Simply Good Foods Co
For the period ended Mar 1, 2025. Filed Apr 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 1, 2025 · Filed Apr 9, 2025
SMPL$12.05-4.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-30; filed 2025-01-08.
0001702744-25-000005
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-01; filed 2025-04-09.
0001702744-25-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 90 current paragraphs.
39 unchanged; 31 reworded; 15 added; 1 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
We continue to monitor macroeconomic trends and uncertainties such as key ingredient inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and profitability. As a result of the tariffs announced by the U.S. presidential administration on April 2, 2025, and potential tariff modifications or the imposition of tariffs or export controls by other countries, we anticipate increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect these factors to result in a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026 planning. Economic pressures on customers and consumers, including the challenges of high inflation and the effects of increased tariffs, may negatively affect our net sales and profitability in the future.
Current report
•Selling and marketing. Selling and marketing expenses increased $0.4 million, or 1.3%, for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024, driven primarily by the OWYN Acquisition and partially offset by a decrease in marketing spend on the legacy business.
Current report
Comparison of Unaudited Results for the Twenty-Six Weeks Ended March 1, 2025, and the Twenty-Six Weeks Ended February 24, 2024
Current report
Net sales. Net sales of $700.9 million represented an increase of $80.0 million, or 12.9%, for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, driven primarily by Quest volume growth and the OWYN Acquisition. North America and International net sales increased 13.4% and decreased 5.8%, respectively, versus last year.
Current report
Cost of goods sold. Cost of goods sold increased $51.4 million, or 13.2%, for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024. The cost of goods sold increase was driven by higher sales volumes, primarily as a result of growth for Quest and the OWYN Acquisition, and the effect of the non-cash $1.4 million inventory step-up charge related to the OWYN Acquisition, which were partially offset by lower ingredient and packaging costs.
Current report
Gross profit. Gross profit increased $28.6 million, or 12.3%, to $260.6 million for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024. Gross profit margin was 37.2% of net sales for the twenty-six weeks ended March 1, 2025, a decrease of 20 basis points from 37.4% of net sales for the twenty-six weeks ended February 24, 2024. The decrease in gross profit margin is primarily driven by lower gross profit margins of the OWYN business, partially offset by favorable commodity expenses, and is inclusive of the non-cash $1.4 million inventory step-up charge related to the OWYN Acquisition.
Current report
Operating expenses. Operating expenses increased $19.2 million, or 14.5%, for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, due to the following:
Current report
•Selling and marketing. Selling and marketing expenses increased $1.4 million, or 2.2%, for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, driven primarily by the OWYN Acquisition and partially offset by a decrease in marketing spend on the legacy business.
Current report
•General and administrative. General and administrative expenses increased $17.2 million, or 30.2%, for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024. The increase in general and administrative expense was driven by an increase of $6.9 million in integration costs and $6.1 million in employee-related costs primarily attributable to OWYN, and $0.7 million in term loan transaction fees related to the 2025 Repricing Amendment, and higher corporate expenses.
Current report
•Depreciation and amortization. Depreciation and amortization expenses were $8.3 million and $8.6 million for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, respectively.
Current report
Interest income. Interest income decreased by $0.5 million for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, due to lower cash balances and the decrease of interest rates.
Current report
Income tax expense. Income tax expense was $21.8 million for the twenty-six weeks ended March 1, 2025, and the twenty-six weeks ended February 24, 2024, respectively.
Current report
Net income. Net income was $74.9 million for the twenty-six weeks ended March 1, 2025, an increase of $6.2 million compared to net income of $68.7 million for the twenty-six weeks ended February 24, 2024. Net income was benefited by higher gross profit and income from operations and was partially offset by higher stock-based compensation expenses.
Current report
Adjusted EBITDA. Adjusted EBITDA increased $18.3 million, or 15.2% for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, driven primarily by higher net gross profit. For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.
Current report
On January 31, 2025, the Company entered into a seventh amendment (the “2025 Repricing Amendment”) to the Credit Agreement to reduce the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to the effective date of the 2025 Repricing Amendment.
