SAN ANTONIO, Aug. 26, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology®, a leading end-to-end hybrid cloud and AI solutions company, and SMPL-C, an AI-powered compliance automation platform, today announced their “Better Together” strategic partnership. The partnership will be delivered through Rackspace Technology Government Solutions, the company’s specialized division focused on secure, CMMC-authorized cloud infrastructure and compliance services for federal, state and local agencies as well as the defense ...

Photo Credit Sean and Catherine Lowe Photo Credit Sean and Catherine Lowe According to Atkins' survey, nearly half (47 percent) of couples who tackle wellness goals together call it the "ultimate relationship hack," with benefits extending past the scale. Sixty-six percent of respondents say adopting healthier habits together reduces relationship stress. A shared focus on wellness also strengthens physical connections and can lead to a more fulfilling intimate relationship: Sixty-two percent of partners who ...

PART I. Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of The Simply Good Foods Company and its subsidiaries for the period ended May 31, 2025, including balance sheets, statements of operations and comprehensive income, cash flows, and stockholders' equity, along with detailed notes explaining the company's operations, significant accounting policies, business combinations, revenue recognition, goodwill, debt, leases, and equity [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (May 31, 2025 vs. August 31, 2024) | Metric (in thousands) | May 31, 2025 | August 31, 2024 | Change | | :-------------------- | :----------- | :-------------- | :----- | | Total Assets | $2,430,388 | $2,436,144 | $(5,756) | | Total Liabilities | $589,437 | $708,658 | $(119,221) | | Total Stockholders' Equity | $1,840,951 | $1,727,486 | $113,465 | | Cash | $98,008 | $132,530 | $(34,522) | | Inventories | $164,464 | $142,107 | $22,357 | | Long-term debt, less current maturities | $248,920 | $397,485 | $(148,565) | [Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Key Financial Performance (Thirteen Weeks Ended) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Net Sales | $380,956 | $334,757 | +13.8% | | Gross Profit | $138,519 | $133,626 | +3.7% | | Income from Operations | $59,320 | $58,774 | +0.9% | | Net Income | $41,102 | $41,334 | -0.6% | | Basic EPS | $0.41 | $0.41 | 0.0% | | Diluted EPS | $0.40 | $0.41 | -2.4% | Key Financial Performance (Thirty-Nine Weeks Ended) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Net Sales | $1,081,879 | $955,634 | +13.2% | | Gross Profit | $399,142 | $365,614 | +9.2% | | Income from Operations | $168,666 | $158,677 | +6.3% | | Net Income | $115,971 | $110,018 | +5.4% | | Basic EPS | $1.15 | $1.10 | +4.5% | | Diluted EPS | $1.14 | $1.09 | +4.6% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Thirty-Nine Weeks Ended) | Cash Flow Activity (in thousands) | May 31, 2025 | May 25, 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Net cash provided by operating activities | $133,087 | $166,755 | $(33,668) | | Net cash used in investing activities | $(2,192) | $(2,345) | $153 | | Net cash used in financing activities | $(165,206) | $(43,569) | $(121,637) | | Net (decrease) increase in cash | $(34,311) | $120,841 | $(155,152) | | Cash at end of period | $98,008 | $208,681 | $(110,673) | - The decrease in cash provided by operating activities was primarily due to changes in working capital, driven by the timing of payments and receipts, the OWYN Acquisition, and inventory building, which consumed **$29.9 million** in cash for the thirty-nine weeks ended May 31, 2025, compared to **$6.8 million** provided in the prior year period[152](index=152&type=chunk) - Net cash used in financing activities significantly increased due to **$150.0 million** in principal payments on the Term Facility and **$24.3 million** in common stock repurchases during the thirty-nine weeks ended May 31, 2025, compared to **$45.0 million** in principal payments in the prior year[154](index=154&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Changes (August 31, 2024 to May 31, 2025) | Metric (in thousands) | August 31, 2024 | May 31, 2025 | Change | | :-------------------- | :-------------- | :----------- | :----- | | Total Stockholders' Equity | $1,727,486 | $1,840,951 | $113,465 | | Retained Earnings | $487,265 | $603,236 | $115,971 | | Treasury Stock | $(78,451) | $(102,789) | $(24,338) | | Common Stock Shares Issued | 102,515,315 | 103,583,702 | +1,068,387 | - Net income contributed **$115.971 million** to retained earnings during the thirty-nine weeks ended May 31, 2025[16](index=16&type=chunk)[22](index=22&type=chunk) - The company repurchased **693,375 shares** of common stock for **$24.338 million** during the period, increasing treasury stock[22](index=22&type=chunk)[78](index=78&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [Note 1. Nature of Operations and Principles of Consolidation](index=10&type=section&id=1.%20Nature%20of%20Operations%20and%20Principles%20of%20Consolidation) - The Simply Good Foods Company is a consumer packaged food and beverage company focused on nutritious snacking, marketing products under Quest, Atkins, and OWYN brands[25](index=25&type=chunk)[27](index=27&type=chunk)[98](index=98&type=chunk) - The company completed the acquisition of Only What You Need, Inc. (OWYN), a plant-based protein food company, on June 13, 2024, for approximately **$280.0 million**, expanding its wellness platform[26](index=26&type=chunk)[36](index=36&type=chunk)[99](index=99&type=chunk) - Products are distributed primarily in North America through grocery, club, mass merchandise, e-commerce, convenience, and specialty channels[27](index=27&type=chunk)[100](index=100&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The company is evaluating the impact of recently issued accounting pronouncements: ASU No. 2023-07 (Segment Reporting), ASU No. 2023-09 (Income Taxes), and ASU No. 2024-03 (Expense Disaggregation Disclosures), which are effective for fiscal years beginning after December 2023, 2024, and 2026, respectively[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 3. Business Combination](index=11&type=section&id=3.