Cover
Cover - shares | 6 Months Ended | |
Feb. 25, 2023 | Mar. 30, 2023 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001702744 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Feb. 25, 2023 | |
Document Fiscal Period Focus | Q2 | |
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 $0.01 per share | |
Trading Symbol | SMPL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Current Fiscal Year End Date | --08-26 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,512,880 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 25, 2023 | Aug. 27, 2022 |
Current assets: | ||
Cash | $ 63,207 | $ 67,494 |
Accounts receivable, net | 148,250 | 132,667 |
Inventories | 114,008 | 125,479 |
Prepaid expenses | 7,173 | 5,027 |
Other current assets | 27,005 | 20,934 |
Total current assets | 359,643 | 351,601 |
Long-term assets: | ||
Property and equipment, net | 17,211 | 18,157 |
Intangible assets, net | 1,115,507 | 1,123,258 |
Goodwill | 543,134 | 543,134 |
Other long-term assets | 53,184 | 58,099 |
Total assets | 2,088,679 | 2,094,249 |
Current liabilities: | ||
Accounts payable | 59,400 | 62,149 |
Accrued interest | 172 | 160 |
Accrued expenses and other current liabilities | 20,591 | 39,675 |
Current maturities of long-term debt | 240 | 264 |
Total current liabilities | 80,403 | 102,248 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 362,622 | 403,022 |
Deferred income taxes | 112,411 | 105,676 |
Other long-term liabilities | 41,328 | 44,639 |
Total liabilities | 596,764 | 655,585 |
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, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | 1,019 | 1,013 |
Treasury stock, 2,365,100 shares and 1,818,754 shares at cost at February 25, 2023 and August 27, 2022, respectively | (78,451) | (62,003) |
Additional paid-in-capital | 1,295,584 | 1,287,224 |
Retained earnings | 275,883 | 214,381 |
Accumulated other comprehensive loss | (2,120) | (1,951) |
Total stockholders’ equity | 1,491,915 | 1,438,664 |
Total liabilities and stockholders’ equity | $ 2,088,679 | $ 2,094,249 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Feb. 25, 2023 | Aug. 27, 2022 |
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) | 101,873,171 | 101,322,834 |
Treasury stock (in shares) | 2,365,100 | 1,818,754 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ (296,584) | $ (296,718) | $ (597,462) | $ (577,983) |
Cost of goods sold | 193,852 | 188,195 | 383,738 | 352,905 |
Gross profit | 102,732 | 108,523 | 213,724 | 225,078 |
Operating expenses: | ||||
Selling and marketing | 29,948 | 31,955 | 58,482 | 62,482 |
General and administrative | 25,934 | 26,288 | 51,575 | 49,990 |
Depreciation and amortization | 4,345 | 4,329 | 8,672 | 8,649 |
Total operating expenses | 60,227 | 62,572 | 118,729 | 121,121 |
Income from operations | 42,505 | 45,951 | 94,995 | 103,957 |
Other income (expense): | ||||
Interest income | 246 | 0 | 253 | 1 |
Interest expense | (8,497) | (5,276) | (15,552) | (11,647) |
Loss in fair value change of warrant liability | 0 | (12,745) | 0 | (30,062) |
(Loss) gain on foreign currency transactions | (214) | 780 | (106) | 427 |
Other income | 0 | 0 | 6 | 9 |
Total other expense | (8,465) | (17,241) | (15,399) | (41,272) |
Income before income taxes | 34,040 | 28,710 | 79,596 | 62,685 |
Income tax expense | 8,398 | 10,249 | 18,094 | 23,072 |
Net income | 25,642 | 18,461 | 61,502 | 39,613 |
Other comprehensive income: | ||||
Foreign currency translation, net of reclassification adjustments | 53 | (708) | (169) | (748) |
Comprehensive income | $ 25,695 | $ 17,753 | $ 61,333 | $ 38,865 |
Earnings per share from net income: | ||||
Basic (in dollars per share) | $ 0.26 | $ 0.19 | $ 0.62 | $ 0.41 |
Diluted (in dollars per share) | $ 0.25 | $ 0.18 | $ 0.61 | $ 0.40 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 99,495,657 | 98,599,271 | 99,346,439 | 97,228,058 |
Diluted (in shares) | 100,840,887 | 100,414,770 | 100,802,169 | 99,152,961 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Feb. 25, 2023 | Feb. 26, 2022 | |
Operating activities | ||
Net income | $ 61,502 | $ 39,613 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 9,904 | 9,572 |
Amortization of deferred financing costs and debt discount | 1,219 | 1,332 |
Stock compensation expense | 6,332 | 5,697 |
Change in fair value change of warrant liability | 0 | 30,062 |
Estimated credit losses | 219 | (5) |
Unrealized loss (gain) on foreign currency transactions | 106 | (427) |
Deferred income taxes | 6,845 | 11,814 |
Amortization of operating lease right-of-use asset | 3,330 | 3,293 |
Gain on termination of lease | 0 | (30) |
Other | 118 | 571 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (15,899) | (6,880) |
Inventories | 11,063 | (24,241) |
Prepaid expenses | (2,145) | (1,695) |
Other current assets | (4,096) | (29,211) |
Accounts payable | (2,359) | 6,109 |
Accrued interest | 12 | 120 |
Accrued expenses and other current liabilities | (19,583) | (12,098) |
Other assets and liabilities | (3,222) | (3,273) |
Net cash provided by operating activities | 53,346 | 30,323 |
Investing activities | ||
Purchases of property and equipment | (1,738) | (4,339) |
Issuance of note receivable | 0 | 1,500 |
Investments in intangible and other assets | (195) | (187) |
Net cash used in investing activities | (1,933) | (6,026) |
Financing activities | ||
Proceeds from option exercises | 4,791 | 1,474 |
Tax payments related to issuance of restricted stock units and performance stock units | (2,401) | (3,289) |
Payments on finance lease obligations | (151) | (157) |
Repurchase of common stock | (16,448) | (20,394) |
Principal payments of long-term debt | (41,500) | (25,000) |
Deferred financing costs | 0 | (544) |
Net cash used in financing activities | (55,709) | (47,910) |
Net decrease in cash | (4,296) | (23,613) |
Cash and cash equivalents | ||
Effect of exchange rate on cash | 9 | (263) |
Cash at beginning of period | 67,494 | 75,345 |
Cash and cash equivalents at end of period | 63,207 | 51,469 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 14,321 | 10,195 |
Cash paid for taxes | 15,747 | 33,162 |
Stock Issued | 0 | 189,897 |
Operating lease right-of-use assets exchanged for operating lease liabilities | 0 | 5,551 |
Non-cash credits for repayment of note receivable | $ 78 | $ 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 |
Treasury Stock, Value | $ (2,145) | |||||
Additional paid-in-capital | $ 1,085,001 | |||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | $ 959 | |||||
Accumulated other comprehensive loss | $ (818) | |||||
Retained earnings | $ 105,807 | |||||
Beginning balance at Aug. 28, 2021 | $ 1,188,804 | |||||
Beginning balance (in shares) at Aug. 28, 2021 | 95,882,908 | |||||
Beginning balance, Treasury (in shares) at Aug. 28, 2021 | 98,234 | |||||
Net income | 21,152 | 21,152 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 2,605 | 2,605 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (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 | |||||
Ending balance at Nov. 27, 2021 | 1,209,607 | |||||
Beginning balance at Aug. 28, 2021 | 1,188,804 | |||||
Beginning balance (in shares) at Aug. 28, 2021 | 95,882,908 | |||||
Beginning balance, Treasury (in shares) at Aug. 28, 2021 | 98,234 | |||||
Net income | $ 39,613 | |||||
Repurchase of common stock (in shares) | 571,271 | |||||
Ending balance (in shares) at Feb. 26, 2022 | 101,070,881 | |||||
Ending balance, Treasury (in shares) at Feb. 26, 2022 | 669,755 | |||||
Ending balance at Feb. 26, 2022 | $ 1,401,054 | |||||
Treasury Stock, Value | $ (2,145) | |||||
Additional paid-in-capital | 1,084,690 | |||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | $ 961 | |||||
Accumulated other comprehensive loss | (858) | |||||
Retained earnings | 126,959 | |||||
Beginning balance at Nov. 27, 2021 | 1,209,607 | |||||
Beginning balance (in shares) at Nov. 27, 2021 | 96,130,441 | |||||
Beginning balance, Treasury (in shares) at Nov. 27, 2021 | 98,234 | |||||
