B&G Foods, Inc. (BGS) Q1 2018 Earnings Report, Transcript and Summary

Good day everyone and welcome to the B&G Foods First Quarter 2018 Earnings Call. Today's call is being recorded. You can access detailed financial information on the quarter in the company's earnings release issued today which is available at ir.bgfoods.com. Before the company begins its formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you to the company's most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The company will also be making references on today's call to the non-GAAP financial adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, base business net sales. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Bruce Wacha, the company's CFO, will start the call by discussing the company's financial results for the quarter. After that, Bob Cantwell, the company's Chief Executive Officer, will discuss various factors that affected the company's results, select businesses highlights and his thoughts concerning the outlook for the remainder of 2018, and Ken Romanzi, the company's Chief Operating Officer will make some remarks. I would now like to turn the conference over to Bruce. Bruce C. Wacha - B&G Foods, Inc.: Good afternoon. Thank you for joining us for our first quarter 2018 earnings call. Our first quarter results were generally in line with our expectations and supportive to our full year guidance that we communicated earlier this year. During the quarter, we generated approximately $432 million in net sales, an increase of 4.7% compared to $412 million in the first quarter of last year. Performance remains on track for our recent acquisition of Back to Nature and this business contributed approximately $20 million for the quarter which was in line with our expectations. Our base business net sales increased by approximately $1.1 million for the quarter driven by pricing which is supportive of our full year target of a $15 million to $20 million benefit for pricing for 2018. We generated $89.4 million of adjusted EBITDA which, as a percentage of net sales, was 20.7%. $36.4 million in adjusted net income and $0.55 in adjusted diluted earnings per share for the quarter, all in line with our budget. We generated $73.7 million in net cash from operations finishing the quarter with $118.1 million in cash and net debt of $2 billion. We had voluntary prepayments on our term loan facility of $125 million for the quarter, reducing the balance to $525 million compared to $650 million at the end of fiscal 2017. We made an additional $25 million voluntary prepayment on our term loan facility at the end of the quarter, further reducing our term loan balance to $500 million. We also paid $30.9 million in dividends to our shareholders during the quarter. Our inventory reduction plan is ahead of schedule for the first quarter of 2018 and we have been able to successfully reduce inventory by $46.5 million to $455.4 million at the end of the first quarter compared to $501.8 million at the end of fiscal 2017. We expect to continue to reduce our inventory throughout the remainder of the year and expect to achieve the high end of our $75 million to $100 million inventory reduction plan by the end of the year. Now, I will walk you through some of the key drivers of net sales performance. We've come to expect big things out of our Green Giant frozen business and this quarter is no different. Net sales in Green Giant frozen products were $94.9 million, an increase of 12.8% compared to $84.1 million in the year ago period. Green Giant frozen products benefited from a strong launch of our new Green Giant Veggie Spirals as well as our Green Giant Riced Veggies, Green Giant Veggie Tots and our Green Giant Mashed Cauliflower which were all launched throughout 2016 and 2017. We had a very strong turnaround in the first quarter from Ortega. Ortega generated net sales of $37.9 million in the first quarter, an increase of 4.1% compared to $36.3 million in the first quarter of last year. Cream of Wheat had another stellar quarter with net sales of $18.4 million, an increase of 11.2% from $16.6 million. Victoria continued its strong momentum since acquisition generating $11.8 million net sales for the quarter, an increase of 11% from $10.6 million. Our portfolio of spices and seasonings brand inclusive of the 2016 acquisitions and other brands such as Mrs. Dash was essentially flat with sales in aggregate of approximately $86 million for the quarter compared to $87 million for the first quarter of last year. Pirate Brands generated net sales of $21 million, down $4.6 million from the prior year first quarter. However, the decline was largely due to the timing of promotional activities, and in fact, we had a very strong April for Pirate Brands where we made up for the Q1 shortfall. We saw some of these same timing issues last year when Pirates had very strong performance in the first, third and fourth quarters with a soft 2Q. We are also encouraged by the consumption data which showed an increase of standard sales of retail at 7.4% over the 13 weeks ended March 31, 2018. We had a series of pluses and minuses across the rest of our portfolio, ultimately contributing to base business net sales of $411.1 million, or as mentioned earlier, an increase of $1.1 million compared to the first quarter of last year. And as I mentioned earlier on the call, Back to Nature continued to perform as expected. The business contributed approximately $20 million in net sales for the quarter, and we remain confident in our target of delivering $80 million in net sales and $70 million in adjusted EBITDA for the business for the full year 2018. We are also pleased to note that we added several key professionals in the B&G Foods family through these acquisitions. In fact, these executives are not only playing important roles in the integration of the acquired business, but they are also taking on incremental responsibilities in adding value across the overall business. First quarter gross profit, as a percentage of net sales, decreased from 29.4% in 2017 to 23.9% in 2018. Excluding the negative impact of $16.1 million of non-recurring expenses, including the non-cash accounting impact of our inventory reduction plan and acquisition related expenses including Back to Nature integration expenses, gross profit as a percentage of net sales was 27.7% for the quarter. The non-cash accounting charges from our inventory reduction plan are driven by the allocation of certain fixed manufacturing, warehouse and other corporate overhead costs associated with inventory that have been purchased and converted to finished goods in 2017 and then sold in 2018. We expect to see an additional $15 million of non-cash charges or about $30 million in total for the year that will be incurred as part of the $100 million inventory reduction plan. The remaining 170 basis point decrease in gross profit percentage was attributable to industry-wide and anticipated increases in freight expenses which were partially offset by procurement savings, a decrease in warehousing expenses and an increase in net pricing. While freight costs are expected to remain high throughout the year, we have plans in place to offset these costs through our pricing strategy as well as other cost savings initiatives that Bob and Ken will touch on later in the call. SG&A expenses decreased $5.9 million to $42.6 million in the first quarter of 2018 compared to $48.5 million in the first quarter of 2017. The quarter benefited from a decrease in acquisition related and non-recurring expenses of $5.4 million, reduced customer marketing expenses of $1.8 million and reduced warehousing expenses of $0.7 million, partially offset by increases in all other expenses of $2 million. Expressed as a percentage of net sales, our SG&A expenses improved by 190 basis points to 9.9% in the first quarter of 2018 from 11.8% in the first quarter of 2017. Adjusted EBITDA although down from previous year, as we managed through industry-wide increases in freight costs finished at $89.4 million, generally in line with our expectations. Adjusted EBITDA as a percentage of net sales was 20.7% which is in line with our full year estimate of 20% to 21%. Moving quickly to the balance sheet, we finished the quarter with leverage at approximately 5.8 times net debt to pro forma adjusted EBITDA with approximately $118 million in cash. As I mentioned earlier, we generated $73.7 million in cash provided by operating activities and we prepaid $125 million in term loans during the quarter. We reduced inventory by $46.5 million and finished the quarter with $455.4 million of inventory, compared to $501.8 million at the end of fiscal 2017. We remain firmly committed to maintaining our dividend policy, at $1.86 per share our current dividend yield is more than 8% based on today's stock price. We paid $30.9 million in dividends to our shareholders during Q1 and another $31 million earlier this week. Now, I'll walk through our guidance for the remainder of the year before turning the call over to Bob so he can provide a little more color on some of the key drivers of quarterly performance and the remainder of the year. We are reaffirming our net sales guidance. We continue to expect net sales for 2018 to be in the range of $1.72 billion to $1.755 billion, which includes the full year impact of the new FASB revenue recognition standard. We are reaffirming our 2018 adjusted EBITDA guidance of $347.5 million to $365 million. And we are reaffirming our 2018 adjusted diluted earnings per share guidance of $2.05 to $2.25. In addition, for those managing your own models, we project 2018 net interest expense of a $110.5 million to $115.5 million including cash interest of $105 million to $110 million and interest amortization of $6 million. We project 2018 depreciation expense of approximately $36 million and amortization expense of approximately $18.5 million. We updated our expectations for the impacts of the tax reform legislation which, we believe, will have a greater than originally expected benefit for our business. We continue to expect an effective tax rate of approximately 25% in 2018 and we now expect our cash taxes for 2018 to be less than $15 million. We continue to expect approximately $50 million to $55 million in CapEx during 2018. Based on the midpoint of our adjusted EBITDA guidance, we expect that our adjusted EBITDA less CapEx, cash taxes and cash interest will be approximately $175 million. In addition, we expect our inventory reduction plan to positively impact cash by an additional $75 million to $100 million before dividends. And now I'd like to turn the call over to Bob Cantwell, our President and Chief Executive Officer. Robert C. Cantwell - B&G Foods, Inc.: Thank you, Bruce and thank you to the audience for joining our call today. As a reminder, when we laid out our vision for 2018 earlier this year, we expressed our belief that during 2018 we would return to the modest growth, stable margins and strong free cash flow generation model that the investment community has come to expect from us ever since we became a public company in 2004. We know that freight costs have increased for every company that puts anything on a truck and we are expecting these costs to remain elevated throughout the year. This is how we built our budget for the year. We hope that we are wrong and that these freight costs come down sooner. And we also hope to be more efficient than our competitors, but we have planned for these costs to be with us for some time and we have various levers at our disposal to help