Removed paragraphs (1)
Previous report
•Selling and marketing. Selling and marketing expenses increased $1.0 million, or 3.1%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023, primarily due to the OWYN Acquisition.
Reworded paragraphs (31)
Previous wording
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements. When used anywhere in this Report, the words “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. 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 achievements to differ materially from those expressed or implied by these forward-looking statements. These statements include, but are not limited to, our expectations regarding our supply chain, including but not limited to, raw materials and logistics costs, the effect of price increases, inflationary pressure on us and our contract manufacturers, our growth, our competitive position, and the unforeseen business disruptions or other effects due to current global geopolitical tension. We disclaim any undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by applicable law. These statements reflect our current views with respect to future events and are based on assumptions subject to risks and uncertainties. Such risks and uncertainties include those related to our ability to sell our products.
Current wording
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements. When used anywhere in this Report, the words “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. 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 achievements to differ materially from those expressed or implied by these forward-looking statements. These statements include, but are not limited to, our expectations regarding our supply chain, including but not limited to, raw materials and logistics costs, the effect of price increases, inflationary pressure on us and our contract manufacturers, changes in taxes, tariffs, duties, governmental laws and regulations, our growth, our competitive position, and the unforeseen business disruptions or other effects due to current global geopolitical tension. We disclaim any undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by applicable law. These statements reflect our current views with respect to future events and are based on assumptions subject to risks and uncertainties. Such risks and uncertainties include those related to our ability to sell our products.
Previous wording
To that end, in June 2024, we completed the acquisition of Only What You Need, Inc., a plant-based protein food company, for a cash purchase price of approximately $280.0 million (subject to customary adjustments). For more information, please see “Liquidity and Capital Resources-OWYN Acquisition”.
Current wording
To that end, in June 2024, we completed the acquisition of OWYN, a plant-based protein food company, for a cash purchase price of approximately $280.0 million (subject to customary adjustments). For more information, please see “Liquidity and Capital Resources-OWYN Acquisition”.
Previous wording
During the thirteen weeks ended November 30, 2024, our business performance improved principally due to the OWYN Acquisition. We benefited from lower ingredient and packaging costs which resulted in gross margin expansion versus the year ago period. We expect fiscal year 2025 organic sales growth to be driven primarily by volume and have strong advertising and marketing plans in place, as well as innovation, merchandising and promotions that we believe should enable us to achieve our objectives. We continue to engage and have discussions with our contract manufacturers and logistics and transportation providers to have our cost structure reflect lower market prices. We continue to monitor key ingredient inflation which may affect profitability; however, we believe our strategy and positioning will continue to drive profitable growth for our product offerings and growth within the growing nutritional snacking category.
Current wording
During the thirteen and twenty-six weeks ended March 1, 2025, our business performance improved principally due to Quest volume growth and the OWYN Acquisition. We expect fiscal year 2025 organic sales growth to be driven primarily by volume and have strong advertising and marketing plans in place, as well as innovation, merchandising and promotions that we believe should enable us to achieve our objectives.
Previous wording
•General and administrative. General and administrative expenses are comprised of expenses associated with corporate and administrative functions that support our business, including employee compensation, stock-based compensation, professional services, executive transition costs, integration costs, restructuring costs, insurance and other general corporate expenses.
Current wording
•General and administrative. General and administrative expenses are comprised of expenses associated with corporate and administrative functions that support our business, including employee compensation, employee stock-based compensation, professional services, executive transition costs, integration costs, restructuring costs, insurance and other general corporate expenses.
Previous wording
During the thirteen weeks ended November 30, 2024, our net sales increased to $341.3 million compared to $308.7 million for the thirteen weeks ended November 25, 2023, driven by the OWYN Acquisition, resulting in a 10.4% increase in our aggregate North America net sales. Gross profit and gross profit margin improved driven by higher sales volumes and lower ingredient and packaging costs. We expect to see continued growth during fiscal year 2025 by building on our existing capabilities and strengthening the position of our brands in the marketplace. We will continue to invest in our business and improve our operating efficiencies as well as continuing the integration of OWYN.
