, $21.5 million in fiscal 2023, $21.4 million in each of fiscal 2024 and 2025, and $20.7 million in fiscal 2026.

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Long-Term Debt

6 Months Ended

Jul. 03, 2021

Long-Term Debt

Long-Term Debt

(6) Long-Term Debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Revolving credit loans	$	225,000	$	235,000
Tranche B term loans due 2026		671,625		671,625
5.25% senior notes due 2025		900,000		900,000
5.25% senior notes due 2027		550,000		550,000
Unamortized deferred debt financing costs		(18,575)		(20,324)
Unamortized discount/premium		(2,142)		(2,215)
Total long-term debt, net of unamortized deferred debt financing costs and discount/premium		2,325,908		2,334,086

As of July 3, 2021, the aggregate contractual maturities of long-term debt were as follows (in thousands):

	Aggregate Contractual Maturities
Fiscal year:
2021 remaining	$	—
2022		—
2023		—
2024		—
2025		1,125,000
Thereafter		1,221,625
Total	$	2,346,625

Senior Secured Credit Agreement. Our senior secured credit agreement includes a term loan facility and a revolving credit facility.

On December 16, 2020, we amended our amended and restated credit agreement, dated as of October 2, 2015, and previously amended on March 30, 2017, November 20, 2017 and October 10, 2019. Among other things, the amendment provides for a $300.0 million add-on tranche B term loan facility, which closed and funded on December 16, 2020. The add-on tranche B term loans were issued at a price equal to 99.00% of their face value. The add-on term loans have the same terms as, and are fungible with, $371.6 million of tranche B term loans. We used the net proceeds of the add-on term loans to repay a portion of the revolving credit facility borrowings used to finance the Crisco acquisition. As of July 3, 2021, $671.6 million of tranche B term loans remained outstanding. The tranche B term loans mature on October 10, 2026.

Interest under the tranche B term loan facility is determined based on alternative rates that we may choose in accordance with our credit agreement, including a base rate per annum plus an applicable margin of 1.00%, and LIBOR plus an applicable margin of 2.50%.

The December 2020 amendment also increased the revolver capacity from $700.0 million to $800.0 million and extended the maturity date of our revolving credit facility from November 21, 2022 to December 16, 2025. As of July 3, 2021, the available borrowing capacity under the revolving credit facility, net of outstanding letters of credit of $4.9 million, was $570.1 million. Proceeds of the revolving credit facility may be used for general corporate purposes, including acquisitions of targets in the same or a similar line of business as our company, subject to specified criteria. The revolving credit facility matures on December 16, 2025.

Interest under the revolving credit facility, including any outstanding letters of credit, is determined based on alternative rates that we may choose in accordance with the credit agreement, including a base rate per annum plus an applicable margin ranging from 0.25% to 0.75%, and LIBOR plus an applicable margin ranging from 1.25% to 1.75%, in each case depending on our consolidated leverage ratio.

We are required to pay a commitment fee of 0.50% per annum on the unused portion of the revolving credit facility. The maximum letter of credit capacity under the revolving credit facility is $50.0 million, with a fronting fee of 0.25% per annum for all outstanding letters of credit and a letter of credit fee equal to the applicable margin for revolving loans that are Eurodollar (LIBOR) loans.

We may prepay term loans or permanently reduce the revolving credit facility commitment under the credit agreement at any time without premium or penalty (other than customary “breakage” costs with respect to the early termination of LIBOR loans). Subject to certain exceptions, the credit agreement provides for mandatory prepayment upon certain asset dispositions or casualty events and issuances of indebtedness.

Our obligations under the credit agreement are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries (other than a domestic subsidiary that is a holding company for one or more foreign subsidiaries). The credit agreement is secured by substantially all of our and our domestic subsidiaries’ assets except our and our domestic subsidiaries’ real property. The credit agreement contains customary restrictive covenants, subject to certain permitted amounts and exceptions, including covenants limiting our ability to incur additional indebtedness, pay dividends and make other restricted payments, repurchase shares of our outstanding stock and create certain liens.

The credit agreement also contains certain financial maintenance covenants, which, among other things, specify a maximum consolidated leverage ratio and a minimum interest coverage ratio, each ratio as defined in the credit agreement. Our consolidated leverage ratio (defined as the ratio, determined on a pro forma basis, of our consolidated net debt, as of the last day of any period of four consecutive fiscal quarters to our adjusted EBITDA (as defined in the credit agreement) before share-based compensation for such period) may not exceed 7.00 to 1.00. We are also required to maintain a consolidated interest coverage ratio (defined as the ratio, determined on a pro forma basis, of our adjusted EBITDA (before share-based compensation) for any period of four consecutive fiscal quarters to our consolidated interest expense for such period payable in cash) of at least 1.75 to 1.00. As of July 3, 2021, we were in compliance with all of the covenants, including the financial covenants, in the credit agreement.

The credit agreement also provides for an incremental term loan and revolving loan facility, pursuant to which we may request that the lenders under the credit agreement, and potentially other lenders, provide unlimited additional amounts of term loans or revolving loans or both on terms substantially consistent with those provided under the credit agreement. Among other things, the utilization of the incremental facility is conditioned on our ability to meet a maximum senior secured leverage ratio of 4.00 to 1.00, and a sufficient number of lenders or new lenders agreeing to participate in the facility.

5.25% Senior Notes due 2025. On April 3, 2017, we issued $500.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public of 100% of their face value. On November 20, 2017, we issued an additional $400.0 million aggregate principal amount of 5.25% senior notes due 2025 at a price to the public 101% of their face value plus accrued interest from October 1, 2017. The notes issued in November 2017 were issued as additional notes under the same indenture as our 5.25% senior notes due 2025 that were issued in April 2017, and, as such, form a single series and trade interchangeably with the previously issued 5.25% senior notes due 2025.

We used the net proceeds of the April 2017 offering to repay all of the then outstanding borrowings and amounts due under our revolving credit facility and tranche A term loans, to pay related fees and expenses and for general corporate purposes. We used the net proceeds of the November 2017 offering to repay all of the then outstanding borrowings and amounts due under our revolving credit facility, to pay related fees and expenses and for general corporate purposes.

Interest on the 5.25% senior notes due 2025 is payable on April 1 and October 1 of each year, commencing October 1, 2017. The 5.25% senior notes due 2025 will mature on April 1, 2025, unless earlier retired or redeemed as described below.

We may redeem some or all of the 5.25% senior notes due 2025 at a redemption price of 102.6250% beginning April 1, 2021, 101.3125% beginning April 1, 2022 and 100% on or after April 1, 2023, in each case plus accrued and unpaid interest to the date of redemption. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 5.25% senior notes due 2025 at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase.

We may also, from time to time, seek to retire the 5.25% senior notes due 2025 through cash repurchases of the 5.25% senior notes due 2025 and/or exchanges of the 5.25% senior notes due 2025 for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our obligations under the 5.25% senior notes due 2025 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The 5.25% senior notes due 2025 and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2025.

The indenture governing the 5.25% senior notes due 2025 contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of July 3, 2021, we were in compliance with all of the covenants in the indenture governing the 5.25% senior notes due 2025.

5.25% Senior Notes due 2027. On September 26, 2019, we issued $550.0 million aggregate principal amount of 5.25% senior notes due 2027 at a price to the public of 100% of their face value.

We used the proceeds of the offering, together with the proceeds of incremental term loans made during the fourth quarter of 2019, to redeem all of our outstanding 4.625% senior notes due 2021, repay a portion of our borrowings under our revolving credit facility, pay related fees and expenses and for general corporate purposes.

Interest on the 5.25% senior notes due 2027 is payable on March 15 and September 15 of each year, commencing March 15, 2020. The 5.25% senior notes due 2027 will mature on September 15, 2027, unless earlier retired or redeemed as described below.

We may redeem some or all of the 5.25% senior notes due 2027 at a redemption price of 103.938% beginning March 1, 2022 and thereafter at prices declining annually to 100% on or after March 1, 2025, in each case plus accrued and unpaid interest to the date of redemption. We may redeem up to 40% of the aggregate principal amount of the 5.25% senior notes due 2027 prior to March 1, 2022 with the net proceeds from certain equity offerings. We may also redeem some or all of the 5.25% senior notes due 2027 at any time prior to March 1, 2022 at a redemption price equal to the make-whole amount set forth in the tenth supplemental indenture. In addition, if we undergo a change of control or upon certain asset sales, we may be required to offer to repurchase the 5.25% senior notes due 2027 at the repurchase price set forth in the indenture plus accrued and unpaid interest to the date of repurchase.

We may also, from time to time, seek to retire the 5.25% senior notes due 2027 through cash repurchases of the 5.25% senior notes due 2027 and/or exchanges of the 5.25% senior notes due 2027 for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our obligations under the 5.25% senior notes due 2027 are jointly and severally and fully and unconditionally guaranteed on a senior basis by all of our existing and certain future domestic subsidiaries. The 5.25% senior notes due 2027 and the subsidiary guarantees are our and the guarantors’ general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors’ secured indebtedness and to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors’ existing and future unsecured senior debt; and are senior in right of payment to all of our and the guarantors’ future subordinated debt. Our foreign subsidiaries are not guarantors, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of the 5.25% senior notes due 2027.