us deal with these costs. The first lever is pricing. As we told you last quarter, we have communicated price increases across the majority of our portfolio to all of our customers. These are not large increases and they are not just focused on a couple of unique categories. Instead, we have elected to go with a broader approach. In general, our strategy does not appear to be different than the majority of our competitors who are also wrestling with costs. Whether these competitors are selling frozen vegetables, canned vegetables or jars of salsa, they appear to be raising prices for their products in some form or fashion. We communicated our list and trade promotional pricing to our customers in February and we began to see benefits of these pricing actions in March. We expect to see these benefits begin to ramp-up in the second quarter and expect to see the majority of the benefits in the back half of the year. We anticipate the full year 2018 benefit from list and trade promotional pricing to be a positive $15 million to $20 million. The second lever at our disposal is on the cost side. Ken will walk you through some of our cost savings initiatives in a few minutes. But we already identified and have begun to implement several opportunities to reduce costs. Some of these include procurement savings on raw materials and other purchasing efficiencies as well as other opportunities to reduce costs by reducing our inventory by optimizing warehousing and distribution centers. And finally by taking a better look at the way we go about managing our freight and logistics network. We believe that there are real opportunities for us here and we are already seeing some of the benefits from these cost savings plans. We expect the combination of our modest price increases and our cost cutting efforts to offset the increased cost from freight that are impacting us and the entire food industry. Now before I ask Ken to walk you through some of these initiatives, I would like to provide a little more color to our performance for the quarter and discuss some of the key business highlights that we are so excited about. We grew our net sales in the quarter by 4.7%, which was in line with our forecast for 4% to 6.5% growth for the year. The majority of the increase was due to the successful integration of our newest acquisition Back to Nature, but our base business also performed well and was positive for the quarter with a slight benefit from our price increase implementation. In fact, based on Nielsen consumption data for the quarter showed a 3.4% increase in dollar sales and a 1.8% increase in units, which is a result, in part, of our ability to shift our portfolio over time to one that can drive modest growth. Over the last 52 weeks, consumption data for our portfolio was up 2.4% in dollar sales and 1.1% in units when compared to the prior 52-week period. Bruce mentioned earlier that we had another strong quarter for Green Giant frozen, our largest brand. This is an understatement. Net sales of our Green Giant frozen products increased by 12.8% in Q1 2018 marking our fourth consecutive quarter of double-digit increases in net sales of Green Giant frozen products. Scanner data for the same time period actually shows an even higher number, up 17.2% at retail for the quarter. Our efforts are helping to grow the category with frozen vegetables continuing to be one of the hottest areas in the grocery store and category consumption being up 7.7% in the quarter. As a brand leader, we outperformed the category and added 1.2 points of market share in March versus the year ago period. We have now grown market share for 15 consecutive months. Based on Nielsen scanner data, Green Giant frozen remained one of the two fastest growing brands in the frozen aisle. As noted in the May 2018 issue of Consumer Reports, Green Giant Riced Veggie SKUs received the top four scores in Consumer Reports' ranking of top frozen vegetables. The key driver for our growth in frozen vegetables is the successful launch and adoption of our new innovation products, which now include Green Giant Veggie Spirals, Green Giant Riced Veggies, Green Giant Veggie Tots and Green Giant Mashed Cauliflower. Green Giant is offering consumers new ways to consume vegetables at home and they are responding positively to our products. It is still early days for Green Giant Veggie Spirals, our newest innovation launch, but we are very excited by the response from consumers and the enthusiasm by our retail partners in carrying these products so far this year. Looking across the rest of our portfolio, we now have a spice and seasonings business that, in the aggregate, including our legacy brands and the spices and seasonings business we acquired in late 2016, generated nearly $90 million of net sales across a number of brands for the first quarter, which is in line with last year's first quarter and we believe is on pace to generate approximately $350 million in net sales for the year. We're also very excited about the turnaround in Ortega thus far in 2018, with net sales up 4.1% in the first quarter and we remain very optimistic for the rest of the year. Pirate Brands, while down for the quarter in net sales, is showing nice mid-to-high single-digit gains in consumption data at retail, and is off to a strong start in the second quarter. Additionally, we are excited about an upcoming Disney marketing tie-in around the new Incredibles 2 movie, which we expect to positively impact Pirate Brands' performance this summer. And as Bruce said earlier, we had a series of puts and calls across the rest of the portfolio that generally balanced out performance. As we think through the rest of our financials, we are pleased to note that the quarter came together as planned with adjusted EBITDA, adjusted EBITDA as a percentage of net sales and adjusted diluted EPS all in line with our budget and support of our full year guidance. And we are very excited by the progress we have made with our inventory reduction plan. We set a target to reduce inventory by $75 million to $100 million this year, and stated in our last earnings call that we expect to begin to achieve these goals starting with Q1. And we successfully executed on this goal, reducing inventory by more than $45 million in the quarter. We also generated net cash provided by operating activities of nearly $75 million, which is more than 2.5 times our dividend payment for the quarter. As we said on the last call, we're very much in a deleveraging mode. We have already voluntarily prepaid $150 million of term loans this year, and expect to continue to use the cash we generate to repay debt throughout the remainder of the year. We also remain committed to our longstanding dividend policy of returning a substantial portion of our excess cash to our shareholders. Additionally, as previously announced, our board of directors authorized a $50 million share repurchase program at our last quarterly board meeting. Due to the timing of the quarterly board meeting, we received the authorization just as we were entering our quarterly blackout period and, therefore, have not yet purchased any shares under the repurchase program. But we are always looking to optimize our capital structure. And with our stock at these levels and a more than 8% dividend yield, repurchasing our stock is a very compelling proposition. Before we go to Q&A, I would like to ask Ken to briefly describe some of the cost saving initiatives that we are beginning to execute on. Ken? Kenneth G. Romanzi - B&G Foods, Inc.: Thanks, Bob. As Bob mentioned earlier, we're very excited about our portfolio, driven by the brands and product categories that we've added to our business over the last few years. These brands have given us a much better top line trajectory than we've had in the past. And quite frankly, our top line trajectory is better than some folks in the industry think we have today. And while growth is tough to achieve for any food company in today's environment, we think we're moving the product line in the right direction. However, there are other ways for us to add value to our company in addition to sales growth and we're spending a lot of time and effort on the cost side of the business doing just that. Over the near term, we're looking to save 2 percentage points in our $1.2 billion of cost of goods sold or approximately $25 million annually. And we've already identified several projects that are beginning to generate results. Our inventory reduction plan is a great place to start. There were valid reasons for the increase in inventory last year, but we had moved past this need now. We're fortunate to have been able to build a team that's focused on streamlining our operations, so that we can reduce our inventory levels without negatively impacting our ability to service our customers. This reduction has a couple of benefits, not only are we freeing up cash to optimize our capital structure, but we are also saving money. The inventory reduction is enabling us to consolidate our warehousing footprint and eliminate outside temporary storage facilities. As a result, we expect our full-year warehouse savings to approach $5 million this year alone, and we started to see some of these benefits in the first quarter. Separately, although freight costs are up industry-wide, we are aggressively identifying ways to save money on freight. Some of this is just being smarter about how we ship. For example, better utilization of trucks, using rail when appropriate and utilizing customer pickups to reduce our reliance on going outside our contracts and into the very expensive spot marketplace. But we're also realigning our distribution network to better match our new customer footprint. This will involve opening a new distribution center in California in the fourth quarter of this year that will move our inventory closer to our West Coast and Southwest customer warehouses, reducing mileage and cost of that most costly last mile, while also providing better customer service. This is an option that just didn't exist for B&G a few years ago when we were more of a regional business. But now with $1.7 billion in sales and a robust national footprint, we're better able to take advantage of opportunities such as this. We believe we will begin to realize benefits from this new distribution center realignment in the fourth quarter this year and will ultimately deliver another $5 million in savings annually. So as Bob said earlier, we moved quickly to protect our margins with a modest price increase, smarter procurement strategies to offset a portion of the cost increases we're seeing in freight. But we're also happy to report that we're working against many other levers to become more efficient. I'd like to now turn the call back over to Bob for his closing remarks. Thank you. Robert C. Cantwell - B&G Foods, Inc.: Thanks, Ken, and thanks, Bruce. As I said earlier, it's a pleasure to sit here today and report a solid first quarter to our investors. We were able to grow net sales and largely maintain our profitability in a challenging environment. More importantly, we had very strong cash flow performance, which is supportive of our efforts to generate returns to our shareholders through our commitment to a healthy dividend as we simultaneously de-lever our balance sheet. We look forward to executing on our stock repurchase program and we continue to actively monitor the M&A market, searching for the right opportunities to further develop our portfolio. With that, I would like to begin the Q&A portion of our call. Operator?