%20Business%20Combination) - The OWYN Acquisition was completed on June 13, 2024, for a cash purchase price of **$281.9 million**, funded by **$250.0 million** in incremental borrowings and cash on hand. Total net consideration paid was **$280.2 million** as of May 31, 2025, after a **$1.7 million** post-closing escrow release[36](index=36&type=chunk)[37](index=37&type=chunk)[147](index=147&type=chunk) Preliminary Purchase Price Allocation of OWYN Acquisition (June 13, 2024) | Assets Acquired / Liabilities Assumed (in thousands) | Fair Value | | :------------------------------------------------- | :--------- | | Cash and cash equivalents | $1,476 | | Accounts receivable, net | $14,214 | | Inventories | $38,955 | | Intangible assets, net | $243,626 | | Goodwill | $46,840 | | Deferred tax liability | $(41,513) | | Total assets acquired and liabilities assumed | $280,172 | OWYN Net Sales Included in Company Results (in thousands) | Period | Net Sales | | :-------------------- | :-------- | | Thirteen Weeks Ended May 31, 2025 | $33,551 | | Thirty-Nine Weeks Ended May 31, 2025 | $99,611 | [Note 4. Revenue Recognition](index=13&type=section&id=4.%20Revenue%20Recognition) Net Sales by Brand and Geographic Area (Thirteen Weeks Ended) | Brand/Region (in thousands) | May 31, 2025 | May 25, 2024 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Atkins | $112,287 | $128,602 | -12.69% | | Quest | $227,737 | $198,096 | +14.96% | | OWYN | $33,551 | — | N/A | | Total North America | $373,575 | $326,698 | +14.35% | | International | $7,381 | $8,059 | -8.35% | | Total Net Sales | $380,956 | $334,757 | +13.80% | Net Sales by Brand and Geographic Area (Thirty-Nine Weeks Ended) | Brand/Region (in thousands) | May 31, 2025 | May 25, 2024 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Atkins | $329,105 | $370,855 | -11.39% | | Quest | $630,445 | $560,433 | +12.49% | | OWYN | $99,611 | — | N/A | | Total North America | $1,059,161 | $931,288 | +13.73% | | International | $22,718 | $24,346 | -6.77% | | Total Net Sales | $1,081,879 | $955,634 | +13.21% | [Note 5. Goodwill and Intangibles](index=14&type=section&id=5.%20Goodwill%20and%20Intangibles) Goodwill Balance (in thousands) | Metric | Amount | | :-------------------- | :----- | | Balance as of August 31, 2024 | $591,687 | | Acquisition of business | $(1,713) | | Balance as of May 31, 2025 | $589,974 | - The change in Goodwill is primarily due to the OWYN Acquisition, with no impairment charges recorded during the period[52](index=52&type=chunk) Intangible Assets, Net (in thousands) | Intangible Asset Category | May 31, 2025 Net Carrying Amount | August 31, 2024 Net Carrying Amount | | :------------------------ | :------------------------------- | :---------------------------------- | | Brands and trademarks | $1,197,000 | $1,197,000 | | Customer relationships | $119,604 | $129,329 | | Licensing agreements | $8,147 | $9,585 | | Software and website development costs | $87 | $113 | | Intangible assets in progress | $1,115 | $439 | | Total Intangible Assets, Net | $1,325,953 | $1,336,466 | - Amortization expense for intangible assets was **$11.2 million** for the thirty-nine weeks ended May 31, 2025, down from **$11.4 million** in the prior year period[53](index=53&type=chunk) [Note 6. Long-Term Debt and Line of Credit](index=15&type=section&id=6.%20Long-Term%20Debt%20and%20Line%20of%20Credit) - The company increased its Term Facility by **$250.0 million** on June 13, 2024, to partially finance the OWYN Acquisition, and further reduced the interest rate on January 31, 2025, through the 2025 Repricing Amendment[60](index=60&type=chunk)[61](index=61&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) Long-Term Debt (in thousands) | Metric | May 31, 2025 | August 31, 2024 | | :-------------------- | :----------- | :-------------- | | Term Facility (outstanding) | $250,000 | $400,000 | | Long-term debt, net of deferred financing fees | $248,920 | $397,485 | - The company was in compliance with all debt covenants as of May 31, 2025, and August 31, 2024. The Term Facility matures in March 2027, with no principal payments required in the next twelve months[65](index=65&type=chunk)[66](index=66&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Note 7. Fair Value of Financial Instruments](index=16&type=section&id=7.%20Fair%20Value%20of%20Financial%20Instruments) - The company defines fair value using a three-tier hierarchy (Level 1, 2, 3) based on input observability. As of May 31, 2025, the book value of the company's debt approximated fair value, classified as Level 2[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 8. Income Taxes](index=17&type=section&id=8.%20Income%20Taxes) Income Tax Data (Thirty-Nine Weeks Ended) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | | :-------------------- | :----------- | :----------- | | Income before income taxes | $151,395 | $145,213 | | Provision for income taxes | $35,424 | $35,195 | | Effective tax rate | 23.4% | 24.2% | - The effective tax rate decreased by **0.8%** for the thirty-nine weeks ended May 31, 2025, primarily due to permanent differences, mainly stock-based compensation[72](index=72&type=chunk) [Note 9. Leases](index=17&type=section&id=9.%20Leases) Total Lease Cost (in thousands) | Period | Thirteen Weeks Ended May 31, 2025 | Thirty-Nine Weeks Ended May 31, 2025 | | :-------------------- | :-------------------------------- | :----------------------------------- | | Total Operating Lease Cost | $3,416 | $9,893 | | Total Finance Lease Cost | $0 | $0 | | Total Lease Cost | $3,416 | $9,893 | Lease Liabilities and Assets (in thousands) | Metric | May 31, 2025 | August 31, 2024 | | :-------------------- | :----------- | :-------------- | | Operating lease right-of-use assets | $45,785 | $35,097 | | Total lease liabilities | $55,813 | $39,824 | - The weighted-average remaining lease term for operating leases was **6.58 years** as of May 31, 2025, with a weighted-average discount rate of **6.0%**[74](index=74&type=chunk) [Note 10. Commitments and Contingencies](index=18&type=section&id=10.