| | | BGS call transcript is out.....
We had a very strong year for cash generation, generating more than $200 million in net cash provided by operating activities for the year. We nailed our inventory reduction plan target, reducing inventory by more than 100 million during the year from approximately 502 million at the beginning of the year to approximately 401 million today.
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Hmmm, since they reduced inventory by $100m, $200m in cash generation is not that great. They should generate about $120m by just selling excess inventory, so.....normalized cash generation (if inventory had remained flat in 2018) would be only $80m.
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Our inability to hit the high end of our net sales target with volume gains, driven by our higher margin brands, further limited our ability to achieve our adjusted EBITDA targets for the quarter and contributed to our lower margin mix, costing us some $5 million in lost adjusted EBITDA opportunity.
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So they sold a lot of low margin food, and less high margin food. Bummer!
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We remain firmly committed to maintaining our dividend policy, and we remain well-positioned to opportunistically pursue M&A. Our board of directors reaffirmed its commitment to our dividend policy yesterday by declaring our 58th consecutive quarterly dividend since our IPO in 2004.
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, we repurchased and retired $8.4 million of common stock or 295,000 shares during the quarter at an average price per share of $28.39, bringing our total for the year to $26.9 million of common stock or approximately one million shares.
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For 2019, we expect net sales to be in the range of 1.635 to 1.665 or in line with our zero to 2% long-term topline growth model.
So they are not even trying to grow!
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an effective tax rate of approximately 44.5% and cash taxes, excluding the tax effects from the gain on sale of Pirate Brands, to be less than 5 million.
Hmmm, wonder how they have a 44% tax rate but only pay $5 million in actual taxes?
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Our sales price increases and the majority of our cost savings initiatives for 2019 will not be effective until after the end of the first quarter.
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All in, we expect to benefit by approximately 15 to $20 million in pricing this year, which includes the 20 to $25 million of annualized price increase that will go into effect this spring. Our second core assumption to combat inflation in 2019 is cost savings. After a complete review of our cost structure in 2018, we only just began to implement the first initiatives of the program late in the year that yielded some 3 to $5 million in the fourth quarter.
In 2019, we expect to drive another 15 to $20 million of cost savings, growing to 20 to $25 million in 2020,
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