Net income | 18,461 | 18,461 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 3,092 | 3,092 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 439 | 439 | ||||
Reclassification adjustment for currency translation gains related to the liquidation of foreign entities | (1,147) | (1,147) | ||||
Treasury Stock, Value, Acquired, Cost Method | (20,394) | $ (20,394) | ||||
Repurchase of common stock (in shares) | 571,521 | |||||
Shares issued upon vesting of Restricted Stock Units | (101) | $ 1 | (102) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 9,679 | |||||
Exercise of options to purchase common stock | 1,200 | $ 1 | 1,199 | |||
Exercise of options to purchase common stock (in shares) | 100,000 | |||||
Ending balance (in shares) at Feb. 26, 2022 | 101,070,881 | |||||
Ending balance, Treasury (in shares) at Feb. 26, 2022 | 669,755 | |||||
Ending balance at Feb. 26, 2022 | 1,401,054 | |||||
Warrant conversion | 189,897 | $ 48 | 189,849 | |||
Warrant conversion (in shares) | 4,830,761 | |||||
Treasury Stock, Value | $ (22,539) | |||||
Additional paid-in-capital | 1,278,728 | |||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | $ 1,011 | |||||
Accumulated other comprehensive loss | (1,566) | |||||
Retained earnings | 145,420 | |||||
Treasury Stock, Value | 62,003 | $ (62,003) | ||||
Additional paid-in-capital | 1,287,224 | 1,287,224 | ||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | 1,013 | $ 1,013 | ||||
Accumulated other comprehensive loss | (1,951) | (1,951) | ||||
Retained earnings | 214,381 | 214,381 | ||||
Beginning balance at Aug. 27, 2022 | $ 1,438,664 | |||||
Beginning balance (in shares) at Aug. 27, 2022 | 101,322,834 | |||||
Beginning balance, Treasury (in shares) at Aug. 27, 2022 | 1,818,754 | 1,818,754 | ||||
Net income | $ 35,860 | 35,860 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 3,237 | 3,237 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (222) | (222) | ||||
Treasury Stock, Value, Acquired, Cost Method | (16,448) | $ (16,448) | ||||
Repurchase of common stock (in shares) | 546,346 | |||||
Shares issued upon vesting of Restricted Stock Units | (2,298) | $ 2 | (2,300) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 180,342 | |||||
Exercise of options to purchase common stock | 4,563 | $ 4 | 4,559 | |||
Exercise of options to purchase common stock (in shares) | 353,281 | |||||
Ending balance (in shares) at Nov. 26, 2022 | 101,856,457 | |||||
Ending balance, Treasury (in shares) at Nov. 26, 2022 | 2,365,100 | |||||
Ending balance at Nov. 26, 2022 | 1,463,356 | |||||
Beginning balance at Aug. 27, 2022 | $ 1,438,664 | |||||
Beginning balance (in shares) at Aug. 27, 2022 | 101,322,834 | |||||
Beginning balance, Treasury (in shares) at Aug. 27, 2022 | 1,818,754 | 1,818,754 | ||||
Net income | $ 61,502 | |||||
Repurchase of common stock (in shares) | 546,346 | |||||
Ending balance (in shares) at Feb. 25, 2023 | 101,873,171 | |||||
Ending balance, Treasury (in shares) at Feb. 25, 2023 | 2,365,100 | 2,365,100 | ||||
Ending balance at Feb. 25, 2023 | $ 1,491,915 | |||||
Treasury Stock, Value | $ (78,451) | |||||
Additional paid-in-capital | 1,292,720 | |||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | $ 1,019 | |||||
Accumulated other comprehensive loss | (2,173) | |||||
Retained earnings | 250,241 | |||||
Beginning balance at Nov. 26, 2022 | 1,463,356 | |||||
Beginning balance (in shares) at Nov. 26, 2022 | 101,856,457 | |||||
Beginning balance, Treasury (in shares) at Nov. 26, 2022 | 2,365,100 | |||||
Net income | 25,642 | 25,642 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 2,739 | 2,739 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 53 | 53 | ||||
Shares issued upon vesting of Restricted Stock Units | (103) | $ 0 | (103) | |||
Shares issued upon vesting of Restricted Stock Units (in shares) | 4,584 | |||||
Exercise of options to purchase common stock | $ 228 | $ 0 | 228 | |||
Exercise of options to purchase common stock (in shares) | 12,130 | |||||
Ending balance (in shares) at Feb. 25, 2023 | 101,873,171 | |||||
Ending balance, Treasury (in shares) at Feb. 25, 2023 | 2,365,100 | 2,365,100 | ||||
Ending balance at Feb. 25, 2023 | $ 1,491,915 | |||||
Treasury Stock, Value | 78,451 | $ (78,451) | ||||
Additional paid-in-capital | 1,295,584 | $ 1,295,584 | ||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively | 1,019 | $ 1,019 | ||||
Accumulated other comprehensive loss | (2,120) | $ (2,120) | ||||
Retained earnings | $ 275,883 | $ 275,883 |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 6 Months Ended |
Feb. 25, 2023 | |
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, and other product offerings. 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®, Quest® and Quest Hero TM 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 Consolidated Financial Statements The unaudited interim 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 consolidated financial statements and related notes of the Company and its subsidiaries are unaudited. The unaudited interim 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 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 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 27, 2022, included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on October 21, 2022. The ultimate effect the supply chain challenges, cost pressures, current high inflation environment, and the possible economic recession could have on consumer purchasing patterns and on the Company’s business continues to be not fully known. Additionally, management is continuing to monitor the conflict in Ukraine, especially regarding the availability and cost of raw materials that are produced in this region and Europe in general. Management is also monitoring the situation in Eastern Europe for its possible supply chain and consumer consumption effects on the Company’s business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Nov. 26, 2022 | |
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 (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which extended the period of time for which ASU 2020-04 could be applied. As a result, the amendments in ASU 2020-04 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, 2024. The amendments of these ASUs are effective for all entities and should be applied on a prospective basis. On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to its credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”), as described in Note 5, Long-Term Debt and Line of Credit. In addition to replacing the London Interbank Offered Rate (“LIBOR”) as the Credit Agreement’s reference rate with the Secured Overnight Financing Rate (“SOFR”), the 2022 Repricing Amendment contemporaneously modified other terms that changed, or had the potential to change, the amount or timing of contractual cash flows as contemplated by the guidance in ASU 2020-04. As such, the contract modifications related to the 2022 Repricing Amendment were outside of the scope of the optional guidance in ASU 2020-04. The Company will continue to monitor the effects of rate reform, if any, on any new or amended contracts through December 31, 2024. The Company does not anticipate the amendments in this ASU will be material to its 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. 26, 2022 | |
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 brands: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 North America (1) Atkins $ 134,351 $ 135,582 $ 266,096 $ 269,376 Quest 154,598 152,573 316,070 290,867 Total North America 288,949 288,155 582,166 560,243 International 7,635 8,563 15,296 17,740 Total net sales $ 296,584 $ 296,718 $ 597,462 $ 577,983 (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. Charges related to credit loss on accounts receivables from transactions with external customers were $0.4 million and $0.2 million for the thirteen and twenty-six weeks ended February 25, 2023, respectively. Charges related to credit loss on accounts receivables from transactions with external customers were immaterial for the thirteen and twenty-six weeks ended February 26, 2022. As of February 25, 2023 and August 27, 2022, the allowances for doubtful accounts related to these accounts receivable were $1.8 million and $1.2 million, respectively. Additionally, as of February 25, 2023, the Company had an expected credit loss reserve of $1.0 million on a $3.0 million note receivable related to the Company’s sale of its SimplyProtein® brand and related assets during its fiscal year 2021. |
