Cover
Cover - shares | 3 Months Ended | |
Nov. 27, 2021 | Jan. 03, 2022 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001702744 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 27, 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity File Number | 001-38115 | |
Entity Registrant Name | The Simply Good Foods Company | |
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 $0.01 per share | |
Trading Symbol | SMPL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Current Fiscal Year End Date | --08-27 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 96,132,194 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 27, 2021 | Aug. 28, 2021 |
Current assets: | ||
Cash | $ 35,447 | $ 75,345 |
Accounts receivable, net | 125,195 | 111,456 |
Inventories | 112,433 | 97,269 |
Prepaid expenses | 4,893 | 4,902 |
Other current assets | 9,669 | 9,694 |
Total current assets | 287,637 | 298,666 |
Long-term assets: | ||
Property and equipment, net | 17,416 | 16,584 |
Intangible assets, net | 1,135,068 | 1,139,041 |
Goodwill | 543,134 | 543,134 |
Other long-term assets | 60,081 | 54,792 |
Total assets | 2,043,336 | 2,052,217 |
Current liabilities: | ||
Accounts payable | 44,811 | 59,713 |
Accrued interest | 0 | 60 |
Accrued expenses and other current liabilities | 35,665 | 53,606 |
Current maturities of long-term debt | 289 | 285 |
Total current liabilities | 80,765 | 113,664 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 427,017 | 451,269 |
Deferred income taxes | 100,499 | 93,755 |
Warrant liability | 177,152 | 159,835 |
Other long-term liabilities | 48,296 | 44,890 |
Total liabilities | 833,729 | 863,413 |
See commitments and contingencies (Note 9) | ||
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, 96,130,441 and 95,882,908 shares issued at November 27, 2021 and August 28, 2021, respectively | 961 | 959 |
Treasury stock, 98,234 shares at cost at November 27, 2021 and August 28, 2021 | (2,145) | (2,145) |
Additional paid-in-capital | 1,084,690 | 1,085,001 |
Retained earnings | 126,959 | 105,807 |
Accumulated other comprehensive loss | (858) | (818) |
Total stockholders’ equity | 1,209,607 | 1,188,804 |
Total liabilities and stockholders’ equity | $ 2,043,336 | $ 2,052,217 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Nov. 27, 2021 | Aug. 28, 2021 |
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) | 96,130,441 | 95,882,908 |
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. 27, 2021 | Nov. 28, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 281,265 | $ 231,152 |
Cost of goods sold | 164,710 | 137,111 |
Gross profit | 116,555 | 94,041 |
Operating expenses: | ||
Selling and marketing | 30,527 | 25,195 |
General and administrative | 23,702 | 25,415 |
Depreciation and amortization | 4,320 | 4,244 |
Total operating expenses | 58,549 | 54,854 |
Income from operations | 58,006 | 39,187 |
Other income (expense): | ||
Interest income | 1 | 3 |
Interest expense | (6,371) | (8,372) |
(Loss) gain in fair value change of warrant liability | (17,317) | 20,453 |
(Loss) gain on foreign currency transactions | (353) | 9 |
Other income | 9 | 47 |
Total other (expense) income | (24,031) | 12,140 |
Income before income taxes | 33,975 | 51,327 |
Income tax expense | 12,823 | 8,374 |
Net income | 21,152 | 42,953 |
Other comprehensive income: | ||
Foreign currency translation adjustments | (40) | (45) |
Comprehensive income | $ 21,112 | $ 42,908 |
Earnings per share from net income: | ||
Basic (in dollars per share) | $ 0.22 | $ 0.45 |
Diluted (in dollars per share) | $ 0.22 | $ 0.23 |
Weighted average shares outstanding: | ||
Basic (in shares) | 95,856,845 | 95,538,111 |
Diluted (in shares) | 97,861,573 | 99,763,119 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Operating activities | ||
Net income | $ 21,152 | $ 42,953 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 4,741 | 4,513 |
Amortization of deferred financing costs and debt discount | 821 | 1,077 |
Stock compensation expense | 2,605 | 1,110 |
Loss (gain) in fair value change of warrant liability | 17,317 | (20,453) |
Contract with Customer, Receivable, Credit Loss Expense (Reversal) | 15 | 0 |
Unrealized loss on foreign currency transactions | 353 | 9 |
Deferred income taxes | 6,687 | 4,400 |
Amortization of operating lease right-of-use asset | 1,643 | 1,182 |
Loss on operating lease right-of-use asset impairment | 0 | 354 |
Gain on termination of lease | (30) | 0 |
Other operating activities | (27) | 402 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (13,993) | (8,604) |
Inventories | (15,331) | (18,138) |
Prepaid expenses | 0 | (558) |
Other current assets | (98) | 2,874 |
Accounts payable | (14,220) | 8,216 |
Accrued interest | (60) | (240) |
Accrued expenses and other current liabilities | (17,902) | (5,127) |
Other assets and liabilities | (1,002) | 1,227 |
Net cash (used in) provided by operating activities | (7,329) | 15,197 |
Investing activities | ||
Purchases of property and equipment | (2,691) | (93) |
Issuance of notes receivable | (1,500) | 0 |
Proceeds from sale of business | 0 | 5,800 |
Investments in intangible assets | (186) | (114) |
Net cash (used in) provided by investing activities | (4,377) | 5,593 |
Financing activities | ||
Proceeds from option exercises | 274 | 157 |
Tax payments related to issuance of restricted stock units and performance stock units | (3,188) | (201) |
Financing cash flows from finance leases | (78) | (78) |
Repayments of Long-term Debt | (25,000) | (25,000) |
Net cash used in financing activities | (27,992) | (25,122) |
Net decrease in cash | (39,698) | (4,332) |
Cash and cash equivalents | ||
Effect of exchange rate on cash | (200) | (39) |
Cash at beginning of period | 75,345 | 95,847 |
Cash and cash equivalents at end of period | 35,447 | 91,476 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 5,731 | 7,535 |
Cash paid for taxes | 8,775 | 282 |
Non-cash proceeds from sale of business | 0 | 3,000 |
Operating lease right-of-use assets recognized after ASU 2016-02 transition | $ 5,551 | $ 306 |
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. 29, 2020 | $ 1,139,333 | $ 958 | $ (2,145) | $ 1,076,472 | $ 64,927 | $ (879) |
Beginning balance (in shares) at Aug. 29, 2020 | 95,751,845 | |||||
Beginning balance, Treasury (in shares) at Aug. 29, 2020 | 98,234 | |||||
Net income | 42,953 | 42,953 | ||||
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 | |||||
Ending balance at Nov. 28, 2020 | 1,183,307 | $ 958 | $ (2,145) | 1,077,538 | 107,880 | (924) |
Treasury Stock, Value | 2,145 | $ (2,145) | ||||
Additional paid-in-capital | 1,085,001 | 1,085,001 | ||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 96,130,441 and 95,882,908 shares issued at November 27, 2021 and August 28, 2021, respectively | 959 | $ 959 | ||||
Accumulated other comprehensive loss | (818) | (818) | ||||
Beginning balance at Aug. 28, 2021 | $ 1,188,804 | 105,807 | ||||
Beginning balance (in shares) at Aug. 28, 2021 | 95,882,908 | |||||
Beginning balance, Treasury (in shares) at Aug. 28, 2021 | 98,234 | 98,234 | ||||
Net income | $ 21,152 | 21,152 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 2,605 | 2,605 | ||||
Foreign currency translation adjustments | (40) | (40) | ||||
Shares issued upon vesting of Restricted Stock Units | (3,188) | $ 2 | (3,190) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 227,729 | |||||
