Core Insights - Simply Good Foods Company will report financial results for the thirteen-week period ended May 31, 2025, on July 10, 2025, before market open [1] - A conference call will be held to discuss these results, featuring CEO Geoff Tanner and incoming CFO Chris Bealer [1] Financial Reporting - The financial results will cover a thirteen-week period ending on May 31, 2025 [1] - The conference call is scheduled for 6:30 a.m. Mountain time (8:30 a.m. Eastern time) on July 10, 2025 [2] Participation Details - Investors can participate in the live call by dialing 1-877-407-0792 from the U.S. or 1-201-689-8263 from international locations [2] - The call will be broadcast live on the Company's website, with a replay available two hours after the call [3] Company Overview - Simply Good Foods Company is a consumer-packaged food and beverage company based in Denver, Colorado, focusing on nutritious snacking [4] - The product portfolio includes protein bars, ready-to-drink shakes, snacks, and confectionery products under brands like Atkins™, Quest™, and OWYN™ [4] - The company aims to lead the nutritious snacking movement through innovation and growth opportunities [4]

Transaction Overview - The enterprise value of the transaction is $856 million, representing a multiple of 116x CY'17E EBITDA of $74 million[35] - The selling shareholders will receive $628 million in cash consideration and approximately 10 million rollover shares at $1000 per share at closing[35] - A common stock private placement will occur in the amount of 10 million shares at $1000 per share, totaling $100 million[35] Atkins Business & Financials - Atkins is estimated to have calendar year 2017E net sales of $411 million and EBITDA of $74 million[21] - The Atkins brand has approximately $600 million in retail sales[22] - Atkins U S snacking point-of-sale takeaway growth has had a compound annual growth rate of 16% from 2008 to 2016[27] - Atkins has attractive margins, with a gross margin of approximately 47% and an EBITDA margin of approximately 18%[25] Market Position & Growth Strategy - Atkins holds a leadership position in its section of the store, with approximately 40% share-of-shelf[25] - The company sees an opportunity to expand its target audience by 4x[25] - Atkins is the category leader in total nutritional snacking with 117% market share[45]

Company Overview - Conyers Park Acquisition Corp merged with Atkins to become The Simply Good Foods Company on July 7th[9] - Atkins' Adjusted EBITDA margins are approaching 20%[9] - The company expects to deliver 2017 Adjusted EBITDA target of $72 million[13] Growth & Strategy - The company is heading to a 9th straight year of consumption growth in the US[14] - The company aims to expand its target consumer base from 8 million low-carb program dieters to include 31 million self-directed consumers[17] - E-commerce gross sales are expected to reach $10 million in FY 2017, up from approximately $4 million in TTM August 2015[37] Financial Performance - Q3 2017 Pro Forma Adjusted Net Sales reached $97 million, a 7% year-over-year growth[41] - Q3 2017 Pro Forma Adjusted Gross Profit reached $44 million, an 8% year-over-year growth[41] - Q3 2017 Pro Forma Adjusted EBITDA reached $15 million, a 20% year-over-year growth[41] - For the 9 months of fiscal year 2017, Pro Forma Adjusted Net Sales reached $299 million, a 6% year-over-year growth[44]

Core Insights - CT Realty has successfully leased an 805,000 square foot industrial facility to Simply Good Foods for a seven-year term, enhancing its presence in a growing logistics hub in Mount Comfort, Indiana [1][4] - The facility features Class A specifications, including a 40-foot clear height and ample parking, supporting Simply Good Foods' supply chain and distribution needs [2][3] - This lease brings CT Realty's Mount Comfort project to 100% occupancy, following a previous successful lease to Walmart in Whitestown, Indiana [4] Company Overview - CT Realty is a national real estate and investment company with over 30 years of experience, having completed more than 300 transactions valued at over $8 billion [5] - The company focuses on Class A industrial logistics developments across the U.S. and has acquired thousands of acres of industrial land since 2010 [5] - Simply Good Foods, headquartered in Denver, Colorado, is a consumer packaged food and beverage company known for its protein bars and shakes, aiming to lead the nutritious snacking movement [5]