Thank you. And your first question will come from Brian Holland with Consumer Edge Research.

Thanks. Good evening, gentlemen. Question for you on the top line, I guess just going back one quarter to the commentary you gave around the guidance. I guess, I want to confirm that we're still thinking about the composition of organic growth in 2018 as being a balance of modest volume and price growth, and if that's the case and obviously you're sort of on that trajectory in Q1 and Q2 is when I think we talked about actually starting to see more of that pricing come through. I guess, just in this environment, thinking about the historical relationship between price and volume in your own business, and then the complexities here. Just if you could walk us through again the components of that and what would give you the confidence in getting both? And I understand albeit modest pricing, but pricing and organic volume growth. Thanks. Robert C. Cantwell - B&G Foods, Inc.: Okay. So as we – we've talked about a little bit here. The plan for the year was approximately 1% volume increase, that's the 15 – 1% pricing increase, that's the $15 million to $20 million we talked about in the script. And approximately 1% increase on the base business volume. So we have plans in place and we have brands led by Green Giant, Pirate's Booty and brands like Ortega among others that will be the drivers of that volume growth, and certainly you saw it from the first quarter what Green Giant was able to do versus prior year, up substantially in frozen. And again, the pricing between list price and changing some trade programs is really not moving price on shelf for most of our items more than $0.10 at retail. So these are very minor price increases to generate $15 million to $20 million, so we don't see volume concerns against that, and we just have strong movers in key brands and a key part of our portfolio that we expect to achieve that 1% organic growth as we head through the rest of the year.

