0001702744false00017027442024-01-042024-01-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________________
FORM 8-K
_______________________________________________________

Current Report

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 4, 2024
_______________________________________________________
The Simply Good Foods Company
(Exact name of registrant as specified in its charter)
logoa08.jpg
_______________________________________________________
Delaware
001-38115
82-1038121
(State or other jurisdiction of
 incorporation or organization)
(Commission File Number)
(I.R.S. Employer
Identification Number)

1225 17th Street, Suite 1000
Denver, CO 80202
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (303) 633-2840


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, par value $0.01 per shareSMPLNasdaq

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02     Results of Operations and Financial Condition.

    On January 4, 2024, The Simply Good Foods Company, a Delaware corporation (the “Company”), reported its results for the fiscal first quarter ended November 25, 2023. The results are discussed in detail in the press release attached hereto as Exhibit 99.1. In addition, the Company has posted an investor presentation at www.thesimplygoodfoodscompany.com.

    The information in this item, including Exhibit 99.1, is being furnished, not filed. Accordingly, the information in this item will not be incorporated by reference into any registration statement unless specifically identified therein as being incorporated by reference therein.

    Certain statements made in Exhibit 99.1 are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as “will”, “expect”, “intends” or other similar words, phrases or expressions. These statements relate to future events or future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause the Company’s actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We caution you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These forward-looking statements include, among other things, statements regarding our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints and inflationary pressure on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate, our ability to maintain adequate product inventory levels to timely supply customer orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably, the loss of one or more members of our management team, potential for increased costs and harm to our business resulting from unauthorized access of the information technology systems we use in our business, expansion of our wellness platform and other risks and uncertainties indicated in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.



Item 9.01    Financial Statements and Exhibits
 
(d) Exhibits
 
Exhibit No. Description
   
 
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:January 4, 2024By:/s/ Shaun Mara
Name:Shaun P. Mara
Title:Chief Financial Officer
(Principal Financial Officer)



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The Simply Good Foods Company Reports Fiscal First Quarter 2024 Financial
Results and Reaffirms Full Fiscal Year 2024 Net Sales and Adjusted EBITDA Outlook

Denver, CO, January 4, 2024 - The Simply Good Foods Company (Nasdaq: SMPL) (“Simply Good Foods,” or the “Company”), a developer, marketer and seller of branded nutritional foods and snacking products, today reported financial results for the thirteen weeks ended November 25, 2023.

First Quarter Summary:(1)
•Net sales of $308.7 million versus $300.9 million
•Net income of $35.6 million versus $35.9 million
•Earnings per diluted share (“EPS”) of $0.35 versus $0.36
•Adjusted Diluted EPS(2) of $0.43 versus $0.42
•Adjusted EBITDA(4) $62.0 million versus $60.8 million
Reaffirm fiscal year 2024 Net Sales and Adjusted EBITDA(3) outlook(4):
•Net sales expected to increase at the high end of the Company’s long-term algorithm of 4-6%, including the benefit of a fifty- third week
•Adjusted EBITDA(3) anticipated to increase slightly greater than the net sales growth rate

"We are pleased with our fiscal first quarter financial results and marketplace performance that were in line with estimates," said Geoff Tanner, President and Chief Executive Officer of Simply Good Foods. "Simply Good Foods retail takeaway in the first quarter of fiscal 2024, in the combined measured and unmeasured channels, was solid and increased slightly more than 8%,(5) driven by volume growth. As expected, retail takeaway outpaced net sales growth of 2.6% due primarily to timing of shipments versus the year ago period related to "New Year, New You" in-store programming."

"Our first quarter marketplace results are a positive start to the year and, while early, the second quarter is off to a good start. Additionally, we have strong marketing and merchandising plans in place for "New Year, New You" season which started this week and will run through the second quarter of fiscal 2024. We're pleased with the progress we've made on the acceleration plans for Quest and the revitalization plan for Atkins. We are confident in our strategy and execution and we believe we are positioned to drive sustained profitable growth. As such, we reaffirm our full year fiscal 2024 outlook and expect net sales growth, driven by volume, to be at the high end of our 4-6% long-term algorithm, including the benefit of a fifty-third week. We continue to anticipate solid gross margin expansion during the year and meaningful investments in marketing and growth initiatives, as well as organizational capabilities. As a result, Adjusted EBITDA is expected to increase slightly higher than the net sales growth rate. We're excited about our prospects and thankful for the efforts of our passionate employees who continue to drive the business forward."

