As filed with the Securities and Exchange Commission on April 28, 2005



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

|(Mark one)                                                                                   |                                                                                         
|-------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                                                            | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|For the quarterly period ended April 2, 2005                                                
|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(State or other jurisdiction of
incorporation or organization)                      |  | 13-3918742(I.R.S. Employer
Identification No.)
|------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|4 Gatehall Drive, Suite 110, Parsippany, New Jersey(Address of principal executive offices) |  | 07054(Zip Code)                               

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

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

As of April 28, 2005, the registrant had 20,000,000 shares of Class A common stock, par value $0.01 per share, and 7,556,443 shares of
Class B common stock, par value $0.01 per share, outstanding.



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B&G Foods, Inc. and Subsidiaries

Index

|                             |         |                                            |                                                                                       | Page No.
|---------------------------- | ------- | ------------------------------------------ | ------------------------------------------------------------------------------------- | --------
|PART I FINANCIAL INFORMATION |         | 1                                         
|                             | Item 1. |                                            | Financial Statements (Unaudited)                                                      |         
|                             |         | 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 |         
|                             | Item 3. |                                            | Quantitative and Qualitative Disclosures About Market Risk                            |         
|                             | Item 4. |                                            | Controls and Procedures                                                               |         
|PART II OTHER INFORMATION    |         | 56                                        
|                             | Item 1. |                                            | Legal Proceedings                                                                     |         
|                             | Item 2. |                                            | Unregistered Sales of Equity Securities and Use of Proceeds                           |         
|                             | Item 3. |                                            | Defaults Upon Senior Securities                                                       |         
|                             | Item 4. |                                            | Submission of Matters to a Vote of Security Holders                                   |         
|                             | Item 5. |                                            | Other Information                                                                     |         
|                             | Item 6. |                                            | Exhibits                                                                              |         
|SIGNATURE                    |         | 57                                        

i

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PART I        FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

B&G Foods, Inc. and Subsidiaries        Consolidated Balance Sheets        (Dollars in thousands, except per share data)  (Unaudited)

|                                     |                                                                                                                          | April 2, 2005                              |         | January 1, 2005 |        
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------- | --------------- | -------
|Assets                               |                                                                                                                          |                                            |         |                 |        
|Current assets:                      |                                                                                                                          |                                            |         |                 |        
|                                     | Cash and cash equivalents                                                                                                |                                            | $       | 23,001          |        
|                                     | Trade accounts receivable, net                                                                                           |                                            |         | 28,306          |        
|                                     | Inventories                                                                                                              |                                            |         | 76,833          |        
|                                     | Prepaid expenses                                                                                                         |                                            |         | 3,283           |        
|                                     | Deferred income taxes                                                                                                    |                                            |         | 1,782           |        
|                                     | Income tax receivable                                                                                                    |                                            |         | 6,990           |        
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total current assets                       |         |                 | 140,195
|Property, plant and equipment, net   |                                                                                                                          |                                            | 43,600  |                 |        
|Goodwill                             |                                                                                                                          |                                            | 188,629 |                 |        
|Trademarks                           |                                                                                                                          |                                            | 193,481 |                 |        
|Other assets                         |                                                                                                                          |                                            | 21,915  |                 |        
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total assets                               |         | $               | 587,820
|                                     |                                                                                                                          |                                            |         |                 |        
|Liabilities and Stockholders' Equity |                                                                                                                          |                                            |         |                 |        
|Current liabilities:                 |                                                                                                                          |                                            |         |                 |        
|                                     | Trade accounts payable                                                                                                   |                                            | $       | 22,067          |        
|                                     | Accrued expenses                                                                                                         |                                            |         | 10,768          |        
|                                     | Dividends payable                                                                                                        |                                            |         | 4,240           |        
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total current liabilities                  |         |                 | 37,075 
|Long-term debt                       |                                                                                                                          |                                            | 405,800 |                 |        
|Other liabilities                    |                                                                                                                          |                                            | 299     |                 |        
|Deferred income taxes                |                                                                                                                          |                                            | 53,702  |                 |        
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total liabilities                          |         |                 | 496,876
|Stockholders' equity:                |                                                                                                                          |                                            |         |                 |        
|                                     | Class A common stock, $0.01 par value per share. Authorized 100,000,000 shares; issued and outstanding 20,000,000 shares |                                            |         | 200             |        
|                                     | Class B common stock, $0.01 par value per share. Authorized 25,000,000 shares; issued and outstanding 7,556,443 shares   |                                            |         | 76              |        
|Additional paid-in capital           |                                                                                                                          |                                            | 156,800 |                 |        
|Accumulated other comprehensive loss |                                                                                                                          |                                            | (60     | )               |        
|Accumulated deficit                  |                                                                                                                          |                                            | (66,072 | )               |        
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total stockholders' equity                 |         |                 | 90,944 
|                                     |                                                                                                                          |                                            |         |                 |        
|                                     |                                                                                                                          | Total liabilities and stockholders' equity |         | $               | 587,820
|                                     |                                                                                                                          |                                            |         |                 |        

See
Notes to Consolidated Financial Statements.

1

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B&G Foods, Inc. and Subsidiaries        Consolidated Statements of Operations        (Dollars in thousands, except per share data)  (Unaudited)

|                                                                |                                                               | Thirteen Weeks Ended                   
|--------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------------
|
|Net sales                                                       |                                                               | $                                      
|Cost of goods sold                                              |                                                               |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        
|Operating expenses:                                             |                                                               |                                        
|Sales, marketing and distribution expenses                      |                                                               |                                        
|General and administrative expenses                             |                                                               |                                        
|Management fees-related party                                   |                                                               |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        
|Interest expense, net                                           |                                                               |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        
|Provision for income taxes                                      |                                                               |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        
|Less: preferred stock dividends accumulated and related charges |                                                               |                                        
|                                                                |                                                               |                                        
|Net income available to common stockholders                     |                                                               | $                                      
|                                                                |                                                               |                                        
|Earnings per share calculations:                                |                                                               |                                        
|                                                                | Net income available to common stockholders per common share: |                                        
|                                                                |                                                               | Basic and diluted distributed earnings:
|                                                                |                                                               |                                        
|                                                                | Earnings (loss) per share:                                    |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        
|                                                                |                                                               |                                        

See
Notes to Consolidated Financial Statements.

2

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B&G Foods, Inc. and Subsidiaries        Consolidated Statements of Cash Flows        (Dollars in thousands)  (Unaudited)

|                                                   |                                                                               | Thirteen Weeks Ended                                           |                          
|-------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------------------------------------------- | -------------------------
|
|Cash flows from operating activities:              |                                                                               |                                                                |                          
|                                                   | Net income                                                                    |                                                                | $                        
|                                                   | Adjustments to reconcile net income to net cash used in operating activities: |                                                                |                          
|                                                   |                                                                               | Depreciation                                                   |                          
|                                                   |                                                                               | Amortization of deferred debt issuance costs and bond discount |                          
|                                                   |                                                                               | Deferred income taxes                                          |                          
|                                                   | Changes in assets and liabilities, net of effects from business acquired:     |                                                                |                          
|                                                   |                                                                               |                                                                | Trade accounts receivable
|                                                   |                                                                               |                                                                | Inventories              
|                                                   |                                                                               |                                                                | Prepaid expenses         
|                                                   |                                                                               |                                                                | Tax receivable           
|                                                   |                                                                               |                                                                | Trade accounts payable   
|                                                   |                                                                               |                                                                | Accrued expenses         
|                                                   |                                                                               |                                                                | Due to related party     
|                                                   |                                                                               |                                                                | Other liabilities        
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Net cash used in operating activities                          |                          
|                                                   |                                                                               |                                                                |                          
|Cash flows from investing activities:              |                                                                               |                                                                |                          
|                                                   | Capital expenditures                                                          |                                                                |                          
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Net cash used in investing activities                          |                          
|                                                   |                                                                               |                                                                |                          
|Cash flows from financing activities:              |                                                                               |                                                                |                          
|                                                   | Payments of long-term debt                                                    |                                                                |                          
|                                                   | Dividends paid                                                                |                                                                |                          
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Net cash used in financing activities                          |                          
|                                                   | Effect of exchange rate fluctuations on cash and cash equivalents             |                                                                |                          
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Net decrease in cash and cash equivalents                      |                          
|                                                   | Cash and cash equivalents at beginning of period                              |                                                                |                          
|                                                   |                                                                               |                                                                |                          
|                                                   | Cash and cash equivalents at end of period                                    |                                                                | $                        
|                                                   |                                                                               |                                                                |                          
|Supplemental disclosures of cash flow information: |                                                                               |                                                                |                          
|                                                   |                                                                               |                                                                | Cash interest            
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               |                                                                | Cash income taxes        
|                                                   |                                                                               |                                                                |                          
|                                                   | Non-cash transactions:                                                        |                                                                |                          
|                                                   |                                                                               | Accretion of Series C senior preferred stock warrants          |                          
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Accretion of Series C senior preferred stock dividends         |                          
|                                                   |                                                                               |                                                                |                          
|                                                   |                                                                               | Dividends declared and unpaid                                  |                          
|                                                   |                                                                               |                                                                |                          

See
Notes to Consolidated Financial Statements

3

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B&G Foods, Inc. and Subsidiaries        Notes to Consolidated Financial Statements        (Dollars in thousands, except per share data)  (Unaudited)

(1) Nature of Operations



Prior to the consummation of our initial public offering on October 14, 2004, we were known as B&G Foods Holdings Corp. and were majority owned by
Bruckmann, Rosser, Sherrill & Co., L.P. (BRS), a private equity investment firm, and minority owned by management, directors and certain other investors. Our only asset and operations consisted
of our ownership of B&G Foods, Inc. and its subsidiaries.

On
October 7, 2004, our Registration Statement on Form S-1 in respect of a proposed initial public offering of 17,391,305 Enhanced Income Securities (EISs), an
offering of $22,800 of 12.0% senior subordinated notes due 2016 separate from the EISs and an offering of $240,000 of 8.0% senior notes due 2011 was declared effective by the Securities and Exchange
Commission. Each EIS represents one share of a then new class of common stock, our Class A common stock, and $7.15 principal amount of 12.0% senior subordinated notes due 2016. The proceeds
were allocated to the underlying Class A common stock and senior subordinated notes based upon the relative fair values of each. Trading of the EISs began on the American Stock Exchange on
October 8, 2004. On October 14, 2004, the initial public offering, separate senior subordinated notes and senior notes transactions closed and we simultaneously entered into a new senior
secured revolving credit facility (see Note 4). From the initial public offering and concurrent offerings, we raised net proceeds (after deducting transaction fees and expenses of $35,313) of
approximately $490,704 on October 14, 2004 and $36,783 on October 22, 2004 in connection with the exercise of the underwriters' over-allotment option for an additional
2,608,695 EISs. We used the proceeds of the initial public offering, the concurrent offerings and cash on hand to repay all outstanding borrowings under, and terminate, our then existing senior
secured credit facility, to repay $194,165 of our $220,000 95/8% senior subordinated notes due 2007, to repurchase all of our outstanding preferred stock from the existing stockholders,
and to repurchase shares of our existing outstanding Class B common stock, options and warrants from the existing stockholders. Also on such date, $25,835 in proceeds from the initial public
offering was set aside to redeem the remaining 95/8% senior subordinated notes on November 15, 2004 at a redemption price equal to 101.604%. In connection with the initial public
offering and the concurrent offerings, for the fifty-two week period ended January 1, 2005 we recorded charges that total approximately $23,766. These costs include:
(i) $13,907 of costs relating to the early extinguishment of debt included in interest expense (including: the write-off of existing deferred financing
fees of $8,361, the write-off of existing bond discount of $655 and bond tender costs of $4,891), and (ii) transaction related compensation expense for the payment of transaction
bonuses of $5,948 and the repurchase of employee stock options of $3,911.

Simultaneously
with the completion of our initial public offering and the concurrent offerings, on October 14, 2004, B&G Foods, Inc., our wholly owned subsidiary, was
merged with and into us and we were renamed B&G Foods, Inc. In addition, on such date and simultaneously with the offerings, our existing common stock was reclassified and converted into
109.8901 shares of Class B common stock. Share, per share, option and warrant amounts for all periods presented give effect to this reclassification and conversion unless otherwise stated.

Unless
the context requires otherwise, references in this report to "B&G Foods," "the company," "we," "us" and "our" refer to B&G Foods, Inc. and its subsidiaries.

4

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(1) Nature of Operations (Continued)



We operate in one industry segment and manufacture, sell and distribute a diverse portfolio of high quality branded, shelf-stable food products. Our products
include pickles, peppers, jams and jellies, canned meats and beans, spices, syrups, hot sauces, maple syrup, salad dressings, taco shells, seasonings, dinner kits, taco sauces, refried beans, salsa
and other specialty food products which are sold to retailers and food service establishments. We distribute these products to retailers in the greater New York metropolitan area through a
direct-store-organization sales and distribution system and elsewhere in the United States through a nationwide network of independent brokers and distributors.

Sales
of a number of our products tend to be seasonal; however, in the aggregate, our sales are not heavily weighted to any particular quarter. Sales during the first quarter of the
fiscal year are generally below that of the following three quarters.

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



Our exposure to credit loss in the event of non-payment of accounts receivable by customers is estimated in the amount of the allowance for doubtful
accounts. We perform ongoing credit evaluations of our customers' financial conditions. As of April 2, 2005, we do not believe we have any significant concentration of credit risk with respect
to our trade accounts receivable. Our top ten customers accounted for approximately 42.0% and 39.2% of consolidated net sales for the thirteen weeks ended April 2, 2005 and April 3,
2004, respectively. No single customer accounted for more than 8.6% and 7.7% of consolidated net sales for the thirteen weeks ended April 2, 2005 and April 3, 2004, respectively.

(2) Summary of Significant Accounting Policies



Our unaudited consolidated interim financial statements contain all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly
our consolidated financial position as of April 2, 2005 and the results of our operations and cash flows for the thirteen week periods ended April 2, 2005 and April 3, 2004.

Our
results of operations for the thirteen week period ended April 2, 2005 are not necessarily indicative of the results to be expected for the full year. The accompanying
unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes for the fiscal year ended January 1, 2005 included
in our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 filed with the Securities and Exchange Commission (SEC) on March 2, 2005.

5

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)



The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires our management to make a number of estimates and
assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve trade and consumer promotion expenses, allowances for excess,
obsolete and unsaleable inventories, and the recoverability of goodwill, trademarks, property, plant and equipment, and deferred tax assets and the accounting for our EISs, including their treatment
in computing our income tax expense. Actual results could differ from those estimates and assumptions.



For purposes of the consolidated statements of cash flows, all highly liquid debt instruments with maturities of three months or less when acquired are considered
to be cash and cash equivalents.



Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out and average cost methods.
Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The estimate is based on our management's review of inventories on hand compared to estimated future
usage and sales.



Property, plant and equipment are stated at cost. Plant and equipment under capital leases are stated at the present value of the minimum lease payments.
Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets, 12 to 20 years for buildings and improvements, 5 to
10 years for machinery and equipment, and 3 to 5 years for office furniture and vehicles. Plant and equipment held under capital leases and leasehold improvements are amortized on a
straight-line basis over the shorter of the lease term or estimated useful life of the asset. Expenditures for maintenance, repairs and minor replacements are charged to current
operations. Expenditures for major replacements and betterments are capitalized.



Goodwill and intangible assets with indefinite useful lives (trademarks) are tested for impairment at least annually and whenever events or circumstances occur
indicating that goodwill or indefinite life intangibles might be impaired.

We
perform the annual impairment tests on the last day of each fiscal year. The annual goodwill impairment test involves a two-step process. The first step of the impairment
test involves comparing the fair value of our company with our company's carrying value, including goodwill. If the carrying value of our company exceeds our fair value, we perform the second step of
the impairment test to determine the amount of the impairment loss. The second step of the goodwill impairment test involves

6

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

comparing
the implied fair value of goodwill with the carrying value of that goodwill and recognizing a loss for the difference. Calculating our fair value requires significant estimates and
assumptions by management. We estimate our fair value by applying third party market value indicators to our earnings before interest, taxes, depreciation and amortization (EBITDA). We test indefinite
life intangible assets for impairment by comparing their carrying value to their fair value that is determined using a cash flow method and recognize a loss to the extent the carrying value is
greater.

We
completed our annual impairment tests for the year ended January 1, 2005 with no adjustments to the carrying values of goodwill and indefinite life intangibles.



Long-lived assets, such as property, plant and equipment, and intangibles with estimated useful lives are depreciated or amortized over their
respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of
the asset.