Okay. Just a follow up there or just a semi-related question, you talked a bit, I appreciate the color around Pirate brand, but the volatility there were a couple of quarters ago we were growing high teens and now we're kind of declining high teens. And I get the nature of the category, but do we get to a point where those bumps smooth out, and how do we get comfortable with kind of what the sustained sort of base level sustainable growth is sort of for that brand? And then just a separate housekeeping one, and then I'll turn the call over is I noticed that you had the inventory reduction which you talked about during the call, and you took it out of the GAAP, or you took it out of the non-GAAP results. So, I'm just curious why that was, just to understand the mechanics behind that, and how long, or how much more we can expect for you to incur there over the course of the year. Any color you could give would be appreciated. Thank you very much. Robert C. Cantwell - B&G Foods, Inc.: Okay. So first on Pirates, Pirates did about $90 million last year in sales. You certainly have seen consumption trends continue to rise. The only issue you have with bumps is there's a key customer or two that drive a lot of snack volume in this country. And you run programs and you tend to not get programs every quarter with those customers. And depending on the quarter you're getting it really changes the sales from one quarter to the next. So we had this issue last year with that customer where a program was moved from the second quarter that was done in 2016 to the third quarter in 2017. So we had a shortfall in the second quarter and a great third quarter, and just a great year for a brand that's going to continue to grow for us. And really what you saw it here is same thing. First quarter of last year we had a program that we did not repeat this year. That has all come back to us here already in the second quarter, Pirate as a brand through kind of April here is now up year-to-date for us. So there is a little bumps just because of the nature of a key customer who really drives tremendous volumes in snacks and that just doesn't go away too soon. I mean, you're going to continue to see that and if we happen to have programs year-over-year in the exact same quarter, you won't see the bump, but negotiations with the retailer sometimes moves those programs. But Pirate is a rock solid brand that we expect to continue to see the growth that we've seen the last few years. On the inventory... Kenneth G. Romanzi - B&G Foods, Inc.: Sure, I could, Bob. This is Ken. We're very bullish on Pirate's. Bob's comments are right on. I mean, I think you have to look at Pirate's on an annual basis because it shows terrific growth year in, year out. We're very bullish because number one it's in a very healthy part of snack category better-for-you snacking. The Pirates Brand (sic) [Pirate Brands] (35:37) [ph] we're (35:38) in distribution is the fastest turning better-for-you snack brand. And that's the upside potential because we believe we have a lot of upside potential in distribution. When you look at the top four items, we have far less than national distribution on our top four items. So gaining new distribution across the top selling items of Pirate's Booty, a very unique product in the marketplace, is why we're so bullish. So everywhere we put it, it turns very relevant, better than the competition and it's just – it's not as ubiquitous as you might expect from a large snack brand. So that's why we're so bullish on that business. Robert C. Cantwell - B&G Foods, Inc.: In answer to your second question, we finished the year with $500 million in inventory last year at the high end of our expectations here and we're heading towards that. We're looking to reduce inventory $100 million this year. That's 20% of that value. In that value, you have fixed cost items such as fixed warehousing costs, fixed manufacturing costs, fix corporate overhead costs that are rolling out of that inventory as a one-time event. And it was about $15 million in the first quarter when we kind of got halfway to our goal of reducing our inventory $46 million. We expect that number to be another $12 million to $15 million. Most of that happening in the second quarter because we expect another large decrease in inventory in the second quarter, and then a little dribs and drabs maybe in the third and fourth quarter. But pretty much all of this one-time chart flows through the P&L by the end of the second quarter. Truly a one-time event as we really restructure our business and kind of take a 20% chunk out of our overall inventory and take that cash to the balance sheet.

Okay. Thanks, gentlemen. Appreciate the color. Best of luck.

And moving on, we'll hear from Bryan Hunt, Wells Fargo Securities.

Thank you for your time. I was wondering, you've had so much success with Green Giant frozen in retailers, a lot of larger ones are doing resets kind of as we speak, is that part of your bullish thesis behind growth in that brand for the upcoming year or just can you talk about maybe where you're gaining shelf on resets that you've seen so far this year? Kenneth G. Romanzi - B&G Foods, Inc.: On Pirate's. Robert C. Cantwell - B&G Foods, Inc.: No, on Green Giant, Kenneth G. Romanzi - B&G Foods, Inc.: Okay, Green Giant.

Well, all across the board. Kenneth G. Romanzi - B&G Foods, Inc.: So, the specific question was...

And resets that have done year-to-date, looking at your portfolio, can you talk about significant incremental gains that you're seeing anywhere? Kenneth G. Romanzi - B&G Foods, Inc.: Well, at Green Giants, every time we come out with new innovation, we're netting out with more shelf space. So, if you look at the product line over time, every new product from mainly 2016 introductions to 2017 introductions, we saw new shelf space and we're seeing new shelf space now with Veggie Spirals. So, we've had unique acceptance and that's not fully launched yet. We had some customers that launched it in January all through the first quarter and we still have a bunch of customers that are continuing to launch their new levels of distribution in April and May. So, I think by the half year through, we should have most of our new distribution on Green Giant and that's why we're bullish on Green Giant trends going forward. Robert C. Cantwell - B&G Foods, Inc.: Right. And the other thing just to kind of add to that and we didn't talk about it in the script. Veggie Spirals we're rolling out, as Ken said, and will be in full distribution here over the next few months, but it's has had a tremendous distribution as we speak. But we also have more to come, there's more innovation coming in the second half of the year just like we've done now in the last two years that we've talked to retailers about some, they are waiting in anxious for our new item, so. Kenneth G. Romanzi - B&G Foods, Inc.: Yeah. There's a lot of our portfolio that you might expect don't have a lot of distribution upside, but there's a lot of our portfolio that does. So Victoria is another one. Victoria has got tremendous opportunity, the premium pasta sauce category is growing, again, very small footprint mostly in the Northeast on Victoria, but we are gaining distribution in that business as well. So the Pirate's Booty, I mentioned and all the recent hits – and it doesn't tell you what quarter that will hit because all the categories reset in different quarters. And they're all over the map. So we're in a constant focus of distribution on the items that perform well in their home markets and looking to expand distribution. In some cases people might say, for instance Victoria is a regional brand, but it does have national distribution with one of our major customer. So there's a lot of wide space to fill in on these brands that have a lot of growth potential.

