As filed with the Securities and Exchange Commission on July 30, 2007

****UNITED STATESSECURITIES AND EXCHANGE COMMISSION****

****Washington, D.C. 20549****

****FORM 10-Q****

(Mark one)
|            | ** ** | ** **                                             | ** ** | ** **                                                                                                                                                                                     |
|------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       | ** ** | ** **                                             | ** ** | ** **                                                                                                                                                                                     |
| **x**      | ** ** | **Quarterly  Report Pursuant to Section 13 or 15(d)**  | ** ** | **                               ** |
| ** ** | ** ** | **of the  Securities Exchange Act of 1934**            | ** ** | ** **                                                                                                                                                                                     |
| ** ** | ** ** | ** **                                             | ** ** | ** **                                                                                                                                                                                     |
| ** ** |       | For the  quarterly period ended June 30, 2007          |       |                                                                                                                                                                                           |
| ** ** | ** ** | ** **                                             | ** ** | ** **                                                                                                                                                                                     |
| ** ** |       | or                                                     |       |                                                                                                                                                                                           |
| ** ** | ** ** | ** **                                             | ** ** | ** **                                                                                                                                                                                     |
| o          | ** ** | **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)                          |   |                                  |
|                                                     |   |                                  |
| **4  Gatehall Drive, Suite 110, Parsippany, New Jersey** |   | **07054**                             |
| (Address of  principal executive offices)                |   | (Zip Code)                            |

 

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

Indicate by check markwhether the registrant: (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports) and (2) has been subject to such filing requirements for the past90 days. Yes  x   No o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

| Large accelerated filer   o |   | Accelerated  filer   x |   | Non-accelerated  filer   o |
|--------------------------------------------|--------|---------------------------------------|--------|-------------------------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes o   No x

As of July 25, 2007, theregistrant had 36,778,988 shares of Class A common stock, par value $0.01 pershare issued and outstanding, 17,290,567 of which were held in the form ofEnhanced Income Securities (EISs) and 19,488,421 of which were held separatefrom EISs. Each EIS represents one share of Class A common stock and $7.15principal amount of 12% senior subordinated notes due 2016. As of July 25,2007, the registrant had no shares of Class B common stock, par value $0.01 pershare, issued or outstanding.

 

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B&G Foods, Inc. andSubsidiariesIndex
|                               | ** ** |                                                                                             | ** ** | **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 Cash Flows                                                       |       |   3     |
|                          |       |                                                                                        |       |              |
|                          |       | Notes to Consolidated Financial Statements                                                  |       |   4     |
|                          |       |                                                                                        |       |              |
| Item 2                        |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations |       | 17                |
|                          |       |                                                                                        |       |              |
| Item 3.                       |       | Quantitative and Qualitative Disclosures About Market  Risk                                 |       | 34                |
|                          |       |                                                                                        |       |              |
| Item 4.                       |       | Controls and Procedures                                                                     |       | 34                |
|                          |       |                                                                                        |       |              |
| PART II OTHER  INFORMATION    |       | 35                                                                                          |
|                          |       |                                                                                        |       |              |
| Item  1.                      |       | Legal  Proceedings                                                                          |       | 35                |
|                          |       |                                                                                        |       |              |
| Item 1A.                      |       | Risk  Factors                                                                               |       | 35                |
|                          |       |                                                                                        |       |              |
| Item 2.                       |       | Unregistered Sales of Equity Securities and Use of  Proceeds                                |       | 36                |
|                          |       |                                                                                        |       |              |
| Item 3.                       |       | Defaults Upon Senior Securities                                                             |       | 36                |
|                          |       |                                                                                        |       |              |
| Item 4.                       |       | Submission of Matters to a Vote of Security Holders                                         |       | 36                |
|                          |       |                                                                                        |       |              |
| Item  5.                      |       | Other  Information                                                                          |       | 37                |
|                          |       |                                                                                        |       |              |
| Item 6.                       |       | Exhibits                                                                                    |       | 37                |
|                          |       |                                                                                        |       |              |
| SIGNATURE                     |       | 38                                                                                          |

 

-i-

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**PARTIFINANCIAL INFORMATION**

**Item 1.  Financial Statements (Unaudited)**

**B&GFoods, Inc. and SubsidiariesConsolidated Balance Sheets(Dollars in thousands, except per share data)(Unaudited)**

** **
| **Assets**                                                                                                                                                                                                | ** ** | **June 30, 2007** | ** ** | **December 30, 2006** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|------------|---------------------------------|------------|
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| Current assets:                                                                                                                                                                                           |       |                        |       |                            |       |
| Cash and cash  equivalents                                                                                                                                                                                |       | $                           | 37,426     |                            | $          | 29,626 |   |
| Trade accounts  receivable, net                                                                                                                                                                           |       | 32,318                      |       | 31,090                          |       |
| Inventories                                                                                                                                                                                               |       | 90,255                      |       | 78,269                          |       |
| Prepaid expenses                                                                                                                                                                                          |       | 2,762                       |       | 3,246                           |       |
| Income tax  receivable                                                                                                                                                                                    |       | 577                         |       | 516                             |       |
| Deferred income  taxes                                                                                                                                                                                    |       | 2,574                       |       | 2,574                           |       |
| Total current  assets                                                                                                                                                                                     |       | 165,912                     |       | 145,321                         |       |
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| Property, plant and  equipment, net of accumulated depreciation of $51,394 and $47,720                                                                                                                    |       | 46,086                      |       | 40,269                          |       |
| Goodwill                                                                                                                                                                                                  |       | 253,763                     |       | 198,076                         |       |
| Trademarks                                                                                                                                                                                                |       | 227,220                     |       | 200,220                         |       |
| Customer relationship  intangibles, net                                                                                                                                                                   |       | 125,993                     |       | 14,369                          |       |
| Net deferred financing  costs and other assets                                                                                                                                                            |       | 20,599                      |       | 17,950                          |       |
| Total assets                                                                                                                                                                                              |       | $                           | 839,573    |                            | $          | 616,205 |   |
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| **Liabilities  and Stockholders’ Equity**                                                                                                                                                            | ** ** | ** **                  | ** ** | ** **                      | ** ** |
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| Current liabilities:                                                                                                                                                                                      |       |                        |       |                            |       |
| Trade accounts  payable                                                                                                                                                                                   |       | $                           | 23,828     |                            | $          | 21,520 |   |
| Accrued expenses                                                                                                                                                                                          |       | 16,685                      |       | 16,520                          |       |
| Dividends  payable                                                                                                                                                                                        |       | 7,797                       |       | 4,240                           |       |
| Total current  liabilities                                                                                                                                                                                |       | 48,310                      |       | 42,280                          |       |
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| Long-term debt                                                                                                                                                                                            |       | 535,800                     |       | 430,800                         |       |
| Other liabilities                                                                                                                                                                                         |       | 4,771                       |       | 4,972                           |       |
| Deferred income taxes                                                                                                                                                                                     |       | 67,281                      |       | 62,666                          |       |
| Total  liabilities                                                                                                                                                                                        |       | 656,162                     |       | 540,718                         |       |
|                                                                                                                                                                                                      |       |                        |       |                            |       |
| Stockholders’ equity:                                                                                                                                                                                |       |                        |       |                            |       |
| Preferred stock,  $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or  outstanding                                                                                                |       | —                      |       | —                          |       |
| Class A common  stock, $0.01 par value per share. Authorized 100,000,000 shares; 36,778,988  and 20,000,000 shares issued and outstanding as of June 30, 2007 and December  30, 2006, respectively        |       | 368                         |       | 200                             |       |
| Class B common  stock, $0.01 par value per share. Authorized 25,000,000 shares; no shares  issued or outstanding as of June 30, 2007 and 7,556,443 shares issued and  outstanding as of December 30, 2006 |       | —                      |       | 76                              |       |
| Additional paid-in  capital                                                                                                                                                                               |       | 217,832                     |       | 119,152                         |       |
| Accumulated other  comprehensive loss                                                                                                                                                                     |       | (563                        | )          | (1,904                          | )          |
| Accumulated deficit                                                                                                                                                                                       |       | (34,226                     | )          | (42,037                         | )          |
| Total  stockholders’ equity                                                                                                                                                                          |       | 183,411                     |       | 75,487                          |       |
| Total liabilities and  stockholders’ equity                                                                                                                                                          |       | $                           | 839,573    |                            | $          | 616,205 |   |

 

See Notes to ConsolidatedFinancial Statements.

1

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**B&GFoods, Inc. and SubsidiariesConsolidated Statements of Operations(Dollars in thousands, except per share data)(Unaudited)**

 
| ** **                                         | ** ** | **Thirteen Weeks Ended** | ** ** | **Twenty-six Weeks Ended** | ** ** |
|----------------------------------------------------|------------|------------------------------------|------------|--------------------------------------|------------|
| ** **                                         | ** ** | **June 30, 2007**        | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
|                                               |       |                               |       |                                 |       |   |   |   |   |
| Net sales                                          |       | $                                  | 118,204    |                                 | $          | 105,265 |   | $ | 221,949 |   | $ | 198,245 |   |
| Cost of goods sold                                 |       | 80,881                             |       | 76,862                               |       | 151,943 |   | 141,976 |   |
| Gross profit                                       |       | 37,323                             |       | 28,403                               |       | 70,006 |   | 56,269 |   |
|                                               |       |                               |       |                                 |       |   |   |   |   |
| Operating expenses:                                |       |                               |       |                                 |       |   |   |   |   |
| Sales, marketing and  distribution expenses        |       | 12,566                             |       | 11,588                               |       | 24,070 |   | 22,069 |   |
| General and  administrative expenses               |       | 1,598                              |       | 1,775                                |       | 3,428 |   | 3,463 |   |
| Amortization  expense—customer relationships  |       | 1,613                              |       | 354                                  |       | 2,276 |   | 354 |   |
| Operating income                                   |       | 21,546                             |       | 14,686                               |       | 40,232 |   | 30,383 |   |
|                                               |       |                               |       |                                 |       |   |   |   |   |
| Other expenses:                                    |       |                               |       |                                 |       |   |   |   |   |
| Interest  expense, net                             |       | 15,529                             |       | 10,929                               |       | 27,654 |   | 21,787 |   |
| Income before income  tax expense                  |       | 6,017                              |       | 3,757                                |       | 12,578 |   | 8,596 |   |
| Income tax expense                                 |       | 2,280                              |       | 1,448                                |       | 4,767 |   | 3,335 |   |
| Net income                                         |       | $                                  | 3,737      |                                 | $          | 2,309 |   | 7,811 |   | 5,261 |   |
|                                               |       |                               |       |                                 |       |   |   |   |   |
| Earnings per share  calculations:                  |       |                               |       |                                 |       |   |   |   |   |
| Basic and  diluted distributed earnings per share: |       |                               |       |                                 |       |   |   |   |   |
| Class A common  stock                              |       | $                                  | 0.30       |                                 | $          | 0.21 |   | $ | 0.52 |   | $ | 0.42 |   |
| Basic and  diluted earnings (loss) per share:      |       |                               |       |                                 |       |   |   |   |   |
| Class A common  stock                              |       | $                                  | 0.17       |                                 | $          | 0.14 |   | $ | 0.38 |   | $ | 0.30 |   |
| Class B common  stock                              |       | $                                  | (0.13      | )                                    | $          | (0.07 | ) | $ | (0.14 | ) | $ | (0.12 | ) |

 

See Notes to Consolidated Financial Statements.

2

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**B&G Foods,Inc. and SubsidiariesConsolidated Statements of Cash Flows(Dollars in thousands)(Unaudited)**
| ** **                                                                         | ** ** | **Twenty-six Weeks Ended** | ** ** |
|------------------------------------------------------------------------------------|------------|--------------------------------------|------------|
| ** **                                                                         | ** ** | **June 30, 2007**          | ** ** | **July 1, 2006** | ** ** |
| ** **                                                                         |       |                                 | ** ** | ** ** | ** ** |
| **Cash flows from operating  activities:**                                         |       |                                 |       |   |   |
| Net income                                                                         |       | $                                    | 7,811      |   | $ | 5,261 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities: |       |                                 |       |   |   |
| Depreciation and  amortization                                                     |       | 5,863                                |       | 3,904 |   |
| Amortization of  deferred debt issuance costs                                      |       | 1,605                                |       | 1,412 |   |
| Deferred income  taxes                                                             |       | 3,842                                |       | 2,794 |   |
| Write off of  deferred debt issuance costs                                         |       | 1,769                                |       | — |   |
| Changes in  assets and liabilities, net of effects of business acquired:           |       |                                 |       |   |   |
| Trade accounts  receivable                                                         |       | (1,228                               | )          | 2,794 |   |
| Inventories                                                                        |       | (10,497                              | )          | (5,190 | ) |
| Prepaid expenses                                                                   |       | 484                                  |       | 91 |   |
| Income tax  receivable                                                             |       | (61                                  | )          | 618 |   |
| Other assets                                                                       |       | (8                                   | )          | (4 | ) |
| Trade accounts  payable                                                            |       | 2,308                                |       | 1,410 |   |
| Accrued expenses                                                                   |       | 117                                  |       | 990 |   |
| Other  liabilities                                                                 |       | (175                                 | )          | (36 | ) |
| Net cash  provided by operating activities                                         |       | 11,830                               |       | 14,044 |   |
|                                                                               |       |                                 |       |   |   |
| **Cash flows from investing  activities:**                                         |       |                                 |       |   |   |
| Capital  expenditures                                                              |       | (6,496                               | )          | (4,013 | ) |
| Payments for  acquisition of businesses                                            |       | (200,936                             | )          | (30,098 | ) |
| Net cash used in  investing activities                                             |       | (207,432                             | )          | (34,111 | ) |
|                                                                               |       |                                 |       |   |   |
| **Cash flows from financing  activities:**                                         |       |                                 |       |   |   |
| Payments of  long-term debt                                                        |       | (100,000                             | )          | — |   |
| Proceeds from  issuance of long-term debt                                          |       | 205,000                              |       | 25,000 |   |
| Payments for  repurchase of Class B common stock                                   |       | (82,417                              | )          | — |   |
| Proceeds from  issuance of Class A common stock, net                               |       | 193,226                              |       | — |   |
| Dividends paid                                                                     |       | (8,480                               | )          | (8,480 | ) |
| Payment of debt  issuance costs                                                    |       | (4,001                               | )          | (404 | ) |
| Net cash provided  by financing activities                                         |       | 203,328                              |       | 16,116 |   |
|                                                                               |       |                                 |       |   |   |
| Effect of  exchange rate fluctuations on cash and cash equivalents                 |       | 74                                   |       | 63 |   |
| Net increase  (decrease) in cash and cash equivalents                              |       | 7,800                                |       | (3,888 | ) |
|                                                                               |       |                                 |       |   |   |
| Cash and cash  equivalents at beginning of period                                  |       | 29,626                               |       | 25,429 |   |
| Cash and cash  equivalents at end of period                                        |       | $                                    | 37,426     |   | $ | 21,541 |   |
| ** **                                                                         |       |                                 |       |   |   |
| **Supplemental disclosures of  cash flow information:**                            |       |                                 |       |   |   |
| Cash interest  payments                                                            |       | $                                    | 23,859     |   | $ | 19,985 |   |
| Cash income tax  payments                                                          |       | $                                    | 547        |   | $ | 438 |   |
| Cash income tax  refunds                                                           |       | $                                    | (91        | ) | $ | (800 | ) |
| Non-cash  transactions:                                                            |       |                                 |       |   |   |
| Dividends declared and  not yet paid                                               |       | $                                    | 7,797      |   | $ | 4,240 |   |

 

See Notes to Consolidated Financial Statements.