Exercise of options to purchase common stock | $ 274 | $ 0 | 274 | |||
Exercise of options to purchase common stock (in shares) | 19,804 | |||||
Ending balance (in shares) at Nov. 27, 2021 | 96,130,441 | |||||
Ending balance, Treasury (in shares) at Nov. 27, 2021 | 98,234 | 98,234 | ||||
Ending balance at Nov. 27, 2021 | $ 1,209,607 | $ 126,959 | ||||
Treasury Stock, Value | 2,145 | $ (2,145) | ||||
Additional paid-in-capital | 1,084,690 | $ 1,084,690 | ||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 96,130,441 and 95,882,908 shares issued at November 27, 2021 and August 28, 2021, respectively | 961 | $ 961 | ||||
Accumulated other comprehensive loss | $ (858) | $ (858) |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 3 Months Ended |
Nov. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Principles of Consolidation | Description of Business The Simply Good Foods Company (“Simply Good Foods” or the “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 product portfolio the Company develops, markets and sells consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Atkins®, Atkins Endulge®, and Quest® brand names. Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space. The Company’s nutritious snacking platform consists of brands that specialize in providing products for consumers that follow certain nutritional philosophies and health-and-wellness trends: Atkins® for those following a low-carb lifestyle and Quest® for consumers seeking 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 common stock of Simply Good Foods is listed on the Nasdaq Capital Market under the symbol “SMPL.” Unaudited Interim Condensed Consolidated Financial Statements The unaudited interim 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. 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 the Company’s 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 the Company’s consolidated financial statements for the fiscal year ended August 28, 2021, included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on October 26, 2021. The Company remains uncertain of the ultimate effect COVID-19 could have on its business notwithstanding the distribution of several U.S. government approved vaccines, the availability of booster inoculations and the easing of movement restrictions relative to the onset of COVID-19. This uncertainty stems from the potential for, among other things, (i) the rise of COVID-19 mutations that have resulted in increased rates of reported cases for which currently approved vaccines are or may not be as effective, (ii) unexpected supply chain disruptions, including disruptions resulting from labor shortages or other human capital challenges, (iii) changes to customer operations, (iv) a reversal in recently improving consumer purchasing and consumption behavior, and (v) the closure of or reduced access to customer establishments. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Nov. 27, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Refer to Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in the Annual Report for a description of significant accounting policies. Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 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 and 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 any new or amended contracts through December 31, 2022. The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes. This ASU was 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 GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The Company adopted this ASU as of the first day of fiscal year 2022. The adoption of this ASU did not have a material effect on the consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which provided updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within GAAP. The Company adopted this ASU as of the first day of fiscal year 2022 on a prospective basis. The adoption of this ASU did not have a material effect on the consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Nov. 27, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue 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 core brands: Thirteen Weeks Ended (In thousands) November 27, 2021 November 28, 2020 North America (1) Atkins $ 133,794 $ 122,761 Quest (2) 138,294 95,769 Total North America 272,088 218,530 International 9,177 12,622 Total net sales $ 281,265 $ 231,152 (1) The North America geographic area consists of net sales substantially related to the United States and there is no individual foreign country to which more than 10% of the Company’s net sales are attributed or that is otherwise deemed individually material. (2) Quest net sales are primarily in North America. Charges related to credit loss on accounts receivables from transactions with external customers were immaterial for the thirteen weeks ended November 27, 2021 and approximately $0.1 million for the thirteen weeks ended November 28, 2020. As of November 27, 2021 and August 28, 2021, the allowances for doubtful accounts related to these accounts receivable were $1.2 million and $1.1 million, respectively. |
Goodwill and Intangibles
Goodwill and Intangibles | 3 Months Ended |
Nov. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | As of November 27, 2021 and August 28, 2021, Goodwill in the Condensed Consolidated Balance Sheets was $543.1 million. There were no impairment charges related to goodwill during the thirteen weeks ended November 27, 2021 or since the inception of the Company. Intangible assets, net in the Condensed Consolidated Balance Sheets consists of the following: November 27, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 33,003 140,997 Licensing agreements 13 years 22,000 7,144 14,856 Proprietary recipes and formulas 7 years 7,000 4,381 2,619 Software and website development costs 3 - 5 years 5,863 3,267 2,596 $ 1,182,863 $ 47,795 $ 1,135,068 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 30,103 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 Changes in Intangible assets, net during the thirteen weeks ended November 27, 2021 were primarily related to recurring amortization expense. Amortization expense related to intangible assets was $4.0 million and $3.9 million for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. There were no impairment charges related to intangible assets during the thirteen weeks ended November 27, 2021 and November 28, 2020. Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2022 $ 11,867 2023 15,602 2024 14,917 2025 13,517 2026 13,517 2027 and thereafter 91,648 Total $ 161,068 |
Long-Term Debt and Line of Cred
Long-Term Debt and Line of Credit | 3 Months Ended |
Nov. 27, 2021 | |