Fiscal First Quarter 2024 Results

Net sales increased $7.8 million, or 2.6%, to $308.7 million. As expected, sales performance was driven by Quest volume growth which more than offset Atkins softness. North America and International net sales increased 2.6% and 0.7%, respectively, versus last year.

Total Simply Good Foods retail takeaway for the thirteen weeks ended November 26, 2023, increased 7.1% in the U.S. measured channels of IRI MULO + Convenience Stores. In the first quarter of fiscal 2024, total Simply Good Foods combined measured and unmeasured channel U.S. retail takeaway increased about 8%.(5) Quest retail takeaway in the combined U.S. measured and unmeasured channels increased about 19% and Atkins was down about 4%.

Gross profit was $115.1 million for the first quarter of fiscal 2024, an increase of $4.1 million from the year ago period. Gross margin was 37.3% in the first quarter of fiscal 2024 versus 36.9% last year, an increase of 40 basis points. The improvement in gross margin was primarily due to lower ingredient and packaging costs.

In the first quarter of fiscal 2024, the Company reported net income of $35.6 million compared to $35.9 million for the comparable period of fiscal 2023.

Operating expenses of $63.3 million increased $4.8 million versus the comparable period of 2023. Selling and marketing expenses increased $3.5 million to $32.0 million primarily due to investments in growth initiatives and higher advertising costs. General and
1

administrative ("G&A") expenses of $27.0 million increased $1.3 million compared to the year ago period primarily due to higher stock-based compensation and executive transition costs.

Net interest income and interest expense was $4.9 million, a decline of $2.1 million versus the first quarter of fiscal 2023. The interest expense decline was due to a lower term loan debt balance versus the year ago period. Interest income increased by $1.0 million due to higher cash balances and the related increase in interest rates versus the year ago period and other sources.

Adjusted EBITDA(3), a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, was $62.0 million versus $60.8 million in the year ago period.

In the first quarter of fiscal 2024, the Company reported earnings per diluted share (“Diluted EPS”) of $0.35 versus $0.36 in the year ago period. The diluted weighted average total shares outstanding in the first quarter of fiscal 2024 was approximately 101.1 million versus 100.7 million in the year ago period.

Adjusted Diluted EPS(3), a non-GAAP financial measure used by the Company that makes certain adjustments to Diluted EPS calculated under GAAP, was $0.43 versus $0.42 in the year ago period.

Balance Sheet and Cash Flow

At the end of the first quarter of fiscal 2024, the Company had cash of $121.4 million. Cash flow from operations in the first quarter of fiscal 2024 was about $47.5 million, an increase of $38.8 million compared to last year. During the quarter, the Company repaid $10.0 million of its term loan debt, and at the end of the quarter, the outstanding principal balance was $275.0 million. Subsequent to the close of the first quarter of fiscal 2024, the Company repaid an additional $25.0 million of its term debt.

Outlook(4)

Given the good start to the year, the Company reaffirms its full year fiscal 2024 outlook. The Company expects sales growth to be driven by volume and has strong advertising and marketing plans in place, as well as innovation, merchandising and promotions that should drive sustained, overall, financial and marketplace results.

Additionally, the Company expects lower supply chain costs in fiscal 2024, which will result in strong gross margin expansion and provide it with flexibility to meaningfully invest in marketing and growth initiatives, as well as new organizational capabilities. Therefore, the Company continues to anticipate the following for the full year fiscal 2024:

•Net sales expected to increase at the high end of the Company's long-term algorithm of 4-6%, including the benefit of a fifty-third week; and

•Adjusted EBITDA(4,6) anticipated to increase slightly greater than the net sales growth rate.