3

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements**

**(Unaudited)**

**(1)           Natureof Operations**

B&G Foods, Inc. is a holding company, theprincipal assets of which are the 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.  We operate in one industry segment andmanufacture, sell and distribute a diversified portfolio of high-qualityshelf-stable foods across the United States, Canada and Puerto Rico.  Our products include jams, jellies and fruitspreads, canned meats and beans, spices, seasonings, marinades, hot sauces,wine vinegar, hot cereals, molasses, maple syrup, salad dressings, Mexican-stylesauces, taco shells and kits, salsas, pickles, peppers and other specialty foodproducts.  We compete in the retailgrocery, food service, specialty store, private label, club and massmerchandiser channels of distribution. We distribute these products to retailers in the greater New Yorkmetropolitan area through a direct-store-delivery sales and distribution systemand elsewhere in the United States through a nationwide network of independentbrokers and distributors.

***Recent Acquisitions***

On January 10, 2006, we acquired the *Grandma’s*molasses business for approximately $30.1 millionin cash, including transaction costs, from Mott’s LLP, a Cadbury SchweppesAmericas Beverages company.  EffectiveFebruary 25, 2007, we completed the acquisition of the *Cream ofWheat*and *Cream of Rice*businessfor approximately $200.9 million in cash, including transaction costs, fromKraft Foods Global, Inc.  We refer to the*Cream of Wheat*and *Cream ofRice*acquisition as the “*Cream of Wheat*acquisition”and the *Cream of Wheat*and *Cream ofRice*businesses collectively as the “*Cream ofWheat* business.”

The acquisitions described above were accounted forusing the purchase method of accounting and, accordingly, the assets acquiredand results of operations are included in our consolidated financial statementsfrom the respective dates of the acquisitions. The excess of the purchase price over the fair value of identifiable netassets acquired represents goodwill. Trademarks are deemed to have an indefinite useful life and are notamortized.  Customer relationshipintangibles are amortized over 20 years. Goodwill, customer relationship intangibles and trademarks aredeductible for income tax purposes.

The following table sets forth the preliminaryallocation of the *Cream of Wheat*purchase price tothe estimated fair value of the net assets acquired at the date of acquisitionbased upon currently available information. Inventory has been recorded at estimated selling price less costs ofdisposal and a reasonable profit.  Equipmenthas been recorded at estimated fair value as determined by a third-partyvaluation.  We have also obtained athird-party valuation of the intangible assets acquired (including trademarksand customer relationship intangibles). Management does not expect any adjustments to the preliminary allocationto be material.

| Acquisition of the *Cream of Wheat* business (dollars in thousands): | ** ** | ** ** | ** ** | ** ** | ** ** |
|-------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| Inventory                                                                                                         |       | $          | 1,489      |       |
| Equipment                                                                                                         |       | 2,860      |       |
| Goodwill                                                                                                          |       | 55,687     |       |
| Trademarks—indefinite  life intangible assets                                                                |       | 27,000     |       |
| Customer  relationship intangibles—amortizable intangible assets                                             |       | 113,900    |       |
| Total                                                                                                             |       | $          | 200,936    |       |

 

During the second quarter of fiscal 2006, we obtaineda third-party valuation of certain acquired assets, including intangibleassets, and finalized our internal assessments of the purchase price allocationfor the *Grandma’s* molasses acquisition.  The following table sets forth the purchaseprice allocation:

4

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(1)           Natureof Operations (continued)**

| Acquisition of the *Grandma’s* molasses business (dollars in thousands): | ** ** | ** ** | ** ** | ** ** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| Equipment                                                                                                             |       | $          | 25         |       |
| Goodwill                                                                                                              |       | 9,877      |       |
| Trademarks—indefinite  life intangible assets                                                                    |       | 5,100      |       |
| Customer  relationship intangibles—amortizable intangible assets                                                 |       | 15,100     |       |
| Total                                                                                                                 |       | $          | 30,102     |       |

 

***Pro Forma Summary of Operations***

The following pro forma summary of operations for thefirst two quarters of 2007 and the second quarter and first two quarters of2006 presents our operations as if the *Creamof Wheat* acquisition had occurred as of the beginning of each periodpresented.  In addition to including theresults of operations of the *Cream of Wheat*business,the pro forma information gives effect to interest on additional borrowings andchanges in depreciation of property, plant and equipment and amortization ofcustomer relationship intangibles.  Nopro forma financial information has been presented for the *Grandma’s*molassesacquisition because such pro forma financial information is not material to ourconsolidated statements of operations for the periods presented.
| ** **                                                        | ** ** | **Thirteen weeks ended**   | ** ** | **Twenty-six weeks ended** | ** ** |
|-------------------------------------------------------------------|------------|--------------------------------------|------------|--------------------------------------|------------|
| ** **                                                        | ** ** | **June 30, 2007**          | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| ** **                                                        | ** ** | **(Actual)**                         | ** ** | **(Pro forma)**                 | ** ** | **(Pro forma)** | ** ** | **(Pro forma)** | ** ** |
| ** **                                                        | ** ** | **(dollars in thousands)** | ** ** |
| Net sales                                                         |       | $                                    | 118,204    |                                 | $          | 117,950 |   | $ | 233,382 |   | $ | 228,039 |   |
| Net income                                                        |       | 3,737                                |       | 3,023                                |       | 9,819 |   | 9,307 |   |
| Basic and  diluted earnings per share Class A common stock        |       | $                                    | 0.17       |                                 | $          | 0.17 |   | $ | 0.34 |   | $ | 0.45 |   |
| Basic and diluted  earnings (loss) per share Class B common stock |       | $                                    | (0.13      | )                                    | $          | (0.04 | ) | $ | (0.08 | ) | $ | 0.03 |   |

 

The pro forma information presented above does notpurport to be indicative of the results that actually would have been attainedif the *Cream of Wheat* acquisitionhad occurred as of the beginning of each period presented and is not intendedto be a projection of future results.

***Class A Common Stock Offering***

On May 29, 2007, we completed a public offering of15,985,000 shares of our Class A common stock as a separately traded security,which includes 2,085,000 shares issued pursuant to the fully exercisedunderwriters’ option to purchase additional shares, at $13.00 per share.  The shares of our separately traded Class Acommon stock trade on the New York Stock Exchange under the trading symbol “BGS”and trade separately from our Enhanced Income Securities (EISs), which trade onthe New York Stock Exchange under the trading symbol “BGF.”  Each EIS represents one share of our Class Acommon stock and $7.15 principal amount of our senior subordinated notes.

The proceeds of the Class A common stock offering were$193.2 million, after deducting underwriting discounts and commissions andother expenses.  In connection with theoffering, we repurchased 6,762,455 outstanding shares of our Class B commonstock for $82.4 million, and the remaining 793,988 

5

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(1)           Nature of Operations (continued)**

shares of our outstanding Class B common stock wereexchanged for an equal number of shares of Class A common stock.  See note 9, “Related-Party Transactions.”  We also prepaid $100.0 million of our termloan borrowings under our senior secured credit facility.  The remaining funds are being used for generalcorporate purposes.

The holders of our EISs may separate each EIS into oneshare of Class A common stock and $7.15 principal amount of senior subordinatednotes at any time.  Upon the occurrenceof certain events EISs will automatically separate.  Conversely, subject to limitations, a holderof separate shares of Class A common stock and senior subordinated notes cancombine such securities to form EISs. Separation and combination of EISs will automatically result inincreases and decreases, respectively, in the number of shares of Class Acommon stock not in the form of EISs.  Asof June 30, 2007, we had 36,778,988 shares of Class A common stock issued andoutstanding, 18,895,867 of which were held in the form of EISs and 17,883,121of which were held separate from EISs. As of December 30, 2006, we had 20,000,000 shares of Class A commonstock issued and outstanding, all of which were held in the form of EISs.

**(2)**           Summary of Significant AccountingPolicies

***Fiscal Year***

Our financial statements are presented on aconsolidated basis.  Typically, ourfiscal 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 yearand fourth fiscal quarter, and on the Saturday closest to the end of thecorresponding calendar quarter in the case of our fiscal quarters.  As a result, a 53rd week is added to ourfiscal year every five or six years.  Ina 53-week fiscal year our fourth fiscal quarter contains 14 weeks.  The fiscal years ending December 29, 2007(fiscal 2007) and December 30, 2006 (fiscal 2006) each contain 52 weeks.  Each quarter of fiscal 2007 and fiscal 2006contains 13 weeks.

***Basis ofPresentation***

Theaccompanying consolidated interim financial statements for the thirteen andtwenty-six week periods ended June 30, 2007 (second quarter of 2007 and firsttwo quarters of 2007) and July 1, 2006 (second quarter of 2006 and first twoquarters of 2006) have been prepared by our company in accordance withaccounting principles generally accepted in the United States of Americawithout audit, pursuant to the rules and regulations of the Securities andExchange Commission (SEC), and include the accounts of B&G Foods,Inc. and its subsidiaries.  Certaininformation and footnote disclosures normally included in annual financialstatements prepared in accordance with generally accepted accounting principleshave been omitted pursuant to such rules and regulations.  However, our management believes, to the bestof their knowledge, that the disclosures herein are adequate to make theinformation presented not misleading.  Allintercompany balances and transactions have been eliminated.  The accompanying unaudited consolidatedinterim financial statements contain all adjustments (consisting only of normaland recurring adjustments) that are, in the opinion of management, necessary topresent fairly our consolidated financial position as of June 30, 2007, theresults of our operations for the second quarter and first two quarters of 2007and 2006, and cash flows for the first two quarters of 2007 and 2006.  Our results of operations for the secondquarter and first two quarters of 2007 are not necessarily indicative of theresults to be expected for the full year. The accompanying unaudited consolidated interim financial statementsshould be read in conjunction with the audited consolidated financialstatements and notes for fiscal 2006 included in our Annual Report on Form10-K/A for fiscal 2006 filed with the SEC on March 9, 2007.

6

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(2)**           Summary of Significant Accounting Policies (continued)

***Use of Estimates***

Thepreparation of financial statements in accordance with U.S. generally acceptedaccounting principles requires our management to make a number of estimates andassumptions relating to the reporting of assets and liabilities and thedisclosure of contingent assets and liabilities at the date of the consolidatedfinancial statements and the reported amounts of revenues and expenses duringthe reporting period.  Some of the moresignificant estimates and assumptions made by management involve trade andconsumer promotion expenses; allowances for excess, obsolete and unsaleableinventories; pension benefits; purchase accounting allocations; therecoverability of goodwill, trademarks, customer relationship intangibles,property, plant and equipment and deferred tax assets; the accounting for ourenhanced income securities (EISs), including their treatment in computing ourincome tax expense; and the accounting for earnings per share.  Actual results could differ from thoseestimates and assumptions.

***Adoption of NewAccounting Standards***

In July 2006, the FASB issued FASB Interpretation No.48, “*Accounting for Uncertainty in Income Taxes*”(FIN 48).  FIN 48 prescribes acomprehensive model for how a company should recognize, measure, present, anddisclose in its financial statements uncertain tax positions that the companyhas taken or expects to take on a tax return. FIN 48 states that a tax benefit from an uncertain tax position may berecognized only if it is “more likely than not” that the position issustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of taxbenefit that is greater than 50% likely of being realized upon settlement witha taxing authority having full knowledge of all relevant information.  A tax benefit from an uncertain position waspreviously recognized if it was probable of being sustained.  Under FIN 48, the liability for unrecognizedtax benefits is classified as non-current unless the liability is expected tobe settled in cash within 12 months of the reporting date.  FIN 48 is effective as of the beginning ofthe first fiscal year beginning after December 15, 2006.  We adopted the provisions of FIN 48 at thebeginning of fiscal 2007.  On May 2,2007, the FASB issued FASB Staff Position No. 48-1, “*Definitionof Settlement in FASB Interpretation 48*” (FIN 48-1).  FIN 48-1 amends FIN 48 to provide guidance onhow an enterprise should determine whether a tax position is effectivelysettled for the purpose of recognizing previously unrecognized taxbenefits.  The guidance in FIN 48-1 is tobe applied upon the initial adoption of FIN 48. Accordingly, we have applied the provisions of FIN 48-1 at the beginningof fiscal 2007.  As a result of theadoption of FIN 48, as amended by FIN 48-1, we reclassified $0.2 million toother non-current liabilities.

We operate in multiple taxing jurisdictions within theUnited States and Canada and from time to time face audits from various taxauthorities regarding the deductibility of certain expenses, state income taxnexus, intercompany transactions, transfer pricing and other matters.  At the beginning of fiscal 2007, ourliability for unrecognized tax benefits was all related to state income taxesand Canadian income taxes and was approximately $0.2 million (of which theentire amount would impact our effective tax rate if recognized) plus approximately$0.1 million of accrued interest and penalties. There was no material change in the net amount of unrecognized taxbenefits in the first two quarters of 2007.

We are currently under examination in one Canadian taxjurisdiction and remain subject to examination in other jurisdictions until theapplicable statute of limitations expires. As of the beginning of fiscal 2007, a summary of the tax years thatremain subject to examination in our major tax jurisdictions are:

| United States—Federal |   | 2003 and forward |   |
|----------------------------|--------|------------------|--------|
| United  States—States |   | 2002 and forward |   |
| Canada                     |   | 1999 and forward |   |

 

7

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(2)**           Summary of Significant Accounting Policies (continued)

Based upon the expiration of statutes of limitationsand the conclusion of tax examinations in several jurisdictions, we believe itis reasonably possible that the total amount of previously unrecognized taxbenefits may decrease by $0.1 million within twelve months of the reportingdate.

Our policy is to classify interest and penaltiesrelated to income tax uncertainties as income tax expense.

***Recently IssuedAccounting Standards***

In September 2006, the FASB issued SFAS No. 157, “*Fair Value Measurements*” (SFAS No. 157), which defines fairvalue, establishes a framework for measuring fair value and expands disclosuresabout fair value measurements.  Theprovisions of SFAS No. 157 are effective as of the beginning of our 2008 fiscalyear.  We are currently evaluating theimpact, if any, of adopting SFAS No. 157 on our consolidated financialstatements.

**(3)           Inventories**

Inventoriesconsist of the following, as of the dates indicated (dollars in thousands):

|                              | ** ** | **June 30, 2007** | ** ** | **December 30, 2006** | ** ** |
|------------------------------|------------|-----------------------------|------------|---------------------------------|------------|
| Raw materials  and packaging |       | $                           | 19,737     |                            | $          | 11,461 |   |
| Work in process              |       | 1,603                       |       | 2,587                           |       |
| Finished goods               |       | 68,915                      |       | 64,221                          |       |
|                         |       |                        |       |                            |       |
| Total                        |       | $                           | 90,255     |                            | $          | 78,269 |   |

 

**(4)           Goodwill, Trademarks and CustomerRelationship Intangibles**

Thefollowing table reconciles the changes in the carrying amount of goodwill forthe period from December 30, 2006 to June 30, 2007 (dollars in thousands):

| Balance at December 30, 2006 |   | $      | 198,076 |   |
|--------------------------------------------------|--------|--------|---------|--------|
| *Cream  of Wheat*acqusition                      |   | 55,687 |    |
| Balance at June 30, 2007                         |   | $      | 253,763 |   |

 

Thefollowing table reconciles the changes in the carrying amount of trademarks forthe period from December 30, 2006 to June 30, 2007 (dollars in thousands):

| Balance at December 30, 2006 |   | $      | 200,220 |   |
|------------------------------|--------|--------|---------|--------|
| *Cream  of Wheat*acquisition |   | 27,000 |    |
| Balance at June 30,  2007    |   | $      | 227,220 |   |

 

Customerrelationship intangibles are presented at cost, net of accumulatedamortization, and are amortized on a straight-line basis over their estimateduseful lives of 20 years.

