The Simply Good Foods Company (Nasdaq: SMPL) (“Simply Good Foods,”
or the “Company”), a developer, marketer and seller of branded
nutritional foods and snacking products, today reported financial
results for the thirteen and thirty-nine weeks ended May 27,
2023.
Third Quarter
Summary:(1)
- Net sales of
$324.8 million versus
$316.5 million
- Net
income(2) of
$35.4 million versus
$38.8 million
- Earnings per diluted share
(“EPS”)(2) of
$0.35 versus
$0.38
- Adjusted Diluted
EPS(3) of
$0.44, the same as the year ago
period
- Adjusted
EBITDA(4) of
$66.6 million versus
$63.3 million
Reaffirm Full Year Fiscal 2023
Outlook:
- Net sales expected to
increase slightly greater than the Company's long-term algorithm of
4-6%, including a headwind of almost 1 percentage point
related to the frozen pizza licensing
- Adjusted
EBITDA(4,6) anticipated to
increase, but slightly less than the net sales growth
rate.
“I’m pleased with our third-quarter financial
and marketplace results that were greater than our expectations,”
said Joseph E. Scalzo, Chief Executive Officer of Simply Good
Foods. “U.S. retail takeaway in the third quarter of fiscal 2023,
in the U.S. combined measured and unmeasured channels increased
about 11%. As expected, retail takeaway growth outpaced the net
sales change principally due to the customer inventory build last
year. Total net sales in the third quarter of fiscal 2023 increased
2.6%. Gross margin of 36.7% exceeded our forecast and sequentially
improved versus the second quarter gross margin of 34.6%. The
better than expected gross margin was primarily due to input cost
moderation compared to our estimate. Higher net sales and gross
margin versus our forecast, as well as good cost control, resulted
in Adjusted EBITDA greater than our outlook giving us flexibility
to invest in brand building initiatives in the fourth quarter,”
Scalzo concluded.
“As we enter the fourth quarter we are on track
to deliver on our full-year objectives while also positioning the
Company for success in fiscal 2024,” said Geoff E. Tanner,
President, Chief Operating Officer and CEO Elect. “We reaffirm our
previous full fiscal year 2023 outlook and anticipate net sales
will increase slightly greater than our 4-6% long-term algorithm
and that Adjusted EBITDA will increase slightly less than the net
sales growth rate. Additionally, there is no change to our fiscal
2023 gross margin outlook. In the fourth quarter fiscal 2023 we
expect net sales growth to meaningfully outpace retail takeaway as
we lap a significant retail customer inventory reduction in the
year ago period. We are confident in the strength of our business
and diversification of our portfolio across brands, forms,
customers and channels that provide us with multiple ways to win in
the marketplace – over the near and long term - and deliver
shareholder value,” Tanner concluded.
Fiscal Third
Quarter 2023 Results
Net sales increased $8.3 million, or 2.6%, to
$324.8 million versus the year ago period. Net price realization
was about a 7.3 percentage point contribution and core volume was
off about 4.6 percentage points. North America and International
net sales increased 2.6% and 1.9%, respectively, versus last
year.
Total Simply Good Foods retail takeaway for the
thirteen weeks ended May 28, 2023, increased 9.7% in the U.S.
measured channels of IRI MULO + Convenience Stores. In the third
quarter of fiscal year 2023, total Simply Good Foods combined
measured and unmeasured channel U.S. retail takeaway increased
about 11%. Quest retail takeaway in the combined U.S. measured and
unmeasured channels increased about 24% and Atkins, as expected,
was off about 2% primarily due to incremental programming in the
year ago period that did not repeat this year.
Gross profit was $119.2 million for the third
quarter of fiscal 2023, an increase of $0.6 million from the year
ago period. Gross margin was 36.7% in the third quarter of fiscal
2023 versus 37.5% last year, a decline of 80 basis points.
In the third quarter of fiscal 2023, the Company
reported net income of $35.4 million compared to $38.8 million for
the comparable period of fiscal 2022.
Operating expenses of $65.0 million increased
$1.7 million versus the comparable period of 2022. Selling and
marketing expenses declined $2.2 million to $30.2 million
largely due to timing. General and administrative (“G&A”)
expenses of $30.5 million increased $3.8 million compared to the
year ago period primarily due to $2.4 million of fees associated
with the Term Loan amendment, which both lowered the interest rate
and extended the maturity, and executive transition costs of $0.7
million.
Net interest income and interest expense was
$7.2 million, an increase of $2.4 million versus the third quarter
of fiscal 2022.