%20Commitments%20and%20Contingencies) - The company is not currently a party to any material litigation or aware of any pending or threatened litigation that could have a material adverse effect on its business[75](index=75&type=chunk)[165](index=165&type=chunk) - Future payments for endorsement contracts with celebrity figures and social media influencers are estimated at **$1.8 million** over the next year as of May 31, 2025[76](index=76&type=chunk) [Note 11. Stockholders' Equity](index=19&type=section&id=11.%20Stockholders'%20Equity) - The company repurchased **693,375 shares** of common stock at an average price of **$35.10** per share during the thirteen and thirty-nine weeks ended May 31, 2025[78](index=78&type=chunk)[149](index=149&type=chunk) - As of May 31, 2025, approximately **$47.2 million** remained available under the **$150.0 million** stock repurchase program, which has no expiration date[78](index=78&type=chunk)[150](index=150&type=chunk)[173](index=173&type=chunk) [Note 12. Earnings Per Share](index=19&type=section&id=12.%20Earnings%20Per%20Share) Earnings Per Share (Thirteen Weeks Ended) | Metric | May 31, 2025 | May 25, 2024 | | :-------------------- | :----------- | :----------- | | Basic EPS | $0.41 | $0.41 | | Diluted EPS | $0.40 | $0.41 | | Basic Weighted Average Shares | 100,923,690 | 100,024,230 | | Diluted Weighted Average Shares | 101,635,521 | 101,270,163 | Earnings Per Share (Thirty-Nine Weeks Ended) | Metric | May 31, 2025 | May 25, 2024 | | :-------------------- | :----------- | :----------- | | Basic EPS | $1.15 | $1.10 | | Diluted EPS | $1.14 | $1.09 | | Basic Weighted Average Shares | 100,787,087 | 99,852,203 | | Diluted Weighted Average Shares | 101,669,998 | 101,240,471 | [Note 13. Omnibus Incentive Plan](index=20&type=section&id=13.%20Omnibus%20Incentive%20Plan) - Stock-based compensation expense was **$4.0 million** for the thirteen weeks ended May 31, 2025, and **$12.8 million** for the thirty-nine weeks ended May 31, 2025[84](index=84&type=chunk) Stock Option Activity (Thirty-Nine Weeks Ended May 31, 2025) | Metric | Shares Underlying Options | Weighted Average Exercise Price | | :------------------------ | :------------------------------ | :------------------------------ | | Outstanding as of August 31, 2024 | 2,410,567 | $20.75 | | Granted | 34,035 | $36.49 | | Exercised | (868,665) | $13.76 | | Forfeited | (19,694) | $40.07 | | Outstanding as of May 31, 2025 | 1,556,243 | $24.75 | - As of May 31, 2025, unrecognized compensation cost for stock options was **$1.6 million** (over **1.1 years**), for restricted stock units was **$16.6 million** (over **1.8 years**), and for performance stock units was **$6.4 million** (over **1.5 years**)[85](index=85&type=chunk)[86](index=86&type=chunk)[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and liquidity, highlighting key business trends, the impact of the OWYN acquisition, and a detailed comparison of financial results for the thirteen and thirty-nine weeks ended May 31, 2025, versus the prior year. It also includes a reconciliation of non-GAAP measures like EBITDA and Adjusted EBITDA [Overview](index=23&type=section&id=Overview) - The Simply Good Foods Company is a consumer packaged food and beverage company focused on nutritious snacking, with brands Quest, Atkins, and OWYN, aiming for innovation, organic growth, and acquisitions[98](index=98&type=chunk)[100](index=100&type=chunk) - The acquisition of OWYN, a plant-based protein food company, was completed in June 2024 for approximately **$280.0 million**, expanding the company's product offerings[99](index=99&type=chunk)[146](index=146&type=chunk) [Business Trends](index=24&type=section&id=Business%20Trends) - Business performance improved due to the OWYN Acquisition and Quest volume growth, offsetting continued softness in Atkins. Fiscal year 2025 organic sales growth is expected to be volume-driven, supported by advertising, marketing, innovation, and promotions[101](index=101&type=chunk) - The company is monitoring macroeconomic trends like consumer uncertainty, ingredient inflation, supply chain challenges, and tariffs, which could impact net sales and profitability, but current performance is in line with fiscal year 2025 expectations[102](index=102&type=chunk) [Key Financial Definitions](index=24&type=section&id=Key%20Financial%20Definitions) - Net sales are product sales less promotional activities, slotting fees, and other adjustments[103](index=103&type=chunk) - Cost of goods sold includes costs paid to contract manufacturers for raw ingredients, packaging, shipping, warehousing, and tolling charges[104](index=104&type=chunk) - Operating expenses comprise selling and marketing, general and administrative, depreciation and amortization, and business transaction costs[105](index=105&type=chunk)[107](index=107&type=chunk) [Results of Operations (Thirteen Weeks Ended May 31, 2025, and May 25, 2024)](index=25&type=section&id=Comparison%20of%20Unaudited%20Results%20for%20the%20Thirteen%20Weeks%20Ended%20May%2031%2C%202025%2C%20and%20the%20Thirteen%20Weeks%20Ended%20May%2025%2C%202024) Thirteen Weeks Ended Financial Performance (YoY Change) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Net Sales | $380,956 | $334,757 | $46,199 | +13.8% | | Cost of Goods Sold | $242,437 | $201,131 | $41,306 | +20.5% | | Gross Profit | $138,519 | $133,626 | $4,893 | +3.7% | | Gross Profit Margin | 36.4% | 39.9% | -3.5% | -350 bps | | Operating Expenses | $79,199 | $74,852 | $4,347 | +5.8% | | Income from Operations | $59,320 | $58,774 | $546 | +0.9% | | Net Income | $41,102 | $41,334 | $(232) | -0.6% | | Adjusted EBITDA | $73,854 | $71,874 | $1,980 | +2.8% | - Net sales increased by **13.8%** primarily due to the OWYN Acquisition and Quest volume growth, despite softness in Atkins. North America net sales increased **14.3%**, while International net sales decreased by **$0.7 million**[108](index=108&type=chunk) - Gross profit margin decreased by **350 basis points** to **36.4%**, mainly due to unfavorable commodity expenses and lower gross profit margins from the OWYN business[110](index=110&type=chunk) - General and administrative expenses