8

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(4)           Goodwill, Trademarks and CustomerRelationship Intangibles (continued)**

|                               | ** ** | **Customer   Relationship   Intangibles** | ** ** | **Less:   Accumulated  Amortization** | ** ** | **Total** | ** ** |
|-------------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------|------------|-----------|------------|
| ** **                    | ** ** | **(dollars in thousands)**                | ** ** |
| Balance at  December 30, 2006 |       | $                                                   | 15,100     |                                       | $          | (731      | )          | $ | 14,369 |   |
| *Cream  of Wheat*acquisition  |       | 113,900                                             |       | —                                     |       | 113,900   |       |
| Amortization  expense         |       | —                                              |       | (2,276                                     | )          | (2,276    | )          |
| Balance at June 30,  2007     |       | $                                                   | 129,000    |                                       | $          | (3,007    | )          | $ | 125,993 |   |

 

Amortizationexpense associated with customer relationship intangibles for the secondquarter and first two quarters of 2007 was $1.6 million and $2.3 million,respectively, and $0.4 million for the second quarter and first two quarters of2006, respectively, and is recorded in operating expenses.  We expect to recognize an additional $3.2million of amortization expense associated with customer relationshipintangibles during the remainder of fiscal 2007.  As of June 30, 2007, amortization ofintangible assets is expected to be $6.5 million for each of the next fivesucceeding fiscal years.

**(5)           Long-termDebt**

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

|                                                       | ** ** | **June 30, 2007** | ** ** | **December 30, 2006** | ** ** |
|-------------------------------------------------------|------------|-----------------------------|------------|---------------------------------|------------|
| Revolving credit  facility                            |       | $                           | —     |                            | $          | — |   |
| Term loan                                             |       | 130,000                     |       | 25,000                          |       |
| Total senior secured credit facility                  |       | 130,000                     |       | 25,000                          |       |
|                                                  |       |                        |       |                            |       |
| 12.0% Senior  Subordinated Notes due October 30, 2016 |       | 165,800                     |       | 165,800                         |       |
| 8.0% Senior  Notes due October 1, 2011                |       | 240,000                     |       | 240,000                         |       |
| Total long-term  debt                                 |       | $                           | 535,800    |                            | $          | 430,800 |   |

 

As of June 30, 2007, theaggregate maturities of long-term debt are as follows (dollars in thousands):

Years ending December:

| 2007       |   | $       | —  |   |
|------------|--------|---------|---------|--------|
| 2008       |   | —  |    |
| 2009       |   | —  |    |
| 2010       |   | —  |    |
| 2011       |   | 240,000 |    |
| Thereafter |   | 295,800 |    |
| Total      |   | $       | 535,800 |   |

 

*Senior Secured Credit Facility*.  InOctober 2004, we entered into a $30.0 million senior secured revolving creditfacility.  In order to finance the *Grandma’s* molasses acquisition, we amendedthe credit facility in January 2006 to provide for, among other things, a new$25.0 million term loan and a reduction in the revolving credit facilitycommitments from $30.0 million to $25.0 million.  In order to finance the *Cream*

9

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(5)           Long-termDebt (continued)**

*ofWheat* acquisition,our credit facility was amended and restated in February 2007 to provide for,among other things, an additional $205.0 million of term loan borrowings.  On May 29, 2007, we prepaid $100.0 million ofterm loan borrowings.  Our $25.0 millionrevolving credit facility matures on January 10, 2011 and the remaining $130.0million of term loan borrowings matures on February 26, 2013.

Interest under the revolvingcredit facility, including any outstanding letters of credit, is determinedbased on alternative rates that we may choose in accordance with the revolvingcredit facility, including the base lending rate per annum plus an applicablemargin, and LIBOR plus an applicable margin. We pay a commitment fee of 0.50% per annum on the unused portion of therevolving credit facility.  Interestunder the term loan facility is determined based on alternative rates that wemay choose in accordance with the credit facility, including the base lendingrate per annum plus an applicable margin of 1.00%, and LIBOR plus an applicablemargin of 2.00%.

Effective as of February 26,2007, we entered into a six-year interest rate swap agreement in order toeffectively fix at 7.0925% the interest rate payable for $130.0 million of termloan borrowings.  The interest rate forthe remaining $100.0 million of term loan borrowings, which we subsequentlyprepaid, was 7.36% as of the prepayment date (based upon a three-month LIBORrate contract that expired on May 25, 2007). The swap is designated as a cash flow hedge under the guidelines of SFASNo. 133.  The swap is in place throughthe life of the term loan, ending on February 26, 2013.  Changes in fair value of the swap arerecorded in accumulated other comprehensive income (loss), net of tax on ourconsolidated balance sheet.

Our obligations under thecredit facility are jointly and severally and fully and unconditionallyguaranteed on a senior basis by all of our existing and certain future domesticsubsidiaries.  The credit facility issecured by substantially all of our and our subsidiaries’ assets except our andour subsidiaries’ real property.  Thecredit facility provides for mandatory prepayment based on asset dispositionsand certain issuances of securities, as defined.  The credit facility contains covenants thatrestrict, among other things, our ability to incur additional indebtedness, paydividends and create certain liens.  Thecredit facility also contains certain financial maintenance covenants, which,among other things, specify maximum capital expenditure limits, a minimuminterest coverage ratio and a maximum senior and total leverage ratio, eachratio as defined.  Proceeds of therevolving credit facility are restricted to funding our working capitalrequirements, capital expenditures and acquisitions of companies in the sameline of business as our company, subject to specified criteria.  The revolving credit facility remainedundrawn through June 30, 2007.  Theavailable borrowing capacity under our revolving credit facility, net ofoutstanding letters of credit of $2.5 million, was $22.5 million at June 30,2007.  The maximum letter of creditcapacity under the revolving credit facility is $10.0 million, with a frontingfee of 3.0% per annum for all outstanding letters of credit.

*Subsidiary Guarantees*.  We have no assets or operations independentof our direct and indirect subsidiaries. All of our present domestic subsidiaries jointly and severally and fullyand unconditionally guarantee our senior subordinated notes and our seniornotes, and management has determined that our subsidiaries that are notguarantors of our senior subordinated notes and senior notes are, individuallyand in the aggregate, “minor subsidiaries” as that term is used in Rule 3-10 ofRegulation S-X promulgated by the Securities and Exchange Commission.  There are no significant restrictions on ourability and the ability of our subsidiaries to obtain funds from our respectivesubsidiaries by dividend or loan. Consequently, separate financial statements have not been presented forour subsidiaries because management has determined that they would not bematerial to investors.

*Deferred Financing Costs*.  In connection with the issuance of our 12.0%senior subordinated notes due 2016 and our 8.0% senior notes due 2011, wecapitalized approximately $23.1 million of financing costs, which will beamortized over their respective terms. In connection with the issuance of our term loan in 

10

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(5)           Long-termDebt (continued)**

January 2006, we capitalized approximately $0.4million of additional financing costs, which will be amortized over the term ofthe loan.  In connection with theissuance of additional term loan borrowings of $205.0 million in February 2007we capitalized approximately $4.0 million of additional financing costs.  During the second quarter of 2007 wewrote-off and expensed $1.8 million relating to our May 2007 prepayment of$100.0 million of term loan borrowings. As of June 30, 2007 and December 30, 2006 we had net deferred financingcosts of $17.9 million and $17.3 million, respectively.

At June 30, 2007 and December 30, 2006 accruedinterest of $9.0 million and $8.5 million, respectively, is included in accruedexpenses in the accompanying consolidated balance sheets.

**(6)           Fair Value of Financial Instruments**

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

We have outstanding$240.0 million principal amount of 8.0% senior notes due 2011.  The fair value of the senior notes at June30, 2007 and December 30, 2006, based on quoted market prices, was $242.4million and $244.8 million, respectively.

We also have outstanding$165.8 million principal amount of 12.0% senior subordinated notes due2016.  Of such outstanding principalamount, $127.9 million principal amount was represented by 17,883,121 EISs asof June 30, 2007, and $143.0 million principal amount was represented by20,000,000 EISs as of December 30, 2006. Each EIS represents one share of our Class A common stock and $7.15principal amount of our senior subordinated notes.  As of June 30, 2007, the fair value of theEISs, based on the per EIS closing price on the New York Stock Exchange, was$362.0 million.  As of December 30, 2006,the fair value of the EISs, based on the per EIS closing price on the AmericanStock Exchange, was $400.4 million.  Itis not practicable to estimate the fair value of the principal amount of seniorsubordinated notes represented by EISs.

Of the $165.8 millionaggregate principal amount of senior subordinated notes outstanding, $37.9million and $22.8 million principal amount as of June 30, 2007 and December 30,2006, respectively, was not represented by EISs and traded separately.  The fair value of the separate seniorsubordinated notes at June 30, 2007 and December 30, 2006, based on quotedmarket prices, was $41.8 million and $25.5 million.

The carrying value of our other borrowingsapproximates their fair value based on the information currently available tous with respect to similar instruments.

We use an interest rate swap to manage variableinterest rate exposure on our $130.0 million of term loan borrowings.  Our objective for holding this derivative isto decrease the volatility of future cash flows associated with interestpayments on our variable rate debt. Derivative instruments are recognized in other assets or liabilities onour consolidated balance sheet at fair value. We record gains and losses on derivatives qualifying as a cash flowhedge in comprehensive income (loss), to the extent that the hedge is effectiveand until we recognize the underlying transactions in net income, at which timethese gains and losses are reflected in the consolidated statement ofoperations.  Other comprehensive income(loss) for the second quarter and for the first two quarters of 2007 includes anet unrealized after tax gain of $1.9 million ($3.1 million pre-tax) and $1.3million ($2.0 million pre-tax), respectively. The unrealized amounts in comprehensive income (loss) will fluctuatebased on changes in the fair value of open contracts during each reportingperiod.  We did not have any derivativesduring the first two quarters of 2006.

11

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(7)           Comprehensive Income Recognition**

Comprehensiveincome includes net income, foreign currency translation adjustments relatingto assets and liabilities located in our foreign subsidiaries, amortization ofunrecognized prior service cost and pension deferrals and cash flow hedges, netof tax.  The components of comprehensiveincome are as follows (dollars in thousands):
| ** **                                                                         | ** ** | **Thirteen Weeks Ended** | ** ** | **Twenty-six Weeks Ended** | ** ** |
|------------------------------------------------------------------------------------|------------|------------------------------------|------------|--------------------------------------|------------|
| ** **                                                                         | ** ** | **June 30, 2007**        | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| ** **                                                                         |       |                               |       |                                 |       |   |   |   |   |
| Net income                                                                         |       | $                                  | 3,737      |                                 | $          | 2,309 |   | $ | 7,811 |   | $ | 5,261 |   |
| Other comprehensive  income:                                                       |       |                               |       |                                 |       |   |   |   |   |
| Foreign currency  translation adjustments                                          |       | 70                                 |       | 106                                  |       | 74 |   | 63 |   |
| Amortization of  unrecognized prior service cost and pension deferrals, net of tax |       | 5                                  |       | —                               |       | 16 |   | — |   |
| Mark to market  adjustment of cash flow hedge transaction, net of tax              |       | 1,948                              |       | —                               |       | 1,251 |   | — |   |
| Comprehensive income                                                               |       | $                                  | 5,760      |                                 | $          | 2,415 |   | $ | 9,152 |   | $ | 5,324 |   |

 

**(8)           Pension Benefits**

Net periodic costs for the second quarter and firsttwo quarters of 2007 and 2006 include the following components (dollars inthousands): 
| ** **                                           | ** ** | **Thirteen Weeks Ended** | ** ** | **Twenty-six Weeks Ended** | ** ** |
|------------------------------------------------------|------------|------------------------------------|------------|--------------------------------------|------------|
| ** **                                           | ** ** | **June 30, 2007**        | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| Service  cost—benefits earned during the period |       | $                                  | 343        |                                 | $          | 359 |   | $ | 728 |   | $ | 785 |   |
| Interest cost on  projected benefit obligation       |       | 324                                |       | 293                                  |       | 660 |   | 606 |   |
| Expected return  on plan assets                      |       | (370                               | )          | (286                                 | )          | (742 | ) | (583 | ) |
| Amortization of  unrecognized prior service cost     |       | (2                                 | )          | 1                                    |       | 4 |   | 2 |   |
| Net amortization  and deferral                       |       | 11                                 |       | 41                                   |       | 22 |   | 105 |   |
| Net pension cost                                     |       | $                                  | 306        |                                 | $          | 408 |   | $ | 672 |   | $ | 915 |   |

 

As of June 30, 2007, we have contributed $1.3 millionto our defined benefit pension plans during fiscal 2007.  As of June 30, 2007, we anticipate electingto make additional payments of approximately $1.5 million for a totalcontribution of $2.8 million for fiscal 2007 to fund our defined benefitpension plan obligations.

**(9)           Related-Party Transactions**

*Transaction Services Agreement.*  We were party to a transaction servicesagreement pursuant to which Bruckmann, Rosser, Sherrill & Co., Inc. (BRS& Co.), the manager of Bruckmann, Rosser, Sherrill & Co., L.P. (BRS),would be paid a transaction fee for management, financial and other corporateadvisory services rendered by BRS & Co. in connection with acquisitions,divestitures, financings and other transactions by our company, which fee wouldnot exceed 1.0% of the total transaction value. BRS was our majority owner prior to our EIS offering in October 2004 andremained a majority owner of our Class B common stock prior to our Class Acommon stock offering in May 2007. Stephen C. Sherrill, the chairman of our board of directors, is amanaging director of BRS & Co.  Thetransaction services agreement provided that transaction fees would be payableas described above unless a majority of disinterested directors determinedotherwise.  Upon the consummation of theClass A common stock offering, the transaction services agreement 

12

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(9)           Related-Party Transactions(continued)**

was terminated. No transaction fees were paid under the transaction services agreementduring fiscal 2007 prior to its termination or during fiscal 2006.

*Roseland Lease.*  We lease a manufacturing and warehousefacility from a former chairman of our board of directors under an operatinglease, which expires in April 2009. Total rent expense associated with this lease was $0.4 million for thefirst two quarters of 2007 and 2006.

*Acquisition of Grandma’s Molasses*.  On January 10, 2006, through a wholly-ownedsubsidiary, we acquired the *Grandma’s*molassesbusiness from Mott’s LLP, a Cadbury Schweppes Americas Beverages company, for$30.0 million in cash.  James R.Chambers, a member of our board of directors has been the President, CadburySchweppes Americas Confectionary since July 2005.  Mr. Chambers did not participate in thenegotiation of the transaction nor did he participate in the board’sdeliberations or decisions regarding the transaction.  Mr. Chambers did not personally have anydirect or indirect pecuniary or other interest in the transaction as a resultof his position at Cadbury.