Current wording
During the thirteen weeks ended March 1, 2025, our net sales increased 15.2% to $359.7 million compared to $312.2 million for the thirteen weeks ended February 24, 2024, driven by the OWYN Acquisition. Gross profit increased during the quarter, driven by higher sales volumes, while gross margin decreased 120 basis points primarily as a result of the inclusion of OWYN. We expect to see continued growth during fiscal year 2025 by building on our existing capabilities and strengthening the position of our brands in the marketplace. We will continue to invest in our business and improve our operating efficiencies as well as continuing the integration of OWYN.
Previous wording
Net sales. Net sales were $341.3 million for the thirteen weeks ended November 30, 2024, compared to $308.7 million for the thirteen weeks ended November 25, 2023, representing an increase of $32.6 million, driven primarily by the OWYN Acquisition. North America net sales increased 10.4% in the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023, and International net sales increased 15.4% during the same period.
Current wording
Net sales. Net sales were $359.7 million for the thirteen weeks ended March 1, 2025, compared to $312.2 million for the thirteen weeks ended February 24, 2024, representing an increase of $47.5 million, or 15.2%, driven primarily by Quest volume growth and the OWYN Acquisition. North America net sales increased 16.3% in the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024, and International net sales decreased $2.1 million during the same period.
Previous wording
Cost of goods sold. Cost of goods sold increased $17.2 million, or 8.9%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023. The cost of goods sold increase was driven by higher sales volumes, primarily as a result of the OWYN Acquisition, the effect of the non-cash $1.0 million inventory step-up charge related to the OWYN Acquisition and was partially offset by lower ingredient and packaging costs.
Current wording
Cost of goods sold. Cost of goods sold increased $34.2 million, or 17.5%, for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024. The cost of goods sold increase was driven by higher sales volumes, primarily as a result of growth for Quest and the OWYN Acquisition, and the effect of the non-cash $0.4 million inventory step-up charge related to the OWYN Acquisition, which were partially offset by lower ingredient and packaging costs.
Previous wording
Gross profit. Gross profit increased $15.4 million, or 13.3%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023. Additionally, gross profit of $130.5 million, or 38.2% of net sales, for the thirteen weeks ended November 30, 2024, increased 90 basis points from 37.3% of net sales for the thirteen weeks ended November 25, 2023. The increase in gross profit margin was primarily driven by lower ingredient and packaging costs and was partially offset by the effect of the non-cash $1.0 million inventory step-up charge related to the OWYN Acquisition.
Current wording
Gross profit. Gross profit increased $13.3 million, or 11.4%, to $130.1 million for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024. Gross profit margin was 36.2% of net sales for the thirteen weeks ended March 1, 2025, a decrease of 120 basis points from 37.4% of net sales for the thirteen weeks ended February 24, 2024. The decrease in gross profit margin is primarily driven by lower gross profit margins of the OWYN business and is inclusive of the effect of the non-cash $0.4 million inventory step-up charge related to the OWYN Acquisition.
Previous wording
Operating expenses. Operating expenses increased $12.6 million, or 19.8%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023, due to the following:
Current wording
Operating expenses. Operating expenses increased $6.6 million, or 9.6%, for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024, due to the following:
Previous wording
•General and administrative. General and administrative expenses increased $11.1 million, or 41.2%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023. The increase in general and administrative expenses was primarily attributable to an increase of $4.9 million in integration costs related to the OWYN Acquisition, an increase of $3.0 million in employee-related costs, and higher corporate expenses.
Current wording
•General and administrative. General and administrative expenses increased $6.1 million, or 20.3%, for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024. The increase in general and administrative expenses was driven by an increase of $2.0 million in integration costs primarily attributable to OWYN, and $0.7 million in term loan transaction fees related to the 2025 Repricing Amendment, $0.4 million in stock-based compensation, and higher employee-related costs and corporate expenses.
Previous wording
•Depreciation and amortization. Depreciation and amortization expense was $4.2 million for the thirteen weeks ended November 30, 2024, and $4.4 million for the thirteen weeks ended November 25, 2023, respectively.