Goodwill and Intangibles
Goodwill and Intangibles | 6 Months Ended |
Feb. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | As of February 25, 2023 and August 27, 2022, Goodwill in the Consolidated Balance Sheets was $543.1 million. There were no impairment charges related to goodwill during the thirteen and twenty-six weeks ended February 25, 2023 or since the inception of the Company. Intangible assets, net in the Consolidated Balance Sheets consists of the following: February 25, 2023 (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 47,503 126,497 Licensing agreements 13 years 22,000 9,540 12,460 Proprietary recipes and formulas 7 years 7,000 5,631 1,369 Software and website development costs 3 - 5 years 5,863 4,793 1,070 Intangible assets in progress 3 - 5 years 111 — 111 $ 1,182,974 $ 67,467 $ 1,115,507 August 27, 2022 (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 41,703 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 Changes in Intangible assets, net during the twenty-six weeks ended February 25, 2023 were primarily related to recurring amortization expense. Amortization expense related to intangible assets was $3.9 million and $4.0 million for the thirteen weeks ended February 25, 2023 and February 26, 2022, respectively, and $7.8 million and $7.9 million for the twenty-six weeks ended February 25, 2023 and February 26, 2022, respectively. There were no impairment charges related to intangible assets during the thirteen and twenty-six weeks ended February 25, 2023 and February 26, 2022. Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2023 $ 7,792 2024 14,917 2025 13,522 2026 13,517 2027 13,517 2028 and thereafter 78,131 Total $ 141,396 |
Long-Term Debt and Line of Cred
Long-Term Debt and Line of Credit | 6 Months Ended |
Feb. 25, 2023 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | On July 7, 2017, the Company (through certain of its subsidiaries) entered into the Credit Agreement. The Credit Agreement at that time provided for (i) a term facility of $200.0 million (“Term Facility”) with a seven five 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). 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 provided 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 then-effective maturity date of the Initial Term Loans and (ii) December 16, 2026. On January 21, 2022, the Company entered into the “2022 Repricing Amendment” to the Credit Agreement. The 2022 Repricing Amendment, among other things, (i) reduced the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to the effective date of the 2022 Repricing Amendment, (ii) reset the prepayment premium for the existing Initial Term Loans to apply to Repricing Transactions (as defined in the Credit Agreement) that occur within six months after the effective date of the 2022 Repricing Amendment, and (iii) implemented SOFR and related replacement provisions for LIBOR. Effective as of the 2022 Repricing Amendment dated January 21, 2022, the interest rate per annum is based on either: i. A base rate equaling the higher of (a) the “prime rate,” (b) the federal funds effective rate plus 0.50%, or (c) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) applicable for an interest period of one month plus 1.00% plus (x) 2.25% margin for the Term Loan or (y) 2.00% margin for the Revolving Credit Facility; or ii. SOFR plus a credit spread adjustment equal to 0.10% for one-month SOFR, 0.15% for up to three-month SOFR and 0.25% for up to six-month SOFR, subject to a floor of 0.50%, plus (x) 3.25% margin for the Term Loan or (y) 3.00% margin for the Revolving Credit Facility. The Simply Good Foods Company is not a borrower under the Credit Agreement and has not provided a guarantee of the Credit Agreement. Simply Good Foods USA, Inc., is the administrative borrower and certain other subsidiary holding companies are co-borrowers under the Credit Agreement. Each of the Company’s domestic subsidiaries that is not a named borrower under the Credit Agreement has provided a guarantee on a secured basis. As security for the payment or performance of the debt under the Credit Agreement, the borrowers and the guarantors have pledged certain equity interests in their respective subsidiaries and granted the lenders a security interest in substantially all of their domestic assets. All guarantors other than Quest Nutrition, LLC are holding companies with no assets other than their investments in their respective subsidiaries. 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 covenants as of February 25, 2023 and August 27, 2022, respectively. Long-term debt consists of the following: (In thousands) February 25, 2023 August 27, 2022 Term Facility (effective rate of 8.0% at February 25, 2023) $ 365,000 $ 406,500 Finance lease liabilities (effective rate of 5.6% at February 25, 2023) 264 406 Less: Deferred financing fees 2,402 3,620 Total debt 362,862 403,286 Less: Current finance lease liabilities 240 264 Long-term debt, net of deferred financing fees $ 362,622 $ 403,022 The Company is not required to make principal payments on the Term Facility over the twelve months following the period ended February 25, 2023. The outstanding balance of the Term Facility is due upon its maturity in July 2024. As of February 25, 2023, 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 February 25, 2023. 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 February 25, 2023 and August 27, 2022, 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 | 6 Months Ended |
Feb. 25, 2023 | |
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 During the thirteen and twenty-six weeks ended February 26, 2022, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party, and were exercised on a cashless basis on January 7, 2022 resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result, there were no outstanding liability-classified Private Warrants as of February 25, 2023 and August 27, 2022. Refer to Note 10, Stockholders’ Equity, for additional details regarding the cashless exercise of the Private Warrants. The Company utilized 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 reflected a Level 3 measurement within the fair value measurement hierarchy. The periodic remeasurement of the warrant liability has been reflected in Loss in fair value change of warrant liability within the Consolidated Statements of Operations and Comprehensive Income. The adjustments for the thirteen and twenty-six weeks ended February 26, 2022 were losses of $12.7 million and $30.1 million, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Nov. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The tax expense and the effective tax rate resulting from operations were as follows: Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 Income before income taxes $ 79,596 $ 62,685 Income tax expense $ 18,094 $ 23,072 Effective tax rate 22.7 % 36.8 % The effective tax rate for the twenty-six weeks ended February 25, 2023 was 14.1% less than the effective tax rate for the twenty-six weeks ended February 26, 2022, which was primarily driven by the non-cash change in the fair value of the warrant liability in the prior fiscal period and other permanent differences. |
Leases
Leases | 3 Months Ended |
Nov. 26, 2022 | |
Leases [Abstract] | |