*Repurchase and Exchange of Class B Common Stock*.  We used a portion of the proceeds of theClass A common stock offering to repurchase 6,762,455 shares of our Class Bcommon stock, which were held by, among others, BRS, Mr. Sherrill and certainof our current and former executive officers, at a per share repurchase price equalto the offering price of our Class A common stock, or $13.00 per share, lessdiscounts and commissions.  We alsoexchanged the remaining 793,988 shares of our Class B common stock, which wereheld by certain of our current and former executive officers, for an equalnumbers of shares of our Class A common stock in order to eliminate all of ouroutstanding Class B common stock.  Ourboard of directors established a special committee comprised solely of ourindependent directors to recommend to our board of directors the repurchaseprice and exchange ratio for our Class B common stock, to negotiate with theholders of the Class B common stock, and to recommend to our board of directorsif the transaction was in our best interests and fair to the holders of ourClass A common stock.  The specialcommittee retained a financial advisor to provide information, advice andanalysis to assist the special committee in its review of the proposedtransaction.  The special committee alsoengaged its own legal counsel to advise the special committee on its duties andresponsibilities.  The financial advisordelivered to the special committee an opinion that the proposed considerationto be paid by us to the holders of the Class B common stock was fair to us andthe holders of the Class A common stock from a financial point of view.  After considering all of the information ithad gathered, the special committee recommended to our board of directors thatfrom a valuation standpoint, the purchase price for the Class B common stock tobe repurchased should be the offering price of the Class A common stock in theoffering, net of underwriting discounts and commissions, and that each share ofour Class B common stock to be exchanged should be exchanged for one share ofour Class A common stock.  The specialcommittee also recommended to our board of directors that based on therepurchase price and Class A and Class B exchange ratio and other materialterms of the transaction, the transaction was advisable and in our best interestsand fair to the holders of our Class A common stock.

**(10)         Commitmentsand Contingencies**

We are subject to environmental laws and regulationsin the normal course of business.  Basedon our experience to date, management believes that the future cost ofcompliance with existing environmental laws and regulations (and liability forknown environmental conditions) will not have a material adverse effect on ourconsolidated financial position, results of operations or liquidity.  However, we cannot predict what environmentalor health and safety legislation or regulations will be enacted in the futureor how existing or future laws or regulations will be enforced, administered orinterpreted, nor can we predict the amount of 

13

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(10)         Commitments and Contingencies****(continued)**

future expenditures that may be required in order tocomply with such environmental or health and safety laws or regulations or torespond to such environmental claims.

We are involved in various claims and legal actionsarising in the ordinary course of business, including proceedings involvingproduct liability claims, worker’s compensation and other employee claims, andtort and other general liability claims, for which we carry insurance, as wellas trademark, copyright, patent infringement and related claims and legalactions.  In the opinion of ourmanagement, the ultimate disposition of these matters will not have a materialadverse effect on our consolidated financial position, results of operations orliquidity.

We have employmentagreements with our executive officers. The agreements generally continue until terminated by the executive orby us, and provide for severance payments under certain circumstances.  As of June 30, 2007, if all of our executiveofficers were to be terminated by us without cause (as defined) or as a resultof the employees’ disability, our severance liability, including salarycontinuation, continuation of health care and insurance benefits, present valueof additional pension credits, and accelerated vesting under compensationplans, would have been approximately $3.2 million.  As of June 30, 2007, if all of our executiveswere to be terminated or deemed terminated by us upon a change of control (asdefined), our severance liability, including salary continuation, continuationof health care and insurance benefits, present value of additional pensioncredits, accelerated vesting under compensation plans, and potential excise taxliability and gross up payments, would have been approximately $5.0 million.

**(11)         Earnings per Share**

We currently have one class of common stock issued andoutstanding, designated as Class A common stock.  Prior to May 29, 2007, we had two classes ofcommon stock issued and outstanding, designated as Class A common stock andClass B common stock.   For periods inwhich we had shares of both Class A and Class B common stock issued andoutstanding, we present earnings per share using the two-class method.  The two-class method is an earningsallocation formula that determines earnings per share for each class of commonstock according to dividends declared and participation rights in undistributedearnings or losses.  Net income isallocated between the two classes of common stock based upon the two-classmethod.  Basic and diluted earnings pershare for the Class A common stock and Class B common stock is calculated bydividing allocated net income by the weighted average number of shares of ClassA common stock and Class B common stock outstanding.

14

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(11)         Earnings per Share****(continued)**
| ** **                                                      | ** ** | **Thirteen  Weeks Ended**       | ** ** | **Twenty-six  Weeks Ended** | ** ** |
|-----------------------------------------------------------------|------------|--------------------------------------|------------|----------------------------------|------------|
| ** **                                                      | ** ** | **June 30, 2007**          | ** ** | **July 1, 2006**       | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| ** **                                                      | ** ** | **(dollars in thousands)** | ** ** |
| Net income                                                      |       | $                                    | 3,737      |                             | $          | 2,309 |   | $ | 7,811 |   | $ | 5,261 |   |
| Less: Class A  common stock dividends declared                  |       | 7,797                                |       | 4,240                            |       | 12,037 |   | 8,480 |   |
| Undistributed  (loss) earnings available to common stockholders |       | $                                    | (4,060     | )                                | $          | (1,931 | ) | $ | (4,226 | ) | $ | (3,219 | ) |
|                                                            |       |                                 |       |                             |       |   |   |   |   |
| Basic and  Diluted weighted average common shares outstanding:  |       |                                 |       |                             |       |   |   |   |   |
| Class A common  stock                                           |       | 26,084,688                           |       | 20,000,000                       |       | 23,042,344 |   | 20,000,000 |   |
| Class B common  stock                                           |       | 4,816,194                            |       | 7,556,443                        |       | 6,186,319 |   | 7,556,443 |   |
|                                                            |       |                                 |       |                             |       |   |   |   |   |
| Basic and  diluted allocation of undistributed (loss) earnings: |       |                                 |       |                             |       |   |   |   |   |
| Class A common  stock                                           |       | $                                    | (3,427     | )                                | $          | (1,401 | ) | $ | (3,332 | ) | $ | (2,336 | ) |
| Class B common  stock                                           |       | (633                                 | )          | (530                             | )          | (894 | ) | (883 | ) |
| Total                                                           |       | $                                    | (4,060     | )                                | $          | (1,931 | ) | $ | (4,226 | ) | $ | (3,219 | ) |
|                                                            |       |                                 |       |                             |       |   |   |   |   |
| Basic and  diluted earnings per share:                          |       |                                 |       |                             |       |   |   |   |   |
| Undistributed  (loss) earnings per share:                       |       |                                 |       |                             |       |   |   |   |   |
| Class A common stock                                            |       | $                                    | (0.13      | )                                | $          | (0.07 | ) | $ | (0.14 | ) | $ | (0.12 | ) |
| Class B common stock                                            |       | $                                    | (0.13      | )                                | $          | (0.07 | ) | $ | (0.14 | ) | $ | (0.12 | ) |
| Distributed  earnings(1):                                       |       |                                 |       |                             |       |   |   |   |   |
| Class A common stock                                            |       | $                                    | 0.30       |                             | $          | 0.21 |   | $ | 0.52 |   | $ | 0.42 |   |
| Earnings (loss)  per share:                                     |       |                                 |       |                             |       |   |   |   |   |
| Class A common stock                                            |       | $                                    | 0.17       |                             | $          | 0.14 |   | $ | 0.38 |   | $ | 0.30 |   |
| Class B common  stock                                           |       | $                                    | (0.13      | )                                | $          | (0.07 | ) | $ | (0.14 | ) | $ | (0.12 | ) |

----

(1)             “Distributedearnings” differs from actual per share amounts paid as dividends as theearnings per share computation under GAAP requires the use of the weightedaverage, rather than the actual number of shares outstanding.

No dividends were declared on our Class B common stockduring the second quarter or first two quarters of 2007 or the second quarteror first two quarters of 2007; therefore, for purposes of the earnings pershare calculation, all distributed earnings are included in Class A commonstock earnings per share.

**(12)         Business and Credit Concentrations andGeographic Information**

Our exposure to credit loss in the event ofnon-payment of accounts receivable by customers is estimated in the amount ofthe allowance for doubtful accounts.  Weperform ongoing credit evaluations of our customers’ financial conditions.  As of June 30, 2007, we do not believe wehave any significant concentration of credit risk with respect to our tradeaccounts receivable.  Our top ten customersaccounted for approximately 44.6%****and43.6% of consolidated net sales for the first two quarters of 2007 and thefirst two quarters of 2006, respectively. Other than Wal-Mart, which accounted for 11.8% and 10.4% of ourconsolidated net sales for the first two quarters of 2007 and the first twoquarters of 2006, respectively, no single customer accounted for 10.0% or moreof our consolidated net sales for the first two quarters of 2007 or the firsttwo quarters of 2006.

During the second quarter of 2007 and 2006 and thefirst two quarters of 2007 and 2006, respectively, our sales to foreigncountries represented less than 1.0% of net sales.  Our foreign sales are primarily to customersin Canada.

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**B&G Foods, Inc. and Subsidiaries**

**Notes to ConsolidatedFinancial Statements (Continued)**

**(Unaudited)**

**(13)         Insurance Recovery**

During the fourth quarter of fiscal 2006, we learnedof an alleged theft of approximately $0.8 million over several years at ourRoseland, New Jersey manufacturing facility resulting from overpaymentsallegedly authorized by a former supervisor to direct-store-deliveryindependent contractor truck drivers. While the cumulative amount of the alleged theft may have beensubstantial, the related losses were reported in each respective period anddiscovery of this alleged theft has not resulted in changes to any previouslyreported results.  During the secondquarter of 2007, we received insurance proceeds for the entire amount of theloss, which is recorded as an offset to general and administrative expenses.

* *

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**Item2.    Management’s Discussion and Analysisof Financial Condition and Results of Operations**

The following Management’s Discussion and Analysis ofFinancial Condition and Results of Operations contains forward-lookingstatements that involve risks and uncertainties.  Our actual results could differ materiallyfrom those anticipated in these forward-looking statements as a result ofcertain factors, including those set forth under the heading “Forward-LookingStatements” below and elsewhere in this report.  The following discussion should be read inconjunction with the unaudited consolidated interim financial statements andrelated notes for the thirteen and twenty-six weeks ended June 30, 2007 (secondquarter of 2007 and first two quarters of 2007) included elsewhere in thisreport and the audited consolidated financial statements and related notes forthe fiscal year ended December 30, 2006 (fiscal 2006) included in our AnnualReport on Form 10-K/A filed with the Securities and Exchange Commission (SEC) onMarch 9, 2007.

**General**

We manufacture, sell and distribute a diversifiedportfolio of high quality, shelf-stable, branded food products, many of whichhave leading regional or national retail market shares.  In general, we position our branded productsto appeal to the consumer desiring a high quality and reasonably priced brandedproduct.

Our business strategy is to continue to increasesales, profitability and cash available to pay dividends by enhancing ourexisting portfolio of branded shelf-stable products and by capitalizing on ourcompetitive strengths.  We intend toimplement our strategy through the following initiatives: profitably growingour established brands, leveraging our unique multiple-channel sales anddistribution system, introducing new products, capitalizing on the highergrowth Mexican segment of the food industry, designing new products andmodifying existing products to address consumer health and wellness concernssuch as diabetes and natural/organic foods, and expanding our brand portfoliothrough acquisitions.

Since 1996, we havesuccessfully acquired and integrated 18 separate brands into ouroperations.  We believe that successfulfuture acquisitions, if any, will enhance our portfolio of existing businesses,further leveraging our existing infrastructure.

We completed the acquisitionof the *Grandma’s* molassesbusiness from Motts LLP, a Cadbury Schweppes Americas Beverages Company, onJanuary 10, 2006.  We completed theacquisition of the *Cream of Wheat*and*Cream of Rice*business from Kraft FoodsGlobal, Inc. effective February 25, 2007. We refer to the *Cream of Wheat*and*Cream of Rice*acquisition as the “*Cream of Wheat*acquisition” and the *Cream ofWheat*and *Cream of Rice*businessescollectively as the “*Cream of Wheat*business.”  Both the *Grandma’s* molasses acquisition and *Cream of Wheat*acquisition have been accounted for using thepurchase method of accounting and, accordingly, the assets acquired and resultsof operations of the acquired businesses are included in our consolidatedfinancial statements from the respective dates of acquisition.  These acquisitions and the application of thepurchase method of accounting for these acquisitions affect comparabilitybetween periods.

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

*Fluctuations in Commodity Prices and Production andDistribution Costs*.  Wepurchase raw materials, including agricultural products, meat, poultry, otherraw materials and packaging materials from growers, commodity processors, otherfood companies and packaging manufacturers. Raw materials are subject to fluctuations in price attributable to anumber of factors.  Fluctuations incommodity prices can lead to retail price volatility and intensive pricecompetition, and can influence consumer and trade buying patterns.  In the second quarter and first two quartersof 2007, our commodity prices for maple syrup and corn sweeteners were higherthan those incurred during the thirteen and twenty-six weeks ended July 1, 2006(second quarter of 2007 and first two quarters of 2007).  In addition, the cost of labor,manufacturing, energy, fuel, packaging materials and other costs related to theproduction and distribution of our food products have 

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risen in recent years, and we believe that certain ofthese costs may continue to rise in the foreseeable future.  We manage these risks by entering intoshort-term supply contracts and advance commodities purchase agreements fromtime to time, and if necessary, by raising prices.  We cannot assure you that any sales priceincreases by us will offset the increased cost of raw material commodities.

*Consolidation in the Retail Trade and ConsequentInventory Reductions*. As the retail grocery trade continues to consolidate and our retailcustomers grow larger and become more sophisticated, our retail customers maydemand lower pricing and increased promotional programs.  These customers are also reducing theirinventories and increasing their emphasis on private label products.

*Changing Customer Preferences*.  Consumers in the market categories in whichwe compete frequently change their taste preferences, dietary habits andproduct packaging preferences.

*Consumer Concern Regarding Food Safety, Quality andHealth*.  The foodindustry is subject to consumer concerns regarding the safety and quality ofcertain food products, including the health implications of geneticallymodified organisms and obesity.

*Changing Valuations of the Canadian Dollar inRelation to the U.S. Dollar*. We purchase the majority of our maple syrup requirements frommanufacturers located in Quebec, Canada. Over the past several years the U.S. dollar has weakened against the Canadiandollar, which has in turn increased our costs relating to the production of ourmaple syrup products.

To confront these challenges, we continue to takesteps to build the value of our brands, to improve our existing portfolio ofproducts with new product and marketing initiatives, to reduce costs throughimproved productivity and to address consumer concerns about food safety,quality and health.

