Cover
Cover - shares | 3 Months Ended | |
Nov. 28, 2020 | Jan. 05, 2021 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001702744 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 28, 2020 | |
Entity Registrant Name | The Simply Good Foods Company | |
Document Fiscal Period Focus | Q1 | |
Entity File Number | 001-38115 | |
Entity Incorporation, State or Country Code | DE | |
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 $0.01 per share | |
Trading Symbol | SMPL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Current Fiscal Year End Date | --08-28 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 95,720,637 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 28, 2020 | Aug. 29, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 91,476 | $ 95,847 |
Accounts receivable, net | 97,887 | 89,740 |
Inventories | 76,067 | 59,085 |
Prepaid expenses | 4,345 | 3,644 |
Other current assets | 9,178 | 11,947 |
Total current assets | 278,953 | 260,263 |
Long-term assets: | ||
Property and equipment, net | 11,344 | 11,850 |
Intangible assets, net | 1,149,895 | 1,158,768 |
Goodwill | 543,134 | 544,774 |
Other long-term assets | 31,892 | 32,790 |
Total assets | 2,015,218 | 2,008,445 |
Current liabilities: | ||
Accounts payable | 41,409 | 32,240 |
Accrued interest | 720 | 960 |
Accrued expenses and other current liabilities | 32,972 | 38,007 |
Current maturities of long-term debt | 275 | 271 |
Total current liabilities | 75,376 | 71,478 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 572,923 | 596,879 |
Deferred income taxes | 88,543 | 84,352 |
Other long-term liabilities | 21,884 | 22,765 |
Total liabilities | 758,726 | 775,474 |
See commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value, 600,000,000 shares authorized, 95,818,871 and 95,751,845 shares issued at November 28, 2020 and August 29, 2020, respectively | 958 | 958 |
Treasury stock, 98,234 and 98,234 shares at cost at November 28, 2020 and August 29, 2020, respectively | (2,145) | (2,145) |
Additional paid-in-capital | 1,095,573 | 1,094,507 |
Retained earnings | 163,030 | 140,530 |
Accumulated other comprehensive loss | (924) | (879) |
Total stockholders’ equity | 1,256,492 | 1,232,971 |
Total liabilities and stockholders’ equity | $ 2,015,218 | $ 2,008,445 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Nov. 28, 2020 | Aug. 29, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock shares issued (in shares) | 95,818,871 | 95,751,845 |
Treasury stock (in shares) | 98,234 | 98,234 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 231,152 | $ 152,153 |
Cost of goods sold | 137,111 | 89,947 |
Gross profit | 94,041 | 62,206 |
Operating expenses: | ||
Selling and marketing | 25,195 | 18,434 |
General and administrative | 25,415 | 18,145 |
Depreciation and amortization | 4,244 | 2,453 |
Business transaction costs | 0 | 26,159 |
Total operating expenses | 54,854 | 65,191 |
Income (loss) from operations | 39,187 | (2,985) |
Other income (expense): | ||
Interest income | 3 | 1,379 |
Interest expense | (8,372) | (4,969) |
Gain on foreign currency transactions | 9 | 16 |
Other income | 47 | 37 |
Total other expense | (8,313) | (3,537) |
Income (loss) before income taxes | 30,874 | (6,522) |
Income tax expense (benefit) | 8,374 | (1,729) |
Net income (loss) | 22,500 | (4,793) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (45) | 0 |
Comprehensive income (loss) | $ 22,455 | $ (4,793) |
Earnings (loss) per share from net income (loss): | ||
Basic (in dollars per share) | $ 0.24 | $ (0.05) |
Diluted (in dollars per share) | $ 0.23 | $ (0.05) |
Weighted average shares outstanding: | ||
Basic (in shares) | 95,538,111 | 89,708,633 |
Diluted (in shares) | 99,763,119 | 89,708,633 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ 22,500 | $ (4,793) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,513 | 2,525 |
Amortization of deferred financing costs and debt discount | 1,077 | 455 |
Stock compensation expense | 1,110 | 1,673 |
Unrealized loss (gain) on foreign currency transactions | 9 | (16) |
Deferred income taxes | 4,400 | (1,853) |
Amortization of operating lease right-of-use asset | 1,182 | 626 |
Loss on operating lease right-of-use asset impairment | 354 | 0 |
Other operating activities | 402 | 566 |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable, net | (8,604) | 4,304 |
Inventories | (18,138) | (9,740) |
Prepaid expenses | (558) | (3,513) |
Other current assets | 2,874 | (1,416) |
Accounts payable | 8,216 | (6,533) |
Accrued interest | (240) | 1,536 |
Accrued expenses and other current liabilities | (5,127) | 8,556 |
Other assets and liabilities | 1,227 | (305) |
Net cash provided by (used in) operating activities | 15,197 | (7,928) |
Investing activities | ||
Purchases of property and equipment | (93) | (280) |
Issuance of notes receivable | 0 | (1,250) |
Acquisition of business, net of cash acquired | 0 | (984,201) |
Proceeds from sale of business | 5,800 | 0 |
Payments to Acquire Intangible Assets | (114) | 0 |
Net cash provided by (used in) investing activities | 5,593 | (985,731) |
Financing activities | ||
Proceeds from option exercises | 157 | 208 |
Issuance of common stock | (201) | (70) |
Payments of finance lease obligations | (78) | (78) |
Payments of Financing Costs | 0 | (8,208) |
Principal payments of long-term debt | (25,000) | (1,000) |
Proceeds from Issuance of Common Stock | 0 | 352,542 |
Payments of Stock Issuance Costs | 0 | (3,323) |
Proceeds from Issuance of Long-term Debt | 0 | 460,000 |
Net cash (used in) provided by financing activities | (25,122) | 800,071 |
Net decrease in cash | (4,332) | (193,588) |
Cash and cash equivalents | ||
Effect of exchange rate on cash | (39) | (42) |
Cash at beginning of period | 95,847 | 266,341 |
Cash and cash equivalents at end of period | 91,476 | 72,711 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 7,535 | 2,978 |
Cash paid for taxes | 282 | 373 |
Non-cash proceeds from sale of business | 3,000 | 0 |
Operating lease right-of-use assets recognized at ASU 2016-02 transition | 0 | 5,102 |
Finance lease right-of-use assets recognized at ASU 2016-02 transition | 0 | 1,211 |
Operating lease right-of-use assets recognized after ASU 2016-02 transition | $ 306 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders Equity Statement - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Aug. 31, 2019 | $ 837,444 | $ 820 | $ (2,145) | $ 733,775 | $ 105,830 | $ (836) |
Beginning balance (in shares) at Aug. 31, 2019 | 81,973,284 | |||||
Beginning balance, Treasury (in shares) at Aug. 31, 2019 | 98,234 | |||||
Net income (loss) | (4,793) | (4,793) | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 1,673 | 1,673 | ||||
Foreign currency translation adjustments | 0 | |||||
Public equity offering (in shares) | 13,379,205 | |||||
Public equity offering | 349,219 | $ 134 | 349,085 | |||
Shares issued upon vesting of Restricted Stock Units | (70) | $ 0 | (70) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 46,911 | |||||
Exercise of options to purchase common stock | 208 | $ 0 | 208 | |||
Exercise of options to purchase common stock (in shares) | 17,372 | |||||
Ending balance (in shares) at Nov. 30, 2019 | 95,416,772 | |||||
Ending balance, Treasury (in shares) at Nov. 30, 2019 | 98,234 | |||||
Ending balance at Nov. 30, 2019 | 1,183,681 | $ 954 | $ (2,145) | 1,084,671 | 101,037 | (836) |
Beginning balance at Aug. 29, 2020 | $ 1,232,971 | $ 958 | $ (2,145) | 1,094,507 | 140,530 | (879) |
Beginning balance (in shares) at Aug. 29, 2020 | 95,751,845 | |||||
Beginning balance, Treasury (in shares) at Aug. 29, 2020 | 98,234 | 98,234 | ||||
Net income (loss) | $ 22,500 | 22,500 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 1,110 | 1,110 | ||||
Foreign currency translation adjustments | (45) | (45) | ||||
Shares issued upon vesting of Restricted Stock Units | (201) | $ 0 | (201) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 53,908 | |||||
Exercise of options to purchase common stock | $ 157 | $ 0 | 157 | |||
Exercise of options to purchase common stock (in shares) | 13,118 | |||||
Ending balance (in shares) at Nov. 28, 2020 | 95,818,871 | |||||
Ending balance, Treasury (in shares) at Nov. 28, 2020 | 98,234 | 98,234 | ||||
Ending balance at Nov. 28, 2020 | $ 1,256,492 | $ 958 | $ (2,145) | $ 1,095,573 | $ 163,030 | $ (924) |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 3 Months Ended |
Nov. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Principles of Consolidation | The Simply Good Foods Company (“Simply Good Foods” or the "Company") was formed by Conyers Park Acquisition Corp. (“Conyers Park”) on March 30, 2017. On April 10, 2017, Conyers Park and NCP-ATK Holdings, Inc., among others, entered into a definitive merger agreement (the “Merger Agreement”), pursuant to which on July 7, 2017, Conyers Park merged into Simply Good Foods and as a result acquired the companies which conducted the Atkins® brand business (the “Acquisition of Atkins”). The common stock of Simply Good Foods is listed on the Nasdaq Capital Market under the symbol “SMPL.” On August 21, 2019, the Company's wholly-owned subsidiary Simply Good Foods USA, Inc., formerly known as Atkins Nutritionals, Inc., (“Simply Good USA”) entered into a Stock and Unit Purchase Agreement (the "Purchase Agreement") to acquire Quest Nutrition, LLC ("Quest"), a healthy lifestyle food company (the "Acquisition of Quest"). On November 7, 2019, Simply Good USA completed the Acquisition of Quest, via Simply Good USA’s direct or indirect acquisition of 100% of the equity interests of Voyage Holdings, LLC (“Voyage Holdings”), and VMG Quest Blocker, Inc. (“Voyage Blocker” and, together with Voyage Holdings, the “Target Companies”) for a cash purchase price of approximately $1.0 billion (subject to customary adjustments for the Target Companies’ levels of cash, indebtedness, net working capital and transaction expenses as of the closing date). The unaudited condensed consolidated financial statements include the accounts of Simply Good Foods and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Simply Good Foods and its subsidiaries. The Company maintains its accounting records on a 52/53-week fiscal year, ending on the last Saturday in August of each year. Description of Business The Simply Good Foods Company 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. The Company’s nutritious snacking platform consists of the following core brands that specialize in providing products for consumers that follow certain nutritional philosophies, dietary approaches and/or health-and-wellness trends: Atkins® for those following a low-carb lifestyle; and Quest® for consumers seeking to partner with a brand that makes the foods they crave work for them, not against them, through a variety of protein-rich foods and beverages that also limit sugars and simple carbs. The Company distributes its products in major retail channels, primarily in North America, including grocery, club and mass merchandise, as well as through e-commerce, convenience, specialty and other channels. The Company's portfolio of nutritious snacking brands gives it a strong platform with which to introduce new products, expand distribution, and attract new consumers to its products. The Company's platform also positions it to continue to selectively pursue acquisition opportunities of brands in the nutritious snacking category. Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated financial statements and related notes of the Company and its subsidiaries are unaudited. The unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited interim condensed consolidated financial statements reflect all adjustments and disclosures which are, in our opinion, necessary for a fair presentation of the results of operations, financial position and cash flows for the indicated periods. All such adjustments were of a normal and recurring nature unless otherwise disclosed. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by GAAP have been condensed or omitted. The results reported in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire fiscal year and should be read in conjunction with our consolidated financial statements for the fiscal year ended August 29, 2020, included in our Annual Report on Form 10-K (“Annual Report”), filed with the SEC on October 28, 2020. Additionally, based on the duration and severity of economic effects from the novel coronavirus ("COVID-19") pandemic, including but not limited to stock market volatility, the potential for (i) continued increased rates of reported cases of COVID-19 (which has been referred to as a second wave), (ii) unexpected supply chain disruptions, (iii) changes to customer operations, (iv) continued or additional changes in consumer purchasing and consumption behavior beyond those evidenced to date, and (v) the closure of customer establishments, the Company remains uncertain of the ultimate effect COVID-19 could have on its business |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Nov. 28, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Refer to Note 3, Summary of Significant Accounting Policies , to the consolidated financial statements included in the Company's Annual Report for a description of significant accounting policies. Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not expect that the adoption of this ASU will be material to its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. The amendments in this ASU are effective for all entities and can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. The Company will continue to monitor the effects of rate reform, if any, on its contracts and the effects of adoption of this ASU through December 31, 2022. The Company does not anticipate the amendments in this ASU to be material to its consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which provides updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within U.S. GAAP. This ASU is effective for all entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The amendments of this ASU should be applied retrospectively. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not anticipate the adoption of this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), which modified the measurement of expected credit losses of certain financial instruments. The Company adopted this ASU as of the first day of fiscal 2021. As a result of adopting this ASU, the Company changed its method of estimating its allowance for doubtful accounts for trade receivables to be based upon the Company's historical credit loss experience adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. The change in estimating the allowance for doubtful accounts did not have a material effect on the Company's consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modified disclosure requirements on fair value measurements of Accounting Standards Codification (“ASC”) 820. The Company adopted this ASU as of the first day of fiscal 2021. The adoption of this ASU did not have a material effect on the consolidated financial statements or the related disclosures. |
Business Combination (Notes)
Business Combination (Notes) | 3 Months Ended |
Nov. 28, 2020 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | On August 21, 2019, Simply Good USA entered into the Purchase Agreement with VMG Voyage Holdings, LLC, VMG Tax-Exempt II, L.P., Voyage Employee Holdings, LLC, and other sellers defined in the Purchase Agreement. On November 7, 2019, pursuant to the Purchase Agreement, Simply Good USA completed the Acquisition of Quest for a cash purchase price at closing of $988.9 million subject to customary post-closing adjustments. Simply Good USA acquired Quest as a part of the Company's 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. Quest is a healthy lifestyle food company offering a variety of bars, cookies, chips, ready-to-drink shakes and pizzas that compete in many of the attractive, fast growing sub-segments within the nutritional snacking category. The Acquisition of Quest was funded by the Company through a combination of cash, equity and debt financing. Total consideration paid on the closing date was $988.9 million. Cash sources of funding included $195.3 million of cash on hand, net proceeds of approximately $350.0 million from an underwritten public offering of common stock, and $443.6 million in new term loan debt. In the third fiscal quarter of 2020, the Company received a post-closing release from escrow of approximately $2.1 million related to net working capital adjustments, resulting in a total net consideration paid of $986.8 million as of November 28, 2020. For the thirteen weeks ended November 30, 2019, Business transaction costs within the Consolidated Statements of Operations and Comprehensive Income were $26.2 million, which included $14.5 million of transaction advisory fees related to the Acquisition of Quest, $3.2 million of banker commitment fees, $6.1 million of non-deferrable debt issuance costs related to the incremental term loan, and $2.4 million of other costs, including legal, due diligence, and accounting fees. Included in the transaction advisory fees was $12.0 million paid to Centerview Partners LLC, an investment banking firm that served as the lead financial advisor to the Company for this transaction. Three members of the Company’s Board of Directors, Messrs. Kilts, West, and Ratzan, have business relationships with certain partners of Centerview Partners LLC (including relating to Centerview Capital Consumer, a private equity firm and affiliate of Conyers Park Sponsor LLC), but they are not themselves partners, executives or employees of Centerview Partners LLC, and Centerview Partners LLC is not a related party of the Company pursuant to applicable rules and policies. The advisory fee paid to Centerview Partners LLC represented approximately 1.2% of the total cash purchase price paid by the Company on the closing date of the Acquisition of Quest. All transaction advisory fees relating to the Acquisition of Quest were approved by the Company’s Audit Committee. The following table sets forth the final purchase price allocation of the Acquisition of Quest to the estimated fair value of the net assets acquired at the date of acquisition, in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 25,359 Inventories 44,032 Prepaid assets 1,214 Other current assets 3,812 Property and equipment, net (1) 9,843 Intangible assets, net (2) 868,375 Other long-term assets 20,997 Liabilities assumed: Accounts payable 25,200 Other current liabilities 11,237 Deferred income taxes (3) 10,754 Other long-term liabilities 18,891 Total identifiable net assets 912,295 Goodwill (4) 74,525 Total assets acquired and liabilities assumed $ 986,820 (1) Property and equipment, net primarily consisted of leasehold improvements for the Quest headquarters of $6.9 million, furniture and fixtures of $2.2 million, and equipment of $0.7 million. The Quest headquarters lease ends in April 2029. The useful lives of the leasehold improvements, furniture and fixtures, and equipment are consistent with the Company's accounting policies. (2) Intangible assets were recorded at fair value consistent with ASC 820 as a result of the Acquisition of Quest. Intangible assets consisted of $750.0 million of indefinite brands and trademarks, $115.0 million of amortizable customer relationships, and $3.4 million of internally developed software. The useful lives of the intangible assets are disclosed in Note 5 of the consolidated financial statements. The fair value measurement of the assets and liabilities was based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3 fair market values were determined using a variety of information, including estimated future cash flows and market comparable data and companies. The fair values of the intangible assets were estimated using inputs primarily from the income approach and the with/without method, which estimates the value using the cash flow impact in a hypothetical scenario where the customer relationships are not in place. The significant assumptions used in estimating the fair value of the intangible assets include the estimated life the asset will contribute to cash flows, profitability, and the estimated discount rate. (3) Primarily as a result of the fair value attributable to the identifiable intangible assets, the deferred income tax liability was $10.8 million. (4) Goodwill was recorded at fair value consistent with ASC 820 as a result of the Acquisition of Quest. Amounts recorded for goodwill created in an acquisition structured as a stock purchase for tax are generally not expected to be deductible for tax purposes. Amounts recorded for goodwill resulting in a tax basis step-up are generally expected to be deductible for tax purposes. Tax deductible Goodwill was estimated to be $67.7 million. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Since the initial preliminary estimates reported in the first fiscal quarter of 2020, the Company has updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of assets acquired and liabilities assumed as set forth above. Specifically, the carrying amount of the intangible assets, net were increased by $20.0 million as a result of valuation adjustments related to the Company's finalization of tax attributes, which also resulted in a decrease to deferred income taxes of $3.2 million. Additionally, accounts receivable, net decreased $4.3 million and inventories increased $0.9 million due to fair value measurement period adjustments, and the carrying amount of property and equipment, net decreased by $0.5 million to reflect its estimated fair value. As a result of these adjustments and the change in total net consideration paid of approximately $2.1 million related to net working capital adjustments discussed above, goodwill has decreased $21.5 million. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date. The results of Quest's operations have been included in the Company's Consolidated Financial Statements since November 7, 2019, the date of acquisition. The following table provides net sales from the acquired Quest business included in the Company's results: Thirteen Weeks Ended (in thousands) November 28, 2020 November 30, 2019 Net sales (1) $ 95,769 $ 17,082 (1) Net sales for the thirteen weeks ended November 28, 2020 excludes immaterial international net sales. Unaudited Pro Forma Financial Information Pro forma financial information is not intended to represent or be indicative of the actual results of operations of the combined business that would have been reported had the Acquisition of Quest been completed at the beginning of the fiscal year 2019, nor is it representative of future operating results of the Company. The following unaudited pro forma financial information presents the combined results of the Company and Quest as if the Acquisition of Quest has occurred at the beginning of fiscal 2019: Thirteen Weeks Ended (in thousands) November 30, 2019 Revenue $ 220,556 Gross profit $ 88,188 Net income $ 15,648 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Nov. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues from transactions with external customers for each of the Company’s products would be impracticable to disclose and management does not view its business by product line. The following is a summary of revenue disaggregated by geographic area and brand: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 North America Atkins $ 122,761 $ 127,812 Quest 95,769 17,082 Total North America 218,530 144,894 International 12,622 7,259 Total net sales $ 231,152 $ 152,153 |
Goodwill and Intangibles
Goodwill and Intangibles | 3 Months Ended |
Nov. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Changes to Goodwill during the thirteen week period ended November 28, 2020 were as follows: (in thousands) Goodwill Balance as of August 29, 2020 $ 544,774 Acquisition of business, measurement period adjustment 1,178 Sale of business (2,818) Balance as of November 28, 2020 $ 543,134 The change in Goodwill attributed to the acquisition of a business during the thirteen weeks ended November 28, 2020 was the result of measurement period adjustments made to finalize the acquisition method of accounting for the Acquisition of Quest as described in Note 3. Additionally, effective September 24, 2020, the Company sold the assets exclusively related to its SimplyProtein® brand of products for approximately $8.8 million of consideration, including cash of $5.8 million and a note receivable for $3.0 million, to a newly formed entity led by the Company’s former Canadian-based management team who had been responsible for this brand prior to the sale transaction (the "SimplyProtein Sale"). In addition to purchasing these assets, the buyer assumed certain liabilities related to the SimplyProtein brand’s business. There was no gain or loss recognized as a result of the SimplyProtein Sale. In conjunction with the SimplyProtein Sale, the Company disposed of $2.8 million of goodwill associated with the SimplyProtein business. There were no impairment charges related to goodwill during the thirteen weeks ended November 28, 2020 or since the inception of the Company. Intangible assets, net in the Consolidated Balance Sheets consist of the following: November 28, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 21,403 152,597 Proprietary recipes and formulas 7 years 7,000 3,381 3,619 Licensing agreements 14 years 22,000 5,313 16,687 Software and website development costs 3 - 5 years 5,302 2,365 2,937 Intangible assets in progress 3 - 5 years 55 — 55 $ 1,182,357 $ 32,462 $ 1,149,895 August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years $ 5,967 $ 2,645 $ 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 Changes in Intangible assets, net during the thirteen weeks ended November 28, 2020 were primarily related to the SimplyProtein Sale and recurring amortization expense. In conjunction with the SimplyProtein Sale, the Company sold its SimplyProtein brand intangible asset, which had a carrying value of approximately $5.0 million as of the date of the sale. Amortization expense related to intangible assets during the thirteen weeks ended November 28, 2020 and November 30, 2019 was $3.9 million and $2.3 million, respectively. There were no impairment charges related to intangible assets during the thirteen weeks ended November 28, 2020 and November 30, 2019. Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2021 $ 11,530 2022 15,224 2023 14,938 2024 14,257 2025 13,171 2026 and thereafter 106,720 Total $ 175,840 |
Long-Term Debt and Line of Cred
Long-Term Debt and Line of Credit | 3 Months Ended |
Nov. 28, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | On July 7, 2017, the Company entered into a credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”). The Credit Agreement provides for (i) a term facility of $200.0 million (“Term Facility”) with a seven five On March 16, 2018 (the “Amendment Date”), the Company entered into an amendment (the “Repricing Amendment”) to the Credit Agreement. As a result of the Repricing Amendment, the interest rate on the Term Loan was reduced and, as of the Amendment Date, such loans had an interest rate equal to, at the Company's option, either LIBOR plus an applicable margin of 3.50% or a base rate plus an applicable margin of 2.50%. The Repricing Amendment did not change the interest rate on the Revolving Credit Facility. The Revolving Credit Facility continued to bear interest based upon the Company's consolidated net leverage ratio as of the last financial statements delivered to the administrative agent. No additional debt was incurred, or any proceeds received, by the Company in connection with the Repricing Amendment. The incremental fees paid to the administrative agent are reflected as additional debt discount and are amortized over the terms of the long-term financing agreements using the effective-interest method. On November 7, 2019, the Company entered into an amendment (the “Incremental Facility Amendment”) to the Credit Agreement to increase the principal borrowed on the Term Facility by $460.0 million. The Term Facility together with the incremental borrowing make up the Initial Term Loans (as defined in the Incremental Facility Amendment) and as of the Amendment No. 2 Effective Date (as defined in the Incremental Facility Amendment), the Initial Term Loans bear interest at a rate equal to, at the Company's option, either LIBOR plus an applicable margin of 3.75% or a base rate plus an applicable margin of 2.75%. The Incremental Facility Amendment was executed to partially finance the Acquisition of Quest. No amounts under the Term Facility were repaid as a result of the execution of the Incremental Facility Amendment. The Credit Agreement contains certain financial and other covenants that limit our ability to, among other things, incur and/or undertake asset sales and other dispositions, liens, indebtedness, certain acquisitions and investments, consolidations, mergers, reorganizations and other fundamental changes, payment of dividends and other distributions to equity and warrant holders, and prepayments of material subordinated debt, in each case, subject to customary exceptions materially consistent with credit facilities of such type and size. The Revolving Credit Facility has a maximum total net leverage ratio equal to or less than 6.25:1.00 (with a reduction to 6.00:1.00 on and after the third anniversary of the closing date of the Credit Agreement) contingent on credit extensions in excess of 30% of the total amount of commitments available under the Revolving Credit Facility. Any failure to comply with the restrictions of the credit facilities may result in an event of default. The Company was in compliance with all financial covenants as of November 28, 2020 and August 29, 2020, respectively. Long-term debt consists of the following: (In thousands) November 28, 2020 August 29, 2020 Term Facility (effective rate of 4.8% at November 28, 2020) $ 581,500 $ 606,500 Finance lease liabilities (effective rate of 5.6% at November 28, 2020) 892 922 Less: Deferred financing fees 9,194 10,272 Total debt 573,198 597,150 Less: Current finance lease liabilities 275 271 Long-term debt, net of deferred financing fees $ 572,923 $ 596,879 The Company is not required to make principal payments on the Term Facility over the twelve months following the period ended November 