Core Insights - Simply Good Foods Company (SMPL) reported strong second-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][3]. Financial Performance - Adjusted earnings were 46 cents per share, surpassing the Zacks Consensus Estimate of 39 cents, and increased from 40 cents in the same quarter last year [3]. - Net sales reached $359.7 million, exceeding the Zacks Consensus Estimate of $353 million, and represented a 15.2% increase from $312.2 million in the prior year [4]. - Gross profit rose 11.4% year over year to $130.1 million, driven by organic volume growth and the addition of OWYN, although gross margin declined by 120 basis points to 36.2% [6]. Operational Highlights - Total retail takeaway increased by 7%, with Quest and OWYN brands showing significant growth of approximately 13% and 52%, respectively, while Atkins retail takeaway declined around 10% [5]. - Operating expenses totaled $75.4 million, an increase of $6.6 million compared to the same period last year [7]. - Adjusted EBITDA increased to $68 million from $57.8 million in the prior-year period [7]. Cash Flow and Debt Management - The company ended the quarter with cash of $103.7 million and an outstanding principal balance of $300 million on its term loan, having repaid $50 million in term loan debt during the quarter [8]. Future Outlook - For fiscal 2025, the company anticipates net sales growth between 8.5% and 10.5%, with OWYN net sales projected to range from $140 million to $150 million [9]. - Gross margin is expected to decline by approximately 200 basis points compared to fiscal 2024, influenced by higher input costs anticipated in the second half of the year [10]. - Adjusted EBITDA is projected to increase by 4-6% [10].

Financial Performance - Net sales increased by 15.2% to $359.7 million for the thirteen weeks ended March 1, 2025, compared to $312.2 million for the same period in 2024, driven primarily by Quest volume growth and the OWYN Acquisition[109]. - Gross profit increased by 11.4% to $130.1 million, with a gross margin of 36.2%, a decrease of 120 basis points from the previous year, primarily due to lower margins from the OWYN business[111]. - Net income for the thirteen weeks ended March 1, 2025, was $36.7 million, an increase of $3.6 million compared to $33.1 million for the same period in 2024[117]. - Adjusted EBITDA rose by 17.6% to $68.0 million, driven by higher gross profit[118]. - Net sales increased by $80.0 million, or 12.9%, to $700.9 million for the twenty-six weeks ended March 1, 2025, driven primarily by Quest volume growth and the OWYN Acquisition[120]. - Gross profit increased by $28.6 million, or 12.3%, to $260.6 million, with a gross profit margin of 37.2%, a decrease of 20 basis points from the previous year[122]. - Net income for the twenty-six weeks ended March 1, 2025, was $74.9 million, an increase of $6.2 million compared to $68.7 million for the same period last year[127]. - Adjusted EBITDA increased by $18.3 million, or 15.2%, to $138.1 million, driven primarily by higher net gross profit[128]. Costs and Expenses - Cost of goods sold rose by 17.5% to $229.5 million, influenced by higher sales volumes and a non-cash inventory step-up charge related to the OWYN Acquisition[110]. - Operating expenses grew by 9.6% to $75.4 million, reflecting increased selling and marketing costs as well as general and administrative expenses[113]. - Cost of goods sold rose by $51.4 million, or 13.2%, to $440.3 million for the same period, attributed to higher sales volumes and a non-cash $1.4 million inventory step-up charge related to the OWYN Acquisition[121]. - Operating expenses increased by $19.2 million, or 14.5%, to $151.3 million, with general and administrative expenses rising by $17.2 million, or 30.2%[129]. - Selling and marketing expenses increased by $1.4 million, or 2.2%, primarily due to the OWYN Acquisition[123]. - Interest expense rose by $2.6 million, primarily due to incremental borrowing associated with the OWYN Acquisition[125]. Acquisition Details - The OWYN Acquisition was completed for approximately $280.0 million, enhancing the company's product portfolio in the plant-based protein segment[99]. - The Company completed the OWYN Acquisition on June 13, 2024, acquiring 100% of equity interests for a cash purchase price of approximately $281.9 million[146]. - The OWYN Acquisition was funded through $250.0 million in incremental borrowings and cash on hand, resulting in a total net consideration paid of $280.2 million as of March 1, 2025[147]. - Business transaction costs related to the OWYN Acquisition amounted to $0.8 million for the twenty-six weeks ended March 1, 2025[129]. Cash Flow and Financing - The Company had $103.7 million in cash as of March 1, 2025, sufficient to finance operations and growth strategy for at least the next twelve months[133]. - Net cash provided by operating activities decreased by $30.7 million to $63.3 million for the twenty-six weeks ended March 1, 2025, compared to $94.0 million for the same period in 2024[151]. - Net cash used in financing activities was $92.4 million for the twenty-six weeks ended March 1, 2025, primarily due to $100.0 million in principal payments on the Term Facility[153]. - Approximately $71.5 million remained available for repurchases under the $150.0 million stock repurchase program as of March 1, 2025[149]. Future Outlook - The company anticipates continued growth in fiscal year 2025, supported by strong advertising, marketing plans, and product innovation[101]. - The company is monitoring macroeconomic trends, including ingredient inflation and tariffs, which may impact future profitability[102]. Debt and Compliance - As of March 1, 2025, the outstanding balance of the Term Facility was $300.0 million, with no principal payments required over the next twelve months[145]. - The Revolving Credit Facility has a maximum total net leverage ratio of 6.00:1.00, and the Company was in compliance with all covenants as of March 1, 2025[144]. - The Company entered into a "2023 Repricing Amendment" on April 25, 2023, reducing the interest rate on Initial Term Loans and extending the maturity date from July 7, 2024, to March 17, 2027[139]. - The Company expensed $0.7 million of non-deferrable third-party costs related to the 2025 Repricing Amendment[142].