Our EISs include Class A common stock and senior subordinated notes. Upon completion of our initial public offering (including the exercise of the
over-allotment option), we allocated the proceeds from the issuance of the EISs, based upon relative fair value at the issuance date, to the Class A common stock and the senior
subordinated notes. We have assumed that the price paid in the EIS offering was equivalent to the combined fair value of the Class A common stock and the senior subordinated notes, and the
price paid in the offering for the senior subordinated notes sold separately (not in the form of EISs) was equivalent to their initial stated principal amount. We have concluded there are no embedded
derivative features related to the EIS that require bifurcation under Financial Accounting Standards Board (FASB) Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended (SFAS No. 133). We have determined the fair value of the Class A common stock and the senior subordinated notes with reference to a number of factors, including
the sale of the senior subordinated notes sold separately from the EISs that have the same terms as the senior subordinated notes included in the EISs. Therefore, we have allocated the entire proceeds
of the EIS offering to the Class A common stock and the senior subordinated notes, and the allocation of the EIS proceeds to the senior subordinated notes did not result in a premium or
discount.

We
have concluded that the call option and the change in control put option in the senior subordinated notes do not warrant separate accounting under SFAS No. 133 because they are
clearly and closely related to the economic characteristics of the host debt instrument. Therefore, we have allocated the entire proceeds of the offering to the Class A common stock and the
senior subordinated notes. Upon subsequent issuances, if any, of senior subordinated notes, we will evaluate whether the call option and the change in control put option in the senior subordinated
notes require separate

7

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

accounting
under SFAS No. 133. We expect that if there is a substantial discount or premium upon a subsequent issuance of senior subordinated notes, we may need to separately account for the
call option and the change in control put option features as embedded derivatives for such subsequent issuance. If we determine that the embedded derivatives, if any, require separate accounting from
the debt host contract under SFAS No. 133, the call option and the change in control put option associated with the senior subordinated notes will be recorded as derivative liabilities at fair
value, with changes in fair value recorded as other non-operating income or expense. Any discount on the senior subordinated notes resulting from the allocation of proceeds to an embedded
derivative will be amortized to interest expense over the remaining life of the senior subordinated notes.

The
Class A common stock portion of each EIS is included in stockholders' equity, net of the related portion of the EIS transaction costs allocated to Class A common stock.
Dividends paid on the Class A common stock are recorded as a reduction to retained earnings when declared by us. The senior subordinated note portion of each EIS is included in
long-term debt, and the related portion of the EIS transaction costs allocated to the senior subordinated notes was capitalized as deferred financing costs and is being amortized to
interest expense using the effective interest method. Interest on the senior subordinated notes is charged to expense as accrued by us.



Revenues are recognized when products are shipped. We report all amounts billed to a customer in a sale transaction as revenue, including those amounts related to
shipping and handling. Shipping and handling costs are included in cost of goods sold. Consideration from a vendor to a retailer is presumed to be a reduction to the selling prices of the vendor's
products and, therefore, should be characterized as a reduction of sales when recognized in the vendor's income statement. As a result, certain coupons and promotional expenses are recorded as a
reduction of net sales.



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

8

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)



We have defined benefit pension plans covering substantially all of our employees. Our funding policy is to contribute annually the amount recommended by our
actuaries.



Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities of our company are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

As
part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process involves estimating our current
tax expenses together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities.
We then assess the likelihood that our deferred tax assets will be recovered from future 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 or increase this allowance in a financial accounting period, we include such charge in our tax provision, or reduce our tax benefits, in
our consolidated statement of
operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

We
have recorded deferred tax assets, a portion of which represents net operating loss carryforwards. A valuation allowance has been recorded for certain state net operating loss
carryforwards.

There
are various factors that may cause those tax assumptions to change in the near term, and we may have to record a valuation allowance against our deferred tax assets. We cannot
predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant
changes to the U.S. federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our consolidated financial statements when new
regulations and legislation are enacted.

We
do not provide for U.S. federal income taxes or tax benefits on the unremitted earnings or losses of our foreign subsidiary as such earnings are intended to be indefinitely
reinvested.

We
have accounted for our issuance of EISs as an issuance of the separate securities evidenced by such EISs and have allocated the proceeds received for each EIS between the
Class A common stock and senior subordinated note represented thereby in the amounts of their respective fair values at the

9

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

time
of issuance. Accordingly, we have accounted for the senior subordinated notes represented by the EISs as long-term debt bearing a stated interest rate and maturing on
October 30, 2016. In connection with the issuance and initial public offering of the EISs, we received an opinion from counsel that the senior subordinated notes should be treated as debt for
United States federal income tax purposes. In accordance with the opinion we received, we continue to be of the view that the senior subordinated notes should be treated as debt for United States
federal income tax purposes (although we have not sought a ruling from the IRS on this issue), and we intend to deduct annually interest expense of approximately $19,896 on the senior subordinated
notes from taxable income for United States federal and state income tax purposes. There can be no assurance that the classification of senior subordinated notes as debt (or the amount of interest
expense deducted) will not be challenged by the IRS or other tax jurisdictions or will be sustained by a court of law if challenged.

If
our treatment of the senior subordinated notes as debt is put at risk in the future as a result of a future ruling by the IRS or other tax jurisdiction or by a court of law, including
an adverse ruling for EISs (or other similar securities) issued by other companies or as a result of a proposed adjustment by the IRS or other tax jurisdiction in an examination of our company or for
any other reason, we will need to consider the effect of such developments on the determination of our future tax provisions and obligations. In the event the senior subordinated notes are required to
be treated as equity for income tax purposes, then the cumulative interest expense associated with the senior subordinated notes for prior tax periods that are open to assessment and for future tax
periods would not be deductible from
taxable income and we would be required to recognize additional tax expense and establish a related income tax liability for prior period treatment. The additional tax due to the federal and state
authorities would be based on our taxable income or loss for each of the years that we claimed the interest expense deduction and would materially and adversely affect our financial position, cash
flow, and liquidity, and could affect our ongoing ability to make interest payments on the senior subordinated notes and dividend payments on the shares of common stock represented by the EISs and our
ability to continue as a going concern. In addition, non-U.S. holders of our EISs could be subject to withholding taxes on the payment of interest treated as dividends on equity, which
could subject us to additional liability for the withholding taxes that we do not collect on such payments. However, because in accordance with the opinion of counsel we received on the date of our
initial public offering we continue to be of the view that the senior subordinated notes should be treated as debt for United States federal income tax purposes, we do not record a liability for a
potential disallowance of this interest expense deduction or for the potential imposition of these withholding taxes.

A
factor in the ongoing determination that our consolidated financial statements should reflect deductions for income tax purposes of the interest on the senior subordinated notes is the
veracity, at the time of the initial public offering, of the representations delivered by the purchasers of senior subordinated notes sold separately (not in the form of EISs). We may conduct
procedures in the future to confirm the veracity, at the time of the offering, of the purchaser representations. In addition, other factors indicating the existence, at the time of the initial public
offering, of any plan or pre-arrangement may also be relevant to this ongoing determination. It is possible that we will at some point in the future, as a result of the findings of the
procedures noted above, or IRS interpretations or other changes in circumstances, conclude that we should establish a reserve for tax liabilities associated with a disallowance of all or part of the
interest deductions on the senior subordinated notes, although

10

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

our
present view is that no such reserve is necessary or appropriate. If we decide to maintain such a reserve, our income tax provision, and related income tax payable, would be materially impacted.
As a result, our ability to pay dividends on the shares of our common stock could be materially impaired and the market price and/or liquidity for the EISs or our common stock could be adversely
affected.



Cash dividends, if any, are accrued as a liability on our consolidated balance sheet when declared.



For the periods prior to our initial public offering, basic earnings per share is calculated by dividing net income available to common shares (net income less
dividends accumulating during the period for our 13% Series A and Series B cumulative preferred stock and Series C senior preferred stock and other charges) by the weighted
average common shares outstanding during the period. Diluted earnings per share is calculated similarly, except that it includes the dilutive effect of the assumed exercise of outstanding options and
warrants.

Following
the consummation of our initial public offering, we have two classes of common stock, designated as Class A common stock and Class B common stock, and we present
basic and diluted earnings per share using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of
common stock according to dividends declared and participation rights in undistributed earnings.

Net
income available to our common stockholders is allocated between our two classes of common stock based upon the two-class method. Basic and diluted earnings per share for
our Class A and Class B common stock is calculated by dividing net income available to common stockholders by the weighted average number of shares of Class A and Class B
common stock outstanding.

Thirteen Weeks EndedApril 2,
2005

April 3,
2004Net income

$
2,958

$
5,314Preferred stock dividends accumulated and related charges





3,908Net income available to common stockholders


2,958


1,406Less: Class A common stock dividends declared


4,240


Undistributed (loss) earnings available to Class A and Class B common stockholders

$
(1,282
)
$
1,406Weighted average common shares outstanding:Basic and Diluted Class A common shares outstanding


20,000,000


Basic Class B common shares outstanding


7,556,443


11,593,394Diluted Class B common shares outstanding


7,556,443


15,492,115


11

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

Basic and diluted allocation of undistributed (loss) earnings:Class A common stock

$
(930
)
$
Class B common stock


(352
)

1,406Total

$
(1,282
)
$
1,406Basic earnings per share:Undistributed (losses) earnings:Class A common stock

$
(0.05
)
$
Class B common stock

$
(0.05
)
$
0.12Distributed earnings:Class A common stock

$
0.21

$
Basic earnings (losses) per share:Class A common stock

$
0.16

$
Class B common stock

$
(0.05
)
$
0.12Diluted (losses) earnings per share:Undistributed (losses) earnings:Class A common stock

$
(0.05
)
$
Class B common stock

$
(0.05
)
$
0.09Distributed earnings:Class A common stock

$
0.21

$
Diluted earnings (losses) per share:Class A common stock

$
0.16

$
Class B common stock

$
(0.05
)
$
0.09




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

We
have outstanding $240,000 principal amount of 8.0% senior notes due 2011. The fair value of the senior notes at April 2, 2005, based on quoted market prices, was $254,400.

We
also have outstanding $165,800 principal amount of 12.0% senior subordinated notes due 2016. Of such outstanding principal amount, $143,000 principal amount is represented by
20.0 million EISs. Each EIS represents one share of our Class A common stock and $7.15 principal amount of our senior subordinated notes. As of April 2, 2005, the fair value of
the EISs, based on the per EIS closing price on the American Stock Exchange on April 1, 2005, was $14.98 per EIS. It is not practicable to estimate

12

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

the
fair value of the $143,000 principal amount of senior subordinated notes represented by the EISs. Of the $165,800 aggregate principal amount of senior subordinated notes outstanding, $22,800
principal amount is not represented by EISs and trades separately. The fair value of the separate senior subordinated notes at April 2, 2005, based on quoted market prices, was $25,559.



In response to the enactment of the American Job Creation Act of 2004 (the "Jobs Act") on October 22, 2004, the FASB issued FASB Staff Position (FSP)
No. 109-1, "Application of FASB Statement No. 109, Accounting for Income Taxes, for the Tax Deduction Provided to U.S. Based
Manufacturers" (FSP 109-1), and FSP No.109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation
Provisions within the American Jobs Creation Act of 2004" (FSP 109-2).

FSP
No. 109-1 clarifies how to apply SFAS No. 109 to the new law's tax deduction for income attributable to "domestic production activities." The fully
phased-in tax deduction is up to nine percent of the lesser of taxable income or "qualified production activities income," as defined by the Jobs Act. The staff position requires that the
deduction be accounted for as a special deduction in the period earned, not as a tax-rate reduction. As a result, we will recognize a reduction in our income tax expense for the domestic
production activities in the quarterly period(s) in which we are eligible for the deduction.

The
Jobs Act includes a provision that encourages companies to reinvest foreign earnings in the United States by temporarily making certain dividends received by a U.S. corporation from
controlled foreign corporations eligible for an 85% dividends-received deduction. We may elect to take this special one-time deduction for dividends received during the fiscal year ending
December 31, 2005. FSP 109-2 permits time beyond the financial reporting period of enactment date to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation
of foreign earnings for purposes of applying SFAS No. 109. We are still in the process of evaluating the effects of the repatriation provision. The related range of income tax effects of such
repatriation cannot be reasonably estimated at the time of issuance of these consolidated financial statements. As provided for in FSP 109-2, there have been no amounts recognized under
the repatriation provision to date and accordingly, there has been no effect on income tax expense included in these consolidated financial statements as of and for the thirteen weeks ended
April 2, 2005.

In
November 2004, the FASB issued SFAS No. 151, "Inventory CostsAn Amendment of ARB No. 43, Chapter 4"
(SFAS No. 151). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). Among other provisions, the new rule requires that items such as idle facility expense, excessive spoilage, double freight, and rehandling costs be
recognized as current-period charges regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43. Additionally, SFAS No. 151 requires that the allocation of
fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for fiscal years beginning after June 15,
2005 and is required to be adopted by us in the first quarter of fiscal 2006, beginning on January 1, 2006. We are currently evaluating the effect that

13

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(2) Summary of Significant Accounting Policies (Continued)

the
adoption of SFAS No. 151 will have on our consolidated results of operations and financial condition but do not expect SFAS No. 151 to have a material impact.

In
December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" (SFAS No. 123R), which replaces SFAS No. 123 and supercedes APB Opinion
No. 25. SFAS No. 123R addresses the accounting for transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or
(b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. SFAS No. 123R requires all
share-based payments to employees, including grants of employee stock options and restrictive stock grants and units, to be recognized as a compensation cost based on their fair values. The pro forma
disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Based on a recent announcement by the Securities and Exchange
Commission, we are required to adopt SFAS No. 123R no later than January 1, 2006. Under SFAS No. 123R, we must determine the appropriate fair value model to be used for valuing
share-based payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition methods include prospective and retroactive adoption
options. Under the retroactive option, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation
expense be recorded for all unvested stock options and restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record
compensation expense for all unvested stock options and restricted stock beginning with the first period restated. We are evaluating the requirements of SFAS No. 123R and expect that the
adoption of SFAS No. 123R will not have a material impact on our consolidated results of operations and earnings per share, since there are currently no share-based payments.

(3) Inventories

Inventories consist of the following:

April 2, 2005

January 1, 2005Raw materials and packaging

$
11,989

$
12,204Work in process


1,283


1,870Finished goods


63,561


65,035Total

$
76,833

$
79,109


(4) Long-term Debt

Prior Senior Secured Credit Facility.On August 21, 2003, we entered into a newly amended and restated $200,000 senior
secured credit facility, which was further amended and restated as of September 9, 2003, comprised of a $50,000 five-year revolving credit facility and a $150,000
six-year term loan facility. The proceeds of the term loan and of certain drawings under the revolving credit facility were used (i) to fund the Ortega acquisition and to pay
related transaction fees and expenses and (ii) to fully pay off our remaining obligations under term loan B of our then-existing term loan

14

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(4) Long-term Debt (Continued)

agreement
dated as of March 15, 1999. In connection therewith, we capitalized approximately $5,300 of new deferred debt issuance costs related to the senior secured credit facility and, in
accordance with the applicable guidance of the FASB's Emerging Issues Task Force, wrote off $1,831 of deferred financing costs related to our then-existing term loan B. Under the senior
secured credit facility, interest was determined based on several alternative rates, including the base lending rate per annum plus an applicable margin, or LIBOR plus an applicable margin. The senior
secured credit facility was secured by substantially all of our assets.

On
October 14, 2004, we used a portion of the net proceeds of our initial public offering, offering of senior subordinated notes separate from the EISs and offering of senior
notes as described in Note 1 and cash on hand to repay all outstanding borrowings under, and terminate our senior secured credit facility. In connection with our termination of the senior
secured credit facility, we wrote-off all of our previously incurred deferred financing costs, which is included in interest expense in fiscal 2004.

Senior Secured Credit Facility.Concurrently with our initial public offering and concurrent offerings, we entered into a
$30,000 senior secured revolving credit facility. Interest is determined based on several alternative rates as stipulated in the revolving credit facility, including the base lending rate per annum
plus an applicable margin, or LIBOR plus an applicable margin. The revolving credit facility is secured by substantially all of our assets except our real property. The revolving credit facility
provides for mandatory prepayment based on asset dispositions and certain issuances of securities, as defined. The revolving credit facility contains covenants that restrict, among other things, our
ability to incur additional indebtedness, pay dividends and create certain liens. The revolving credit facility also
contains certain financial maintenance covenants, which, among other things, specify maximum capital expenditure limits, a minimum interest coverage ratio and a maximum senior and total leverage
ratio, each ratio as defined. Proceeds of the revolving credit facility are restricted to funding our working capital requirements, capital expenditures and acquisitions of companies in the same line
of business as our company, subject to specified criteria. The revolving credit facility was undrawn on the date of consummation of our initial public offering and concurrent offerings and remained
undrawn at April 2, 2005. The available borrowing capacity under our revolving credit facility, net of outstanding letters of credit of $72 was $29,928 at April 2, 2005. The maximum
letter of credit capacity under the revolving credit facility is $10,000, with a fee of 3.0% for all outstanding letters of credit.