Lessee, Operating Leases | The components of lease expense were as follows: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) Statements of Operations Caption February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Operating lease cost: Lease cost Cost of goods sold and $ 2,248 $ 2,273 $ 4,500 $ 4,528 Variable lease cost (1) Cost of goods sold and 780 860 1,518 1,513 Total operating lease cost 3,028 3,133 6,018 6,041 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 63 68 131 136 Interest on lease liabilities Interest expense 4 8 9 17 Total finance lease cost 67 76 140 153 Total lease cost $ 3,095 $ 3,209 $ 6,158 $ 6,194 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption February 25, 2023 August 27, 2022 Assets Operating lease right-of-use assets Other long-term assets $ 43,132 $ 46,460 Finance lease right-of-use assets Property and equipment, net 235 367 Total lease assets $ 43,367 $ 46,827 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 7,238 $ 6,249 Finance lease liabilities Current maturities of long-term debt 240 264 Long-term: Operating lease liabilities Other long-term liabilities 40,814 44,482 Finance lease liabilities Long-term debt, less current maturities 24 142 Total lease liabilities $ 48,316 $ 51,137 Future maturities of lease liabilities as of February 25, 2023 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2023 4,603 127 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 56,471 272 Less: Interest (8,419) (8) Present value of lease liabilities $ 48,052 $ 264 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: February 25, 2023 August 27, 2022 Weighted-average remaining lease term (in years) Operating leases 6.89 7.27 Finance leases 1.08 1.51 Weighted-average discount rate Operating leases 4.7 % 4.7 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,957 $ 4,990 Operating cash flows from finance leases $ 239 $ 281 Financing cash flows from finance leases $ 151 $ 157 |
Lessee, Finance Leases | The components of lease expense were as follows: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) Statements of Operations Caption February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Operating lease cost: Lease cost Cost of goods sold and $ 2,248 $ 2,273 $ 4,500 $ 4,528 Variable lease cost (1) Cost of goods sold and 780 860 1,518 1,513 Total operating lease cost 3,028 3,133 6,018 6,041 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 63 68 131 136 Interest on lease liabilities Interest expense 4 8 9 17 Total finance lease cost 67 76 140 153 Total lease cost $ 3,095 $ 3,209 $ 6,158 $ 6,194 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption February 25, 2023 August 27, 2022 Assets Operating lease right-of-use assets Other long-term assets $ 43,132 $ 46,460 Finance lease right-of-use assets Property and equipment, net 235 367 Total lease assets $ 43,367 $ 46,827 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 7,238 $ 6,249 Finance lease liabilities Current maturities of long-term debt 240 264 Long-term: Operating lease liabilities Other long-term liabilities 40,814 44,482 Finance lease liabilities Long-term debt, less current maturities 24 142 Total lease liabilities $ 48,316 $ 51,137 Future maturities of lease liabilities as of February 25, 2023 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2023 4,603 127 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 56,471 272 Less: Interest (8,419) (8) Present value of lease liabilities $ 48,052 $ 264 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: February 25, 2023 August 27, 2022 Weighted-average remaining lease term (in years) Operating leases 6.89 7.27 Finance leases 1.08 1.51 Weighted-average discount rate Operating leases 4.7 % 4.7 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,957 $ 4,990 Operating cash flows from finance leases $ 239 $ 281 Financing cash flows from finance leases $ 151 $ 157 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Feb. 25, 2023 | |
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. 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 February 25, 2023, the Company will be required to make payments of $3.3 million over the next year. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Feb. 25, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stock Repurchase Program The Company adopted a $50.0 million stock repurchase program on November 13, 2018. On April 13, 2022, and October 21, 2022, the Company announced that its Board of Directors had approved the addition of $50.0 million and $50.0 million, respectively, to its stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $150.0 million. 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 twenty-six weeks ended February 25, 2023, the Company repurchased 546,346 shares of common stock at an average share price of $30.11 per share. The Company did not repurchase any shares of common stock during the thirteen weeks ended February 25, 2023. During the thirteen and twenty-six weeks ended February 26, 2022, the Company repurchased 571,271 shares of common stock at an average share price of $35.68 per share. As of February 25, 2023, approximately $71.5 million remained available under the stock repurchase program. Warrants to Purchase Common Stock During the thirteen and twenty-six weeks ended February 26, 2022, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants were held by Conyers Park, a related party. Each whole warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. On January 7, 2022, Conyers Park elected to exercise the Private Warrants on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of February 25, 2023 and August 27, 2022. As discussed in Note 6, Fair Value of Financial Instruments, the liability-classified warrants were 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 fair value remeasurements of the warrant liability have been reflected in Loss in fair value change of warrant liability within the Consolidated Statements of Operations and Comprehensive Income. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Feb. 25, 2023 | |
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, including the Company’s employee stock options, non-vested stock units, and Private Warrants for the periods during which they were outstanding. During periods when the effect of the outstanding Private Warrants was dilutive, the Company assumed share settlement of the instruments as of the beginning of the reporting period and adjusted the numerator to remove the change in fair value of the warrant liability and adjusted the denominator to include the dilutive shares, calculated using the treasury stock method. During periods when the effect of the outstanding Private Warrants was anti-dilutive, the share settlement was excluded. In periods in which the Company has a net loss, diluted loss 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 per share: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands, except per share data) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Basic earnings per share computation: Numerator: Net income available to common stockholders $ 25,642 $ 18,461 $ 61,502 $ 39,613 Denominator: Weighted average common shares outstanding - basic 99,495,657 98,599,271 99,346,439 97,228,058 Basic earnings per share from net income $ 0.26 $ 0.19 $ 0.62 $ 0.41 Diluted earnings per share computation: Numerator: Net income available for common stockholders $ 25,642 $ 18,461 $ 61,502 $ 39,613 Numerator for diluted earnings per share $ 25,642 $ 18,461 $ 61,502 $ 39,613 Denominator: Weighted average common shares outstanding - basic 99,495,657 98,599,271 99,346,439 97,228,058 Employee stock options 1,227,507 1,640,199 1,270,406 1,645,793 Non-vested stock units 117,723 175,300 185,324 279,110 Weighted average common shares - diluted 100,840,887 100,414,770 100,802,169 99,152,961 Diluted earnings per share from net income $ 0.25 $ 0.18 $ 0.61 $ 0.40 Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 25, 2023 excluded 0.6 million and 0.5 million shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive. Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 26, 2022 excluded 0.3 million and 0.3 million shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive. Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 25, 2023 excluded 0.1 million non-vested stock units and 0.1 million non-vested stock units, respectively, that would have been anti-dilutive. Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 26, 2022 excluded 0.1 million and 0.1 million of non-vested stock units, respectively, that would have been anti-dilutive. The diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 26, 2022 excluded 0.9 million shares and 1.5 million shares issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive. |
