B&G Foods Reports Financial Results for Fourth Quarter and Full Year 2019

Parsippany, N.J., February 25, 2020—B&G Foods, Inc. (NYSE: BGS) today announced financial results for the fourth quarter and full year 2019. Financial results for the fourth quarter and full year 2019 reflect the impact of the divestiture of Pirate Brands during the fourth quarter of 2018 and the acquisitions of McCann’s  during the third quarter of 2018 and Clabber Girl during the second quarter of 2019.

Fourth Quarter 2019 Financial Summary:

Full Year 2019 Financial Summary:

Guidance for Full Year Fiscal 2020

1   Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “adjusted diluted earnings per share,” “adjusted net income,” “EBITDA,” “adjusted EBITDA” and “base business net sales,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures.

Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods, stated “I am happy to report 2019 financial results that are consistent with our short-term and long-term plans, which are based on our goal of a stable base business with pricing and cost savings initiatives to offset inflation, complemented by net sales and earnings growth through new product innovation and accretive acquisitions.”  

Mr. Romanzi continued, “We have been successful in our efforts to generate growth by investing in plant-based innovation products by Green Giant. We recently augmented these efforts with our acquisition last week of Farmwise LLC, proud creator of Veggie Fries®, Veggie Tots® and Veggie Rings®.  Additionally, in 2019, we acquired and successfully integrated Clabber Girl, the nation’s #1 manufacturer of retail baking powder. We also strengthened our organization in 2019, including organizational re-design, personnel enhancements and system improvements such as our new ERP system implementation. We believe that these initiatives, coupled with our investor-friendly capital allocation strategy, position us to create long-term value for our shareholders.”

Financial Results for the Fourth Quarter of 2019 

Net sales increased $12.1 million, or 2.6%, to $470.2 million for the fourth quarter of 2019 from $458.1 million for the fourth quarter of 2018.  The increase was primarily due to the Clabber Girl acquisition, partially offset by the Pirate Brands divestiture. Net sales of Clabber Girl,  which was acquired on May 15, 2019 and therefore not part of the Company’s fourth quarter of 2018 results, contributed $25.2 million to the Company’s net sales for the fourth quarter of 2019. Net sales of Pirate Brands, which was sold on October 17, 2018 and therefore not part of the Company’s fourth quarter of 2019 results, were $2.1 million during the fourth quarter of 2018.

Base business net sales1 for the fourth quarter of 2019 decreased $10.8 million, or 2.4%, to $445.0 million from $455.8 million for the fourth quarter of 2018. The decrease in base business net sales reflected an increase in net pricing of $4.1 million, or 0.9% of base business net sales, inclusive of list price increases and promotional trade spend optimization, more than offset by a decrease in unit volume of $14.9 million.

Net sales of the Company’s spices & seasonings2 increased $0.8 million, or 1.0%, and net sales of New York Style increased $0.2 million, or 1.9%,  for the fourth quarter of 2019 as compared to the fourth quarter of 2018. Net sales of Cream of Wheat decreased $1.4 million, or 7.5%; net sales of Ortega decreased $1.3 million, or 3.6%; net sales of Green Giant (including Le Sueur)  decreased $1.3 million, or 0.8%; and net sales of Maple Grove Farms decreased $0.4 million, or 2.4%, for the  fourth quarter of 2019 as compared to the fourth quarter of 2018. Net sales of all other brands in the aggregate decreased $7.4 million, or 5.8%, for the fourth quarter of 2019.

Gross profit was $94.4 million for the fourth quarter of 2019, or 20.1% of net sales.  Excluding the negative impact of $2.6 million of acquisition/divestiture-related and non-recurring expenses during the fourth quarter of 2019, the Company’s gross profit would have been $97.0 million, or 20.6% of net sales. Gross profit was $49.9 million for the fourth quarter of 2018, or 10.9% of net sales. Excluding the negative impact of $36.9 million of acquisition/divestiture-related and non-recurring expenses during the fourth quarter of 2018, which includes expenses relating to the non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $86.8 million, or 19.0% of net sales.