increased by **30.7%** due to **$5.2 million** in integration costs and **$3.2 million** in employee-related costs from OWYN, plus higher corporate expenses[118](index=118&type=chunk) [Results of Operations (Thirty-Nine Weeks Ended May 31, 2025, and May 25, 2024)](index=27&type=section&id=Comparison%20of%20Unaudited%20Results%20for%20the%20Thirty-Nine%20Weeks%20Ended%20May%2031%2C%202025%2C%20and%20the%20Thirty-Nine%20Weeks%20Ended%20May%2025%2C%202024) Thirty-Nine Weeks Ended Financial Performance (YoY Change) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Net Sales | $1,081,879 | $955,634 | $126,245 | +13.2% | | Cost of Goods Sold | $682,737 | $590,020 | $92,717 | +15.7% | | Gross Profit | $399,142 | $365,614 | $33,528 | +9.2% | | Gross Profit Margin | 36.9% | 38.3% | -1.4% | -140 bps | | Operating Expenses | $230,476 | $206,937 | $23,539 | +11.4% | | Income from Operations | $168,666 | $158,677 | $9,989 | +6.3% | | Net Income | $115,971 | $110,018 | $5,953 | +5.4% | | Adjusted EBITDA | $211,923 | $191,679 | $20,244 | +10.6% | - Net sales increased by **13.2%** driven by the OWYN Acquisition and Quest volume growth, partially offset by Atkins' softness. North America net sales increased **13.7%**, while International net sales decreased by **$1.6 million**[119](index=119&type=chunk) - Gross profit margin decreased by **140 basis points** to **36.9%**, primarily due to lower gross profit margins of the OWYN business, partially offset by favorable commodity expenses[121](index=121&type=chunk) - General and administrative expenses increased by **30.4%** due to **$12.1 million** in integration costs and **$9.2 million** in employee-related costs from OWYN, and higher corporate expenses[129](index=129&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=29&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) - EBITDA and Adjusted EBITDA are non-GAAP measures used by management to reflect ongoing operations and provide additional information to investors, excluding items not directly attributable to underlying operating performance[130](index=130&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (Thirteen Weeks Ended) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | | :-------------------- | :----------- | :----------- | | Net income | $41,102 | $41,334 | | EBITDA | $64,314 | $63,943 | | Adjusted EBITDA | $73,854 | $71,874 | EBITDA and Adjusted EBITDA Reconciliation (Thirty-Nine Weeks Ended) | Metric (in thousands) | May 31, 2025 | May 25, 2024 | | :-------------------- | :----------- | :----------- | | Net income | $115,971 | $110,018 | | EBITDA | $183,824 | $174,847 | | Adjusted EBITDA | $211,923 | $191,679 | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) - The company had **$98.0 million** in cash as of May 31, 2025, and believes its liquidity and capital sources are sufficient for operations and growth for at least the next twelve months[133](index=133&type=chunk) - The OWYN Acquisition was funded by **$250.0 million** in incremental borrowings under the Term Facility and cash on hand, with the Term Facility balance at **$250.0 million** as of May 31, 2025, maturing in March 2027[145](index=145&type=chunk)[147](index=147&type=chunk) - The company repurchased **693,375 shares** of common stock for **$24.3 million** during the period, with **$47.2 million** remaining available under its **$150.0 million** stock repurchase program[149](index=149&type=chunk)[150](index=150&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) Cash Flow Summary (Thirty-Nine Weeks Ended) | Cash Flow Activity (in thousands) | May 31, 2025 | May 25, 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Net cash provided by operating activities | $133,087 | $166,755 | $(33,668) | | Net cash used in investing activities | $(2,192) | $(2,345) | $153 | | Net cash used in financing activities | $(165,206) | $(43,569) | $(121,637) | - Operating cash flow decreased by **$33.7 million**, primarily due to a **$36.7 million** negative swing in working capital, driven by inventory building and the OWYN Acquisition[152](index=152&type=chunk) - Financing cash flow saw a significant increase in usage, primarily due to **$150.0 million** in Term Facility principal payments and **$24.3 million** in common stock repurchases[154](index=154&type=chunk) [New Accounting Pronouncements](index=32&type=section&id=New%20Accounting%20Pronouncements) - The company refers to Note 2, Summary of Significant Accounting Policies, for information regarding recently issued accounting standards[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There were no material changes in the company's market risk exposure during the thirteen-week period ended May 31, 2025 - No material changes in market risk exposure occurred during the thirteen-week period ended May 31, 2025[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of May 31, 2025. The assessment scope excluded the recently acquired OWYN business, which accounted for 15% of total assets and 9% of net sales, consistent with SEC guidance for new acquisitions - Disclosure controls and procedures were deemed effective as of May 31, 2025, by the CEO and CFO[158](index=158&type=chunk) - The assessment of disclosure controls excluded the OWYN Acquisition, which represented **15%** of total assets and **9%** of total net sales, in line with SEC guidance for recently acquired businesses[159](index=159&type=chunk) - New processes and controls are being implemented for OWYN's internal control over financial reporting following the acquisition[160](index=160&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings and is unaware of any pending or threatened litigation that could significantly impact its business, operating results, financial condition, or cash flows - The company is not a party to any material litigation and is unaware of any pending or threatened litigation that could materially adversely affect its business[165](index=165&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factor highlighted is the volatility of ingredient and packaging costs, which can significantly rise due to global competition, currency fluctuations, weather, climate change, geopolitical