95/8% Senior Subordinated Notes due 2007.Immediately prior to our initial public offering, we had outstanding
$220,000 of 95/8% senior subordinated notes due August 1, 2007 with interest payable semiannually on February 1 and August 1 of each year, of which we issued
$120,000 principal amount in August 1997 and $100,000 principal amount in March 2002. The proceeds from the issuance of the senior subordinated notes issued in March 2002 were
used to pay off, in its entirety, the then outstanding balance under our then-existing term loan A, and to reduce the amount outstanding under the our then-existing term loan
B, and pay related deferred debt issuance costs.

On
October 14, 2004, $194,165 aggregate principal amount of the 95/8% senior subordinated notes was repaid with the proceeds of the initial public offering, the
concurrent offerings and cash on hand at the redemption price of 102.043% (which redemption price included a consent payment of 0.03%). Also on such date, $26,968 in proceeds from the initial public
offering, the concurrent offerings and

15

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(4) Long-term Debt (Continued)

cash
on hand were set aside to redeem the remaining $25,835 aggregate principal amount of the 95/8% senior subordinated notes on November 15, 2004 at a redemption price equal to
101.604% of the remaining aggregate principal amount plus accrued interest. The difference between the carrying value, including remaining bond discount of $655, and the redemption value of
approximately $4,891 has been recognized as interest expense in our fiscal 2004 consolidated statement of operations. In connection with the extinguishment of these notes, we wrote-off all
of our previously incurred deferred financing costs, which is also included in interest expense in fiscal 2004.

12.0% Senior Subordinated Notes due 2016.In connection with our initial public offering, we issued on October 14,
2004, $124,348 aggregate principal amount of 12.0% senior subordinated notes due 2016 in the form of EISs and an additional $22,800 aggregate principal amount of 12.0% senior subordinated notes due
2016 (not in the form of EISs). In connection with the exercise of the underwriters' over-allotment option, on October 22, 2004 we issued an additional $18,652 aggregate principal
amount of 12.0% senior subordinated notes in the form of EISs. Each EIS represents one share of our Class A common stock and $7.15 principal amount of our 12.0% senior subordinated notes.

Interest
on the senior subordinated notes is payable quarterly in arrears on each January 30, April 30, July 30 and October 30 through the maturity date. The
senior subordinated notes will mature on October 30, 2016, unless earlier redeemed at our option as described below. We may not redeem the
notes prior to October 30, 2009. On and after October 30, 2009, we may redeem for cash all or part of the senior subordinated notes upon not less than 30 or more than 60 days'
notice by mail to the owners of senior subordinated notes, at a redemption price of 106.0% beginning October 30, 2009 and thereafter at 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 EIS will be automatically separated. Upon the
occurrence of a change of control (as defined in the indenture), unless we have exercised our right to redeem all senior subordinated notes as described above, each holder of the senior subordinated
notes has the right to require us to repurchase that holder's senior subordinated notes at a price equal to 101.0% of the principal amount of the senior subordinated notes being repurchased, plus any
accrued and unpaid interest to the date of repurchase. In order to exercise this right, a holder must separate the senior subordinated notes and Class A common stock represented by such
holder's EISs. The senior subordinated notes are unsecured obligations and are subordinated in right of payment to all of our existing and future senior secured and senior unsecured indebtedness,
including the indebtedness under our revolving credit facility and our senior notes. The senior subordinated notes rankpari passuin right of payment
with any of our other subordinated indebtedness.

The
senior subordinated notes are jointly and severally and fully and unconditionally guaranteed by all of our existing domestic subsidiaries and certain future domestic subsidiaries on
an unsecured and subordinated basis on the terms set forth in the indenture governing the senior subordinated notes. The senior subordinated note guarantees are subordinated in right of payment to all
existing and future senior indebtedness of the guarantors, including the indebtedness under our revolving credit facility and the senior notes. Our present foreign subsidiary, Les Produits
Alimentaires Jacques et Fils Inc., is not a

16

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(4) Long-term Debt (Continued)

guarantor,
and any future foreign or partially owned domestic subsidiaries will not be guarantors, of our senior subordinated notes.

The
indenture governing the senior subordinated notes contains covenants with respect to us and restricts the incurrence of additional indebtedness and the issuance of capital stock; the
payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; specified creation of liens,
sale-leaseback transactions and sales of assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions
with affiliates.

8.0% Senior Notes due 2011.Concurrently with our initial public offering and offering of separate senior subordinated notes,
we issued $240,000 aggregate principal amount of 8.0% senior notes due 2011. Interest on the senior notes is payable on April 1 and October 1 of each year, commencing on April 1,
2005. Our obligations under the senior notes are fully and unconditionally guaranteed on a senior basis by all of our existing and future domestic subsidiaries. The senior notes and the subsidiary
guarantees are our and the guarantors' general unsecured obligations and are effectively junior in right of payment to all of our and the guarantors' secured indebtedness and to the indebtedness and
other liabilities of our non-guarantor subsidiaries; are pari passu in right of payment to all of our and the guarantors' existing and future unsecured senior debt; and are senior in right
of payment to all of our and the guarantors' future subordinated debt, including the senior subordinated notes. Our present
foreign subsidiary, Les Produits Alimentaires Jacques et Fils Inc., is not a guarantor, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of our senior
notes.

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 to October 1, 2007, we may redeem up to 35% of the aggregate principal amount of the senior notes issued in the senior note offering
with the net proceeds of one or more equity offerings at the redemption price as described in the indenture governing the senior notes. If we or any of the guarantors sell certain assets or experience
specific kinds of changes in control, we must offer to purchase the senior notes at the prices as described in the indenture governing the senior notes plus accrued and unpaid interest to the date of
redemption. The indenture governing the senior notes limits our ability and the ability of the guarantors to incur additional indebtedness and issue preferred stock; make restricted payments,
including dividend payments on our common stock; allow restrictions on the ability of certain subsidiaries to make distributions; sell all or substantially all of our assets or consolidate or merge
with or into other companies; enter into certain transactions with affiliates; or create liens and enter into sale and leaseback transactions. Each of the covenants is subject to a number of important
exceptions and qualifications.

Subsidiary Guarantees.We have no assets or operations independent of our direct and indirect subsidiaries. All of our
domestic subsidiaries jointly and severally, and fully and unconditionally, guarantee our senior subordinated notes and our senior notes, and management has determined that our only subsidiary that is
not a guarantor of our senior subordinated notes and senior notes is a "minor" subsidiary as that term is used in Rule 3-10 of Regulation S-X promulgated by the
Securities and Exchange Commission. There are no significant restrictions on our ability and the ability of our

17

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(4) Long-term Debt (Continued)

subsidiaries
to obtain funds from our respective subsidiaries by dividend or loan. Consequently, separate financial statements have not been presented for our subsidiaries because management has
determined that they would not be material to investors.

Deferred Financing Costs.In connection with the issuance of the 12.0% senior subordinated notes due 2016 and the 8.0% senior
notes due 2011, we capitalized approximately $23,123 of financing costs, which will be amortized over their respective terms. As of April 2, 2005 we had net deferred financing costs of $21,818.
During the fourth quarter of fiscal 2004 we wrote-off and expensed $8,361 relating to our then existing senior secured credit facility and our 95/8% senior subordinated
notes.

At
April 2, 2005 and January 1, 2005 accrued interest of $3,317 and $8,365, respectively, is included in accrued expenses in the accompanying consolidated balance sheets.

(5) Redeemable Preferred Stock

Our Amended and Restated Certificate of Incorporation provides that we may issue 100,000 shares of Preferred Stock, $0.01 par value per share. Prior to our
initial public offering, 22,000 shares of which were designated as the 13% Series A Cumulative Preferred Stock, 35,000 shares of which were designated as the 13% Series B Cumulative
Preferred Stock and 25,000 of which were designated as the Series C Senior Preferred Stock (See Note 6).

With
respect to dividend rights and rights on liquidation, winding up and dissolution of our company, the Series C Senior Preferred Stock ranked senior to the 13% Series B
Cumulative Preferred Stock and each ranked senior to the 13% Series A Cumulative Preferred Stock. The Series C Senior Preferred Stock, the 13% Series B Cumulative Preferred Stock
and the 13% Series A Cumulative Preferred Stock each ranked senior to our common stock.

13% Series A Cumulative Preferred Stock.Each holder of 13% Series A Cumulative Preferred Stock was entitled to
receive, when, as and if declared by the our board of directors, out of funds legally available therefor, cash dividends on each share of 13% Series A Cumulative Preferred Stock at a rate per
annum equal to 13%, which dividends were cumulative without interest, whether or not earned or declared, on a daily basis, and were payable annually in arrears. These dividends amounted to $27,547 as
of April 3, 2004.

13% Series B Cumulative Preferred Stock.Each holder of 13% Series B Cumulative Preferred Stock was entitled to
receive, when, as and if declared by the our board of directors, out of funds legally available therefor, cash dividends on each share of 13% Series B Cumulative Preferred Stock at a rate per
annum equal to 13%, which dividends were cumulative without interest, whether or not earned or declared, on a daily basis, and were payable annually in arrears. These dividends amounted to $12,928 as
of April 3, 2004.

On
October 14, 2004, we used a portion of the proceeds from our initial public offering and the concurrent offerings, and cash on hand, to repurchase all of our outstanding
Series A Cumulative Preferred Stock and Series B Cumulative Preferred Stock for an aggregate purchase price of $32,736 and $24,481, respectively, which was recorded against stockholders'
equity.

18

---



B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(5) Redeemable Preferred Stock (Continued)

Warrants.The holders of the Series B Cumulative Preferred Stock received warrants exercisable to purchase an
aggregate of 1,289,621 shares of our common stock, with an exercise price of $0.01 per share and an expiration date of December 22, 2009. All of these warrants remained outstanding at
April 3, 2004. In October 2004, we used a portion of the proceeds from our initial public offering (including from the exercise of the over-allotment option) and the
concurrent offerings, and cash on hand to repurchase all of the outstanding warrants granted to the holders of our Series B Cumulative Preferred Stock for an aggregate purchase price of $6,733,
which was recorded against stockholders' equity.

(6) Mandatorily Redeemable Preferred Stock

Series C Senior Preferred Stock.When and as declared by our board of directors and to the extent permitted under the
General Corporation Law of the State of Delaware, we paid preferential dividends to the holders of our Series C Senior Preferred Stock. Dividends on each share of Series C Senior
Preferred Stock accrued at a rate of 14% per annum. Such dividends accrued whether or not they were declared and whether or not we had profits, surplus or other funds legally available for the payment
of dividends. To the extent that all accrued dividends were not paid on each June 30 and December 31 of each year beginning June 30, 2000 (which we refer to as the "dividend
reference dates"), all dividends which had accrued on each share of Series C Senior Preferred Stock outstanding during the six-month period (or other period in the case of the
initial dividend reference date) ending upon each such dividend reference date was accumulated and added to the liquidation value of such share. These dividends amounted to $19,698 as of
April 3, 2004. Such dividends are charged to net income available to common stockholders.

On
October 14, 2004, we used a portion of the proceeds from our initial public offering and the concurrent offerings, and cash on hand to repurchase all of our outstanding
Series C Senior Preferred Stock for an aggregate purchase price of $48,433, which was recorded against stockholders' equity.

Warrants.The holders of our Series C Senior Preferred Stock received warrants exercisable to purchase an aggregate of
1,805,477 shares of our common stock, with an exercise price of $0.01 per share and an expiration date of December 22, 2009. All of these warrants remained outstanding at April 3, 2004.
In October 2004, we used a portion of the proceeds from our initial public offering (including from the exercise of the over-allotment option) and the concurrent offerings, and cash
on hand to repurchase a portion of the outstanding warrants granted to the holders of our Series C Senior Preferred Stock for an aggregate purchase price of $2,173, which was recorded against
stockholders' equity. The remaining 728,393 warrants that had been granted to the holders of our Series C Senior Preferred Stock were exercised for an equivalent number of shares of our
Class B common stock as of October 22, 2004.

(7) Capital Stock and Option Plan

Voting Rights.The holders of our common stock are entitled to one vote per share with respect to each matter on which the
holders of our common stock are entitled to vote. Shares of our Class A common stock and shares of our Class B common stock are entitled to the same voting rights per share and vote
together as a single class on all matters with respect to which holders are entitled to vote,

19

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(7) Capital Stock and Option Plan (Continued)

except
that so long as our former sponsor investor, BRS, together with its affiliates, beneficially owns more than 10% of the outstanding shares of Class A and Class B common stock in
the aggregate on a fully-diluted basis, the holders of our Class B common stock will have the exclusive right to elect two directors to the board of directors. In accordance with the restated
stockholders agreement, so long as the holders of Class B common stock have the right to elect two directors, the holders of our Class B common stock have agreed to vote for two director
nominees nominated by our former sponsor investor. The holders of our common stock are not entitled to cumulate their votes in the election of our directors.

Dividends.The holders of our common stock are entitled to receive dividends, if any, as they may be lawfully declared from
time to time by the board of directors of our company, subject to any preferential rights of holders of any outstanding shares of preferred stock. In the event of any liquidation, dissolution or
winding up of our company, Class A and Class B common stockholders are entitled to share ratably in our assets available for distribution to the stockholders, subject to the prior
rights of holders of any outstanding preferred stock. With respect to rights to dividends and on liquidation, dissolution or winding up, there is no difference between our Class A and
Class B common stock, except that: (i) for periods ending on or before January 2, 2010, Class B dividends, if any, will be paid on an annual basis and will be equal, in the
aggregate, to Class B Available Cash (as defined below) (subject to the subordination provision described below); and (ii) for each annual dividend payment period, after
December 30, 2006 and through the dividend payment period ending on January 2, 2010, if we declare and pay dividends on our Class A common stock, the holders of Class B
common stock will have the right to dividend payments (subject to the subordination provisions described below) equal to Class B Available Cash (up to 1.1 times the amount of dividends paid to
the holders of our Class A common stock). For quarterly periods subsequent to January 2, 2010, if we declare and pay dividends on our Class A common stock, the holders of our
Class B common stock will be entitled to dividend payments of 1.1 times the amount paid per share to the holders of our Class A common stock.

"Class B Available Cash" means the lesser of: (i) "excess cash" (as defined in the indenture governing our senior
subordinated notes) for the last four fiscal quarters, including the most recently completed fiscal quarter, minus the sum of the aggregate amount of the prior four Class A dividends, and minus
dividend restricted cash of $6.0 million or (ii) the aggregate per share amount of dividends declared or to be declared on our Class A common stock (or 1.1 times such amount for
dividends with respect to periods commencing after December 31, 2006) with respect to the annual period for which the dividends on our Class B common stock are to be paid multiplied by
the number of shares of our Class B common stock issued and outstanding on the last day of such period.

Under
our organizational documents, through the dividend payment dates with respect to the quarterly and annual dividend payment periods ending January 2, 2010, dividends on our
Class B common stock will be subordinated to the payment of dividends on our Class A common stock. Specifically: (i) an annual dividend on our Class B common stock may only
be declared if we have declared and paid dividends on our Class A common stock at no less than the quarterly rate of $0.212 per share for each of the four fiscal quarters corresponding to such
annual dividend payment period of the Class B common stock and (ii) no dividends on our Class B common stock may be declared with

20

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(7) Capital Stock and Option Plan (Continued)

respect
to any annual period unless the "Class B Threshold Amount" (as defined below) as of the last day of such period is at least $10.0 million.

The
subordination of dividends on our Class B common stock will be suspended upon the occurrence of any default or event of default under the indentures governing the senior notes
and the senior subordinated notes and will become applicable again upon the cure of any default or event of default. Dividends on our Class B common stock will not be subordinated to dividends
on our Class A common stock for any period subsequent to January 2, 2010. If for any dividend payment date after the February 20, 2010 dividend payment date the amount of cash to
be distributed is insufficient to pay dividends at the levels intended by our dividend policy, any shortfall will reduce the dividends on the Class A and Class B common stock pro rata.

"Class B Threshold Amount" as of any date means the amount of cash on our consolidated balance sheet as of such date calculated on
a pro forma basis giving effect to the payment of any previously declared but unpaid dividends on any class of our capital stock and the payment of any dividends to be declared with respect to any
class of our capital stock with respect to the period for which the Class B Threshold Amount is being calculated less any actual or funded borrowings under our new revolving credit facility (or
any successor or additional revolving credit facility) as of such date.

On
December 27, 2004, our board of directors declared a cash dividend of $0.1864 per share for our 20 million shares of Class A common stock for the partial
quarterly dividend period commencing on October 14, 2004, the date of completion of our initial public offering, and ending on January 1, 2005. We made this dividend payment on
January 31, 2005 to holders of record as of December 31, 2005. On March 8, 2005, our board of directors declared a cash dividend of $0.2120 per share for our 20 million
shares of Class A common stock for the quarterly dividend period ending on April 2, 2005. We are scheduled to make this dividend payment on May 2, 2005 to holders of record as of
March 31, 2005. No dividends were declared for our Class B common stock in the first quarter of 2005 or in fiscal 2004.