The indenture governing the 5.25% senior notes due 2027 contains covenants with respect to us and the guarantors and restricts the incurrence of additional indebtedness and the issuance of capital stock; the payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; creation of specified liens, certain sale-leaseback transactions and sales of certain specified assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions with affiliates. Each of the covenants is subject to a number of important exceptions and qualifications. As of July 3, 2021, we were in compliance with all of the covenants in the indenture governing the 5.25% senior notes due 2027.

Subsidiary Guarantees. We have no assets or operations independent of our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fully and unconditionally guarantee our long-term debt. There are no significant restrictions on our ability and the ability of our subsidiaries to obtain funds from our respective subsidiaries by dividend or loan. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”

Accrued Interest. At July 3, 2021 and January 2, 2021, accrued interest of $21.1 million and $20.9 million, respectively, is included in accrued expenses in the accompanying unaudited consolidated balance sheets.

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Fair Value Measurements

6 Months Ended

Jul. 03, 2021

Fair Value Measurements

Fair Value Measurements

(7) Fair Value Measurements

The authoritative accounting literature relating to fair value measurements defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The accounting literature outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and the accounting literature details the disclosures that are required for items measured at fair value. Financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy under the accounting literature. The three levels are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 quoted prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value driver is observable for the asset or liability, either directly or indirectly.

Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

Cash and cash equivalents, trade accounts receivable, income tax receivable, trade accounts payable, accrued expenses, income tax payable and dividends payable are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments.

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of July 3, 2021 and January 2, 2021 were as follows (in thousands):

		July 3, 2021						January 2, 2021
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	225,000		$	225,000	(1)	$	235,000		$	235,000	(1)
Tranche B term loans due 2026		667,461	(2)		667,461	(3)		667,118	(2)		665,450	(3)
5.25% senior notes due 2025		902,022	(4)		926,828	(3)		902,292	(4)		931,616	(3)
5.25% senior notes due 2027	$	550,000		$	573,788	(3)	$	550,000		$	580,250	(3)

(1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2) The carrying value of the tranche B term loans includes a discount. At July 3, 2021 and January 2, 2021, the face amount of the tranche B term loans was $671.6 million.

(3) Fair values are estimated based on quoted market prices.

(4) The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 3, 2021 and January 2, 2021, the face amount of the 5.25% senior notes due 2025 was $900.0 million.

There was no Level 3 activity during the second quarter or first two quarters of 2021 or 2020.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jul. 03, 2021

Accumulated Other Comprehensive Loss.

Accumulated Other Comprehensive Loss

(8) Accumulated Other Comprehensive Loss

The reclassifications from accumulated other comprehensive loss (AOCL) for the second quarter and first two quarters of 2021 and 2020 were as follows (in thousands):

	Amounts Reclassified from AOCL				Amounts Reclassified from AOCL
	Thirteen Weeks Ended				Twenty-six Weeks Ended				Affected Line Item in
	July 3,		June 27,		July 3,		June 27,		the Statement Where
Details about AOCL Components	2021		2020		2021		2020		Net Income is Presented
Defined benefit pension plan items
Amortization of unrecognized loss	$	403	$	296	$	845	$	696	See (1) below
Accumulated other comprehensive loss before tax		403		296		845		696	Total before tax
Tax expense		(99)		(77)		(207)		(181)	Income tax expense
Total reclassification	$	304	$	219	$	638	$	515	Net of tax

(1) These items are included in the computation of net periodic pension cost. See Note 10, “Pension Benefits,” for additional information.

Changes in AOCL for the first two quarters of 2021 were as follows (in thousands):

			Foreign Currency
	Defined Benefit		Translation
	Pension Plan Items		Adjustments		Total
Balance at January 2, 2021	$	(27,631)	$	(7,963)	$	(35,594)
Other comprehensive loss before reclassifications		—		3,400		3,400
Amounts reclassified from AOCL		638		—		638
Net current period other comprehensive income		638		3,400		4,038
Balance at July 3, 2021	$	(26,993)	$	(4,563)	$	(31,556)

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Stock Repurchase Program

6 Months Ended

Jul. 03, 2021

Treasury Stock Value [Abstract]

Stock Repurchase Program

(9)Stock Repurchase Program

On March 9, 2021, our board of directors authorized an extension of our stock repurchase program from March 15, 2021 to March 15, 2022. In extending the repurchase program, our board of directors also reset the repurchase authority to up to $50.0 million.

Under the authorization, we may purchase shares of common stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the SEC. The timing and amount of future stock repurchases, if any, under the program will be at the discretion of management, and will depend on a variety of factors, including price, available cash, general business and market conditions and other investment opportunities. Therefore, we cannot assure you as to the number or aggregate dollar amount of additional shares, if any, that will be repurchased under the program. We may discontinue the program at any time. Any shares repurchased pursuant to the program will be retired.

We did not repurchase any shares of our common stock during the first two quarters of 2021 or the first two quarters of 2020. As of July 3, 2021, we had $50.0 million available for future repurchases of common stock under the stock repurchase program.

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Pension Benefits

6 Months Ended

Jul. 03, 2021

Pension Benefits

Pension Benefits

(10) Pension Benefits

Company-Sponsored Defined Benefit Pension Plans. As of July 3, 2021, we had four company-sponsored defined benefit pension plans covering approximately 33% of our employees. Three of these defined benefit pension plans are for the benefit of certain of our union employees and one is for the benefit of salaried and certain hourly employees. The benefits in the salaried and hourly plan are based on each employee’s years of service and compensation, as defined. Newly hired employees are no longer eligible to participate in any of our four company-sponsored defined benefit pension plans. Net periodic pension cost for our four company-sponsored defined benefit pension plans for the second quarter and first two quarters of 2021 and 2020 includes the following components (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Service cost—benefits earned during the period	$	2,603	$	2,052	$	5,229	$	4,519
Interest cost on projected benefit obligation		1,208		1,322		2,433		2,699
Expected return on plan assets		(2,727)		(2,319)		(5,484)		(4,548)
Amortization of unrecognized loss		403		296		845		696
Net periodic pension cost	$	1,487	$	1,351	$	3,023	$	3,366

We made contributions to our company-sponsored defined benefit pension plans of $2.5 million and $8.0 million during the first two quarters of 2021 and 2020, respectively. During the remainder of fiscal 2021, we expect to make approximately $3.0 million of additional contributions.

Multi-Employer Defined Benefit Pension Plan. We also contribute to the Bakery and Confectionery Union and Industry International Pension Fund (EIN 52-6118572, Plan No. 001), a multi-employer defined benefit pension plan, sponsored by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) on behalf of certain employees at our Portland, Maine manufacturing facility. The plan provides multiple plan benefits with corresponding contribution rates that are collectively bargained between participating employers and their affiliated BCTGM local unions.

We were notified that for the plan year beginning January 1, 2012, the plan was in critical status and classified in the Red Zone, and for the plan year beginning January 1, 2018, the plan was in critical and declining status. As of the date of the accompanying unaudited consolidated interim financial statements, the plan remains in critical and declining status. The law requires that all contributing employers pay to the plan a surcharge to help correct the plan’s financial situation. The amount of the surcharge is equal to a percentage of the amount an employer is otherwise required to contribute to the plan under the applicable collective bargaining agreement. During the second quarter of 2015, we agreed to a collective bargaining agreement that, among other things, implemented a rehabilitation plan. As a result, our contributions to the plan had been increasing by at least 5% per year, assuming consistent hours were worked. Effective December 31, 2020, the annual 5% contribution rate increases have been suspended.

B&G Foods made contributions to the plan of approximately $0.3 million and $0.4 million during the first two quarters of 2021 and the first two quarters of 2020, respectively. During the remainder of fiscal 2021, we expect to make approximately $0.3 million of additional contributions and we expect to pay surcharges of approximately $0.2 million assuming consistent hours are worked. These contributions represent less than 5% of total contributions made to the plan.

In the event that we withdraw from participation in the plan or substantially reduce our participation in this plan (such as due to a workforce reduction), or if a mass withdrawal were to occur, applicable law could require us to make withdrawal liability payments to the plan, and we would have to reflect that liability on our balance sheet. The amount of our withdrawal liability, which would be material, would depend on the extent of this plan’s funding of vested benefits at the time of our withdrawal. As discussed above, the plan is severely underfunded. Furthermore, our withdrawal liability could increase as the number of employers participating in this plan decreases. As of July 3, 2021, we estimate that if we were to voluntarily withdraw from participation in the plan, we would trigger a withdrawal liability with a present value

of approximately $14.1 million, which liability would be payable over 20 years in annual installments of approximately $0.9 million.

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Leases

6 Months Ended

Jul. 03, 2021

Leases

Leases

(11) Leases

Operating Leases. Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items:

	July 3,		January 2,
	2021		2021
Right-of-use assets:
Operating lease right-of-use assets	$	38,704	$	32,216
Operating lease liabilities:
Current portion of operating lease liabilities	$	9,801	$	11,034
Long-term operating lease liabilities, net of current portion		31,802		23,959
Total operating lease liabilities	$	41,603	$	34,993

We determine whether an arrangement is a lease at inception. We have operating leases for certain of our manufacturing facilities, distribution centers, warehouse and storage facilities, machinery and equipment, and office equipment. Our leases have remaining lease terms of one year to seven years, some of which include options to extend the lease term for up to five years, and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of use assets and lease liabilities.