Core Insights - Simply Good Foods (SMPL) reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.39 per share, and showing an increase from $0.40 per share a year ago, resulting in an earnings surprise of 17.95% [1] - The company achieved revenues of $359.66 million for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 1.86% and up from $312.2 million year-over-year [2] - The stock has experienced a decline of approximately 14.9% since the beginning of the year, compared to the S&P 500's decline of 15.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $381.79 million, and for the current fiscal year, it is $1.91 on revenues of $1.46 billion [7] - The estimate revisions trend for Simply Good Foods is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Food - Confectionery industry, to which Simply Good Foods belongs, is currently ranked in the bottom 3% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Hershey (HSY), is expected to report quarterly earnings of $1.96 per share, reflecting a year-over-year decline of 36.2%, with revenues anticipated to be $2.83 billion, down 13.1% from the previous year [9][10]

Financial Data and Key Metrics Changes - Total net sales for Simply Good Foods in Q2 2025 reached $359.7 million, reflecting a 15.2% increase year-over-year, driven by the contribution from Owen and organic growth [44][45] - Adjusted EBITDA increased by 17.6% to $68 million, with net income growing by 10.9% to $36.7 million [48][49] - Gross margin was reported at 36.2%, a decline of 120 basis points compared to the previous year, influenced by the inclusion of Owen and inflationary pressures [46][54] Business Line Data and Key Metrics Changes - Quest's net sales grew by 16.5% in Q2, representing 60% of the company's net sales, while Atkins saw a decline of 11.5% due to lower consumption and lost distribution [44][28] - Owen experienced a retail takeaway increase of 52%, with ready-to-drink shakes growing by 53% [36][44] Market Data and Key Metrics Changes - The nutritional snacking category grew by 12% in Q2, marking the 16th consecutive quarter of growth [16] - Quest's retail takeaway increased by 13%, while Atkins faced a decline in consumption [22][28] Company Strategy and Development Direction - The company aims to lead the nutritional snacking category by focusing on innovation, expanding physical availability, and increasing brand awareness [19][20][41] - The strategy includes shifting focus from Atkins to faster-growing brands like Quest and Owen, with plans to optimize SKU distribution [30][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic and uncertain consumer environment but expressed confidence in the company's positioning within the high-protein, low-sugar market [41][42] - The outlook for fiscal year 2025 includes a projected net sales increase of 8.5% to 10.5%, with adjusted EBITDA expected to grow by 4% to 6% [54][56] Other Important Information - The company is undergoing a leadership transition with the retirement of CFO Sean Mara and the appointment of Chris Beeler as his successor [10][12] - The integration of Owen is progressing well, with expectations for synergy capture starting in fiscal 2026 [40] Q&A Session Summary Question: What is driving the reduction in sales guidance for Atkins? - Management noted that the reduction is due to lost display space and distribution at a key customer, which was anticipated [60][64] Question: What prompted the relaunch of Quest shakes? - The relaunch was driven by the need to meet consumer demand for indulgent, high-protein options, with a focus on flipping the macros of traditional shakes [71][75] Question: How does the company plan to build awareness for Owen? - The initial focus will be on expanding distribution, with marketing efforts to follow once a solid distribution footprint is established [120] Question: What are the expectations for the bar category, specifically for Quest? - Management acknowledged the need for continuous innovation in the bar category and expressed optimism about upcoming product launches [124][125]