And then next, I mean, if I went back to the script from last quarter you all said seasonings and spices was a little over $300 million. And now you're discussing $350 million business for this year. That's a good solid 15% growth. Can you talk about what's driving that? Kenneth G. Romanzi - B&G Foods, Inc.: Yeah. So just to be clear, when we are talking about a business with $350 million of sales, that is the combination of the business that we acquired in late 2016 as well as the brands that we already had in our portfolio such as Mrs. Dash. Good growth, unfortunately it is not 15% every single quarter. Robert C. Cantwell - B&G Foods, Inc.: Right. So our spice expectations, great category to play in, the category we want to one play in and hopefully to continue to acquire other acquisitions in that category. But it's a category that's growing 1%, 2%, 3%. We're going to grow as a category, hopefully outperform in certain areas. So the $350 million is all – we had a substantial spice business in our portfolio in addition to what we bought. That's just the total of what we really have today and with growth of kind of a couple of percent.

And then, my last question is, Bob, when you look at M&A opportunities out there, I mean, you look at your own stock and it trades at 10 times EBITDA and you eliminate the dividend as well when you buy back your own stock on those shares. So when you think about buying back – making an acquisition or buying back your own stock, kind of where would you in the current valuation environment put those opportunities? Robert C. Cantwell - B&G Foods, Inc.: No, I get the point. I mean, certainly the math on buying back stock is extremely appealing today. So I hear that and it's – we don't want our stock at this price. We think the stock has been driven down. We didn't have the greatest results in 2017, but where the stock is trading today is just not where it should be. And our performance as the quarters go on we'll hopefully change that as people see consistent B&G-like performance. But we're still – we're about acquisitions, we're about absorbing acquisitions into this organization, we're extremely good at that, so we're going to look at both and understanding from a balance sheet perspective today, it certainly makes sense to buy back stock. Hopefully, our price starts going up in the right direction, but we want to – we're going to keep looking and we're certainly going to pay the way B&G pays for acquisitions if something comes along that makes sense for us. I think, we've been very disciplined forever on that, and we understand as hopefully everybody else looks out in the industry as their multiples have traded down a little bit here, prices that should be paid for things need to get closer to how B&G has bought things in the past. So, I think, tuck-in acquisitions that fit B&G, if one comes available we strongly have to consider that, but in the meantime we're going to look at our balance sheet in the right way and certainly repurchasing stock is something we have to consider at this point.

All right. Thank you. I'll hand it off to somebody else.

From Bank of Montreal, Ken Zaslow.

Hey. Good afternoon, everyone. Can you hear me? Kenneth G. Romanzi - B&G Foods, Inc.: Hi, good afternoon. Robert C. Cantwell - B&G Foods, Inc.: Yes we can.

So I have two questions. One is, can we just review the cash flow and your dividend, where – the last question is you're saying about acquisitions, but clearly, there is concerns about you and your ability to pay your dividend. So what do you think is the risk that you're paying your dividend over the next year? It also sounded like your cash taxes is actually going to be lower, does that provide another – how much does that provide in terms of additional cash? And can you just give us a totality of your cash picture and how much... Robert C. Cantwell - B&G Foods, Inc.: Sure. Yeah. Sorry. I mean, sure. And as Bruce talked about in the script, if you take the midpoint of our EBITDA guidance, less cash interest, CapEx and cash taxes, we generate $175 million there. On top of that, we're looking at an inventory reduction plan of upwards at the high-end of $100 million and we really expect to achieve that at this point. That's another $100 million on top of that. So, we're going to generate upwards of $275 million this year and our cash dividend is about $125 million, so plenty of room. There's no risk to the dividend. It is from a board perspective a very important part of our model and we are focused on cash flow here and cash flow to drive balance sheet to allow us to continue to do the right thing with our balance sheet, whether that's M&A or buying back stock, et cetera, or continuing to pay down debt, but also to have that cash available at all times to pay dividends. And we certainly – internally, it's not a question that even comes up because we know that there's no issue with us paying cash dividend. I get confused sometimes with the external concerns on our cash dividend, we're a major cash generator and the dividend is a small piece of our net cash generation. Bruce also mentioned cash taxes. We expected cash taxes to be $15 million this year. Actually, that number is going to be lower. It can only go to zero. So, it's going to be somewhere between zero and $15 million, so we're going to be paying mid- to high-single digits in taxes here, so it's a really low number if you think about midpoint of our guidance of $352 million of EBITDA or so in the $350s million, we're going to be paying cash taxes of well less than $15 million, so...

And there is no option of you needing to raise equity to do any sort of payment for your dividend in any way. Is that fair? Bruce C. Wacha - B&G Foods, Inc.: I don't know how you can structure that math, no. Robert C. Cantwell - B&G Foods, Inc.: Yeah. So no issue with dividends. Most – from our debt side, our debt, the majority of our debt is fixed. We have $500 million left on our term B loan, there is no payments due on that to the end. But in reality, based on our cash generation, we'd probably continue to pay some of that down too. So plenty of cash, no issue. And honestly, a conversation that doesn't come up internally here or at the board, I mean it doesn't take the board more than a couple of seconds to approve the dividend, because that's part of our model and it's part of the expectation of management here and our entire board.

And I just have one follow-up on the business. Ken, can you talk about your savings program, but how much will be net savings versus just gross savings, and how much is – basically how much is going to fall down to the bottom line, if that helps us? Kenneth G. Romanzi - B&G Foods, Inc.: I think it's pre-mature now to talk about our long-term program and how much will actually fall, some of the cost savings obviously has to offset other inflationary factors, like wage increases and the transportation issues. So, I'd just outline to you our short-term focus on what we're trying to do. And when I say short-term, I mean over the next year or so. But we'll be looking for a formal program to reduce cost of goods, some of which will fall to the bottom line, some of which will be used to offset the inflationary pressures like every company has. Robert C. Cantwell - B&G Foods, Inc.: And the other thing I just want to say on that is as other companies are talking about inflationary pressures, our inflationary pressures are really coming from what Ken mentioned, freight and sort of the wage and benefits. We've not seen inflationary pressures from our – net of commodities and packaging, et cetera. So, because of the diversity of what we're in here, we don't have that pressure that other people have. And we have actually a net positive on that. So our cost structure is getting hit by freight, gets hit by a little bit from wages and things like that, but we feel very comfortable with everything we've got in place we're more than offsetting that which is...

And my last question is, once you get to 2018 numbers, can you talk about what your growth algorithm will be thereafter as you now know freight, you know all the cost structures, I don't think anything is going to change really. Can you just lay out the 2019, 2020 type of plan of how one should think about it and long term growth? I'll leave it there. Robert C. Cantwell - B&G Foods, Inc.: Certainly, it's certainly hard to give that guidance today, but I think as we've always said, we expect because of the mix of our products and we've got some growth engines now in that mix that we can generate 1%, 2% organic growth top line. That doesn't generate a whole bunch of bottom line, at 20% EBITDA margins, 21% EBITDA margins that's what would drop to the bottom line. I think from the cost side, we'll have much better visibility as the quarters go on as to where that goes and I hope you're right that freight, the freight costs we're experiencing this year doesn't compound on itself and go up further in 2019. So, I hesitate on that yet, because I don't think we totally know that that's not the case yet. But certainly we do know what it is this year. We haven't been surprised. We know what it's – we know what to expect for the rest of the year. But we have some real good cost savings initiatives that hopefully can drive some better bottom line performance organically as we go forward and we'll talk about that more as the year goes on. It's just a little too early as we're putting some of those cost initiatives together where that's going to come from and the timing of that.

