As filed with the Securities and Exchange Commission on May 15, 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one) Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended April 1, 2000
or
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _________ to _________.
Commission file number 333-39813
B&G FOODS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of 13-3916496
incorporation or organization) (I.R.S. Employer Identification No.)
4 Gatehall Drive, Suite 110, Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 401-6500
Indicate by check 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 X No
As of May 1, 2000, B&G Foods, Inc. had one (1) share of common stock,
$.01 par value, outstanding, which was owned by an affiliate.
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<PAGE>
B&G Foods, Inc. and Subsidiaries
Index
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets....................................1
Consolidated Statements of Operations..........................2
Consolidated Statements of Cash Flows..........................3
Notes to Consolidated Financial Statements.....................5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..............8
Item 3. Quantitative and Qualitative Disclosures about
Market Risk...............................................11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.........................................11
Item 2. Changes in Securities and Use of Proceeds.................11
Item 3. Defaults Upon Senior Securities...........................11
Item 4. Submission of Matters to a Vote of Security Holders.......11
Item 5. Other Information.........................................11
Item 6. Exhibits and Reports on Form 8-K..........................12
(a) Exhibits
(b) Reports on Form 8-K
SIGNATURES
Index to Exhibits....................................................16
(i)
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
B&G Foods, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
<S> <C> <C>
Assets April 1, 2000 January 1, 2000
------------- ---------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 4,191 $ 7,745
Trade accounts receivable, net 17,914 25,852
Inventories 73,012 71,913
Prepaid expenses 2,076 2,297
Deferred income taxes 5,063 5,063
-------------------------------
Total current assets 102,256 112,870
Property, plant and equipment, net 41,611 41,615
Intangible assets, net 309,732 312,143
Other assets 10,016 10,429
-------------------------------
$ 463,615 $ 477,057
===============================
Liabilities and Stockholder's Equity
Current liabilities:
Current installments of long-term debt $ 15,306 $ 11,552
Trade accounts payable 16,231 23,640
Accrued expenses 13,356 18,057
Due to related parties 83 208
-------------------------------
Total current liabilities 44,976 53,457
Long-term debt 325,513 329,340
Deferred income taxes 35,533 36,136
Other liabilities 76 51
-------------------------------
Total liabilities 406,098 418,984
Stockholder's equity:
Common stock, $.01 par value per share. Authorized
1,000 shares; issued and outstanding 1 share - -
Additional paid-in capital56,342 56,342
Retained earnings 1,175 1,731
-------------------------------
Total stockholder's equity 57,517 58,073
-------------------------------
$ 463,615 $ 477,057
===============================
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Operations
(dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Thirteen Weeks Ended
April 1, 2000 April 3, 1999
Net sales $ 73,394 $ 56,480
Cost of goods sold 37,754 32,711
-----------------------------
Gross profit 35,640 23,769
Sales, marketing, and distribution expenses 24,589 16,978
General and administrative expenses 3,462 2,392
Management fees-related party 125 73
------------------------------
Operating income 7,464 4,326
Other expense:
Interest expense-related parties 0 15
Interest expense 8,623 5,046
---------------------------------
Loss before income tax benefit (1,159) (735)
Income tax benefit (603) (360)
-------------------------------
Net loss $ (556) $ (375)
==============================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Thirteen Weeks Ended
April 1, 2000 April 3, 1999
------------- -------------
Cash flows from operating activities
Net loss $ (556) $ (375)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 3,970 2,457
Deferred income tax benefit (603) (360)
Amortization of deferred debt issuance costs 413 221
Changes in assets and liabilities, net of effects
of businesses acquired:
Trade accounts receivable 7,938 (5,698)
Inventories (1,099) 4,565
Prepaid expenses 221 (863)
Other assets 0 (37)
Trade accounts payable (7,409) (2,749)
Accrued expenses (4,701) (470)
Due to related parties (125) (253)
Other liabilities 25 -
--------------------------------
Net cash used in operating activities (1,926) (3,562)
--------------------------------
Cash flows from investing activities:
Paid for acquisitions - (222,570)
Capital expenditures (1,555) (1,667)
--------------------------------
Net cash used in investing activities (1,555) (224,237)
--------------------------------
(continued)
3
<PAGE>
B&G Foods, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
April 1, 2000 April 3, 1999
------------- -------------
Cash flows from financing activities:
Payments of long-term debt (73) (20,672)
Proceeds from issuance of long-term debt - 220,000
Proceeds from capital contribution - 35,000
Payments of deferred debt issuance costs - (6,202)
---------------------------------
Net cash (used in) provided by
financing activities (73) 228,126
--------------------------------
(Decrease) increase in cash and
cash equivalents (3,554) 327
Cash and cash equivalents at beginning of period 7,745 599
--------------------------------
Cash and cash equivalents at end of period $ 4,191 $ 926
================================
Supplemental disclosure of cash flow information
Cash paid for:
Interest $11,262 $ 1,776
======= =========
Income taxes $ 65 $ 8
======= =========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(dollars in thousands)
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements of B&G
Foods, Inc. and subsidiaries (the "Company") contain all adjustments
(consisting only of normal and recurring adjustments) necessary to
present fairly the Company's consolidated financial position as of
April 1, 2000 and the results of their operations and their cash flow
for the thirteen week period ended April 1, 2000 and April 3, 1999.
The results of operations for the thirteen week period ended April 1,
2000 are not necessarily indicative of the results to be expected for
the full year. The accompanying consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes included in the Company's 1999 Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
(2) Nature of Operations and Business Acquisitions
Nature of Operations
The Company operates in one industry segment, the manufacturing,
marketing and distribution of branded, shelf-stable food products. The
Company's products include pickles, peppers, jams and jellies, canned
meats and beans, spices, syrups, bagel chips, hot sauces, maple syrup,
salad dressings and other specialty food products which are sold to
retailers and food service establishments. The Company distributes
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.
Acquisitions and Financing
On February 5, 1999, the Company acquired certain assets of the Polaner
and related brands (collectively, "Polaner") from International Home
Foods, Inc. ("IHF"), for approximately $30,574, including transaction
costs (the "Polaner Brands Acquisition"). Financing for the Polaner
Brands Acquisition and certain related transaction fees and expenses
was provided by borrowings from the Company's then existing $50,000
senior secured credit facility.
On March 15, 1999, through a subsidiary, the Company acquired the
assets of the Heritage Portfolio of Brands ("Heritage") from The
Pillsbury Company, Indivined B.V. and IC Acquisition Corp. for
approximately $194,126, including transaction costs (the "Heritage
Brands Acquisition"). In connection with this transaction, the Company
entered into a $280,000 senior secured credit facility (the "Senior
Secured Credit Facility"). The Senior Secured Credit Facility comprised
of a $60,000 five-year revolving credit facility, a $70,000 five-year
term loan facility ("Term Loan A") and a $150,000 seven-year term loan
facility ("Term Loan B" and collectively with Term Loan A, the "Term
Loan Facilities"). The borrowings under the Senior Secured Credit
5
<PAGE>
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(dollars in thousands)
(Unaudited)
(Continued)
Facility, together with an additional $35,000 of equity from Bruckmann,
Rosser, Sherrill & Co., L.P. ("BRS"), were used to fund the Heritage
Brands Acquisition and refinance borrowings under the Company's then
existing $50,000 senior secured credit facility.
The acquisitions described above have been accounted for using the
purchase method and, accordingly, the assets acquired, liabilities
assumed, and results of operations are included in the consolidated
financial statements from the respective dates of the acquisitions. The
excess of the purchase price over the fair value of identifiable net
assets acquired, representing goodwill, is included in intangible
assets. Goodwill and trademarks resulting from the acquisitions
described above are being amortized over 40 and 31-32 years,
respectively.
Pro Forma Summary of Operations
The following unaudited pro forma summary of operations for the
thirteen weeks ended April 3, 1999 presents the results of operations
of the Company as if the Polaner Brands Acquisition and the Heritage
Brands Acquisition had occurred as of the beginning of the period
presented. In addition to including the results of operations of such
acquisitions, the pro forma information gives effect primarily to
interest on additional borrowings and changes in depreciation and
amortization of intangible assets. Net sales and net income for the
thirteen-week period ended April 1, 2000 are not presented below
because the Company's actual results reflect such acquired businesses
for such thirteen-week period.
Thirteen Weeks Ended
April 3, 1999
--------------------
Net sales $ 82,469
Net income 1,761
The pro forma information presented above does not purport to be
indicative of the results that actually would have been attained if the
aforementioned acquisitions, and related financing transactions, had
occurred at the beginning of the period presented and is not intended
to be a projection of future results.
(3) Inventories
Inventories consist of the following:
April 1, 2000 January 1, 2000
------------- ---------------
Raw materials and packaging $ 18,251 $ 19,319
Work in process 1,282 1,513
Finished goods 53,479 51,081
---------- -----------
$ 73,012 $ 71,913
========== ===========
6
<PAGE>
B&G Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(dollars in thousands)
(Unaudited)
(4) Debt
On August 11, 1997, the Company issued $120,000 of 9.625% Senior
Subordinated Notes (the "Notes") due August 1, 2007 with interest
payable semiannually on February 1 and August 1 of each year. The
proceeds of the Notes were used to repay certain outstanding debt,
finance certain acquisitions, and for general corporate purposes. As
part of a registration rights agreement dated August 11, 1997 entered
into with the initial purchasers of the Notes, the Company agreed to
offer to exchange an aggregate principal amount of up to $120,000 of
its 9.625% Senior Subordinated Notes due 2007 (the "New Notes") for a
like principal amount of the Notes outstanding (the "Exchange Offer").
