# To Our Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NYSE_BGS_2020/NYSE_BGS_2020.mmd` · pages 2-8_

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To Our Stockholders:

## Business Performance

I am pleased to report that fiscal 2020 was a record breaking year for B&G Foods. We set a company record for net sales, which increased 18.5% to \(1.968 billion, and adjusted EBITDA \( ^{*} \) , which increased 19.4% to \)361.2 million. We generated adjusted EBITDA as a percentage of net sales of 18.4%. We also successfully completed the Clabber Girl integration, the Crisco acquisition and a credit agreement refinancing at very attractive interest rates.

It would be a gross understatement to say that 2020 was a year like no other. COVID-19 brought an incredible amount of suffering, inconvenience and unfortunately, death with it. It is humbling that our company benefited from such tragedy, and at the same time a tribute to our employees, working in the midst of a pandemic, that we were able to respond as well as we did to the increased needs of consumers as they coped with COVID-19 and the resultant quarantines.

Consistent with B&G Foods' core values, the health and safety of our employees and the quality and safety of our products are our highest priorities. During 2020, we implemented a wide range of precautionary measures at our manufacturing facilities and other work locations in response to COVID-19. We have also been working closely with our supply chain partners and our customers to ensure that we can continue to provide uninterrupted service. Thanks to the tremendous efforts of our employees, especially those throughout our supply chain, our ability to serve our customers has not, to date, been materially impacted, although, as discussed in the accompanying annual report, we have faced and continue to face supply chain constraints for certain of our products.

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

We also rewarded our dedicated employees at our manufacturing facilities by temporarily increasing compensation for our hourly employees, supervisors and managers from March 30, 2020 through February 15, 2021. This is in addition to the continued pay we provide to workers while in quarantine. And in light of the extraordinary performance of our business during fiscal 2020, we also rewarded those employees not otherwise eligible for any of our incentive compensation programs or the enhanced COVID-19 pay described above by providing those employees with cash bonuses that were paid in March 2021.

Beyond the numbers and our response to COVID-19, in 2020 we took major strides in our corporate social responsibility efforts. The year saw the formation of a new Corporate Social Responsibility committee at the Board of Director level, its mission to direct and oversee our efforts to meet our corporate social responsibilities to our employees, customers, consumers, communities and other stakeholders. During 2020, we also adopted and published on our website a new human rights policy and a new environmental, health and safety policy. And most recently, we have established an employee-directed Diversity, Equity and Inclusion (DEI) Council and have engaged a third-party DEI consultant to help us understand and meet the needs of our employees while achieving appropriate workforce DEI throughout our company. While we already have efforts in place on these fronts, we as a company are committed to increasing our efforts and investments.

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## Investment Highlights

In our sixteen years as a publicly held company, we have proven our commitment to creating stockholder value by consistently paying a generous and growing cash dividend. We have paid a dividend every quarter since our initial public offering and over the sixteen years since our initial public offering, we have increased the dividend at a compound annual growth rate of 5.5%. We have been able to maintain our dividend policy year after year by growing net sales and adjusted EBITDA over the past sixteen years at compound annual growth rates of 11.0% and 10.8%, respectively. Our dividend yield is among the highest in the industry and we remain as committed as ever to our policy of returning a meaningful portion of our excess cash to stockholders. During 2020, we returned \(121.9 million of cash to our stockholders.

## Acquisition Strategy

Our ongoing acquisition strategy, which we have executed successfully over many years, continued to yield positive results in 2020. On December 1, 2020, we acquired the iconic Crisco brand of oils and shortening from The J. M. Smucker Co. Crisco has a strong heritage, as the original all-vegetable shortening that transformed the way people bake and cook over 100 years ago. Crisco is the number one brand of shortening, the number one brand of vegetable oil and also holds a leadership position in other cooking oils and cooking sprays. Crisco is an excellent complement to our existing portfolio of brands, including our Clabber Girl and other baking powder brands. This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples.

## In Closing

We had some significant achievements during an unprecedented fiscal 2020. Most importantly we were able to successfully continue to operate our business despite the COVID-19 pandemic and did so in a manner that kept our employees safe and healthy. The successes of fiscal 2020 should not mislead any of us about the challenges of 2021; it will be a much more challenging year in terms of inflation across a number of key input costs, including certain agricultural products, packaging and freight. As in prior years, our expectation is that we will manage these costs through a combination of pricing initiatives and cost savings activities to preserve our margin profile and our cash flows.

Notwithstanding these challenges, we remain very optimistic about 2021. We like to believe that consumers have discovered or rediscovered the satisfaction of cooking and baking at home, and the savings they can reap from doing so. Our sales continue to be strong, a reflection of consumption trends, and our service levels continue to improve as we add capacity and our workforce strengthens. Fiscal 2021 will also see a full year of ownership of the Crisco brand, which, as mentioned above, we acquired on December 1, 2020, and which made significant accretive contributions to our fiscal 2020 results in just one month.

Finally, I want to recognize our company's employees, all of whom have contributed to making this company successful in an extremely challenging year. Without all of their dedicated efforts we could not have achieved the records that were set in fiscal 2020, or begun 2021 with the prospect of another successful year. Our passion for what we do, our commitment to food safety and quality, integrity and accountability, our customer and consumer focus, our commitment to the safety and health of our employees and our belief in collaboration and empowerment are the values that have driven the success of this company for many years and will continue to drive our company's success in the future. It is because of these values that we have been able to create tremendous stockholder value over the years, and I believe stockholders of B&G Foods should continue to expect a bright future ahead.

Sincerely,

![](images/3_0.jpg)

David L. Wenner

Interim President and Chief Executive Officer
March 31, 2021