Financial Data and Key Metrics Changes - Total net sales for Simply Good Foods in Q2 2025 reached $359.7 million, reflecting a 15.2% increase year-over-year, driven by contributions from Owen and organic growth [44] - Adjusted EBITDA increased by 17.6% to $68 million compared to the previous year [48] - Net income grew by 10.9% to $36.7 million, with adjusted diluted EPS rising to $0.46 from $0.40 [50] Business Line Data and Key Metrics Changes - Quest net sales grew by 16.5% in Q2, benefiting from strong retail takeaway and timing of shipments [44] - Atkins net sales declined by 11.5% due to lower consumption and reduced trade inventory [45] - Owen experienced a retail takeaway increase of 52%, with ready-to-drink shakes growing by 53% [36][37] Market Data and Key Metrics Changes - The nutritional snacking category grew by 12% in Q2, marking the 16th consecutive quarter of growth [16] - Quest now represents 60% of the company's net sales, with a strong growth trajectory [18] - Owen's brand awareness and household penetration remain low, indicating significant growth potential [38] Company Strategy and Development Direction - The company aims to lead the nutritional snacking category by leveraging innovation, expanding product availability, and increasing brand awareness [41][42] - Focus on transitioning underperforming Atkins SKUs to faster-turning Quest and Owen products to enhance overall contribution margins [66][70] - Continued investment in Atkins is planned, with new product launches and marketing strategies to stabilize the brand [34][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a dynamic environment with consumer sentiment pressures but remains optimistic about the demand for high-protein, low-sugar products [41] - The company expects full-year net sales growth of 8.5% to 10.5%, with adjusted EBITDA growth of 4% to 6% [54] - Management is confident in the long-term growth potential of Quest and Owen, despite short-term challenges with Atkins [110][112] Other Important Information - The company has repaid $100 million of its term loan since the beginning of the fiscal year, with a net debt to trailing 12-month adjusted EBITDA ratio of 0.7 times [51] - The effective tax rate for Q2 was 25%, compared to 23.7% in the previous year [49] Q&A Session Summary Question: What is driving the reduction in sales guidance for Atkins? - Management noted that the reduction is due to lost display space and distribution at a key customer, which was more significant than anticipated [64][66] Question: What prompted the relaunch of Quest shakes? - The relaunch is based on consumer demand for indulgent, high-protein options, with a focus on flipping the macros of traditional shakes [74][76] Question: How will the company build awareness for Owen? - Initially, the focus will be on expanding distribution, with marketing efforts to follow once a solid distribution base is established [120] Question: What is the outlook for the bar category, specifically for Quest? - Management is optimistic about innovation in the bar category, with new products expected to drive growth [125][126]

Financial Performance - Q2 net sales increased by 152% year-over-year to $3597 million, driven by 44% organic growth and the OWYN acquisition[9, 28] - First half net sales increased 129% year-over-year to $7009 million[28] - Q2 Adjusted EBITDA grew 176% year-over-year[10, 31] - Q2 Net Income increased 109% year-over-year to $367 million[10, 31] - The company reaffirms fiscal year 2025 outlook, expecting net sales growth in the 85% to 105% range year-over-year and Adjusted EBITDA growth in the 4% to 6% range year-over-year[9, 38] Brand Performance - Quest Q2 retail takeaway grew 13%[11] - OWYN Q2 retail takeaway grew 52%, with robust growth across channels[20, 21] - Atkins Q2 retail takeaway declined 10%, attributed to reduced displays and lost club distribution[19] Outlook and Strategy - Fiscal year 2025 net sales for OWYN are expected to be in the $140-$150 million range[21, 38] - The company expects Quest to approach net sales of $1 billion and remains confident in multi-year runway for growth[13] - The company plans to invest behind attractive opportunities, enabling sustainable growth and creating meaningful shareholder value[25]