events, and tariffs. These cost increases may negatively affect profitability if not offset by price increases or cost savings, potentially reducing sales volume - Ingredient and packaging costs are volatile and may rise significantly due to factors like global competition, currency fluctuations, weather, climate change, geopolitical events, and tariffs, potentially affecting profitability[167](index=167&type=chunk)[168](index=168&type=chunk) - Attempts to offset cost pressures through price increases or cost savings may not be successful and could lead to reductions in sales volume or profitability[169](index=169&type=chunk) - The company does not use hedges for core ingredient or packaging availability, making it vulnerable to upward price movements that could negatively impact margins if costs cannot be passed on or efficiencies found[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 693,375 shares of common stock at an average price of $35.10 per share during the three months ended May 31, 2025. As of May 31, 2025, approximately $47.2 million remained available under the $150.0 million stock repurchase program Issuer Purchases of Equity Securities (March 2, 2025 - May 31, 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Maximum Dollar Value Remaining (in thousands) | | :-------------------------- | :--------------------- | :--------------------------- | :-------------------------------------------- | | March 2, 2025 - March 29, 2025 | 38,586 | $33.01 | $70,272.9 | | March 30, 2025 - April 26, 2025 | 92,902 | $32.96 | $67,211.0 | | April 27, 2025 - May 31, 2025 | 561,887 | $35.60 | $47,209.4 | | Total | 693,375 | $35.10 | $47,209.4 | - Approximately **$47.2 million** remained available under the **$150.0 million** stock repurchase program as of May 31, 2025[173](index=173&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[175](index=175&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the three months ended May 31, 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended May 31, 2025[176](index=176&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Third Amended and Restated Executive Severance Plan, certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL-related documents - Exhibits include the Third Amended and Restated Executive Severance Plan, Section 302 and 906 certifications, and XBRL documents[177](index=177&type=chunk)

Financial Data and Key Metrics Changes - Simply Good Foods reported Q3 net sales of $381 million, an increase of 13.8% year over year, driven by the acquisition of Owen and 3.8% organic growth [21][22] - Adjusted EBITDA for the quarter was $73.9 million, up 2.8% from the previous year, while net income was $41.1 million, slightly down from $41.3 million last year [23][24] - Gross margin declined to 36.4%, a decrease of 350 basis points year over year, primarily due to elevated input costs [22][24] Business Line Data and Key Metrics Changes - Quest, representing approximately 60% of net sales, achieved 11% consumption growth in Q3, with household penetration increasing by 120 basis points to 18.3% [11][21] - Atkins experienced a decline in consumption of 13% in Q3, attributed to distribution losses and the absence of high-volume merchandising events from the previous year [14][15] - Owen's retail takeaway grew by 24% in Q3, with ready-to-drink shakes seeing over 20% growth [17][21] Market Data and Key Metrics Changes - The nutritional snacking category continued to show robust growth, with overall consumption up double digits, reflecting a shift towards high protein, low sugar, and low carb options [7][19] - The company noted that Quest and Owen together account for approximately 70% of net sales, indicating strong market positioning [19][20] Company Strategy and Development Direction - Simply Good Foods aims to lead the generational shift towards healthier food options through innovation, expanding physical availability, and increasing brand awareness [19][20] - The company is focusing on optimizing the Atkins brand by reducing lower-velocity SKUs and enhancing the core product offerings [15][16] - There is a commitment to driving growth in the Salty Snacks platform, which saw a 31% increase in retail takeaway [12][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inflationary pressures impacting margins, particularly from cocoa and whey, and emphasized ongoing productivity and cost management efforts [8][9] - The outlook for the full year has been tightened, with expectations for net sales growth of 8.5% to 9.5% and adjusted EBITDA growth of 4% to 5% [28][30] - Management expressed confidence in the long-term growth potential of Quest and Owen, despite anticipated challenges with Atkins [19][20] Other Important Information - The company has repaid nearly all of the $250 million borrowed for the acquisition of Owen and has repurchased over $24 million worth of common stock [10][27] - The company is actively evaluating pricing strategies to address high input costs and maintain gross margins [96] Q&A Session Summary Question: Distribution expectations for Atkins and impact on sales - Management expects continued double-digit declines for Atkins due to distribution cuts but anticipates offsetting gains from Quest and Owen [36][39] Question: Performance expectations for Owen - Management remains confident in Owen's growth potential, expecting similar consumption trends to continue into FY 2026 [44][47] Question: Gross margin outlook and pricing strategies - Management indicated that gross margins are under pressure but are working on productivity and pricing actions to recover costs [65][68] Question: Capital allocation priorities - The company prioritizes M&A, debt repayment, and share buybacks as part of its capital allocation strategy [98][99] Question: Impact of Texas legislation on product portfolio - Management believes the impact of new regulations will be minimal, with only a few SKUs requiring reformulation [108][109]