The following table shows supplemental information related to leases:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,073	$	3,095	$	6,423	$	6,182
The components of lease costs were as follows:
Cost of goods sold	$	1,158	$	1,012	$	2,342	$	2,016
Selling, general and administrative expenses		2,231		1,975		4,205		3,952
Total lease costs	$	3,389	$	2,987	$	6,547	$	5,968

Total rent expense was $4.1 million, including the operating lease costs of $3.4 million stated above, for the second quarter of 2021, and $8.1 million, including the operating lease costs of $6.5 million stated above, for the first two quarters of 2021. Total rent expense was $3.8 million, including the operating lease costs of $3.0 million stated above, for the second quarter of 2020, and $7.3 million, including the operating lease costs of $6.0 million stated above, for the first two quarters of 2020.

Because our operating leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. With the exception of our real estate leases, we account for our leases as a single lease component.

The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:

	July 3,		January 2,
	2021		2021
Weighted average remaining lease term (years)		5.2		4.8
Weighted average discount rate		3.20%		3.94%

As of July 3, 2021, the maturities of operating lease liabilities were as follows (in thousands):

	Maturities of Operating Lease Liabilities
Fiscal year:
2021 remaining	$	6,648
2022		8,472
2023		8,154
2024		7,210
2025		6,675
Thereafter		8,091
Total undiscounted future minimum lease payments		45,250
Less: Imputed interest		(3,647)
Total present value of future operating lease liabilities	$	41,603

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Commitments and Contingencies

6 Months Ended

Jul. 03, 2021

Commitments and Contingencies

Commitments and Contingencies

(12) Commitments and Contingencies

Legal Proceedings. We are from time to time involved in various claims and legal actions arising in the ordinary course of business, including proceedings involving product liability claims, product labeling claims, worker’s compensation and other employee claims, and tort and other general liability claims, as well as trademark, copyright, patent infringement and related claims and legal actions. While we cannot predict with certainty the results of these claims and legal actions in which we are currently, or in the future may be, involved, we do not expect that the ultimate disposition of any currently pending claims or actions will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Environmental. We are subject to environmental laws and regulations in the normal course of business. We did not make any material expenditures during the first two quarters of 2021 or 2020 in order to comply with environmental laws and regulations. Based on our experience to date, management believes that the future cost of compliance with existing environmental laws and regulations (and liability for any known environmental conditions) will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.

Collective Bargaining Agreements. As of July 3, 2021, 1,966 of our 3,071 employees, or approximately 64.0%, were covered by collective bargaining agreements.

As of the date of this report, we have only one collective bargaining agreement that is scheduled to expire in the next twelve months. The collective bargaining agreement covering employees at our Portland, Maine facility, which covers approximately 80 employees, is scheduled to expire on April 30, 2022.

While we believe that our relations with our union employees are in general good, we cannot assure you that we will be able to negotiate a new collective bargaining agreements for our Portland facility on terms satisfactory to us, or at all, and without production interruptions, including labor stoppages. At this time, however, management does not expect that the outcome of the negotiations will have a material adverse impact on our business, financial condition or results of operations.

Severance and Change of Control Agreements. We have employment agreements with each of our executive officers. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain circumstances, including termination by us without cause (as defined in the agreements) or as a result of the employee’s death or disability, or termination by us or a deemed termination upon a change of control (as defined in the agreements). Severance benefits generally include payments for salary continuation, continuation of health care and insurance benefits, present value of additional pension credits and, in certain cases, accelerated vesting under compensation plans. See Note 16, “Separation Expenses.”

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Earnings per Share

6 Months Ended

Jul. 03, 2021

Earnings per Share

Earnings per Share

(13) Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding plus all additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued upon the exercise of stock options or in connection with performance shares that may be earned under long-term incentive awards as of the grant date, in the case of the stock options, and as of the beginning of the period, in the case of the performance shares, using the treasury stock method. For the second quarter of 2021 and 2020, there were 498,963 and 1,124,416, respectively, shares of common stock issuable upon the exercise of stock options excluded from the calculation of diluted weighted average shares outstanding because the effect would have been anti-dilutive on diluted earnings per share.

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Weighted average shares outstanding:
Basic		64,776,532		64,129,778		64,679,761		64,088,464
Net effect of potentially dilutive share-based compensation awards		633,312		280,035		630,019		158,555
Diluted		65,409,844		64,409,813		65,309,780		64,247,019

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Business and Credit Concentrations and Geographic Information

6 Months Ended

Jul. 03, 2021

Business and Credit Concentrations and Geographic Information

Business and Credit Concentrations and Geographic Information

(14) Business and Credit Concentrations and Geographic Information

Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful accounts. We perform ongoing credit evaluations of the financial condition of our customers. Our top ten customers accounted for approximately 60.8% and 61.2% of consolidated net sales for the first two quarters of 2021 and 2020, respectively. Other than Walmart, which accounted for approximately 28.8% and 25.9% of our consolidated net sales for the first two quarters of 2021 and 2020, respectively, no single customer accounted for more than 10.0% of our consolidated net sales for the first two quarters of 2021 or 2020.

Our top ten customers accounted for approximately 64.8% and 62.6% of our consolidated trade accounts receivables as of July 3, 2021 and January 2, 2021, respectively. Other than Walmart, which accounted for approximately 32.5% and 32.6% of our consolidated trade accounts receivables as of July 3, 2021 and January 2, 2021, no single customer accounted for more than 10.0% of our consolidated trade accounts receivables. As of July 3, 2021, we do not believe we have any significant concentration of credit risk with respect to our consolidated trade accounts receivables with any single customer whose failure or nonperformance would materially affect our results other than as described above with respect to Walmart.

During the first two quarters of 2021 and 2020, our sales to customers in foreign countries represented approximately 7.7% and 7.9%, respectively, of net sales. Our foreign sales are primarily to customers in Canada.

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Share-Based Payments

6 Months Ended

Jul. 03, 2021

Share-Based Payments

Share-Based Payments

(15) Share-Based Payments

The following table details our stock option activity for the first two quarters of fiscal 2021 (dollars in thousands, except per share data):

		Weighted		Weighted Average
		Average		Contractual Life	Aggregate
	Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at January 2, 2021	1,030,667	$	31.41	5.50	$	591
Granted	246,911	$	33.79
Exercised	(466,112)	$	31.71
Forfeited	(37,627)	$	26.80
Expired	(2,171)	$	32.59
Outstanding at July 3, 2021	771,668	$	32.21	6.67	$	1,209
Exercisable at July 3, 2021	524,757	$	31.47	5.14	$	1,194

The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on both historical and implied volatilities of our common stock over the estimated expected term of the award. The expected term of the options granted represents the period of time that options were expected to be outstanding and is based on the “simplified method” in accordance with accounting guidance. We utilized the simplified method to determine the expected term of the options as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The assumptions used in the Black-Scholes option-pricing model during the first two quarters of 2021 and 2020 were as follows:

	2021		2020
Weighted average grant date fair value	$	6.48	$	4.51
Expected volatility		37.3% - 38.8%		45.4%
Expected term		5.5 - 6.5 years		5.5 years
Risk-free interest rate		0.9% - 1.1%		0.4%
Dividend yield		5.6% - 6.3%		7.9%

The following table details the activity in our performance share long-term incentive awards (LTIAs) for the first two quarters of 2021:

		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares(1)	(per share)(2)
Outstanding at January 2, 2021	986,223	$	15.56
Granted	450,104	$	28.71
Vested	(86,523)	$	21.36
Forfeited	(207,950)	$	16.75
Outstanding at July 3, 2021	1,141,854	$	20.08

(1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% to 233% of the target number of performance shares).

(2) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period.

The following table details the activity in our restricted stock for the first two quarters of 2021:

		Weighted Average
	Number of Shares	Grant Date Fair Value
	of Restricted Stock	(per share)(1)
Outstanding at January 2, 2021	97,359	$	18.22
Granted	38,098	$	32.86
Vested	(59,867)	$	19.30
Forfeited	(956)	$	20.94
Outstanding at July 3, 2021	74,634	$	24.79

(1) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes).

The following table details the net number of shares of common stock issued by our company during the second quarter and first two quarters of 2021 and 2020 upon the vesting of performance share LTIAs, the exercise of stock options, the issuance of restricted stock and other share-based compensation:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Number of performance shares vested		—		—		86,523		—
Shares withheld for tax withholding		—		—		(35,281)		—
Shares of common stock issued for performance share LTIAs		—		—		51,242		—
Shares of common stock issued upon the exercise of stock options		27,212		—		466,112		—
Shares of common stock issued to non-employee directors for annual equity grants		39,251		43,024		39,251		43,024
Shares of restricted common stock issued to employees		7,126		592		38,098		76,440
Shares of restricted stock withheld and cancelled for tax withholding upon vesting		(66)		(3,660)		(21,528)		(3,660)
Shares of restricted stock cancelled upon forfeiture		(956)		—		(956)		—
Net shares of common stock issued		72,567		39,956		572,219		115,804

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the second quarter and first two quarters of 2021 and 2020 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
Consolidated Statements of Operations Location	2021		2020		2021		2020
Compensation expense included in cost of goods sold	$	322	$	1,157	$	458	$	1,174
Compensation expense included in selling, general and administrative expenses		1,080		2,664		1,667		3,070
Total compensation expense for share-based payments	$	1,402	$	3,821	$	2,125	$	4,244

During the second quarter of 2020, we recognized additional pre-tax share-based compensation expense of $2.3 million for our performance share LTIAs because of the increased likelihood of achieving performance goals in light of our improved operating performance and profitability as a result of increased demand for our products due to the COVID-19 pandemic.