The terms of the New Notes are identical in all material respects to
those of the Notes (including principal amount, interest rate, maturity
and guarantees), except for certain transfer restrictions and
registration rights relating to the Notes. The Exchange Offer was
completed on February 6, 1998.
On March 15, 1999, the Company entered into a $280,000 Senior Secured
Credit Facility comprised of a $60,000 five-year revolving credit
facility, a $70,000 five-year Term Loan A and a $150,000 seven-year
Term Loan B. The proceeds of the Term Loan Facilities, together with an
additional $35,000 of equity from BRS, were used to fund the Heritage
Brands Acquisition and refinance borrowings under the Company's then
existing senior secured credit facility which had been used for the
Polaner Brands Acquisition and the Company's July 17, 1998 acquisition
of Maple Grove Farms of Vermont, Inc. Interest is determined based on
several alternative rates as stipulated in the Senior Secured Credit
Facility, including the base lending rate per annum plus an applicable
margin, or LIBOR plus an applicable margin. The Senior Secured Credit
Facility is secured by substantially all of the Company's assets. The
Senior Secured Credit Facility provides for mandatory prepayment
requirements based on asset dispositions and issuance of securities, as
defined. The Senior Secured Credit Facility contains covenants that
will restrict, among other things, the ability of the Company to incur
additional indebtedness, pay dividends and create certain liens. The
Senior Secured Credit Facility also contains certain financial
covenants, which, among other things, specify maximum capital
expenditure limits, a minimum fixed charge coverage ratio, a minimum
total interest coverage ratio and a maximum indebtedness to EBITDA
ratio, each ratio as defined. Proceeds of the Senior Secured Credit
Facility are restricted to funding the Company's working capital
requirements, capital expenditures and acquisitions of companies in the
same line of business as the Company, subject to certain criteria. The
Senior Secured Credit Facility limits acquisitions to $30,000 in fiscal
2000 and $40,000 thereafter. There were no borrowings outstanding under
the revolving credit facility at April 1, 2000.
At April 1, 2000, the Company was not in compliance with certain
financial covenants. On May 12, 2000, the Company and the lenders
entered into an amendment to the Senior Secured Credit Facility
effective as of April 1, 2000 which, among other things, amended such
covenants such that the Company currently is and, as of April 1, 2000,
was in compliance with such covenants as amended.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
13 week period ended April 1, 2000 compared to 13 week period ended
April 3, 1999.
Net Sales. Net sales increased $16.9 million or 29.9% to $73.4 million
for the thirteen week period ended April 1, 2000 (the "2000 Quarterly Period")
from $56.5 million for the thirteen week period ended April 3, 1999 (the "1999
Quarterly Period"). The net sales increase included $19.5 million in the
aggregate of incremental sales due to the Polaner Brands Acquisition and the
Heritage Brands Acquisition that did not exist prior to these acquisitions.
Sales of the Company's Burns & Ricker Snack Foods, Trappey's products, B&G
pickles and peppers and Vermont Maid pancake syrups decreased $0.9 million, $0.7
million, $0.5 million and $0.3 million or 14.3%, 15.2%, 4.8% and 23.0%,
respectively. All other brands decreased $0.2 million or 0.2%.
Gross Profit. Gross profit increased $11.9 million or 49.9% to $35.6
million for the 2000 Quarterly Period from $23.8 million for the 1999 Quarterly
Period. Gross profit expressed as a percentage of net sales increased to 48.6%
in the 2000 Quarterly Period from 42.1% in the 1999 Quarterly Period. This was
due to a favorable shift in the sales mix to higher gross profit margins from
sales of the Company's Polaner and Heritage Portfolio of Brands products, along
with reduced labor and overhead costs at the Burns & Ricker Snack Food
manufacturing facility.
Sales, Marketing and Distribution Expenses. Sales, marketing and
distribution expenses increased $7.6 million or 44.8% to $24.6 million in the
2000 Quarterly Period from $17.0 million in the 1999 Quarterly Period. Such
expenses expressed as a percentage of net sales increased to 33.5% in the 2000
Quarterly Period from 30.1% in the 1999 Quarterly Period as a result of the
Polaner Brands Acquisition and the Heritage Brands Acquisition. These
acquisitions accounted for $7.6 million of the increase. Trade promotion
spending increased $0.2 million on the Regina brands and $0.1 million on Burns &
Ricker Snack Foods. All other expenses decreased $0.3 million or 1.2%.
General and Administrative Expenses. General and administrative
expenses (including amortization of intangibles and management fees) increased
$1.1 million or 45.5% to $3.6 million for the 2000 Quarterly Period from $2.5
million for the 1999 Quarterly Period, primarily due to increased amortization
of intangibles of $1.2 million associated with the Polaner Brands Acquisition
and the Heritage Brands Acquisition offset by a decrease in operating expenses
of $0.1 million.
Operating Income. As a result of the foregoing, operating income
increased $3.1 million or 72.5% to $7.5 million in the 2000 Quarterly Period
from $4.3 million in the 1999 Quarterly Period. Operating income expressed as a
percentage of net sales increased to 10.2% in the 2000 Quarterly Period from
7.7% in the 1999 Quarterly Period.
Interest Expense. Interest expense increased $3.6 million to $8.6
million for the 2000 Quarterly Period from $5.1 million in the 1999 Quarterly
Period as a result of the additional debt incurred by the Company to fund the
Polaner Brands Acquisition and the Heritage Brands Acquisition.
Income Tax Benefit. Income tax benefit for the 2000 Quarterly Period
was $0.6 million as compared with $0.4 million in the 1999 Quarterly Period. The
Company's effective tax rate for the 2000 Quarterly Period was 52.0% as compared
with 49.0% in the 1999 Quarterly Period.
8
<PAGE>
Because of the highly leveraged status of the Company, earnings before
interest, taxes, depreciation and amortization ("EBITDA") is an important
performance measure used by the Company and its stockholders. The Company
believes that EBITDA provides additional information for determining its ability
to meet future debt service requirements. However, EBITDA is not indicative of
operating income or cash flow from operations as determined under generally
accepted accounting principles. The Company's EBITDA from continuing operations
for the thirteen weeks ended April 1, 2000 and April 3, 1999 is calculated as
follows (dollars in thousands):
Thirteen weeks ended
--------------------
April 1, 2000 April 3, 1999
------------- -------------
Net loss $ (0.6) $ (0.4)
Depreciation and amortization 4.0 2.5
Income tax benefit (0.6) (0.4)
Interest expense 8.6 5.1
----- ------
EBITDA $ 11.4 $ 6.8
====== =====
Liquidity and Capital Resources
Cash Flows
Cash used in operating activities decreased $1.6 million to $1.9
million for the 2000 Quarterly Period from $3.6 million in the 1999 Quarterly
Period. The decrease is primarily a result of the Polaner Brands Acquisition and
the Heritage Brands Acquisition offset by decreases in receivables in relation
to sales. Working capital at April 1, 2000 was $57.3 million, a decrease of $2.1
million over working capital at January 1, 2000 of $59.4 million. The decrease
in working capital is due to a portion of long term debt becoming current offset
by a decrease in accounts payable and accrued expenses.
Net cash used in investing activities for the 2000 Quarterly Period was
$1.6 million as compared to $224.2 million for the 1999 Quarterly Period.
Investment expenditures during the 1999 Quarterly Period included $30.6 million
for the Polaner Brands Acquisition and $192.0 million for the Heritage Brands
Acquisition. Capital expenditures during the 2000 Quarterly Period of $1.6
million included purchases of manufacturing and computer equipment and were $0.1
million below the $1.7 million in expenditures for the 1999 Quarterly Period.
Net cash used in financing activities for the 2000 Quarterly Period was
$0.1 million as compared to net cash provided by financing activities of $228.1
million for the 1999 Quarterly Period. The net cash provided by financing
activities for the 1999 Quarterly Period was obtained primarily from proceeds
from the issuance of long-term debt and equity to finance the Polaner Brands
Acquisition and the Heritage Brands Acquisition.
Acquisitions
The Company's liquidity and capital resources have been significantly
impacted by acquisitions and may be impacted in the foreseeable future by
additional acquisitions. The Company has historically financed acquisitions with
borrowings and cash flow from operations. The Company's future interest expense
has increased significantly as a result of additional indebtedness the Company
has incurred as a result of its recent acquisitions, and will increase with any
additional indebtedness the Company may incur to finance potential future
acquisitions, if any. To the extent future acquisitions, if any, are financed by
9
<PAGE>
additional indebtedness, the resulting increase in debt and interest expense
could have a negative impact on liquidity.
Debt
On August 11, 1997, the Company issued $120,000 of 9.625% Senior
Subordinated Notes (the "Notes") due August 1, 2007 with interest payable
semiannually on February 1 and August 1 of each year. The proceeds of the Notes
were used to repay certain outstanding debt, finance certain acquisitions, and
for general corporate purposes. As part of a registration rights agreement dated
August 11, 1997 entered into with the initial purchasers of the Notes, the
Company agreed to offer to exchange an aggregate principal amount of up to
$120,000 of its 9.625% Senior Subordinated Notes due 2007 (the "New Notes") for
a like principal amount of the Notes outstanding (the "Exchange Offer"). The
terms of the New Notes are identical in all material respects to those of the
Notes (including principal amount, interest rate, maturity and guarantees),
except for certain transfer restrictions and registration rights relating to the
Notes. The Exchange Offer was completed on February 6, 1998.