___________________________________
(1) All comparisons for the first quarter ended November 25, 2023, versus the first quarter ended November 26, 2022.
(2) Adjusted Diluted Earnings Per Share is a non-GAAP financial measure. The Company excludes acquisition related costs, such as business transaction costs, integration expense and depreciation and amortization expense in calculating Adjusted Diluted Earnings Per Share. Please refer to "Reconciliation of Adjusted Diluted Earnings Per Share" in this press release for an explanation and reconciliation of this non-GAAP financial measure.
(3) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP financial measure. Please refer to "Reconciliation of Adjusted Diluted Earnings Per Share" in this press release for an explanation and reconciliation of this non-GAAP financial measure..
(4) The Company does not provide a forward-looking reconciliation of Adjusted Diluted Earnings Per Share to Earnings Per Share or Adjusted EBITDA to Net Income, the most directly comparable GAAP financial measures, expected for 2024, because we are unable to provide such a reconciliation without unreasonable effort due to the unavailability of reliable estimates for certain components of consolidated net income and the respective reconciliations, and the inherent difficulty of predicting what the changes in these components will be throughout the fiscal year. As these items may vary greatly between periods, we are unable to address the probable significance of the unavailable information, which could significantly affect our future financial results.
(5) Combined IRI MULO + C-store and Company unmeasured channel estimate for the 13-weeks ending November 26,2023.

2

Conference Call and Webcast Information
The Company will host a conference call with members of the executive management team to discuss these results today, Thursday, January 4, 2024, at 6:30 a.m. Mountain time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial 877-407-0792 from the U.S. and International callers can dial 201-689-8263. In addition, the call and accompanying presentation slides will be broadcast live over the Internet hosted at the “Investor Relations” section of the Company's website at http://www.thesimplygoodfoodscompany.com. A telephone replay will be available approximately two hours after the call concludes and will be available through January 11, 2024, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13743146.

About The Simply Good Foods Company
The Simply Good Foods Company (Nasdaq: SMPL), headquartered in Denver, Colorado, is a consumer packaged food and beverage company that aims to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements, and other product offerings. The product portfolio we develop, market and sell consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Quest® and Atkins® brand names. Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space. For more information, please refer to http://www.thesimplygoodfoodscompany.com.

Investor Contact
Mark Pogharian
Vice President, Investor Relations, Treasury and Business Development
The Simply Good Foods Company
(720) 768-2681
mpogharian@simplygoodfoodsco.com
3


Forward Looking Statements

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as “will”, “expect”, “intends” or other similar words, phrases or expressions. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. We caution you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These forward looking statements include, among other things, statements regarding our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints and inflationary pressure on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical conditions affecting us and the industry in which we operate, our ability to maintain adequate product inventory levels to timely supply customer orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably, the loss of one or more members of our management team, potential for increased costs and harm to our business resulting from unauthorized access of the information technology systems we use in our business, expansion of our wellness platform and other risks and uncertainties indicated in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.
4

The Simply Good Foods Company and Subsidiaries
Consolidated Balance Sheets
(Unaudited, dollars in thousands, except share and per share data)
November 25, 2023August 26, 2023
Assets
Current assets:
Cash$121,391 $87,715 
Accounts receivable, net
135,561 145,078 
Inventories
123,175 116,591 
Prepaid expenses
6,076 6,294 
Other current assets
10,336 15,974 
Total current assets
396,539 371,652 
Long-term assets:
Property and equipment, net
23,830 24,861 
Intangible assets, net
1,104,318 1,108,119 
Goodwill
543,134 543,134 
Other long-term assets
47,238 49,318 
Total assets
$2,115,059 $2,097,084 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$43,249 $52,712 
Accrued interest
1,574 1,940 
Accrued expenses and other current liabilities
34,083 35,062 
Current maturities of long-term debt
83 143 
Total current liabilities
78,989 89,857 
Long-term liabilities:
Long-term debt, less current maturities
272,032 281,649 
Deferred income taxes
120,200 116,133 
Other long-term liabilities
36,660 38,346 
Total liabilities
507,881 525,985 
See commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued
— — 
Common stock, $0.01 par value, 600,000,000 shares authorized, 102,175,233 and 101,929,868 shares issued at November 25, 2023 and August 26, 2023, respectively1,022 1,019 
Treasury stock, 2,365,100 shares and 2,365,100 shares at cost at November 25, 2023 and August 26, 2023, respectively(78,451)(78,451)
Additional paid-in-capital
1,303,411 1,303,168 
Retained earnings
383,517 347,956 
Accumulated other comprehensive loss
(2,321)(2,593)
Total stockholders’ equity
1,607,178 1,571,099 
Total liabilities and stockholders’ equity$2,115,059 $2,097,084 

5

The Simply Good Foods Company and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(Unaudited, dollars in thousands, except share and per share data)