As of July 3, 2021, there was $7.3 million of unrecognized compensation expense related to performance share LTIAs, which is expected to be recognized over the next 2.5 years, $1.6 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over the next 3.0 years, and less than $1.6 million of unrecognized compensation expense related to stock options, which is expected to be recognized over the next 2.8 years.

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Separation Expenses

6 Months Ended

Jul. 03, 2021

Workforce Reduction, Retirement Expenses and Separation Expenses

Separation Expenses

(16) Separation Expenses

During the fourth quarter of 2020, we recorded separation costs of $4.2 million for severance and other benefits payable pursuant to the terms of a separation agreement entered into in November 2020 with our former president and chief executive officer. Of this amount, approximately $1.7 million has resulted or will result in cash payments, of which $0.8 million were made during the first two quarters of 2021 and most of the remainder of which will be paid during the remainder of fiscal 2021. The remaining $2.5 million of non-cash separation costs relate to share-based compensation expense for shares that have vested in fiscal 2021 or may vest at the end of fiscal 2021 and fiscal 2022 if certain company performance goals are achieved.

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Net Sales by Brand

6 Months Ended

Jul. 03, 2021

Net Sales by Brand

Net Sales by Brand

(17) Net Sales by Brand

The following table sets forth net sales by brand (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Brand:(1)
Green Giant - frozen	$	74,061	$	105,262	$	172,676	$	213,401
Spices & Seasonings(2)		71,584		68,492		147,997		120,287
Crisco(3)		58,442		—		116,498		—
Ortega		40,850		46,797		79,801		85,578
Green Giant - shelf-stable(4)		23,767		49,032		49,232		86,962
Maple Grove Farms of Vermont		20,154		18,044		40,831		36,485
Dash		20,033		20,839		38,216		35,338
Clabber Girl(5)		17,580		26,453		34,993		45,132
Cream of Wheat		14,236		17,985		32,396		36,911
All other brands		123,668		159,635		256,869		301,815
Total	$	464,375	$	512,539	$	969,509	$	961,909

(1) Table includes net sales for each of our brands whose net sales for the first two quarters of 2021 or fiscal 2020 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand.

(2) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(3) We completed the Crisco acquisition on December 1, 2020. See Note 3, “Acquisitions.”

(4) Does not include net sales of the Le Sueur brand. Net sales of the Le Sueur brand are included below in “All other brands.”

(5) Includes net sales for multiple brands acquired as part of the Clabber Girl acquisition that we completed on May 15, 2019, including, among others, the Clabber Girl, Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 03, 2021

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated interim financial statements for the thirteen and twenty-six week periods ended July 3, 2021 (second quarter and first two quarters of 2021) and June 27, 2020 (second quarter and first two quarters of 2020) have been prepared by our company in accordance with generally accepted accounting principles in the United States (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), and include the accounts of B&G Foods, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, our management believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated. The accompanying unaudited consolidated interim financial statements contain all adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of July 3, 2021, and the results of our operations, comprehensive income, changes in stockholders’ equity and cash flows for the second quarter and first two quarters of 2021 and 2020. Our results of operations for the second quarter and first two quarters of 2021 are not necessarily indicative of the results to be expected for the full year. We have evaluated subsequent events for disclosure through the date of issuance of the accompanying unaudited consolidated interim financial statements. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for fiscal 2020 filed with the SEC on March 2, 2021.

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with GAAP requires our management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve revenue recognition as it relates to trade and consumer promotion expenses; pension benefits; acquisition accounting fair value allocations; the recoverability of goodwill, other intangible assets, property, plant and equipment and deferred tax assets; and the determination of the useful life of customer relationship and finite-lived trademark intangible assets. Actual results could differ significantly from these estimates and assumptions.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in the credit and equity markets can increase the uncertainty inherent in such estimates and assumptions.

Accounting Standards Adopted and Recently Issued Accounting Standards

Accounting Standards Adopted in Fiscal 2020 or Fiscal 2021

In December 2019, the Financial Accounting Standards Board (FASB) issued a new accounting standards update (ASU) that removes certain exceptions for recognizing deferred taxes for certain investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. This guidance became effective during the first quarter of 2021. The adoption of this ASU did not have a material impact to our consolidated financial statements and related disclosures.

In May 2020, the SEC issued a final rule that amends the financial statement requirements for acquisitions and dispositions of businesses. The amendments primarily relate to disclosures required by Rule 3-05 and Article 11 of Regulation S-X. Among other things, the final rule modifies the tests provided in Rule 1-02(w) of Regulation S-X used to determine whether a subsidiary or an acquired or disposed business is significant and modifies the number of years of audited financial statements required for acquisitions with significance levels greater than specified percentages. We early adopted the rule in the fourth quarter of fiscal 2020 and we applied the rule to our financial statement disclosure requirements for the Crisco acquisition. See Note 3, “Acquisitions.”

In June 2016, the FASB issued a new ASU which modifies the measurement of expected credit losses of certain financial instruments. This ASU replaces the incurred loss methodology for recognizing credit losses with a current expected credit losses model and applies to all financial assets, including trade accounts receivables. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. This guidance became effective during the first quarter of 2020. The adoption of the new standard did not have a material impact to our consolidated financial statements and related disclosures.

In January 2017, the FASB issued an amendment to the standards of goodwill impairment testing. The new guidance simplifies the test for goodwill impairment, by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance became effective during the first quarter of 2020 and was applied during our annual goodwill impairment testing for fiscal 2020. The adoption of this ASU did not have an impact to our consolidated financial statements.

In March 2020, the SEC adopted amendments to the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered in Rule 3-10 of Regulation S-X, and affiliates whose securities collateralize securities registered or being registered in Rule 3-16 of Regulation S-X (SEC Release No. 33-10762). We adopted the amendments to the disclosure requirements during the third quarter of 2020. This amendment did not have an impact on our consolidated financial statements as this amendment simplifies the financial disclosures required in our guarantor and non-guarantor financial information. The amendment replaces the requirement to present condensed consolidating financial statements, comprised of balance sheets and statements of operations, comprehensive income and cash flows for all periods presented, with summarized financial information of the guarantor only for the most recently completed fiscal year and any subsequent interim period. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Financial Information about B&G Foods and Guarantor Subsidiaries.”

In August 2018, the FASB issued a new ASU that aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies by changing disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. This guidance became effective during the fourth quarter of fiscal 2020 and we updated our defined benefit pension plan disclosures accordingly. The adoption of this ASU did not have an impact to our consolidated financial statements as this ASU only modified disclosure requirements. See Note 10, “Pension Benefits.”

Recently Issued Accounting Standards – Pending Adoption

In March 2020, the FASB issued a new ASU which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR. The update may be applied as of the beginning of the interim period that includes March 12, 2020 through December 31, 2022. We currently expect to adopt the standard during fiscal 2022. We are in the process of evaluating the impact of the adoption of this ASU. LIBOR is used to determine interest under our revolving credit facility and our tranche B term loans due 2026. Currently, however, we do not expect the adoption of this ASU to have a material impact to our consolidated financial statements.

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Acquisitions (Tables) - Crisco Acquisition

6 Months Ended

Jul. 03, 2021

Acquisitions and Divestitures

Schedule of preliminary allocation of purchase price to the estimated fair value of the net assets acquired

Preliminary Purchase Price Allocation (in thousands):	December 1, 2020
Inventories	$	37,137
Prepaid expenses and other current assets		113
Property, plant and equipment, net		81,405
Operating lease right-of-use assets		1,477
Trademarks — indefinite-lived intangible assets		322,000
Customer relationships — finite-lived intangible assets		52,800
Current portion of operating lease liabilities		(565)
Long-term operating lease liabilities, net of current portion		(912)
Goodwill		45,806
Total purchase price (paid in cash)	$	539,261

Schedule of unaudited pro forma summary of operations

	Twenty-six Weeks Ended
	June 27,
	2020
Net sales(1)	$	1,113,331
Net income(1)	$	95,201
Basic earnings per share(1)	$	1.49
Diluted earnings per share(1)	$	1.48

(1) The pro forma financial information presented above does not purport to be indicative of the results that actually would have been attained had the Crisco acquisition occurred as of the beginning of fiscal 2020, and is not intended to be a projection of future results.