On March 15, 1999, the Company entered into a $280,000 Senior Secured
Credit Facility comprised of a $60,000 five-year revolving credit facility, a
$70,000 five-year Term Loan A and a $150,000 seven-year Term Loan B. The
proceeds of the Term Loan Facilities, together with an additional $35,000 of
equity from BRS, were used to fund the Heritage Brands Acquisition and refinance
borrowings under the Company's then existing senior secured credit facility
which had been used for the Polaner Brands Acquisition and the Company's July
17, 1998 acquisition of Maple Grove Farms of Vermont, Inc. Interest is
determined based on several alternative rates as stipulated in the Senior
Secured Credit Facility, including the base lending rate per annum plus an
applicable margin, or LIBOR plus an applicable margin. The Senior Secured Credit
Facility is secured by substantially all of the Company's assets. The Senior
Secured Credit Facility provides for mandatory prepayment requirements based on
asset dispositions and issuance of securities, as defined. The Senior Secured
Credit Facility contains covenants that will restrict, among other things, the
ability of the Company to incur additional indebtedness, pay dividends and
create certain liens. The Senior Secured Credit Facility also contains certain
financial covenants, which, among other things, specify maximum capital
expenditure limits, a minimum fixed charge coverage ratio, a minimum total
interest coverage ratio and a maximum indebtedness to EBITDA ratio, each ratio
as defined. Proceeds of the Senior Secured Credit Facility are restricted to
funding the Company's working capital requirements, capital expenditures and
acquisitions of companies in the same line of business as the Company, subject
to certain criteria. The Senior Secured Credit Facility limits acquisitions to
$30,000 in fiscal 2000 and $40,000 thereafter. There were no borrowings
outstanding under the revolving credit facility at April 1, 2000.
At April 1, 2000, the Company was not in compliance with certain
financial covenants. On May 12, 2000, the Company and the lenders entered into
an amendment to the Senior Secured Credit Facility effective as of April 1, 2000
which, among other things, amended such covenants such that the Company
currently is and, as of April 1, 2000, was in compliance with such covenants as
amended.
Future Capital Needs
The Company is highly leveraged. On April 1, 2000, the Company's total
long-term debt (including current installments) and stockholder's equity was
$340.8 million and $57.5 million, respectively.
10
<PAGE>
The Company's primary sources of capital are cash flow from operations
and borrowings under a $60.0 million revolving credit facility. The Company's
primary capital requirements include debt service, capital expenditures, working
capital needs and financing for acquisitions. The Company's ability to generate
sufficient cash to fund its operations depends generally on the results of its
operations and the availability of financing. Management believes that cash flow
from operations in conjunction with the available borrowing capacity under the
revolving credit facility, net of outstanding letters of credit, of
approximately $58.7 million at April 1, 2000, and possible future debt financing
will be sufficient for the foreseeable future to meet debt service requirements,
make future acquisitions, if any, and fund capital expenditures. However, there
can be no assurance in this regard or that the terms available for any future
financing, if required, would be favorable to the Company.
Seasonality
Sales of a number of the Company's products tend to be seasonal;
however, in the aggregate, the Company's sales are not heavily weighted to any
particular quarter. The Company purchases most of the produce used to make its
shelf-stable pickles, relishes, peppers, olives and other related specialty
items during the period from July 1, to October 31, and it purchases all of its
maple syrup requirements during the months of April through July. Consequently,
its liquidity needs are greatest during these periods.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement
on Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 standardizes the accounting
for derivative instruments by requiring that an entity recognize derivatives as
assets or liabilities in the statement of financial position and measure them at
fair value. In June 1999, the Financial Accounting Standards Board issued SFAS
No. 137, "Accounting for Derivative Instruments and Hedging Activities-Deferral
of the Effective Dates of FASB Statement No. 133 and Amendment of FASB Statement
No. 133." SFAS No. 137 defers the effective date of SFAS No. 133, requiring
implementation of the provisions of SFAS No. 133 for all quarters of all fiscal
years beginning after June 15, 2000. These Statements should have no material
impact on the Company's consolidated financial statements.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Statements in
this report regarding future events or conditions, including statements
regarding industry prospects and the Company's expected financial position,
business and financing plans, are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations are disclosed in this report
as well as the Company's most recent annual report on Form 10-K, and include the
Company's substantial leverage, the risks associated with the expansion of the
Company's business, the possible inability of the Company to integrate the
businesses it has acquired, lower sales volumes for the Company's products and
higher costs of food product raw materials, as well as factors that affect the
food industry generally. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of their dates. The
Company undertakes no obligations to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
11
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of operations, the Company is 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 resulting from an
adverse movement in interest rates. As of April 1, 2000, the Company's only
variable rate borrowings were under the Term Loan Facilities that bear interest
at several alternative variable rates as stipulated in the Senior Secured Credit
Facility. A 100 basis point increase in interest rates, applied to the Company's
borrowings at April 1, 2000, would result in an annual increase in interest
expense and a corresponding reduction in cash-flow of approximately $2.2
million.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company, in the ordinary course of business, is involved in various
legal proceedings. The Company does not believe the outcome of these proceedings
will have a material adverse effect on the Company's consolidated financial
condition, results of operations or liquidity.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
At April 1, 2000, the Company was not in compliance with certain
financial covenants. On May 12, 2000, the Company and the lenders entered into
an amendment to the Senior Secured Credit Facility effective as of April 1, 2000
which, among other things, amended such covenants such that the Company
currently is and, as of April 1, 2000, was in compliance with such covenants as
amended.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
12
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT NO. DESCRIPTION
- -------------------- ----------------------------------------------------
2.1 Stock Purchase Agreement, dated July 2, 1998, by and
among BGH Holdings, Inc., Maple Grove Farms of
Vermont, Inc., Up Country Naturals of Vermont, Inc.,
Les Produits Alimentaires Jacques et Fils Inc.,
William F. Callahan and Ruth M. Callahan. (Filed
with the Securities and Exchange Commission as
Exhibit 2.1 to Commission Filing No. 333-39813 on
August 3, 1998 and incorporated herein by reference)
2.2 Asset Purchase Agreement, dated as of January 12,
1999, by and among Roseland Distribution Company,
International Home Foods, Inc. and M. Polaner, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 1 to the Company's Report on Form 8-K
filed February 19, 1999 and incorporated herein by
reference)
2.3 Asset and Stock Purchase Agreement, dated as of
January 28, 1999, by and among The Pillsbury
Company, Indivined B.V., IC Acquisition Company,
Heritage Acquisition Corp. and, as guarantor, B&G
Foods, Inc. (Filed as Exhibit 2.1 to the Company's
Report on Form 8-K filed April 1, 1999 and
incorporated herein by reference).
3.1 Certificate of Incorporation of B&G Foods, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.1 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.2 Bylaws of B&G Foods, Inc. (Filed with the Securities
and Exchange Commission as Exhibit 3.2 to Amendment
No. 1 to Registration Statement No. 333-39813 on
January 14, 1998 and incorporated herein by
reference)
3.3 Certificate of Incorporation of BGH Holdings, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.3 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.4 Bylaws of BGH Holdings, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.4 to
Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.5 Intentionally omitted.
3.6 Intentionally omitted.
3.7 Certificate of Incorporation of Trappey's Fine
Foods, Inc. (Filed with the Securities and Exchange
Commission as Exhibit 3.7 to Amendment No. 1 to
Registration Statement No. 333-39813 on January 14,
1998 and incorporated herein by reference)
3.8 Bylaws of Trappey's Fine Foods, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.8 to
Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
13
<PAGE>
3.9 Certificate of Incorporation for Bloch &
Guggenheimer, Inc. (Filed with the Securities and
Exchange Commission as Exhibit 3.9 to Amendment No.
1 to Registration Statement No. 333-39813 on January
14, 1998 and incorporated herein by reference)
3.10 Bylaws of Bloch & Guggenheimer, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.10
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.11 Certificate of Incorporation of RWBW Acquisition
Corp. (Filed with the Securities and Exchange
Commission as Exhibit 3.11 to Amendment No. 1 to
Registration Statement No. 333-39813 on January 14,
1998 and incorporated herein by reference)
3.12 Bylaws of RWBW Acquisition Corp. (Filed with the
Securities and Exchange Commission as Exhibit 3.12
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.13 Intentionally omitted.
3.14 Intentionally omitted.
3.15 Certificate of Incorporation of Roseland
Distribution Company. (Filed with the Securities and
Exchange Commission as Exhibit 3.15 to Amendment No.
1 to Registration Statement No. 333-39813 on January
14, 1998 and incorporated herein by reference)
3.16 Bylaws of Roseland Distribution Company. (Filed with
the Securities and Exchange Commission as Exhibit
3.16 to Amendment No. 1 to Registration Statement
No. 333-39813 on January 14, 1998 and incorporated
herein by reference)
3.17 Intentionally omitted.
3.18 Intentionally omitted.
3.19 Certificate of Incorporation of Burns & Ricker, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.19 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.20 Bylaws of Burns & Ricker, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.20
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
4.1 Indenture dated as of August 11, 1997 between B&G
Foods, Inc. (the "Company"), BGH Holdings, Inc.,
RWBW Acquisition Corp., BRH Holdings, Inc., Bloch &
Guggenheimer, Inc., Roseland Distribution Company,
Burns & Ricker, Inc., Roseland Manufacturing, Inc.,
and RWBW Brands Company (collectively, the
"Guarantors") and The Bank of New York, as trustee
(the "Trustee"). (Filed with the Securities and
Exchange Commission as Exhibit 4.1 to Registration
Statement No. 333-39813 on November 7, 1997 and
incorporated herein by reference)
4.2 Form of the Company's 9% Senior Notes due 2007.
(Filed with the Securities and Exchange Commission
as Exhibit 4.1 to Registration Statement No.