Additional Issuance of Our Authorized Common Stock.Additional shares of our authorized common stock may be issued, as
determined by the board of directors of our company from time to time, without approval of holders of our common stock, except as may be required by applicable law or the rules of any stock exchange
or automated quotation system on which our securities may be listed or traded. However, according to our bylaws we may not issue any shares of Class A common stock unless: (i) they are
issued as part of an EIS the issuance of which has been registered with the SEC, (ii) any EIS that may result from the combination of the shares of Class A common stock and our senior
subordinated notes have been issued in a transaction registered with the SEC or (iii) no EISs are currently outstanding.

1997 Incentive Stock Option Plan.In 1997, we adopted the 1997 Incentive Stock Option Plan for our and our subsidiaries' key
employees. The option plan authorized for grant to key employees and officers options for up to 736,263 shares of our common stock. The option plan authorized us to grant either (i) options
intended to constitute incentive stock options under the Internal Revenue Code of 1986 or (ii) non-qualified stock options. The option plan provided that it may be administered by
our board of directors or a committee designated by our board of directors. Options granted under the

21

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(7) Capital Stock and Option Plan (Continued)

option
plan were exercisable in accordance with the terms established by the board of directors. Under the option plan, our board of directors determined the exercise price of each option granted,
which in the case of incentive stock options, could not be less than fair value. All option grants were made at fair value as determined by a third party valuation. Options expired on the date
determined by the board of directors, which expiration date was not permitted to be later than the tenth anniversary of the date of grant. The options vested ratably over 5 years. No options
were granted during fiscal 2004, 2003 or 2002. Prior to our initial public offering, options to purchase 728,020 shares of our common stock, all of which were incentive stock options, had been granted
since the inception of the option plan, and 8,243 additional shares were available for grant under the plan. Upon the consummation of our initial public offering and following the option repurchases
described below, we terminated the option plan.

Other Stock Options.Pursuant to the terms of a license agreement with Emeril's Food of Love Productions, LLC (EFLP) dated
June 2000, we granted EFLP and William Morris Agency, Inc. 68,021 and 7,582 stock options, respectively. Prior to our initial public offering, all such options were exercisable at a
price of $0.09 per share of common stock, were fully vested and had an expiration date of June 9, 2010. We recorded the options at fair value and expensed such options in 2000.

Option Repurchases.On October 14, 2004, we used a portion of the proceeds from our initial public offering and the
concurrent offerings to repurchase all options outstanding under the option plan for an aggregate purchase price of $3,911, and terminated the option plan. The repurchase of stock options was charged
to operations. In addition, we used a portion of the proceeds from our initial public offering and the concurrent offerings and cash on hand to repurchase all options that we had granted to EFLP and
William Morris Agency for an aggregate purchase price of $406. The repurchase of non-employee stock options was charged to our stockholders' equity up to the fair value of the stock
options on the date of repurchase.

(8) Pension Benefits

Net periodic costs for the thirteen week periods ended April 2, 2005 and April 3, 2004 include the following components:

Thirteen Weeks EndedApril 2, 2005

April 3, 2004Service costbenefits earned during the period

$
377

$
339Interest cost on projected benefit obligation


277


260Expected return on plan assets


(262
)

(209
)Amortization of unrecognized prior service cost


1


0Amortization of unrecognized loss


48


47Net pension benefit cost

$
441

$
437


We
previously disclosed in our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 that we expected to contribute $1,860 to our pension plans
in 2005. As of April 2, 2005, $370 in

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(8) Pension Benefits (Continued)

contributions
have been made. We presently anticipate decreasing our total contribution to $1,000 for the plan year ended December 31, 2005 to fund our pension plan obligations.

(9) Related-Party Transactions

Prior to the consummation of our initial public offering, we were party to a management agreement with BRS & Co., the manager of BRS, pursuant to which
BRS & Co. was paid an annual fee of $500 per year for certain management, business and organizational strategy, and merchant and investment banking services. BRS owned the majority of our
capital stock prior to the completion of our initial public offering. The management agreement was terminated as of October 14, 2004.

We
are party to a transaction services agreement pursuant to which BRS & Co. will be paid a transaction fee for management, financial and other corporate advisory services
rendered by BRS & Co.
in connection with acquisitions by our company, which fee will not exceed 1.0% of the total transaction value. No such fees were paid during the thirteen weeks ended April 2, 2005 and
April 3, 2004.

In
connection with our initial public offering and the concurrent offerings, the transaction services agreement was amended to provide that transaction fees will be payable as described
above unless a majority of our disinterested directors determines otherwise. BRS & Co. did not receive any transaction fees in connection with the initial public offering and the concurrent
offerings.

We
lease a manufacturing and warehouse facility from the chairman of our board of directors under an operating lease, which expires in April 2009. Total rent expense associated
with this lease was $192 for the thirteen weeks ended April 2, 2005 and April 3, 2004.

(10) Commitments and Contingencies

We did not make any material expenditures during the thirteen week periods ended April 2, 2005 and April 3, 2004 in order to comply with
environmental laws or regulations. Based on our experience to date, we believe that the future cost of compliance with existing environmental laws and regulations (and liability for known
environmental conditions) will not have a material adverse effect on our consolidated financial condition, results of operations or liquidity. However, we cannot predict what environmental or health
and safety legislation or regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future
expenditures that may be required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.

We
are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of our management, the ultimate disposition of these other matters will not
have a material adverse effect on our consolidated financial position, results of operations or liquidity.

We
are subject to environmental regulations in the normal course of business. Management believes that the cost of compliance with such regulations will not have a material adverse
effect on our consolidated financial position, results of operations or liquidity.

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B&G Foods, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Dollars in thousands, except per share data)
(Unaudited)

(10) Commitments and Contingencies (Continued)

We
have employment agreements with our executive officers. The agreements generally continue until terminated by the executive or by us, and provide for severance payments under certain
circumstances. As of April 2, 2005, if all of our executives were to be terminated by us without cause (as defined) or as a result of the employees' disability, our severance liability would be
approximately $2,213.

(11) Long-term Incentive Plan

In connection with our initial public offering, we adopted a long-term incentive plan (LTIP). Our executive officers and other senior employees to be
identified by the compensation committee of our board of directors will be eligible to participate in the LTIP. The purpose of the LTIP is to strengthen the mutuality of interests between the LTIP
participants and holders of our EISs. The LTIP is administered by our compensation committee, which has the power to, among other things, determine those individuals who will participate in the LTIP;
the level of participation of each participant in an incentive pool; the conditions that must be satisfied in order for the participants to vest in their allocated incentive pool amounts (including
establishing specified performance targets that must be achieved in order for a pool to be created and amounts to be allocated to the participants); and other conditions that the participants must
satisfy in order to receive payment of their allocated amounts. Under the LTIP, the maximum amount that any one participant can receive in respect of a one-year performance period is
$1,000. The LTIP is an unfunded plan. There was no expense related to the LTIP in the thirteen week period ending April 2, 2005.

(12) Restructuring

On February 17, 2005, we announced our intention to close our New Iberia, Louisiana manufacturing facility effective July 1, 2005 as part of our
ongoing efforts to optimize our production capacity, improve productivity and operating efficiencies and lower our overall costs. We expect to record a one-time charge associated with the
plant closing relating to employee other compensation and other costs of approximately $600 and a non-cash write-down of land, building, and equipment not to exceed $3,100. In
the thirteen weeks ended April 2, 2005, we expensed $116 of the employee other compensation charge.

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

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading
"Forward-Looking Statements" and elsewhere in this report. The following discussion should be read in conjunction with the unaudited consolidated interim financial statements and related notes for the
thirteen weeks ended April 2, 2005 included elsewhere in this report and the audited consolidated financial statements and related notes for the fiscal year ended January 1, 2005 (fiscal
2004) included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 2, 2005.

General

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

Our
business strategy is to continue to increase sales, profitability and free cash flow by enhancing our existing portfolio of branded shelf-stable products and by capitalizing on our
competitive strengths. We intend to implement our strategy through the following initiatives: profitably growing our established brands, leveraging our unique multiple-channel sales and distribution
system, introducing new products, capitalizing on the higher growth Mexican segment of the food industry, and expanding our brand portfolio with new licensing arrangements.

Since
1996, we have successfully acquired and integrated 16 separate brands into our operations. We believe that successful future acquisitions, if any, will enhance our portfolio of
existing businesses, further leveraging our existing platform.

We
completed the acquisition of certain assets of The Ortega Brand of Business from Nestle Prepared Foods Company on August 21, 2003, which we refer to in this report as "Ortega"
or the "Ortega
acquisition." The Ortega acquisition has been accounted for using the purchase method of accounting and, accordingly, the assets acquired, liabilities assumed and results of operations of the acquired
business are included in our consolidated financial statements from the date of acquisition.

We
are subject to a number of challenges that may adversely affect our businesses. These challenges, which are discussed below and under the heading "Forward-Looking Statements" and
"Certain Factors That May Affect Future Results" in this report include:

Fluctuations in Commodity Prices.We purchase raw materials, including agricultural products, meat and poultry from growers,
commodity processors, other food companies and packaging manufacturers. Raw materials are subject to fluctuations in price attributable to a number of factors. We have seen increasing prices in
certain of these commodities, particularly in packaging materials, pork, beans and maple syrup and we expect this trend may continue. We manage this risk by entering into short-term supply
contracts and advance commodities purchase agreements from time to time, and if necessary, by raising prices. There can be no assurance, however, that any price increases by us will offset the
increased cost of these raw material commodities, or that we will be able to raise prices at all.

Consolidation in the Retail Trade and Consequent Inventory Reductions.As the retail grocery trade continues to consolidate
and our retail customers grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs. These customers are also reducing their
inventories and increasing their emphasis on private label products.

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Changing Customer Preferences.Consumers in the market categories in which we compete frequently change their taste
preferences, dietary habits and product packaging preferences.

Consumer Concern Regarding Food Safety, Quality and Health.The food industry is subject to consumer concerns regarding the
safety and quality of certain food products, including the health implications of genetically modified organisms, obesity and trans fatty acids.

Changing Valuations of the Canadian Dollar in Relation to the U.S. Dollar.We purchase most of our maple syrup requirements
from manufacturers located in Quebec, Canada. Over the past year the U.S. dollar has weakened against the Canadian dollar, which has in turn increased our costs relating to the production of our maple
syrup products.

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

Fluctuations
in commodity prices can lead to retail price volatility and intensive price competition, and can influence consumer and trade buying patterns. In the thirteen weeks ended
April 2, 2005, our commodity prices for maple syrup, meat, beans and cans have been higher than those incurred during the thirteen weeks ended April 3, 2004.

Critical Accounting Policies; Use of Estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires our management to make a number of estimates and
assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Some of the more significant estimates and assumptions made by management involve trade and consumer promotion expenses, allowances for excess,
obsolete and unsaleable inventories, and the recoverability of goodwill, trademarks, property, plant and equipment, and deferred tax assets, and the accounting for our EISs, including their treatment
in computing of our income tax expense and the accounting for earnings per share. Actual results could differ from those estimates and assumptions.



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



Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out and average cost methods.
Inventories have been
reduced by an allowance for excess, obsolete and unsaleable inventories. The estimate is based on our management's review of inventories on hand compared to estimated future usage and sales.



Long-lived assets, such as property, plant and equipment, and intangibles with estimated useful lives are depreciated or amortized over their
respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash

26

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flows
expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount
of the asset exceeds the fair value of the asset.



Goodwill and intangible assets with indefinite useful lives (trademarks) are tested for impairment at least annually and whenever events or circumstances occur
indicating that goodwill or indefinite life intangibles might be impaired.

We
perform the annual impairment tests on the last day of each fiscal year. The annual goodwill impairment test involves a two-step process. The first step of the impairment
test involves comparing the fair value of our company with our company's carrying value, including goodwill. If the carrying value of our company exceeds our fair value, we perform the second step of
the impairment test to determine the amount of the impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of goodwill with the carrying value of
that goodwill and recognizing a loss for the difference. Calculating our fair value requires significant estimates and assumptions by management. We estimate our fair value by applying third party
market value indicators to our earnings before interest, taxes, depreciation and amortization (EBITDA). We test indefinite life intangible assets for impairment by comparing their carrying value to
their fair value that is determined using a cash flow method and recognize a loss to the extent the carrying value is greater.

We
completed our annual impairment tests for the years ended January 1, 2005 with no adjustments to the carrying values of goodwill and indefinite life intangibles. We did not
note any events or circumstances during the quarter ended April 2, 2005 that would indicate that goodwill or indefinite life intangibles might be impaired.



Our EISs include Class A common stock and senior subordinated notes. Upon completion of our initial public offering (including the exercise of the
over-allotment option), we allocated the proceeds from the issuance of the EISs, based upon relative fair value at the issuance date, to the Class A common stock and the senior
subordinated notes. We have assumed that the price paid in the EIS offering was equivalent to the combined fair value of the Class A common stock and the senior subordinated notes, and the
price paid in the offering for the senior subordinated notes sold separately (not in the form of EISs) was equivalent to their initial stated principal amount. We have concluded there are no embedded
derivative features related to the EIS that require bifurcation under Financial Accounting Standards Board (FASB) Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended (SFAS No. 133). We have determined the fair value of the Class A common stock and the senior subordinated notes with reference to a number of factors, including
the sale of the senior subordinated notes sold separately from the EISs that have the same terms as the senior subordinated notes included in the EISs. Therefore, we have allocated the entire proceeds
of the EIS offering to the Class A common stock and the senior subordinated notes, and the allocation of the EIS proceeds to the senior subordinated notes did not result in a premium or
discount.

We
have concluded that the call option and the change in control put option in the senior subordinated notes do not warrant separate accounting under SFAS No. 133 because they are
clearly and closely related to the economic characteristics of the host debt instrument. Therefore, we have allocated the entire proceeds of the offering to the Class A common stock and the
senior subordinated notes. Upon subsequent issuances, if any, of senior subordinated notes, we will evaluate whether the call option and the change in control put option in the senior subordinated
notes require separate accounting under SFAS No. 133. We expect that if there is a substantial discount or premium upon a subsequent issuance of senior subordinated notes, we may need to
separately account for the call

27

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option
and the change in control put option features as embedded derivatives for such subsequent issuance. If we determine that the embedded derivatives, if any, require separate accounting from the
debt host contract under SFAS No. 133, the call option and the change in control put option associated with the senior subordinated notes will be recorded as derivative liabilities at fair
value, with changes in fair value recorded as other non-operating income or expense. Any discount on the senior subordinated notes resulting from the allocation of proceeds to an embedded
derivative will be amortized to interest expense over the remaining life of the senior subordinated notes.

The
Class A common stock portion of each EIS is included in stockholders' equity, net of the related portion of the EIS transaction costs allocated to Class A common stock.
Dividends paid on the Class A common stock are recorded as a reduction to retained earnings when declared by us. The senior subordinated note portion of each EIS is included in
long-term debt, and the related portion of the EIS transaction costs allocated to the senior subordinated notes was capitalized as deferred financing costs and is being amortized to
interest expense using the effective interest method. Interest on the senior subordinated notes is charged to expense as accrued by us.



Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities of our company are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

As
part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process involves estimating our current
tax expenses together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities.
We then assess the likelihood that our deferred tax assets will be recovered from future 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 or increase this allowance in a financial accounting period, we include such charge in our tax provision, or reduce our tax benefits in
our consolidated statement of operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against
our net deferred tax assets.

We
have recorded deferred tax assets, a portion of which represents net operating loss carryforwards. A valuation allowance has been recorded for certain state net operating loss
carryforwards.

There
are various factors that may cause those tax assumptions to change in the near term, and we may have to record a valuation allowance against our deferred tax assets. We cannot
predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant
changes to the U.S. federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our consolidated financial statements when new
regulations and legislation are enacted.

We
do not provide for U.S. federal income taxes or tax benefits on the unremitted earnings or losses of our foreign subsidiary as such earnings are intended to be indefinitely
reinvested.

28

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We
have accounted for our issuance of EISs as an issuance of the separate securities evidenced by such EISs and have allocated the proceeds received for each EIS between the
Class A common stock and senior subordinated note represented thereby in the amounts of their respective fair values at the time of issuance. Accordingly, we have accounted for the senior
subordinated notes represented by the EISs as long-term debt bearing a stated interest rate and maturing on October 30, 2016. In connection with the issuance and initial public
offering of the EISs, we received an opinion from counsel that the senior subordinated notes should be treated as debt for United States federal income tax purposes. In accordance with the opinion we
received, we continue to be of the view that the senior subordinated notes should be treated as debt for United States federal income tax purposes (although we have not sought a ruling from the IRS on
this issue), and we intend to deduct annually interest expense of approximately $19.9 million on the senior subordinated notes from taxable income for United States federal and state income tax
purposes. There can be no assurance that the classification of senior subordinated notes as debt (or the amount of interest expense deducted) will not be challenged by the IRS or other tax
jurisdictions or will be sustained by a court of law if challenged.