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Inventories (Tables)

6 Months Ended

Jul. 03, 2021

Inventories

Summary of Inventories

Inventories consist of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Raw materials and packaging	$	112,991	$	87,843
Work-in-process		46,386		95,207
Finished goods		374,254		309,754
Inventories	$	533,631	$	492,804

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jul. 03, 2021

Goodwill and Other Intangible Assets

Schedule of goodwill and other intangible assets

The carrying amounts of goodwill and other intangible assets, as of the dates indicated, consist of the following (in thousands):

	July 3, 2021						January 2, 2021
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Finite-Lived Intangible Assets
Trademarks	$	20,100	$	6,169	$	13,931	$	20,100	$	5,597	$	14,503
Customer relationships		407,033		157,641		249,392		406,901		147,378		259,523
Total finite-lived intangible assets	$	427,133	$	163,810	$	263,323	$	427,001	$	152,975	$	274,026
Indefinite-Lived Intangible Assets
Goodwill	$	645,070					$	644,747
Trademarks	$	1,698,175					$	1,697,300

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Long-Term Debt (Tables)

6 Months Ended

Jul. 03, 2021

Long-Term Debt

Schedule of long-term debt

Long-term debt consists of the following, as of the dates indicated (in thousands):

	July 3, 2021		January 2, 2021
Revolving credit loans	$	225,000	$	235,000
Tranche B term loans due 2026		671,625		671,625
5.25% senior notes due 2025		900,000		900,000
5.25% senior notes due 2027		550,000		550,000
Unamortized deferred debt financing costs		(18,575)		(20,324)
Unamortized discount/premium		(2,142)		(2,215)
Total long-term debt, net of unamortized deferred debt financing costs and discount/premium		2,325,908		2,334,086

Schedule of aggregate contractual maturities of long-term debt

As of July 3, 2021, the aggregate contractual maturities of long-term debt were as follows (in thousands):

	Aggregate Contractual Maturities
Fiscal year:
2021 remaining	$	—
2022		—
2023		—
2024		—
2025		1,125,000
Thereafter		1,221,625
Total	$	2,346,625

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 03, 2021

Fair Value Measurements

Summary of carrying values and fair values of our revolving credit loans, term loans and senior notes

The carrying values and fair values of our revolving credit loans, term loans and senior notes as of July 3, 2021 and January 2, 2021 were as follows (in thousands):

		July 3, 2021						January 2, 2021
	Carrying Value			Fair Value			Carrying Value			Fair Value
Revolving credit loans	$	225,000		$	225,000	(1)	$	235,000		$	235,000	(1)
Tranche B term loans due 2026		667,461	(2)		667,461	(3)		667,118	(2)		665,450	(3)
5.25% senior notes due 2025		902,022	(4)		926,828	(3)		902,292	(4)		931,616	(3)
5.25% senior notes due 2027	$	550,000		$	573,788	(3)	$	550,000		$	580,250	(3)

(1) Fair values are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active.

(2) The carrying value of the tranche B term loans includes a discount. At July 3, 2021 and January 2, 2021, the face amount of the tranche B term loans was $671.6 million.

(3) Fair values are estimated based on quoted market prices.

(4) The carrying value of the 5.25% senior notes due 2025 includes a premium. At July 3, 2021 and January 2, 2021, the face amount of the 5.25% senior notes due 2025 was $900.0 million.

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jul. 03, 2021

Accumulated Other Comprehensive Loss.

Schedule of reclassification from accumulated other comprehensive loss

The reclassifications from accumulated other comprehensive loss (AOCL) for the second quarter and first two quarters of 2021 and 2020 were as follows (in thousands):

	Amounts Reclassified from AOCL				Amounts Reclassified from AOCL
	Thirteen Weeks Ended				Twenty-six Weeks Ended				Affected Line Item in
	July 3,		June 27,		July 3,		June 27,		the Statement Where
Details about AOCL Components	2021		2020		2021		2020		Net Income is Presented
Defined benefit pension plan items
Amortization of unrecognized loss	$	403	$	296	$	845	$	696	See (1) below
Accumulated other comprehensive loss before tax		403		296		845		696	Total before tax
Tax expense		(99)		(77)		(207)		(181)	Income tax expense
Total reclassification	$	304	$	219	$	638	$	515	Net of tax

(1) These items are included in the computation of net periodic pension cost. See Note 10, “Pension Benefits,” for additional information.

Schedule of changes in accumulated other comprehensive loss

Changes in AOCL for the first two quarters of 2021 were as follows (in thousands):

			Foreign Currency
	Defined Benefit		Translation
	Pension Plan Items		Adjustments		Total
Balance at January 2, 2021	$	(27,631)	$	(7,963)	$	(35,594)
Other comprehensive loss before reclassifications		—		3,400		3,400
Amounts reclassified from AOCL		638		—		638
Net current period other comprehensive income		638		3,400		4,038
Balance at July 3, 2021	$	(26,993)	$	(4,563)	$	(31,556)

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Pension Benefits (Tables)

6 Months Ended

Jul. 03, 2021

Pension Benefits

Schedule of components of net periodic pension costs

Net periodic pension cost for our four company-sponsored defined benefit pension plans for the second quarter and first two quarters of 2021 and 2020 includes the following components (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Service cost—benefits earned during the period	$	2,603	$	2,052	$	5,229	$	4,519
Interest cost on projected benefit obligation		1,208		1,322		2,433		2,699
Expected return on plan assets		(2,727)		(2,319)		(5,484)		(4,548)
Amortization of unrecognized loss		403		296		845		696
Net periodic pension cost	$	1,487	$	1,351	$	3,023	$	3,366

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Leases (Tables)

6 Months Ended

Jul. 03, 2021

Leases

Operating leases on the Balance Sheets

Operating leases are included in the accompanying unaudited consolidated balance sheets in the following line items:

	July 3,		January 2,
	2021		2021
Right-of-use assets:
Operating lease right-of-use assets	$	38,704	$	32,216
Operating lease liabilities:
Current portion of operating lease liabilities	$	9,801	$	11,034
Long-term operating lease liabilities, net of current portion		31,802		23,959
Total operating lease liabilities	$	41,603	$	34,993

Supplemental information related to leases

The following table shows supplemental information related to leases:

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,073	$	3,095	$	6,423	$	6,182
The components of lease costs were as follows:
Cost of goods sold	$	1,158	$	1,012	$	2,342	$	2,016
Selling, general and administrative expenses		2,231		1,975		4,205		3,952
Total lease costs	$	3,389	$	2,987	$	6,547	$	5,968

Schedule of weighted average remaining lease term and weighted average discount rate

The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:

	July 3,		January 2,
	2021		2021
Weighted average remaining lease term (years)		5.2		4.8
Weighted average discount rate		3.20%		3.94%

Future minimum lease payments under operating leases

As of July 3, 2021, the maturities of operating lease liabilities were as follows (in thousands):

	Maturities of Operating Lease Liabilities
Fiscal year:
2021 remaining	$	6,648
2022		8,472
2023		8,154
2024		7,210
2025		6,675
Thereafter		8,091
Total undiscounted future minimum lease payments		45,250
Less: Imputed interest		(3,647)
Total present value of future operating lease liabilities	$	41,603

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Earnings per Share (Tables)

6 Months Ended

Jul. 03, 2021

Earnings per Share

Schedule of calculations related to basic and diluted earning per share

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Weighted average shares outstanding:
Basic		64,776,532		64,129,778		64,679,761		64,088,464
Net effect of potentially dilutive share-based compensation awards		633,312		280,035		630,019		158,555
Diluted		65,409,844		64,409,813		65,309,780		64,247,019

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Share-Based Payments (Tables)

6 Months Ended

Jul. 03, 2021

Share-Based Payments

Schedule of stock option activity

The following table details our stock option activity for the first two quarters of fiscal 2021 (dollars in thousands, except per share data):

		Weighted		Weighted Average
		Average		Contractual Life	Aggregate
	Options	Exercise Price		Remaining (Years)	Intrinsic Value
Outstanding at January 2, 2021	1,030,667	$	31.41	5.50	$	591
Granted	246,911	$	33.79
Exercised	(466,112)	$	31.71
Forfeited	(37,627)	$	26.80
Expired	(2,171)	$	32.59
Outstanding at July 3, 2021	771,668	$	32.21	6.67	$	1,209
Exercisable at July 3, 2021	524,757	$	31.47	5.14	$	1,194

Schedule of stock options, valuation assumption

	2021		2020
Weighted average grant date fair value	$	6.48	$	4.51
Expected volatility		37.3% - 38.8%		45.4%
Expected term		5.5 - 6.5 years		5.5 years
Risk-free interest rate		0.9% - 1.1%		0.4%
Dividend yield		5.6% - 6.3%		7.9%

Schedule of non-vested performance share LTIAs

		Weighted Average
	Number of	Grant Date Fair Value
	Performance Shares(1)	(per share)(2)
Outstanding at January 2, 2021	986,223	$	15.56
Granted	450,104	$	28.71
Vested	(86,523)	$	21.36
Forfeited	(207,950)	$	16.75
Outstanding at July 3, 2021	1,141,854	$	20.08

(1) Solely for purposes of this table, the number of performance shares is based on the participants earning the maximum number of performance shares (i.e., 200% to 233% of the target number of performance shares).

(2) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes), reduced by the present value of expected dividends using the risk-free interest-rate, as the award holders are not entitled to dividends or dividend equivalents during the vesting period.

Restricted stock activity

		Weighted Average
	Number of Shares	Grant Date Fair Value
	of Restricted Stock	(per share)(1)
Outstanding at January 2, 2021	97,359	$	18.22
Granted	38,098	$	32.86
Vested	(59,867)	$	19.30
Forfeited	(956)	$	20.94
Outstanding at July 3, 2021	74,634	$	24.79

(1) The fair value of the awards was determined based upon the closing price of our common stock on the applicable measurement dates (i.e., the deemed grant dates for accounting purposes).