Cool. Thanks. Kenneth G. Romanzi - B&G Foods, Inc.: Thank you.

Next we'll hear from Cornell Burnette with Citi Investment Research.

Good evening, everyone. Kenneth G. Romanzi - B&G Foods, Inc.: Good evening.

Just wanted to go back to the cost side a bit. You did highlight on the call that there's about 2% of COGS or $25 million of kind of annual cost savings that you see in the near term. Just wanted to get your take on basically how much of those gross savings should we expect in 2018? It sounds like you get some of them, but not all of them, but I wanted to make sure. Robert C. Cantwell - B&G Foods, Inc.: So in 2018, I think what you clearly should expect is the warehouse savings that we articulated of... Bruce C. Wacha - B&G Foods, Inc.: $5 million. Robert C. Cantwell - B&G Foods, Inc.: ...of $5 million. And as we get to the back probably quarter of the year, we'll begin to see some benefits from the realignment of our distribution centers and building out a California distribution center. Those are the big drivers probably in 2018 and we'll start to see some of the rest in 2019 and beyond.

So I would think about kind of 2018 kind of cost savings somewhere in that $6 million to $7 million range, and then in the 2019, I should think about kind of getting the whole $25 million, is that what you're saying? Kenneth G. Romanzi - B&G Foods, Inc.: Yes. I don't know that I say the whole $25 million in 2019.

Okay. Kenneth G. Romanzi - B&G Foods, Inc.: But I think it's a medium to near-term, and then as we think about 2018, we feel very comfortable with the 20%, 21% area EBITDA margins that we discussed and certainly some of those cost savings are part of that. Robert C. Cantwell - B&G Foods, Inc.: Yeah. I think, Cornell, what we're trying to get to here is, we believe longer term we can start improving kind of the EBITDA margin from where we are today, assuming no other major cost increases come at us in a big way like freight did to this industry in kind of the last year and a half. So, we'll have much better kind of trajectory on that latter part of this year as we talk about how these cost savings can come in over the next few years, and how that can drive margin improvement overall.

And then in the near term, I think in terms of input cost pressures, I believe in the last quarter you identified about $20 million of input cost inflation this year. So, first off, is that still the case? Kenneth G. Romanzi - B&G Foods, Inc.: Yeah. And truly that input cost inflation right around that is kind of that freight cost. I mean, that's really the majority of that input cost inflation.

And so to kind of get comfortable on kind of meeting the EBITDA margin targets for the year, you're just saying that look, you're looking for basically $15 million to $20 million from pricing. So pricing, if you get at the high end of it in and of itself should be enough to offset inflation, and then kind of layered on top of that you have these incremental cost savings opportunities that you didn't have in the past. And so, I'm just trying to figure out here, is that kind of what gets you comfortable that you can indeed kind of see flattish margins this year when all is said and done? Robert C. Cantwell - B&G Foods, Inc.: Yeah. To be clear, we're looking at cost savings this year to offset that inflation for margin neutral outcome. Bruce C. Wacha - B&G Foods, Inc.: Yeah. So, we're very comfortable that in our guidance of what we talked about and what we've performed out in the first quarter is what you should see kind of for the full year in that 20%, 21% EBITDA margin range.

Okay. And lastly, you spoke a little bit earlier about kind of what the top line looks like this year between price and volume, and I think you said think about like two points of organic top line, a point of price, maybe a point of volume. But just kind of if you look at the range on where numbers are at in terms of your EPS range, would it be safe to say that kind of given to that two point type of organic growth is really what's required to get to the top end and then at the bottom end it's more kind of like flat organic growth where perhaps there is a point of price, but at the same time, volume is down kind of a point. So, what I'm getting here is to get kind of what's in the range even if you see a point of volume down for each point of pricing you get, net-net that can still get you to where you need to be within the range that you've outlined for this year? Kenneth G. Romanzi - B&G Foods, Inc.: Yeah. Cornell, that's exactly right. The 4% to 6.5% top line range is 4, 4.5 points of Back to Nature and then a point of volume and price to get to the high end of the range.

Okay, very good. I'll pass it on. Robert C. Cantwell - B&G Foods, Inc.: Okay.

From RBC, David Palmer.

Thanks. Thanks for those comments on cash flow before. If we could maybe touch on the fundamental stuff, the sales and EBITDA drivers and how it will net through the year, I'm just trying to roughly gauge how these things will flow. You mentioned the pricing is $15 million to $20 million worth. And I think you said $1 million of that happened in the first quarter. I don't know if I caught that right, but a de minimis amount, is that correct? Bruce C. Wacha - B&G Foods, Inc.: Yes, it was $1.1 million in the first quarter and that was just some freight efficiencies and part of that pricing is changing some trade programs. So, it was not list price changes yet, that happened in the second quarter.

And then it sounds like Pirate's Booty promotion shifted out of the first quarter perhaps into the second quarter, but I would imagine some Easter-related sales moved up into the first quarter and other parts of the business. How should we think about that? Kenneth G. Romanzi - B&G Foods, Inc.: So, yeah, the only large Easter-related piece of our business is kind of what are Green Giant more than anything else and a lot of that relates to the Green Giant can business, some frozen but more for the Green Giant can business, because we're not the bigger commodity vegetable frozen guy. So, buying cans of peas and corn certainly helped us in March. So, that did move a little bit. Outside of that, there's not a lot of our businesses, there is a little bit of our Polaner jam and jelly business, but there's not much movement in the – for Easter that's really meaningful. Robert C. Cantwell - B&G Foods, Inc.: Also Easter was in mid-April last year and... Kenneth G. Romanzi - B&G Foods, Inc.: Yeah. Robert C. Cantwell - B&G Foods, Inc.: ...it was April this year so it wasn't that big a shift, most of our shipments occur a week or two weeks before the holiday. So, it was not much of a shift in Easter shipments.