Selling, general and administrative expenses decreased $3.1 million, or 6.5%, to $44.5 million for the fourth quarter of 2019 from $47.6 million for the fourth quarter of 2018. The decrease was composed of decreases in acquisition/divestiture-related and non-recurring expenses of $3.2 million,  consumer marketing expenses of $1.6 million and warehousing expenses of $1.3 million, partially offset by increases in other general and administrative expenses of $2.2 million and selling expenses of $0.8 million.  Expressed as a percentage of net sales, selling, general and administrative expenses improved by 0.9 percentage points to  9.5% for the fourth quarter of 2019,  compared to 10.4% for the fourth quarter of 2018.

2   Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Mrs. Dash and Ac’cent.  Excludes net sales of French’s® seasoning mixes, which the Company discontinued during the third quarter of 2018.

Net interest expense increased $3.2 million, or 13.2%, to $27.7 million for the fourth quarter of 2019 from $24.5 million in the fourth quarter of 2018. The increase was primarily attributable to an increase in average long-term debt outstanding during the fourth quarter of 2019 as compared to the fourth quarter of 2018, primarily as a result of borrowings made in fiscal 2019 to fund the Clabber Girl acquisition,  to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program. During the fourth quarter of 2019, net interest expense was negatively impacted in connection with the Company’s debt refinancing because the Company’s new 5.25% senior notes due 2027 were issued on September 26, 2019, prior to the redemption of the Company’s 4.625% senior notes due 2021 on October 10, 2019, and therefore during such fourteen day period (twelve days of which occurred during the fourth quarter) the Company incurred interest expense on both sets of notes.

The Company’s net income was $10.3 million, or $0.16 per diluted share, for the fourth quarter of 2019,  compared to net income of $111.9 million, or $1.70 per diluted share, for the fourth quarter of 2018, which includes the $176.4 million gain on sale from the Pirate Brands divestiture. The Company’s adjusted net income1 for the fourth quarter of 2019 was $17.8 million, or $0.28 per adjusted diluted share, compared to $22.3 million, or $0.34 per adjusted diluted share, for the fourth quarter of 2018.

For the fourth quarter of 2019, adjusted EBITDA was $69.5 million, an increase of $11.0 million, or 18.8%,  compared to $58.5 million for the fourth quarter of 2018.  The increase in adjusted EBITDA was primarily attributable to improved operating performance (which includes the benefits of the Company’s pricing initiatives and the Company’s cost savings program, which were offset in part by input cost inflation and reduced volume), as well as the acquisition of Clabber Girl in the second quarter of 2019, partially offset by the divestiture of Pirate Brands in the fourth quarter of 2018. Adjusted EBITDA as a percentage of net sales was 14.8% for the fourth quarter of 2019, compared to 12.8% in the fourth quarter of 2018. 

Financial Results for the Full Year Fiscal 2019

B&G Foods generated net sales of $1,660.4 million for fiscal 2019, compared to $1,700.8 million for fiscal 2018. The decrease was primarily attributable to the Pirate Brands divestiture, offset in part by the McCann’s and Clabber Girl acquisitions. Net sales of Pirate Brands, which was sold on October 17, 2018 and therefore not part of the Company’s fiscal 2019 results, were $74.9 million during fiscal 2018. An additional six and one-half months of net sales of McCann’s, which was acquired on July 16, 2018, contributed $5.8  million to the Company’s net sales for fiscal 2019. Net sales of Clabber Girl,  which was acquired on May 15, 2019 and therefore not part of the Company’s fiscal 2018 results, contributed $53.6 million to the Company’s net sales for fiscal 2019.

Base business net sales for fiscal 2019 decreased $22.2 million, or 1.4%, to $1,601.0 million from $1,623.2 million for fiscal 2018.  The decrease in base business net sales reflected an increase in net pricing of $20.3 million, or 1.3% of base business net sales, inclusive of list price increases and promotional trade spend optimization, more than offset by a decrease in unit volume of $42.4 million and the negative impact of foreign currency of  $0.1 million.

Net sales of Green Giant (including Le Sueur)  increased $7.8 million, or 1.5%; net sales of Maple Grove Farms increased $2.6 million, or 3.7%; and net sales of New York Style increased $2.1 million, or 5.7%,  in fiscal 2019,  as compared to fiscal 2018. Net sales of the Company’s spices & seasonings2 decreased $4.6 million, or 1.3%; net sales of Cream of Wheat decreased $2.6 million, or 4.2%; and net sales of Ortega decreased $0.9 million, or 0.6%,  for fiscal 2019 as compared to fiscal 2018. Net sales of all other brands in the aggregate decreased $26.6 million, or 5.9%, for fiscal 2019.