Schedule of number of shares of common stock issued by entity upon the vesting of performance share long-term incentive awards other share based compensation

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Number of performance shares vested		—		—		86,523		—
Shares withheld for tax withholding		—		—		(35,281)		—
Shares of common stock issued for performance share LTIAs		—		—		51,242		—
Shares of common stock issued upon the exercise of stock options		27,212		—		466,112		—
Shares of common stock issued to non-employee directors for annual equity grants		39,251		43,024		39,251		43,024
Shares of restricted common stock issued to employees		7,126		592		38,098		76,440
Shares of restricted stock withheld and cancelled for tax withholding upon vesting		(66)		(3,660)		(21,528)		(3,660)
Shares of restricted stock cancelled upon forfeiture		(956)		—		(956)		—
Net shares of common stock issued		72,567		39,956		572,219		115,804

Schedule of compensation expense recognized for share-based payments

The following table sets forth the compensation expense recognized for share-based payments (performance share LTIAs, restricted stock, stock options, non-employee director stock grants and other share-based payments) during the second quarter and first two quarters of 2021 and 2020 and where that expense is reflected in our consolidated statements of operations (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
Consolidated Statements of Operations Location	2021		2020		2021		2020
Compensation expense included in cost of goods sold	$	322	$	1,157	$	458	$	1,174
Compensation expense included in selling, general and administrative expenses		1,080		2,664		1,667		3,070
Total compensation expense for share-based payments	$	1,402	$	3,821	$	2,125	$	4,244

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Net Sales by Brand (Tables)

6 Months Ended

Jul. 03, 2021

Net Sales by Brand

Schedule of net sales by brand

The following table sets forth net sales by brand (in thousands):

	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Brand:(1)
Green Giant - frozen	$	74,061	$	105,262	$	172,676	$	213,401
Spices & Seasonings(2)		71,584		68,492		147,997		120,287
Crisco(3)		58,442		—		116,498		—
Ortega		40,850		46,797		79,801		85,578
Green Giant - shelf-stable(4)		23,767		49,032		49,232		86,962
Maple Grove Farms of Vermont		20,154		18,044		40,831		36,485
Dash		20,033		20,839		38,216		35,338
Clabber Girl(5)		17,580		26,453		34,993		45,132
Cream of Wheat		14,236		17,985		32,396		36,911
All other brands		123,668		159,635		256,869		301,815
Total	$	464,375	$	512,539	$	969,509	$	961,909

(1) Table includes net sales for each of our brands whose net sales for the first two quarters of 2021 or fiscal 2020 equaled or exceeded 3% of our total net sales for those periods, and for all other brands in the aggregate. Net sales for each brand includes branded net sales and, if applicable, any private label and foodservice net sales attributable to the brand.

(2) Includes net sales for multiple brands acquired as part of the spices & seasonings acquisition that we completed on November 21, 2016. Does not include net sales for Dash and our other legacy spices & seasonings brands.

(3) We completed the Crisco acquisition on December 1, 2020. See Note 3, “Acquisitions.”

(4) Does not include net sales of the Le Sueur brand. Net sales of the Le Sueur brand are included below in “All other brands.”

(5) Includes net sales for multiple brands acquired as part of the Clabber Girl acquisition that we completed on May 15, 2019, including, among others, the Clabber Girl, Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes.

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Summary of Significant Accounting Policies - Fiscal Year (Details)	6 Months Ended	12 Months Ended
	Jul. 03, 2021	Jan. 02, 2021
Fiscal Year
Number of weeks in fiscal period	364 days	371 days
Number of weeks in each fiscal quarter	91 days	91 days
Number of weeks in third fiscal quarter		98 days
Minimum
Fiscal Year
Number of years between 53 week fiscal years	5 years
Maximum
Fiscal Year
Number of years between 53 week fiscal years	6 years

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Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Dec. 01, 2020	Jul. 03, 2021	Jan. 02, 2021
Allocation:
Goodwill		$ 645,070	$ 644,747
Crisco Acquisition
Acquisitions and Divestitures
Cash paid	$ 539,300
Allocation:
Inventories	37,137
Prepaid expenses and other current assets	113
Property, plant and equipment, net	81,405
Operating lease right-of-use assets	1,477
Trademarks - indefinite-lived intangible assets	322,000
Customer relationship intangibles - finite-lived intangible assets	52,800
Current portion of operating lease liabilities	(565)
Long-term operating lease liabilities, net of current portion	(912)
Goodwill	45,806
Total purchase price (paid in cash)	$ 539,261

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Acquisitions - Pro Forma (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Unaudited Pro Forma Summary of Operations
Net sales	$ 464,375	$ 512,539	$ 969,509	$ 961,909
Crisco Acquisition
Unaudited Pro Forma Summary of Operations
Net sales - actual			$ 116,500
Net sales				1,113,331
Net income				$ 95,201
Basic earnings per share (in dollars per share)				$ 1.49
Diluted earnings per share (in dollars per share)				$ 1.48

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Inventories (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Inventories
Raw materials and packaging	$ 112,991	$ 87,843
Work-in-process	46,386	95,207
Finished goods	374,254	309,754
Inventories	$ 533,631	$ 492,804

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020	Jan. 02, 2021
Goodwill and Other Intangible Assets
Amortization expense	$ 5,399	$ 4,739	$ 10,835	$ 9,462
Amortizable Intangible Assets
Gross Carrying Amount	427,133		427,133		$ 427,001
Accumulated Amortization	163,810		163,810		152,975
Net Carrying Amount	263,323		263,323		274,026
Unamortizable Intangible Assets
Goodwill	645,070		645,070		644,747
Future amortization expense
Remainder of fiscal 2021	10,800		10,800
2022	21,600		21,600
2023	21,500		21,500
2024	21,400		21,400
2025	21,400		21,400
2026	20,700		20,700
Trademarks
Unamortizable Intangible Assets
Unamortizable intangible assets excluding goodwill	1,698,175		1,698,175		1,697,300
Trademarks
Amortizable Intangible Assets
Gross Carrying Amount	20,100		20,100		20,100
Accumulated Amortization	6,169		6,169		5,597
Net Carrying Amount	13,931		13,931		14,503
Customer relationship
Amortizable Intangible Assets
Gross Carrying Amount	407,033		407,033		406,901
Accumulated Amortization	157,641		157,641		147,378
Net Carrying Amount	$ 249,392		$ 249,392		$ 259,523

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Long-Term Debt (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021	Dec. 15, 2020	Oct. 10, 2019	Sep. 26, 2019	Nov. 20, 2017	Apr. 03, 2017
Information related to long-term debt
Outstanding principal	$ 2,346,625
Unamortized deferred financing costs	(18,575)	$ (20,324)
Unamortized discount/premium	(2,142)	(2,215)
Total long-term debt, net of unamortized deferred debt financing costs and discount/premium	2,325,908	2,334,086
Long-term debt, net of unamortized deferred debt financing costs and discount/premium and excluding current portion	2,325,908	2,334,086
Revolving credit loans
Information related to long-term debt
Outstanding principal	225,000	235,000
Tranche B Term Loan 2026
Information related to long-term debt
Outstanding principal	671,625	671,625	$ 371,600
4.625% Senior notes due 2021
Information related to long-term debt
Interest rate (as a percent)				4.625%
5.25% Senior Notes due 2025
Information related to long-term debt
Outstanding principal	$ 900,000	900,000
Interest rate (as a percent)	5.25%					5.25%	5.25%
5.25% Senior Notes due 2027
Information related to long-term debt
Outstanding principal	$ 550,000	$ 550,000			$ 550,000
Interest rate (as a percent)	5.25%				5.25%

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Long-Term Debt, Activity (Details) $ in Thousands	6 Months Ended
	Jul. 03, 2021 USD ($) item	Jan. 02, 2021 USD ($)	Dec. 16, 2020 USD ($)	Dec. 15, 2020 USD ($)	Oct. 10, 2019	Sep. 26, 2019 USD ($)	Nov. 20, 2017 USD ($)	Apr. 03, 2017 USD ($)
Information related to senior notes
Outstanding principal	$ 2,346,625
Accrued Interest
Accrued interest	$ 21,100	$ 20,900
LIBOR
Information related to senior notes
Interest rate added to variable base rate (as a percent)	2.50%
Base rate
Information related to senior notes
Interest rate added to variable base rate (as a percent)	1.00%
Revolving credit loans
Information related to senior notes
Outstanding principal	$ 225,000	235,000
Maximum capacity available			$ 800,000	$ 700,000
Outstanding letters of credit	4,900
Available borrowing capacity	$ 570,100
Commitment fees (as a percent)	0.50%
Number of quarters consolidated leverage ratio to be maintained | item	4
Revolving credit loans | Maximum
Information related to senior notes
Consolidated interest leverage ratio	1.75
Consolidated leverage ratio	7.00
Senior secured leverage ratio	4.00
Revolving credit loans | LIBOR | Minimum
Information related to senior notes
Interest rate added to variable base rate (as a percent)	1.25%
Revolving credit loans | LIBOR | Maximum
Information related to senior notes
Interest rate added to variable base rate (as a percent)	1.75%
Revolving credit loans | Base rate | Minimum
Information related to senior notes
Interest rate added to variable base rate (as a percent)	0.25%
Revolving credit loans | Base rate | Maximum
Information related to senior notes
Interest rate added to variable base rate (as a percent)	0.75%
Letters of credit facility
Information related to senior notes
Maximum capacity available	$ 50,000
Fronting fee (as a percent)	0.25%
4.625% Senior notes due 2021
Information related to senior notes
Interest rate (as a percent)					4.625%
5.25% Senior Notes due 2025
Information related to senior notes
Debt issuance price (as a percent)							101.00%	100.00%
Outstanding principal	$ 900,000	900,000
Principal amount of notes							$ 400,000	$ 500,000
Interest rate (as a percent)	5.25%						5.25%	5.25%
5.25% Senior Notes due 2025 | Redemption period beginning April 1, 2021
Information related to senior notes
Redemption price (as a percent)	102.625%
5.25% Senior Notes due 2025 | Redemption period on or after April 1, 2022
Information related to senior notes
Redemption price (as a percent)	101.3125%
5.25% Senior Notes due 2025 | Redemption period on or after April 1, 2023
Information related to senior notes
Redemption price (as a percent)	100.00%
5.25% Senior Notes due 2027
Information related to senior notes
Debt issuance price (as a percent)						100.00%
Outstanding principal	$ 550,000	550,000				$ 550,000
Interest rate (as a percent)	5.25%					5.25%
Percentage of principal amount redeemed or which may redeem	40.00%
5.25% Senior Notes due 2027 | From March 1st 2022 To February 28th 2025
Information related to senior notes
Redemption price (as a percent)	103.938%
5.25% Senior Notes due 2027 | On Or After March 1st 2025
Information related to senior notes
Redemption price (as a percent)	100.00%
Tranche B Term Loan 2026
Information related to senior notes
Increase in principal of debt	$ 300,000
Debt issuance price (as a percent)			99.00%
Outstanding principal	$ 671,625	$ 671,625		$ 371,600