333-39813 on November 7, 1997 and incorporated
herein by
14
<PAGE>
reference)
10.1 Registration Rights Agreement dated as of August 11,
1997 by and among the Company, the Guarantors party
thereto, Lehman Brothers, Inc. and Lazard Freres &
Co., LLC. (Filed with the Securities and Exchange
Commission as Exhibit 10.1 to Registration Statement
No. 333-39813 on November 7, 1997 and incorporated
herein by reference)
10.2 Purchase Agreement dated August 6, 1997 among the
Company, the Guarantors party thereto, Lehman
Brothers, Inc., and Lazard Freres & Co., LLC. (Filed
with the Securities and Exchange Commission as
Exhibit 10.2 to Registration Statement No. 333-39813
on November 7, 1997 and incorporated herein by
reference)
10.3 Intentionally omitted.
10.4 Intentionally omitted.
10.5 Amended and Restated Jams Manufacturing Agreement
dated as of March 3, 1997 by and between Roseland
Manufacturing, Inc., and International Home Foods,
Inc. (Filed with the Securities and Exchange
Commission as Exhibit 10.5 to Amendment No. 2 to
Registration Statement No. 333-39813 on February 4,
1998 and incorporated herein by reference)
10.6 Sales and Distribution Agreement dated as of March
19, 1993 by and between M. Polaner, Inc. and DSD,
Inc. (Filed with the Securities and Exchange
Commission as Exhibit 10.6 to Amendment No. 2 to
Registration Statement No. 333-39813 on February 4,
1998 and incorporated herein by reference)
10.7 Spices Supply Agreement dated as of March 19, 1993
by and between Bloch & Guggenheimer, Inc. and M.
Polaner, Inc. (Filed with the Securities and
Exchange Commission as Exhibit 10.7 to Amendment No.
2 to Registration Statement No. 333-39813 on
February 4, 1998 and incorporated herein by
reference)
10.8 Transition Services Agreement, dated as of February
5, 1999, among International Home Foods, Inc., M.
Polaner, Inc. and Roseland Distribution Company.
(Filed with the Securities and Exchange Commission
as Exhibit 2 to the Company's Report on Form 8-K
filed February 19, 1999 and incorporated herein by
reference)
10.9 Guaranty, dated as of January 12, 1999, of B&G
Foods, Inc. in favor of International Home Foods,
Inc. and M. Polaner, Inc. (Filed with the Securities
and Exchange Commission as Exhibit 3 to the
Company's Report on Form 8-K filed February 19, 1999
and incorporated herein by reference)
10.10 Consent, Waiver and Second Amendment, dated as of
January 12, 1999, to the Second Amended and Restated
Credit Agreement, dated as of August 11, 1997, among
B&G Foods, Inc., the subsidiaries party thereto,
Heller Financial, Inc., as agent and lender, and the
other lenders party thereto. (Filed with the
Securities and Exchange Commission as Exhibit 4 to
the Company's Report on Form 8-K filed February 19,
1999 and incorporated herein by reference)
10.11 Revolving Credit Agreement, dated as of March 15,
1999, among B&G Foods Holdings Corp., B&G Foods,
Inc., as borrower, the several lenders
15
<PAGE>
from time to time party thereto, Lehman Brothers
Inc., as Arranger, The Bank of New York, as
Documentation Agent, Heller Financial, Inc., as
Co-Documentation Agent, and Lehman Commercial Paper
Inc. as Syndication Agent and Administrative Agent
(Filed as Exhibit 10.1 to the Company's Report on
Form 10-Q filed May 17, 1999 and incorporated herein
by reference).
10.12 Term Loan Agreement, dated as of March 15, 1999,
among B&G Foods Holdings Corp., B&G Foods, Inc., as
borrower, the several lenders from time to time
party thereto, Lehman Brothers Inc., as Arranger,
The Bank of New York, as Documentation Agent, Heller
Financial, Inc., as Co-Documentation Agent, and
Lehman Commercial Paper, Inc., as Syndication Agent
and Administrative Agent (Filed as Exhibit 10.2 to
the Company's Report on Form 10-Q filed May 17, 1999
and incorporated herein by reference).
10.13 Guarantee and Collateral Agreement, dated as of
March 15, 1999, by B&G Foods Holdings Corp., B&G
Foods, Inc., and certain of its subsidiaries in
favor of Lehman Commercial Paper, Inc., as
Administrative Agent (Filed as Exhibit 10.3 to the
Company's Report on Form 10-Q filed May 17, 1999 and
incorporated herein by reference)
10.14 Amended and Restated Securities Holders Agreement
dated December 22, 1999 among B&G Foods Holdings
Corp., Bruckmann, Rosser, Sherrill & Co., L.P.,
Canterbury Mezzanine Capital II, L.P., The CIT
Group/Equity Investments, Inc. and the Management
Stockholders named therein (Filed as Exhibit 10.14
to the Company's Report on Form 10-K filed March 3,
2000 and incorporated herein by reference)
10.15 Amendment, dated as of May 12, 2000, to Revolving
Credit Agreement, dated as of March 15, 1999, among
B&G Foods Holdings Corp., B&G Foods, Inc., as
borrower, the several lenders from time to time
party thereto, Lehman Brothers Inc., as Arranger,
The Bank of New York, as Documentation Agent, Heller
Financial, Inc., as Co-Documentation Agent, and
Lehman Commercial Paper Inc. as Syndication Agent
and Administrative Agent. (Filed herewith)
10.16 Amendment, dated as of May 12, 2000, to Term Loan
Agreement, dated as of March 15, 1999, among B&G
Foods Holdings Corp., B&G Foods, Inc., as borrower,
the several lenders from time to time party thereto,
Lehman Brothers Inc., as Arranger, The Bank of New
York, as Documentation Agent, Heller Financial,
Inc., as Co-Documentation Agent, and Lehman
Commercial Paper, Inc., as Syndication Agent and
Administrative Agent (Filed herewith)
27.1 Financial Data Schedule. (Filed herewith)
(b) Reports on Form 8-K
None.
16
<PAGE>
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: May 15, 2000 B&G FOODS, INC.
By: /s/ Robert C. Cantwell
------------------------------------------
Robert C. Cantwell
Executive Vice President and Chief
Financial Officer (Principal Financial and
Accounting Officer and Authorized Officer)
17
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------------------- ----------------------------------------------------
2.1 Stock Purchase Agreement, dated July 2, 1998, by and
among BGH Holdings, Inc., Maple Grove Farms of
Vermont, Inc., Up Country Naturals of Vermont, Inc.,
Les Produits Alimentaires Jacques et Fils Inc.,
William F. Callahan and Ruth M. Callahan. (Filed
with the Securities and Exchange Commission as
Exhibit 2.1 to Commission Filing No. 333-39813 on
August 3, 1998 and incorporated herein by reference)
2.2 Asset Purchase Agreement, dated as of January 12,
1999, by and among Roseland Distribution Company,
International Home Foods, Inc. and M. Polaner, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 1 to the Company's Report on Form 8-K
filed February 19, 1999 and incorporated herein by
reference)
2.3 Asset and Stock Purchase Agreement, dated as of
January 28, 1999, by and among The Pillsbury
Company, Indivined B.V., IC Acquisition Company,
Heritage Acquisition Corp. and, as guarantor, B&G
Foods, Inc. (Filed as Exhibit 2.1 to the Company's
Report on Form 8-K filed April 1, 1999 and
incorporated herein by reference).
3.1 Certificate of Incorporation of B&G Foods, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.1 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.2 Bylaws of B&G Foods, Inc. (Filed with the Securities
and Exchange Commission as Exhibit 3.2 to Amendment
No. 1 to Registration Statement No. 333-39813 on
January 14, 1998 and incorporated herein by
reference)
3.3 Certificate of Incorporation of BGH Holdings, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.3 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.4 Bylaws of BGH Holdings, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.4 to
Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.5 Intentionally omitted.
3.6 Intentionally omitted.
3.7 Certificate of Incorporation of Trappey's Fine
Foods, Inc. (Filed with the Securities and Exchange
Commission as Exhibit 3.7 to Amendment No. 1 to
Registration Statement No. 333-39813 on January 14,
1998 and incorporated herein by reference)
3.8 Bylaws of Trappey's Fine Foods, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.8 to
Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by
18
<PAGE>
reference)
3.9 Certificate of Incorporation for Bloch &
Guggenheimer, Inc. (Filed with the Securities and
Exchange Commission as Exhibit 3.9 to Amendment No.
1 to Registration Statement No. 333-39813 on January
14, 1998 and incorporated herein by reference)
3.10 Bylaws of Bloch & Guggenheimer, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.10
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.11 Certificate of Incorporation of RWBW Acquisition
Corp. (Filed with the Securities and Exchange
Commission as Exhibit 3.11 to Amendment No. 1 to
Registration Statement No. 333-39813 on January 14,
1998 and incorporated herein by reference)
3.12 Bylaws of RWBW Acquisition Corp. (Filed with the
Securities and Exchange Commission as Exhibit 3.12
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
3.13 Intentionally omitted.
3.14 Intentionally omitted.
3.15 Certificate of Incorporation of Roseland
Distribution Company. (Filed with the Securities and
Exchange Commission as Exhibit 3.15 to Amendment No.