Gross profit was $383.1 million for fiscal 2019, or 23.1% of net sales. Excluding the negative impact of $22.0 million of acquisition/divestiture-related and non-recurring expenses during fiscal 2019, which includes expenses related to the trailing non-cash accounting impact of the Company’s 2018 inventory reduction plan and the amortization of acquisition-related inventory fair value step-up of inventory, the Company’s gross profit would have been $405.1 million, or 24.4% of net sales. Gross profit was $349.5 million for fiscal 2018, or 20.5% of net sales. Excluding the negative impact of  $76.3 million of acquisition/divestiture-related and non-

recurring expenses during fiscal 2018, which includes expenses relating to the non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $425.8 million, or 25.0% of net sales.

Selling, general and administrative expenses decreased $6.7 million, or 4.0%, to $160.7 million for fiscal 2019 from $167.4 million for fiscal 2018. The decrease was composed of decreases in consumer marketing expenses of $5.7 million, warehousing expenses of $2.7 million, selling expenses of $2.5 million and acquisition/divestiture-related and non-recurring expenses of $0.2 million,  partially offset by an increase in other general and administrative expenses of $4.4 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 0.1 percentage points to 9.7% for fiscal 2019,  compared to 9.8% for fiscal 2018.

Net interest expense decreased $10.2 million, or 9.4%, to $98.1 million for fiscal 2019 from $108.3 million in fiscal 2018. The decrease was primarily attributable to a reduction in average long-term debt outstanding during fiscal 2019 as compared to fiscal 2018, primarily as a result of the use of the net proceeds from the sale of Pirate Brands to prepay long-term debt during the fourth quarter of 2018, and earlier prepayments of long-term debt made during the first and second quarters of 2018, which was partially offset by additional borrowings made in fiscal 2019 to fund the Clabber Girl acquisition,  to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program. During fiscal 2019, net interest expense was negatively impacted in connection with the Company’s debt refinancing because the Company’s new 5.25% senior notes due 2027 were issued on September 26, 2019, prior to the redemption of the Company’s 4.625% senior notes due 2021 on October 10, 2019, and therefore during such fourteen day period the Company incurred interest expense on both sets of notes.

The Company’s net income was $76.4 million, or $1.17 per diluted share, for fiscal 2019, compared to net income of $172.4 million, or $2.60 per diluted share, for fiscal 2018, which includes the $176.4 million gain on the sale from the Pirate Brands divestiture. The Company’s adjusted net income for fiscal 2019 was $106.6 million, or $1.64 per adjusted diluted share, compared to $122.3 million, or $1.85 per adjusted diluted share, for fiscal 2018.

For fiscal 2019, adjusted EBITDA was $302.5 million, a decrease of $11.7 million, or 3.7%, compared to $314.2 million for fiscal 2018. The  decrease in adjusted EBITDA was primarily attributable to the divestiture of Pirate Brands in the fourth quarter of 2018, which was offset in part by improved operating performance (which includes the benefits of the Company’s pricing initiatives and the Company’s cost savings program, which were offset in part by input cost inflation and reduced volume), as well as the acquisitions of McCann’s in the third quarter of 2018 and Clabber Girl in the second quarter of 2019. Adjusted EBITDA as a percentage of net sales was 18.2% for fiscal 2019, compared to 18.5% in fiscal 2018.

Full Year Fiscal 2020 Guidance

For fiscal 2020, net sales are expected to be approximately $1.660 billion to $1.680 billion, adjusted EBITDA is expected to be approximately $302.5 million to $312.5 million and adjusted diluted earnings per share is expected to be approximately $1.60 to $1.80.

For fiscal 2020,  net interest expense is expected to be approximately $98.0 million to $103.0 million (including cash interest payments which are expected to be approximately $94.0 million to $99.0 million), depreciation expense is expected to be approximately $45.0 million, amortization expense is expected to be approximately $19.0 million, cash taxes are expected to be approximately $10.0 million to $20.0 million and capital expenditures are expected to be approximately $40.0 million to $45.0 million.