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 at that time provided for (i) a term facility of $200.0 million (“Term Facility”) with a seven year maturity and (ii) a revolving credit facility of up to $75.0 million (the “Revolving Credit Facility”) with a 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 a second 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 Nutrition, LLC on November 7, 2019. No amounts under the Term Facility were repaid as a result of the execution of the Incremental Facility Amendment. Effective as of December 16, 2021, the Company entered into a third amendment (the “Extension Amendment”) to the Credit Agreement. The Extension Amendment provides for an extension of the stated maturity date of the Revolving Commitments and Revolving Loans (each as defined in the Credit Agreement) from July 7, 2022 to the earlier of (i) 91 days prior to the maturity date of the Initial Term Loans on July 7, 2024 and (ii) December 16, 2026. The Credit Agreement contains certain financial and other covenants that limit the Company’s 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 6.00:1.00 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 27, 2021 and August 28, 2021, respectively. Long-term debt consists of the following: (In thousands) November 27, 2021 August 28, 2021 Term Facility (effective rate of 4.8% at November 27, 2021) 431,500 456,500 Finance lease liabilities (effective rate of 5.6% at November 27, 2021) 620 690 Less: Deferred financing fees 4,814 5,636 Total debt 427,306 451,554 Less: Current finance lease liabilities 289 285 Long-term debt, net of deferred financing fees $ 427,017 $ 451,269 The Company is not required to make principal payments on the Term Facility over the twelve months following the period ended November 27, 2021. The outstanding balance of the Term Facility is due upon its maturity in July 2024. As of November 27, 2021, the Company had letters of credit in the amount of $3.5 million outstanding. These letters of credit offset against the $75.0 million 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 27, 2021. 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 27, 2021 and August 28, 2021, the book value of the Company’s debt approximated fair value. The estimated fair value of the Term Loan is valued based on observable inputs and classified as Level 2 in the fair value hierarchy. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Nov. 27, 2021 | |
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 used: 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. Level 3 Measurements The Company has outstanding liability-classified Private Warrants that allow holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants are held by Conyers Park Sponsor, LLC, a related party. The Company utilizes the Black-Scholes model to estimate the fair value of the Private Warrants at each reporting date. The application of the Black-Scholes model utilizes significant assumptions, including volatility. Significant judgment is required in determining the expected volatility, historically the key assumption, of the Private Warrants. In order to determine the most accurate measure of this volatility, the Company measured expected volatility based on several inputs, including considering a peer group of publicly traded companies, the Company’s implied volatility based on traded options, the implied volatility of comparable warrants, and the implied volatility of any outstanding public warrants during the periods they were outstanding. As a result of the unobservable inputs that were used to determine the expected volatility of the Private Warrants, the fair value measurement of these warrants reflects a Level 3 measurement within the fair value measurement hierarchy. There were 6,700,000 Private Warrants outstanding as of November 27, 2021 and November 28, 2020. The table below summarizes the inputs used to calculate the fair value of the warrant liability at each of the following reporting dates: November 27, 2021 November 28, 2020 Exercise Price $ 11.50 $ 11.50 Stock Price $ 37.93 $ 22.36 Dividend Yield — % — % Expected Term (in Years) 0.61 1.60 Risk-Free Interest Rate 0.15 % 0.14 % Expected Volatility 27.34 % 25.60 % Per Share Value of Warrants $ 26.44 $ 10.92 The periodic remeasurement of the warrant liability is reflected in (Loss) gain in fair value change of warrant liability within the Condensed Consolidated Statements of Operations and Comprehensive Income. The adjustments for the thirteen weeks ended November 27, 2021 and November 28, 2020 were a loss of $17.3 million and a gain of $20.5 million, respectively. The adjustments resulted in a total warrant liability at November 27, 2021 and November 28, 2020 of $177.2 million and $73.2 million, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 27, 2021 | |
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 27, 2021 November 28, 2020 Income before income taxes $ 33,975 $ 51,327 Income tax expense $ 12,823 $ 8,374 Effective tax rate 37.7 % 16.3 % The effective tax rate for the thirteen weeks ended November 27, 2021 was 21.4% greater than the effective tax rate for the thirteen weeks ended November 28, 2020, which was primarily driven by the non-cash change in the fair value of the warrant liability and other permanent differences. |
Leases
Leases | 3 Months Ended |
Nov. 27, 2021 | |
Leases [Abstract] | |
Lessee, Operating Leases | The components of lease expense were as follows: Thirteen Weeks Ended (In thousands) Statements of Operations Caption November 27, 2021 November 28, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 2,255 $ 1,498 Variable lease cost (1) Cost of goods sold and General and administrative 653 398 Total operating lease cost 2,908 1,896 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 68 68 Interest on lease liabilities Interest expense 9 13 Total finance lease cost 77 81 Total lease cost $ 2,985 $ 1,977 (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 13, Restructuring and Related Charges, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the thirteen weeks ended November 27, 2021 and a $0.4 million impairment charge related to its operating lease right-of-use asset for its lease in Toronto, Ontario in the thirteen weeks ended November 28, 2020. The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income. Refer to Note 13, Restructuring and Related Charges, for additional information regarding restructuring activities. The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption November 27, 2021 August 28, 2021 Assets Operating lease right-of-use assets Other long-term assets $ 50,116 $ 46,197 Finance lease right-of-use assets Property and equipment, net 571 640 Total lease assets $ 50,687 $ 46,837 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,774 $ 3,788 Finance lease liabilities Current maturities of long-term debt 289 285 Long-term: Operating lease liabilities Other long-term liabilities 48,297 44,892 Finance lease liabilities Long-term debt, less current maturities 331 405 Total lease liabilities $ 53,691 $ 49,370 Future maturities of lease liabilities as of November 27, 2021 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2022 $ 5,490 $ 235 2023 8,349 278 2024 9,212 145 2025 8,462 — 2026 6,655 — Thereafter 26,063 — Total lease payments 64,231 658 Less: Interest (11,160) (38) Present value of lease liabilities $ 53,071 $ 620 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: November 27, 2021 August 28, 2021 Weighted-average remaining lease term (in years) Operating leases 7.83 8.38 Finance leases 2.20 2.44 Weighted-average discount rate Operating leases 4.8 % 4.9 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: Thirteen Weeks Ended (In thousands) November 27, 2021 November 28, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,054 $ 1,811 Operating cash flows from finance leases $ 148 $ 7 Financing cash flows from finance leases $ 78 $ 78 |