If
our treatment of the senior subordinated notes as debt is put at risk in the future as a result of a future ruling by the IRS or other tax jurisdiction or by a court of law, including
an adverse ruling for EISs (or other similar securities) issued by other companies or as a result of a proposed adjustment by the IRS or other tax jurisdiction in an examination of our company or for
any other reason, we will need to consider the effect of such developments on the determination of our future tax provisions and obligations. In the event the senior subordinated notes are required to
be treated as equity for income tax purposes, then the cumulative interest expense associated with the senior subordinated notes for prior tax periods that are open to assessment and for future tax
periods would not be deductible from taxable income and we would be required to recognize additional tax expense and establish a related income tax liability for prior period treatment. The additional
tax due to the federal and state authorities would be based on our taxable income or loss for each of the years that we claimed the interest expense deduction and would materially and adversely affect
our financial position, cash flow, and liquidity, and could affect our ongoing ability to make interest payments on the senior subordinated notes and dividend payments on the shares of common stock
represented by the EISs and our ability to continue as a going concern. In addition, non-U.S. holders of our EISs could be subject to withholding taxes on the payment of interest treated
as dividends on equity, which could subject us to additional liability for the withholding taxes that we do not collect on such payments. However, because in accordance with the opinion of counsel we
received on the date of our initial public offering we continue to be of the view that the senior subordinated notes should be treated as debt for United States federal income tax purposes, we do not
record a liability for a potential disallowance of this interest expense deduction or for the potential imposition of these withholding taxes.

A
factor in the ongoing determination that our consolidated financial statements should reflect deductions for income tax purposes of the interest on the senior subordinated notes is the
veracity, at the time of the initial public offering, of the representations delivered by the purchasers of senior subordinated notes sold separately (not in the form of EISs). We may conduct
procedures in the future to confirm the veracity, at the time of the offering, of the purchaser representations. In addition, other factors indicating the existence, at the time of the initial public
offering, of any plan or pre-arrangement may also be relevant to this ongoing determination. It is possible that we will at some point in the future, as a result of the findings of the
procedures noted above, or IRS interpretations or other changes in circumstances, conclude that we should establish a reserve for tax liabilities associated with a disallowance of all or part of the
interest deductions on the senior subordinated notes, although our present view is that no such reserve is necessary or appropriate. If we decide to maintain such a reserve, our income tax provision,
and related income tax payable, would be materially impacted. As a result, our ability to pay dividends on the shares of our common stock could be materially impaired and the market price and/or
liquidity for the EISs or our common stock could be adversely affected.

29

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For the periods prior to our initial public offering, basic earnings per share is calculated by dividing net income (loss) available to common shares (net income
less dividends accumulating during the period for our 13% Series A and Series B cumulative preferred stock and Series C senior preferred stock and other charges) by the weighted
average common shares outstanding during the period. Diluted earning per share is calculated similarly, except that it includes the dilutive effect of the assumed exercise of outstanding options and
warrants.

Following
the consummation of our initial public offering, we have two classes of common stock, designated as Class A common stock and Class B common stock, and we present
basic and diluted earnings per share using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of
common stock according to dividends declared and participation rights in undistributed earnings.

Net
income available to our common stockholders is allocated between our two classes of common stock based upon the two-class method. Basic and diluted earnings per share for
our Class A and Class B common stock is calculated by dividing net income available to common stockholders by the weighted average number of shares of Class A and Class B
common stock outstanding.

Results of Operations

The following table sets forth the percentages of net sales represented by selected items for the thirteen week periods ended April 2, 2005 and
April 3, 2004 reflected in our consolidated statements of operations. The comparisons of financial results are not necessarily indicative of future results:

Thirteen Weeks EndedApril 2, 2005

April 3, 2004Common Size Income Statement:Net sales

100.0
%
100.0
%Cost of goods sold

70.2
%
68.0
%Gross profit

29.8
%
32.0
%Sales, marketing and distribution expenses

11.2
%
12.0
%General and administrative expenses

1.6
%
1.7
%Management fees-related party

0.0
%
0.1
%Operating income

17.0
%
18.2
%Interest expense, net

11.6
%
8.6
%Income before income taxes

5.4
%
9.5
%Provision for income taxes

2.1
%
3.7
%Net income

3.3
%
5.9
%Preferred stock dividend accumulated and related charges

0.0
%
4.3
%Net income available to common stockholders per common share

3.3
%
1.6
%


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

Net Sales.Our net sales represents gross sales of products shipped to customers plus amounts charged customers for shipping
and handling, less cash discount, coupon redemption, slotting fees and trade promotional spending.

30

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

Sales, Marketing and Distribution Expenses.Our sales, marketing and distribution expenses include costs for marketing
personnel, consumer programs, internal sales forces, brokerage costs and warehouse facilities.

General and Administrative Expenses.Our general and administrative expenses include administrative employee compensation and
benefit costs, as well as information technology infrastructure and communication costs, office rent and supplies, professional services, management fees and other general corporate expenses.

Thirteen week period ended April 2, 2005 compared to thirteen week period ended April 3, 2004.

Net Sales.Net sales decreased $0.6 million or 0.6% to $90.1 million for the thirteen week period ended
April 2, 2005 from $90.7 million for the thirteen week period ended April 3, 2004. Sales decreased $2.4 million relating to unit volume, which was offset by price increases
and mix improvements of $1.8 million. Sales of our lines ofMaple Grove Farms,Las Palmas, PolanerandB&M Baked Beansproducts increased $2.8 million, $1.3 million,
$0.9 million and $0.6 million or 25.6%, 25.2%, 9.6% and 14.6%, respectively. These increases were offset by a reduction of sales in Ortega,Sason,Emeril, UnderwoodandB&Gpickles and peppers products in the amounts of $2.9 million,
$0.9 million, $0.8 million, $0.7 million and $0.4 million or 12.9%, 64.2%, 12.8%, 12.4% and 4.5%, respectively. All other brands decreased, in the aggregate by,
$0.5 million or 2.1%.

Gross Profit.Gross profit decreased $2.2 million or 7.4% to $26.8 million for the thirteen week period ended
April 2, 2005 from $29.0 million for the thirteen week period ended April 3, 2004. Gross profit expressed as a percentage of net sales decreased 2.2% to 29.8% in the thirteen week
period ended April 2, 2005 from 32.0% in the thirteen week period ended April 3, 2004. The shift in the mix of products sold accounted for 1.0% of the gross profit margin decline. Higher
costs of meat, beans, maple syrup and cans accounted for the additional 1.2% decline in gross profit margin.

Sales, Marketing and Distribution Expenses.Sales, marketing and distribution expenses decreased $0.8 million or 7.4%
to $10.1 million for the thirteen week period ended April 2, 2005 from $10.9 million for the thirteen week period ended April 3, 2004. These expenses as a percentage of net
sales decreased to 11.2% for the thirteen week period ended April 2, 2005 from 12.0% for the thirteen week period ended April 3, 2004. This reduction is primarily due to a reduction in
brokerage and salesmen commissions of $0.6 million. All other expenses decreased $0.2 million.

General and Administrative Expenses.General and administrative expenses and management fees decreased $0.2 million or
10.5% to $1.5 million for the thirteen week period ended April 2, 2005 from $1.7 million in the thirteen week period ended April 3, 2004. The decrease was primarily due to
the elimination of the management fees previously paid to BRS.

Operating Income.As a result of the foregoing, operating income decreased $1.2 million or 7.2% to
$15.3 million for the thirteen week period ended April 2, 2005 from $16.5 million for the thirteen week period ended April 3, 2004. Operating income expressed as a
percentage of net sales decreased to 17.0% in the thirteen week period ended April 2, 2005 from 18.2% in the thirteen week period ended April 3, 2004.

Interest Expense.Interest expense, net increased $2.6 million or 33.6% to $10.4 million for the thirteen week
period ended April 2, 2005 from $7.8 million in the thirteen week period ended April 3, 2004. The average debt outstanding increased approximately $37.2 million in the
thirteen week period ended April 2, 2005 verses the thirteen week period ended April 3, 2004. The effective interest rate for

31

---



our
outstanding debt during the thirteen week period ended April 2, 2005 under our post-initial public offering capital structure was higher than the effective interest rate for our
outstanding debt during the thirteen week period ended April 3, 2004. See "Liquidity and Capital ResourcesDebt" below.

Income Tax Expense.Income tax expense decreased $1.4 million or 43.4% to $1.9 million for the thirteen week
period ended April 2, 2005 from $3.3 million in the thirteen week period ended April 3, 2004. Our effective tax rate was 39.0% for the thirteen week period ended April 2,
2005 and 38.6% for the thirteen week period ended April 3, 2004.

Preferred Stock Dividends Accumulated and Related Charges.Preferred stock dividends accumulated and related charges for the
thirteen week period ended April 3, 2004 was $3.9 million. All of our then outstanding preferred stock was repurchased on October 14, 2004 with the proceeds from our initial
public offering and the concurrent offerings. Accordingly, no preferred stock dividends were accumulated for the thirteen week period ended April 2, 2005.

Liquidity and Capital Resources

Our primary liquidity requirements include debt service, capital expenditures and working capital needs. See also, "Commitments and Contractual Obligations"
below. We fund our liquidity needs primarily through cash generated from operations and to the extent necessary, through borrowings under our revolving credit facility.

Cash Flows.Cash used in operating activities increased $2.5 million to $0.3 million for the thirteen week
period ended April 2, 2005 from $2.8 million in the thirteen week period ended April 3, 2004. The increase was due to a decrease in inventory, a lesser decrease in accrued
expenses, a lesser increase in accounts receivable offset by a decrease in net income and accounts payable. Working capital at April 2, 2005 was $103.1 million, an increase of
$1.3 million over working capital at January 1, 2005 of $101.8 million.

Net
cash used in investing activities for the thirteen week period ended April 2, 2005 was $1.5 million as compared to net cash used in investing activities of
$1.5 million for the thirteen week period ended April 3, 2004. Capital expenditures during the thirteen week period ended April 2, 2005 of $1.5 million included purchases
of manufacturing and computer equipment and were consistent with the $1.5 million in similar capital expenditures for the thirteen week period ended April 3, 2004.

Net
cash used in financing activities for the thirteen week period ended April 2, 2005 was $3.7 million as compared to $0.4 million for the thirteen week period
ended April 3, 2004. In December 2004, our board of directors declared $3.7 million, or $0.185 per share, in dividends payable to holders of our Class A common stock, which
dividends were paid on January 31, 2005. The net cash used in financing activities for the thirteen week period ended April 3, 2004, included our required $0.4 million
year-to-date payment under our then existing term loan.

We
believe that based on a number of factors, including our trademark and goodwill amortization for tax purposes from our prior acquisitions, and the income tax effects of our initial
public offering, the concurrent offerings and related transactions, including our call premium on our outstanding senior subordinated notes, other write-offs of existing deferred financing
costs and the compensation expense associated with our repurchase of certain management stock options, we realized a significant reduction in cash taxes in 2004 and we expect to realize significant
reductions in 2005 as compared to our tax expense for financial statement purposes, and further, we will realize a benefit to our cash taxes payable from amortization of our trademarks and goodwill
for the taxable years 2005 through 2018.

32

---





Certain disclosures in this report include "non-GAAP (Generally Accepted Accounting Principles) financial measures." A non-GAAP financial
measure is defined as a numerical measure of our financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in
accordance with GAAP in our consolidated balance sheets and related consolidated statements of operations, changes in stockholders' equity and comprehensive income (loss), and cash flows. We present
EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA (EBITDA as adjusted for transaction related compensation expenses incurred in connection with our initial
public offering, the concurrent offerings and the related transactions) because we believe they are useful indicators of our historical debt capacity and ability to service debt. We also present this
discussion of EBITDA and adjusted EBITDA because covenants in the indenture governing our senior notes, our revolving credit facility and the indenture governing our senior subordinated notes contain
ratios based on these measures.

A
reconciliation of EBITDA and adjusted EBITDA with the most directly comparable GAAP measure is included below for the thirteen weeks ended April 2, 2005 and April 3, 2004
along with the components of EBITDA and adjusted EBITDA.



Thirteen Weeks EndedApril 2,
2005

April 3,
2004(Dollars in thousands)Net income

$
2,958

$
5,314Depreciation


1,667


1,605Income tax expense


1,892


3,342Interest expense, net


10,434


7,812EBITDA(1)


16,951


18,073Adjustments to EBITDA(1)





Adjusted EBITDA(1)


16,951


18,073Income tax expense


(1,892
)

(3,342
)Interest expense, net


(10,434
)

(7,812
)Deferred income taxes


1,799


1,475Amortization of deferred financing and bond discount


698


642Changes in assets and liabilities, net of effects of business combination


(7,384
)

(11,859
)Net cash used in operating activities

$
(262
)
$
(2,823
)


---

33

---





Prior to the completion of our initial public offering, our board of directors adopted a dividend policy that reflects a basic judgment that our stockholders
would be better served if we distributed our cash available to pay dividends to them instead of retaining it in our business. Under this policy, cash generated by our company in excess of operating
needs, interest and principal payments on indebtedness, capital expenditures sufficient to maintain our properties and other assets and $6.0 million of dividend restricted cash (that can be
used for the payment of dividends on Class A common stock or for any other purpose other than the payment of dividends on the Class B common stock) would in general be distributed as
regular quarterly cash dividends (up to the intended dividend rate as determined by our board of directors) to the holders of our Class A common stock and as regular annual cash dividends (up
to the dividend rate permitted under our debt agreements and our organizational documents) to the holders of our Class B common stock and not be retained by us as cash on our consolidated
balance sheet. However, dividend payments are not mandatory or guaranteed and holders of our common stock do not have any legal right to receive, or require us to pay, dividends. Furthermore, our
board of directors may, in its sole discretion, amend or repeal this dividend policy with respect to the Class A and Class B common stock at any time. Our board of directors may decrease
the level of dividends for the Class A and Class B common stock below the intended dividend rates or discontinue entirely the payment of dividends.

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

For
the thirteen weeks ended April 2, 2005, we had cash flows used in operations of $0.3 million. If our cash flows from operations for future periods were to fall below
our minimum expectations (or if our assumptions as to capital expenditures or interest expense were too low or our assumptions as to the sufficiency of our revolving credit facility to finance our
working capital needs were to prove incorrect), we would need either to reduce or eliminate dividends or, to the extent permitted under the indenture governing our senior notes, the indenture
governing our senior subordinated notes and the terms of our revolving credit facility, fund a portion of our dividends with borrowings or from other sources. If we were to use working capital or
permanent borrowings to fund dividends, we would have less cash and/or borrowing capacity available for future dividends and other purposes, which could negatively impact our financial condition, our
results of operations, our liquidity and our ability to maintain or expand our business.

34

---



The
table below illustrates for the fiscal year ended January 1, 2005 and the latest twelve months ended April 2, 2005, respectively, the amount of cash that we had
available for distribution to our stockholders.

|Cash Available to Pay Dividends                                           |  | Fiscal Year
Ended
January 1, 2005 |         | Less: Thirteen
Weeks Ended
April 3, 2004 |   | Plus: Thirteen
Weeks Ended
April 2, 2005 |   | Latest Twelve
Months Ended
April 2, 2005(a) |       
|------------------------------------------------------------------------- |  | --------------------------------- | ------- | ---------------------------------------- | - | ---------------------------------------- | - | ------------------------------------------- | ------
|
|
|Net cash provided by (used in) operating activities(b)                    |  | $                                 | 19,302  |                                          | $ | (2,823                                   | ) | $                                           | (262  
|Interest expense, net(c)                                                  |  |                                   | 48,148  |                                          |   | 7,812                                    |   |                                             | 10,434
|Income taxes                                                              |  |                                   | 2,126   |                                          |   | 3,342                                    |   |                                             | 1,892 
|Amortization of deferred debt issuance costs and bond discount            |  |                                   | (2,532  | )                                        |   | (642                                     | ) |                                             | (698  
|Costs relating to the early extinguishment of debt(c)                     |  |                                   | (13,906 | )                                        |   |                                         |   |                                             |      
|Deferred income taxes                                                     |  |                                   | (7,462  | )                                        |   | (1,475                                   | ) |                                             | (1,799
|Changes in assets and liabilities, net of effects of business acquired(b) |  |                                   | 14,616  |                                          |   | 11,859                                   |   |                                             | 7,384 
|                                                                          |  |                                   |         |                                          |   |                                          |   |                                             |       
|EBITDA                                                                    |  |                                   | 60,292  |                                          |   | 18,073                                   |   |                                             | 16,951
|Transaction related compensation expenses(d)                              |  |                                   | 9,859   |                                          |   |                                         |   |                                             |      
|                                                                          |  |                                   |         |                                          |   |                                          |   |                                             |       
|Adjusted EBITDA                                                           |  |                                   | 70,151  |                                          |   | 18,073                                   |   |                                             | 16,951
|Reduction for cash income tax expense                                     |  |                                   |        |                                          |   |                                         |   |                                             | (40   
|Pro forma cash interest expense(e)                                        |  |                                   | (39,096 | )                                        |   | (9,774                                   | ) |                                             | (9,736
|Capital expenditures                                                      |  |                                   | (6,598  | )                                        |   | (1,546                                   | ) |                                             | (1,499
|                                                                          |  |                                   |         |                                          |   |                                          |   |                                             |       
|Cash available to pay dividends                                           |  | $                                 | 24,457  |                                          | $ | 6,753                                    |   | $                                           | 5,676 
|                                                                          |  |                                   |         |                                          |   |                                          |   |                                             |       

---

35

---





There
can be no assurance that we will continue to pay dividends at historical levels, or at all. Dividend payments are not mandatory or guaranteed, are within the absolute discretion of
our board of directors
and will be dependent upon many factors and future developments that could differ materially from our current expectations. Over time, our EBITDA (net income before interest expense, net, income
taxes, depreciation and amortization), adjusted EBITDA (EBITDA as adjusted for the transaction related compensation expenses incurred in connection with our initial public offering, the concurrent
offerings and related transactions) and capital expenditure, working capital and other cash needs will be subject to uncertainties, which could impact the level of any dividends, if any, we pay in the
future.