B&G Foods provides earnings guidance only on a non-GAAP basis and does not provide a reconciliation of the Company’s forward-looking adjusted EBITDA and adjusted diluted earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for deferred taxes; loss on extinguishment of debt; acquisition/divestiture-related and non-recurring expenses, gains and losses, including severance and other expenses primarily relating to a  workforce reduction;  the non-cash

accounting impact of the Company’s inventory reduction plan; restructuring expenses; gains and losses on the sale of assets and other charges reflected in the Company’s reconciliation of historic non-GAAP financial measures, the amounts of which, based on past experience, could be material. For additional information regarding B&G Foods’ non-GAAP financial measures, see “About Non-GAAP Financial Measures and Items Affecting Comparability” below.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, February 25, 2020.  The call will be webcast live and can be accessed at www.bgfoods.com/investor-relations.  The call can also be accessed live over the phone by dialing (877) 407-0792 for U.S. callers or (201) 689-8263 for international callers.

A replay of the call will be available two hours after the call and can be accessed by dialing (844) 512-2921 for U.S. callers or (412) 317-6671 for international callers; the password is 13698859.  The replay will be available from February 25, 2020 through March 3, 2020. Investors may also access a web-based replay of the call at www.bgfoods.com/investor-relations.

About Non-GAAP Financial Measures and Items Affecting Comparability

“Adjusted net income”  (net income adjusted for certain items that affect comparability), “adjusted diluted earnings per share,” (diluted earnings per share adjusted for certain items that affect comparability), “base business net sales” (net sales without the impact of acquisitions until the acquisitions are included in both comparable periods and without the impact of discontinued or divested brands), “EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and “adjusted EBITDA” (EBITDA as adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses  (which may include third party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up and gains and losses on sale of assets), non-recurring expenses, gains and losses and the non-cash accounting impact of the Company’s inventory reduction plan) are “non-GAAP financial measures.” A non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in B&G Foods’ consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.  Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures.  The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

The Company uses non-GAAP financial measures to adjust for certain items that affect comparability.  This information is provided in order to allow investors to make meaningful comparisons of the Company’s operating performance between periods and to view the Company’s business from the same perspective as the Company’s management.  Because the Company cannot predict the timing and amount of these items that affect comparability, management does not consider these items when evaluating the Company’s performance or when making decisions regarding allocation of resources. 

Additional information regarding EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to net income and to net cash provided by operating activities, is included below for the fourth quarter and full year 2019 and 2018, along with the components of EBITDA and adjusted EBITDA.  Also included below are reconciliations of the non-GAAP terms adjusted net income, adjusted diluted earnings per share and base business net sales to the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.

About B&G Foods, Inc.

Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including Back to Nature,  B&G,  B&M,  Cream of Wheat,  Green Giant,  Las Palmas,  Le Sueur,  Mama Mary’s,  Maple Grove Farms, Mrs. Dash,  New York Style,  Ortega, Polaner,  SnackWell’s,  Spice Islands and Victoria,  there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include, without limitation, statements related to B&G Foods’ net sales, adjusted EBITDA, adjusted diluted earnings per share, cash interest payment, cash taxes, capital expenditure, depreciation expense, amortization expense and overall expectations for fiscal 2020 and beyond, including our goal of offsetting inflation with pricing and cost savings initiatives and achieving net sales and earnings growth through new product innovation and accretive acquisitions, and our ability to create long-term value for our shareholders. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements.  In addition to statements that explicitly describe such risks and uncertainties,  readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking.  Factors that may affect actual results include, without limitation: the Company’s substantial leverage; the effects of rising costs for the Company’s raw materials, packaging and ingredients; crude oil prices and their impact on distribution, packaging and energy costs; the Company’s ability to successfully implement sales price increases and cost saving measures to offset any cost increases; intense competition, changes in consumer preferences, demand for the Company’s products and local economic and market conditions; the Company’s continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity; the risks associated with the expansion of the Company’s business; the Company’s possible inability to identify new acquisitions or to integrate recent or future acquisitions or the Company’s failure to realize anticipated revenue enhancements, cost savings or other synergies; tax reform and legislation, including the effects of the U.S. Tax Cuts and Jobs Act; the Company’s ability to access the credit markets and the Company’s borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of the Company’s competitors; unanticipated expenses, including, without limitation, litigation or legal settlement expenses; the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar; the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on the Company’s international procurement, sales and operations; future impairments of the Company’s goodwill and intangible assets; the Company’s ability to successfully complete the implementation of additional modules and the integration and operation of a new enterprise resource planning (ERP) system;  the Company’s ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; the Company’s sustainability initiatives and changes to environmental laws and regulations; and other factors that affect the food industry generally. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in B&G Foods’ filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8‑K.  Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made.  B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