Financial Data and Key Metrics Changes - Total net sales for Q3 2025 reached $381 million, an increase of 13.8% year over year, driven by Owen's contribution of $33.6 million or 10%, alongside 3.8% organic growth [23] - Adjusted EBITDA for the quarter was $73.9 million, reflecting a 2.8% increase from the previous year [25] - Gross profit increased to $138.5 million, a 3.7% rise from the year-ago period, but gross margin declined to 36.4%, down 350 basis points due to elevated input costs [24][25] - Reported EPS was $0.40 per diluted share, compared to $0.41 in Q3 last year, while adjusted diluted EPS increased to $0.51 from $0.50 [26] Business Line Data and Key Metrics Changes - Quest, representing approximately 60% of net sales, achieved 11% consumption growth in Q3, with household penetration increasing by 120 basis points to 18.3% [11] - Atkins experienced a 12.7% decline in net sales, attributed to distribution losses and the absence of high-volume merchandising events from the previous year [23][15] - Owen's retail takeaway grew by 24% in Q3, with ready-to-drink shakes seeing over 20% growth [18] Market Data and Key Metrics Changes - The nutritional snacking category continued to show robust growth, with overall consumption up double digits, reflecting a shift towards high protein, low sugar, and low carb options [8] - Quest's Salty Snacks platform saw retail takeaway grow by 31% in Q3, indicating strong market demand [12] Company Strategy and Development Direction - The company aims to optimize the Atkins brand by focusing on high-velocity SKUs and reducing lower-performing products, while continuing to support Quest and Owen's growth [16][18] - Simply Good Foods is positioned as a leader in the nutritional snacking category, focusing on innovation, expanding distribution, and increasing brand awareness [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inflationary pressures impacting margins, particularly from cocoa and whey, and emphasized ongoing productivity and cost management efforts [9][10] - The company expects to generate approximately 3% organic growth and mid-single-digit total adjusted EBITDA growth for the fiscal year [10] Other Important Information - The company has repaid $240 million of the $250 million borrowed for the acquisition of Owen, with a current leverage ratio of approximately 0.5 times [10][27] - Cash flow from operations for the fiscal year to date was $133 million, down from $167 million the previous year due to higher working capital needs [27] Q&A Session Summary Question: Distribution expectations for Atkins and impact on sales - Management expects continued double-digit declines for Atkins due to distribution cuts, but is proactively addressing these challenges with retailers [38][40] Question: Performance expectations for Owen - Management remains confident in Owen's growth potential, anticipating similar consumption trends as seen in Q3 [46][50] Question: Gross margin outlook and pricing strategy - Management is evaluating additional pricing actions to recover costs and support gross margins, which are currently under pressure [97][70] Question: Capital allocation priorities - The company prioritizes M&A, debt repayment, and share buybacks as part of its capital allocation strategy [99][100] Question: Impact of Texas legislation on product portfolio - Management believes the impact of new regulations will be minimal, with only a few SKUs requiring reformulation [110]

Company Performance - Simply Good Foods reported quarterly earnings of $0.51 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.50 per share a year ago [1] - The company posted revenues of $380.96 million for the quarter ended May 2025, exceeding the Zacks Consensus Estimate by 0.23% and up from $334.76 million year-over-year [2] - Over the last four quarters, Simply Good Foods has surpassed consensus EPS estimates three times and has also topped consensus revenue estimates three times [1][2] Stock Outlook - Simply Good Foods shares have declined approximately 17% since the beginning of the year, contrasting with the S&P 500's gain of 6.5% [3] - The company's current consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $376.45 million, and for the current fiscal year, it is $1.94 on revenues of $1.46 billion [7] Industry Context - The Food - Confectionery industry, to which Simply Good Foods belongs, is currently ranked in the bottom 11% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Simply Good Foods' stock performance [5]

Financial Performance - Q3 reported net sales increased by 13.8% year-over-year to $381 million, driven by the OWYN acquisition and 3.8% organic net sales growth[9, 31] - Fiscal year-to-date reported net sales increased by 13.2% year-over-year to $1,081.9 million, with OWYN contributing $99.6 million, or 10.4% to the growth[31] - Q3 Adjusted EBITDA grew by 2.8% year-over-year, while net income decreased slightly by 0.6% to $41.1 million[10, 34] - Fiscal year-to-date Adjusted EBITDA grew by 10.6% year-over-year, and net income increased by 5.4% to $116 million[11, 38] - The company's leverage improved to 0.5x, driven by Adjusted EBITDA growth and strong cash flow generation[11] Brand Performance - Quest retail takeaway grew by 11%, with household penetration increasing by 120 bps to 18.3%[9, 13] - OWYN Q3 retail takeaway grew by 24%, with balanced growth across channels, including MULO+C (+26%) and e-commerce (+19%)[9, 24, 25] - Atkins Q3 retail takeaway declined by 13%, primarily due to distribution losses[9, 23] Outlook and Strategy - Fiscal Year 2025 net sales for OWYN are expected to be $145 million[25] - The company expects Fiscal Year 2025 retail takeaway to increase low double-digits for Quest and decline low double digits for Atkins[17, 23] - The company is updating its Fiscal Year 2025 outlook, expecting net sales growth in the 8.5% to 9.5% range[10, 47]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section details the company's financial results for Q3 and year-to-date FY2025, including key metrics, brand and geographic performance, and profitability analysis [Q3 FY2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) In Q3 FY2025, The Simply Good Foods Company reported a 13.8% increase in net sales to $381.0 million, primarily driven by the OWYN acquisition and 3.8% organic growth from the Quest brand. While