**Critical Accounting Policies; Use of Estimates**

The preparation of financial statements in accordancewith U.S. generally accepted accounting principles requires our management tomake a number of estimates and assumptions relating to the reporting of assetsand liabilities and the disclosure of contingent assets and liabilities at thedate of the consolidated financial statements and the reported amounts ofrevenues and expenses during the reporting period.  Some of the more significant estimates andassumptions made by management involve trade and consumer promotion expenses,allowances for excess, obsolete and unsaleable inventories, pension benefits;purchase accounting allocations; the recoverability of goodwill, trademarks,customer relationship intangibles, property, plant and equipment, and deferredtax assets; the accounting for our EISs, including their treatment in computingour income tax expense; and the accounting for earnings per share.  Actual results could differ from theseestimates and assumptions.

Summaries of our significant accounting policies aredescribed more fully in note 2 to our consolidated financial statementsincluded in our 2006 Annual Report on Form 10-K/A.  We believe the following critical accountingpolicies involve the most significant judgments and estimates used in thepreparation of our consolidated financial statements.

***Trade and Consumer PromotionExpenses***

We offer various sales incentive programs to customersand consumers, such as price discounts, in-store display incentives, slottingfees and coupons.  The recognition ofexpense for these programs involves the use of judgment related to performanceand redemption estimates.  Estimates aremade based on historical experience and other factors.  Actual expenses may differ if the level ofredemption rates and performance vary from estimates.

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***Inventories***

Inventories are stated at the lower of cost ormarket.  Cost is determined using thefirst-in, first-out and average cost methods. Inventories have been reduced by an allowance for excess, obsolete andunsaleable inventories.  The allowance isan estimate based on our management’s review of inventories on hand compared toestimated future usage and sales.

***Long-Lived Assets***

Long-lived assets, such as property, plant andequipment, and intangibles with estimated useful lives are depreciated oramortized over their respective estimated useful lives to their estimatedresidual values, and reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable.  Recoverability of assets tobe held and used is measured by a comparison of the carrying amount of an assetto estimated undiscounted future cash flows expected to be generated by theasset.  If the carrying amount of anasset exceeds its estimated future cash flows, an impairment charge isrecognized by the amount by which the carrying amount of the asset exceeds thefair value of the asset.  Recoverabilityof assets held for sale is measured by a comparison of the carrying amount ofan asset or asset group to their fair value less estimated cost to sell.  Calculating fair value of assets requiressignificant estimates and assumptions by management.

***Goodwill andTrademarks***

Goodwill and intangible assets with indefinite usefullives (trademarks) are tested for impairment at least annually and wheneverevents or circumstances occur indicating that goodwill or indefinite lifeintangibles might be impaired.

We perform the annual impairment tests as of the lastday of each fiscal year.  The annualgoodwill impairment test involves a two-step process.  The first step of the impairment testinvolves comparing the fair value of our company with our company’s carryingvalue, including goodwill.  If thecarrying value of our company exceeds our fair value, we perform the secondstep of the impairment test to determine the amount of the impairmentloss.  The second step of the goodwillimpairment test involves comparing the implied fair value of goodwill with thecarrying value of that goodwill and recognizing a loss for the difference.  Calculating our fair value requires significantestimates and assumptions by management. We estimate our fair value by applying third party market valueindicators to our earnings before interest, taxes, depreciation andamortization (EBITDA).  We testindefinite life intangible assets for impairment by comparing their carryingvalue to their fair value that is determined using a cash flow method andrecognize a loss to the extent the carrying value is greater.

We completed our annual impairment tests for fiscal2006 with no adjustments to the carrying values of goodwill and indefinite lifeintangibles.  We did not note any eventsor circumstances during the first two quarters of 2007 that would indicate thatgoodwill or indefinite life intangibles might be impaired.

***Cash Flow Hedge***

We use an interest rate swap to manage variableinterest rate exposure on $130.0 million of term loan borrowings.  Our objective for holding this derivative isto decrease the volatility of future cash flows associated with interestpayments on our variable rate debt.  Thisderivative is recognized in other assets or liabilities on our consolidatedbalance sheet at fair value.   We recordgains and losses on derivatives qualifying as a cash flow hedge incomprehensive income (loss), to the extent that the hedge is effective anduntil we recognize the underlying transactions in net income, at which time werecognize these gains and losses in our consolidated statement of operations.

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The unrealized amounts in comprehensive income (loss)will fluctuate based on changes in the fair value of open contracts during eachreporting period.  Our interest rateswap, which is described below under “Liquidity and Capital Resources—*Debt*” and in note 5 to our consolidated financial statementswas an effective hedge for the second quarter and first two quarters of 2007,meaning that it qualified for hedge accounting treatment.

***Accounting Treatment for EISs***

Our EISs include Class A common stock and seniorsubordinated notes.  Upon completion ofour 2004 EIS offering (including the exercise of the over-allotment option), weallocated the proceeds from the issuance of the EISs, based upon relative fairvalue at the issuance date, to the Class A common stock and the seniorsubordinated notes.  We have assumed thatthe price paid in the 2004 EIS offering was equivalent to the combined fairvalue of the Class A common stock and the senior subordinated notes, and theprice paid in the offering for the senior subordinated notes sold separately(not in the form of EISs) was equivalent to their initial stated principalamount.  Therefore, we have allocated theentire proceeds of the 2004 EIS offering to the Class A common stock and thesenior subordinated notes, and the allocation of the EIS proceeds to the seniorsubordinated notes did not result in a premium or discount.

The Class A common stock portion of each EIS isincluded in stockholders’ equity, net of the related portion of the EIStransaction costs allocated to Class A common stock.  Dividends paid on the Class A common stockportion of each EIS are recorded as a decrease to additional paid-in capitalwhen declared by us.  The seniorsubordinated note portion of each EIS is included in long-term debt, and therelated portion of the EIS transaction costs allocated to the senior subordinatednotes was capitalized as deferred financing costs and is being amortized tointerest expense using the effective interest method.  Interest on the senior subordinated notes ischarged to interest expense as accrued by us and deducted for income tax purposes.

***Income Tax Expense Estimates andPolicies***

As part of the income tax provision process ofpreparing our consolidated financial statements, we are required to estimateour income taxes.  This process involvesestimating our current tax expenses together with assessing temporarydifferences resulting from differing treatment of items for tax and accountingpurposes.  These differences result indeferred tax assets and liabilities.  Wethen assess the likelihood that our deferred tax assets will be recovered fromfuture taxable income and to the extent we believe the recovery is not likely,we establish a valuation allowance. Further, to the extent that we establish a valuation allowance orincrease this allowance in a financial accounting period, we include suchcharge in our tax provision, or reduce our tax benefits in our consolidatedstatement of operations.  We use ourjudgment to determine our provision or benefit for income taxes, deferred taxassets and liabilities and any valuation allowance recorded against our netdeferred tax assets.

There are various factors that may cause these taxassumptions to change in the near term, and we may have to record a valuationallowance against our deferred tax assets. We cannot predict whether future U.S. federal and state income tax lawsand regulations might be passed that could have a material effect on ourresults of operations.  We assess theimpact of significant changes to the U.S. federal and state income tax laws andregulations on a regular basis and update the assumptions and estimates used toprepare our consolidated financial statements when new regulations andlegislation are enacted.  We recognizethe benefit of an uncertain tax position that we have taken or expect to takeon the income tax returns we file if it is “more likely than not” that such taxposition will be sustained based on its technical merits.

***Earnings Per Share***

We currently have one class of common stock issued andoutstanding, designated as Class A common stock.  Prior to May 29, 2007, we had two classes ofcommon stock issued and outstanding, designated as Class A common stock andClass B common stock.   For periods inwhich we had shares of both Class A and 

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Class B common stock issued and outstanding, wepresent earnings per share using the two-class method.  The two-class method is an earningsallocation formula that determines earnings per share for each class of commonstock according to dividends declared and participation rights in undistributedearnings or losses.

Net income is allocated between the two classes ofcommon stock based upon the two-class method. Basic and diluted earnings per share for the Class A common stock andClass B common stock is calculated by dividing allocated net income by theweighted average number of shares of Class A common stock and Class Bcommon stock outstanding.

***Pension Expense***

We have defined benefitpension plans covering substantially all of our employees.  Our funding policy is to contribute annuallythe amount recommended by our actuaries. The funded status of our pension plans is dependent upon many factors,including returns on invested assets and the level of certain market interestrates.  We review pension assumptionsregularly and we may from time to time make voluntary contributions to ourpension plans, which exceed the amounts required by statute.  During the second quarter of 2007 andthe second quarter of 2006, wemade contributions of $1.3 million and $0.5 million, respectively, to ourpension plans.  During the firstquarter of fiscal 2007 and the first quarter of fiscal 2006, we made no contributions to our pensionplans.  Changes in interest rates and themarket value of the securities held by the plans could materially change,positively or negatively, the underfunded status of the plans and affect thelevel of pension expense and required contributions in fiscal 2007 and beyond.

Our discount rate assumptionincreased from 5.65% at December 31, 2005 to 5.90% at December 30, 2006 for ourpension plans.  We presently anticipatethat assumption changes, coupled with the amortization of deferred gains andlosses will result in a decrease in fiscal 2007 pre-tax pension expense ofapproximately $0.3 million.  In addition,as a sensitivity measure, a 0.25% decline or increase in our discount ratewould increase or decrease our pension expense by approximately $0.1million.  Similarly, a 0.25% decrease orincrease in the expected return on pension plan assets would increase ordecrease our pension expense by approximately $0.1 million.

In August 2006, the PensionProtection Act of 2006 was signed into law. The major provisions of the statute will take effect January 1,2008.  Among other things, the statute isdesigned to ensure timely and adequate funding of qualified pension plans byshortening the time period within which employers must fully fund pensionbenefits.  We are currently evaluatingthe effect, if any, that the Pension Protection Act of 2006 will have on futurepension funding requirements.

The adoption of SFAS No. 158as of December 30, 2006 required us to record an incremental after-tax chargeof $1.6 million in accumulated other comprehensive loss related to theunrecognized net actuarial losses and unrecognized prior service costs.

***Acquisition Accounting***

We account for acquiredbusinesses using the purchase method of accounting, which requires that theassets acquired and liabilities assumed be recorded at the date of acquisitionat their respective fair values.  Ourconsolidated financial statements and results of operations reflect an acquiredbusiness after the completion of the acquisition.  The cost to acquire a business, includingtransaction costs, is allocated to the underlying net assets of the acquiredbusiness in proportion to their respective fair values.  Any excess of the purchase price over theestimated fair values of the net assets acquired is recorded as goodwill.

The judgments made indetermining the estimated fair value assigned to each class of assets acquiredand liabilities assumed, as well as asset lives, can materially impact ourresults of operations.  Accordingly, forsignificant items, we typically obtain assistance from third party valuationspecialists.

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Determining the useful lifeof an intangible asset also requires judgment as different types of intangibleassets will have different useful lives and certain assets may even beconsidered to have indefinite useful lives.

All of these judgments andestimates can materially impact our results of operations.

**Results of Operations**

The following table sets forth the percentages of netsales represented by selected items for the second quarter of 2007 and 2006 andthe first two quarters of 2007 and 2006 reflected in our consolidatedstatements of operations.  Thecomparisons of financial results are not necessarily indicative of futureresults:
| ** **                                        | ** ** | **Thirteen Weeks Ended** | ** ** | **Twenty-six Weeks Ended** | ** ** |
|---------------------------------------------------|------------|------------------------------------|------------|--------------------------------------|------------|
| ** **                                        | ** ** | **June 30, 2007**        | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| **Statement  of Operations:**                     |       |                               |       |                                 |       |   |   |   |   |
| Net sales                                         |       | 100.0                              | %          | 100.0                                | %          | 100.0 | % | 100.0 | % |
| Cost of goods  sold                               |       | 68.4                               | %          | 73.0                                 | %          | 68.5 | % | 71.6 | % |
| Gross profit                                      |       | 31.6                               | %          | 27.0                                 | %          | 31.5 | % | 28.4 | % |
|                                              |       |                               |       |                                 |       |   |   |   |   |
| Sales, marketing  and distribution expenses       |       | 10.6                               | %          | 11.0                                 | %          | 10.8 | % | 11.1 | % |
| General and  administrative expenses              |       | 1.4                                | %          | 1.7                                  | %          | 1.5 | % | 1.7 | % |
| Amortization  expense—customer relationships |       | 1.4                                | %          | 0.3                                  | %          | 1.0 | % | 0.2 | % |
| Operating income                                  |       | 18.2                               | %          | 14.0                                 | %          | 18.1 | % | 15.3 | % |
|                                              |       |                               |       |                                 |       |   |   |   |   |
| Interest  expense, net                            |       | 13.1                               | %          | 10.4                                 | %          | 12.5 | % | 11.0 | % |
| Income before income tax expense                  |       | 5.1                                | %          | 3.6                                  | %          | 5.7 | % | 4.3 | % |
|                                              |       |                               |       |                                 |       |   |   |   |   |
| Income tax  expense                               |       | 1.9                                | %          | 1.4                                  | %          | 2.1 | % | 1.7 | % |
| Net income                                        |       | 3.2                                | %          | 2.2                                  | %          | 3.5 | % | 2.7 | % |

 

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

*Net Sales.*  Our net sales represents gross sales ofproducts shipped to customers plus amounts charged customers for shipping andhandling, less cash discounts, coupon redemptions, slotting fees and tradepromotional spending.

*Gross Profit.*  Our gross profit is equal to our net salesless cost of goods sold.  The primarycomponents of our cost of goods sold are cost of internally manufacturedproducts, purchases of finished goods from co-packers plus freight costs to ourdistribution centers and to our customers.

*Sales, Marketing and DistributionExpenses.*  Our sales,marketing and distribution expenses include costs for marketing personnel, consumeradvertising programs, internal sales forces, brokerage costs and warehousefacilities.

*General and Administrative Expenses.*  Our general and administrative expensesinclude administrative employee compensation and benefit costs, as well asinformation technology infrastructure and communication costs, office rent andsupplies, professional services, and other general corporate expenses.  For the second quarter and first two quartersof 2007, general and administrative expenses is net of $0.8 million ofinsurance proceeds relating to a previously reported employee theft.

*Amortization Expenses—CustomerRelationships.* Amortization expense—customer relationshipsincludes the amortization expense associated with customer relationshipintangibles and are amortized over their useful lives of 20 years.

* *

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*Net Interest Expense.*  Net interest expense includes interestrelating to our outstanding indebtedness and amortization of deferred debtissuance costs, net of interest income.

***Non-GAAP Financial Measures***

Certain disclosures in this report include “non-GAAP(Generally Accepted Accounting Principles) financial measures.”  A non-GAAP financial measure is defined as anumerical measure of our financial performance that excludes or includesamounts so as to be different than the most directly comparable measurecalculated and presented in accordance with GAAP in our consolidated balancesheets and related consolidated statements of operations, changes instockholders’ equity and comprehensive income, and cash flows.

EBITDA is a measure used by management to measureoperating performance. EBITDA is defined as net income before net interestexpense, income taxes, depreciation, and amortization. Management believes thatit is useful to eliminate net interest expense, income taxes, depreciation andamortization because it allows management to focus on what it deems to be amore reliable indicator of ongoing operating performance and our ability togenerate cash flow from operations. We use EBITDA in our business operations,among other things, to evaluate our operating performance, develop budgets andmeasure our performance against those budgets, determine employee bonuses andevaluate our cash flows in terms of cash needs. We also present EBITDA becausewe believe it is a useful indicator of our historical debt capacity and abilityto service debt and because covenants in our credit facility and the indenturesgoverning the senior notes and the senior subordinated notes contain ratiosbased on these measures. As a result, internal management reports used duringmonthly operating reviews feature the EBITDA metric. However, management usesthis metric in conjunction with traditional GAAP operating performance andliquidity measures as part of its overall assessment of company performance andliquidity and therefore does not place undue reliance on this measure as itsonly measure of operating performance and liquidity.