Lessee, Finance Leases | The components of lease expense were as follows: Thirteen Weeks Ended (In thousands) Statements of Operations Caption November 27, 2021 November 28, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 2,255 $ 1,498 Variable lease cost (1) Cost of goods sold and General and administrative 653 398 Total operating lease cost 2,908 1,896 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 68 68 Interest on lease liabilities Interest expense 9 13 Total finance lease cost 77 81 Total lease cost $ 2,985 $ 1,977 (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 13, Restructuring and Related Charges, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the thirteen weeks ended November 27, 2021 and a $0.4 million impairment charge related to its operating lease right-of-use asset for its lease in Toronto, Ontario in the thirteen weeks ended November 28, 2020. The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income. Refer to Note 13, Restructuring and Related Charges, for additional information regarding restructuring activities. The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption November 27, 2021 August 28, 2021 Assets Operating lease right-of-use assets Other long-term assets $ 50,116 $ 46,197 Finance lease right-of-use assets Property and equipment, net 571 640 Total lease assets $ 50,687 $ 46,837 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,774 $ 3,788 Finance lease liabilities Current maturities of long-term debt 289 285 Long-term: Operating lease liabilities Other long-term liabilities 48,297 44,892 Finance lease liabilities Long-term debt, less current maturities 331 405 Total lease liabilities $ 53,691 $ 49,370 Future maturities of lease liabilities as of November 27, 2021 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2022 $ 5,490 $ 235 2023 8,349 278 2024 9,212 145 2025 8,462 — 2026 6,655 — Thereafter 26,063 — Total lease payments 64,231 658 Less: Interest (11,160) (38) Present value of lease liabilities $ 53,071 $ 620 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: November 27, 2021 August 28, 2021 Weighted-average remaining lease term (in years) Operating leases 7.83 8.38 Finance leases 2.20 2.44 Weighted-average discount rate Operating leases 4.8 % 4.9 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: Thirteen Weeks Ended (In thousands) November 27, 2021 November 28, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,054 $ 1,811 Operating cash flows from finance leases $ 148 $ 7 Financing cash flows from finance leases $ 78 $ 78 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Nov. 27, 2021 | |
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 results, financial condition or cash flows. As of November 27, 2021 and August 28, 2021, the Company had $0.7 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 27, 2021, the Company will be required to make payments of $2.1 million over the next year. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Nov. 27, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Warrants to Purchase Common Stock As of November 27, 2021, the Company has outstanding liability-classified Private Warrants that allow holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants are held by Conyers Park Sponsor, LLC, a related party. Each whole warrant entitles the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. The warrants expire on July 7, 2022 or earlier upon redemption or liquidation, as applicable. As discussed in Note 6, Fair Value of Financial Instruments, the liability-classified warrants are remeasured on a recurring basis, primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represents a Level 3 measurement within the fair value measurement hierarchy. The periodic remeasurement of the warrant liability is reflected in (Loss) gain in fair value change of warrant liability within the Condensed Consolidated Statements of Operations and Comprehensive Income. 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. During the thirteen weeks ended November 27, 2021 and November 28, 2020, the Company did not repurchase any shares of common stock. As of November 27, 2021, approximately $47.9 million remained available under the stock repurchase program. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Nov. 27, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Basic earnings or loss per share is based on the weighted average number of common shares issued and outstanding. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive securities. 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. As of November 27, 2021, the Company has outstanding liability-classified Private Warrants to purchase 6,700,000 shares of the Company’s common stock. During periods when the effect is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares, calculated using the treasury stock method. During periods when the impact is anti-dilutive, the share settlement is excluded. The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share: Thirteen Weeks Ended (In thousands, except per share data) November 27, 2021 November 28, 2020 Basic earnings per share computation: Numerator: Net income available to common stockholders $ 21,152 $ 42,953 Denominator: Weighted average common shares outstanding - basic 95,856,845 95,538,111 Basic earnings per share from net income $ 0.22 $ 0.45 Diluted earnings per share computation: Numerator: Net income available for common stockholders $ 21,152 $ 42,953 Gain in fair value change of warrant liability — (20,453) Numerator for diluted earnings per share $ 21,152 $ 22,500 Denominator: Weighted average common shares outstanding - basic 95,856,845 95,538,111 Private Warrants — 3,216,252 Employee stock options 1,652,577 899,375 Non-vested shares 352,151 109,381 Weighted average common shares - diluted 97,861,573 99,763,119 Diluted earnings per share from net income $ 0.22 $ 0.23 The diluted earnings per share calculation for the thirteen weeks ended November 27, 2021 excluded 4.6 million shares, issuable upon exercise of Private Warrants, that would have been anti-dilutive. Diluted earnings per share calculations for the thirteen weeks ended November 27, 2021 and November 28, 2020 excluded 0.2 million and 0.7 million shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive. An immaterial number of non-vested restricted stock units that would have been anti-dilutive were excluded from diluted earnings per share calculations for the thirteen weeks ended November 27, 2021 and November 28, 2020. |
Omnibus Incentive Plan
Omnibus Incentive Plan | 3 Months Ended |
Nov. 27, 2021 | |