Current wording
•Depreciation and amortization. Depreciation and amortization expense was $4.1 million for the thirteen weeks ended March 1, 2025, and $4.2 million for the thirteen weeks ended February 24, 2024, respectively.
Previous wording
•Business transaction costs. Business transaction costs were $0.6 million for the thirteen weeks ended November 30, 2024 and were comprised of expenses related to the OWYN Acquisition.
Current wording
•Business transaction costs. Business transaction costs were $0.2 million for the thirteen weeks ended March 1, 2025 and were comprised of expenses related to the OWYN Acquisition.
Previous wording
Interest income. Interest income decreased $0.3 million for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023.
Current wording
Interest income. Interest income decreased $0.2 million for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024.
Previous wording
Interest expense. Interest expense increased $1.8 million for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023, primarily due to the effect of the incremental borrowing associated with the OWYN Acquisition on June 13, 2024, and principal payments reducing the outstanding balance of the Term Facility (as defined below) to $350.0 million subsequent to the borrowing as of November 30, 2024.
Current wording
Interest expense. Interest expense increased $0.7 million for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024, primarily due to the effect of the incremental borrowing associated with the OWYN Acquisition on June 13, 2024, and principal payments reducing the outstanding balance of the Term Facility (as defined below) to $300.0 million subsequent to the borrowing as of March 1, 2025.
Previous wording
Gain on foreign currency transactions. Foreign currency transactions resulted in a gain of $0.1 million and $0.2 million for the thirteen weeks ended November 30, 2024, and November 25, 2023, respectively. The variance is attributable to changes in foreign currency rates related to our international operations.
Current wording
Loss on foreign currency transactions. Foreign currency transactions resulted in a loss of $0.1 million and an immaterial loss for the thirteen weeks ended March 1, 2025, and February 24, 2024, respectively. The variance is attributable to changes in foreign currency rates related to our international operations.
Previous wording
Income tax expense. Income tax expense decreased $2.0 million for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023. The decrease in our income tax expense was primarily driven by changes in permanent differences, principally stock-based compensation.
Current wording
Income tax expense. Income tax expense increased $2.0 million for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024. The increase in our income tax expense was primarily driven by higher income from operations and changes in permanent differences.
Previous wording
Net income. Net income was $38.1 million for the thirteen weeks ended November 30, 2024, an increase of $2.6 million, compared to net income of $35.6 million for the thirteen weeks ended November 25, 2023. Net income benefited from higher gross profit and a decrease in income tax expense of $2.0 million and was partially offset by $0.6 million of business transaction costs related to the OWYN Acquisition.
Current wording
Net income. Net income was $36.7 million for the thirteen weeks ended March 1, 2025, an increase of $3.6 million, compared to net income of $33.1 million for the thirteen weeks ended February 24, 2024. Net income benefited from higher gross profit and income from operations, and was partially offset by an increase in income tax expense of $2.0 million.
Previous wording
Adjusted EBITDA. Adjusted EBITDA increased $8.1 million, or 13.1%, for the thirteen weeks ended November 30, 2024, compared to the thirteen weeks ended November 25, 2023, driven primarily by higher gross profit. For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.
Current wording
Adjusted EBITDA. Adjusted EBITDA increased $10.2 million, or 17.6%, for the thirteen weeks ended March 1, 2025, compared to the thirteen weeks ended February 24, 2024, driven primarily by higher gross profit. For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.
Previous wording
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). The Company 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, business transaction costs, purchase price accounting, inventory step-up, integration 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.
Current wording
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). The Company 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, business transaction costs, purchase price accounting, inventory step-up, integration costs, term loan transaction fees, 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.
Previous wording
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 30, 2024, and November 25, 2023:
Current wording
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 and twenty-six weeks ended March 1, 2025, and February 24, 2024:
Previous wording
We had $121.8 million in cash as of November 30, 2024. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. As circumstances warrant, we may issue debt and/or equity securities from time to time on an opportunistic basis, dependent upon market conditions and available pricing. We make no assurance that we can issue and sell such securities on acceptable terms or at all.