I mean, so net-net, your – it sounds like there was a major shipment or a promotion mismatch between 1Q and 2Q that would shock one quarter or the other as you see it? Kenneth G. Romanzi - B&G Foods, Inc.: Yes, not much, really just Green Giant can business that showed really pretty good performance here, only down less than $2 million for the quarter. Some of that was a little bit of a benefit of the Easter shift. Outside of Green Giant cans, there's nothing really of any magnitude here that kind of moved the needle in any real way.

And then going through the rest of the year, obviously, we've had a cross current in your Green Giant business between canned and frozen, and this year, I would imagine, you're going to have the benefit of some of these spiralized frozen veggies, however, you're going to be lapping some of the success that you had in Veggie Riced and Tots. And so, how should we think about the net of those things and of course, I guess, you're going to have some – the can business coming up on some seriously easier comparisons coming fourth quarter, perhaps give a sense on all that. Robert C. Cantwell - B&G Foods, Inc.: Well, certainly from the can side, we really have been basically now April through September dealing with tough comparisons, but it's performing pretty well in the customers that still exist, but certainly losing a very large customer hurts those comparisons here from now and through the end of September. You're absolutely right. Once we get past September, those comparisons, except for just general things, we should just see the can business move with general consumption trends and really not from any lost distribution movement. So, that's real positive. We are super positive on everything going on on Green Giant. Yes, we do start lapping some of the first part of the innovation, but we still have distribution gains on some of that innovation filling out shelf on all the items at all customers, even though it's pretty much at all customers, all customers might not have all items and we're getting that filled up. Spirals should be totally on top and then there's more coming. You'll see another launch of new innovation, we're real excited about here coming in the latter part of the summer. So we'll get some benefit of that in the fourth quarter just like we've gotten benefit from innovation in the last two years in the fourth quarter. So we expect a really big year on Green Giant frozen, really Green Giant frozen has really has turned the corner, certainly turned corner last year, but this is the year where it really starts pure (01:01:34) dollar sales start really moving up.

Thank you. Bruce C. Wacha - B&G Foods, Inc.: And total will be better because we won't have as (01:01:38) big a drag on shelf stable, so the brand in total will be growing up nicely this year.

Thank you.

And next question will come from Farha Aslam with Stephens.

Hi. Good evening. Kenneth G. Romanzi - B&G Foods, Inc.: Hello. How are you doing, Farha?

Good. First question is on Ortega, that brand is large and very profitable and struggled last year and it's turned in the first quarter. Could you share with us what's caused the turn and you seem confident about the rest of the year, and what gives you that confidence? Robert C. Cantwell - B&G Foods, Inc.: There's a couple of things about Ortega. Number one, last year, we missed out some key promotional price points. So we just sharpened up our promotional calendar and got more competitive and the brands really responded and some of those were sent to the categories like shells, but we also had some nice innovation in the shells area and in Taco Sauce, and we're a leader in Taco Sauce. So, we gained new distribution on those and they are performing well. We also have – we're launching what is probably the biggest innovation in this category in a long time. In a long time, we're launching a bowl kit, so people can actually very quickly heat up a tortilla in the shape of a bowl and use the tortilla for salad or any type of Mexican entrée they want to develop, so a restaurant style and experience in the home. Probably the biggest innovation in the category since Taco Shells themselves and that's gotten tremendous reception from our customers. So, pretty bullish on both the innovation and being able to be more competitive, just overlapping some poor promotion performance last year.

That's helpful. And as a follow-up, you guys talked about your stock being at an attractive price. Would you consider an accelerated buyback or a 10b5 filing so that you wouldn't have to be blacked out during certain periods? Robert C. Cantwell - B&G Foods, Inc.: I think we're looking at all options. And I guess, the one that you said is I don't consider it attractive price. It's the wrong price right now. It might be attractive for a buyback, but it's not attractive for where we think we should trade at. So, I think the first part is, yeah, we're looking – I think we've been historically – I think anybody who has invested in B&G knows we are excellent stewards of capital and we're going to make the right balance sheet decisions here. And certainly retiring unique percent dividend is something you have to consider.

Thank you very much.

From Jefferies, we'll hear from Karru Martinson.

Good evening. Just in terms of the cash flow generation, you guys met your debt reduction goal. Can you talk to – you kind of said certainly it could be more additional payments on deck, kind of talk to us just why the focus on the term loan versus the bonds here in the open market? Bruce C. Wacha - B&G Foods, Inc.: I think a couple of things just with the term loan being pre-payable as well as tied to LIBOR rates going up and we've got the bond with a nice fixed cost of debt, but we're obviously looking at everything. Robert C. Cantwell - B&G Foods, Inc.: Yeah. And the other thing I would just add to that is we're certainly an acquirer and we expect to be acquiring things as the years go on here. We have a lot of fixed capital with very good rates. Yes, the math works to buy some of that back now, but we're happy with our fixed capital, because we know as we do acquisitions down the road we need to borrow more money, and it just doesn't make – even though it's – the math might work today, the long-term is that rather leave that fixed capital out there at the rates it is and as we borrow we'd be borrowing more in the variable rate market if we were doing an acquisition today.

Got it. That addresses actually my second question was building capacity for M&A, so I appreciate that. Thank you very much, guys. Robert C. Cantwell - B&G Foods, Inc.: Thank you.

And we'll hear from Eric Larson with Buckingham Research Group.

Yeah. Thanks. Good afternoon, everyone. Robert C. Cantwell - B&G Foods, Inc.: Hey, Eric.

Just a couple of questions. I know we've probably beaten revenue issues to death but, and I know a 1% kind of on average price increase isn't substantial, but is there any elasticity risk with that, I would assume with your guidance you're probably not assuming a lot, but what has been kind of your history, Bob, on sort of elasticity with your pricing? Robert C. Cantwell - B&G Foods, Inc.: Well, for most of what we think here, and we've done that, we look brand by brand and what that would be and took that into account. And yeah, we've built in some elasticity and whether that actually happens or not, we'll see. I think part of the belief is, if there is some elasticity, it's early on in the price increase. And once you get past three to six months, the consumer comes back to buying it anyway or maybe just took the shock the one time they were in the store and comes back the next time. So, yeah, I think just from – as we look at a 1% volume growth, it's truly – there's a lot of puts and takes on a lot of our piece of business, but it truly drives in a big way from a few key brands and certainly led by the most – the exciting growth brand we have today in Green Giant frozen, which is just a huge part of that 1% volume growth for us this year. And then certainly we got some wonderful kind of news on Ortega and Pirate's among others. Cream of Wheat's having a tremendous year, it's good to have longer colder winters in the Northeast. It certainly helps those kind of businesses. So, we're pretty comfortable, and we have to judge it. But I think at the end of the day, just like growing 2% doesn't drive tremendous dollars to the bottom line. If that falls a little short, because that's the high end of our guidance, that's not the midpoint of our guidance, and – but we still think we could hopefully achieve that. At the end of the day, it doesn't really generate that much less in EBITDA...

