The Simply Good Foods pany(SMPL) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales increased by $47.5 million, or 15.2%, to $359.7 million in the second quarter of fiscal year 2025, with OWYN contributing $33.8 million, or 10.8% to reported net sales growth [4]. - Adjusted EBITDA grew by 18% year-over-year to $68.0 million, compared to $57.8 million in the prior year [10]. - Organic net sales growth was 4.4%, primarily driven by the Quest brand, while international organic net sales declined by $2.1 million to $6.4 million [4]. - Net income for the second quarter was $36.7 million, an increase of $3.6 million, or 10.9%, compared to $33.1 million in the prior year [10]. - The company reported a net income of $74,869,000 for the twenty-six weeks ended March 1, 2025, compared to $68,684,000 for the same period in 2024, reflecting an increase of 9.5% [37]. - Net income for the twenty-six weeks ended March 1, 2025, was $74,869,000, compared to $68,684,000 for the same period in 2024, representing an increase of 3.1% [40]. - Adjusted EBITDA for the twenty-six weeks ended March 1, 2025, was $138,069,000, up from $119,805,000 in the prior year, reflecting a growth of 15.2% [40]. - EBITDA for the twenty-six weeks ended March 1, 2025, was reported at $119,510,000, compared to $110,904,000 for the same period in 2024, indicating an increase of 7.3% [40]. Sales and Revenue - The company expects net sales to increase by 8.5% to 10.5% and Adjusted EBITDA to grow by 4% to 6% for fiscal year 2025 [25]. - OWYN's fiscal year 2025 net sales are expected to be in the range of $140-150 million [25]. - Net sales for the thirteen weeks ended March 1, 2025, were $359,655,000, representing a 15.2% increase from $312,199,000 for the same period in 2024 [35]. - Gross profit for the twenty-six weeks ended March 1, 2025, was $260,623,000, up from $231,988,000 in the prior year, indicating a growth of 12.3% [35]. - The OWYN brand generated net sales of $66,060,000 for the twenty-six weeks ended March 1, 2025, compared to no sales in the prior year, indicating successful market entry [38]. Expenses and Costs - Gross profit increased by $13.3 million, or 11.4%, to $130.1 million, resulting in a gross margin of 36.2%, a decrease of 120 basis points year-over-year [5]. - Operating expenses rose by $6.6 million to $75.4 million, with G&A expenses increasing by $6.1 million, largely due to the OWYN acquisition [6]. - Operating expenses for the thirteen weeks ended March 1, 2025, totaled $75,416,000, an increase from $68,787,000 in the same period last year, reflecting a rise of 9.4% [35]. - Stock-based compensation expense for the twenty-six weeks ended March 1, 2025, was $8,792,000, slightly higher than $8,736,000 in the previous year [40]. - Interest expense for the twenty-six weeks ended March 1, 2025, totaled $14,199,000, compared to $11,630,000 for the same period in 2024, reflecting an increase of 21.8% [40]. - The company reported an interest income of $1,477,000 for the twenty-six weeks ended March 1, 2025, down from $2,014,000 in the prior year [40]. Assets and Liabilities - Total current assets increased to $444,467,000 as of March 1, 2025, from $440,280,000 as of August 31, 2024 [33]. - Long-term debt decreased to $298,537,000 as of March 1, 2025, down from $397,485,000 as of August 31, 2024, showing a reduction of 25% [33]. - The company's cash and cash equivalents at the end of the period were $103,682,000, down from $132,530,000 at the beginning of the period, a decrease of 21.7% [37]. - The company's net debt as of March 1, 2025, was $196,318,000, with total debt outstanding under the credit agreement at $300,000,000 [44]. - As of March 1, 2025, the company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was 0.7x [21]. - The trailing twelve months Adjusted EBITDA as of March 1, 2025, was $287,394,000, resulting in a net debt to Adjusted EBITDA ratio of 0.7x [44]. Shareholder Information - The weighted average shares outstanding for diluted earnings per share increased to 101,821,229 for the thirteen weeks ended March 1, 2025, compared to 101,276,575 for the same period in 2024 [35]. - Adjusted diluted earnings per share increased to $0.95 for the twenty-six weeks ended March 1, 2025, compared to $0.82 for the same period in 2024, marking a rise of 15.9% [42]. - The effective tax rate applied to Adjusted Diluted Earnings Per Share adjustments was assumed to be 25% for the reporting periods [42]. Future Outlook - The company expects to achieve synergies from the OWYN acquisition, although specific financial targets were not disclosed [30].