Our liquidity and capital resources have been significantly impacted by acquisitions and may be impacted in the foreseeable future by additional acquisitions. We
have historically financed acquisitions with borrowings and cash flows from operations. Our interest expense will increase with any additional indebtedness we may incur to finance potential future
acquisitions, if any. To the extent future acquisitions, if any, are financed by additional indebtedness, the resulting increase in debt and interest expense could have a negative impact on liquidity.



We have not made any material expenditures during the thirteen week period ended April 2, 2005 in order to comply with environmental laws or regulations.
Based on our experience to date, we believe that the future cost of compliance with existing environmental laws and regulations (and liability for known environmental conditions) will not have a
material adverse effect on our consolidated financial condition, results of operations or liquidity. However, we cannot predict what environmental or health and safety legislation or regulations will
be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted, nor can we predict the amount of future expenditures that may be required in order
to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.



Prior Senior Secured Credit Facility.On August 21, 2003, we entered into a newly amended and restated
$200.0 million senior secured credit facility, which was further amended and restated as of September 9, 2003, comprised of a $50.0 million five-year revolving credit
facility and a $150.0 million six-year term loan facility. The proceeds of the term loan and of certain drawings under the revolving credit facility were used (i) to fund the
Ortega acquisition and to pay related transaction fees and expenses and (ii) to fully pay off our remaining obligations under term loan B of our then-existing term loan
agreement dated as of March 15, 1999. In connection therewith, we capitalized approximately $5.3 million of new deferred debt issuance costs related to the senior secured credit facility
and, in accordance with the applicable guidance of the FASB's Emerging Issues Task Force, wrote off $1.8 million of deferred financing costs related to our then-existing term
loan B. Under the senior secured credit facility, interest was determined based on several alternative rates, including the base

36

---



lending
rate per annum plus an applicable margin, or LIBOR plus an applicable margin. The senior secured credit facility was secured by substantially all of our assets.

On
October 14, 2004, we used a portion of the net proceeds of our initial public offering, offering of senior subordinated notes separate from the EISs and offering of senior
notes and cash on hand to repay all outstanding borrowings under, and terminate our senior secured credit facility. In connection with our termination of the senior secured credit facility, we
wrote-off all of our previously incurred deferred financing costs, which is included in interest expense in fiscal 2004.

Senior Secured Credit Facility.Concurrently with our initial public offering and concurrent offerings, we entered into a
$30.0 million senior secured revolving credit facility. Interest is determined based on several alternative rates as stipulated in the revolving credit facility, including the base lending rate
per annum plus an applicable margin, or LIBOR plus an applicable margin. The revolving credit facility is secured by substantially all of our assets except our real property. The revolving credit
facility provides for mandatory prepayment based on asset dispositions and certain issuances of securities, as defined. The revolving credit facility contains covenants that restrict, among other
things, our ability to incur additional indebtedness, pay dividends and create certain liens. The revolving credit facility also contains certain financial maintenance covenants, which, among other
things, specify maximum capital expenditure limits, a minimum interest coverage ratio and a maximum senior and total leverage ratio, each ratio as defined. Proceeds of the revolving credit facility
are restricted to funding our working capital requirements, capital expenditures and acquisitions of companies in the same line of business as our company, subject to specified criteria. The revolving
credit facility was undrawn on the date of consummation of our initial public offering and concurrent offerings and remained undrawn at April 2, 2005. The available borrowing capacity under our
revolving credit facility, net of outstanding letters of credit of $0.1 million, was $29.9 million at April 2, 2005. The maximum letter of credit capacity under the revolving
credit facility is $10 million, with a fee of 3% for all outstanding letters of credit.

95/8% Senior Subordinated Notes due 2007.Immediately prior to our initial public offering, we had outstanding
$220.0 million of 95/8% senior subordinated notes due August 1, 2007 with interest payable semiannually on February 1 and August 1 of each year, of which we
issued $120.0 million principal amount in August 1997 and $100.0 million principal amount in March 2002. The proceeds from the issuance of the senior subordinated notes
issued in March 2002 were used to pay off, in its entirety, the
then outstanding balance under our then-existing term loan A, and to reduce the amount outstanding under the our then-existing term loan B, and pay related
deferred debt issuance costs.

On
October 14, 2004, $194.2 million aggregate principal amount of the 95/8% senior subordinated notes was repaid with the proceeds of the initial public
offering, the concurrent offerings and cash on hand at the redemption price of 102.043% (which redemption price included a consent payment of 0.03%. Also on such date, $27.0 million in proceeds
from the initial public offering, the concurrent offerings and cash on hand were set aside to redeem the remaining $25.8 million aggregate principal amount of the 95/8% senior
subordinated notes on November 15, 2004 at a redemption price equal to 101.604% of the remaining aggregate principal amount plus accrued interest.

12.0% Senior Subordinated Notes due 2016.In connection with our initial public offering, we issued on October 14,
2004, $124.3 million aggregate principal amount of 12.0% senior subordinated notes due 2016 in the form of EISs and an additional $22.8 million aggregate principal amount of 12.0% senior
subordinated notes due 2016 (not in the form of EISs). In connection with the exercise of the underwriters' over-allotment option, on October 22, 2004 we issued an additional
$18.7 million aggregate principal amount of 12.0% senior subordinated notes in the form of EISs. Each EIS represents one share of our Class A common stock and $7.15 principal amount of
our 12.0% senior subordinated notes. As of April 2, 2005, $165.8 million aggregate principal amount of senior subordinated notes was outstanding.

37

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Interest
on the senior subordinated notes is payable quarterly in arrears on each January 30, April 30, July 30 and October 30 through the maturity date. The
senior subordinated notes will mature on October 30, 2016, unless earlier redeemed at our option as described below. We may not redeem the notes prior to October 30, 2009. On and after
October 30, 2009, we may redeem for cash all or part of the senior subordinated notes upon not less than 30 or more than 60 days' notice by mail to the owners of senior subordinated
notes, at a redemption price of 106.0% beginning October 30, 2009 and thereafter at 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 EIS will be automatically separated. Upon the occurrence of a change of control (as defined in the indenture),
unless we have exercised our right to redeem all senior subordinated notes as described above, each holder of the senior subordinated notes has the right to require us to repurchase that holder's
senior subordinated notes at a price equal to 101.0% of the principal amount of the senior subordinated notes being repurchased, plus any accrued and unpaid interest to the date of repurchase. In
order to exercise this right, a holder must separate the senior subordinated notes and Class A common stock represented by such holder's EISs. The senior subordinated notes are unsecured
obligations and are subordinated in right of payment to all of our existing and future senior secured and senior unsecured indebtedness, including the indebtedness under our revolving credit facility
and our senior notes. The senior subordinated notes rankpari passuin right of payment with any of our other subordinated indebtedness.

The
senior subordinated notes are jointly and severally and fully and unconditionally guaranteed by all of our existing domestic subsidiaries and certain future domestic subsidiaries on
an unsecured and subordinated basis on the terms set forth in the indenture governing the senior subordinated notes. The senior subordinated note guarantees are subordinated in right of payment to all
existing and future senior indebtedness of the guarantors, including the indebtedness under our revolving credit facility and the senior notes. Our present foreign subsidiary, Les Produits
Alimentaires Jacques et Fils Inc., is not a guarantor, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of our senior subordinated notes.

The
indenture governing the senior subordinated notes contains covenants with respect to us and restricts the incurrence of additional indebtedness and the issuance of capital stock; the
payment of dividends or distributions on, and redemption of, capital stock; a number of other restricted payments, including certain investments; specified creation of liens,
sale-leaseback transactions and sales of assets; fundamental changes, including consolidation, mergers and transfers of all or substantially all of our assets; and specified transactions
with affiliates.

Although
we believe that the senior subordinated notes should be treated as debt for U.S. federal income tax purposes in accordance with the opinion of our tax counsel issued on the date
of our initial public offering, this conclusion cannot be assured. If all or a portion of the senior subordinated notes were treated as equity rather than debt for U.S. federal income tax purposes,
then a corresponding portion of the interest on the senior subordinated notes would not be deductible by us for U.S. federal income tax purposes. In addition, we would be subject to liability for U.S.
withholding taxes on interest payments to non-U.S. holders if such payments were determined to be dividends. Our inability to deduct interest on the senior subordinated notes could
materially increase our taxable income and, thus, our U.S. federal and applicable state income tax liability. Our liability for income taxes (and withholding taxes) if the senior subordinated notes
were determined to be equity for income tax purposes would materially reduce our after-tax cash flow and would materially and adversely impact our ability to make interest and/or dividend
payments and could impact our ability to continue as a going concern. See "Critical Accounting Policies; Use of EstimatesIncome Tax Expense Estimates and Policies" for further discussion
of income tax matters relating to our senior subordinated notes.

8.0% Senior Notes due 2011.Concurrently with our initial public offering and offering of separate senior subordinated notes,
we issued $240.0 million aggregate principal amount of 8.0% senior notes

38

---



due
2011. Interest on the senior notes is payable on April 1 and October 1 of each year, commencing on April 1, 2005. Our obligations under the senior notes are fully and
unconditionally guaranteed on a senior basis by all of our existing and future domestic subsidiaries. The senior notes and the subsidiary guarantees are our and the guarantors' general unsecured
obligations and are effectively junior in right of payment to all of our and the guarantors' secured indebtedness and to the indebtedness and other liabilities of our non-guarantor
subsidiaries; arepari passuin right of payment to all of our and the guarantors' existing and future unsecured senior debt; and are senior in right of
payment to all of our and the guarantors' future subordinated debt, including the senior subordinated notes. Our present foreign subsidiary, Les Produits Alimentaires Jacques et Fils Inc., is
not a guarantor, and any future foreign or partially owned domestic subsidiaries will not be guarantors, of our senior notes.

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 to October 1, 2007, we may redeem up to 35% of the aggregate principal amount of the senior notes issued in the senior note offering
with the net proceeds of one or more equity offerings at the redemption price as described in the indenture governing the senior notes. If we or any of the guarantors sell certain assets or experience
specific kinds of changes in control, we must offer to purchase the senior notes at the prices as described in the indenture governing the senior notes plus accrued and unpaid interest to the date of
redemption. The indenture governing the senior notes limits our ability and the ability of the guarantors to incur additional indebtedness and issue preferred stock; make restricted payments,
including dividend payments on our common stock; allow restrictions on the ability of certain subsidiaries to make distributions; sell all or substantially all of our assets or consolidate or merge
with or into other companies; enter into certain transactions with affiliates; or create liens and enter into sale and leaseback transactions. Each of the covenants is subject to a number of important
exceptions and qualifications.



We are highly leveraged. On April 2, 2005, our total long-term debt and stockholders' equity was $405.8 million and
$90.9 million, respectively.

Our
ability to generate sufficient cash to fund our operations depends generally on our results of operations and the availability of financing. Our management believes that the cash on
our consolidated balance sheet and our cash flow from operations in conjunction with the available borrowing capacity under our revolving credit facility, net of outstanding letters of credit, of
approximately $29.9 million at April 2, 2005, will be sufficient for the foreseeable future to fund operations, meet debt service requirements, fund capital expenditures, make future
acquisitions within
our line of business, if any, and pay our anticipated dividends. We expect to make capital expenditures of between $6.5 million and $7.0 million for fiscal 2005.



Sales of a number of our products tend to be seasonal. In the aggregate, however, our sales are not heavily weighted to any particular quarter due to the
diversity of our product and brand portfolio. Sales during the first quarter of the fiscal year are generally below those of the following three quarters.

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

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In response to the enactment of the American Job Creation Act of 2004 (the "Jobs Act") on October 22, 2004, the FASB issued FASB Staff Position (FSP)
No. 109-1, "Application of FASB Statement No. 109, Accounting for Income Taxes, for the Tax Deduction Provided to U.S. Based Manufacturers"
(FSP 109-1), and FSP No. 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provisions within the American Jobs Creation Act of
2004"(FSP 109-2).

FSP
No. 109-1 clarifies how to apply SFAS No. 109 to the new law's tax deduction for income attributable to "domestic production activities." The fully
phased-in tax deduction is up to nine percent of the lesser of taxable income or "qualified production activities income," as defined by the Jobs Act. The staff position requires that the
deduction be accounted for as a special deduction in the period earned, not as a tax-rate reduction. As a result, we will recognize a reduction in our income tax expense for the domestic
production activities in the quarterly period(s) in which we are eligible for the deduction.

The
Jobs Act includes a provision that encourages companies to reinvest foreign earnings in the United States by temporarily making certain dividends received by a U.S. corporation from
controlled foreign corporations eligible for an 85% dividends-received deduction. We may elect to take this special one-time deduction for dividends received during the fiscal year ending
December 31, 2005. FSP 109-2 permits time beyond the financial reporting period of enactment date to evaluate the effect of the Jobs Act on its plan for reinvestment or
repatriation of foreign earnings for purposes of applying SFAS No. 109. We are still in the process of evaluating the effects of the repatriation provision. The related range of income tax
effects of such repatriation cannot be reasonably estimated at the time of issuance of these consolidated financial statements. As provided for in FSP 109-2, there have been no
amounts recognized under the repatriation provision to date and accordingly, there has been no effect on income tax expense included in these consolidated financial statements as of and for the
thirteen weeks ended April 2, 2005.

In
November 2004, the FASB issued SFAS No. 151,"Inventory CostsAn Amendment of ARB No. 43,
Chapter 4"(SFAS No. 151). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Among other provisions, the new rule requires that items such as idle facility expense, excessive
spoilage, double freight, and rehandling costs be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43. Additionally, SFAS
No. 151 requires that the allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for
fiscal years beginning after June 15, 2005 and is required to be adopted by us in the first quarter of fiscal 2006, beginning on January 1, 2006. We are currently evaluating the effect
that the adoption of SFAS No. 151 will have on our consolidated results of operations and financial condition but do not expect SFAS No. 151 to have a material impact.

In
December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" (SFAS No. 123R), which replaces SFAS No. 123 and supercedes APB Opinion
No. 25. SFAS No. 123R addresses the accounting for transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or
(b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. SFAS No. 123R requires all
share-based payments to employees, including grants of employee stock options and restrictive stock grants and units, to be recognized as a compensation cost based on their fair values. The pro forma
disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Based on a recent announcement by the Securities and Exchange
Commission, we are required to adopt SFAS No. 123R no later than January 1, 2006. Under SFAS No. 123R, we must determine the appropriate fair value model to be used for valuing
share-

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based
payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition methods include prospective and retroactive adoption options.
Under the retroactive option, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense
be recorded for all unvested stock options and restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the first period restated. We are evaluating the requirements of SFAS No. 123R and expect that the adoption of SFAS
No. 123R will not have a material impact on our consolidated results of operations and earnings per share, since there are currently no share-based payments.



Prior to the consummation of our initial public offering on October 14, 2004, we were party to a management agreement with BRS & Co., the manager of
Bruckmann, Rosser, Sherrill & Co., L.P. (BRS), pursuant to which BRS & Co. was paid an annual fee of $500,000 per year for certain management, business and organizational strategy, and
merchant and investment banking services. BRS owned the majority of our capital stock prior to the consummation of our initial public offering. The management agreement was terminated as of
October 14, 2004.