Right. Robert C. Cantwell - B&G Foods, Inc.: It's 20% (01:08:40) so it's not big movements either way on the volume side of it, certainly pricing drops right to the bottom line, so that's a very important part of our model for this year is achieving that price increase itself.

Okay. Yeah, that makes sense. And then I know that we've chatted about this before. Obviously, the canned business is still kind of a rough business. Is there any way strategically that you can either make the business smaller by maybe contracting less acreage or something to take down in a particular growing area and gradually trim that down, or is there a certain volume level that's important to be whatever in that business, is there any strategic thought on what the canned business could do as a smaller piece of your company? Robert C. Cantwell - B&G Foods, Inc.: Well, certainly it is smaller than it was when we bought it, because we've lost distribution and consumption trends aren't good. But where we are today, it's actually performing very well. And we kind of look at how that's affecting our inventory reduction plan, when you look at us, and I'm looking at saving $100 million or so in inventory, $50 million of that is coming from less canned vegetables, part of that is planned reduction in inventory, that's very important, tightening the inventory number of weeks on hand. Part of that is we've lost the volume, it is down through 2017. So it has – it is a business that's much lower. We were only a little – on Green Giant cans which is, we have two pieces of business, Green Giant canned vegetables and a brand called Le Sueur. Le Sueur is mid-30s to $40 million in sales, rock solid, really well-performing business and has consistently performed well for us. We've been hurt on the Green Giant canned commodity vegetable business, cans of corn and peas and things like that. We're rolling over against that lost distribution. We have another – well, now we're down to five months because it's May, but we have that rollover through September. The good news is canned vegetable season is really fourth quarter where you sell a lot and we took a big hit last year. We won't take that hit this year because we don't have that lost distribution, it will be comparative and then certainly Easter which we've now gone through. So, April through September, not the biggest canned vegetable times. So the volume is less. So, even the losses year-over-year will be less in total just because of the nature of the timing of the business. So, it is smaller for us. The customers that we have it in today, we still want to support wholly. And we see some upside in some of those customers too. So, it's good business, we've lost a lot of ground, it's profitable business and we just have to manage what we have left today.

Yeah. No, that makes sense. And that connected a number of questions together with your inventory reduction as well. So, thanks for the answer. I'll catch you maybe in the queue. Thanks. Robert C. Cantwell - B&G Foods, Inc.: Okay.

From Credit Suisse, Robert Moskow. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi. Thank you for the question. I think one of the reasons why the stock has kind of fallen this year is that there is a lack of confidence in the visibility of the business model, Bob. There has been such a high degree of volatility even on a quarter-to-quarter basis, so it's great to see that the first quarter coming in largely as planned. But can you give us a sense of what kind of IT tools you've developed or processes you've developed so that you and Bruce and Ken have at least better visibility as to when the problems are occurring and where they're occurring? And is that part of the solution or is it – am I – is that really not what is really the big driver for improving visibility? Robert C. Cantwell - B&G Foods, Inc.: A very fair question. Part of – to be very open, part of our growth in 2017 over the last few years was doubling the size of this business really in kind of a two-year timeframe from Green Giant in late 2015 to everything we did in 2016 and then not so much Back to Nature in 2017. And that was a doubling of a business, doubling of the size of the business, doubling the size of our organization and also changing our IT systems. Yeah. And part of this – so part of what we saw there was all of that as we grew up through 2017. We came out of 2017 feel very confident that B&G is the company it is going forward that was before, just twice the size. So we have all that visibility. As we even go back and looked at the 2017 fourth quarter, one of the big hits we took, and we don't want to go back into this again is, we took a hit of incremental freight of over $12 million as really freight costs rocketed up on us more than expected and more than totally understood in this industry, I believe, by a lot of people. We understood that coming into 2018. We understand what that looks like through the first four months; it's tracking to our budget. We don't love that costs are up, but we know what that is, we have full visibility. But we've really changed from the level of the team that's here, the growth of this company, the growth of IT systems; we're on Oracle JD Edwards, that's our system today. All of that is in place for us to go forward in a bigger way. So, we have full visibility to everything. The only thing we're truly dealing with this year, but we feel very covered on it is, just like everybody else, we're dealing with the freight issue in this industry, that's not going to go away. So, we're all getting through that and that's why we have things in place to deliver our EBITDA. And what you should see is a cadence of EBITDA that we no longer have that big Green Giant switch of marketing and timing that we were all counting on in the fourth quarter. This is normal cadence that will look like 2017 in our spending, in our sales, expect sales to be over those numbers each quarter. But look and feel like 2017 growing a few percent on the top line and kind of dropping to the bottom and really the only other real change is just adding Back to Nature in those numbers in the first nine months. Robert Moskow - Credit Suisse Securities (USA) LLC: Okay. Does that mean EBITDA grows every quarter, second, third, fourth, for the rest of the year? Robert C. Cantwell - B&G Foods, Inc.: Yes, a little larger in the second half as pricing is slow. And so, we're seeing pricing kind of kicked in in March, we'll certainly see more in the second quarter, but a good chunk of that pricing comes in the back half of the year. Outside of that, you should see kind of growth growing based on the sales number moving. Robert Moskow - Credit Suisse Securities (USA) LLC: Great. Thank you very much. Robert C. Cantwell - B&G Foods, Inc.: Okay.

And from JPMorgan, Carla Casella.

Hi. This is Maye Nin (01:17:02) on for Carla Casella. We just had a quick question about your – you mentioned that you should be able to pass on the cost increases through pricing. Are there any categories to go where this is available to you? Kenneth G. Romanzi - B&G Foods, Inc.: So the pricing initiate is, generally speaking, across the portfolio and the way we're designing it is very small increases that probably are not noticed by consumers, but it's across the board. And to be quite frank, we're seeing other competitors that sell similar products in some form or fashion raising prices as well. Not all, not in every category, but we're seeing it.

Thank you. Kenneth G. Romanzi - B&G Foods, Inc.: Thanks.

Ladies and gentlemen, that does conclude today's question-and-answer session. At this time, I would like to turn the conference back over to management for any additional or concluding remarks. Robert C. Cantwell - B&G Foods, Inc.: Okay. I just want to thank everyone for joining the call and feel very good about our first quarter and the outlook on the rest of the year and look forward to talking to you as the year progresses. Bye now.

Ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation and you may now disconnect.