B&G Foods (BGS) risk factors, FY2024 10-K

Other

1. 01The packaged food industry is highly competitive and we face risks related to the execution of our strategy and our ability to respond to channel shifts and other competitive pressures
2. 02We may be unable to anticipate changes in consumer preferences and consumer demographics, which may result in decreased demand for our products
3. 03Our business may be adversely impacted if we are unable to respond and adapt to rapid changes in technology and emerging laws and regulations relating to such technology
4. 04We may be unable to maintain our profitability in the face of a consolidating retail environment
5. 05We are vulnerable to decreases in the supply and increases in the price of raw materials and labor, manufacturing, distribution and other costs, and we may not be able to offset increasing costs by increasing prices to our customers
6. 06We may be unable to offset any reduction in net sales in our mature food product categories through an increase in trade spending for these categories or an increase in net sales in other categories
7. 07We may have difficulties integrating acquisitions or identifying new acquisitions
8. 08We have substantial indebtedness, which could restrict our ability to pay dividends and impact our financing options and liquidity position
9. 09We are subject to restrictive debt covenants and other requirements related to our debt that limit our business flexibility by imposing operating and financial restrictions on our operations
10. 10Our credit agreement requires us to maintain specified financial ratios and satisfy financial condition tests, including, without limitation, a maximum leverage ratio and a minimum interest coverage ratio
11. 11To service our indebtedness and fund our working capital needs, capital expenditures and any future acquisitions, we require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control
12. 12A significant portion of our cash flow from operations is dedicated to servicing our debt requirements. In addition, in accordance with our current dividend policy we intend to continue distributing a significant portion of any remaining cash flow to our stockholders as dividends
13. 13Financial market conditions may impede our access to, or increase the cost of, financing for acquisitions
14. 14Future disruptions in the credit markets or other factors, could impair our ability to refinance our debt upon terms acceptable to us or at all
15. 15We rely on co-packers for a significant portion of our manufacturing needs, and the inability to enter into additional or future co-packing agreements may result in our failure to meet customer demand
16. 16We rely on the performance of major retailers, wholesalers, specialty distributors and mass merchants for the success of our business, and should they perform poorly or give higher priority to other brands or products, our business could be adversely affected
17. 17Pandemics or disease outbreaks may disrupt our business, including among other things, our supply chain, our manufacturing operations and customer and consumer demand for our products, and could have a material adverse impact on our business
18. 18Our efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic or disease outbreak, as well as third-party actions taken to contain its spread and mitigate public health effects
19. 19Severe weather conditions, natural disasters and other natural events can affect raw material supplies and reduce our operating results
20. 20Climate change, water scarcity or legal, regulatory, or market measures to address climate change or water scarcity, could negatively affect our business and operations
21. 21Most of our products are sourced from single manufacturing sites, which means disruptions in our or our co-packers’ operations for any number of reasons could have a material adverse effect on our business
22. 22Our operations are subject to numerous laws and governmental regulations, exposing us to potential claims and compliance costs that could adversely affect our business
23. 23Failure by third-party co-packers or suppliers of raw materials to comply with food safety, environmental or other regulations may disrupt our supply of certain products and adversely affect our business
24. 24A recall of our products could have a material adverse effect on our business. In addition, we may be subject to significant liability should the consumption of any of our products cause injury, illness or death
25. 25Pending and future litigation may lead us to incur significant costs
26. 26Consumer concern regarding the safety and quality of food products or health concerns could adversely affect sales of certain of our products
27. 27A weakening of the U.S. dollar in relation to the Canadian dollar or the Mexican peso would significantly increase our future costs relating to the production of maple syrup or frozen vegetable products
28. 28Our net sales to Canada are subject to foreign currency fluctuations
29. 29Our operations in, and sales to customers in, foreign countries are subject to political and economic risk
30. 30Litigation regarding our trademarks and any other proprietary rights and intellectual property infringement claims may have a significant negative impact on our business
31. 31We face risks associated with our defined benefit pension plans
32. 32Our financial well-being could be jeopardized by unforeseen changes in our employees’ collective bargaining agreements, shifts in union policy or labor disruptions in the food industry
33. 33One of our collective bargaining agreements expires in the next twelve months. The collective bargaining agreement covering our Ankeny, Iowa facility, which covers approximately 321 employees, is scheduled to expire on April 6, 2025
34. 34We are increasingly dependent on information technology; Disruptions, failures or security breaches of our information technology infrastructure could have a material adverse effect on our operations
35. 35Failure to Comply with Data Privacy and Data Breach Laws May Subject Our Company to Fines, Administrative Actions and Reputational Harm
36. 36If we are unable to hire or retain key management personnel, and a highly skilled and diverse workforce or effectively manage changes in our workforce or respond to shifts in labor availability, our growth and future success may be impaired and our results of operations could suffer as a result
37. 37We are a holding company and we rely on dividends, interest and other payments, advances and transfers of funds from our subsidiaries to meet our obligations
38. 38Future changes that increase cash taxes payable by us could significantly decrease our future cash flow available to make interest and dividend payments with respect to our securities and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity
39. 39our future cash and impact our ability to make interest and dividend payments and have a material adverse effect on our business, consolidated financial condition, results of operations and liquidity
40. 40A change in the assumptions used to value our goodwill or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth
41. 41Any future financial market disruptions or tightening of the credit markets could expose us to additional credit risks from customers and supply risks from suppliers and co-packers

Risks Relating to our Securities

1. 42Holders of our common stock may not receive the level of dividends provided for in our dividend policy or any dividends at all
2. 43Our dividend policy may negatively impact our ability to finance capital expenditures, operations or acquisition opportunities
3. 44Our certificate of incorporation authorizes us to issue without stockholder approval preferred stock that may be senior to our common stock in certain respects
4. 45Future sales or the possibility of future sales of a substantial number of shares of our common stock or other securities convertible or exchangeable into common stock may depress the price of our common stock
5. 46Our certificate of incorporation and bylaws and several other factors could limit another party’s ability to acquire us and deprive our investors of the opportunity to obtain a takeover premium for their securities