Thirteen Weeks Ended
November 25, 2023November 26, 2022
Net sales$308,678 $300,878 
Cost of goods sold193,560 189,886 
Gross profit115,118 110,992 
Operating expenses:
Selling and marketing31,990 28,534 
General and administrative26,950 25,641 
Depreciation and amortization4,358 4,327 
Total operating expenses63,298 58,502 
Income from operations51,820 52,490 
Other income (expense):
Interest income1,090 7 
Interest expense(6,034)(7,055)
Gain on foreign currency transactions226 108 
Other income6 6 
Total other expense(4,712)(6,934)
Income before income taxes47,108 45,556 
Income tax expense11,547 9,696 
Net income$35,561 $35,860 
Other comprehensive income:
Foreign currency translation, net of reclassification adjustments272 (222)
Comprehensive income$35,833 $35,638 
Earnings per share from net income:
Basic$0.36 $0.36 
Diluted$0.35 $0.36 
Weighted average shares outstanding:
Basic99,629,188 99,200,557 
Diluted101,094,736 100,723,036 

6

The Simply Good Foods Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited, dollars in thousands)

Thirteen Weeks Ended
November 25, 2023November 26, 2022
Operating activities
Net income
$35,561 $35,860 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
5,605 4,952 
Amortization of deferred financing costs and debt discount
385 532 
Stock compensation expense
4,168 3,313 
Estimated credit losses
51 (141)
Unrealized gain on foreign currency transactions
(226)(108)
Deferred income taxes
4,084 3,206 
Amortization of operating lease right-of-use asset
1,735 1,660 
Other
301 571 
Changes in operating assets and liabilities:
Accounts receivable, net
9,869 (26,288)
Inventories
(6,699)638 
Prepaid expenses
257 (541)
Other current assets
5,173 8,631 
Accounts payable
(9,806)(6,609)
Accrued interest
(366)97 
Accrued expenses and other current liabilities
(1,337)(14,843)
Other assets and liabilities
(1,232)(2,212)
Net cash provided by operating activities
47,523 8,718 
Investing activities
Purchases of property and equipment
(744)(1,151)
Investments in intangible and other assets
(56)(87)
Net cash used in investing activities
(800)(1,238)
Financing activities
Proceeds from option exercises
—4,563
Tax payments related to issuance of restricted stock units and performance stock units(3,642)(2,298)
Payments on finance lease obligations
(61)(78)
Cash received on repayment of note receivable600 — 
Repurchase of common stock
— (16,448)
Principal payments of long-term debt
(10,000)(6,500)
Net cash used in financing activities
(13,103)(20,761)
Cash and cash equivalents
Net increase (decrease) in cash
33,620 (13,281)
Effect of exchange rate on cash
56 (69)
Cash at beginning of period
87,715 67,494 
Cash and cash equivalents at end of period
$121,391 $54,144 

7

Reconciliation of EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA are non-GAAP financial measures commonly used in our industry and should not be construed as alternatives to net income as an indicator of operating performance or as alternatives to cash flow provided by operating activities as a measure of liquidity (each as determined in accordance with GAAP). Simply Good Foods defines EBITDA as net income or loss before interest income, interest expense, income tax expense, depreciation and amortization, and Adjusted EBITDA as further adjusted to exclude the following items: stock-based compensation expense, executive transition costs and other non-core expenses. The Company believes that EBITDA and Adjusted EBITDA, when used in conjunction with net income, are useful to provide additional information to investors. Management of the Company uses EBITDA and Adjusted EBITDA to supplement net income because these measures reflect operating results of the on-going operations, eliminate items that are not directly attributable to the Company’s underlying operating performance, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics the Company’s management uses in its financial and operational decision making. The Company also believes that EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. EBITDA and Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in the non-GAAP calculation.

The following unaudited table provides a reconciliation of EBITDA and Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the thirteen weeks ended November 25, 2023 and November 26, 2022:
(In thousands)Thirteen Weeks Ended
November 25, 2023November 26, 2022
Net income$35,561 $35,860 
Interest income(1,090)(7)
Interest expense6,034 7,055 
Income tax expense11,547 9,696 
Depreciation and amortization5,605 4,952 
EBITDA57,657 57,556 
Stock-based compensation expense4,168 3,313 
Executive transition costs366 — 
Other (1)
(226)(103)
Adjusted EBITDA$61,965 $60,766 
(1) Other items consist principally of exchange impact of foreign currency transactions and other expenses.