Current wording
We had $103.7 million in cash as of March 1, 2025. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. As circumstances warrant, we may issue debt and/or equity securities from time to time on an opportunistic basis, dependent upon market conditions and available pricing. We make no assurance that we can issue and sell such securities on acceptable terms or at all.
Previous wording
Effective as of the date of the 2024 Incremental Facility Amendment, the interest rate per annum for the Initial Term Loans is based on either:
Current wording
Effective as of the 2025 Repricing Amendment, the interest rate per annum for the Initial Term Loans is based on either:
Previous wording
i. A base rate equaling the higher of (a) the “prime rate,” (b) the federal funds effective rate plus 0.50%, or (c) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) applicable for an interest period of one month plus 2.50% plus (x) 1.50% margin for the Term Loan or (y) 2.00% margin for the Revolving Credit Facility; or ii. SOFR plus a credit spread adjustment equal to 0.10% for one-month SOFR, 0.15% for up to three-month SOFR and 0.25% for up to six-month SOFR, subject to a floor of 0.50%, plus (x) 2.50% margin for the Term Loan or (y) 3.00% margin for the Revolving Credit Facility.
Current wording
i. A base rate equaling the higher of (a) the “prime rate,” (b) the federal funds effective rate plus 0.50%, or (c) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) applicable for an interest period of one month plus 1.00% plus (x) 1.00% margin for the Term Loan or (y) 2.00% margin for the Revolving Credit Facility; or
Previous wording
In connection with the closing of the 2024 Incremental Facility Amendment, the Company expensed $3.4 million of non-deferrable third-party costs through Business transaction costs and capitalized $1.2 million of third-party financing costs.
Current wording
In connection with the closing of the 2025 Repricing Amendment, the Company expensed $0.7 million of non-deferrable third-party costs through General and administrative.
Previous wording
At November 30, 2024, the outstanding balance of the Term Facility was $350.0 million. We are not required to make principal payments on the Term Facility over the twelve months following the period ended November 30, 2024. The outstanding balance of the Term Facility is due upon its maturity in March 2027. As of November 30, 2024, there were no amounts drawn against the Revolving Credit Facility.
Current wording
At March 1, 2025, the outstanding balance of the Term Facility was $300.0 million. We are not required to make principal payments on the Term Facility over the twelve months following the period ended March 1, 2025. The outstanding balance of the Term Facility is due upon its maturity in March 2027. As of March 1, 2025, there were no amounts drawn against the Revolving Credit Facility.
Previous wording
On April 29, 2024, the Company’s wholly owned subsidiary, Simply Good Foods, USA, Inc. entered into a stock purchase agreement (“the Purchase Agreement”) to acquire Only What You Need, Inc. (“OWYN”), a plant-based protein food company (the “OWYN Acquisition”), for approximately $280.0 million. On June 13, 2024, pursuant to the Purchase Agreement, the Company completed the OWYN Acquisition by acquiring 100% of the equity interests for a cash purchase price at closing of $281.9 million, subject to certain customary post-closing adjustments. We acquired OWYN as a part of our vision 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 that will now offer plant-based products to a wider market of consumers.
Current wording
On April 29, 2024, the Company’s wholly owned subsidiary, Simply Good Foods, USA, Inc. entered into a Purchase Agreement to acquire OWYN, a plant-based protein food company, for approximately $280.0 million. On June 13, 2024, pursuant to the Purchase Agreement, the Company completed the OWYN Acquisition by acquiring 100% of the equity interests for a cash purchase price at closing of $281.9 million, subject to certain customary post-closing adjustments. We acquired OWYN as a part of our vision 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 that will now offer plant-based products to a wider market of consumers.
Previous wording
The OWYN Acquisition was funded through a combination of incremental borrowings under our outstanding Term Facility, totaling $250.0 million, and cash on hand. Business transaction costs associated with the OWYN Acquisition within the Consolidated Statements of Operations and Comprehensive Income for thethirteen weeks ended November 30, 2024, were $0.6 million, which consisted of legal, accounting, and other costs.