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. Stock Options The following table summarizes stock option activity for the thirteen weeks ended November 27, 2021: Shares underlying options Weighted average Weighted average remaining contractual life (years) Outstanding as of August 28, 2021 2,993,163 $ 16.31 Granted 138,479 40.88 Exercised (19,804) 13.83 Forfeited (2,300) 19.89 Outstanding as of November 27, 2021 3,109,538 $ 17.42 6.73 Vested and expected to vest as of November 27, 2021 3,109,538 $ 17.42 6.73 Exercisable as of November 27, 2021 2,494,944 $ 14.13 6.10 As of November 27, 2021, the Company had $6.5 million of total unrecognized compensation cost related to stock option plans that will be recognized over a weighted average period of 2.3 years. During the thirteen weeks ended November 27, 2021 and November 28, 2020, the Company received $0.3 million and $0.2 million in cash from stock option exercises, respectively. Restricted Stock Units The following table summarizes restricted stock unit activity for the thirteen weeks ended November 27, 2021: Units Weighted average Non-vested as of August 28, 2021 496,334 $ 24.56 Granted 129,423 39.54 Vested (139,459) 22.13 Forfeited (10,675) 25.72 Non-vested as of November 27, 2021 475,623 $ 29.34 As of November 27, 2021, the Company had $12.1 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 2.0 years. Performance Stock Units During the thirteen weeks ended November 27, 2021, 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 27, 2021: Units Weighted average Non-vested as of August 28, 2021 380,097 $ 19.31 Granted 50,212 63.42 Vested (166,688) 11.93 Forfeited (6,350) 16.48 Non-vested as of November 27, 2021 257,271 $ 32.77 As of November 27, 2021, the Company had $5.7 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 and are awarded to non-employee, consultants of the Company. The Company’s SARs settle in shares of its common stock once the applicable vesting criteria has been met. SARs cliff vest three years from the date of grant and must be exercised within ten years. The following table summarizes SARs activity for the thirteen weeks ended November 27, 2021: Shares underlying SARs Weighted average Weighted average remaining contractual life (years) Outstanding as of August 28, 2021 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of November 27, 2021 150,000 $ 24.20 7.93 Vested and expected to vest as of November 27, 2021 150,000 $ 24.20 7.93 Exercisable as of November 27, 2021 — $ — 0.00 As of November 27, 2021, the Company had $0.1 million of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 0.9 years. |
Restructuring and Related Charg
Restructuring and Related Charges | 3 Months Ended |
Nov. 27, 2021 | |
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 Nutrition, LLC on November 7, 2019. 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 27, 2021 were as follows: (In thousands) Termination benefits and severance Other Restructuring liability Balance as of August 28, 2021 $ 851 $ — $ 851 Charges 44 28 72 Cash payments (748) (28) (776) Balance as of November 27, 2021 $ 147 $ — $ 147 In addition to the restructuring costs shown above, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the thirteen weeks ended November 27, 2021. As a result, the Company’s total restructuring and restructuring-related costs incurred in the thirteen weeks ended November 27, 2021 were immaterial. The Company incurred a total of $2.5 million in restructuring and restructuring-related costs in the thirteen weeks ended November 28, 2020. The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income. Since the restructuring activities were announced in May 2020, the Company has incurred aggregate restructuring and restructuring-related costs of $9.9 million. Overall, the Company expects to incur a total of approximately $10.1 million in restructuring and restructuring-related costs, which are to be paid through the second quarter of fiscal year 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Nov. 27, 2021 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Refer to Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in the Annual Report for a description of significant accounting policies. Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 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 and 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 any new or amended contracts through December 31, 2022. The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes. This ASU was 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 GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The Company adopted this ASU as of the first day of fiscal year 2022. The adoption of this ASU did not have a material effect on the consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which provided updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within GAAP. The Company adopted this ASU as of the first day of fiscal year 2022 on a prospective basis. The adoption of this ASU did not have a material effect on the consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements. |
Basis of Accounting, Policy [Policy Text Block] | Unaudited Interim Condensed Consolidated Financial Statements The unaudited interim 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. 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 the Company’s 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 the Company’s consolidated financial statements for the fiscal year ended August 28, 2021, included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on October 26, 2021. The Company remains uncertain of the ultimate effect COVID-19 could have on its business notwithstanding the distribution of several U.S. government approved vaccines, the availability of booster inoculations and the easing of movement restrictions relative to the onset of COVID-19. This uncertainty stems from the potential for, among other things, (i) the rise of COVID-19 mutations that have resulted in increased rates of reported cases for which currently approved vaccines are or may not be as effective, (ii) unexpected supply chain disruptions, including disruptions resulting from labor shortages or other human capital challenges, (iii) changes to customer operations, (iv) a reversal in recently improving consumer purchasing and consumption behavior, and (v) the closure of or reduced access to customer establishments. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue 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 core brands: Thirteen Weeks Ended (In thousands) November 27, 2021 November 28, 2020 North America (1) Atkins $ 133,794 $ 122,761 Quest (2) 138,294 95,769 Total North America 272,088 218,530 International 9,177 12,622 Total net sales $ 281,265 $ 231,152 (1) The North America geographic area consists of net sales substantially related to the United States and there is no individual foreign country to which more than 10% of the Company’s net sales are attributed or that is otherwise deemed individually material. (2) Quest net sales are primarily in North America. |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net in the Condensed Consolidated Balance Sheets consists of the following: November 27, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 33,003 140,997 Licensing agreements 13 years 22,000 7,144 14,856 Proprietary recipes and formulas 7 years 7,000 4,381 2,619 Software and website development costs 3 - 5 years 5,863 3,267 2,596 $ 1,182,863 $ 47,795 $ 1,135,068 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 30,103 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net in the Condensed Consolidated Balance Sheets consists of the following: November 27, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 33,003 140,997 Licensing agreements 13 years 22,000 7,144 14,856 Proprietary recipes and formulas 7 years 7,000 4,381 2,619 Software and website development costs 3 - 5 years 5,863 3,267 2,596 $ 1,182,863 $ 47,795 $ 1,135,068 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying 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 30,103 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 |