Omnibus Incentive Plan
Omnibus Incentive Plan | 6 Months Ended |
Feb. 25, 2023 | |
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 for equity-classified awards 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 twenty-six weeks ended February 25, 2023: Shares underlying options Weighted average Weighted average remaining contractual life (years) Outstanding as of August 27, 2022 2,776,551 $ 18.04 6.10 Granted 135,001 38.61 Exercised (326,561) 14.67 Forfeited (20,009) 31.33 Outstanding as of February 25, 2023 2,564,982 $ 19.45 5.86 Vested and expected to vest as of February 25, 2023 2,564,982 $ 19.45 5.86 Exercisable as of February 25, 2023 2,054,267 $ 15.62 5.16 As of February 25, 2023, the Company had $5.0 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 1.7 years. During the twenty-six weeks ended February 25, 2023 and February 26, 2022, the Company received $4.8 million and $1.5 million in cash from stock option exercises, respectively. Restricted Stock Units The following table summarizes restricted stock unit activity for the twenty-six weeks ended February 25, 2023: Units Weighted average Non-vested as of August 27, 2022 453,003 $ 30.68 Granted 264,992 37.16 Vested (175,301) 27.23 Forfeited (44,662) 33.66 Non-vested as of February 25, 2023 498,032 $ 35.08 As of February 25, 2023, the Company had $13.3 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.7 years. Performance Stock Units During the twenty-six weeks ended February 25, 2023, the Company granted performance stock units under its 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 twenty-six weeks ended February 25, 2023: Units Weighted average Non-vested as of August 27, 2022 255,023 $ 32.82 Granted 50,629 62.55 Vested (72,452) 27.39 Forfeited (37,241) 31.00 Non-vested as of February 25, 2023 195,959 $ 42.85 As of February 25, 2023, the Company had $5.0 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.5 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 have been met. The SARs outstanding as of February 25, 2023 cliff vest two years from the date of grant and must be exercised within five years. The following table summarizes SARs activity for the twenty-six weeks ended February 25, 2023: Shares underlying SARs Weighted average Outstanding as of August 27, 2022 150,000 $ 24.20 Granted 150,000 37.67 Exercised (150,000) 24.20 Forfeited — — Outstanding as of February 25, 2023 150,000 $ 37.67 |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Feb. 25, 2023 | |
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 included workforce reductions, changes in management structure, and the relocation of business activities from one location to another. The Company substantially completed its restructuring activities during the third quarter of fiscal 2022; therefore no restructuring or restructuring-related costs were incurred in the thirteen and twenty-six weeks ended February 25, 2023. In the thirteen and twenty-six weeks ended February 26, 2022, the Company incurred $0.1 million of restructuring and restructuring-related costs. Since the announcement of the restructuring activities in May 2020, the Company incurred aggregate restructuring and restructuring-related costs of $9.9 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 25, 2023 | |
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 (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which extended the period of time for which ASU 2020-04 could be applied. As a result, the amendments in ASU 2020-04 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, 2024. The amendments of these ASUs are effective for all entities and should be applied on a prospective basis. On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to its credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”), as described in Note 5, Long-Term Debt and Line of Credit. In addition to replacing the London Interbank Offered Rate (“LIBOR”) as the Credit Agreement’s reference rate with the Secured Overnight Financing Rate (“SOFR”), the 2022 Repricing Amendment contemporaneously modified other terms that changed, or had the potential to change, the amount or timing of contractual cash flows as contemplated by the guidance in ASU 2020-04. As such, the contract modifications related to the 2022 Repricing Amendment were outside of the scope of the optional guidance in ASU 2020-04. The Company will continue to monitor the effects of rate reform, if any, on any new or amended contracts through December 31, 2024. The Company does not anticipate the amendments in this ASU will be material to its 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 Consolidated Financial Statements The unaudited interim 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 consolidated financial statements and related notes of the Company and its subsidiaries are unaudited. The unaudited interim 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 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 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 27, 2022, included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on October 21, 2022. The ultimate effect the supply chain challenges, cost pressures, current high inflation environment, and the possible economic recession could have on consumer purchasing patterns and on the Company’s business continues to be not fully known. Additionally, management is continuing to monitor the conflict in Ukraine, especially regarding the availability and cost of raw materials that are produced in this region and Europe in general. Management is also monitoring the situation in Eastern Europe for its possible supply chain and consumer consumption effects on the Company’s business. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Feb. 25, 2023 | |
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 brands: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 North America (1) Atkins $ 134,351 $ 135,582 $ 266,096 $ 269,376 Quest 154,598 152,573 316,070 290,867 Total North America 288,949 288,155 582,166 560,243 International 7,635 8,563 15,296 17,740 Total net sales $ 296,584 $ 296,718 $ 597,462 $ 577,983 (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. |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consists of the following: February 25, 2023 (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 47,503 126,497 Licensing agreements 13 years 22,000 9,540 12,460 Proprietary recipes and formulas 7 years 7,000 5,631 1,369 Software and website development costs 3 - 5 years 5,863 4,793 1,070 Intangible assets in progress 3 - 5 years 111 — 111 $ 1,182,974 $ 67,467 $ 1,115,507 August 27, 2022 (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 41,703 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consists of the following: February 25, 2023 (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 47,503 126,497 Licensing agreements 13 years 22,000 9,540 12,460 Proprietary recipes and formulas 7 years 7,000 5,631 1,369 Software and website development costs 3 - 5 years 5,863 4,793 1,070 Intangible assets in progress 3 - 5 years 111 — 111 $ 1,182,974 $ 67,467 $ 1,115,507 August 27, 2022 (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 41,703 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 |