8

Reconciliation of Adjusted Diluted Earnings Per Share

Adjusted Diluted Earnings per Share. Adjusted Diluted Earnings per Share is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to diluted earnings per share as an indicator of operating performance. Simply Good Foods defines Adjusted Diluted Earnings Per Share as diluted earnings per share before depreciation and amortization, stock-based compensation expense and executive transition costs, on a theoretical tax effected basis of such adjustments. The tax effect of such adjustments to Adjusted Diluted Earnings Per Share is calculated by applying an overall assumed statutory tax rate to each gross adjustment as shown in the reconciliation to Adjusted EBITDA, as previously defined. The assumed statutory tax rate reflects a normalized effective tax rate estimated based on assumptions regarding the Company's statutory and effective tax rate for each respective reporting period, including the current and deferred tax effects of each adjustment, and is adjusted for the effects of tax reform, if any. The Company consistently applies the overall assumed statutory tax rate to periods throughout each fiscal year and reassesses the overall assumed statutory rate on annual basis. The Company believes that the inclusion of these supplementary adjustments in presenting Adjusted Diluted Earnings per Share, when used in conjunction with diluted earnings per share, are appropriate to provide additional information to investors, reflects more accurately operating results of the on-going operations, enhances the overall understanding of past financial performance and future prospects and allows for greater transparency with respect to the key metrics the Company uses in its financial and operational decision making. The Company also believes that Adjusted Diluted Earnings per Share is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. Adjusted Diluted Earnings per Share may not be comparable to other similarly titled captions of other companies due to differences in the non-GAAP calculation.

The following unaudited tables below provide a reconciliation of Adjusted Diluted Earnings Per Share to its most directly comparable GAAP measure, which is diluted earnings per share, for the thirteen weeks ended November 25, 2023 and November 26, 2022:
Thirteen Weeks Ended
November 25, 2023November 26, 2022
Diluted earnings per share$0.35 $0.36 
Depreciation and amortization0.06 0.05 
Stock-based compensation expense0.04 0.03 
Executive transition costs0.00— 
Tax effects of adjustments (1)
(0.02)(0.02)
Adjusted diluted earnings per share$0.43 $0.42 
(1) This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. The tax effect of each adjustment is computed (i) by dividing the gross amount of the adjustment, as shown in the Adjusted EBITDA reconciliation, by the number of diluted weighted average shares outstanding for the applicable fiscal period and (ii) applying an overall assumed statutory tax rate of 25% for the thirteen weeks ended November 25, 2023, as well as the thirteen weeks ended November 26, 2022.





9

Reconciliation of Net Debt to Adjusted EBITDA

Net Debt to Adjusted EBITDA. Net Debt to Adjusted EBITDA is a non-GAAP financial measure which Simply Good Foods defines as the total debt outstanding under our credit agreement with Barclays Bank PLC and other parties (“Credit Agreement”), reduced by cash and cash equivalents, and divided by the trailing twelve months of Adjusted EBITDA, as previously defined.

The following unaudited table below provides a reconciliation of Net Debt to Adjusted EBITDA as of November 25, 2023:

(In thousands)November 25, 2023
Net Debt:
Total debt outstanding under the Credit Agreement$275,000 
Less: cash and cash equivalents(121,391)
Net Debt as of November 25, 2023$153,609 
Trailing twelve months Adjusted EBITDA:
Add: Adjusted EBITDA for the thirty-nine weeks ended November 25, 2023$61,965 
Add: Adjusted EBITDA for the fiscal year ended August 26, 2023245,555 
Less: Adjusted EBITDA for the thirty-nine weeks ended November 26, 2022(60,766)
Trailing twelve months Adjusted EBITDA as of November 25, 2023$246,754 
Net Debt to Adjusted EBITDA0.6 x

10
v3.23.4
Cover Document
Jan. 04, 2024
Document Information [Line Items]  
Entity Central Index Key 0001702744
Entity Incorporation, State or Country Code DE
Document Type 8-K
Document Period End Date Jan. 04, 2024
Entity Registrant Name The Simply Good Foods Company
Entity File Number 001-38115
Entity Tax Identification Number 82-1038121
Entity Address, Address Line One 1225 17th Street, Suite 1000
Entity Address, City or Town Denver
Entity Address, State or Province CO
Entity Address, Postal Zip Code 80202
City Area Code 303
Local Phone Number 633-2840
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol SMPL
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Simply Good Foods (NASDAQ:SMPL)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Simply Good Foods Charts.
Simply Good Foods (NASDAQ:SMPL)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Simply Good Foods Charts.