net income remained flat, Adjusted EBITDA grew by 2.8% to $73.9 million and Adjusted Diluted EPS saw a slight increase to $0.51 Q3 FY2025 Key Financial Metrics (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $381.0M | $334.8M | +13.8% | | Net Income | $41.1M | $41.3M | -0.5% | | Adjusted EBITDA | $73.9M | $71.9M | +2.8% | | Diluted EPS | $0.40 | $0.41 | -2.4% | | Adjusted Diluted EPS | $0.51 | $0.50 | +2.0% | - Net sales growth of **13.8%** was composed of a **10.0%** contribution from the OWYN acquisition and **3.8%** organic growth, driven by the Quest brand[3](index=3&type=chunk) - CEO Geoff Tanner highlighted that Quest and OWYN, now representing about **70%** of net sales, experienced double-digit consumption growth, while Atkins remained under pressure as anticipated[2](index=2&type=chunk) [YTD FY2025 Financial Results](index=3&type=section&id=Year-to-Date%20Third%20Quarter%20Fiscal%20Year%202025%20Summary) For the first thirty-nine weeks of FY2025, net sales grew 13.2% to $1.08 billion, with the OWYN acquisition contributing 10.4% to this growth. Adjusted EBITDA increased by 10.6% to $211.9 million, and Adjusted Diluted EPS rose 9.8% to $1.46 YTD FY2025 Key Financial Metrics (vs. YTD FY2024) | Metric | YTD FY2025 | YTD FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,081.9M | $955.6M | +13.2% | | Net Income | $116.0M | $110.0M | +5.5% | | Adjusted EBITDA | $211.9M | $191.7M | +10.6% | | Diluted EPS | $1.14 | $1.09 | +4.6% | | Adjusted Diluted EPS | $1.46 | $1.33 | +9.8% | - Year-to-date net sales growth was driven by a **$99.6 million** (**10.4%**) contribution from OWYN and **2.8%** organic growth from Quest[10](index=10&type=chunk) [Brand and Geographic Performance](index=1&type=section&id=Brand%20and%20Geographic%20Performance) Brand performance was mixed, with strong retail takeaway growth for Quest (+11%) and OWYN (+24%) in Q3, while Atkins declined (-13%). North America remains the dominant market, with sales growing to $373.6 million in Q3, whereas International sales saw a slight decline Q3 Retail Takeaway Growth | Brand | Retail Takeaway Growth (Q3) | | :--- | :--- | | Quest | ~11% | | OWYN | ~24% | | Atkins | ~-13% | Net Sales by Brand (Q3, in thousands) | Brand | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Atkins | $112,287 | $128,602 | | Quest | $227,737 | $198,096 | | OWYN | $33,551 | — | - North American net sales increased to **$373.6 million** in Q3 from **$326.7 million** in the prior year, while International sales decreased from **$8.1 million** to **$7.4 million**[36](index=36&type=chunk) [Profitability and Expenses](index=1&type=section&id=Profitability%20and%20Expenses) Q3 gross margin decreased by 350 basis points to 36.4%, impacted by net inflation and the inclusion of the lower-margin OWYN business. Operating expenses rose, driven by a $9.7 million increase in G&A, which included $5.2 million in integration expenses related to the OWYN acquisition - Q3 gross profit increased **3.7%** to **$138.5 million**, but gross margin fell **350 basis points** to **36.4%** due to net inflation and the OWYN acquisition[3](index=3&type=chunk) - Q3 Selling and marketing expenses decreased by **$2.7 million**, while General and administrative (G&A) expenses increased by **$9.7 million**, primarily due to OWYN integration costs (**$5.2 million**) and the inclusion of OWYN's G&A[5](index=5&type=chunk) - YTD gross margin decreased by **140 basis points** to **36.9%**, primarily due to the inclusion of OWYN[12](index=12&type=chunk) [Fiscal Year 2025 Outlook](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) This section outlines the company's updated financial guidance for fiscal year 2025, including expected growth rates for net sales and Adjusted EBITDA, along with key underlying assumptions and anticipated headwinds [Updated Guidance](index=1&type=section&id=Updated%20Guidance) The company has narrowed its full-year fiscal 2025 outlook. It now expects net sales to increase by 8.5% to 9.5% and Adjusted EBITDA to grow by 4% to 5%. This guidance incorporates an approximate 2-percentage point headwind from the 53rd week in fiscal 2024 FY2025 Outlook | Metric | Expected Growth | | :--- | :--- | | Net Sales | 8.5% to 9.5% | | Adjusted EBITDA | 4% to 5% | - The outlook includes expected net sales of **$145 million** for OWYN, which is the midpoint of the previously provided range[23](index=23&type=chunk) - The 53rd week in FY2024 creates an approximate **2-percentage point** headwind to both Net Sales and Adjusted EBITDA growth in FY2025, which is factored into the outlook[4](index=4&type=chunk)[23](index=23&type=chunk) [Key Assumptions and Headwinds](index=2&type=section&id=Key%20Assumptions%20and%20Headwinds) The company's outlook is based on the assumption of consistent economic conditions. It anticipates a significant gross margin decline of approximately 200 basis points for the full year, driven by inflation and tariff headwinds. To counteract these pressures, the company is increasing its productivity, cost savings, and pricing initiatives - The company is maintaining its outlook for a full-year gross margin decline of approximately **200 basis points** year-over-year[20](index=20&type=chunk) - The margin pressure is attributed to elevated inflation and tariff headwinds, particularly in the second half of the fiscal year[20](index=20&type=chunk) - Management is stepping up productivity, cost savings, and other mitigation efforts to offset headwinds while continuing to invest in long-term growth drivers[2](index=2&type=chunk)[20](index=20&type=chunk) [Financial Position and Cash Flow](index=4&type=section&id=Financial%20Position%20and%20Cash%20Flow) This section reviews the company's balance sheet, debt management, and cash flow performance, highlighting liquidity, leverage, and operational cash generation [Balance Sheet and Debt](index=4&type=section&id=Balance%20Sheet%20and%20Debt) As of May 31, 2025, the company held $98.0 million in cash. It has been actively deleveraging, repaying $50.0 million of its term loan in Q3 and a total of $150.0 million year-to-date. The outstanding principal on its term loan is $250.0 million, resulting in