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Long-Term Debt - Contractual Maturities (Details) $ in Thousands	Jul. 03, 2021 USD ($)
Aggregate contractual maturities of long-term debt
2025	$ 1,125,000
Thereafter	1,221,625
Outstanding principal	$ 2,346,625

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Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020	Jan. 02, 2021
Financial assets and liabilities at fair value
Long-term debt	$ 2,346,625		$ 2,346,625
Term loans and senior notes, carrying value	2,325,908		2,325,908		$ 2,334,086
Changes in level 3
Level 3 activity	0	$ 0	0	$ 0
Tranche B Term Loans due 2026
Financial assets and liabilities at fair value
Face amount of senior notes	$ 671,600		$ 671,600		$ 671,600
5.25% Senior Notes due 2025
Financial assets and liabilities at fair value
Interest rate (as a percent)	5.25%		5.25%		5.25%
Face amount of senior notes	$ 900,000		$ 900,000		$ 900,000
5.25% Senior Notes due 2027
Financial assets and liabilities at fair value
Interest rate (as a percent)	5.25%		5.25%		5.25%
Carrying Value | Revolving credit loans
Financial assets and liabilities at fair value
Term loans and senior notes, carrying value	$ 225,000		$ 225,000		$ 235,000
Carrying Value | Tranche B Term Loans due 2026
Financial assets and liabilities at fair value
Term loans and senior notes, carrying value	667,461		667,461		667,118
Carrying Value | 5.25% Senior Notes due 2025
Financial assets and liabilities at fair value
Term loans and senior notes, carrying value	902,022		902,022		902,292
Carrying Value | 5.25% Senior Notes due 2027
Financial assets and liabilities at fair value
Term loans and senior notes, carrying value	550,000		550,000		550,000
Fair value measured on recurring basis | Fair Value | Revolving credit loans | Level 2
Financial assets and liabilities at fair value
Term loans and senior notes, fair value	225,000		225,000		235,000
Fair value measured on recurring basis | Fair Value | Tranche B Term Loans due 2026
Financial assets and liabilities at fair value
Term loans and senior notes, fair value	667,461		667,461		665,450
Fair value measured on recurring basis | Fair Value | 5.25% Senior Notes due 2025 | Level 1
Financial assets and liabilities at fair value
Term loans and senior notes, fair value	926,828		926,828		931,616
Fair value measured on recurring basis | Fair Value | 5.25% Senior Notes due 2027
Financial assets and liabilities at fair value
Term loans and senior notes, fair value	$ 573,788		$ 573,788		$ 580,250

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Accumulated Other Comprehensive Loss - Reclassifications (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 03, 2021	Apr. 03, 2021	Jun. 27, 2020	Mar. 28, 2020	Jul. 03, 2021	Jun. 27, 2020
Reclassification from AOCL
Income tax expense	$ 8,968		$ 15,956		$ 18,191	$ 22,498
Net income	(24,551)	$ (26,878)	(44,911)	$ (28,092)	(51,429)	(73,003)
Defined Benefit Pension Plan Items | Amount Reclassified from AOCL
Reclassification from AOCL
Total before tax	403		296		845	696
Income tax expense	(99)		(77)		(207)	(181)
Net income	304		219		638	515
Amortization of unrecognized loss | Amount Reclassified from AOCL
Reclassification from AOCL
Total before tax	$ 403		$ 296		$ 845	$ 696

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Accumulated Other Comprehensive Loss - Changes in AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Changes in accumulated other comprehensive income (loss)
Beginning balance	$ 840,614	$ 796,287	$ 831,877	$ 812,542
Net current period other comprehensive income	4,200	1,890	4,038	(12,163)
Ending balance	841,605	817,149	841,605	817,149
Defined Benefit Pension Plan Items
Changes in accumulated other comprehensive income (loss)
Beginning balance			(27,631)
Amounts reclassified from AOCL			638
Net current period other comprehensive income			638
Ending balance	(26,993)		(26,993)
Foreign Currency Translation Adjustments
Changes in accumulated other comprehensive income (loss)
Beginning balance			(7,963)
Other comprehensive loss before reclassifications			3,400
Net current period other comprehensive income			3,400
Ending balance	(4,563)		(4,563)
Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive income (loss)
Beginning balance	(35,756)	(45,947)	(35,594)	(31,894)
Other comprehensive loss before reclassifications			3,400
Amounts reclassified from AOCL			638
Net current period other comprehensive income			4,038
Ending balance	$ (31,556)	$ (44,057)	$ (31,556)	$ (44,057)

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Stock Repurchases Program (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Mar. 10, 2021
Stock repurchase program
Stock repurchased (in shares)	0	0
Available for future repurchases (in dollars)	$ 50.0
Maximum
Stock repurchase program
Value of stock authorized for repurchase			$ 50.0

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Pension Benefits (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021 USD ($) plan	Jun. 27, 2020 USD ($)	Jul. 03, 2021 USD ($) plan	Jun. 27, 2020 USD ($)
Pension Benefits
Number of defined benefit pension plans sponsored by company | plan	4		4
Percentage of employees covered by defined benefit pension plans			33.00%
Number of defined benefit pension plans sponsored by company for union employees | plan			3
Number of defined benefit pension plans sponsored by company for salaried and certain hourly employees | plan			1
Change in projected benefit obligation:
Service cost	$ 2,603	$ 2,052	$ 5,229	$ 4,519
Interest cost	$ 1,208	$ 1,322	2,433	2,699
Change in plan assets:
Employer contributions			2,500	$ 8,000
Expected employer contributions			$ 3,000

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Pension Benefits - Net Periodic Pension Cost, AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Components of net periodic pension cost
Service cost-benefits earned during the period	$ 2,603	$ 2,052	$ 5,229	$ 4,519
Interest cost on projected benefit obligation	1,208	1,322	2,433	2,699
Expected return on plan assets	(2,727)	(2,319)	(5,484)	(4,548)
Amortization of unrecognized loss	403	296	845	696
Net periodic pension cost	$ 1,487	$ 1,351	$ 3,023	$ 3,366

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Pension Benefits - Multi-Employer Defined Benefit Pension Plan (Details) - USD ($) $ in Millions	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Dec. 31, 2020
Multi-Employer Defined Benefit Pension Plan
Maximum contribution to multi-employer plan (as a percent)	5.00%
Contribution to the multi-employer plan	$ 0.3	$ 0.4
Expected contributions to be paid	0.3
Surcharges expected to be paid	0.2
Defined benefit plan, Withdrawal liability	$ 14.1
Defined Benefit Plan Expected Withdrawal Liability Payout Period	20 years
Defined Benefit Plan, Withdrawal Liability, Annual Installments	$ 0.9
Defined benefit pension plans
Multi-Employer Defined Benefit Pension Plan
Plan expected to increase (as a percent)	5.00%
Multi-employee Plan Period Contribution Percentage Increase Suspended			5.00%

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Leases (Details)	6 Months Ended
	Jul. 03, 2021	Jan. 02, 2021
Lessee, Lease, Description [Line Items]
Remaining lease term	5 years 2 months 12 days	4 years 9 months 18 days
Option to terminate	true
Operating lease existence of option To terminate	true
Lessee, Operating Lease, Terminate Term	1 year
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	7 years
Operating lease renewal term	5 years

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Leases - Operating Leases on Balance Sheets (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Leases
Operating lease right-of-use assets	$ 38,704	$ 32,216
Current portion of operating lease liabilities	9,801	11,034
Long-term operating lease liabilities, net of current portion	31,802	23,959
Total operating lease liabilities	$ 41,603	$ 34,993

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Leases - Supplemental information related to leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Leases
Operating cash flows - Cash paid for amounts included in the measurement of operating lease liabilities	$ 3,073	$ 3,095	$ 6,423	$ 6,182
Cost of goods sold	1,158	1,012	2,342	2,016
Selling, general and administrative expenses	2,231	1,975	4,205	3,952
Total lease costs	3,389	2,987	6,547	5,968
Rent expense	$ 4,100	$ 3,800	$ 8,100	$ 7,300

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Leases - Lease term and discount rate for our ROU (Details)	Jul. 03, 2021	Jan. 02, 2021
Leases
Weighted average remaining lease term (years)	5 years 2 months 12 days	4 years 9 months 18 days
Weighted average discount rate	3.20%	3.94%