Current wording
The OWYN Acquisition was funded through a combination of incremental borrowings under our outstanding Term Facility, totaling $250.0 million, and cash on hand. During the thirteen weeks ended March 1, 2025, the Company received a post-closing release from escrow of approximately $1.7 million related to net working capital adjustments, resulting in a total net consideration paid of $280.2 million as of March 1, 2025. Business transaction costs associated with the OWYN Acquisition within the Consolidated Statements of Operations and Comprehensive Income for thethirteen weeks ended March 1, 2025, were $0.2 million, which consisted of legal, accounting, and other costs.
Previous wording
The Company did not repurchase any shares of common stock during the thirteen weeks ended November 30, 2024, and November 25, 2023. As of November 30, 2024, approximately $71.5 million remained available for repurchases under our $150.0 million stock repurchase program. Refer to Note 11, Stockholders’ Equity, of the Notes to Unaudited Consolidated Financial Statements in this Report for additional information related to our stock repurchase program.
Current wording
The Company did not repurchase any shares of common stock during the twenty-six weeks ended March 1, 2025, and February 24, 2024. As of March 1, 2025, approximately $71.5 million remained available for repurchases under our $150.0 million stock repurchase program. Refer to Note 11, Stockholders’ Equity, of the Notes to Unaudited Consolidated Financial Statements in this Report for additional information related to our stock repurchase program.
Previous wording
Operating activities. Our net cash provided by operating activities decreased $15.5 million to $32.0 million for the thirteen weeks ended November 30, 2024, compared to $47.5 million for the thirteen weeks ended November 25, 2023. The decrease in cash provided by operating activities was primarily attributable to changes in working capital for the thirteen weeks ended November 30, 2024, as compared to the thirteen weeks ended November 25, 2023. Changes in working capital, comprised of changes in accounts receivable, net, inventories, prepaid expenses, other current assets, accounts payable, accrued interest, accrued expenses and other current liabilities, and other assets and liabilities, were driven by the timing of payments and receipts, the OWYN Acquisition, and the seasonal building of inventory, which consumed cash of $20.8 million in the thirteen weeks ended November 30, 2024 compared to $4.1 million of cash consumed in the thirteen weeks ended November 25, 2023, a difference of $16.6 million. Income from operations increased by $2.8 million to $54.6 million for the thirteen weeks ended November 30, 2024, as compared to $51.8 million for the thirteen weeks ended November 25, 2023. Additionally, cash paid for interest was $7.5 million in the thirteen weeks ended November 30, 2024, which was an increase of $5.4 million as compared to the $2.1 million paid for interest in the thirteen weeks ended November 25, 2023.
Current wording
Operating activities. Our net cash provided by operating activities decreased $30.7 million to $63.3 million for the twenty-six weeks ended March 1, 2025, compared to $94.0 million for the twenty-six weeks ended February 24, 2024. The decrease in cash provided by operating activities was primarily attributable to changes in working capital for the twenty-six weeks ended March 1, 2025, as compared to the twenty-six weeks ended February 24, 2024. Changes in working capital, comprised of changes in accounts receivable, net, inventories, prepaid expenses, other current assets, accounts payable, accrued interest, accrued expenses and other current liabilities, and other assets and liabilities, were driven by the timing of payments and receipts, the OWYN Acquisition and the seasonal building of inventory, which consumed cash of $41.6 million in the twenty-six weeks ended March 1, 2025, compared to $5.5 million of cash consumed in the twenty-six weeks ended February 24, 2024, a difference of $36.0 million. Income from operations increased by $9.4 million to $109.3 million for the twenty-six weeks ended March 1, 2025, as compared to $99.9 million for the twenty-six weeks ended February 24, 2024. Additionally, cash paid for interest was $13.5 million in the twenty-six weeks ended March 1, 2025, which was an increase of $2.3 million as compared to the $11.2 million paid for interest in the twenty-six weeks ended February 24, 2024.
