The Simply Good Foods pany(SMPL) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales increased to $341.3 million for the thirteen weeks ended November 30, 2024, compared to $308.7 million for the same period in 2023, representing a 10.4% increase in North America net sales [107]. - Gross profit rose by $15.4 million, or 13.3%, to $130.5 million, with a gross profit margin of 38.2%, up from 37.3% in the prior year [109]. - Net income for the thirteen weeks ended November 30, 2024, was $38.1 million, an increase of $2.6 million compared to $35.6 million in the prior year [114]. - Adjusted EBITDA increased by $8.1 million, or 13.1%, driven primarily by higher gross profit, reaching $70.1 million [115]. - EBITDA for the same period was $59.8 million, up 3.7% from $57.7 million year-over-year [118]. - Adjusted EBITDA increased to $70.1 million, compared to $62.0 million in the prior year, reflecting a growth of 12.5% [118]. - Income from operations increased by $2.8 million to $54.6 million for the thirteen weeks ended November 30, 2024, compared to $51.8 million in the prior year [138]. Expenses and Costs - Operating expenses increased by $12.6 million, or 19.8%, primarily due to higher general and administrative costs related to the OWYN Acquisition [110]. - Cost of goods sold increased by $17.2 million, or 8.9%, primarily due to higher sales volumes from the OWYN Acquisition [108]. - General and administrative expenses rose by 41.2%, largely due to integration costs associated with the OWYN Acquisition [116]. - Interest expense increased by $1.8 million due to incremental borrowing related to the OWYN Acquisition [111]. Acquisition Impact - The OWYN Acquisition contributed significantly to the overall sales growth and improved gross margins due to lower ingredient and packaging costs [101]. - The OWYN Acquisition was completed for approximately $281.9 million, funded through $250.0 million in incremental borrowings and cash on hand [133]. Cash Flow and Liquidity - Cash provided by operating activities decreased by $15.5 million to $32.0 million, primarily due to changes in working capital [138]. - The company had $121.8 million in cash as of November 30, 2024, indicating sufficient liquidity for operations and growth strategy for at least the next twelve months [120]. - The outstanding balance of the Term Facility was $350.0 million, with no principal payments required over the next twelve months [132]. - Net cash used in financing activities was $42.3 million, significantly higher than $13.1 million in the prior year, primarily due to principal payments on the Term Facility [140]. - The company did not repurchase any shares during the thirteen weeks ended November 30, 2024, with approximately $71.5 million remaining available under the stock repurchase program [136]. Future Outlook - The company expects continued growth in fiscal year 2025 driven by volume, advertising, marketing, and innovation strategies [101]. Market Risk - No material changes in market risk exposure during the thirteen-week period ended November 30, 2024 [143].