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Leases - Maturity of lease liabilities (Topic 842) (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Leases
2021 remaining	$ 6,648
2022	8,472
2023	8,154
2024	7,210
2025	6,675
Thereafter	8,091
Total undiscounted future minimum lease payments	45,250
Less: Imputed interest	(3,647)
Total present value of future operating lease liabilities	$ 41,603	$ 34,993

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Commitments and Contingencies - Collective Bargaining (Details)	6 Months Ended
	Jul. 03, 2021 employee agreement
Information related to Collective Bargaining Agreements
Number of employees	3,071
Covered under collective bargaining agreements
Information related to Collective Bargaining Agreements
Number of employees	1,966
Percentage of employees	64.00%
Covered under collective bargaining agreements | Collective Bargaining Agreement Covering Portland Maine Facility [Member]
Information related to Collective Bargaining Agreements
Number of employees	80
Collective bargaining agreements expiring with next 12 months
Information related to Collective Bargaining Agreements
Collective bargaining agreements expiration period	12 months
Number of collective bargaining agreements expiring within one year | agreement	1

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Earnings per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Earnings per Share
Antidilutive securities excluded from computation of loss per share	498,963	1,124,416
Weighted average shares outstanding:
Basic (in shares)	64,776,532	64,129,778	64,679,761	64,088,464
Net effect of potentially dilutive share-based compensation awards (in shares)	633,312	280,035	630,019	158,555
Diluted (in shares)	65,409,844	64,409,813	65,309,780	64,247,019

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Business and Credit Concentrations and Geographic Information (Details) - customer	6 Months Ended		12 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jan. 02, 2021
Net sales | Consolidated net sales | Top ten customers
Business and Credit Concentrations
Number of top customers	10	10
Percentage of concentration risk	60.80%	61.20%
Net sales | Consolidated net sales | Other than Walmart
Business and Credit Concentrations
Percentage of concentration risk		25.90%
Net sales | Consolidated net sales | Wal-Mart
Business and Credit Concentrations
Percentage of concentration risk	28.80%
Accounts receivable | Trade accounts receivables | Top ten customers
Business and Credit Concentrations
Number of top customers	10		10
Percentage of concentration risk	64.80%		62.60%
Accounts receivable | Trade accounts receivables | Other than Walmart
Business and Credit Concentrations
Percentage of concentration risk			32.60%
Accounts receivable | Trade accounts receivables | Wal-Mart
Business and Credit Concentrations
Percentage of concentration risk	32.50%
Foreign | Net sales | Consolidated net sales
Business and Credit Concentrations
Percentage of concentration risk	7.70%	7.90%

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Share-Based Payments - Stock Options (Details) - Stock Option - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jan. 02, 2021
Options
Outstanding at beginning of fiscal period (in shares)	1,030,667
Granted (in shares)	246,911
Exercised (in shares)	(466,112)
Forfeited (in shares)	(37,627)
Cancelled (in shares)	(2,171)
Outstanding at end of quarter (in shares)	771,668		1,030,667
Exercisable at end of fiscal 2016 (In shares)	524,757
Weighted Average Exercise Price
Outstanding at beginning of fiscal period (in dollar per share)	$ 31.41
Granted (in dollars per share)	33.79
Exercised (in dollars per share)	31.71
Forfeited (in dollars per share)	26.80
Cancelled (in dollars per share)	32.59
Outstanding at end of quarter (in dollar per share)	32.21		$ 31.41
Exercisable at end of quarter ( in dollars per share)	$ 31.47
Weighted Average Contractual Life Remaining (Years)
Weighted Average Contractual Life Remaining (Years)	6 years 8 months 1 day		5 years 6 months
Exercisable, Weighted Average Contractual Life Remaining (Years)	5 years 1 month 20 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value	$ 1,209		$ 591
Exercisable, Aggregate Intrinsic Value	$ 1,194
Assumptions:
Weighted average grant date fair value (in dollars per share)	$ 6.48	$ 4.51
Expected volatility (as a percent)		45.40%
Expected term		5 years 6 months
Risk-free interest rate (as a percent)		0.40%
Dividend yield (as a percent)		7.90%
Minimum
Assumptions:
Expected volatility (as a percent)	37.30%
Expected term	5 years 6 months
Risk-free interest rate (as a percent)	0.90%
Dividend yield (as a percent)	5.60%
Maximum
Assumptions:
Expected volatility (as a percent)	38.80%
Expected term	6 years 6 months
Risk-free interest rate (as a percent)	1.10%
Dividend yield (as a percent)	6.30%

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Share-Based Payments - Performance (Details)	6 Months Ended
	Jul. 03, 2021 $ / shares shares
Performance shares
Number of Shares
Balance at the beginning of the period (in shares) | shares	986,223
Granted (in shares) | shares	450,104
Vested (in shares) | shares	(86,523)
Forfeited (in shares) | shares	(207,950)
Balance at the end of the period (in shares) | shares	1,141,854
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share) | $ / shares	$ 15.56
Granted (in dollars per share) | $ / shares	28.71
Vested (in dollars per share) | $ / shares	21.36
Forfeited (in dollars per share) | $ / shares	16.75
Balance at the end of the period (in dollars per share) | $ / shares	$ 20.08
Performance shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of target number of shares that may be earned	200.00%
Performance shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of target number of shares that may be earned	233.00%
Restricted Stock
Number of Shares
Balance at the beginning of the period (in shares) | shares	97,359
Granted (in shares) | shares	38,098
Vested (in shares) | shares	(59,867)
Forfeited (in shares) | shares	(956)
Balance at the end of the period (in shares) | shares	74,634
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share) | $ / shares	$ 18.22
Granted (in dollars per share) | $ / shares	32.86
Vested (in dollars per share) | $ / shares	19.30
Forfeited (in dollars per share) | $ / shares	20.94
Balance at the end of the period (in dollars per share) | $ / shares	$ 24.79

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Share-Based Payments - Other Vested (Details) - shares	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Cancellation of restricted stock upon forfeiture (in shares)	(956,000)		(956,000)
Net shares of common stock issued	72,567,000	39,956,000	572,219,000	115,804,000
Performance shares
Share based compensation expense related to long-term incentive plans
Number of performance shares vested			86,523
Performance shares | Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Number of performance shares vested			86,523,000
Shares withheld for tax withholding			(35,281,000)
Net shares of common stock issued			51,242,000
Stock Option | Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Net shares of common stock issued	27,212,000		466,112,000
Restricted Stock
Share based compensation expense related to long-term incentive plans
Number of performance shares vested			59,867
Restricted Stock | Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Shares withheld for tax withholding	(66,000)	(3,660,000)	(21,528,000)	(3,660,000)
Restricted Stock | Employee | Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Net shares of common stock issued	7,126,000	592,000	38,098,000	76,440,000
Annual Equity Grants | Board Members | Non-employee director | Common Class A [Member]
Share based compensation expense related to long-term incentive plans
Net shares of common stock issued	39,251,000	43,024,000	39,251,000	43,024,000

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Share-Based Payments - Share-based payments (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jun. 29, 2019	Jul. 03, 2021	Jun. 27, 2020
Compensation expense
Total compensation expense for share-based payments	$ 1,402	$ 3,821		$ 2,125	$ 4,244
Performance shares
Compensation expense
Unrecognized compensation expense, other than stock option	7,300			$ 7,300
Period over which unrecognized compensation expense is expected to be recognized				2 years 6 months
Restricted Stock
Compensation expense
Unrecognized compensation expense, stock option	1,600			$ 1,600
Period over which unrecognized compensation expense is expected to be recognized				3 years
Stock Option
Compensation expense
Additional pre-tax share based compensation expense			$ 2,300
Unrecognized compensation expense, stock option	1,600			$ 1,600
Period over which unrecognized compensation expense is expected to be recognized				2 years 9 months 18 days
Cost of Goods Sold
Compensation expense
Total compensation expense for share-based payments	322	1,157		$ 458	1,174
Selling, General and Administrative Expenses
Compensation expense
Total compensation expense for share-based payments	$ 1,080	$ 2,664		$ 1,667	$ 3,070

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Separation Expenses (Details) - Separation of former president and chief executive officer - Employee severance - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jan. 02, 2021	Jul. 03, 2021
Restructuring Cost and Reserve [Line Items]
Severance and related charges	$ 4.2
Severance Costs	1.7	$ 0.8
Severance additional charges	$ 2.5

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Net Sales by Brand (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Brand
Net sales	$ 464,375	$ 512,539	$ 969,509	$ 961,909
Specific brand sale to total sale (as a percent)			3.00%
Green Giant - frozen
Brand
Net sales	74,061	105,262	$ 172,676	213,401
Spices and Seasonings
Brand
Net sales	71,584	68,492	147,997	120,287
Crisco
Brand
Net sales	58,442		116,498
Green Giant - shelf stable
Brand
Net sales	23,767	49,032	49,232	86,962
Ortega
Brand
Net sales	40,850	46,797	79,801	85,578
Clabber Girl
Brand
Net sales	17,580	26,453	34,993	45,132
Maple Grove Farms of Vermont
Brand
Net sales	20,154	18,044	40,831	36,485
Cream of Wheat
Brand
Net sales	14,236	17,985	32,396	36,911
Mrs. Dash
Brand
Net sales	20,033	20,839	38,216	35,338
All other brands
Brand
Net sales	$ 123,668	$ 159,635	$ 256,869	$ 301,815