28, 2020. Additionally, as of November 28, 2020 and August 29, 2020, there were no amounts drawn against the Revolving Credit Facility. As of November 28, 2020, the Company had letters of credit in the amount of $4.4 million outstanding. These letters of credit offset against the availability of the Revolving Credit Facility and exist to support three of the Company's leased buildings and insurance programs relating to workers' compensation. No amounts were drawn against these letters of credit at November 28, 2020. The Company utilizes market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates. The Company carries debt at historical cost and discloses fair value. As of November 28, 2020 and August 29, 2020, the book value of the |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Nov. 28, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 – Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 – Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 – Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of November 28, 2020 and August 29, 2020 due to the relatively short maturity of these instruments. |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The tax expense and the effective tax rate resulting from operations were as follows: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 Income (loss) before income taxes $ 30,874 $ (6,522) Provision (benefit) for income taxes $ 8,374 $ (1,729) Effective tax rate 27.1 % 26.5 % The effective tax rate for the thirteen weeks ended November 28, 2020 was 0.6% greater than the effective tax rate for the thirteen weeks ended November 30, 2019, which was primarily driven by other permanent differences. |
Leases
Leases | 3 Months Ended |
Nov. 28, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | The components of lease expense were as follows: Thirteen Weeks Ended (In thousands) Statement of Operations Caption November 28, 2020 November 30, 2019 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 1,498 $ 806 Variable lease cost (1) Cost of goods sold and General and administrative 398 310 Operating lease cost 1,896 1,116 Short term lease cost General and administrative — 6 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 68 70 Interest on lease liabilities Interest expense 13 16 Total finance lease cost 81 86 Total lease cost $ 1,977 $ 1,208 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. In conjunction with the Company's restructuring activities as discussed in Note 15, the Company incurred a $0.4 million impairment charge related to its operating lease right-of-use asset for its lease in Toronto, Ontario during the thirteen weeks ended November 28, 2020. Costs for these restructuring activities have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income. Refer to Note 15, Restructuring and Related Charges, for additional information regarding restructuring activities. The gross amounts of assets and liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheet Caption November 28, 2020 August 29, 2020 Assets Operating lease right- of-use assets Other long-term assets $ 24,532 $ 25,703 Finance lease right-of-use assets Property and equipment, net 844 912 Total lease assets $ 25,376 $ 26,615 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,355 $ 4,329 Finance lease liabilities Current maturities of long-term debt 275 271 Long-term: Operating lease liabilities Other long-term liabilities 21,882 22,764 Finance lease liabilities Long-term debt, less current maturities 617 651 Total lease liabilities $ 27,129 $ 28,015 Future maturities of lease liabilities as of November 28, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2021 $ 4,166 $ 235 2022 4,722 313 2023 4,187 278 2024 4,289 145 2025 3,837 — Thereafter 11,050 — Total lease payments 32,251 971 Less: Interest (6,014) (79) Present value of lease liabilities $ 26,237 $ 892 As of November 28, 2020, the Company had entered into a lease with estimated total minimum future lease payments of $32.2 million over a 10.0-year minimum lease term that had not yet commenced, and as a result it is not recorded on the Consolidated Balance Sheets. The Company expects the lease to commence in fiscal year 2021, and the Company has the option to renew the lease for an additional 5.0 years or 10.0 years after the minimum lease term. The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases were as follows: November 28, 2020 August 29, 2020 Weighted-average remaining lease term (in years) Operating leases 6.78 6.97 Finance leases 3.17 3.41 Weighted-average discount rate Operating leases 5.7 % 5.7 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,811 $ 1,170 Operating cash flows from finance leases 7 11 Financing cash flows from finance leases $ 78 $ 78 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Nov. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Litigation The Company is a party to certain litigation and claims that are considered normal to the operations of the business. From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any litigation that it believes to be material, and the Company is not aware of any pending or threatened litigation against it that its management believes could have a material adverse effect on its business, operating result, financial condition or cash flows. During the fiscal year ended August 31, 2019, the Company reserved $3.5 million for the potential settlement of class action litigation concerning certain product label claims. During the thirteen weeks ended November 30, 2019, the Company reserved an additional $0.3 million. The reserve was included within General and administrative in the Consolidated Statements of Operations and Comprehensive Income, and the reserve was fully paid into escrow and settled during the fiscal year ended August 29, 2020. As of November 28, 2020 and August 29, 2020, the Company had $1.3 million reserved for potential settlements. Other The Company has entered into endorsement contracts with certain celebrity figures and social media influencers to promote and endorse the Atkins and Quest brands and product lines. These contracts contain endorsement fees, which are expensed ratably over the life of the contract, and performance fees, that are recognized at the time of achievement. Based on the terms of the contracts in place and achievement of performance conditions as of November 28, 2020, the Company will be required to make payments of $2.9 million over the next year. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Nov. 28, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Public Equity Offering On October 9, 2019, the Company completed an underwritten public offering of 13,379,205 shares of common stock at a price to the public of $26.35 per share. The Company paid underwriting discounts and commissions of $0.19 per share resulting in net proceeds to the Company of $26.16 per share, or approximately $350.0 million (the “Offering”). The Company paid $0.8 million for legal, accounting and registrations fees related to the Offering. The net proceeds were used to pay a portion of the purchase price and related fees and expenses for the Acquisition of Quest. Equity Warrants Prior to the Acquisition of Atkins, Conyers Park issued 6,700,000 private placement warrants. The Company assumed these private placement warrants in connection with the Acquisition of Atkins. As a result of the Acquisition of Atkins, the warrants issued by Conyers Park were no longer exercisable for shares of Conyers Park common stock, but were instead exercisable for common stock of the Company. All other features of the warrants were unchanged. As of November 28, 2020, the private placement warrants to purchase 6,700,000 shares of the Company’s common stock remain outstanding. Stock Repurchase Program On November 13, 2018, the Company announced that its Board of Directors had adopted a $50.0 million stock repurchase program. Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions. The stock repurchase program does not obligate the Company to acquire any specific number of shares or acquire shares over any specific period of time. The stock repurchase program may be suspended or discontinued at any time by the Company and does not have an expiration date. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Nov. 28, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Basic earnings (loss) per share is based on the weighted average number of common shares issued and outstanding. In periods in which the Company has net income, diluted earnings per share is based on the weighted average number of common shares issued and outstanding and the effect of all dilutive common stock equivalents outstanding during each period. In periods in which the Company has a net loss, diluted earnings per share is based on the weighted average number of common shares issued and outstanding as the effect of including common stock equivalents outstanding would be anti-dilutive. The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings (loss) per share: Thirteen Weeks Ended (In thousands, except per share data) November 28, 2020 November 30, 2019 Basic earnings (loss) per share computation: Numerator: Net income (loss) $ 22,500 $ (4,793) Denominator: Weighted average common shares - basic 95,538,111 89,708,633 Basic earnings (loss) per share from net income (loss) $ 0.24 $ (0.05) Diluted earnings (loss) per share computation: Numerator: Net income (loss) $ 22,500 $ (4,793) Denominator: Weighted average common shares outstanding - basic 95,538,111 89,708,633 Public and Private Warrants 3,216,252 — Employee stock options 899,375 — Non-vested shares 109,381 — Weighted average common shares - diluted 99,763,119 89,708,633 Diluted earnings (loss) per share from net income (loss) $ 0.23 $ (0.05) |
Omnibus Incentive Plan
Omnibus Incentive Plan | 3 Months Ended |