1 to Registration Statement No. 333-39813 on January
14, 1998 and incorporated herein by reference)
3.16 Bylaws of Roseland Distribution Company. (Filed with
the Securities and Exchange Commission as Exhibit
3.16 to Amendment No. 1 to Registration Statement
No. 333-39813 on January 14, 1998 and incorporated
herein by reference)
3.17 Intentionally omitted.
3.18 Intentionally omitted.
3.19 Certificate of Incorporation of Burns & Ricker, Inc.
(Filed with the Securities and Exchange Commission
as Exhibit 3.19 to Amendment No. 1 to Registration
Statement No. 333-39813 on January 14, 1998 and
incorporated herein by reference)
3.20 Bylaws of Burns & Ricker, Inc. (Filed with the
Securities and Exchange Commission as Exhibit 3.20
to Amendment No. 1 to Registration Statement No.
333-39813 on January 14, 1998 and incorporated
herein by reference)
4.1 Indenture dated as of August 11, 1997 between B&G
Foods, Inc. (the "Company"), BGH Holdings, Inc.,
RWBW Acquisition Corp., BRH Holdings, Inc., Bloch &
Guggenheimer, Inc., Roseland Distribution Company,
Burns & Ricker, Inc., Roseland Manufacturing, Inc.,
and RWBW Brands Company (collectively, the
"Guarantors") and The Bank of New York, as trustee
(the "Trustee"). (Filed with the Securities and
Exchange Commission as Exhibit 4.1 to Registration
Statement No. 333-39813 on November 7, 1997 and
incorporated herein by reference)
4.2 Form of the Company's 9% Senior Notes due 2007.
(Filed with the Securities and Exchange Commission
as Exhibit 4.1 to Registration
19
<PAGE>
Statement No. 333-39813 on November 7, 1997 and
incorporated herein by reference)
10.1 Registration Rights Agreement dated as of August 11,
1997 by and among the Company, the Guarantors party
thereto, Lehman Brothers, Inc. and Lazard Freres &
Co., LLC. (Filed with the Securities and Exchange
Commission as Exhibit 10.1 to Registration Statement
No. 333-39813 on November 7, 1997 and incorporated
herein by reference)
10.2 Purchase Agreement dated August 6, 1997 among the
Company, the Guarantors party thereto, Lehman
Brothers, Inc., and Lazard Freres & Co., LLC. (Filed
with the Securities and Exchange Commission as
Exhibit 10.2 to Registration Statement No. 333-39813
on November 7, 1997 and incorporated herein by
reference)
10.3 Intentionally omitted.
10.4 Intentionally omitted.
10.5 Amended and Restated Jams Manufacturing Agreement
dated as of March 3, 1997 by and between Roseland
Manufacturing, Inc., and International Home Foods,
Inc. (Filed with the Securities and Exchange
Commission as Exhibit 10.5 to Amendment No. 2 to
Registration Statement No. 333-39813 on February 4,
1998 and incorporated herein by reference)
10.6 Sales and Distribution Agreement dated as of March
19, 1993 by and between M. Polaner, Inc. and DSD,
Inc. (Filed with the Securities and Exchange
Commission as Exhibit 10.6 to Amendment No. 2 to
Registration Statement No. 333-39813 on February 4,
1998 and incorporated herein by reference)
10.7 Spices Supply Agreement dated as of March 19, 1993
by and between Bloch & Guggenheimer, Inc. and M.
Polaner, Inc. (Filed with the Securities and
Exchange Commission as Exhibit 10.7 to Amendment No.
2 to Registration Statement No. 333-39813 on
February 4, 1998 and incorporated herein by
reference)
10.8 Transition Services Agreement, dated as of February
5, 1999, among International Home Foods, Inc., M.
Polaner, Inc. and Roseland Distribution Company.
(Filed with the Securities and Exchange Commission
as Exhibit 2 to the Company's Report on Form 8-K
filed February 19, 1999 and incorporated herein by
reference)
10.9 Guaranty, dated as of January 12, 1999, of B&G
Foods, Inc. in favor of International Home Foods,
Inc. and M. Polaner, Inc. (Filed with the Securities
and Exchange Commission as Exhibit 3 to the
Company's Report on Form 8-K filed February 19, 1999
and incorporated herein by reference)
10.10 Consent, Waiver and Second Amendment, dated as of
January 12, 1999, to the Second Amended and Restated
Credit Agreement, dated as of August 11, 1997, among
B&G Foods, Inc., the subsidiaries party thereto,
Heller Financial, Inc., as agent and lender, and the
other lenders party thereto. (Filed with the
Securities and Exchange Commission as Exhibit 4 to
the Company's Report on Form 8-K filed February 19,
1999 and incorporated herein by reference)
10.11 Revolving Credit Agreement, dated as of March 15,
1999, among B&G
20
<PAGE>
Foods Holdings Corp., B&G Foods, Inc., as borrower,
the several lenders from time to time party thereto,
Lehman Brothers Inc., as Arranger, The Bank of New
York, as Documentation Agent, Heller Financial,
Inc., as Co-Documentation Agent, and Lehman
Commercial Paper Inc. as Syndication Agent and
Administrative Agent (Filed as Exhibit 10.1 to the
Company's Report on Form 10-Q filed May 17, 1999 and
incorporated herein by reference).
10.12 Term Loan Agreement, dated as of March 15, 1999,
among B&G Foods Holdings Corp., B&G Foods, Inc., as
borrower, the several lenders from time to time
party thereto, Lehman Brothers Inc., as Arranger,
The Bank of New York, as Documentation Agent, Heller
Financial, Inc., as Co-Documentation Agent, and
Lehman Commercial Paper, Inc., as Syndication Agent
and Administrative Agent (Filed as Exhibit 10.2 to
the Company's Report on Form 10-Q filed May 17, 1999
and incorporated herein by reference).
10.13 Guarantee and Collateral Agreement, dated as of
March 15, 1999, by B&G Foods Holdings Corp., B&G
Foods, Inc., and certain of its subsidiaries in
favor of Lehman Commercial Paper, Inc., as
Administrative Agent (Filed as Exhibit 10.3 to the
Company's Report on Form 10-Q filed May 17, 1999 and
incorporated herein by reference)
10.14 Amended and Restated Securities Holders Agreement
dated December 22, 1999 among B&G Foods Holdings
Corp., Bruckmann, Rosser, Sherrill & Co., L.P.,
Canterbury Mezzanine Capital II, L.P., The CIT
Group/Equity Investments, Inc. and the Management
Stockholders named therein (Filed as Exhibit 10.14
to the Company's Report on Form 10-K filed March 3,
2000 and incorporated herein by reference)
10.15 Amendment, dated as of May 12, 2000, to Revolving
Credit Agreement, dated as of March 15, 1999, among
B&G Foods Holdings Corp., B&G Foods, Inc., as
borrower, the several lenders from time to time
party thereto, Lehman Brothers Inc., as Arranger,
The Bank of New York, as Documentation Agent, Heller
Financial, Inc., as Co-Documentation Agent, and
Lehman Commercial Paper Inc. as Syndication Agent
and Administrative Agent. (Filed herewith)
10.16 Amendment, dated as of May 12, 2000, to Term Loan
Agreement, dated as of March 15, 1999, among B&G
Foods Holdings Corp., B&G Foods, Inc., as borrower,
the several lenders from time to time party thereto,
Lehman Brothers Inc., as Arranger, The Bank of New
York, as Documentation Agent, Heller Financial,
Inc., as Co-Documentation Agent, and Lehman
Commercial Paper, Inc., as Syndication Agent and
Administrative Agent (Filed herewith)
27.1 Financial Data Schedule. (Filed herewith)
21
AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMENDMENT, dated as of May __, 2000 (this "Amendment"), to the
Revolving Credit Agreement, dated as of March 15, 1999 (such Revolving Credit
Agreement, as amended, supplemented or otherwise modified from time to time, the
"Revolving Credit Agreement"), among B&G FOODS HOLDINGS CORP., a Delaware
corporation ("Holdings"), B&G FOODS, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to the Revolving Credit Agreement (the "Lenders"), LEHMAN
BROTHERS INC., as advisor, lead arranger and book manager (in such capacity, the
"Arranger"), THE BANK OF NEW YORK, as documentation agent (in such capacity, the
"Documentation Agent"), HELLER FINANCIAL, INC., as co-documentation agent (in
such capacity, the "Co-Documentation Agent"), LEHMAN COMMERCIAL PAPER INC., as
syndication agent (in such capacity, the "Syndication Agent"), and LEHMAN
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, Holdings and the Borrower have requested that the Lenders
amend, and the Required Lenders have agreed to amend, certain of the provisions
of the Revolving Credit Agreement, upon the terms and subject to the conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other valuable consideration the receipt of which is
hereby acknowledged, Holdings, the Borrower, the Lenders and the Administrative
Agent hereby agree as follows:
1. Definitions. All terms defined in the Revolving Credit Agreement
shall have such defined meanings when used herein unless otherwise defined
herein.
2. Amendment to Annex A (Pricing Grid). Annex A is hereby amended by
deleting it in its entirety and inserting in its place Annex A attached hereto.
3. Amendment of Section 1.1 (Defined Terms).
(a) Section 1.1 of the Revolving Credit Agreement is hereby amended by
deleting the definitions of "Applicable Margin" and "Consolidated Fixed Charge
Coverage Ratio" in their entirety and inserting, in proper alphabetical order,
the following defined terms and related definitions:
"`Applicable Margin': for each Type of Loan, the rate per annum
determined pursuant to the Pricing Grid.
<PAGE>
`Consolidated Fixed Charge Coverage Ratio': for any period, the ratio
of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period minus the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Capital Expenditures
plus the aggregate amount of Equity Proceeds received by Holdings, and
contributed by Holdings in cash to the capital of the Borrower, during such
period for use for the Borrower's general working capital purposes in the
ordinary course of business to (b) Consolidated Fixed Charges for such
period.