EBITDA is not a recognized term under GAAP and doesnot purport to be an alternative to operating income or net income as anindicator of operating performance or any other GAAP measure. EBITDA is not acomplete net cash flow measure because EBITDA is a measure of liquidity thatdoes not include reductions for cash payments for an entity’s obligation toservice its debt, fund its working capital, capital expenditures andacquisitions, if any, and pay its income taxes and dividends, if any. Rather,EBITDA is a potential indicator of an entity’s ability to fund these cashrequirements. EBITDA also is not a complete measure of an entity’sprofitability because it does not include costs and expenses for depreciationand amortization, interest and related expenses and income taxes. Because notall companies use identical calculations, this presentation of EBITDA may notbe comparable to other similarly titled measures of other companies. However,EBITDA can still be useful in evaluating our performance against our peercompanies because management believes this measure provides users with valuableinsight into key components of GAAP amounts.

A reconciliation of EBITDA to net income and to netcash provided by (used in) operating activities for the second quarter andfirst two quarters of 2007 and 2006 along with the components of EBITDAfollows:

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| ** **                                                                 | ** ** | **Thirteen Weeks Ended**   | ** ** | **Twenty-six Weeks Ended** | ** ** |
|----------------------------------------------------------------------------|------------|--------------------------------------|------------|--------------------------------------|------------|
| ** **                                                                 | ** ** | **June 30, 2007**          | ** ** | **July 1, 2006**           | ** ** | **June 30, 2007** | ** ** | **July 1, 2006** | ** ** |
| ** **                                                                 | ** ** | **(Dollars in thousands)** | ** ** |
| Net income                                                                 |       | $                                    | 3,737      |                                 | $          | 2,309 |   | $ | 7,811 |   | $ | 5,261 |   |
| Income tax expense                                                         |       | 2,280                                |       | 1,448                                |       | 4,767 |   | 3,335 |   |
| Interest expense, net                                                      |       | 15,529                               |       | 10,929                               |       | 27,654 |   | 21,787 |   |
| Depreciation and  amortization                                             |       | 3,405                                |       | 2,133                                |       | 5,863 |   | 3,904 |   |
| EBITDA                                                                     |       | 24,951                               |       | 16,819                               |       | 46,095 |   | 34,287 |   |
| Income tax expense                                                         |       | (2,280                               | )          | (1,448                               | )          | (4,767 | ) | (3,335 | ) |
| Interest expense, net                                                      |       | (15,529                              | )          | (10,929                              | )          | (27,654 | ) | (21,787 | ) |
| Deferred income taxes                                                      |       | 1,766                                |       | 1,178                                |       | 3,842 |   | 2,794 |   |
| Amortization of deferred  financing costs                                  |       | 832                                  |       | 704                                  |       | 1,605 |   | 1,412 |   |
| Write off of deferred  debt issuance costs                                 |       | 1,769                                |       | —                               |       | 1,769 |   | — |   |
| Changes in assets and  liabilities, net of effects of business combination |       | (13,624                              | )          | (928                                 | )          | (9,060 | ) | 673 |   |
| Net cash (used in) provided by operating activities                        |       | $                                    | (2,115     | )                                    | $          | 5,396 |   | $ | 11,830 |   | $ | 14,044 |   |

*** ***

***Secondquarter of 2007 compared to second quarter of 2006.***

*Net Sales. *Net sales increased $12.9million or 12.3% to $118.2 million for the second quarter of 2007 from $105.3million for the second quarter of 2006. Excluding the impact of the *Cream of Wheat*acquisitionand the termination of a temporary co-packing arrangement, net sales increased$1.6 million or 1.5% relating to increases in sales price and unit volume.  The *Cream of Wheat*acquisition accounted for $12.4 million of the net sales increase offset by adecrease in net sales of $1.1 million relating to the termination of atemporary co-packing arrangement.  Netsales of our lines of*Maple Grove Farms,Polaner, Grandma’s* and *Sa’son*products increased**in the amounts of $1.4 million, $1.0million, $0.7 million and $0.5 million or 9.9%, 11.1%, 46.3% and 46.0%,respectively.  These increases wereoffset by a reduction in net sales of *B&G*,*Emeril’s, Joan of Arc* and *B&M*products of $0.6 million, $0.5 million, $0.4 million and $0.4million or 4.8%, 9.0%, 23.6% and 4.3%, respectively.  In the aggregate, net sales for all otherbrands decreased $0.1 million or 0.2%.

*Gross Profit. *Gross profit increased $8.9million or 31.4% to $37.3 million for the second quarter of 2007 from $28.4million for the second quarter of 2006. Gross profit expressed as a percentage of net sales increased 4.6% to31.6% in the second quarter of 2007 from 27.0 % in the second quarter of2006.  The increase in gross profitexpressed as a percentage of net sales was primarily due to the positive effectof the *Cream of Wheat*acquisition, whichimproved our overall gross profit expressed as a percentage of net sales by4.1%.  The remaining increase in grossprofit expressed as a percentage of net sales of 0.5% was due to priceincreases partially offset by higher costs for packaging, transportation costs,corn sweeteners and maple syrup.

*Sales, Marketing and DistributionExpenses. *Sales,marketing and distribution expenses increased $1.0 million or 8.4% to $12.6million for the second quarter of 2007 from $11.6 million for the secondquarter of 2006.  This increase isprimarily due to an increase in brokerage and salesmen commissions of $0.9million relating to increased sales volume from the *Cream ofWheat*acquisition and internal sales growth.  Expressed as a percentage of net sales, oursales, marketing and distribution expenses decreased to 10.6% for the secondquarter of 2007 from 11.0% for the second quarter of 2006.

*General and AdministrativeExpenses. *General andadministrative expenses decreased $0.2 million or 10.0% to $1.6 million for thesecond quarter of 2007 from $1.8 million for the second quarter of 2006.  The decrease primarily resulted from anincrease in incentive compensation of $0.5 million and other miscellaneousexpenses of $0.1 million, offset by an insurance reimbursement of $0.8 millionrelating to a previously reported employee theft.

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*Amortization Expense*—*Customer Relationships. *Amortization expense—customerrelationships, all of which relates to the amortization of customerrelationship intangibles acquired in the*Grandma’s*molasses and *Cream ofWheat*acquisitions, increased $1.2 million to $1.6 for the secondquarter of 2007 from $0.4 million forthe second quarter of 2006.

*Operating Income. *As a result of theforegoing, operating income increased $6.8 million or 46.7% to $21.5 millionfor the second quarter of 2007 from $14.7 million for the second quarter of2006.  Operating income expressed as a percentageof net sales increased to 18.2% in the second quarter of 2007 from 14.0% in thesecond quarter of 2006.

*Net Interest Expense. *Net interest expenseincreased $4.6 million or 42.1% to $15.5 million for the second quarter of 2007from $10.9 million in the second quarter of 2006.  Interest expense for the second quarter of2007 included a write-off of deferred financing costs of $1.8 million relatingto our prepayment of $100.0 million of term loan borrowings with a portion ofthe proceeds of our public offering of Class A common stock in May 2007.  Our average debt outstanding wasapproximately $172.0 million higher for the second quarter of 2007 as comparedto the second quarter of 2006.  See “—Liquidityand Capital Resources—Debt” below.

*Income Tax Expense. *Income tax expenseincreased $0.9 million to $2.3 for the second quarter of 2007 from $1.4 millionfor the second quarter of 2006.  Oureffective tax rate was 37.9% for the second quarter of 2007 and 38.5% for thesecond quarter of 2006.

***Firsttwo quarters of 2007 compared to first two quarters of 2006.***

*Net Sales. *Net sales increased $23.7million or 12.0% to $221.9 million for the first two quarters of 2007 from$198.2 million for the first two quarters of 2006.  Excluding the impact of the *Cream of Wheat*acquisition and the termination of atemporary co-packing arrangement, net sales increased $6.2 million or 3.2%relating to increases in sales price and unit volume.  The *Cream of Wheat*acquisition accounted for $18.8 million of the net sales increase offset by adecrease in net sales of $1.3 million relating to the termination of atemporary co-packing arrangement.   Netsales of our lines of***Maple Grove Farms, Grandma’s*, *Polaner, LasPalmas, Underwood,  Sa-són Ac’cent*and*Ortega*products increased**inthe amounts of $5.0 million, $1.2 million, $0.6 million, $0.5 million $0.5million, $0.4 million and $0.4 million or 19.2%, 50.1%, 3.2%, 4.6%, 4.7%, 23.2%and 0.9%, respectively.  These increaseswere offset by a reduction in net sales of *Emeril’s*and  *Regina*productsof $1.8 million and $0.6 million or 16.3% and 9.7%, respectively.  All other brands remained constant in theaggregate.

*Gross Profit. *Gross profit increased$13.7 million or 24.4% to $70.0 million for the first two quarters of 2007 from$56.3 million for the first two quarters of 2006.  Gross profit expressed as a percentage of netsales increased 3.1% to 31.5% in the first two quarters of 2007 from 28.4% inthe first two quarters of 2006.  Theincrease in gross profit expressed as a percentage of net sales was primarilydue to the positive effect of the *Cream of Wheat*acquisition,which improved our overall gross profit expressed as a percentage of net salesby 3.0%.  The remaining increase in grossprofit of 0.1% was due to price increases partially offset by higher costs forpackaging, transportation costs, corn sweeteners and maple syrup.

*Sales, Marketing and DistributionExpenses. *Sales,marketing and distribution expenses increased $2.0 million or 9.1% to $24.1million for the first two quarters of 2007 from $22.1 million for the first twoquarters of 2006.  The increase isprimarily due to an increase in brokerage and salesmen commissions of $1.3million relating to increased sales volume from the *Cream ofWheat*acquisition and internal sales growth and an increase inconsumer marketing of $0.7 million. Expressed as a percentage of net sales, our sales, marketing anddistribution expenses decreased to 10.8% for the first two quarters of 2007from 11.1% for the first two quarters of 2006.

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*General and AdministrativeExpenses. *General andadministrative expenses decreased $0.1 million or 1.0% to $3.4 million for thefirst two quarters of 2007 from $3.5 million in the first two quarters of2006.  The decrease in general andadministrative expenses primarily resulted from an increase in incentivecompensation of $0.6 million and other miscellaneous expenses of $0.3 million,offset almost entirely by an insurance reimbursement of $0.8 million relatingto a previously reported employee theft.

*Amortization Expense—CustomerRelationships.* Amortization expense—customer relationships, all of which relates to theamortization of customer relationship intangibles acquired in the *Grandma’s* molasses and *Cream of Wheat*acquisitions,increased $1.9 million to $2.3 million for the first two quarters of 2007 from$0.4 million for the first two quarters of 2006.

*Operating Income. *As a result of theforegoing, operating income increased $9.8 million or 32.4% to $40.2 millionfor the first two quarters of 2007 from $30.4 million for the first twoquarters of 2006.  Operating incomeexpressed as a percentage of net sales increased to 18.1% in the first twoquarters of 2007 from 15.3% in the first two quarters of 2006.

*Net Interest Expense. *Net interest expenseincreased $5.9 million or 26.9% to $27.7 million for the first two quarters of2007 from $21.8 million in the first two quarters of 2006.  Interest expense for the first two quartersof 2007 included a write-off of deferred financing costs of $1.8 millionrelating to our prepayment of $100.0 million of term loan borrowings with aportion of the proceeds of our public offering of Class A common stock in May2007.  Our average debt outstanding wasapproximately $120.0 million higher for the first two quarters of 2007 ascompared to the first two quarters of 2006. See “—Liquidity and Capital Resources—Debt” below.

*Income Tax Expense. *Income tax expenseincreased $1.5 million or 42.9% to $4.8 million for the first two quarters of2007 from $3.3 million for the first two quarters of 2006.  Our effective tax rate was 37.9% for thefirst two quarters of 2007 and 38.8% for the first two quarters of 2006.

**Liquidity and Capital Resources**

Our primary liquidity requirements include debtservice, capital expenditures and working capital needs.  See also, “Dividend Policy” and “Commitmentsand Contractual Obligations” below.  Wefund our liquidity requirements, as well as financing for acquisitions anddividend payments, if any, primarily through cash generated from operations andto the extent necessary, through borrowings under our credit facility.

*Cash Flows*.  Cash provided by operating activitiesdecreased $2.2 million to $11.8 million for the first two quarters of 2007 from$14.0 million for the first two quarters of 2006.  The decrease was due to changes relating toan increase in accounts receivable and inventory offset by an increase in netincome and trade accounts payable.  Workingcapital at June 30, 2007 was $117.6 million, an increase of $14.6 million overworking capital at December 30, 2006 of $103.0 million.

Net cash used in investing activities for the firsttwo quarters of 2007 was $207.4 million as compared to $34.1 million for thefirst two quarters of 2006.  Capitalexpenditures during the first two quarters of 2007 were $6.5 million andincluded purchases of manufacturing and computer equipment, and were $2.4million greater than our $4.0 million in capital expenditures for the first twoquarters of 2006.  Investmentexpenditures for the first two quarters of 2007 included $200.9 million for the*Cream of Wheat*acquisition.  Investment expenditures for the first twoquarters of 2006 included $30.1 million for the *Grandma’s*molasses acquisition.

Net cash provided by financing activities for the firsttwo quarters of 2007 was $203.3 million as compared to $16.1 million for thefirst two quarters of 2006.  Net cashprovided by financing activities for the first two quarters of 2007 consists of$205.0 million from additional term loan borrowings and $193.2 million from theissuance of Class A common stock, net of underwriting discounts and commissionsand other 

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expenses, offset by $100.0 million for the prepaymentof term loan borrowings, $82.4 million for the repurchase of Class B commonstock, $8.5 million for the payment of dividends to holders of our Class Acommon stock and $4.0 million in debt issuance costs.  Net cash provided by financing activities forthe first two quarters of 2006 consisted of $25.0 million from term loanborrowings, offset by $8.5 million in dividends paid to holders of our Class Acommon stock and $0.4 million in debt issuance costs.

We believe that based on anumber of factors, including our trademark and goodwill amortization for taxpurposes from our prior acquisitions, we realized a significant reduction incash taxes in 2006 and 2005 as compared to our tax expense for financialreporting purposes.  While we expect cashtaxes to increase beginning in 2007 as compared to the prior two years, we willrealize a benefit to our cash taxes payable from amortization of ourtrademarks, goodwill and customer relationship intangibles for the taxableyears 2007 through 2022 that will not be reflected in our income tax expensefor financial statement purposes.

***Dividend Policy***

Our dividend policy reflects a basic judgment that ourstockholders would be better served if we distributed a substantial portion ofour cash available to pay dividends to them instead of retaining it in ourbusiness.  Under this policy, asubstantial portion of the cash generated by our company in excess of operatingneeds, interest and principal payments on indebtedness, capital expendituressufficient to maintain our properties and other assets is in generaldistributed as regular quarterly cash dividends (up to the intended dividendrate as determined by our board of directors) to the holders of our commonstock and not retained by us.  Thecurrent intended dividend rate for our Class A common stock is $0.848 per shareper annum.