a low Net Debt to Adjusted EBITDA ratio of 0.5x Key Balance Sheet Items (as of May 31, 2025) | Item | Amount (in thousands) | | :--- | :--- | | Cash | $98,008 | | Total Current Assets | $436,939 | | Total Assets | $2,430,388 | | Long-term Debt | $248,920 | | Total Liabilities | $589,437 | | Total Stockholders' Equity | $1,840,951 | - The company repaid **$50.0 million** of its term loan debt during Q3, bringing fiscal year-to-date repayments to **$150.0 million**[19](index=19&type=chunk) - The company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was **0.5x** as of May 31, 2025[20](index=20&type=chunk)[42](index=42&type=chunk) [Cash Flow](index=4&type=section&id=Cash%20Flow) For the thirty-nine weeks ended May 31, 2025, net cash provided by operating activities was $133.1 million, a decrease from $166.8 million in the prior-year period. The decline was primarily attributed to higher uses of working capital, specifically an increase in inventory YTD Cash Flow Summary (in thousands) | Activity | YTD FY2025 | YTD FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $133,087 | $166,755 | | Net Cash used in Investing Activities | ($2,192) | ($2,345) | | Net Cash used in Financing Activities | ($165,206) | ($43,569) | - The decline in cash flow from operations was primarily due to higher uses of working capital, principally a **$23.2 million** increase in inventories[19](index=19&type=chunk)[35](index=35&type=chunk) [Non-GAAP Financial Measures Reconciliations](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted Diluted EPS, and Net Debt to Adjusted EBITDA, to their most directly comparable GAAP equivalents [Reconciliation of EBITDA and Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) The company provides a reconciliation from GAAP Net Income to non-GAAP Adjusted EBITDA. For Q3 FY2025, Net Income of $41.1 million was adjusted for items including interest, taxes, D&A, stock-based compensation ($4.0M), and OWYN integration costs ($5.2M) to arrive at an Adjusted EBITDA of $73.9 million Adjusted EBITDA Reconciliation Summary (Q3, in thousands) | Line Item | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Net Income | $41,102 | $41,334 | | EBITDA | $64,314 | $63,943 | | Adjustments (Stock Comp, Integration, etc.) | $9,540 | $7,931 | | **Adjusted EBITDA** | **$73,854** | **$71,874** | [Reconciliation of Adjusted Diluted Earnings Per Share](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Diluted%20Earnings%20Per%20Share) This section reconciles GAAP Diluted EPS to non-GAAP Adjusted Diluted EPS. For Q3 FY2025, GAAP Diluted EPS of $0.40 was adjusted for items like D&A ($0.05), stock-based compensation ($0.04), and OWYN integration costs ($0.05), net of tax effects, resulting in an Adjusted Diluted EPS of $0.51 Adjusted Diluted EPS Reconciliation Summary (Q3) | Line Item | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Diluted EPS (GAAP) | $0.40 | $0.41 | | Adjustments (D&A, Stock Comp, etc.) | $0.14 | $0.12 | | Tax Effects of Adjustments | ($0.04) | ($0.03) | | **Adjusted Diluted EPS** | **$0.51** | **$0.50** | [Reconciliation of Net Debt to Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Net%20Debt%20to%20Adjusted%20EBITDA) The report details the calculation of the Net Debt to Adjusted EBITDA ratio. As of May 31, 2025, total debt of $250.0 million less cash of $98.0 million resulted in Net Debt of $152.0 million. Divided by the trailing twelve months Adjusted EBITDA of $289.4 million, this yields a leverage ratio of 0.5x Net Debt to Adjusted EBITDA Calculation (as of May 31, 2025) | Component | Amount (in thousands) | | :--- | :--- | | Total Debt | $250,000 | | Less: Cash | ($98,008) | | **Net Debt** | **$151,992** | | **Trailing 12-Month Adj. EBITDA** | **$289,374** | | **Net Debt to Adj. EBITDA Ratio** | **0.5x** |

Core Insights - Simply Good Foods Company reported a 14% increase in net sales for the third quarter of fiscal year 2025, with organic net sales growth of approximately 4% [2][3] - The acquisition of Only What You Need, Inc. (OWYN) contributed significantly to the sales growth, with OWYN net sales accounting for 10% of the total reported net sales growth [3][8] - The company expects to generate approximately 3% organic net sales growth and mid-single-digit Adjusted EBITDA growth for the full fiscal year 2025 [2][17] Financial Performance - Net sales for the third quarter reached $381.0 million, an increase of $46.2 million or 13.8% compared to the previous year [3][14] - Gross profit increased to $138.5 million, reflecting a 3.7% rise year-over-year, although gross margin decreased by 350 basis points to 36.4% due to inflationary pressures [4][10] - Operating expenses rose to $79.2 million, with general and administrative expenses increasing significantly due to the inclusion of OWYN [5][11] Earnings Metrics - Net income for the third quarter was $41.1 million, a slight decrease of 0.6% from $41.3 million in the prior year [6][14] - Adjusted EBITDA for the quarter was $73.9 million, up 2.8% from $71.9 million year-over-year [6][13] - Adjusted diluted EPS was reported at $0.51, compared to $0.50 in the same period last year [7][45] Year-to-Date Performance - Year-to-date net sales reached $1,081.9 million, a 13.2% increase from the previous year, with OWYN contributing $99.6 million [8][14] - The company experienced a decline in international organic net sales, down $1.6 million compared to the prior year [8] Market Position and Strategy - Simply Good Foods is positioned as a leader in the nutritional snacking category, focusing on high-protein, low-sugar, and low-carb products [2][27] - The company aims to enhance growth through innovation, increased product availability, and effective marketing strategies [2][17] - The company anticipates continued challenges from inflation and tariffs but is implementing productivity and cost-saving measures to support long-term growth [2][17]

分组1 - The Simply Good Foods Company (SMPL) has experienced a decline of 10% despite achieving over 30% revenue growth in the last four years [1] - The company's recent acquisitions have shown significant growth, contributing positively to its overall performance [1]