We
are also party to a transaction services agreement pursuant to which BRS & Co. will be paid a transaction fee for management, financial and other corporate advisory services
rendered by BRS & Co. in connection with acquisitions by our company, which fee will not exceed 1.0% of the total transaction value. No such fees were paid during the thirteen weeks ended
April 2, 2005 and April 3, 2004.

In
connection with our initial public offering and the concurrent offerings, the transaction services agreement was amended to provide that transaction fees will be payable as described
above unless a majority of our disinterested directors determines otherwise. BRS & Co. did not receive any transaction fees in connection with the initial public offering and the concurrent
offerings.

We
are a party to a lease for our Roseland manufacturing and warehouse facility with 426 Eagle Rock Avenue Associates, a real estate partnership of which Leonard S. Polaner, our
Chairman, is the general partner. Total rent expense associated with this lease was approximately $192,000 for the thirteen week periods ended April 2, 2005 and April 3, 2004. The lease
expires in April 2009.

Off-balance Sheet Arrangements

As of April 2, 2005, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of
Regulation S-K.

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Commitments and Contractual Obligations

Our contractual obligations and commitments principally include obligations associated with our outstanding indebtedness and future minimum operating lease
obligations as set forth in the following table as of January 1, 2005.

|                               |  | Payments Due by Period
|------------------------------ |  | ----------------------
|
|
|Long-term debt(1)              |  | $                     
|Operating leases               |  |                       
|Other long-term obligations(2) |  |                       
|                               |  |                       
|Total                          |  | $                     
|                               |  |                       

---

During
the thirteen week period ended April 2, 2005, there were no material changes outside the ordinary course of business in the specified contractual obligations set forth in
the table above, except
that our expected contributions under our defined benefit pension plans decreased from $1.9 million to $1.0 million.

Forward-Looking Statements

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



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

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

We
caution that the foregoing list of important factors is not exclusive. We urge investors not to unduly rely on forward-looking statements contained in this report.

Certain Factors That May Affect Future Results

Any investment in our company will be subject to risks inherent to our business. Before making an investment decision, investors should carefully consider the
risks described below together with all of the other information included in this report. The risks and uncertainties described below are not the only ones facing our company. Additional risks and
uncertainties that we are not aware of or focused on or that we currently deem immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors.

Any
of the following risks could materially and adversely affect our business, consolidated financial condition, results of operations or liquidity. In that case, holders of our
securities may lose all or part of their investment.

Risks Specific to Our Company

The packaged food industry is highly competitive.

The packaged food industry is highly competitive. Numerous brands and products, including private label products, compete for shelf space and sales, with
competition based primarily on product quality, convenience, price, trade promotion, consumer promotion, brand recognition and loyalty, customer service, effective advertising and promotional
activities and the ability to identify and satisfy emerging consumer preferences. We compete with a significant number of companies of varying sizes, including divisions or subsidiaries of larger
companies. Many of these competitors have multiple product lines, substantially greater financial and other resources available to them and may have lower fixed costs and/or are substantially less
leveraged than our company. If we are unable to continue to compete successfully with these companies or if competitive pressures or other factors cause our

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products
to lose market share or result in significant price erosion, our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

We may be unable to maintain our profitability in the face of a consolidating retail environment.

Our largest customer, Wal-Mart Stores, Inc., accounted for 8.6% of our net sales during the thirteen week period ended April 2, 2005
compared to 7.7% of our net sales during the thirteen week period ended April 3, 2004. Our ten largest customers together accounted for approximately 42.0% of our net sales during the thirteen
week period ended April 2, 2005 compared to 39.2% of our net sales during the thirteen week period ended April 3, 2004. As the retail grocery trade continues to consolidate and our
retail customers grow larger and become more sophisticated, our retail customers may demand lower pricing and increased promotional programs. Further, these customers are reducing their inventories
and increasing their emphasis on private label products. If we fail to use our marketing expertise and unique products and category leadership positions to respond to these trends, or if we lower our
prices or increase promotional support of our products and are unable to increase the volume of our products sold, our profitability may be adversely affected.

If we are unable to retain our key management personnel, our growth and future success may be impaired and our financial condition could suffer as a
result.

Our success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. In addition, we
do not maintain key-man life insurance on any of our executive officers. As a result, departure by our executive officers could have a material adverse effect on our business, consolidated
financial condition, results of operations or liquidity.

Most of our food product categories are mature and certain categories have experienced declining consumption rates from time to time. We may be unable
to offset any reduction in, or increase, net sales through an increase in trade spending for these categories or an increase in net sales in other categories.

If consumption rates and sales in our mature food product categories continue to decline, our revenue and operating income may be adversely affected, and we may
not be able to offset this decrease in business with increased trade spending or an increase in sales or profitability of other products and product categories.

We may have difficulties integrating any future acquisitions or identifying new licensing arrangements.

We may pursue additional acquisitions of food product lines and businesses. However, we may be unable to identify additional acquisitions or may be unable to
integrate and manage any acquired product lines or businesses successfully or achieve a substantial portion of any anticipated cost savings from these acquisitions or other anticipated benefits in the
timeframe we anticipate, or at all. In addition, any acquired product lines or businesses may require a greater amount of trade and promotional spending than we anticipate. Historically, we have grown
net sales for some but not all of the brands we have acquired. Acquisitions involve numerous risks, including difficulties in the assimilation of the operations, technologies, services and products of
the acquired companies, personnel turnover and the diversion of management's attention from other business concerns. Any inability by us to integrate and manage any acquired product lines or
businesses in a timely and efficient manner, any inability to achieve a substantial portion of any anticipated cost savings or other anticipated benefits from these acquisitions in the time frame we
anticipate or any unanticipated required increases in trade or promotional spending could adversely affect our business, consolidated financial condition, results of operations or liquidity. Moreover,
future acquisitions by us could result in our incurring substantial additional indebtedness, being exposed to contingent liabilities or incurring the impairment of goodwill and other intangible
assets, all of which could adversely affect our financial condition and results of

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operations.
In addition, we intend to pursue licensing arrangements with third parties to expand our brand and product offerings. However, we may be unable to identify additional licensing
arrangements or achieve benefits anticipated from these arrangements.

We are vulnerable to fluctuations in the supply and price of raw materials and labor, manufacturing and other costs, and we may not be able to offset
increasing costs by increasing prices to our customers.

We purchase agricultural products, meat and poultry, other raw materials and packaging supplies from growers, commodity processors, other food companies and
packaging manufacturers. While all such materials are available from numerous independent suppliers, raw materials are subject to fluctuations in price attributable to a number of factors, including
changes in crop size, federal and state agricultural programs, export demand, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi. Although we enter into
advance commodities purchase agreements from time to time, these contracts do not protect us from all increases in raw material costs. In addition, the cost of labor, manufacturing and packaging
materials and pork and chicken and other costs related to the production and distribution of our food products have risen in recent years, and we believe that they may continue to rise in the
foreseeable future. Over the past several years, due primarily to an increase in price competition, we and other manufacturers throughout the packaged food industry have been unable to offset
increased costs by raising prices to our customers. If the cost of labor, raw materials or manufacturing or other costs of production and distribution of our food products continue to increase, and we
are unable to offset these increases by raising prices or other measures, our profitability and financial condition could be negatively impacted.

We rely on co-packers for a significant portion of our manufacturing needs, and the inability to enter into additional or future
co-packing agreements may result in our failure to meet customer demand.

We rely upon co-packers for a significant portion of our manufacturing needs. The success of our business depends, in part, on maintaining a strong
sourcing and manufacturing platform. We believe that there are a limited number of competent, high-quality co-packers in the industry, and if we were required to obtain
additional or alternative co-packing agreements or arrangements in the future, we can provide no assurance that we would be able to do so on satisfactory terms or in a timely manner. Our
inability to enter into satisfactory co-packing agreements could limit our ability to implement our business plan or meet customer demand.

The loss of our exclusive license with Emeril's Food of Love Productions, L.L.C. or events or rumors relating to the Emeril's brand could adversely
impact our operating results.

The value of our exclusive license agreement with Emeril's Food of Love Productions, L.L.C. (EFLP) depends in part on the reputation and integrity of Emeril
Lagasse, under whose name theEmeril'sproducts are marketed. Mr. Lagasse is a widely recognized chef who currently enjoys celebrity status for
his ability to prepare gourmet foods. Consumer and customer recognition of Mr. Lagasse and theEmeril'sbrand and the association of this brand
with safe and high quality food products form an integral part of ourEmeril'sproducts. Should Mr. Lagasse's popularity decline, or should our
exclusive license with EFLP be lost or compromised for any reason, our operating results could be adversely impacted. In addition, EFLP may terminate the license agreement at any point if we fail to
meet our obligations under the agreement.

We rely on the performance of major retailers, wholesalers, specialty distributors and mass merchants for the success of our business, and should they
perform poorly or give higher priority to other brands or products, our business could be adversely affected.

We sell our products principally to retail outlets and wholesale distributors including, traditional supermarkets, food service outlets, mass merchants, warehouse
clubs, non-food outlets and specialty

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food
distributors. The replacement by or poor performance of our major wholesalers, retailers or chains or our inability to collect accounts receivable from our customers could materially and
adversely affect our results of operations and financial condition. In addition, our customers offer branded and private label products that compete directly with our products for retail shelf space
and consumer purchases. Accordingly, there is a risk that our customers may give higher priority to the products of our competitors. In the future, our customers may not continue to purchase our
products or provide our products with adequate levels of promotional support.

We may be unable to anticipate changes in consumer preferences, which may result in decreased demand for our products.

Our success depends in part on our ability to anticipate and offer products that appeal to the changing tastes, dietary habits and product packaging preferences
of consumers in the market categories in which we compete. If we are not able to anticipate, identify or develop and market products that respond to these changes in consumer preferences, demand for
our products may decline and our operating results maybe adversely affected. In addition, we may incur significant costs related to developing and marketing new products or expanding our existing
product lines in reaction to what we perceive to be increased consumer preference or demand. Such development or marketing may not result in the volume of sales or profitability anticipated.

Severe weather conditions and natural disasters can affect crop supplies and reduce our operating results.

Severe weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes or pestilence, may affect the supply of the raw materials that we
use for our products. Our maple syrup products, for instance, are particularly susceptible to severe freezing conditions in Quebec, Canada and Vermont during the season in which the syrup is produced.
Competing manufacturers can be affected differently by weather conditions and natural disasters depending on the location of their supplies. If our supplies of raw materials are reduced, we may not be
able to find enough supplemental supply sources on favorable terms, which could adversely affect our business and operating results.

We are subject to environmental laws and regulations relating to hazardous materials, substances and waste used in or resulting from our operations.
Liabilities or claims with respect to environmental matters could have a significant negative impact on our business.

As with other companies engaged in similar businesses, the nature of our operations expose us to the risk of liabilities and claims with respect to environmental
matters, including those relating to the disposal and release of hazardous substances. Furthermore, our operations are governed by laws and regulations relating to workplace safety and worker health
which, among other things, regulate employee exposure to hazardous chemicals in the workplace. Any material costs incurred in connection with such liabilities or claims could have a material adverse
effect on our business, consolidated financial condition, results of operations or liquidity. Any environmental or health and safety legislation or regulations enacted in the future, or any changes in
how existing or future laws or regulations will be enforced, administered or interpreted may lead to an increase in compliance costs or expose us to additional risk of liabilities and claims, which
could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.

Our operations are subject to numerous laws and governmental regulations, exposing us to potential claims and compliance costs that could adversely
affect our business.

Our operations are subject to extensive regulation by the United States Food and Drug Administration (FDA), the United States Department of Agriculture (USDA) and
other national, state and local authorities. For example, we are subject to the Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program
governs, among other

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things,
the manufacturing, composition and ingredients, packaging and safety of foods. Under this program the FDA regulates manufacturing practices for foods through its current "good manufacturing
practices" regulations and specifies the recipes for certain foods. Furthermore, our processing facilities and products are subject to periodic inspection by federal, state and local authorities. Any
changes in these laws and regulations could increase the cost of developing and distributing our products and otherwise increase the cost of conducting our business, which would adversely affect our
financial condition. In addition, failure by us to comply with applicable laws and regulations, including future laws and regulations, could subject us to civil remedies, including fines, injunctions,
recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.

We may be subject to significant liability should the consumption of any of our products cause injury, illness or death.

The sale of food products for human consumption involves the risk of injury to consumers. Such injuries may result from tampering by unauthorized third parties or
product contamination or spoilage, including the presence of foreign objects, substances, chemicals, other agents or residues introduced during the growing, storage, handling or transportation phases
of production. We have from time to time been involved in product liability lawsuits, none of which have been material to our business. While we are subject to governmental inspection and regulations
and believe our facilities comply in all material respects with all applicable laws and regulations, if the consumption of any of our products causes, or is alleged to have caused, a health-related
illness in the future we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity
surrounding any assertion that our products caused injury, illness or death could adversely affect our reputation with existing and potential customers and our corporate and brand image. Moreover,
claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. We maintain product liability insurance in an
amount which we believe to be adequate. However, we cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage.

Furthermore,
our products could potentially suffer from product tampering, contamination or spoilage or be mislabeled or otherwise damaged. Under certain circumstances, we may be
required to recall products, leading to a material adverse effect on our business. Even if a situation does not necessitate a recall, product liability claims might be asserted against us. A product
liability judgment against us or a product recall could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity.

Consumer concern regarding the safety and quality of food products or health concerns could adversely affect sales of certain of our products.

If consumers in our principal markets lose confidence in the safety and quality of certain food products, our business could be adversely affected. The food
industry is also subject to recent publicity concerning the health implications of obesity and trans fatty acids. Developments in any of these areas could cause our results to differ materially from
results that have been or may be projected. For example, negative publicity about genetically modified organisms, whether or not valid, may discourage consumers from buying certain of our products or
result in production and delivery disruptions.

Litigation regarding our trademarks and any other proprietary rights may have a significant negative impact on our business.

We own 107 trademarks which are registered in the United States, 23 trademarks which are registered with certain U.S. states and Puerto Rico, and 227 trademarks
which are registered in foreign

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countries.
In addition, we have nine trademark applications pending in the United States and foreign countries. We consider our trademarks to be of significant importance in our business. If the
actions we take to establish and protect our trademarks and other proprietary rights are not adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of
our products as an alleged violation of their trademarks and proprietary rights, it may be necessary for us to initiate or enter into litigation in the future to enforce our trademark right or to
defend ourselves against claimed infringement of the rights of others. Any legal proceedings could result in an adverse determination that could have a material adverse effect on our business,
consolidated financial condition, results of operations or liquidity.

Our financial well-being could be jeopardized by unforeseen changes in our employees' collective bargaining agreements or shifts in union
policy.

As of April 2, 2005, approximately 279 of our 762 employees were covered by collective bargaining agreements. Approximately 55 of our employees at our
Roseland, New Jersey facility were represented by a collective bargaining agreement with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (Local
No. 863). Approximately 136 of our employees at our Portland and Biddeford, Maine facilities were represented by a collective bargaining agreement with the Bakery, Confectionery, Tobacco
Workers and Grain Millers International Union (AFL-CIO, Local No. 334). Approximately 88 of our employees at our Stoughton, Wisconsin facility were represented by a collective
bargaining agreement with the Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union (Local No. 695). Although we consider our employee relations to be
generally good, a prolonged work stoppage or strike at any facility with union employees could have a material adverse effect on our business, consolidated financial condition, results of operations
or liquidity. In addition, if upon the expiration of existing collective bargaining agreements we are unable to reach new agreements without union action or any such new agreements are not on terms
satisfactory to us, our business, consolidated financial condition, results of operations or liquidity could be materially and adversely affected.

Future labor disruptions in the food industry could significantly impact our sales and profitability.

The grocer's strike in California, which began in October 2003 and ended March 2004, in response to proposed healthcare cuts by several large retail
grocers, affected over 70,000 grocery workers in California, and had a negative impact on our net sales. Should a similar strike or other labor disruption occur in California or elsewhere in the
future, it may have a significant impact on our sales revenue and operating profits.

Risks Relating to our Securities

Holders of our EISs, Class A common stock and Class B common stock, may not receive the level of dividends provided for in the dividend
policy our board of directors adopted in connection with our initial public offering, or any dividends at all.

Dividend payments are not mandatory or guaranteed and holders of our common stock do not have any legal right to receive, or require us to pay, dividends.
Furthermore, our board of directors may, in its sole discretion, amend or repeal the dividend policy it adopted in connection with our initial public offering. Our board of directors may decrease the
level of dividends provided for in this dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to shares of our capital stock, if any, depend on, among other
things, our results of operations, cash requirements, financial condition, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors
may deem relevant. The indenture governing our senior subordinated notes, the terms of our revolving credit facility and the indenture governing the senior

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notes
contain significant restrictions on our ability to make dividend payments. In addition, certain provisions of the Delaware General Corporation Law may limit our ability to pay dividends.