Dividend payments, however, are not mandatory orguaranteed and holders of our common stock do not have any legal right toreceive, or require us to pay, dividends. Furthermore, our board of directors may, in its sole discretion, amendor repeal this dividend policy.  Ourboard of directors may decrease the level of dividends below the intendeddividend rate or discontinue entirely the payment of dividends.  Future dividends with respect to shares ofour common stock, if any, depend on, among other things, our results ofoperations, cash requirements, financial condition, contractual restrictions,business opportunities, provisions of applicable law and other factors that ourboard of directors may deem relevant. Over time, our EBITDA and capital expenditure, working capital and othercash needs will be subject to uncertainties, which could impact the level ofdividends, if any, we pay in the future. The indenture governing our senior subordinated notes, the terms of ourrevolving credit facility and the indenture governing the senior notes containsignificant restrictions on our ability to make dividend payments.  In addition, certain provisions of theDelaware General Corporation Law may limit our ability to pay dividends.

As a result of our dividend policy, we may not retaina sufficient amount of cash to finance growth opportunities or unanticipatedcapital expenditure needs or to fund our operations in the event of asignificant business downturn.  We mayhave to forego growth opportunities or capital expenditures that would otherwisebe necessary or desirable if we do not find alternative sources offinancing.  If we do not have sufficientcash for these purposes, our financial condition and our business will suffer.

For the first two quarters of 2007 and 2006, we hadcash flows provided by operating activities of $11.8 million and $14.0 million,and distributed $8.5 million and $8.5 million as dividends, respectively.  If our cash flows from operating activitiesfor future periods were to fall below our minimum expectations (or if ourassumptions as to capital expenditures or interest expense were too low or ourassumptions as to the sufficiency of our revolving credit facility to financeour working capital needs were to prove incorrect), we would need either toreduce or eliminate dividends or, to the extent permitted under the indenturegoverning our senior notes, the indenture governing our senior subordinatednotes and the terms of our credit facility, fund a portion of our dividendswith borrowings or from other sources. If we were to use working capital or permanent borrowings to funddividends, we would have less cash and/or borrowing capacity available forfuture dividends and other purposes, which could negatively impact ourfinancial position, our results of operations, our liquidity and our ability tomaintain or expand our business.

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***Acquisitions***

Our liquidity and capital resources have beensignificantly impacted by acquisitions and may be impacted in the foreseeablefuture by additional acquisitions.  Wehave historically financed acquisitions with borrowings and cash flows fromoperating activities.  Our interestexpense has increased significantly as a result of additional indebtedness wehave incurred as a result of the *Grandma’s*molassesacquisition in January 2006 and the *Cream of Wheat*acquisition in February 2007, and will increase with any additionalindebtedness we may incur to finance potential future acquisitions, ifany.  To the extent future acquisitions,if any, are financed by additional indebtedness, the resulting increase in debtand interest expense could have a negative impact on liquidity.

***Environmental and Health andSafety Costs***

We have not made any material expenditures during thefirst two quarters of 2007 in order to comply with environmental laws orregulations.  Based on our experience todate, we believe that the future cost of compliance with existing environmentallaws and regulations (and liability for known environmental conditions) willnot have a material adverse effect on our consolidated financial condition,results of operations or liquidity. However, we cannot predict what environmental or health and safetylegislation or regulations will be enacted in the future or how existing orfuture laws or regulations will be enforced, administered or interpreted, norcan we predict the amount of future expenditures that may be required in orderto comply with such environmental or health and safety laws or regulations orto respond to such environmental claims.

***Debt***

*Senior Secured Credit Facility*.  InOctober 2004, we entered into a $30.0 million senior secured revolving creditfacility.  In order to finance the *Grandma’s*molasses acquisition, we amended the creditfacility in January 2006 to provide for, among other things, a new $25.0million term loan and a reduction in the revolving credit facility commitmentsfrom $30.0 million to $25.0 million.  Inorder to finance the *Cream of Wheat*acquisition,our credit facility was amended and restated in February 2007 to provide for,among other things, an additional $205.0 million of term loan borrowings.  On May 29, 2007 we prepaid $100.0 million ofterm loan borrowings.  Our $25.0 millionrevolving credit facility matures on January 10, 2011 and the remaining $130.0million of term loan borrowings matures on February 26, 2013.

Interest under the revolvingcredit facility, including any outstanding letters of credit, is determinedbased on alternative rates that we may choose in accordance with the revolvingcredit facility, including the base lending rate per annum plus an applicablemargin, and LIBOR plus an applicable margin. We pay a commitment fee of 0.50% per annum on the unused portion of therevolving credit facility.  Interestunder the term loan facility is determined based on alternative rates that wemay choose in accordance with the credit facility, including the base lendingrate per annum plus an applicable margin of 1.00%, and LIBOR plus an applicablemargin of 2.00%.

Effective as of February 26,2007, we entered into a six year interest rate swap agreement in order toeffectively fix at 7.0925% the interest rate payable for $130.0 million of termloan borrowings.  The interest rate forthe remaining $100.0 of term loan borrowings, which we subsequently prepaid,was 7.36% as of the prepayment date (based upon a three-month LIBOR ratecontract that expired on May 25, 2007). The swap is designated as a cash flow hedge under the guidelines of SFASNo. 133.  The swap is in place throughthe life of the term loan, ending on February 26, 2013.  Changes in fair value of the swap are recordedin accumulated other comprehensive income (loss), net of tax on ourconsolidated balance sheet.

Our obligations under thecredit facility are jointly and severally and fully and unconditionallyguaranteed on a senior basis by all of our existing and certain future domesticsubsidiaries.  The credit facility issecured by substantially all of our and our subsidiaries’ assets except our andour subsidiaries’ real property.  Thecredit facility provides for mandatory prepayment based on asset dispositionsand certain issuances of 

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securities,as defined.  The credit facility containscovenants that restrict, among other things, our ability to incur additionalindebtedness, pay dividends and create certain liens.  The credit facility also contains certainfinancial maintenance covenants, which, among other things, specify maximumcapital expenditure limits, a minimum interest coverage ratio and a maximumsenior and total leverage ratio, each ratio as defined.  Proceeds of the revolving credit facility arerestricted to funding our working capital requirements, capital expendituresand acquisitions of companies in the same line of business as our company,subject to specified criteria.  Therevolving credit facility was undrawn on the date of consummation of our 2004EIS offering and concurrent offerings and remained undrawn through June 30,2007.  The available borrowing capacityunder our revolving credit facility, net of outstanding letters of credit of$2.5 million, was $22.5 million at June 30, 2007.  The maximum letter of credit capacity underthe revolving credit facility is $10.0 million, with a fronting fee of 3.0% perannum for all outstanding letters of credit.

*12.0% Senior Subordinated Notes due 2016*.  In October 2004, we issued $165.8 millionaggregate principal amount of 12.0% senior subordinated notes due 2016, $143.0million of which in the form of EISs and $22.8 million separate from EISs.  As of June 30, 2007, $127.9 million aggregateprincipal amount of senior subordinated notes was held in the form of EISs and$37.9 million aggregate principal amount of senior subordinated notes was heldseparate from EISs.

Interest on the seniorsubordinated notes is payable quarterly in arrears on each January 30, April30, July 30 and October 30 through the maturity date.  The senior subordinated notes will mature onOctober 30, 2016, unless earlier retired or redeemed at our option as describedbelow.

Upon the occurrence of achange of control (as defined in the indenture), unless we have retired thesenior subordinated notes or exercised our right to redeem all seniorsubordinated notes as described below, each holder of the senior subordinatednotes has the right to require us to repurchase that holder’s senior subordinatednotes at a price equal to 101.0% of the principal amount of the seniorsubordinated notes being repurchased, plus any accrued and unpaid interest tothe date of repurchase.  In order toexercise this right, a holder must separate the senior subordinated notes andClass A common stock represented by such holder’s EISs.

We may not redeem the notesprior to October 30, 2009.  However, wemay, from time to time, seek to retire the senior subordinated notes throughcash repurchases of EISs or separate senior subordinated notes and/or exchangesof EISs or separate senior subordinated notes for equity securities, in openmarket purchases, privately negotiated transactions or otherwise.  Such repurchases or exchanges, if any, willdepend on prevailing market conditions, our liquidity requirements, contractualrestrictions and other factors.  Weexpect that any repurchase of EISs or senior subordinated notes would be fundedwith our existing cash balances and cash from operations.  The amounts involved may be material.

In addition, on and afterOctober 30, 2009, we may redeem for cash all or part of the senior subordinatednotes at a redemption price of 106.0% beginning October 30, 2009 and thereafterat prices declining annually to 100% on or after October 30, 2012.  If we redeem any senior subordinated notes,the senior subordinated notes and Class A common stock represented by each EISwill be automatically separated.

The senior subordinatednotes are unsecured obligations and are subordinated in right of payment to allof our existing and future senior secured and senior unsecured indebtedness,including the indebtedness under our credit facility and our senior notes. Thesenior subordinated notes rank pari passu in right of payment with any of ourother subordinated indebtedness.

The senior subordinatednotes are jointly and severally and fully and unconditionally guaranteed by allof our existing domestic subsidiaries and certain future domestic subsidiarieson an unsecured and subordinated basis on the terms set forth in the indenturegoverning the senior subordinated notes. The senior subordinated note guarantees are subordinated in right ofpayment to all existing and future senior indebtedness of the guarantors,including the indebtedness under our credit facility and the senior notes.  Our 

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presentforeign subsidiaries are not guarantors, and any future foreign or partiallyowned domestic subsidiaries will not be guarantors, of our senior subordinatednotes.

The indenture governing thesenior subordinated notes contains covenants with respect to us and restrictsthe 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; specifiedcreation of liens, sale-leaseback transactions and sales of assets; fundamentalchanges, including consolidation, mergers and transfers of all or substantiallyall of our assets; and specified transactions with affiliates.  Each of the covenants is subject to a numberof important exceptions and qualifications.

*8.0% Senior Notes due 2011*.  InOctober 2004, we issued $240.0 million aggregate principal amount of 8.0%senior notes due 2011.  Interest on thesenior notes is payable on April 1 and October 1 of each year, commencing onApril 1, 2005.  The senior notes willmature on October 1, 2011, unless earlier retired or redeemed at our option asdescribed below.

We may not redeem the notesprior to October 1, 2008.  However, wemay, from time to time, seek to retire the senior notes through cashrepurchases of senior subordinated notes and/or exchanges of senior notes forequity securities, in open market purchases, privately negotiated transactionsor otherwise.  Such repurchases orexchanges, if any, will depend on prevailing market conditions, our liquidityrequirements, contractual restrictions and other factors.

On or after October 1, 2008,we may redeem some or all of the senior notes at a redemption price of 104.0%beginning October 1, 2008 and thereafter at prices declining annually to 100%on or after October 1, 2010.  Prior toOctober 1, 2007, we may redeem up to 35% of the aggregate principal amount ofthe senior notes issued in the senior note offering with the net proceeds ofone or more equity offerings at the redemption price as described in theindenture governing the senior notes.  Ifwe or any of the guarantors sell certain assets or experience specific kinds ofchanges in control, we must offer to purchase the senior notes at the prices asdescribed in the indenture governing the senior notes plus accrued and unpaidinterest to the date of redemption.

Our obligations under thesenior notes are jointly and severally and fully and unconditionally guaranteedon a senior basis by all of our existing and certain future domesticsubsidiaries.  The senior notes and thesubsidiary guarantees are our and the guarantors’ general unsecured obligationsand are effectively junior in right of payment to all of our and the guarantors’secured indebtedness and to the indebtedness and other liabilities of ournon-guarantor subsidiaries; are pari passu in right of payment to all of ourand the guarantors’ existing and future unsecured senior debt; and are seniorin right of payment to all of our and the guarantors’ future subordinated debt,including the senior subordinated notes. Our present foreign subsidiaries are not guarantors, and any futureforeign or partially owned domestic subsidiaries will not be guarantors, of oursenior notes.

The indenture governing thesenior notes contains covenants with respect to us and the guarantors andrestricts the incurrence of additional indebtedness and the issuance of capitalstock; the payment of dividends or distributions on, and redemption of, capitalstock; a number of other restricted payments, including certain investments;specified creation of liens, sale-leaseback transactions and sales of assets;fundamental changes, including consolidation, mergers and transfers of all orsubstantially all of our assets; and specified transactions withaffiliates.  Each of the covenants issubject to a number of important exceptions and qualifications.

***Future Capital Needs***

We are highlyleveraged.  On June 30, 2007, our totallong-term debt and stockholders’ equity was $535.8 million and $183.4 million,respectively.

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Our ability to generatesufficient cash to fund our operations depends generally on our results ofoperations and the availability of financing. Our management believes that our cash on hand, cash flow from operatingactivities and available borrowing capacity under our revolving creditfacility, will be sufficient for the foreseeable future to fund operations,meet debt service requirements, fund capital expenditures, make futureacquisitions within our line of business, if any, and pay our anticipateddividends on our Class A common stock.  Weexpect to make capital expenditures of approximately $12.0 to 13.0 million inthe aggregate during fiscal 2007.

***Seasonality***

Sales of a number of ourproducts tend to be seasonal.  In theaggregate, however, our sales are not heavily weighted to any particularquarter due to the diversity of our product and brand portfolio.  Sales during the first quarter of the fiscalyear are generally below those of the following three quarters.

We purchase most of the produce used to make ourshelf-stable pickles, relishes, peppers and other related specialty itemsduring the months of July through October, and we purchase substantially all ofour maple syrup requirements during the months of April through July.  Consequently, our liquidity needs aregreatest during these periods.

***Inflat******ion***

During fiscal 2006 and thefirst two quarters of 2007, we were faced with increasing prices in certaincommodities and packaging materials and we expect this trend may continue.  We manage this risk by entering intoshort-term supply contracts and advance commodities purchase agreements fromtime to time, and if necessary, by raising prices.  Our cost increases in fiscal 2006 and thefirst two quarters of 2007 were partially attributable to the spike in oil andnatural gas prices, which have had a substantial impact on our raw material,packaging and transportation costs.  Webelieve that through sales price increases and our cost saving efforts we haveto some degree been able to offset the impact of recent raw material, packagingand transportation cost increases.  Therecan be no assurance, however, that any future sales price increases or costsaving efforts by us will offset the increased cost of raw material, packagingand transportation costs, or that we will be able to raise prices or reducecosts at all.

**Recent AccountingPronouncements**

In July 2006, the FASB issued FASB Interpretation No.48, “*Accounting for Uncertainty in Income Taxes*”(FIN 48).  FIN 48 prescribes acomprehensive model for how a company should recognize, measure, present, anddisclose in its financial statements uncertain tax positions that the companyhas taken or expects to take on a tax return. FIN 48 states that a tax benefit from an uncertain tax position may berecognized only if it is “more likely than not” that the position issustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of taxbenefit that is greater than 50% likely of being realized upon settlement witha taxing authority having full knowledge of all relevant information.  A tax benefit from an uncertain position waspreviously recognized if it was probable of being sustained.  Under FIN 48, the liability for unrecognizedtax benefits is classified as non-current unless the liability is expected tobe settled in cash within 12 months of the reporting date.  FIN 48 is effective as of the beginning ofthe first fiscal year beginning after December 15, 2006.  We adopted the provisions of FIN 48 at thebeginning of fiscal 2007.  On May 2,2007, the FASB issued FASB Staff Position No. 48-1, “*Definitionof Settlement in FASB Interpretation 48*” (FIN 48-1).  FIN 48-1 amends FIN 48 to provide guidance onhow an enterprise should determine whether a tax position is effectivelysettled for the purpose of recognizing previously unrecognized taxbenefits.  The guidance in FIN 48-1 is tobe applied upon the initial adoption of FIN 48.  Accordingly, we have applied the provisions ofFIN 48-1 at the beginning of fiscal 2007. As a result of the adoption of FIN 48, as amended by FIN 48-1, wereclassified $0.2 million to other non-current liabilities.