Estimated Future Amortization | Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization Remainder of 2023 $ 7,792 2024 14,917 2025 13,522 2026 13,517 2027 13,517 2028 and thereafter 78,131 Total $ 141,396 |
Long-Term Debt and Line of Cr_2
Long-Term Debt and Line of Credit (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following: (In thousands) February 25, 2023 August 27, 2022 Term Facility (effective rate of 8.0% at February 25, 2023) $ 365,000 $ 406,500 Finance lease liabilities (effective rate of 5.6% at February 25, 2023) 264 406 Less: Deferred financing fees 2,402 3,620 Total debt 362,862 403,286 Less: Current finance lease liabilities 240 264 Long-term debt, net of deferred financing fees $ 362,622 $ 403,022 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Feb. 25, 2023 | |
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: Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 Income before income taxes $ 79,596 $ 62,685 Income tax expense $ 18,094 $ 23,072 Effective tax rate 22.7 % 36.8 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Feb. 25, 2023 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) Statements of Operations Caption February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Operating lease cost: Lease cost Cost of goods sold and $ 2,248 $ 2,273 $ 4,500 $ 4,528 Variable lease cost (1) Cost of goods sold and 780 860 1,518 1,513 Total operating lease cost 3,028 3,133 6,018 6,041 Finance lease cost: Amortization of right-of-use assets Cost of goods sold 63 68 131 136 Interest on lease liabilities Interest expense 4 8 9 17 Total finance lease cost 67 76 140 153 Total lease cost $ 3,095 $ 3,209 $ 6,158 $ 6,194 (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 February 25, 2023 August 27, 2022 Assets Operating lease right-of-use assets Other long-term assets $ 43,132 $ 46,460 Finance lease right-of-use assets Property and equipment, net 235 367 Total lease assets $ 43,367 $ 46,827 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 7,238 $ 6,249 Finance lease liabilities Current maturities of long-term debt 240 264 Long-term: Operating lease liabilities Other long-term liabilities 40,814 44,482 Finance lease liabilities Long-term debt, less current maturities 24 142 Total lease liabilities $ 48,316 $ 51,137 |
Finance Lease, Liability, Maturity | Future maturities of lease liabilities as of February 25, 2023 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2023 4,603 127 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 56,471 272 Less: Interest (8,419) (8) Present value of lease liabilities $ 48,052 $ 264 |
Lessee, Operating Lease, Liability, Maturity | Future maturities of lease liabilities as of February 25, 2023 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: Remainder of 2023 4,603 127 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 56,471 272 Less: Interest (8,419) (8) Present value of lease liabilities $ 48,052 $ 264 |
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: February 25, 2023 August 27, 2022 Weighted-average remaining lease term (in years) Operating leases 6.89 7.27 Finance leases 1.08 1.51 Weighted-average discount rate Operating leases 4.7 % 4.7 % 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: Twenty-Six Weeks Ended (In thousands) February 25, 2023 February 26, 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,957 $ 4,990 Operating cash flows from finance leases $ 239 $ 281 Financing cash flows from finance leases $ 151 $ 157 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Nov. 26, 2022 | |
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 Twenty-Six Weeks Ended (In thousands, except per share data) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Basic earnings per share computation: Numerator: Net income available to common stockholders $ 25,642 $ 18,461 $ 61,502 $ 39,613 Denominator: Weighted average common shares outstanding - basic 99,495,657 98,599,271 99,346,439 97,228,058 Basic earnings per share from net income $ 0.26 $ 0.19 $ 0.62 $ 0.41 Diluted earnings per share computation: Numerator: Net income available for common stockholders $ 25,642 $ 18,461 $ 61,502 $ 39,613 Numerator for diluted earnings per share $ 25,642 $ 18,461 $ 61,502 $ 39,613 Denominator: Weighted average common shares outstanding - basic 99,495,657 98,599,271 99,346,439 97,228,058 Employee stock options 1,227,507 1,640,199 1,270,406 1,645,793 Non-vested stock units 117,723 175,300 185,324 279,110 Weighted average common shares - diluted 100,840,887 100,414,770 100,802,169 99,152,961 Diluted earnings per share from net income $ 0.25 $ 0.18 $ 0.61 $ 0.40 |
Omnibus Incentive Plan (Tables)
Omnibus Incentive Plan (Tables) | 6 Months Ended |
Feb. 25, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock option activity | The following table summarizes stock option activity for the twenty-six weeks ended February 25, 2023: Shares underlying options Weighted average Weighted average remaining contractual life (years) Outstanding as of August 27, 2022 2,776,551 $ 18.04 6.10 Granted 135,001 38.61 Exercised (326,561) 14.67 Forfeited (20,009) 31.33 Outstanding as of February 25, 2023 2,564,982 $ 19.45 5.86 Vested and expected to vest as of February 25, 2023 2,564,982 $ 19.45 5.86 Exercisable as of February 25, 2023 2,054,267 $ 15.62 5.16 |
Restricted stock unit activity | The following table summarizes restricted stock unit activity for the twenty-six weeks ended February 25, 2023: Units Weighted average Non-vested as of August 27, 2022 453,003 $ 30.68 Granted 264,992 37.16 Vested (175,301) 27.23 Forfeited (44,662) 33.66 Non-vested as of February 25, 2023 498,032 $ 35.08 |
Performance stock unit activity | The following table summarizes performance stock unit activity for the twenty-six weeks ended February 25, 2023: Units Weighted average Non-vested as of August 27, 2022 255,023 $ 32.82 Granted 50,629 62.55 Vested (72,452) 27.39 Forfeited (37,241) 31.00 Non-vested as of February 25, 2023 195,959 $ 42.85 |
Stock appreciation right activity | The following table summarizes SARs activity for the twenty-six weeks ended February 25, 2023: Shares underlying SARs Weighted average Outstanding as of August 27, 2022 150,000 $ 24.20 Granted 150,000 37.67 Exercised (150,000) 24.20 Forfeited — — Outstanding as of February 25, 2023 150,000 $ 37.67 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Disaggregation of revenue | ||||
Net sales | $ 296,584 | $ 296,718 | $ 597,462 | $ 577,983 |
North America | ||||
Disaggregation of revenue | ||||
Net sales | 288,949 | 288,155 | 582,166 | 560,243 |
International | ||||
Disaggregation of revenue | ||||
Net sales | 7,635 | 8,563 | 15,296 | 17,740 |
Atkins | North America | ||||
Disaggregation of revenue | ||||
Net sales | 134,351 | 135,582 | 266,096 | 269,376 |
Quest | North America | ||||
Disaggregation of revenue | ||||
Net sales | $ 154,598 | $ 152,573 | $ 316,070 | $ 290,867 |
Revenue Recognition (Details 2)
Revenue Recognition (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Feb. 25, 2023 | Feb. 25, 2023 | Aug. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Allowance for doubtful accounts | $ 1,800 | $ 1,800 | $ 1,200 |
Accounts and Financing Receivable, Allowance for Credit Loss | 1,000 | 1,000 | |
Note Receivable from SimplyProtein Sale | 3,000 | 3,000 | |
Credit loss expense (reversal), accounts receivable | $ 400 | $ 200 |
Goodwill Rollforward (Details)
Goodwill Rollforward (Details) - USD ($) $ in Thousands | Feb. 25, 2023 | Aug. 27, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 543,134 | $ 543,134 |
Goodwill Narrative (Details)
Goodwill Narrative (Details) $ in Thousands | Feb. 25, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill impairment charges | $ 0 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 27, 2022 | Feb. 25, 2023 | |
Intangible assets with finite lives: | ||
Intangible assets, gross carrying amount | $ 1,182,863 | $ 1,182,974 |