Our dividend policy may negatively impact our ability to finance our working capital requirements, capital expenditures or operations.

In connection with our initial public offering, our board of directors has adopted a dividend policy under which cash generated by our business in excess of
operating needs, interest and principal
payments on indebtedness, capital expenditures sufficient to maintain our properties and assets and $6.0 million of dividend restricted cash (that can be used for the payment of dividends on
the Class A common stock or for any other purpose other than the payment of dividends on the Class B common stock), would in general be distributed as regular quarterly cash dividends
(up to the intended dividend rates as determined by our board of directors) to the holders of our Class A common stock and as regular annual cash dividends (up to the dividend rate permitted
under our debt agreements and our organizational documents) to the holders of our Class B common stock and not be retained by us as cash on our consolidated balance sheet. As a result, we may
not retain a sufficient amount of cash to finance growth opportunities or unanticipated capital expenditure needs or to fund our operations in the event of a significant business downturn. We may have
to forego growth opportunities or capital expenditures that would otherwise be necessary or desirable if we do not find alternative sources of financing. If we do not have sufficient cash for these
purposes, our financial condition and our business will suffer.

If we have insufficient cash flow to cover the intended dividend payments under the dividend policy adopted by our board of directors we would need to
reduce or eliminate dividends or, to the extent permitted under our debt agreements, fund a portion of our dividends with additional borrowings.

For the latest twelve months ended April 2, 2005, we had cash flows from operations of $21.9 million. If our cash flows from operations for future
periods were to fall below our minimum expectations (or if our assumptions as to capital expenditures or interest expense were too low or our assumptions as to the sufficiency of our revolving credit
facility to finance our working capital needs were to prove incorrect), we would need either to reduce or eliminate dividends or, to the extent permitted under the indenture governing our senior
notes, the indenture governing our senior subordinated notes and the terms of our revolving credit facility, fund a portion of our dividends with borrowings or from other sources. If we were to use
working capital or permanent borrowings to fund dividends, we would have less cash and/or borrowing capacity available for future dividends and other purposes, which could negatively impact our
financial condition, our results of operations, our liquidity and our ability to maintain or expand our business.

Our certificate of incorporation authorizes us to issue without stockholder approval preferred stock that may be senior to our common stock in right of
dividend payment.

Our certificate of incorporation authorizes the issuance of preferred stock without stockholder approval and upon such terms as the board of directors may
determine. The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of holders of any class or series of preferred stock that may be
issued in the future. The right of the holders of our common stock to receive dividends as they may be lawfully declared from time to time by our board of directors is subject to any preferential
rights that we may grant to the holders of preferred stock that we may issue. The terms of any preferred stock we issue may place restrictions on the payment of dividends to the holders of our common
stock. If we issue preferred stock that is senior to our common stock in right of dividend payment, and our cash flows from operations or surplus are insufficient to support dividend payments to the
holders of preferred stock and to the holders of EISs

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and
Class A and Class B common stock, we may be forced to reduce or eliminate dividends to the holders of EISs and Class A and Class B common stock.

We have substantial indebtedness, which could:



At
April 2, 2005, we had $240.0 million of senior indebtedness, and $165.8 million of senior subordinated indebtedness.

Our
ability to pay dividends is subject to applicable law and contractual restrictions contained in the instruments governing any indebtedness of ours and our subsidiaries, including our
revolving credit facility, which is secured on a senior basis by substantially all of our and our subsidiaries' assets except our real property, and our senior notes. The degree to which we are
leveraged on a consolidated basis could have important consequences to the holders of our securities, including:



Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate risks
associated with our substantial indebtedness.

While our revolving credit facility contains total leverage, senior leverage and cash interest coverage maintenance covenants and the indentures governing the
senior notes and senior subordinated notes contain incurrence covenants that restrict our ability to incur debt, as long as we meet these financial covenant tests we will be allowed to incur
additional indebtedness. In addition, the indenture governing the senior subordinated notes allows us to issue additional senior subordinated notes with terms identical (other than issuance date) to
our existing senior subordinated notes under certain circumstances.

To service our indebtedness, we require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. We may
not be able to repay or refinance the senior subordinated notes, the revolving credit facility or our senior notes upon terms acceptable to us if at all.

Our ability to make payments on and to refinance our indebtedness, including the senior subordinated notes, and to fund planned capital expenditures depends on
our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors
that are beyond our control.

A
significant portion of our cash flow from operations is dedicated to servicing our debt requirements. In addition, we currently intend to distribute a significant portion of any
remaining cash flow to our stockholders in the form of dividends. Moreover, prior to the maturity of our senior notes, we are not required to make any payments of principal on our senior subordinated
notes.

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Our
ability to continue to expand our business is, to a certain extent, dependent upon our ability to borrow funds under our revolving credit facility and to obtain other third-party
financing, including through the sale of EISs or other securities. The revolving credit facility is subject to periodic renewal or must otherwise be refinanced. Likewise, we expect that we will
refinance our senior notes at or prior to maturity, which will be substantially prior to the maturity date of the senior subordinated notes. If we are unable to refinance our indebtedness, including
our revolving credit facility or our senior notes, on commercially reasonable terms or at all, we would be forced to seek other alternatives, including:



In
addition, if we are unable to refinance the senior subordinated notes or the senior notes, our failure to repay all amounts due on the applicable maturity date would cause a default
under the applicable indentures.

If
we are forced to pursue any of the above options, our business and/or the value of an investment in our securities could be adversely affected.

Credit ratings may affect our ability to obtain financing and the cost of such financing.

Our ability to obtain external financing and, in particular, debt financing is affected by our debt ratings, which are periodically reviewed by the major credit
rating agencies. Moody's and S&P have provided ratings to the senior subordinated notes of Caa1 and CCC+ respectively. In determining our credit ratings, the rating agencies generally consider a
number of both quantitative and qualitative factors. These factors include earnings, fixed charges such as interest, cash flows, total debt outstanding, off-balance sheet obligations and
other commitments, total capitalization and various ratios calculated from these factors. The ratings provided to us by Moody's and S&P for the senior subordinated notes indicate that these rating
agencies have determined that our senior subordinated notes have a currently identifiable vulnerability to default and that we are dependent upon favorable business, financial, and economic conditions
to meet timely payment of interest and repayment of principal on the senior subordinated notes.

We are a holding company and we rely on dividends, interest and other payments, advances and transfers of funds from our subsidiaries to meet our debt
service and other obligations.

We are a holding company and all of our assets are held by our direct and indirect subsidiaries and we rely on dividends and other payments or distributions from
our subsidiaries to meet our debt service obligations and to enable us to pay dividends. The ability of our subsidiaries to pay dividends or make other payments or distributions to us depends on their
respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends),
agreements of those subsidiaries, the revolving credit facility, the terms of the indenture governing the senior notes and the covenants of any future outstanding indebtedness we or our subsidiaries
incur.

We may amend our revolving credit facility, the indenture governing the senior notes or the indenture governing the senior subordinated notes, or we may
enter into new agreements that govern senior indebtedness. The amended or new terms may significantly affect our ability to pay interest and dividends to holders of our securities, as applicable.

Our revolving credit facility and the indenture governing the senior notes contain significant restrictions on our ability to pay interest on the senior
subordinated notes and dividends on the shares of Class A and Class B common stock based on meeting specified financial ratios, and compliance with

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other
conditions. As a result of general economic conditions, conditions in the lending markets, the results of our business or for any other reason, we may elect or be required to amend or refinance
our revolving credit facility or our senior notes, at or prior to maturity, or enter into additional agreements for senior indebtedness. Regardless of any protection holders of our securities have in
the indenture governing the senior subordinated notes, any such amendment, refinancing or additional agreement may contain covenants which could limit in a significant manner our ability to pay
interest payments and dividends to holders of the EISs, our Class A and Class B common stock and our senior subordinated notes.

We are subject to restrictive debt covenants and other requirements related to our debt that limit our business flexibility by imposing operating and
financial restrictions on our operations.

The agreements governing our indebtedness impose significant operating and financial restrictions on us. These restrictions prohibit or limit, among other things:



Our
revolving credit facility and the indenture governing the senior notes include other and more restrictive covenants and prohibit us from prepaying our other indebtedness, including
the senior subordinated notes, while senior indebtedness is outstanding. The revolving credit facility requires us to maintain specified financial ratios and satisfy financial condition tests,
including, without limitation, the following: a maximum leverage ratio, a minimum interest coverage ratio and a maximum senior leverage ratio.

Our
ability to comply with the ratios or tests may be affected by events beyond our control, including prevailing economic, financial and industry conditions. A breach of any of these
covenants, or failure to meet or maintain ratios or tests could result in a default under the revolving credit facility, the terms of the indenture governing the senior notes and/or the indenture
governing the senior subordinated notes. Certain events of default under the revolving credit facility and the terms of the indenture governing the senior notes would prohibit us from making payments
on the senior subordinated notes, including payment of interest when due. In addition, upon the occurrence of an event of default under the revolving credit facility or the terms of the indenture
governing the senior notes, the lenders could elect to declare all amounts outstanding under the revolving credit facility and the senior notes, together with accrued interest, to be immediately due
and payable. If we were unable to repay those amounts, the lenders could proceed against the security granted to them to secure that indebtedness. If the lenders accelerate the payment of the
indebtedness, our assets may not be sufficient to repay in full this indebtedness and our other indebtedness, including the senior subordinated notes.

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Interest on the senior subordinated notes may not be deductible by us for U.S. federal income tax purposes, which could significantly reduce our future
cash flow and impact our ability to make interest and dividend payments.

If all or a portion of the senior subordinated notes were treated as equity rather than debt for U.S. federal income tax purposes, then a corresponding portion of
the interest on the senior subordinated notes would not be deductible by us for U.S. federal income tax purposes. In addition, we would be subject to liability for U.S. withholding taxes on interest
payments to non-U.S. holders if such payments were determined to be dividends. Our inability to deduct interest on the senior subordinated notes could materially increase our taxable
income and, thus, our U.S. federal and applicable state income tax liability. Our liability for income taxes (and withholding taxes) if the senior subordinated notes were determined to be equity for
income tax purposes would materially reduce our after-tax cash flow and would materially and adversely impact our ability to make interest and/or dividend payments and could impact our
ability to continue as a going concern. In the case of foreign holders, treatment of the senior subordinated notes as equity for U.S. federal income tax purposes would subject such holders in respect
of the senior subordinated notes to withholding or estate taxes in the same manner as with regard to common stock and could subject us to liability for withholding taxes that were not collected on
payments of interest. Therefore, foreign holders would receive any such payments net of the tax withheld.

Even
if the IRS does not challenge the tax treatment of the senior subordinated notes, it is possible that we will at some point in the future, as a result of changes in circumstances or
facts that come to light in the future, conclude that we should establish a reserve for contingent tax liabilities associated with a disallowance of all or part of the interest deductions on the
senior subordinated notes, although our present view is that no such reserve is necessary or appropriate. If we decide to maintain such a reserve, our ability to pay dividends on the shares of our
common stock could be materially impaired and the market price and/or liquidity for the ElSs or our common stock could be adversely affected.

For
discussion of these tax related risks, see "Critical Accounting Policies; Use of EstimatesIncome Tax Expense Estimates and Policies" above.

Future changes that increase cash taxes payable by us could significantly decrease our future cash flow available to make interest and dividend payments
with respect to our securities.

We are able to amortize goodwill and certain intangible assets within the meaning of Section 197 of the Internal Revenue Code of 1986. This enables us to
amortize for tax purposes approximately $16.0 million annually through 2011, approximately $14.4 million for fiscal 2012, approximately $12.9 million for fiscal 2013 and 2014, and
approximately $7.1 million for fiscal 2015 through 2018. If there is a change in U.S. federal tax policy that reduces any of these available deductions or results in an increase in our
corporate tax rate, our cash taxes payable may increase, which could significantly reduce our future cash and impact our ability to make interest and dividend payments. As of January 1, 2005,
we had net operating loss, or NOL, carryforwards for U.S. federal income tax purposes of
approximately $2.9 million which are available to offset future U.S. federal taxable income, if any, through 2020 subject to certain limitations under Section 382 of the Internal Revenue
Code of 1986. The realizable amount of these NOLs could be reduced in the near term if estimates of future taxable income during future periods are reduced.

If interest rates rise, the trading value of our ElSs and senior subordinated notes may decline.

Should interest rates rise or should the threat of rising interest rates develop, debt markets may be adversely affected. As a result, the trading value of our
EISs and senior subordinated notes may decline.

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Future sales or the possibility of future sales of a substantial amount of EISs, shares of our Class A common stock, our senior subordinated
notes or other securities may depress the price of our securities.

Future sales or the availability for sale of substantial amounts of EISs, shares of our Class A common stock, a significant principal amount of our senior
subordinated notes or other securities in the public market could adversely affect the prevailing market price of our securities and could impair our ability to raise capital through future sales of
our securities.

We
may issue shares of our Class A common stock and senior subordinated notes, which may be in the form of EISs, or other securities from time to time in future financings or as
consideration for future acquisitions and investments. In the event any such future financing, acquisition or investment is significant, the number of shares of our Class A common stock and the
aggregate principal amount of senior subordinated notes, which may be in the form of EISs, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in
turn be significant. In addition, we may also grant registration rights covering those EISs, shares of our Class A common stock, senior subordinated notes or other securities in connection with
any such future financing, acquisitions and investments.

In
addition, following the fifth anniversary of the closing of our initial public offering or earlier under certain circumstances, holders of Class B common stock may demand
registration of their Class B common stock.

Our certificate of incorporation and bylaws and several other factors could limit another party's ability to acquire us and deprive our investors of the
opportunity to obtain a takeover premium for their securities.

Our certificate of incorporation and bylaws contain certain provisions that may make it difficult for another company to acquire us and for holders of our
securities to receive any related takeover premium for their securities. For example, our certificate of incorporation authorizes the issuance of preferred stock without stockholder approval and upon
such terms as the board of directors may determine. The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of holders of any class or
series of preferred stock that may be issued in the future.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of operations, we are exposed to market risks arising from adverse changes in interest rates. Market risk is defined for these purposes as
the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates. As of April 2, 2005, our revolving credit facility entered into
concurrently with our initial public offering and the concurrent offerings was undrawn, and we have no outstanding variable rate borrowings. Interest under our revolving credit facility is determined
based on several alternative rates as stipulated in the revolving credit facility, including the base lending rate per annum plus an applicable margin, or LIBOR plus an applicable margin.

We
also have outstanding $240.0 million principal amount of 8.0% senior notes due October 1, 2011, with interest payable semiannually on April 1 and October 1
of each year. The fair value of the senior notes at January 1, 2005, based on quoted market prices, was $254.4 million.

We
also have outstanding $165.8 million principal amount of 12.0% senior subordinated notes due October 30, 2016, with interest payable semiannually on April 30 and
October 30 of each year. Of such outstanding principal amount, $143.0 million principal amount is represented by approximately 20.0 million EISs. Each EIS represents one share of
our Class A common stock and $7.15 principal amount of our senior subordinated notes. As of April 2, 2005, the fair value of the EISs, based on the per EIS closing price on the AMEX on
April 1, 2005, was $14.98 per EIS. It is not practicable to

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estimate
the fair value of the $143.0 million principal amount of senior subordinated notes represented by the EISs. Of the $165.8 aggregate principal amount of senior subordinated notes
outstanding, $22.8 million principal amount is not represented by EISs and trades separately. The fair value of the separate senior subordinated notes at April 2, 2005, based on quoted
market prices, was $25.6 million.

We
purchase raw materials, including agricultural products, meat and poultry from growers, commodity processors, other food companies and packaging manufacturers. Raw materials are
subject to fluctuations in price attributable to a number of factors. During 2004, we were faced with increasing prices in certain of these commodities, particularly in packaging materials, pork and
chicken and we expect this trend may continue. We manage this risk by entering into short-term supply contracts and advance commodities purchase agreements from time to time, and if
necessary, by raising prices. There can be no assurance, however, that any price increases by us will offset the increased cost of these raw material commodities, or that we will be able to raise
prices at all.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.As required by Rule 13a-15(b) under the Securities
Exchange Act of 1934, as amended, our management, including our chief executive officer and our chief financial officer, conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this report. As defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, disclosure
controls and procedures are controls and other procedures that we use that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our
chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based
on that evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period
covered by this report. It should be noted that any system of controls, however well designed and operated, is based in part upon certain assumptions and can provide only reasonable, and not absolute,
assurance that the objectives of the system are met.

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

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PART II        OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of our management, the ultimate disposition of
these other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

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.
|32.2        |  | 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 Financial Officer.

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SIGNATURE

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

|Dated: April 28, 2005 |  | B&G FOODS, INC.
|--------------------- |  | ---------------
|                      |  | By:            

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INDEX TO 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.
|32.2        |  | 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 Financial Officer.

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