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We operate in multiple taxing jurisdictions within theUnited States and Canada and from time to time face audits from various taxauthorities regarding the deductibility of certain expenses, state income taxnexus, intercompany transactions, transfer pricing and other matters.  At the beginning of fiscal 2007, ourliability for unrecognized tax benefits related to state income taxes andCanadian income taxes and was approximately $0.2 million (of which the entireamount would impact our effective tax rate if recognized) plus approximately $0.1million of accrued interest and penalties. There was no material change in the net amount of unrecognized taxbenefits in the first two quarters of 2007.

We are currently under examination in one Canadian taxjurisdiction and remain subject to examination in other jurisdictions until theapplicable statute of limitations expires. As of the beginning of fiscal 2007, a summary of the tax years thatremain subject to examination in our major tax jurisdictions are:

| United States—Federal |   | 2003 and forward |   |
|----------------------------|--------|------------------|--------|
| United  States—States |   | 2002 and forward |   |
| Canada                     |   | 1999 and forward |   |

 

Based upon the expiration of statutes of limitationsand the conclusion of tax examinations in several jurisdictions, we believe itis reasonably possible that the total amount of previously unrecognized taxbenefits may decrease by $0.1 million within twelve months of the reportingdate.

Our policy is to classify interest and penaltiesrelated to income tax uncertainties as income tax expense.

In September 2006, the FASB issued SFAS No. 157, “*Fair Value Measurements*” (SFAS No. 157), which defines fairvalue, establishes a framework for measuring fair value and expands disclosuresabout fair value measurements.  Theprovisions of SFAS No. 157 are effective as of the beginning of our 2008 fiscalyear.  We are currently evaluating theimpact, if any, of adopting SFAS No. 157 on our consolidated financialstatements.

**Off-balance Sheet Arrangements**

As of June 30, 2007, we did not have any off-balancesheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

**Commitments andContractual Obligations**

Our contractual obligations and commitmentsprincipally include obligations associated with our outstanding indebtedness,future minimum operating lease obligations and future pension obligations.  During the first two quarters of 2007, therewere no material changes outside the ordinary course of business in thespecified contractual obligations, except that in February 2007, we incurredadditional long-term debt of $205.0 million in the form of additional term loanborrowings under our credit facility, $100.0 million of which we prepaid in May2007.  As amended, our $25.0 millionrevolving credit facility matures on January 10, 2011 and $130.0 million of ourterm loan borrowings matures on February 26, 2013.  See “Debt—Senior Secured Credit Facility”above.  In addition, during the first twoquarters of 2007, we made contributions to our defined benefit pension plans of$1.3 million and currently anticipate electing to make additional payments ofapproximately $1.5 million during the remainder of fiscal 2007.

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***Forward-Looking Statements***

This report includes forward-looking statements,including without limitation the statements under “Management’s Discussion andAnalysis of Financial Condition and Results of Operations.”  The words “believes,” “anticipates,” “plans,”“expects,” “intends,” “estimates,” “projects” and similar expressions areintended to identify forward-looking statements.  These forward looking statements involveknown and unknown risks, uncertainties and other factors that may cause ouractual results, performance and achievements, or industry results, to bematerially different from any future results, performance, or achievementsexpressed or implied by any forward-looking statements.  We believe important factors that could causeactual results to differ materially from our expectations include thefollowing:

·                  our substantial leverage;

·                  intense competition, changes in consumerpreferences, demand for our products, the effects of changing prices for ourraw materials and local economic and market conditions;

·                  our continued ability to promote brand equitysuccessfully, to anticipate and respond to new consumer trends, to develop newproducts and markets, to broaden brand portfolios in order to competeeffectively with lower priced products and in markets that are consolidating atthe retail and manufacturing levels, to improve productivity and to maintainaccess to credit markets;

·                  the risks associated with the expansion ofour business;

·                  our possible inability to integrate anybusinesses we acquire;

·                  our borrowing costs and credit ratings, whichmay be influenced by the credit ratings of our competitors;

·                  factors that affect the food industrygenerally, including:

·                  recallsif products become adulterated or misbranded, liability if product consumptioncauses injury, ingredient disclosure and labeling laws and regulations and thepossibility that consumers could lose confidence in the safety and quality ofcertain food products, as well as recent publicity concerning the healthimplications of obesity; and

·                  fluctuationsin the level of our customers’ inventories and credit and other business risksrelated to our customers operating in a challenging economic and competitiveenvironment;

·                  the effects of currency movements in Canada;and

·                  other factors discussed elsewhere in thisreport and in our other public filings with the SEC, including under Item 1A, “RiskFactors” in our Annual Report on Form 10-K/A for fiscal 2006.

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

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

We caution that the foregoing list of importantfactors is not exclusive.  We urgeinvestors not to unduly rely on forward-looking statements contained in thisreport.

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**Item 3.    Quantitative and Qualitative DisclosuresAbout Market Risk**

In the normal course of operations, we are exposed tomarket risks arising from adverse changes in interest rates.  Market risk is defined for these purposes asthe potential change in the fair value of a financial asset or liabilityresulting from an adverse movement in interest rates.

Interest under our $25.0million revolving credit facility, including any outstanding letters of credit,is determined based on alternative rates that we may choose in accordance withthe revolving credit facility, including the base lending rate per annum plusan applicable margin, and LIBOR plus an applicable margin.  Interest under our term loan facility isdetermined based on alternative rates that we may choose in accordance with thecredit facility, including the base lending rate per annum plus an applicablemargin of 1.00%, and LIBOR plus an applicable margin of 2.00%.  The interest rate payable for our $130.0million of term loan borrowings is effectively fixed at 7.0925% based upon asix year interest rate swap agreement that we entered into on February 26,2007.

We also have outstanding $240.0 million principalamount of 8.0% senior notes due October 1, 2011, with interest payablesemiannually on April 1 and October 1 of each year.  The fair value of the senior notes at June30, 2007 and December 30, 2006, based on quoted market prices, was $242.4million and $244.8 million, respectively.

We also have outstanding $165.8 million principalamount of 12.0% senior subordinated notes due 2016.  Of such outstanding principal amount, $127.9million principal amount was represented by 17,883,121 EISs as of June 30,2007, and $143.0 million principal amount was represented by 20,000,000 EISs asof December 30, 2006.  Each EISrepresents one share of our Class A common stock and $7.15 principal amount ofour senior subordinated notes.  As ofJune 30, 2007, the fair value of the EISs, based on the per EIS closing priceon the New York Stock Exchange was $362.0 million.  As of December 30, 2006, the fair value ofthe EISs, based on the per EIS closing price on the American Stock Exchange was$400.4 million.  It is not practicable toestimate the fair value of the principal amount of senior subordinated notes representedby EISs.

Of the $165.8 million aggregate principal amount ofsenior subordinated notes outstanding, $37.9 million and $22.8 millionprincipal amount as of June 30, 2007 and December 31, 2006, respectively, wasnot represented by EISs and traded separately. The fair value of the separate senior subordinated notes at June 30,2007 and December 30, 2006, based on quoted market prices, was $41.8 millionand $25.5 million, respectively.  Theinformation under the heading “Inflation” under Item 2, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” isincorporated herein by reference.

**Item 4.    Controls and Procedures**

*Evaluation of Disclosure Controlsand Procedures. *Asrequired by Rule 13a-15(b) under the Securities Exchange Act of 1934, asamended, our management, including our chief executive officer and our chieffinancial officer, conducted an evaluation of the effectiveness of the designand operation of our disclosure controls and procedures as of the end of theperiod covered by this report.  As definedin Rules 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure controlsand procedures are controls and other procedures that we use that are designedto ensure that information required to be disclosed by us in the reports wefile or submit under the Exchange Act is recorded, processed, summarized andreported, 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 informationrequired to be disclosed by us in the reports we file or submit under theExchange Act is accumulated and communicated to our management, including ourchief executive officer and our chief financial officer, as appropriate, toallow timely decisions regarding required disclosure.

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

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*Changes in Internal Control OverFinancial Reporting*. As required by Rule 13a-15(d) under the Exchange Act, our management,including our chief executive officer and our chief financial officer, alsoconducted an evaluation of our internal control over financial reporting to determinewhether any change occurred during the quarter covered by this report that hasmaterially affected, or is reasonably likely to materially affect, our internalcontrol over financial reporting.  Basedon that evaluation, our chief executive officer and our chief financial officerconcluded that there has been no change during the period covered by thisreport that has materially affected, or is reasonably likely to materiallyaffect, our internal control over financial reporting.

*Inherent Limitations on Effectiveness of Controls.*  Our company’s management, including the chiefexecutive officer and chief financial officer, does not expect that ourdisclosure controls or our internal control over financial reporting willprevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provideonly reasonable, not absolute, assurance that the control system’s objectiveswill be met.  The design of a controlsystem must reflect the fact that there are resource constraints, and thebenefits of controls must be considered relative to their costs.  Further, because of the inherent limitationsin all control systems, no evaluation of controls can provide absoluteassurance that misstatements due to error or fraud will not occur or that allcontrol issues and instances of fraud, if any, within our company have beendetected.  These inherent limitationsinclude the realities that judgments in decision-making can be faulty and thatbreakdowns can occur because of simple error or mistake.  Controls can also be circumvented by theindividual acts of some persons, by collusion of two or more people, or bymanagement override of the controls.  Thedesign of any system of controls is based in part on certain assumptions aboutthe likelihood of future events, and there can be no assurance that any designwill succeed in achieving its stated goals under all potential futureconditions.  Projections of anyevaluation of controls effectiveness to future periods are subject to risks.  Over time, controls may become inadequatebecause of changes in conditions or deterioration in the degree of compliancewith policies or procedures.

**PART IIOTHER INFORMATION**

**Item 1.    Legal Proceedings**

We are involved in various claims and legal actionsarising in the ordinary course of business, including proceedings involvingproduct liability claims, worker’s compensation and other employee claims, andtort and other general liability claims, for which we carry insurance, as wellas trademark, copyright, patent infringement and related claims and legalactions.  In the opinion of ourmanagement, the ultimate disposition of these matters will not have a materialadverse effect on our consolidated financial position, results of operations orliquidity.

**Item 1A.  Risk Factors**

Except for the additional risk factor set forth below,we do not believe there have been any material changes in our risk factors aspreviously disclosed in our Annual Report on Form 10-K/A for the year endedDecember 30, 2006 filed with the Securities and Exchange Commission on March 9,2007.

***The separate public tradingmarkets for EISs and separately held shares of Class A Common Stock, and theability to separate and create EISs, may diminish the value of your investmentin EISs or separately held shares of Class A Common Stock, as the case may be.***

Our EISs and shares of Class A common stock not heldin the form of EISs are separately listed for trading on the New York StockExchange.  An EIS holder may separateeach EIS into one share of Class A common stock and $7.15 principal amount ofsenior subordinated notes.  Upon theoccurrence of certain events EISs will automatically separate.  Conversely, subject to limitations, a holderof separate shares of Class A common stock and senior subordinated notes cancombine such securities to form EISs. Separation and 

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creation of EISs will automatically result inincreases and decreases, respectively, in the number of shares of Class Acommon stock not in the form of EISs and in the number of EISs.

We cannot predict what effect separate trading marketsin EISs and separately held shares of Class A common stock, or fluctuations inthe number of such securities, will have on the value of such securities.  If the value of separately held Class Acommon stock is deemed to be less than the value of the same securityunderlying an EIS, creation of EISs by combining such separate shares with anythen available separate senior subordinated notes may become more attractive.  Conversely, if the value of an EIS is deemedto be less than the value of its components, separation of EISs may become moreattractive.

Any reduction in the number of either EISs orseparately held shares of Class A common stock would decrease the liquidity forthe remaining EISs or separately held shares of Class A common stock, as thecase may be, which could further diminish the value of such securities.  Furthermore, if the number of either of suchsecurities outstanding falls below the minimum required for listing on the NewYork Stock Exchange, such securities may be delisted from such exchange.

**Item 2.    Unregistered Sales of Equity Securities andUse of Proceeds**

(a)           Theinformation required by Item 701 of Regulation S-K as to all equity securitiesof our company that were sold by us during the period covered by this reportthat were not registered under the Securities Act of 1934, as amended, haspreviously been included in the Current Report on Form 8-K that we filed withthe SEC on May 14, 2007.

(b)           Notapplicable.

(c)           Notapplicable.

**Item 3.    Defaults Upon Senior Securities**

Not applicable.

**Item 4.    Submission of Matters to a Vote of SecurityHolders**

Our annual meeting of stockholders was held on May 8,2007.  At the annual meeting, ourstockholders considered and voted upon the election of six Class A directorsand one Class B director to serve until the next annual meeting of stockholdersand until their successors have been elected and qualified.  All seven of the nominees for the board ofdirectors were elected by the following vote:

| Class A Director Nominee | ** ** | **For**    | ** ** | **Withheld** | ** ** |
|-----------------------------------------|------------|------------|------------|--------------|------------|
| David L. Wenner                         |       | 25,545,763 |       | 137,422      |       |
| Robert C.  Cantwell                     |       | 25,548,657 |       | 134,528      |       |
| James R.  Chambers                      |       | 25,531,475 |       | 151,710      |       |
| Cynthia T.  Jamison                     |       | 25,531,991 |       | 151,194      |       |
| Dennis Mullen                           |       | 25,536,617 |       | 146,568      |       |
| Alfred Poe                              |       | 25,532,746 |       | 150,439      |       |

 

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| Class B Director Nominee | ** ** | **For**   | ** ** | **Withheld** | ** ** |
|-----------------------------------------|------------|-----------|------------|--------------|------------|
| Steven C.  Sherrill                     |       | 6,185,192 |       | —       |       |

** **

In addition, our stockholders ratified the appointmentof KPMG LLP as our independent registered public accounting firm for the fiscalyear ending December 29, 2007, by the following vote:

| For        | ** ** | **Against** | ** ** | **Abstain** |
|------------|------------|-------------|------------|-------------|
| 25,539,392 |       | 74,354      |       | 69,439      |

 

**Item 5.    Other Information**

Not applicable.

**Item 6.    Exhibits**

 
| EXHIBIT NO. | ** ** | **DESCRIPTION**                                                                                                                                                                       |
|-------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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. |

 

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**SIGNATURE**

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.
| Dated: July 30, 2007 | B&G FOODS, INC. |
|----------------------|---------------------|
|                 |                |   |
|                 |                |   |
|                 | By:                 | /s/ Robert C. Cantwell |
|                 |                | Robert C. Cantwell  Executive Vice President and Chief Financial Officer  (Principal Financial and Accounting Officer and Authorized Officer) |

* *

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