Finite-lived intangible assets, accumulated amortization | 59,605 | 67,467 |
Intangible assets, net carrying amount | $ 1,123,258 | 1,115,507 |
Finite-lived intangible assets, net carrying amount | $ 141,396 | |
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 | 41,703 | 47,503 |
Finite-lived intangible assets, net carrying amount | $ 132,297 | $ 126,497 |
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 | 8,581 | 9,540 |
Finite-lived intangible assets, net carrying amount | $ 13,419 | $ 12,460 |
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 | 5,131 | 5,631 |
Finite-lived intangible assets, net carrying amount | 1,869 | 1,369 |
Software and website development costs | ||
Intangible assets with finite lives: | ||
Finite-lived intangible assets, gross carrying amount | 5,863 | 5,863 |
Finite-lived intangible assets, accumulated amortization | 4,190 | 4,793 |
Finite-lived intangible assets, net carrying amount | $ 1,673 | 1,070 |
In Process Research and Development | ||
Intangible assets with finite lives: | ||
Finite-lived intangible assets, gross carrying amount | 111 | |
Finite-lived intangible assets, accumulated amortization | 0 | |
Finite-lived intangible assets, net carrying amount | $ 111 | |
Minimum | Software and website development costs | ||
Intangible assets with finite lives: | ||
Useful life | 3 years | 3 years |
Minimum | In Process Research and Development | ||
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 | In Process Research and Development | ||
Intangible assets with finite lives: | ||
Useful life | 5 years | |
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 | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible asset amortization expense | $ 3.9 | $ 4 | $ 7.8 | $ 7.9 |
Impairment of intangible assets, excluding goodwill | $ 0 | $ 0 |
Estimated Future Amortization (
Estimated Future Amortization (Details) $ in Thousands | Feb. 25, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2023 | $ 7,792 |
2024 | 14,917 |
2025 | 13,522 |
2026 | 13,517 |
2027 | 13,517 |
2028 and thereafter | 78,131 |
Finite-lived intangible assets, net carrying amount | $ 141,396 |
Long-Term Debt and Line of Cr_3
Long-Term Debt and Line of Credit - Narrative (Details) $ in Millions | Jan. 21, 2022 | Nov. 07, 2019 USD ($) | Jul. 07, 2017 USD ($) | Feb. 25, 2023 USD ($) |
Debt Instrument [Line Items] | ||||
Letters of Credit Outstanding, Amount | $ 3.5 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 8% | |||
Proceeds from long-term line of credit | $ 460 | |||
Repayments of principal in next twelve months | $ 0 | |||
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% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Line of Credit | Barclays Bank PLC and Other Parties | SOFR Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | SOFR Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | Secured Overnight Financing Rate SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Interest rate floor | 0.50% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | One Month Secured Overnight Financing Rate SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate floor | 10% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | Three Month Secured Overnight Financing Rate SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate floor | 0.15% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Term Loan | Six Month Secured Overnight Financing Rate SOFR | ||||
Debt Instrument [Line Items] | ||||
Interest rate floor | 0.25% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Revolving Credit Facility | SOFR Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2% | |||
Line of Credit | Barclays Bank PLC and Other Parties | Revolving Credit Facility | Secured Overnight Financing Rate SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3% |
Long-Term Debt and Line of Cr_4
Long-Term Debt and Line of Credit - Schedule of Debt (Details) - USD ($) $ in Thousands | Feb. 25, 2023 | Aug. 27, 2022 |
Debt Disclosure [Abstract] | ||
Term Facility (effective rate of 8.0% at February 25, 2023) | $ 365,000 | $ 406,500 |
Finance lease liabilities (effective rate of 5.6% at February 25, 2023) | 264 | 406 |
Less: Deferred financing fees | 2,402 | 3,620 |
Total debt | 362,862 | 403,286 |
Less: Current finance lease liabilities | (240) | (264) |
Long-term debt, net of deferred financing fees | $ 362,622 | $ 403,022 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Change in fair value change of warrant liability | $ 0 | $ 12,745 | $ 0 | $ 30,062 |
Private Warrants | ||||
Fair Value Disclosures [Abstract] | ||||
Warrants outstanding | 0 | 6,700,000 | 0 | 6,700,000 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants outstanding | 0 | 6,700,000 | 0 | 6,700,000 |
Change in fair value change of warrant liability | $ 12,700 | $ 30,100 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 34,040 | $ 28,710 | $ 79,596 | $ 62,685 |
Income tax expense | $ 8,398 | $ 10,249 | $ 18,094 | $ 23,072 |
Effective tax rate | 22.70% | 36.80% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 6 Months Ended |
Feb. 25, 2023 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate difference | (14.10%) |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | Aug. 27, 2022 | |
Components of lease expense | |||||
Lease cost | $ 2,248 | $ 2,273 | $ 4,500 | $ 4,528 | |
Variable lease cost (1) | 780 | 860 | 1,518 | 1,513 | |
Total operating lease cost | 3,028 | 3,133 | 6,018 | 6,041 | |
Amortization of right-of-use assets | 63 | 68 | 131 | 136 | |
Interest on lease liabilities | 4 | 8 | 9 | 17 | |
Total finance lease cost | 67 | 76 | 140 | 153 | |
Total lease cost | 3,095 | $ 3,209 | 6,158 | 6,194 | |
Assets and liabilities, lessee | |||||
Operating lease, right-of-use asset | 43,132 | 43,132 | $ 46,460 | ||
Finance lease, right-of-use asset | 235 | 235 | 367 | ||
Total lease assets | 43,367 | 43,367 | 46,827 | ||
Operating lease, liability, current | 7,238 | 7,238 | 6,249 | ||
Finance lease, liability, current | 240 | 240 | 264 | ||
Operating lease, liability, noncurrent | 40,814 | 40,814 | 44,482 | ||
Finance lease, liability, noncurrent | 24 | 24 | 142 | ||
Total lease liabilities | 48,316 | 48,316 | 51,137 | ||
Future maturities of lease liabilities, operating leases | |||||
Remainder of 2023 | 4,603 | 4,603 | |||
2024 | 9,424 | 9,424 | |||
2025 | 8,680 | 8,680 | |||
2026 | 6,880 | 6,880 | |||
2027 | 7,036 | 7,036 | |||
Thereafter | 19,848 | 19,848 | |||
Total lease payments | 56,471 | 56,471 | |||
Less: Interest | (8,419) | (8,419) | |||
Present value of lease liabilities | 48,052 | 48,052 | |||
Future maturities of lease liabilities, finance leases | |||||
Remainder of 2023 | 127 | 127 | |||
2024 | 145 | 145 | |||
2025 | 0 | 0 | |||
2026 | 0 | 0 | |||
2027 | 0 | 0 | |||
Thereafter | 0 | 0 | |||
Total lease payments | 272 | 272 | |||
Less: Interest | (8) | (8) | |||
Present value of lease liabilities | $ 264 | $ 264 | $ 406 | ||
Lessee, Lease, Description [Line Items] | |||||
Finance Lease, Weighted Average Discount Rate, Percent | 5.60% | 5.60% | 5.60% | ||
Finance Lease, Weighted Average Remaining Lease Term | 1 year 29 days | 1 year 29 days | 1 year 6 months 3 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 4.70% | 4.70% | 4.70% | ||
Operating Lease, Weighted Average Remaining Lease Term | 6 years 10 months 20 days | 6 years 10 months 20 days | 7 years 3 months 7 days | ||
Supplemental and other information related to leases | |||||
Operating cash flows from operating leases | $ 4,957 | 4,990 | |||
Operating cash flows from finance leases | 239 | 281 | |||
Financing cash flows from finance leases | $ 151 | $ 157 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Feb. 25, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Other commitment payment obligation | $ 3.3 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Nov. 26, 2022 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | Oct. 21, 2022 | Apr. 13, 2022 | Jan. 07, 2022 | Nov. 13, 2018 | |