Nov. 28, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Plan | Stock-based compensation includes stock options, restricted stock units, performance stock unit awards and stock appreciation rights, which are awarded to employees, directors, and consultants of the Company. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award based on their grant date fair value. Stock-based compensation expense is included within General and administrative expense, which is the same financial statement caption where the recipient’s other compensation is reported. The Company recorded stock-based compensation expense of $1.1 million and $1.7 million in the thirteen weeks ended November 28, 2020 and November 30, 2019, respectively. Stock Options The following table summarizes stock option activity for the thirteen weeks ended November 28, 2020: Shares Underlying Options Weighted Average Weighted Average Remaining Contractual Life (Years) Outstanding as of August 29, 2020 2,615,899 $ 14.33 Granted 282,952 20.28 Exercised (13,118) 12.00 Forfeited (39,575) 23.08 Outstanding as of November 28, 2020 2,846,158 $ 14.81 7.34 Vested and expected to vest as of November 28, 2020 2,846,158 $ 14.81 7.34 Exercisable as of November 28, 2020 2,228,465 $ 13.22 6.85 As of November 28, 2020, the Company had $4.0 million of total unrecognized compensation cost related to stock option plans that will be recognized over a weighted average period of 2.1 years. During each of the thirteen weeks ended November 28, 2020 and November 30, 2019, the Company received $0.2 million in cash from stock option exercises. Restricted Stock Units The following table summarizes restricted stock unit activity for the thirteen weeks ended November 28, 2020: Restricted Stock Units Weighted average Non-vested as of August 29, 2020 208,023 $ 22.82 Granted 293,907 21.16 Vested (63,759) 26.27 Forfeited (12,530) 23.68 Non-vested as of November 28, 2020 425,641 $ 21.13 As of November 28, 2020, the Company had $8.4 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 2.6 years. Performance Stock Units During the thirteen weeks ended November 28, 2020, the Board of Directors granted performance stock units under the Company’s equity compensation plan. Performance stock units vest in a range between 0% and 200% based upon certain performance criteria in a three The following table summarizes performance stock unit activity for the thirteen weeks ended November 28, 2020: Performance Stock Units Weighted average Non-vested as of August 29, 2020 295,256 $ 17.93 Granted 116,309 23.59 Vested — — Forfeited (26,400) 22.06 Non-vested as of November 28, 2020 385,165 $ 19.35 As of November 28, 2020, the Company had $5.1 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.8 years. Stock Appreciation Rights Stock appreciation rights ("SARs") permit the holder to participate in the appreciation of the Company's common stock price. The Company's SARs settle in shares of its common stock once the applicable vesting criteria has been met. SARs cliff vest 3 years from the date of grant and must be exercised within 10 years. The following table summarizes SARs activity for the thirteen weeks ended November 28, 2020: Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 29, 2020 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of November 28, 2020 150,000 $ 24.20 8.93 Vested and expected to vest as of November 28, 2020 150,000 $ 24.20 8.93 Exercisable as of November 28, 2020 — $ — 0.00 |
Segment and Customer Informatio
Segment and Customer Information | 3 Months Ended |
Nov. 28, 2020 | |
Segment Reporting [Abstract] | |
Segment and Customer Information | Following the Acquisition of Quest, the Company's operations are organized into two operating segments, Atkins and Quest, which are aggregated into one reporting segment due to similar financial, economic and operating characteristics. The operating segments are also similar in the following areas: (a) the nature of the products; (b) the nature of the production processes; (c) the methods used to distribute products to customers, (d) the type of customer for the products; and, (e) the nature of the regulatory environment. |
Restructuring and Related Charg
Restructuring and Related Charges | 3 Months Ended |
Nov. 28, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | In May 2020, the Company announced certain restructuring activities in conjunction with the implementation of the Company’s future-state organization design, which created a fully integrated organization with its completed Acquisition of Quest. The new organization design became effective on August 31, 2020. These restructuring plans primarily include workforce reductions, changes in management structure, and the relocation of business activities from one location to another. The one-time termination benefits and employee severance costs to be incurred in relation to these restructuring activities are accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits, respectively. The Company recognizes a liability and the related expense for these restructuring costs when the liability is incurred and can be measured. Restructuring accruals are based upon management estimates at the time and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded. Changes to the restructuring liability during the thirteen weeks ended November 28, 2020 were as follows: (in thousands) Restructuring Liability Balance as of August 29, 2020 $ 4,139 Charges 2,165 Cash payments (5,966) Non-cash settlements or adjustments — Balance as of November 28, 2020 $ 338 In addition to the $2.2 million restructuring costs incurred related to one-time termination benefits and employee severance as shown above, the Company incurred a $0.4 million restructuring-related impairment charge in the thirteen weeks ended November 28, 2020 related to its operating lease right-of-use asset for its lease in Toronto, Ontario. As a result, for the thirteen weeks ended November 28, 2020, the Company incurred a total of $2.5 million in restructuring and restructuring related costs, which have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Nov. 28, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not expect that the adoption of this ASU will be material to its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. The amendments in this ASU are effective for all entities and can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. The Company will continue to monitor the effects of rate reform, if any, on its contracts and the effects of adoption of this ASU through December 31, 2022. The Company does not anticipate the amendments in this ASU to be material to its consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which provides updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within U.S. GAAP. This ASU is effective for all entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The amendments of this ASU should be applied retrospectively. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not anticipate the adoption of this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), which modified the measurement of expected credit losses of certain financial instruments. The Company adopted this ASU as of the first day of fiscal 2021. As a result of adopting this ASU, the Company changed its method of estimating its allowance for doubtful accounts for trade receivables to be based upon the Company's historical credit loss experience adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. The change in estimating the allowance for doubtful accounts did not have a material effect on the Company's consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modified disclosure requirements on fair value measurements of Accounting Standards Codification (“ASC”) 820. The Company adopted this ASU as of the first day of fiscal 2021. The adoption of this ASU did not have a material effect on the consolidated financial statements or the related disclosures. |
Basis of Accounting, Policy [Policy Text Block] | The interim condensed consolidated financial statements and related notes of the Company and its subsidiaries are unaudited. The unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited interim condensed consolidated financial statements reflect all adjustments and disclosures which are, in our opinion, necessary for a fair presentation of the results of operations, financial position and cash flows for the indicated periods. All such adjustments were of a normal and recurring nature unless otherwise disclosed. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by GAAP have been condensed or omitted. The results reported in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire fiscal year and should be read in conjunction with our consolidated financial statements for the fiscal year ended August 29, 2020, included in our Annual Report on Form 10-K (“Annual Report”), filed with the SEC on October 28, 2020. Additionally, based on the duration and severity of economic effects from the novel coronavirus ("COVID-19") pandemic, including but not limited to stock market volatility, the potential for (i) continued increased rates of reported cases of COVID-19 (which has been referred to as a second wave), (ii) unexpected supply chain disruptions, (iii) changes to customer operations, (iv) continued or additional changes in consumer purchasing and consumption behavior beyond those evidenced to date, and (v) the closure of customer establishments, the Company remains uncertain of the ultimate effect COVID-19 could have on its business |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table sets forth the final purchase price allocation of the Acquisition of Quest to the estimated fair value of the net assets acquired at the date of acquisition, in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 25,359 Inventories 44,032 Prepaid assets 1,214 Other current assets 3,812 Property and equipment, net (1) 9,843 Intangible assets, net (2) 868,375 Other long-term assets 20,997 Liabilities assumed: Accounts payable 25,200 Other current liabilities 11,237 Deferred income taxes (3) 10,754 Other long-term liabilities 18,891 Total identifiable net assets 912,295 Goodwill (4) 74,525 Total assets acquired and liabilities assumed $ 986,820 |