Previous wording
Investing activities. Our net cash used in investing activities was $0.7 million for the thirteen weeks ended November 30, 2024, compared to $0.8 million for the thirteen weeks ended November 25, 2023. Our net cash used in investing activities for the thirteen weeks ended November 30, 2024, was primarily comprised of $0.3 million of purchases of property and equipment and $0.4 million of investments in intangible and other assets. The $0.8 million of net cash used in investing activities for the thirteen weeks ended November 25, 2023, was primarily comprised of $0.7 million of purchases of property and equipment.
Current wording
Investing activities. Our net cash used in investing activities was immaterial for the twenty-six weeks ended March 1, 2025, compared to net cash used in investing activities of $1.3 million for the twenty-six weeks ended February 24, 2024. Our net cash used investing activities for the twenty-six weeks ended March 1, 2025, was primarily comprised of $0.8 million of purchases of property and equipment and $0.9 million of investments in intangible and other assets, and was offset by $1.7 million of cash proceeds received from escrow related to net working capital adjustments related to the OWYN Acquisition. The $1.3 million of net cash used in investing activities for the twenty-six weeks ended February 24, 2024, was primarily comprised of $1.1 million of purchases of property and equipment.
Previous wording
Financing activities. Our net cash used in financing activities was $42.3 million for the thirteen weeks ended November 30, 2024, compared to $13.1 million for the thirteen weeks ended November 25, 2023. Net cash used in financing activities for the thirteen weeks ended November 30, 2024, primarily consisted of $50.0 million in principal payments on the Term Facility, and $2.3 million in tax payments related to the issuance of restricted stock units and performance stock units, partially offset by $10.0 million of cash proceeds received from option exercises. Net cash used in financing activities for the thirteen weeks ended November 25, 2023, primarily consisted of $10.0 million in principal payments on the Term Facility, and $3.6 million in tax payments related to issuance of restricted stock units and performance stock units, partially offset by $0.6 million of cash received on repayment of a note receivable.
Current wording
Financing activities. Our net cash used in financing activities was $92.4 million for the twenty-six weeks ended March 1, 2025, compared to $44.7 million for the twenty-six weeks ended February 24, 2024. Net cash used in financing activities for the twenty-six weeks ended March 1, 2025, primarily consisted of $100.0 million in principal payments on the Term Facility, and $2.5 million in tax payments related to the issuance of restricted stock units and performance stock units, partially offset by $10.1 million of cash proceeds received from option exercises. Net cash used in financing activities for the twenty-six weeks ended February 24, 2024, primarily consisted of $45.0 million in principal payments on the Term Facility, and $3.8 million in tax payments related to issuance of restricted stock units and performance stock units, partially offset by $1.2 million of cash received on repayment of a note receivable and $3.0 million of cash proceeds received from option exercises.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following unaudited table presents, for the periods indicated, selected information from our Consolidated Statements of Operations and Comprehensive Income, including information presented as a percentage of net sales:
Current report — wording carried from elsewhere
•Business transaction costs. Business transaction costs were $0.8 million for the twenty-six weeks ended March 1, 2025 and were comprised of expenses related to the OWYN Acquisition.
Current report — wording carried from elsewhere
Interest expense. Interest expense increased $2.6 million for the twenty-six weeks ended March 1, 2025, compared to the twenty-six weeks ended February 24, 2024, primarily due to the effect of the incremental borrowing associated with the OWYN Acquisition on June 13, 2024, and principal payments reducing the outstanding balance of the Term Facility (as defined below) to $300.0 million subsequent to the borrowing as of March 1, 2025.
Current report — wording carried from elsewhere
(Loss) gain on foreign currency transactions. Foreign currency transactions resulted in an immaterial loss and a $0.2 million gain for the twenty-six weeks ended March 1, 2025, and February 24, 2024, respectively. The variance is attributable to changes in foreign currency rates related to our international operations.
Current report — wording carried from elsewhere
ii. SOFR, subject to a floor of 0.50%, plus (x) 2.00% margin for the Term Loan or (y) 3.00% margin for the Revolving Credit Facility.