Class of Stock [Line Items] | ||||||||
Repurchase of common stock (in shares) | 546,346 | 571,271 | ||||||
Stock repurchase program, remaining authorized repurchase amount | $ 71.5 | |||||||
Treasury Stock Acquired, Average Cost Per Share | $ 30.11 | $ 35.68 | ||||||
Shares of common stock issued | 4,830,761 | |||||||
Private Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Exercise price of warrants | $ 11.50 | $ 11.50 | ||||||
Warrants outstanding | 6,700,000 | 0 | 6,700,000 | |||||
Treasury Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase program, authorized amount | $ 150 | $ 50 | $ 50 | $ 50 | ||||
Repurchase of common stock (in shares) | 546,346 | 571,521 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Feb. 25, 2023 | Nov. 26, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Feb. 25, 2023 | Feb. 26, 2022 | |
Earnings per share, diluted | ||||||
Weighted average common shares - basic | 99,495,657 | 98,599,271 | 99,346,439 | 97,228,058 | ||
Basic earnings per share from net income (in dollars per share) | $ 0.26 | $ 0.19 | $ 0.62 | $ 0.41 | ||
Weighted Average Number of Shares Outstanding, Diluted | 100,840,887 | 100,414,770 | 100,802,169 | 99,152,961 | ||
Diluted earnings per share from net income (in dollars per share) | $ 0.25 | $ 0.18 | $ 0.61 | $ 0.40 | ||
Net income | $ 25,642 | $ 35,860 | $ 18,461 | $ 21,152 | $ 61,502 | $ 39,613 |
Numerator for diluted earnings per share | $ 25,642 | $ 18,461 | $ 61,502 | $ 39,613 | ||
Employee stock options | 1,227,507 | 1,640,199 | 1,270,406 | 1,645,793 | ||
Non-vested shares | 117,723 | 175,300 | 185,324 | 279,110 | ||
Numerator: | ||||||
Net income | $ 25,642 | 35,860 | $ 18,461 | 21,152 | $ 61,502 | $ 39,613 |
Denominator: | ||||||
Weighted average common shares - basic | 99,495,657 | 98,599,271 | 99,346,439 | 97,228,058 | ||
Basic earnings per share from net income (in dollars per share) | $ 0.26 | $ 0.19 | $ 0.62 | $ 0.41 | ||
Numerator: | ||||||
Net income | $ 25,642 | $ 35,860 | $ 18,461 | $ 21,152 | $ 61,502 | $ 39,613 |
Numerator for diluted earnings per share | $ 25,642 | $ 18,461 | $ 61,502 | $ 39,613 | ||
Denominator: | ||||||
Weighted average common shares - basic | 99,495,657 | 98,599,271 | 99,346,439 | 97,228,058 | ||
Employee stock options | 1,227,507 | 1,640,199 | 1,270,406 | 1,645,793 | ||
Non-vested shares | 117,723 | 175,300 | 185,324 | 279,110 | ||
Weighted average common shares - diluted | 100,840,887 | 100,414,770 | 100,802,169 | 99,152,961 | ||
Diluted earnings per share from net income (in dollars per share) | $ 0.25 | $ 0.18 | $ 0.61 | $ 0.40 | ||
Private Warrants | ||||||
Earnings per share, diluted | ||||||
Antidilutive securities excluded from computation of earnings per share | 900,000 | 1,500,000 | ||||
Stock Options | ||||||
Earnings per share, diluted | ||||||
Antidilutive securities excluded from computation of earnings per share | 600,000 | 300,000 | 500,000 | 300,000 | ||
Restricted Stock Units | ||||||
Earnings per share, diluted | ||||||
Antidilutive securities excluded from computation of earnings per share | 100,000 | 100,000 | 100,000 | 100,000 |
Omnibus Incentive Plan (Details
Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 25, 2023 | Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock compensation expense | $ 3,000 | $ 3,100 | $ 6,332 | $ 5,697 |
Omnibus Incentive Plan - Stock
Omnibus Incentive Plan - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Aug. 27, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Additional disclosures | |||
Proceeds from option exercises | $ 4,791 | $ 1,474 | |
Stock Options | |||
Shares | |||
Outstanding at beginning of period (in shares) | 2,776,551 | ||
Granted (in shares) | 135,001 | ||
Exercised (in shares) | (326,561) | ||
Forfeited (in shares) | (20,009) | ||
Outstanding at end of period (in shares) | 2,776,551 | 2,564,982 | |
Options vested or expected to vest (in shares) | 2,564,982 | ||
Exercisable (in shares) | 2,054,267 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 18.04 | ||
Granted (in dollars per share) | 38.61 | ||
Exercised (in dollars per share) | 14.67 | ||
Forfeited (in dollars per share) | 31.33 | ||
Outstanding at end of period (in dollars per share) | $ 18.04 | 19.45 | |
Options vested or expected to vest (in dollars per share) | 19.45 | ||
Exercisable (in dollars per share) | $ 15.62 | ||
Weighted average remaining contractual term | |||
Outstanding at end of period, weighted average remaining contractual life | 6 years 1 month 6 days | 5 years 10 months 9 days | |
Vested and expected to vest at end of period, weighted average remaining contractual life | 5 years 10 months 9 days | ||
Exercisable at end of period, weighted average remaining contractual life | 5 years 1 month 28 days | ||
Additional disclosures | |||
Unrecognized compensation costs | $ 5,000 | ||
Period for recognition of unrecognized compensation cost | 1 year 8 months 12 days | ||
Proceeds from option exercises | $ 4,800 | $ 1,500 |
Omnibus Incentive Plan - Restri
Omnibus Incentive Plan - Restricted Stock Units Activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 6 Months Ended |
Feb. 25, 2023 USD ($) $ / shares shares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 453,003 |
Granted (in shares) | shares | 264,992 |
Vested (in shares) | shares | (175,301) |
Forfeited (in shares) | shares | (44,662) |
Non-vested at end of period (in shares) | shares | 498,032 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 30.68 |
Granted (in dollars per share) | $ / shares | 37.16 |
Vested (in dollars per share) | $ / shares | 27.23 |
Forfeited (in dollars per share) | $ / shares | 33.66 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 35.08 |
Additional disclosures | |
Unrecognized compensation costs | $ | $ 13.3 |
Period for recognition of unrecognized compensation cost | 1 year 8 months 12 days |
Omnibus Incentive Plan - Perfor
Omnibus Incentive Plan - Performance Stock Units Activity (Details) - Performance Stock Units $ / shares in Units, $ in Millions | 6 Months Ended |
Feb. 25, 2023 USD ($) $ / shares shares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 255,023 |
Granted (in shares) | shares | 50,629 |
Vested (in shares) | shares | (72,452) |
Forfeited (in shares) | shares | (37,241) |
Non-vested at end of period (in shares) | shares | 195,959 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 32.82 |
Granted (in dollars per share) | $ / shares | 62.55 |
Vested (in dollars per share) | $ / shares | 27.39 |
Forfeited (in dollars per share) | $ / shares | 31 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 42.85 |
Additional disclosures | |
Period for recognition of unrecognized compensation cost | 1 year 6 months |
Unrecognized compensation costs | $ | $ 5 |
Requisite service period | 3 years |
Minimum | |
Additional disclosures | |
Performance stock vesting range | 0% |
Maximum | |
Additional disclosures | |
Performance stock vesting range | 200% |
Omnibus Incentive Plan - Stoc_2
Omnibus Incentive Plan - Stock Appreciation Rights (Activity) (Details) - Stock Appreciation Rights (SARs) | 6 Months Ended |
Feb. 25, 2023 $ / shares shares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 150,000 |
Granted (in shares) | shares | 150,000 |
Exercised (in shares) | shares | (150,000) |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 150,000 |
Weighted average exercise price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 24.20 |
Granted (in dollars per share) | $ / shares | 37.67 |
Exercised (in dollars per share) | $ / shares | 24.20 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 37.67 |
Additional disclosures | |
Award vesting period | 2 years |
Award expiration period | 5 years |
Restructuring and Related Cha_2
Restructuring and Related Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Feb. 26, 2022 | Feb. 25, 2023 | Feb. 26, 2022 | |
Restructuring and Related Charges | |||
Restructuring incurred cost | $ 100 | $ 0 | $ 100 |
Aggregate restructuring costs | $ 9,900 |