Estimated Future Amortization | Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2022 $ 11,867 2023 15,602 2024 14,917 2025 13,517 2026 13,517 2027 and thereafter 91,648 Total $ 161,068 |
Long-Term Debt and Line of Cr_2
Long-Term Debt and Line of Credit (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following: (In thousands) November 27, 2021 August 28, 2021 Term Facility (effective rate of 4.8% at November 27, 2021) 431,500 456,500 Finance lease liabilities (effective rate of 5.6% at November 27, 2021) 620 690 Less: Deferred financing fees 4,814 5,636 Total debt 427,306 451,554 Less: Current finance lease liabilities 289 285 Long-term debt, net of deferred financing fees $ 427,017 $ 451,269 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | November 27, 2021 November 28, 2020 Exercise Price $ 11.50 $ 11.50 Stock Price $ 37.93 $ 22.36 Dividend Yield — % — % Expected Term (in Years) 0.61 1.60 Risk-Free Interest Rate 0.15 % 0.14 % Expected Volatility 27.34 % 25.60 % Per Share Value of Warrants $ 26.44 $ 10.92 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
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 27, 2021 November 28, 2020 Income before income taxes $ 33,975 $ 51,327 Income tax expense $ 12,823 $ 8,374 Effective tax rate 37.7 % 16.3 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Thirteen Weeks Ended (In thousands) Statements of Operations Caption November 27, 2021 November 28, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 2,255 $ 1,498 Variable lease cost (1) Cost of goods sold and General and administrative 653 398 Total operating lease cost 2,908 1,896 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 68 68 Interest on lease liabilities Interest expense 9 13 Total finance lease cost 77 81 Total lease cost $ 2,985 $ 1,977 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. |
Lease assets and liabilities | The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption November 27, 2021 August 28, 2021 Assets Operating lease right-of-use assets Other long-term assets $ 50,116 $ 46,197 Finance lease right-of-use assets Property and equipment, net 571 640 Total lease assets $ 50,687 $ 46,837 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,774 $ 3,788 Finance lease liabilities Current maturities of long-term debt 289 285 Long-term: Operating lease liabilities Other long-term liabilities 48,297 44,892 Finance lease liabilities Long-term debt, less current maturities 331 405 Total lease liabilities $ 53,691 $ 49,370 |
Finance Lease, Liability, Maturity | Future maturities of lease liabilities as of November 27, 2021 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2022 $ 5,490 $ 235 2023 8,349 278 2024 9,212 145 2025 8,462 — 2026 6,655 — Thereafter 26,063 — Total lease payments 64,231 658 Less: Interest (11,160) (38) Present value of lease liabilities $ 53,071 $ 620 |
Lessee, Operating Lease, Liability, Maturity | Future maturities of lease liabilities as of November 27, 2021 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2022 $ 5,490 $ 235 2023 8,349 278 2024 9,212 145 2025 8,462 — 2026 6,655 — Thereafter 26,063 — Total lease payments 64,231 658 Less: Interest (11,160) (38) Present value of lease liabilities $ 53,071 $ 620 |
Schedule of Weighted Average Remaining Lease Terms | The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: November 27, 2021 August 28, 2021 Weighted-average remaining lease term (in years) Operating leases 7.83 8.38 Finance leases 2.20 2.44 Weighted-average discount rate Operating leases 4.8 % 4.9 % 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 27, 2021 November 28, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,054 $ 1,811 Operating cash flows from finance leases $ 148 $ 7 Financing cash flows from finance leases $ 78 $ 78 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
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 per share: Thirteen Weeks Ended (In thousands, except per share data) November 27, 2021 November 28, 2020 Basic earnings per share computation: Numerator: Net income available to common stockholders $ 21,152 $ 42,953 Denominator: Weighted average common shares outstanding - basic 95,856,845 95,538,111 Basic earnings per share from net income $ 0.22 $ 0.45 Diluted earnings per share computation: Numerator: Net income available for common stockholders $ 21,152 $ 42,953 Gain in fair value change of warrant liability — (20,453) Numerator for diluted earnings per share $ 21,152 $ 22,500 Denominator: Weighted average common shares outstanding - basic 95,856,845 95,538,111 Private Warrants — 3,216,252 Employee stock options 1,652,577 899,375 Non-vested shares 352,151 109,381 Weighted average common shares - diluted 97,861,573 99,763,119 Diluted earnings per share from net income $ 0.22 $ 0.23 |
Omnibus Incentive Plan (Tables)
Omnibus Incentive Plan (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock option activity | The following table summarizes stock option activity for the thirteen weeks ended November 27, 2021: Shares underlying options Weighted average Weighted average remaining contractual life (years) Outstanding as of August 28, 2021 2,993,163 $ 16.31 Granted 138,479 40.88 Exercised (19,804) 13.83 Forfeited (2,300) 19.89 Outstanding as of November 27, 2021 3,109,538 $ 17.42 6.73 Vested and expected to vest as of November 27, 2021 3,109,538 $ 17.42 6.73 Exercisable as of November 27, 2021 2,494,944 $ 14.13 6.10 |
Restricted stock activity | The following table summarizes restricted stock unit activity for the thirteen weeks ended November 27, 2021: Units Weighted average Non-vested as of August 28, 2021 496,334 $ 24.56 Granted 129,423 39.54 Vested (139,459) 22.13 Forfeited (10,675) 25.72 Non-vested as of November 27, 2021 475,623 $ 29.34 |
Performance stock unit activity | The following table summarizes performance stock unit activity for the thirteen weeks ended November 27, 2021: Units Weighted average Non-vested as of August 28, 2021 380,097 $ 19.31 Granted 50,212 63.42 Vested (166,688) 11.93 Forfeited (6,350) 16.48 Non-vested as of November 27, 2021 257,271 $ 32.77 |
Stock appreciation right activity | The following table summarizes SARs activity for the thirteen weeks ended November 27, 2021: Shares underlying SARs Weighted average Weighted average remaining contractual life (years) Outstanding as of August 28, 2021 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of November 27, 2021 150,000 $ 24.20 7.93 Vested and expected to vest as of November 27, 2021 150,000 $ 24.20 7.93 Exercisable as of November 27, 2021 — $ — 0.00 |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 3 Months Ended |
Nov. 27, 2021 | |
Restructuring and Related Activities [Abstract] | |
Changes to Restructuring Liability | Changes to the restructuring liability during the thirteen weeks ended November 27, 2021 were as follows: (In thousands) Termination benefits and severance Other Restructuring liability Balance as of August 28, 2021 $ 851 $ — $ 851 Charges 44 28 72 Cash payments (748) (28) (776) Balance as of November 27, 2021 $ 147 $ — $ 147 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Disaggregation of revenue | ||
Net sales | $ 281,265 | $ 231,152 |
North America | ||
Disaggregation of revenue | ||