Business Combination, Revenues of Acquired Entity | The results of Quest's operations have been included in the Company's Consolidated Financial Statements since November 7, 2019, the date of acquisition. The following table provides net sales from the acquired Quest business included in the Company's results: Thirteen Weeks Ended (in thousands) November 28, 2020 November 30, 2019 Net sales (1) $ 95,769 $ 17,082 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents the combined results of the Company and Quest as if the Acquisition of Quest has occurred at the beginning of fiscal 2019: Thirteen Weeks Ended (in thousands) November 30, 2019 Revenue $ 220,556 Gross profit $ 88,188 Net income $ 15,648 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues from transactions with external customers for each of the Company’s products would be impracticable to disclose and management does not view its business by product line. The following is a summary of revenue disaggregated by geographic area and brand: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 North America Atkins $ 122,761 $ 127,812 Quest 95,769 17,082 Total North America 218,530 144,894 International 12,622 7,259 Total net sales $ 231,152 $ 152,153 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes to Goodwill during the thirteen week period ended November 28, 2020 were as follows: (in thousands) Goodwill Balance as of August 29, 2020 $ 544,774 Acquisition of business, measurement period adjustment 1,178 Sale of business (2,818) Balance as of November 28, 2020 $ 543,134 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: November 28, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 21,403 152,597 Proprietary recipes and formulas 7 years 7,000 3,381 3,619 Licensing agreements 14 years 22,000 5,313 16,687 Software and website development costs 3 - 5 years 5,302 2,365 2,937 Intangible assets in progress 3 - 5 years 55 — 55 $ 1,182,357 $ 32,462 $ 1,149,895 August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years $ 5,967 $ 2,645 $ 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: November 28, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 21,403 152,597 Proprietary recipes and formulas 7 years 7,000 3,381 3,619 Licensing agreements 14 years 22,000 5,313 16,687 Software and website development costs 3 - 5 years 5,302 2,365 2,937 Intangible assets in progress 3 - 5 years 55 — 55 $ 1,182,357 $ 32,462 $ 1,149,895 August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years $ 5,967 $ 2,645 $ 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2021 $ 11,530 2022 15,224 2023 14,938 2024 14,257 2025 13,171 2026 and thereafter 106,720 Total $ 175,840 |
Long-Term Debt and Line of Cr_2
Long-Term Debt and Line of Credit (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following: (In thousands) November 28, 2020 August 29, 2020 Term Facility (effective rate of 4.8% at November 28, 2020) $ 581,500 $ 606,500 Finance lease liabilities (effective rate of 5.6% at November 28, 2020) 892 922 Less: Deferred financing fees 9,194 10,272 Total debt 573,198 597,150 Less: Current finance lease liabilities 275 271 Long-term debt, net of deferred financing fees $ 572,923 $ 596,879 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The tax expense and the effective tax rate resulting from operations were as follows: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 Income (loss) before income taxes $ 30,874 $ (6,522) Provision (benefit) for income taxes $ 8,374 $ (1,729) Effective tax rate 27.1 % 26.5 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Thirteen Weeks Ended (In thousands) Statement of Operations Caption November 28, 2020 November 30, 2019 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 1,498 $ 806 Variable lease cost (1) Cost of goods sold and General and administrative 398 310 Operating lease cost 1,896 1,116 Short term lease cost General and administrative — 6 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 68 70 Interest on lease liabilities Interest expense 13 16 Total finance lease cost 81 86 Total lease cost $ 1,977 $ 1,208 |
Lease assets and liabilities | The gross amounts of assets and liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheet Caption November 28, 2020 August 29, 2020 Assets Operating lease right- of-use assets Other long-term assets $ 24,532 $ 25,703 Finance lease right-of-use assets Property and equipment, net 844 912 Total lease assets $ 25,376 $ 26,615 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,355 $ 4,329 Finance lease liabilities Current maturities of long-term debt 275 271 Long-term: Operating lease liabilities Other long-term liabilities 21,882 22,764 Finance lease liabilities Long-term debt, less current maturities 617 651 Total lease liabilities $ 27,129 $ 28,015 |
Finance Lease, Liability, Maturity | Future maturities of lease liabilities as of November 28, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2021 $ 4,166 $ 235 2022 4,722 313 2023 4,187 278 2024 4,289 145 2025 3,837 — Thereafter 11,050 — Total lease payments 32,251 971 Less: Interest (6,014) (79) Present value of lease liabilities $ 26,237 $ 892 |
Lessee, Operating Lease, Liability, Maturity | Future maturities of lease liabilities as of November 28, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2021 $ 4,166 $ 235 2022 4,722 313 2023 4,187 278 2024 4,289 145 2025 3,837 — Thereafter 11,050 — Total lease payments 32,251 971 Less: Interest (6,014) (79) Present value of lease liabilities $ 26,237 $ 892 |
Schedule of Weighted Average Remaining Lease Terms | The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases were as follows: November 28, 2020 August 29, 2020 Weighted-average remaining lease term (in years) Operating leases 6.78 6.97 Finance leases 3.17 3.41 Weighted-average discount rate Operating leases 5.7 % 5.7 % Finance leases 5.6 % 5.6 % |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental and other information related to leases was as follows: Thirteen Weeks Ended (In thousands) November 28, 2020 November 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,811 $ 1,170 Operating cash flows from finance leases 7 11 Financing cash flows from finance leases $ 78 $ 78 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings (loss) per share: Thirteen Weeks Ended (In thousands, except per share data) November 28, 2020 November 30, 2019 Basic earnings (loss) per share computation: Numerator: Net income (loss) $ 22,500 $ (4,793) Denominator: Weighted average common shares - basic 95,538,111 89,708,633 Basic earnings (loss) per share from net income (loss) $ 0.24 $ (0.05) Diluted earnings (loss) per share computation: Numerator: Net income (loss) $ 22,500 $ (4,793) Denominator: Weighted average common shares outstanding - basic 95,538,111 89,708,633 Public and Private Warrants 3,216,252 — Employee stock options 899,375 — Non-vested shares 109,381 — Weighted average common shares - diluted 99,763,119 89,708,633 Diluted earnings (loss) per share from net income (loss) $ 0.23 $ (0.05) |
Omnibus Incentive Plan (Tables)
Omnibus Incentive Plan (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity | The following table summarizes stock option activity for the thirteen weeks ended November 28, 2020: Shares Underlying Options Weighted Average Weighted Average Remaining Contractual Life (Years) Outstanding as of August 29, 2020 2,615,899 $ 14.33 Granted 282,952 20.28 Exercised (13,118) 12.00 Forfeited (39,575) 23.08 Outstanding as of November 28, 2020 2,846,158 $ 14.81 7.34 Vested and expected to vest as of November 28, 2020 2,846,158 $ 14.81 7.34 Exercisable as of November 28, 2020 2,228,465 $ 13.22 6.85 |
Restricted stock activity | The following table summarizes restricted stock unit activity for the thirteen weeks ended November 28, 2020: Restricted Stock Units Weighted average Non-vested as of August 29, 2020 208,023 $ 22.82 Granted 293,907 21.16 Vested (63,759) 26.27 Forfeited (12,530) 23.68 Non-vested as of November 28, 2020 425,641 $ 21.13 |
Performance stock unit activity | The following table summarizes performance stock unit activity for the thirteen weeks ended November 28, 2020: Performance Stock Units Weighted average Non-vested as of August 29, 2020 295,256 $ 17.93 Granted 116,309 23.59 Vested — — Forfeited (26,400) 22.06 Non-vested as of November 28, 2020 385,165 $ 19.35 |
Stock appreciation right activity | The following table summarizes SARs activity for the thirteen weeks ended November 28, 2020: Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 29, 2020 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of November 28, 2020 150,000 $ 24.20 8.93 Vested and expected to vest as of November 28, 2020 150,000 $ 24.20 8.93 Exercisable as of November 28, 2020 — $ — 0.00 |
Restructuring and related cha_2
Restructuring and related charges (Tables) | 3 Months Ended |
Nov. 28, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Changes to the restructuring liability during the thirteen weeks ended November 28, 2020 were as follows: (in thousands) Restructuring Liability Balance as of August 29, 2020 $ 4,139 Charges 2,165 Cash payments (5,966) Non-cash settlements or adjustments — Balance as of November 28, 2020 $ 338 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | Nov. 07, 2019 | Oct. 09, 2019 | Nov. 28, 2020 | May 30, 2020 | Nov. 30, 2019 |
Business Acquisition [Line Items] | |||||
Payments to acquire business, equity issuance | $ 350,000 | ||||
Business transaction costs | $ 0 | $ 26,159 | |||
Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 988,900 | ||||
Total purchase price | 986,820 | 986,800 | |||
Payments to acquire business, cash on hand | 195,300 | ||||
Payments to acquire business, equity issuance | $ 350,000 | ||||
Proceeds from long-term line of credit | 443,600 | ||||
Business transaction costs | 26,200 | ||||
Transaction advisory fees | 14,500 | ||||
Banker commitment fees | 3,200 | ||||
Non-deferrable debt issuance costs | 6,100 | ||||
Legal, due diligence and accounting fees | 2,400 | ||||
Intangible assets, net | 868,375 | ||||
Deferred income taxes | 10,754 | ||||
Property and equipment, net | 9,843 | ||||
Goodwill, Purchase Accounting Adjustments | 21,500 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 2,100 | ||||
Acquisition of Quest | Deferred income taxes | |||||
Business Acquisition [Line Items] | |||||