`Equity Proceeds': cash proceeds received by Holdings from the issuance
and sale to Permitted Investors of common stock of Holdings, or preferred
stock of Holdings which is not mandatorily redeemable, and on which no cash
dividends are payable, in each case prior to the date which is one year
after the final maturity date of the Term Loans; provided, that any such
proceeds received in connection with any Permitted Acquisition or used to
finance, in whole or in part, any Permitted Acquisition shall not constitute
`Equity Proceeds'."
(b) Section 1.1 of the Revolving Credit Agreement is hereby further
amended by deleting paragraph (b) of the definition of "Permitted Acquisition"
in its entirety and inserting in its place the following:
"(b) (i) the Borrower shall be in compliance with the financial
covenants set forth in Section 6.1, after giving pro forma effect to
such acquisition as if it had occurred on the first day of the
respective periods measured by such covenants, and (ii) if such
acquisition occurs prior to the end of FQ1 2003, then, unless such
acquisition is funded wholly with the proceeds of common stock of
Holdings issued to Permitted Investors, the Consolidated Leverage Ratio
and the Consolidated Senior Leverage Ratio as of the last day of the
fiscal quarter most recently ended on or prior to the date of such
acquisition shall be less than or equal to the amounts applicable to
such fiscal quarter pursuant to the chart set forth below, in each case
after giving pro forma effect to such acquisition as if it had occurred
on the first day of the period of four consecutive fiscal quarters
ended with the fiscal quarter most recently ended on or prior to the
date of such acquisition:
Consolidated Consolidated
Fiscal Quarter Leverage Ratio Senior Leverage Ratio
-------------- -------------- ---------------------
FQ2 2000 6.00 3.75
FQ3 2000 6.00 3.75
FQ4 2000 5.75 3.50
FQ1 2001 5.75 3.50
FQ2 2001 5.50 3.50
FQ3 2001 5.50 3.25
FQ4 2001 5.50 3.25
FQ1 2002 5.50 3.25
FQ2 2002 5.50 3.25
FQ3 2002 5.50 3.25
FQ4 2002 5.50 3.25"
2
<PAGE>
(c) Section 1.1 of the Revolving Credit Agreement is hereby further
amended by deleting paragraph (d) of the definition of "Permitted Acquisition"
in its entirety and inserting in its place the following:
"(d) the aggregate consideration for such acquisition shall not
exceed (i) $20,000,000 if such acquisition is consummated in FY 2000,
(ii) $30,000,000 if such acquisition is consummated in FY 2001, and
(iii) $40,000,000 if such acquisition is consummated thereafter;
provided, that the foregoing restrictions in this paragraph (d) shall
not be applicable to any acquisition if the Consolidated Leverage Ratio
would be less than or equal to 5.5 to 1.0 after giving pro forma effect
to such acquisition as if it had occurred on the first day of the
period measured by the Consolidated Leverage Ratio;"
4. Amendment of Section 2.7 (Mandatory Prepayments and Commitment
Reductions). Section 2.7 of the Revolving Credit Agreement is amended by
inserting the following after the period in paragraph (b):
"Notwithstanding the foregoing, with respect to any Asset Sale consummated
before the last day of FQ1 2003, the Borrower shall not be permitted to
submit a Reinvestment Notice in respect thereof but, instead, shall be
required to apply the Net Cash Proceeds thereof immediately upon receipt
thereof, first, toward prepayment of the Term Loans and, second, after
prepayment in full of the Term Loans, toward reduction of the Revolving
Credit Commitments, unless, after giving pro forma effect to such Asset
Sale (but not to the use of the proceeds thereof) as if such Asset Sale had
occurred on the first day of the period of four consecutive fiscal quarters
most recently ended on or prior to the date of such Asset Sale, the
Consolidated Leverage Ratio and the Consolidated Senior Leverage Ratio as
of the last day of the fiscal quarter most recently ended on or prior to
the date of such Asset Sale shall be less than or equal to the amounts
applicable to such fiscal quarter pursuant to the chart set forth in
paragraph (b) of the definition of "Permitted Acquisition" in Section 1.1."
5. Amendment of Section 6.1 (Financial Condition Covenants). Section
6.1 of the Revolving Credit Agreement is amended by deleting paragraphs (a), (b)
and (c) of such Section in their entirety and inserting in their place the
following:
"6.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:
3
<PAGE>
Consolidated
Fiscal Quarter Leverage Ratio
-------------- ---------------
FQ1 2000 6.60
FQ2 2000 6.60
FQ3 2000 6.50
FQ4 2000 6.50
FQ1 2001 6.50
FQ2 2001 6.25
FQ3 2001 6.25
FQ4 2001 6.00
FQ1 2002 6.00
FQ2 2002 5.75
FQ3 2002 5.75
FQ4 2002 5.50
FQ1 2003 5.50
FQ2 2003 5.25
FQ3 2003 5.25
FQ4 2003 5.00
FQ1 2004 5.00
FQ2 2004 4.75
FQ3 2004 4.75
FQ4 2004 4.50
FQ1 2005 4.50
FQ2 2005 4.25
FQ3 2005 4.25
FQ4 2005 4.00
(b) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- ----------------
FQ1 2000 4.25
FQ2 2000 4.25
FQ3 2000 4.25
FQ4 2000 4.25
FQ1 2001 4.25
FQ2 2001 4.00
FQ3 2001 4.00
FQ4 2001 3.75
FQ1 2002 3.75
FQ2 2002 3.50
FQ3 2002 3.50
FQ4 2002 3.25
FQ1 2003 3.25
4
<PAGE>
FQ2 2003 3.00
FQ3 2003 3.00
FQ4 2003 3.00
FQ1 2004 3.00
FQ2 2004 2.75
FQ3 2004 2.50
FQ4 2004 2.50
FQ1 2005 2.50
FQ2 2005 2.50
FQ3 2005 2.50
FQ4 2005 2.50
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio.
-------------- ----------------
FQ1 2000 1.50
FQ2 2000 1.50
FQ3 2000 1.50
FQ4 2000 1.50
FQ1 2001 1.50
FQ2 2001 1.50
FQ3 2001 1.50
FQ4 2001 1.50
FQ1 2002 1.50
FQ2 2002 1.75
FQ3 2002 1.75
FQ4 2002 1.75
FQ1 2003 1.75
FQ2 2003 1.75
FQ3 2003 2.00
FQ4 2003 2.00
FQ1 2004 2.00
FQ2 2004 2.00
FQ3 2004 2.25
FQ4 2004 2.25
FQ1 2005 2.25
FQ2 2005 2.25
FQ3 2005 2.50
FQ4 2005 2.50"
6. Representations; No Default. On and as of the date hereof, and after
giving effect to this Amendment, (i) each of Holdings and the Borrower certifies
that no Default or Event
5
<PAGE>
of Default has occurred or is continuing, and (ii) each of Holdings and the
Borrower confirms, reaffirms and restates that the representations and
warranties set forth in Section 3 of the Revolving Credit Agreement and in the
other Loan Documents are true and correct in all material respects, provided
that the references to the Revolving Credit Agreement therein shall be deemed to
be references to this Amendment and to the Revolving Credit Agreement as amended
by this Amendment.
7. Conditions to Effectiveness. This Amendment shall become effective
on and as of the date that:
(a) the Administrative Agent shall have received counterparts of this
Amendment, duly executed and delivered by a duly authorized officer of each of
Holdings and the Borrower;
(b) the Administrative Agent shall have received executed Lender
Consent Letters, substantially in the form of Exhibit A hereto ("Lender Consent
Letters"), from Lenders whose consent is required pursuant to Section 9.1 of the
Revolving Credit Agreement;
(c) the Administrative Agent shall have received an executed
Acknowledgment and Consent, in the form set forth at the end of this Amendment,
from each Loan Party other than the Borrower;
(d) the Administrative Agent shall have received an executed
certificate of an officer of each of Holdings and the Borrower in form
satisfactory to the Administrative Agent as to the accuracy of the
representations and warranties set forth in Section 3 of the Revolving Credit
Agreement and in the other Loan Documents, the absence of any Default or Event
of Default after giving effect to this Amendment, and as to such other customary
matters as the Administrative Agent may reasonably request;
(e) the Administrative Agent shall have received for the account of
each Lender executing and delivering this Amendment by May 12, 2000 a fee of 3/8
of 1% of the aggregate principal amount of such Lenders' total Commitments under
the Revolving Credit Agreement; and
(f) the Administrative Agent shall be satisfied that amendments to the
Term Loan Agreement consistent with the amendments effected hereby have become
effective.
8. Limited Consent and Amendment. Except as expressly amended herein,
the Revolving Credit Agreement shall continue to be, and shall remain, in full
force and effect. This Amendment shall not be deemed to be a waiver of, or
consent to, or a modification or amendment of, any other term or condition of
the Revolving Credit Agreement or any other Loan Document or to prejudice any
other right or rights which the Lenders may now have or may have in the future
under or in connection with the Revolving Credit Agreement or any of the
instruments or agreements referred to therein, as the same may be amended from
time to time.
6
<PAGE>
9. Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
B&G FOODS HOLDINGS CORP.
By:
------------------------------
Name:
Title:
B&G FOODS, INC.