Net sales | 272,088 | 218,530 |
International | ||
Disaggregation of revenue | ||
Net sales | 9,177 | 12,622 |
Atkins | ||
Disaggregation of revenue | ||
Net sales | 133,794 | 122,761 |
Quest | ||
Disaggregation of revenue | ||
Net sales | $ 138,294 | $ 95,769 |
Revenue Recognition (Details 2)
Revenue Recognition (Details 2) - USD ($) $ in Millions | 3 Months Ended | ||
Nov. 28, 2020 | Nov. 27, 2021 | Aug. 28, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Allowance for doubtful accounts | $ 1.2 | $ 1.1 | |
Credit loss expense (reversal), accounts receivable | $ 0.1 |
Goodwill Rollforward (Details)
Goodwill Rollforward (Details) - USD ($) $ in Thousands | Nov. 27, 2021 | Aug. 28, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 543,134 | $ 543,134 |
Goodwill Narrative (Details)
Goodwill Narrative (Details) $ in Thousands | Nov. 27, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill impairment charges | $ 0 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Aug. 28, 2021 | Nov. 27, 2021 |
Intangible assets with finite lives: | ||
Intangible assets, gross carrying amount | $ 1,182,863 | $ 1,182,863 |
Finite-lived intangible assets, accumulated amortization | 43,822 | 47,795 |
Intangible assets, net carrying amount | $ 1,139,041 | 1,135,068 |
Finite-lived intangible assets, net carrying amount | $ 161,068 | |
Customer relationships | ||
Intangible assets with finite lives: | ||
Useful life | 15 years | 15 years |
Finite-lived intangible assets, gross carrying amount | $ 174,000 | $ 174,000 |
Finite-lived intangible assets, accumulated amortization | 30,103 | 33,003 |
Finite-lived intangible assets, net carrying amount | $ 143,897 | $ 140,997 |
Licensing agreements | ||
Intangible assets with finite lives: | ||
Useful life | 13 years | 13 years |
Finite-lived intangible assets, gross carrying amount | $ 22,000 | $ 22,000 |
Finite-lived intangible assets, accumulated amortization | 6,664 | 7,144 |
Finite-lived intangible assets, net carrying amount | $ 15,336 | $ 14,856 |
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 |
Finite-lived intangible assets, accumulated amortization | 4,131 | 4,381 |
Finite-lived intangible assets, net carrying amount | 2,869 | 2,619 |
Software and website development costs | ||
Intangible assets with finite lives: | ||
Finite-lived intangible assets, gross carrying amount | 5,560 | 5,863 |
Finite-lived intangible assets, accumulated amortization | 2,924 | 3,267 |
Finite-lived intangible assets, net carrying amount | $ 2,636 | $ 2,596 |
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 | |
Finite-lived intangible assets, gross carrying amount | $ 303 | |
Finite-lived intangible assets, accumulated amortization | 0 | |
Finite-lived intangible assets, net carrying amount | 303 | |
Brands and trademarks | ||
Intangible assets with indefinite lives: | ||
Indefinite-lived intangible assets | $ 974,000 | $ 974,000 |
Intangibles Narrative (Details)
Intangibles Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset amortization expense | $ 4 | $ 3.9 |
Impairment of intangible assets, excluding goodwill | $ 0 | $ 0 |
Estimated Future Amortization (
Estimated Future Amortization (Details) $ in Thousands | Nov. 27, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 11,867 |
2022 | 15,602 |
2023 | 14,917 |
2024 | 13,517 |
2025 | 13,517 |
2027 and thereafter | 91,648 |
Finite-lived intangible assets, net carrying amount | $ 161,068 |
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. 27, 2021 |
Debt Instrument [Line Items] | ||||
Letters of Credit Outstanding, Amount | $ 3.5 | |||
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 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. 27, 2021 | Aug. 28, 2021 |
Debt Disclosure [Abstract] | ||
Term Facility (effective rate of 4.8% at November 27, 2021) | $ 431,500 | $ 456,500 |
Finance lease liabilities (effective rate of 5.6% at November 27, 2021) | 620 | 690 |
Less: Deferred financing fees | 4,814 | 5,636 |
Total debt | 427,306 | 451,554 |
Less: Current finance lease liabilities | (289) | (285) |
Long-term debt, net of deferred financing fees | $ 427,017 | $ 451,269 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Nov. 27, 2021 | Nov. 28, 2020 | Aug. 28, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Company share price | $ 37.93 | $ 22.36 | |
Expected term of warrants | 7 months 9 days | 1 year 7 months 6 days | |
Risk free interest rate | 0.15% | 0.14% | |
Expected volatility rate | 27.34% | 25.60% | |
Per share fair value of warrants | $ 26.44 | $ 10.92 | |
Loss (gain) in fair value change of warrant liability | $ 17,317 | $ (20,453) | |
Warrant liability | $ 177,152 | $ 73,200 | $ 159,835 |
Private Warrants | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Exercise price of warrants | $ 11.50 | $ 11.50 | |
Loss (gain) in fair value change of warrant liability | $ (17,300) | $ (20,500) | |
Private Placement Warrants | |||
Fair Value Disclosures [Abstract] | |||
Warrants outstanding | 6,700,000 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants outstanding | 6,700,000 | ||
Exercise price of warrants | $ 11.50 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 33,975 | $ 51,327 |
Income tax expense | $ 12,823 | $ 8,374 |
Effective tax rate | 37.70% | 16.30% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended |
Nov. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate difference | 21.40% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 27, 2021 | Nov. 28, 2020 | Aug. 28, 2021 | |
Components of lease expense | |||
Lease cost | $ 2,255 | $ 1,498 | |
Variable lease cost (1) | 653 | 398 | |
Total operating lease cost | 2,908 | 1,896 | |
Amortization of right-of-use assets | 68 | 68 | |
Interest on lease liabilities | 9 | 13 | |
Total finance lease cost | 77 | 81 | |
Total lease cost | 2,985 | 1,977 | |
Assets and liabilities, lessee | |||
Operating lease, right-of-use asset | 50,116 | $ 46,197 | |
Finance lease, right-of-use asset | 571 | 640 | |
Total lease assets | 50,687 | 46,837 | |
Operating lease, liability, current | 4,774 | 3,788 | |
Finance lease, liability, current | 289 | 285 | |
Operating lease, liability, noncurrent | 48,297 | 44,892 | |
Finance lease, liability, noncurrent | 331 | 405 | |
Total lease liabilities | 53,691 | 49,370 | |
Future maturities of lease liabilities, operating leases | |||
Remainder of 2022 | 5,490 | ||
2023 | 8,349 | ||
2024 | 9,212 | ||
2025 | 8,462 | ||
2026 | 6,655 | ||
Thereafter | 26,063 | ||
Total lease payments | 64,231 | ||
Less: Interest | (11,160) | ||
Present value of lease liabilities | 53,071 | ||
Future maturities of lease liabilities, finance leases | |||
Remainder of 2022 | 235 | ||
2023 | 278 | ||
2024 | 145 | ||
2025 | 0 | ||
2026 | 0 | ||
Thereafter | 0 | ||
Total lease payments | 658 | ||
Less: Interest | (38) | ||
Present value of lease liabilities | 620 | $ 690 | |
Loss on operating lease right-of-use asset impairment | 0 | 354 | |
Lessee, Lease, Description [Line Items] | |||
Loss on operating lease right-of-use asset impairment | 0 | 354 | |
Gain on termination of lease | $ 30 | 0 | |
Finance Lease, Weighted Average Discount Rate, Percent | 5.60% | 5.60% | |
Finance Lease, Weighted Average Remaining Lease Term | 2 years 2 months 12 days | 2 years 5 months 8 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 4.80% | 4.90% | |