B&G Foods, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

B&G Foods, Inc. and Subsidiaries

Items Affecting Comparability

Reconciliation of EBITDA and Adjusted EBITDA to Net Income and to Net Cash Provided by Operating Activities

(In thousands)

(Unaudited)

EBITDA and adjusted EBITDA are not recognized terms under GAAP and do not purport to be alternatives to operating income, net income or any other GAAP measure as an indicator of operating performance. EBITDA and adjusted EBITDA are not complete net cash flow measures because EBITDA and adjusted EBITDA are measures of liquidity that do not include reductions for cash payments for an entity’s obligation to service its debt, fund its working capital, capital expenditures and acquisitions and pay its income taxes and dividends. Rather, EBITDA and adjusted EBITDA are two potential indicators of an entity’s ability to fund these cash requirements. EBITDA and adjusted EBITDA are not complete measures of an entity’s profitability because they do not include certain costs and expenses and gains and losses described above. Because not all companies use identical calculations, this presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. However, EBITDA and adjusted EBITDA can still be useful in evaluating the Company’s performance against the Company’s peer companies because management believes these measures provide users with valuable insight into key components of GAAP amounts.

For the fourth quarter of 2018, inventory reduction plan impact of $29.0 million includes $19.4 million of fixed manufacturing, warehouse and other corporate overhead costs associated with inventory purchased and converted into finished goods in fiscal 2017 and sold in the fourth quarter of 2018 as part of the Company’s inventory reduction plan and $9.6 million for the underutilization of the Company’s manufacturing facilities as the Company reduced inventory during the implementation of the inventory reduction plan.

For fiscal 2018,  inventory reduction plan impact of $66.3 million includes $51.1 million of fixed manufacturing, warehouse and other corporate overhead costs associated with inventory purchased and converted into finished goods in fiscal 2017 and sold in fiscal 2018 as part of the Company’s inventory reduction plan and $15.2 million for the underutilization of the Company’s manufacturing facilities as the Company reduced inventory during the implementation of the inventory reduction plan.

B&G Foods, Inc. and Subsidiaries

Items Affecting Comparability

Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share to Net Income

(In thousands, except per share data)

(Unaudited)

For the fourth quarter of 2018, inventory reduction plan impact of  $29.0 million (or $22.5 million net of taxes) includes $19.4  million of fixed manufacturing, warehouse and other corporate overhead costs associated with inventory purchased and converted into finished goods in fiscal 2017 and sold in the fourth quarter of 2018 as part of the Company’s inventory reduction plan and $9.6 million for the underutilization of the Company’s manufacturing facilities as the Company reduced inventory during the implementation of the inventory reduction plan.

For  fiscal 2018,  inventory reduction plan impact of $66.3 million (or $51.5 million net of taxes) includes $51.1 million of fixed manufacturing, warehouse and other corporate overhead costs associated with inventory purchased and converted into finished goods in fiscal 2017 and sold in fiscal 2018 as part of the Company’s inventory reduction plan  and $15.2 million for the underutilization of the Company’s manufacturing facilities as the Company reduced inventory during the implementation of the inventory reduction plan.

B&G Foods, Inc. and Subsidiaries

Items Affecting Comparability

Reconciliation of Base Business Net Sales to Net Sales

(In thousands)

(Unaudited)

The definition of base business net sales set forth above, as it relates to acquisitions, was modified during the third quarter of 2019 from the definition the Company had most recently used. Under the Company’s most recent prior definition of base business net sales, for each acquisition, the excluded period started at the beginning of the most recent fiscal period being compared and ended on the last day of the quarter in which the first anniversary of the date of acquisition occurred. The Company believes that it is more useful to measure base business net sales on a partial quarter basis based upon the actual period of comparable ownership instead of adjusting for an entire quarter.