By:
------------------------------
Name:
Title:
LEHMAN BROTHERS INC.,
as Arranger
By:
------------------------------
Name:
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent, and as
Administrative Agent
By:
------------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Documentation Agent
By:
------------------------------
Name:
Title:
8
<PAGE>
HELLER FINANCIAL, INC., as
Co-Documentation Agent
By:
------------------------------
Name:
Title:
9
<PAGE>
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned parties to the Guarantee and Collateral
Agreement, dated as of March 15, 1999, and as amended, supplemented or otherwise
modified from time to time, made by the undersigned in favor of Lehman
Commercial Paper Inc., as Administrative Agent, for the benefit of the Lenders,
hereby (a) consents to the transactions contemplated by the foregoing Amendment
to the Revolving Credit Agreement and (b) acknowledges and agrees that the
guarantees and grants of security interests contained in the Guarantee and
Collateral Agreement and in the other Security Documents are, and shall remain,
in full force and effect after giving effect to such Amendment and all prior
modifications to the Revolving Credit Agreement.
[INSERT SIGNATURE LINES FOR ALL LOAN
PARTIES OTHER THAN THE BORROWER]
By:
------------------------------
Title:
<PAGE>
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS AND COMMITMENT FEES
Applicable
Consolidated Leverage Applicable Margin for Margin for Base Commitment
Ratio Eurodollar Loans Rate Loans Fee Rate
- --------------------- --------------------- --------------- -----------
Greater than or equal to 3.50 2.50 .60
5.50 to 1.00
Less than 5.50 to 1.00, but 3.25 2.25 .60
greater than or equal to 4.75
to 1.00
Less than 4.75 to 1.00, but 3.00 2.00 .60
greater than or equal to 4.25
to 1.00
Less than 4.25 to 1.00, but 2.75 1.75 .50
greater than or equal to 3.75
to 1.00
Less than 3.75 to 1.00, but 2.50 1.50 .50
greater than 3.25 to 1.00
Less than or equal to 3.25 2.25 1.25 .50
to 1.00
Changes in the Applicable Margin with respect to Loans or in the Commitment Fee
Rate resulting from changes in the Consolidated Leverage Ratio shall become
effective on the date (the "Adjustment Date") on which financial statements are
delivered to the Lenders pursuant to Section 6.1 (but in any event not later
than the 45th day after the end of each of the first three quarterly periods of
each fiscal year or the 90th day after the end of each fiscal year, as the case
may be) and shall remain in effect until the next change to be effected pursuant
to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this Pricing Grid be deemed to be greater than 6.00 to 1. In addition, at all
times while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this Pricing Grid be
deemed to be greater than 6.00 to 1. Each determination of the Consolidated
Leverage Ratio pursuant to this Pricing Grid shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.
<PAGE>
EXHIBIT A
LENDER CONSENT LETTER
B & G FOODS, INC.
REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 15, 1999
To: Lehman Commercial Paper Inc.,
as Administrative Agent
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement, dated as of March
15, 1999 (the "Revolving Credit Agreement"), among B & G Foods Holdings Corp., a
Delaware corporation ("Holdings"), B & G Foods, Inc., a Delaware corporation
(the "Borrower"), the Lenders parties thereto, Lehman Commercial Paper Inc., as
Administrative Agent, and others. Unless otherwise defined herein, capitalized
terms used herein and defined in the Revolving Credit Agreement are used herein
as therein defined.
The Borrower has requested that the Lenders consent to amend the
Revolving Credit Agreement on the terms described in the Amendment to which a
form of this Lender Consent Letter is attached as Exhibit A (the "Amendment").
Pursuant to Section 9.1 of the Revolving Credit Agreement, the
undersigned Lender hereby consents to the execution by the Administrative Agent
of the Amendment.
Very truly yours,
---------------------------
(NAME OF LENDER)
By:
-----------------------
Name:
Title:
Dated as of May ___, 2000
AMENDMENT TO TERM LOAN AGREEMENT
AMENDMENT, dated as of May __, 2000 (this "Amendment"), to the Term
Loan Agreement, dated as of March 15, 1999 (such Term Loan Agreement, as
amended, supplemented or otherwise modified from time to time, the "Term Loan
Agreement"), among B&G FOODS HOLDINGS CORP., a Delaware corporation
("Holdings"), B&G FOODS, INC., a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to the Term Loan Agreement (the "Lenders"), LEHMAN BROTHERS INC., as
advisor, lead arranger and book manager (in such capacity, the "Arranger"), THE
BANK OF NEW YORK, as documentation agent (in such capacity, the "Documentation
Agent"), HELLER FINANCIAL, INC., as co-documentation agent (in such capacity,
the "Co-Documentation Agent"), LEHMAN COMMERCIAL PAPER INC., as syndication
agent (in such capacity, the "Syndication Agent"), and LEHMAN COMMERCIAL PAPER
INC., as administrative agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, Holdings and the Borrower have requested that the Lenders
amend, and the Required Lenders have agreed to amend, certain of the provisions
of the Term Loan Agreement, upon the terms and subject to the conditions set
forth below;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other valuable consideration the receipt of which is
hereby acknowledged, Holdings, the Borrower, the Lenders and the Administrative
Agent hereby agree as follows:
1. Definitions. All terms defined in the Term Loan Agreement shall have
such defined meanings when used herein unless otherwise defined herein.
2. Amendment to Annex A (Pricing Grid). Annex A is hereby amended by
deleting it in its entirety and inserting in its place Annex A attached hereto.
3. Amendment of Section 1.1 (Defined Terms).
(a) Section 1.1 of the Term Loan Agreement is hereby amended by
deleting the definitions of "Applicable Margin" and "Consolidated Fixed Charge
Coverage Ratio" in their entirety and inserting, in proper alphabetical order,
the following defined terms and related definitions:
"`Applicable Margin': for each Type of Loan under each Facility, the
percentages per annum determined in accordance with the Pricing Grid.
<PAGE>
'Consolidated Fixed Charge Coverage Ratio': for any period, the ratio
of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period minus the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Capital Expenditures
plus the aggregate amount of Equity Proceeds received by Holdings, and
contributed by Holdings in cash to the capital of the Borrower, during such
period for use for the Borrower's general working capital purposes in the
ordinary course of business to (b) Consolidated Fixed Charges for such
period.
`Equity Proceeds': cash proceeds received by Holdings from the issuance
and sale to Permitted Investors of common stock of Holdings, or preferred
stock of Holdings which is not mandatorily redeemable, and on which no cash
dividends are payable, in each case prior to the date which is one year
after the final maturity date of the Term Loans; provided, that any such
proceeds received in connection with any Permitted Acquisition or used to
finance, in whole or in part, any Permitted Acquisition shall not constitute
`Equity Proceeds'."
(b) Section 1.1 of the Term Loan Agreement is hereby further amended by
deleting paragraph (b) of the definition of "Permitted Acquisition" in its
entirety and inserting in its place the following:
"(b) (i) the Borrower shall be in compliance with the financial
covenants set forth in Section 6.1, after giving pro forma effect to
such acquisition as if it had occurred on the first day of the
respective periods measured by such covenants, and (ii) if such
acquisition occurs prior to the end of FQ1 2003, then, unless such
acquisition is funded wholly with the proceeds of common stock of
Holdings issued to Permitted Investors, the Consolidated Leverage Ratio
and the Consolidated Senior Leverage Ratio as of the last day of the
fiscal quarter most recently ended on or prior to the date of such
acquisition shall be less than or equal to the amounts applicable to
such fiscal quarter pursuant to the chart set forth below, in each case
after giving pro forma effect to such acquisition as if it had occurred
on the first day of the period of four consecutive fiscal quarters
ended with the fiscal quarter most recently ended on or prior to the
date of such acquisition:
Consolidated Consolidated
Fiscal Quarter Leverage Ratio Senior Leverage Ratio
- -------------- -------------- ---------------------
FQ2 2000 6.00 3.75
FQ3 2000 6.00 3.75
FQ4 2000 5.75 3.50
FQ1 2001 5.75 3.50
FQ2 2001 5.50 3.50
FQ3 2001 5.50 3.25
FQ4 2001 5.50 3.25
FQ1 2002 5.50 3.25
FQ2 2002 5.50 3.25
2
<PAGE>
FQ3 2002 5.50 3.25
FQ4 2002 5.50 3.25"
(c) Section 1.1 of the Term Loan Agreement is hereby further amended by
deleting paragraph (d) of the definition of "Permitted Acquisition" in its
entirety and inserting in its place the following:
"(d) the aggregate consideration for such acquisition shall not
exceed (i) $20,000,000 if such acquisition is consummated in FY 2000,
(ii) $30,000,000 if such acquisition is consummated in FY 2001, and
(iii) $40,000,000 if such acquisition is consummated thereafter;
provided, that the foregoing restrictions in this paragraph (d) shall
not be applicable to any acquisition if the Consolidated Leverage Ratio
would be less than or equal to 5.5 to 1.0 after giving pro forma effect
to such acquisition as if it had occurred on the first day of the
period measured by the Consolidated Leverage Ratio;"
4. Amendment of Section 2.7 (Mandatory Prepayments and Commitment
Reductions). Section 2.7 of the Term Loan Agreement is amended by inserting the
following after the period in paragraph (b):
"Notwithstanding the foregoing, with respect to any Asset Sale consummated
before the last day of FQ1 2003, the Borrower shall not be permitted to
submit a Reinvestment Notice in respect thereof but, instead, shall be
required to apply the Net Cash Proceeds thereof immediately upon receipt
thereof, first, toward prepayment of the Term Loans, second, after
prepayment in full of the Term Loans, toward reduction of the Revolving
Credit Commitments unless, after giving pro forma effect to such Asset Sale
(but not to the use of the proceeds thereof) as if such Asset Sale had
occurred on the first day of the period of four consecutive fiscal quarters
most recently ended on or prior to the date of such Asset Sale, the
Consolidated Leverage Ratio and the Consolidated Senior Leverage Ratio as of
the last day of the fiscal quarter most recently ended on or prior to the
date of such Asset Sale shall be less than or equal to the amounts
applicable to such fiscal quarter pursuant to the chart set forth in
paragraph (b) of the definition of "Permitted Acquisition" in Section 1.1."