Fair value measurement period adjustment | 3,200 | ||||
Acquisition of Quest | Intangible assets, net | |||||
Business Acquisition [Line Items] | |||||
Fair value measurement period adjustment | 20,000 | ||||
Acquisition of Quest | Accounts receivable, net | |||||
Business Acquisition [Line Items] | |||||
Fair value measurement period adjustment | (4,300) | ||||
Acquisition of Quest | Inventories | |||||
Business Acquisition [Line Items] | |||||
Fair value measurement period adjustment | 900 | ||||
Acquisition of Quest | Property and equipment, net | |||||
Business Acquisition [Line Items] | |||||
Fair value measurement period adjustment | $ (500) | ||||
Centerview Partners | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Transaction advisory fees | 12,000 | ||||
Brands and trademarks | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 750,000 | ||||
Customer relationships | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 115,000 | ||||
Tax deductible goodwill | 67,700 | ||||
Software and website development costs | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 3,400 | ||||
Leasehold improvements | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Property and equipment, net | 6,900 | ||||
Furniture and fixtures | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Property and equipment, net | 2,200 | ||||
Equipment | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Property and equipment, net | $ 700 |
Business Combination (Details 2
Business Combination (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 28, 2020 | Nov. 30, 2019 | Aug. 29, 2020 | Nov. 07, 2019 | |
Business Combination, Consideration Transferred [Abstract] | ||||
Goodwill | $ 543,134 | $ 544,774 | ||
Business Combination, Description [Abstract] | ||||
Net sales | 231,152 | $ 152,153 | ||
Acquisition of Quest | ||||
Business Combination, Consideration Transferred [Abstract] | ||||
Cash and equivalents | $ 4,745 | |||
Accounts receivable, net | 25,359 | |||
Inventories | 44,032 | |||
Prepaid assets | 1,214 | |||
Other current assets | 3,812 | |||
Property and equipment, net | 9,843 | |||
Intangible assets, net | 868,375 | |||
Other long-term assets | 20,997 | |||
Accounts payable | 25,200 | |||
Other current liabilities | 11,237 | |||
Deferred income taxes | 10,754 | |||
Other long-term liabilities | 18,891 | |||
Total identifiable net assets | 912,295 | |||
Goodwill | 74,525 | |||
Total assets acquired and liabilities assumed | 986,800 | $ 986,820 | ||
Quest | Acquisition of Quest | ||||
Business Combination, Description [Abstract] | ||||
Net sales | $ 95,769 | $ 17,082 |
Business Combination (Details 3
Business Combination (Details 3) - Acquisition of Quest $ in Thousands | 3 Months Ended |
Nov. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Pro forma revenue | $ 220,556 |
Pro forma gross profit | 88,188 |
Pro forma net income (loss) | $ 15,648 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Disaggregation of revenue | ||
Net sales | $ 231,152 | $ 152,153 |
North America | ||
Disaggregation of revenue | ||
Net sales | 218,530 | 144,894 |
International | ||
Disaggregation of revenue | ||
Net sales | 12,622 | 7,259 |
Atkins | ||
Disaggregation of revenue | ||
Net sales | 122,761 | 127,812 |
Acquisition of Quest | Quest | ||
Disaggregation of revenue | ||
Net sales | $ 95,769 | $ 17,082 |
Revenue Recognition (Details 2)
Revenue Recognition (Details 2) - USD ($) $ in Millions | 3 Months Ended | ||
Nov. 28, 2020 | Nov. 30, 2019 | Aug. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |||
Allowance for doubtful accounts | $ 0.6 | $ 0.5 | |
Credit loss expense (reversal), accounts receivable | $ 0.1 | $ 0 |
Goodwill and Intangibles Goodwi
Goodwill and Intangibles Goodwill Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Aug. 29, 2020 | |
Goodwill [Line Items] | ||
Goodwill | $ 543,134 | $ 544,774 |
Change in goodwill due to acquisition of a business | 1,178 | |
Goodwill disposed of with sale of business | $ (2,818) |
Goodwill and Intangibles - Narr
Goodwill and Intangibles - Narrative (Details) - USD ($) $ in Thousands | Sep. 24, 2020 | Nov. 28, 2020 | Nov. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Proceeds from SimplyProtein Sale | $ 8,800 | ||
Cash proceeds from SimplyProtein Sale | 5,800 | ||
Note Receivable from SimplyProtein Sale | 3,000 | ||
Gain (loss) on sale of business | 0 | ||
Goodwill, Impaired, Accumulated Impairment Loss | $ 0 | ||
Intangible asset amortization expense | 3,900 | $ 2,300 | |
Indefinite-lived intangible assets disposed of in sale of business | $ 5,000 | ||
Impairment of intangible assets, excluding goodwill | $ 0 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Nov. 28, 2020 | Aug. 29, 2020 | |
Intangible assets with finite lives: | ||
Intangible assets, Gross carrying amount | $ 1,182,357 | $ 1,187,967 |
Accumulated amortization | 32,462 | 29,199 |
Intangible assets, Net carrying amount | 1,149,895 | $ 1,158,768 |
Finite-lived intangible assets, Net carrying amount | $ 175,840 | |
Customer relationships | ||
Intangible assets with finite lives: | ||
Useful life | 15 years | 15 years |
Finite-lived intangible assets, Gross carrying amount | $ 174,000 | $ 174,000 |
Accumulated amortization | 21,403 | 18,503 |
Finite-lived intangible assets, Net carrying amount | 152,597 | 155,497 |
Software and website development costs | ||
Intangible assets with finite lives: | ||
Finite-lived intangible assets, Gross carrying amount | 5,302 | 5,967 |
Accumulated amortization | 2,365 | 2,645 |
Finite-lived intangible assets, Net carrying amount | $ 2,937 | $ 3,322 |
Proprietary recipes and formulas | ||
Intangible assets with finite lives: | ||
Useful life | 7 years | 7 years |
Finite-lived intangible assets, Gross carrying amount | $ 7,000 | $ 7,000 |
Accumulated amortization | 3,381 | 3,131 |
Finite-lived intangible assets, Net carrying amount | $ 3,619 | $ 3,869 |
Licensing agreements | ||
Intangible assets with finite lives: | ||
Useful life | 14 years | 14 years |
Finite-lived intangible assets, Gross carrying amount | $ 22,000 | $ 22,000 |
Accumulated amortization | 5,313 | 4,920 |
Finite-lived intangible assets, Net carrying amount | 16,687 | $ 17,080 |
Intangible assets in progress | ||
Intangible assets with finite lives: | ||
Finite-lived intangible assets, Gross carrying amount | 55 | |
Accumulated amortization | 0 | |
Finite-lived intangible assets, Net carrying amount | $ 55 | |
Minimum | Software and website development costs | ||
Intangible assets with finite lives: | ||
Useful life | 3 years | 3 years |
Minimum | Intangible assets in progress | ||
Intangible assets with finite lives: | ||
Useful life | 3 years | |
Maximum | Software and website development costs | ||
Intangible assets with finite lives: | ||
Useful life | 5 years | 5 years |
Maximum | Intangible assets in progress | ||
Intangible assets with finite lives: | ||
Useful life | 5 years | |
Brands and trademarks | ||
Intangible assets with indefinite lives: | ||
Indefinite-lived intangible assets | $ 974,000 | $ 979,000 |
Goodwill and Intangibles - Sc_2
Goodwill and Intangibles - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 3,900 | $ 2,300 |
Remainder of 2021 | 11,530 | |
2020 | 15,224 | |
2021 | 14,938 | |
2022 | 14,257 | |
2023 | 13,171 | |
2026 and thereafter | 106,720 | |
Finite-lived intangible assets, Net carrying amount | $ 175,840 |
Long-Term Debt and Line of Cr_3
Long-Term Debt and Line of Credit - Narrative (Details) - USD ($) $ in Millions | Nov. 07, 2019 | Mar. 16, 2018 | Jul. 07, 2017 | Nov. 28, 2020 | Aug. 29, 2020 |
Debt Instrument [Line Items] | |||||
Revolving Credit Facility, Amount Outstanding | $ 0 | ||||
Letters of Credit Outstanding, Amount | $ 4.4 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.80% | ||||
Proceeds from long-term line of credit | $ 460 | ||||
Repayments of principal in next twelve months | $ 0 | ||||
Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.75% | ||||
Finance leases | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Effective Percentage | 5.60% | ||||
Barclays Bank PLC and Other Parties | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 200 | ||||
Maturity period | 7 years | ||||
Barclays Bank PLC and Other Parties | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 75 | ||||
Maturity period | 5 years | ||||
Net leverage ratio (equal to or less than) | 6.25 | ||||
Net leverage ratio post reduction (equal to or less than) | 6 | ||||
Percent of commitments (in excess of) | 30.00% | ||||
Line of Credit | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.75% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.50% | 0.50% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Eurocurrency | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.50% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | Eurocurrency | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.00% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 4.00% | ||||
Interest rate floor | 1.00% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | Revolving Credit Facility | Eurocurrency | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.00% | ||||
Line of Credit | Barclays Bank PLC and Other Parties | Revolving Credit Facility | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.00% |
Long-Term Debt and Line of Cr_4
Long-Term Debt and Line of Credit - Schedule of Debt (Details) - USD ($) $ in Thousands | Nov. 28, 2020 | Aug. 29, 2020 |
Debt Disclosure [Abstract] | ||
Term Facility (effective rate of 4.8% at November 28, 2020) | $ 581,500 | $ 606,500 |
Finance lease liabilities (effective rate of 5.6% at November 28, 2020) | 892 | 922 |
Less: Deferred financing fees | 9,194 | 10,272 |
Total debt | 573,198 | 597,150 |
Less: Current finance lease liabilities | (275) | (271) |
Long-term debt, net of deferred financing fees | $ 572,923 | $ 596,879 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 30,874 | $ (6,522) |
Provision (benefit) for income taxes | $ 8,374 | $ (1,729) |
Effective tax rate | 27.10% | 26.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended |
Nov. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate difference | 0.60% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 28, 2020 | Nov. 30, 2019 | Aug. 29, 2020 | |