Operating Lease, Weighted Average Remaining Lease Term | 7 years 9 months 29 days | 8 years 4 months 17 days | |
Supplemental and other information related to leases | |||
Operating cash flows from operating leases | $ 2,054 | 1,811 | |
Operating cash flows from finance leases | 148 | 7 | |
Financing cash flows from finance leases | $ 78 | $ 78 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Nov. 27, 2021 | Aug. 28, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Other commitment payment obligation | $ 2.1 | |
Loss Contingency Accrual | $ 0.7 | $ 0.7 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | ||
Nov. 28, 2020 | Nov. 27, 2021 | Nov. 13, 2018 | |
Class of Stock [Line Items] | |||
Repurchase of common stock (in shares) | 0 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 47.9 | ||
Private Placement Warrants | |||
Class of Stock [Line Items] | |||
Exercise price of warrants | $ 11.50 | ||
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. 27, 2021 | Nov. 28, 2020 | |
Earnings per share, diluted | ||
Loss (gain) in fair value change of warrant liability | $ 17,317 | $ (20,453) |
Numerator: | ||
Net income | $ 21,152 | $ 42,953 |
Denominator: | ||
Weighted average common shares - basic | 95,856,845 | 95,538,111 |
Basic earnings per share from net income (in dollars per share) | $ 0.22 | $ 0.45 |
Numerator: | ||
Net income | $ 21,152 | $ 42,953 |
Loss (gain) in fair value change of warrant liability | 17,317 | (20,453) |
Numerator for diluted earnings per share | $ 21,152 | $ 22,500 |
Denominator: | ||
Weighted average common shares - basic | 95,856,845 | 95,538,111 |
Employee stock options | 1,652,577 | 899,375 |
Non-vested shares | 352,151 | 109,381 |
Weighted average common shares - diluted | 97,861,573 | 99,763,119 |
Diluted earnings per share from net income (in dollars per share) | $ 0.22 | $ 0.23 |
Private Warrants | ||
Earnings per share, diluted | ||
Loss (gain) in fair value change of warrant liability | $ 0 | $ (20,453) |
Private Warrants | 0 | 3,216,252 |
Numerator: | ||
Loss (gain) in fair value change of warrant liability | $ 0 | $ (20,453) |
Denominator: | ||
Private Warrants | 0 | 3,216,252 |
Private Warrants | ||
Earnings per share, diluted | ||
Antidilutive securities excluded from computation of earnings per share | 4,600,000 | |
Stock Options | ||
Earnings per share, diluted | ||
Antidilutive securities excluded from computation of earnings per share | 200,000 | 700,000 |
Omnibus Incentive Plan (Details
Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | $ 2,605 | $ 1,110 |
Stock compensation expense | $ 2,605 | $ 1,110 |
Omnibus Incentive Plan - Stock
Omnibus Incentive Plan - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Additional disclosures | ||
Proceeds from option exercises | $ 274 | $ 157 |
Stock Options | ||
Shares | ||
Outstanding at beginning of period (in shares) | 2,993,163 | |
Granted (in shares) | 138,479 | |
Exercised (in shares) | (19,804) | |
Forfeited (in shares) | (2,300) | |
Outstanding at end of period (in shares) | 3,109,538 | |
Options vested or expected to vest (in shares) | 3,109,538 | |
Exercisable (in shares) | 2,494,944 | |
Weighted average exercise price | ||
Outstanding at beginning of period (in dollars per share) | $ 16.31 | |
Granted (in dollars per share) | 40.88 | |
Exercised (in dollars per share) | 13.83 | |
Forfeited (in dollars per share) | 19.89 | |
Outstanding at end of period (in dollars per share) | 17.42 | |
Options vested or expected to vest (in dollars per share) | 17.42 | |
Exercisable (in dollars per share) | $ 14.13 | |
Weighted average remaining contractual term | ||
Outstanding at end of period, weighted average remaining contractual life | 6 years 8 months 23 days | |
Vested and expected to vest at end of period, weighted average remaining contractual life | 6 years 8 months 23 days | |
Exercisable at end of period, weighted average remaining contractual life | 6 years 1 month 6 days | |
Additional disclosures | ||
Unrecognized compensation costs | $ 6,500 | |
Period for recognition of unrecognized compensation cost | 2 years 3 months 18 days | |
Proceeds from option exercises | $ 300 | $ 200 |
Omnibus Incentive Plan - Restri
Omnibus Incentive Plan - Restricted Stock Units Activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 3 Months Ended |
Nov. 27, 2021USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 496,334 |
Granted (in shares) | shares | 129,423 |
Vested (in shares) | shares | (139,459) |
Forfeited (in shares) | shares | (10,675) |
Non-vested at end of period (in shares) | shares | 475,623 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 24.56 |
Granted (in dollars per share) | $ / shares | 39.54 |
Vested (in dollars per share) | $ / shares | 22.13 |
Forfeited (in dollars per share) | $ / shares | 25.72 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 29.34 |
Additional disclosures | |
Unrecognized compensation costs | $ | $ 12.1 |
Period for recognition of unrecognized compensation cost | 2 years |
Omnibus Incentive Plan - Perfor
Omnibus Incentive Plan - Performance Stock Units Activity (Details) - Performance Stock Units $ / shares in Units, $ in Millions | 3 Months Ended |
Nov. 27, 2021USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 380,097 |
Granted (in shares) | shares | 50,212 |
Vested (in shares) | shares | (166,688) |
Forfeited (in shares) | shares | (6,350) |
Non-vested at end of period (in shares) | shares | 257,271 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 19.31 |
Granted (in dollars per share) | $ / shares | 63.42 |
Vested (in dollars per share) | $ / shares | 11.93 |
Forfeited (in dollars per share) | $ / shares | 16.48 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 32.77 |
Additional disclosures | |
Period for recognition of unrecognized compensation cost | 1 year 9 months 18 days |
Unrecognized compensation costs | $ | $ 5.7 |
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. 27, 2021USD ($)$ / 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 | 7 years 11 months 4 days |
Outstanding at end of period, weighted average remaining contractual life | 7 years 11 months 4 days |
Exercisable at end of period, weighted average remaining contractual life | 0 years |
Additional disclosures | |
Unrecognized compensation costs | $ | $ 0.1 |
Period for recognition of unrecognized compensation cost | 10 months 24 days |
Restructuring and Related Cha_3
Restructuring and Related Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 27, 2021 | Nov. 28, 2020 | |
Restructuring and Related Charges | ||
Loss on operating lease right-of-use asset impairment | $ 0 | $ 354 |
Gain on termination of lease | (30) | $ 0 |
Restructuring incurred cost | 2,500 | |
Aggregate restructuring costs | 9,900 | |
Expected restructuring costs | 10,100 | |
Changes to the restructuring liability | ||
Balance as of August 28, 2021 | 851 | |
Charges | 72 | |
Cash payments | (776) | |
Balance as of November 27, 2021 | 147 | |
Termination benefits and severance | ||
Changes to the restructuring liability | ||
Balance as of August 28, 2021 | 851 | |
Charges | 44 | |
Cash payments | (748) | |
Balance as of November 27, 2021 | 147 | |
Other restructuring | ||
Changes to the restructuring liability | ||
Balance as of August 28, 2021 | 0 | |
Charges | 28 | |
Cash payments | (28) | |
Balance as of November 27, 2021 | $ 0 |