5. Amendment of Section 6.1 (Financial Condition Covenants). Section
6.1 of the Term Loan Agreement is amended by deleting paragraphs (a), (b) and
(c) of such Section in their entirety and inserting in their place the
following:
"6.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:
3
<PAGE>
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ1 2000 6.60
FQ2 2000 6.60
FQ3 2000 6.50
FQ4 2000 6.50
FQ1 2001 6.50
FQ2 2001 6.25
FQ3 2001 6.25
FQ4 2001 6.00
FQ1 2002 6.00
FQ2 2002 5.75
FQ3 2002 5.75
FQ4 2002 5.50
FQ1 2003 5.50
FQ2 2003 5.25
FQ3 2003 5.25
FQ4 2003 5.00
FQ1 2004 5.00
FQ2 2004 4.75
FQ3 2004 4.75
FQ4 2004 4.50
FQ1 2005 4.50
FQ2 2005 4.25
FQ3 2005 4.25
FQ4 2005 4.00
(b) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated Senior
Fiscal Quarter Leverage Ratio
-------------- -------------------
FQ1 2000 4.25
FQ2 2000 4.25
FQ3 2000 4.25
FQ4 2000 4.25
FQ1 2001 4.25
FQ2 2001 4.00
FQ3 2001 4.00
FQ4 2001 3.75
FQ1 2002 3.75
FQ2 2002 3.50
4
<PAGE>
FQ3 2002 3.50
FQ4 2002 3.25
FQ1 2003 3.25
FQ2 2003 3.00
FQ3 2003 3.00
FQ4 2003 3.00
FQ1 2004 3.00
FQ2 2004 2.75
FQ3 2004 2.50
FQ4 2004 2.50
FQ1 2005 2.50
FQ2 2005 2.50
FQ3 2005 2.50
FQ4 2005 2.50 (c)
Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
--------------- -----------------------
FQ1 2000 1.50
FQ2 2000 1.50
FQ3 2000 1.50
FQ4 2000 1.50
FQ1 2001 1.50
FQ2 2001 1.50
FQ3 2001 1.50
FQ4 2001 1.50
FQ1 2002 1.50
FQ2 2002 1.75
FQ3 2002 1.75
FQ4 2002 1.75
FQ1 2003 1.75
FQ2 2003 1.75
FQ3 2003 2.00
FQ4 2003 2.00
FQ1 2004 2.00
FQ2 2004 2.00
FQ3 2004 2.25
FQ4 2004 2.25
FQ1 2005 2.25
FQ2 2005 2.25
FQ3 2005 2.50
FQ4 2005 2.50"
5
<PAGE>
6. Representations; No Default. On and as of the date hereof, and after
giving effect to this Amendment, (i) each of Holdings and the Borrower certifies
that no Default or Event of Default has occurred or is continuing, and (ii) each
of Holdings and the Borrower confirms, reaffirms and restates that the
representations and warranties set forth in Section 3 of the Term Loan Agreement
and in the other Loan Documents are true and correct in all material respects,
provided that the references to the Term Loan Agreement therein shall be deemed
to be references to this Amendment and to the Term Loan Agreement as amended by
this Amendment.
7. Conditions to Effectiveness. This Amendment shall become effective
on and as of the date that:
(a) the Administrative Agent shall have received counterparts of this
Amendment, duly executed and delivered by a duly authorized officer of each of
Holdings and the Borrower;
(b) the Administrative Agent shall have received executed Lender
Consent Letters, substantially in the form of Exhibit A hereto ("Lender Consent
Letters"), from Lenders whose consent is required pursuant to Section 9.1 of the
Term Loan Agreement;
(c) the Administrative Agent shall have received an executed
Acknowledgment and Consent, in the form set forth at the end of this Amendment,
from each Loan Party other than the Borrower;
(d) the Administrative Agent shall have received an executed
certificate of an officer of each of Holdings and the Borrower in form
satisfactory to the Administrative Agent as to the accuracy of the
representations and warranties set forth in Section 3 of the Term Loan Agreement
and in the other Loan Documents, the absence of any Default or Event of Default
after giving effect to this Amendment, and as to such other customary matters as
the Administrative Agent may reasonably request;
(e) the Administrative Agent shall have received for the account of
each Lender executing and delivering this Amendment by May 12, 2000 a fee of 3/8
of 1% of the aggregate principal amount Tranche A Term Loans and Tranche B Term
Loans held by such Lender under the Term Loan Agreement; and
(f) the Administrative Agent shall be satisfied that amendments to the
Revolving Credit Agreement consistent with the amendments effected hereby have
become effective.
8. Limited Consent and Amendment. Except as expressly amended herein,
the Term Loan Agreement shall continue to be, and shall remain, in full force
and effect. This Amendment shall not be deemed to be a waiver of, or consent to,
or a modification or amendment of, any other term or condition of the Term Loan
Agreement or any other Loan Document or to prejudice any other right or rights
which the Lenders may now have or may have in the future under or in connection
with the Term Loan Agreement or any of the instruments or agreements referred to
therein, as the same may be amended from time to time.
6
<PAGE>
9. Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
B&G FOODS HOLDINGS CORP.
By:
------------------------
Name:
Title:
B&G FOODS, INC.
By:
------------------------
Name:
Title:
LEHMAN BROTHERS INC.,
as Arranger
By:
------------------------
Name:
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent, and as
Administrative Agent
By:
------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Documentation Agent
By:
------------------------
Name:
Title:
8
<PAGE>
HELLER FINANCIAL, INC., as
Co-Documentation Agent
By:
------------------------
Name:
Title:
9
<PAGE>
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned parties to the Guarantee and Collateral
Agreement, dated as of March 15, 1999 and as amended, supplemented or otherwise
modified from time to time, made by the undersigned in favor of Lehman
Commercial Paper Inc., as Administrative Agent, for the benefit of the Lenders,
hereby (a) consents to the transactions contemplated by the foregoing Amendment
to the Term Loan Agreement and (b) acknowledges and agrees that the guarantees
and grants of security interests contained in the Guarantee and Collateral
Agreement and in the other Security Documents are, and shall remain, in full
force and effect after giving effect to such Amendment and all prior
modifications to the Term Loan Agreement.
[INSERT SIGNATURE LINES FOR ALL LOAN
PARTIES OTHER THAN THE BORROWER]
By:
-------------------------------------
Title:
<PAGE>
Annex A
PRICING GRID FOR TERM LOANS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Applicable Margin Applicable Margin Applicable Margin Applicable Margin
Consolidated for Tranche A for Tranche A for Tranche B for Tranche B Base
Leverage Ratio Eurodollar Loans Base Rate Loans Eurodollar Loans Rate Loans
Greater than or
equal to 6.00 to 1.00 3.50 2.50 4.00 3.00
Less than 6.00 to 1.00,
but greater than or
equal to 5.50 to 1.00 3.50 2.50 3.75 2.75
Less than 5.50 to 1.00,
but greater than or
equal to 4.75 to 1.00 3.25 2.25 3.50 2.50
Less than 4.75 to
1.00, but greater than or
equal to 4.25 to 1.00 3.00 2.00 3.50 2.50
Less than 4.25 to 1.00,
but greater than or equal to
3.75 to 1.00 2.75 1.75 3.50 2.50
Less than 3.75 to 1.00,
but greater than 3.25 to 1.00 2.50 1.50 3.50 2.50
Less than
or equal to 3.25 to 1.00 2.25 1.25 3.50 2.50
</TABLE>
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall become effective on the date (the "Adjustment Date") on
which financial statements are delivered to the Lenders pursuant to Section 6.1
(but in any event not later than the 45th day after the end of each of the first
three quarterly periods of each fiscal year or the 90th day after the end of
each fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Leverage
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this Pricing Grid be deemed to be greater than 6.00 to
1. In addition, at all times while an Event of Default shall have occurred and
be continuing, the Consolidated Leverage Ratio shall for the purposes of this
Pricing Grid be deemed to be greater than 6.00 to 1. Each determination of the
Consolidated Leverage Ratio pursuant to this Pricing Grid shall be made with
<PAGE>
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
<PAGE>
EXHIBIT A
LENDER CONSENT LETTER
B & G FOODS, INC.
TERM LOAN AGREEMENT
DATED AS OF MARCH 15, 1999
To: Lehman Commercial Paper Inc.,
as Administrative Agent
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Reference is made to the Term Loan Agreement, dated as of March 15,
1999 (the "Term Loan Agreement"), among B & G Foods Holdings Corp., a Delaware
corporation ("Holdings"), B & G Foods, Inc., a Delaware corporation (the
"Borrower"), the Lenders parties thereto, Lehman Commercial Paper Inc., as
Administrative Agent, and others. Unless otherwise defined herein, capitalized
terms used herein and defined in the Term Loan Agreement are used herein as
therein defined.
The Borrower has requested that the Lenders consent to amend the Term
Loan Agreement on the terms described in the Amendment to which a form of this
Lender Consent Letter is attached as Exhibit A (the "Amendment").
Pursuant to Section 9.1 of the Term Loan Agreement, the undersigned
Lender hereby consents to the execution by the Administrative Agent of the
Amendment.
Very truly yours,
-----------------------------------
(NAME OF LENDER)
By:________________________________
Name:
Title:
Dated as of May __, 2000
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