Components of lease expense | |||
Lease cost | $ 1,498 | $ 806 | |
Variable lease cost (1) | 398 | 310 | |
Operating lease cost | 1,896 | 1,116 | |
Short term lease cost | 0 | 6 | |
Amortization of right-of-use assets | 68 | 70 | |
Interest on lease liabilities | 13 | 16 | |
Total finance lease cost | 81 | 86 | |
Total lease cost | 1,977 | 1,208 | |
Assets and liabilities, lessee | |||
Operating lease, right-of-use asset | 24,532 | $ 25,703 | |
Finance lease, right-of-use asset | 844 | 912 | |
Total lease assets | 25,376 | 26,615 | |
Operating lease, liability, current | 4,355 | 4,329 | |
Finance lease, liability, current | 275 | 271 | |
Operating lease, liability, noncurrent | 21,882 | 22,764 | |
Finance lease, liability, noncurrent | 617 | 651 | |
Total lease liabilities | 27,129 | 28,015 | |
Future maturities of lease liabilities, operating leases | |||
Remainder of 2021 | 4,166 | ||
2021 | 4,722 | ||
2022 | 4,187 | ||
2023 | 4,289 | ||
2024 | 3,837 | ||
Thereafter | 11,050 | ||
Total lease payments | 32,251 | ||
Less: Interest | (6,014) | ||
Present value of lease liabilities | 26,237 | ||
Future maturities of lease liabilities, finance leases | |||
Remainder of 2021 | 235 | ||
2021 | 313 | ||
2022 | 278 | ||
2023 | 145 | ||
2024 | 0 | ||
Thereafter | 0 | ||
Total lease payments | 971 | ||
Less: Interest | (79) | ||
Present value of lease liabilities | 892 | $ 922 | |
Loss on operating lease right-of-use asset impairment | 354 | 0 | |
Lessee, Operating Lease, Lease Not Yet Commences, Expected Payments | $ 32,200 | ||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years | ||
Lessee, Lease, Description [Line Items] | |||
Finance Lease, Weighted Average Discount Rate, Percent | 5.60% | 5.60% | |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 2 months 1 day | 3 years 4 months 28 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 5.70% | 5.70% | |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 9 months 10 days | 6 years 11 months 19 days | |
Supplemental and other information related to leases | |||
Operating cash flows from operating leases | $ 1,811 | 1,170 | |
Operating cash flows from finance leases | 7 | 11 | |
Financing cash flows from finance leases | $ 78 | $ 78 | |
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Lease Not yet Commenced, Renewal Term | 10 years | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Lease Not yet Commenced, Renewal Term | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Aug. 31, 2019 | Nov. 28, 2020 | Aug. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Litigation Settlement, Expense | $ 0.3 | $ 3.5 | ||
Other commitment payment obligation | $ 2.9 | |||
Loss Contingency Accrual | $ 1.3 | $ 1.3 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 09, 2019 | Nov. 28, 2020 | Nov. 30, 2019 |
Class of Stock [Line Items] | |||
Shares, Issued | 13,379,205 | ||
Shares issued price per share to public | $ 26.35 | ||
Underwriting discounts and commissions, Price per share | 0.19 | ||
Shares issued proceeds per shares | $ 26.16 | ||
Proceeds from issuance of equity | $ 350 | ||
Equity Issuance costs, Legal | $ 0.8 | ||
Repurchase of common stock (in shares) | 0 | 0 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 47.9 | ||
Private Placement Warrants | |||
Class of Stock [Line Items] | |||
Class of Warrant or Right, Outstanding | 6,700,000 | ||
Treasury Stock | |||
Class of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 50 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Numerator: | ||
Net income (loss) | $ 22,500 | $ (4,793) |
Denominator: | ||
Weighted average common shares - basic (in shares) | 95,538,111 | 89,708,633 |
Basic earnings per share from net income (in dollars per share) | $ 0.24 | $ (0.05) |
Numerator: | ||
Net income (loss) | $ 22,500 | $ (4,793) |
Denominator: | ||
Weighted average common shares - basic (in shares) | 95,538,111 | 89,708,633 |
Public and Private Warrants | 3,216,252 | 0 |
Employee stock options | 899,375 | 0 |
Non-vested shares | 109,381 | 0 |
Weighted average common shares - diluted (in shares) | 99,763,119 | 89,708,633 |
Diluted earnings per share from net income (in dollars per share) | $ 0.23 | $ (0.05) |
Stock Options | ||
Earnings per share, diluted | ||
Antidilutive securities excluded from computation of earnings per share | 700,000 | 2,700,000 |
Restricted Stock Units | ||
Earnings per share, diluted | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 300,000 |
Omnibus Incentive Plan (Details
Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | $ 1,110 | $ 1,673 |
Stock compensation expense | $ 1,110 | $ 1,673 |
Omnibus Incentive Plan - Stock
Omnibus Incentive Plan - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 28, 2020 | Nov. 30, 2019 | |
Additional disclosures | ||
Proceeds from option exercises | $ 157 | $ 208 |
Stock Options | ||
Shares | ||
Outstanding at beginning of period (in shares) | 2,615,899 | |
Granted (in shares) | 282,952 | |
Exercised (in shares) | (13,118) | |
Forfeited (in shares) | (39,575) | |
Outstanding at end of period (in shares) | 2,846,158 | |
Options vested or expected to vest (in shares) | 2,846,158 | |
Exercisable (in shares) | 2,228,465 | |
Weighted average exercise price | ||
Outstanding at beginning of period (in dollars per share) | $ 14.33 | |
Granted (in dollars per share) | 20.28 | |
Exercised (in dollars per share) | 12 | |
Forfeited (in dollars per share) | 23.08 | |
Outstanding at end of period (in dollars per share) | 14.81 | |
Options vested or expected to vest (in dollars per share) | 14.81 | |
Exercisable (in dollars per share) | $ 13.22 | |
Weighted average remaining contractual term | ||
Outstanding at end of period, weighted average remaining contractual life | 7 years 4 months 2 days | |
Vested and expected to vest at end of period, weighted average remaining contractual life | 7 years 4 months 2 days | |
Exercisable at end of period, weighted average remaining contractual life | 6 years 10 months 6 days | |
Additional disclosures | ||
Unrecognized compensation costs | $ 4,000 | |
Period for recognition of unrecognized compensation cost | 2 years 1 month 6 days |
Omnibus Incentive Plan - Restri
Omnibus Incentive Plan - Restricted Stock Units Activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 3 Months Ended |
Nov. 28, 2020USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 208,023 |
Granted (in shares) | shares | 293,907 |
Vested (in shares) | shares | (63,759) |
Forfeited (in shares) | shares | (12,530) |
Non-vested at end of period (in shares) | shares | 425,641 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 22.82 |
Granted (in dollars per share) | $ / shares | 21.16 |
Vested (in dollars per share) | $ / shares | 26.27 |
Forfeited (in dollars per share) | $ / shares | 23.68 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 21.13 |
Additional disclosures | |
Unrecognized compensation costs | $ | $ 8.4 |
Period for recognition of unrecognized compensation cost | 2 years 7 months 6 days |
Omnibus Incentive Plan - Perfor
Omnibus Incentive Plan - Performance Stock Units Activity (Details) - Performance Stock Units $ / shares in Units, $ in Millions | 3 Months Ended |
Nov. 28, 2020USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 295,256 |
Granted (in shares) | shares | 116,309 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (26,400) |
Non-vested at end of period (in shares) | shares | 385,165 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 17.93 |
Granted (in dollars per share) | $ / shares | 23.59 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 22.06 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 19.35 |
Additional disclosures | |
Period for recognition of unrecognized compensation cost | 1 year 9 months 18 days |
Unrecognized compensation costs | $ | $ 5.1 |
Requisite service period | 3 years |
Minimum | |
Additional disclosures | |
Performance stock vesting range | 0.00% |
Maximum | |
Additional disclosures | |
Performance stock vesting range | 200.00% |
Omnibus Incentive Plan - Stoc_2
Omnibus Incentive Plan - Stock Appreciation Rights (Activity) (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Nov. 28, 2020USD ($)$ / sharesshares | |
Additional disclosures | |
Award vesting period | 3 years |
Award expiration period | 10 years |
Stock Appreciation Rights (SARs) | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 150,000 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 150,000 |
Options vested or expected to vest (in shares) | shares | 150,000 |
Exercisable (in shares) | shares | 0 |
Weighted average exercise price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 24.20 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | 24.20 |
Options vested or expected to vest (in dollars per share) | $ / shares | 24.20 |
Exercisable (in dollars per share) | $ / shares | $ 0 |
Weighted average remaining contractual term | |
Vested and expected to vest at end of period, weighted average remaining contractual life | 8 years 11 months 4 days |
Outstanding at end of period, weighted average remaining contractual life | 8 years 11 months 4 days |
Exercisable at end of period, weighted average remaining contractual life | 0 years |
Additional disclosures | |
Unrecognized compensation costs | $ | $ 0.3 |
Period for recognition of unrecognized compensation cost | 1 year 11 months 4 days |
Segment and Customer Informat_2
Segment and Customer Information (Details) | 3 Months Ended |
Nov. 28, 2020 | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Restructuring and related cha_3
Restructuring and related charges (Details) $ in Thousands | 3 Months Ended |
Nov. 28, 2020USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring, Incurred cost | $ 2,500 |
Restructuring and Related Cost, Cost Incurred to Date | 8,000 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring, Expected cost | 9,200 |
Changes to the restructuring liability | |
Balance as of August 29, 2020 | 4,139 |
Charges | 2,165 |
Cash payments | (5,966) |
Non-cash settlements or adjustments | 0 |
Balance as of November 28, 2020 | $ 338 |