# To Our Stockholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-defensive-packaged-foods/NYSE_BGS_2019/NYSE_BGS_2019.mmd` · pages 2-8_

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To Our Stockholders:

## Business Performance

I am pleased to report that our 2019 financial results were solid and consistent with our short-term and long-term plans, which are based upon our goal of a stable base business with pricing and cost savings initiatives to offset inflation, complemented by net sales and earnings growth through new product innovation and accretive acquisitions. We see 2019 as the start of a new era for B&G Foods.

Some of our notable 2019 highlights include:

• the realignment of our executive leadership team, including a new executive vice president and chief customer officer, executive vice president and chief commercial officer and executive vice president and chief supply chain officer;

• the successful implementation of our new enterprise resources planning (ERP) system;

• the continued roll out of our Green Giant brand vision to be the "plant-based veggie brand of the future" by delivering on its mission to get people to eat more vegetables with continued growth of category re-inventing innovation;

• the successful acquisition of Clabber Girl Corporation and fully integrating the business into our sales, distribution and manufacturing network;

• the completion of a \(1 billion debt refinancing, the largest in our company's history and at attractive interest rates; and

• the return of \(123.7 million of cash to our stockholders in the form of dividends and an additional \)34.7 million in the form of share repurchases.

Our 2019 results demonstrate that we can get back to growth through accretive acquisitions and deliver what we say. In 2019, we had net sales of \(1,660.4 million and adjusted EBITDA* of \)302.5 million. We also generated adjusted EBITDA as a percentage of net sales of 18.2% for fiscal 2019, which was generally consistent with our expectations. After adjusting for approximately \(74.9 million in net sales for Pirate Brands in fiscal 2018 (a business that we sold in late 2018), our fiscal 2019 net sales represented an increase of \)34.5 million, or 2.1%, over the prior year. While there is certainly room for improvement, we believe 2019 was the first year of many in improved performance.

## Investment Highlights

In our fifteen 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 fifteen years since our initial public offering, we have increased the dividend at a compound annual growth rate of 5.9%. We have been able to maintain our dividend policy year after year by growing net sales and adjusted EBITDA over the past fifteen years at compound annual growth rates of 10.5% and 10.2%, respectively. Our dividend yield is among the highest in the industry and we remain as committed as ever to our policy of

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returning a meaningful portion of our excess cash to stockholders. As mentioned above, during 2019, we returned almost $160 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 2019. On May 15, 2019, we acquired Clabber Girl Corporation, a leader in baking products, including baking powder, baking soda and corn starch, from Hulman & Company for approximately $84.6 million in cash. In addition to Clabber Girl, the number one retail baking powder brand, Clabber Girl Corporation's product offerings include the Rumford, Davis, Hearth Club and Royal brands of retail baking powder, baking soda and corn starch, and the Royal brand of foodservice dessert mixes. Clabber Girl is an excellent addition to our existing portfolio of brands. This acquisition is another example, along with our acquisitions of Green Giant, McCann's, Spice Islands and other spices & seasoning brands, Victoria and Back to Nature, of our efforts in recent years to acquire better-for-you brands that taste great and resonate with today's consumer.

## In Closing

It has been almost a year since I took over as President and Chief Executive Officer of B&G Foods. I am very proud of the progress we made during the last year, viewing 2019 as a year that got us back on track with our long-term goals.

While we understand investor concern over our stock price and debt leverage, we are committed to continuing to make progress in 2020 towards improved, sustainable performance and generating excess cash flow to help reduce leverage. We believe our 2020 plan will allow us to reduce our leverage below six times pro forma adjusted EBITDA by the end of the year. In addition, we believe we maintain the capability to acquire additional businesses, consistent with our acquisition strategy. We believe opportunities remain to acquire businesses without increasing leverage and that in some cases, may even help reduce leverage.

For 2020, our long-term strategic objectives remain the same:

• driving modest organic growth of up to 2% through key brands, including Green Giant, Ortega, Mrs. Dash and McCann's, amongst others, while maintaining a large portfolio of stable brands and managing our remaining brands for cash flow;

• improving margins through cost savings initiatives and trade spend optimization;

• making accretive acquisitions of complementary businesses; and

• building a winning workplace by investing in our people, processes and systems.

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)

Kenneth G. Romanzi
President and Chief Executive Officer
February 26, 2020