The Simply Good Foods pany(US:SMPL)2025-04-09 20:06Financial 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].