Adjusted EBITDA(4), a non-GAAP financial measure
used by the Company that makes certain adjustments to net income
calculated under GAAP, was $66.6 million versus $63.3 million in
the year ago period.
In the third quarter of fiscal 2023, the Company
reported earnings per diluted share (“Diluted EPS”) of $0.35 versus
$0.38 in the year ago period. The diluted weighted average total
shares outstanding in the third quarter of fiscal 2023 was
approximately 100.9 million versus 102.2 million in the
year ago period.
Adjusted Diluted EPS(3), a non-GAAP financial
measure used by the Company that makes certain adjustments to
Diluted EPS calculated under GAAP, was $0.44, the same as the year
ago period.
Year-to-Date
Third Quarter 2023 Highlights vs.
Year-to-Date Third Quarter
2022
- Net sales were
$922.3 million versus
$894.5 million
- Net
income(2) of
$96.9 million versus
$78.4 million
- Earnings per diluted share
(“EPS”)(2) of
$0.96 versus
$0.78
- Adjusted Diluted
EPS(3) of
$1.18 versus
$1.23
- Adjusted
EBITDA(4) of
$178.3 million versus
$183.1 million
Net sales increased $27.7 million, or 3.1%, to
$922.3 million. Net price realization was about an 8.0 percentage
point contribution to net sales growth and core volume was off
about 4.1 percentage points. The March 2022 agreement to license
the Quest frozen pizza business to Bellisio Foods was a 0.8%
percentage point headwind. North America net sales increased 3.5%
and was primarily driven by price. International net sales declined
8.9%.
Gross profit was $333.0 million for the
thirty-nine weeks ended May 27, 2023 compared to $343.7
million in the year ago period. Gross margin was 36.1% for the
year-to-date third quarter of fiscal 2023, a decrease of 230 basis
points primarily due to higher ingredient and packaging costs.
Net income was $96.9 million compared to $78.4
million for the comparable period of 2022. The year-to-date third
quarter fiscal 2022 results were affected by the remeasurement of
the Company’s private warrant liabilities. Specifically, the
Company recognized a non-operating, non-cash charge of $30.1
million in the year-to-date second quarter fiscal 2022 related to
the fair value change of private warrant liabilities.
Operating expenses of $183.8 million declined
$0.7 million versus the comparable period of 2022. Selling and
marketing expenses were $88.7 million compared to $94.8 million in
the year ago period. G&A expenses increased $5.4 million to
$82.1 million. Higher corporate and executive transition expenses
were partially offset by lower employee costs.
Net interest income and interest expense was
$22.5 million, an increase of $6.0 million versus the comparable
period of fiscal 2022.
Adjusted EBITDA(4), a non-GAAP financial measure
used by the Company that makes certain adjustments to net income
calculated under GAAP, declined 2.6% to $178.3 million.
For the year-to-date third quarter fiscal 2023,
the Company reported Diluted EPS of $0.96 versus $0.78 in the year
ago period. In the year ago period, results were affected by the
remeasurement of the Company’s private warrant liabilities. The
diluted weighted average total shares outstanding for the
thirty-nine weeks ending May 27, 2023 was approximately 100.8
million versus 100.2 million in the year ago period.
Adjusted Diluted EPS(3), a non-GAAP financial
measure used by the Company that makes certain adjustments to
Diluted EPS calculated under GAAP, was $1.18 versus $1.23 in the
year ago period. The calculation of Adjusted Diluted EPS for the
year-to-date fiscal third quarter 2023 and the year-to-date fiscal
third quarter 2022 assumes fully diluted shares outstanding(2,3) of
approximately 100.8 million shares and 102.3 million shares to
reverse the exclusion of the private warrants in fully diluted
shares outstanding under GAAP.
Balance Sheet and Cash Flow
As of May 27, 2023, the Company had cash of
$68.8 million. Year-to-date third quarter fiscal 2023 net cash
provided by operating activities was $110.4 million, an increase of
about 64% versus the year ago period.
During the third quarter of fiscal 2023 the
Company repaid $40.0 million of its term loan debt, and, at
May 27, 2023, the outstanding principal balance was $325.0
million, and the trailing twelve month Net Debt to Adjusted EBITDA
ratio was 1.1x(5). As previously reported, on April 25, 2023, the
Company completed an amendment of its term loan facility to both
lower the interest rate and extended its maturity from July 2024 to
March 2027.
Outlook
The Company has a portfolio of brands aligned
with consumer mega-trends of both health and wellness, convenience
and on-the-go nutrition. As such, despite the challenging economic
environment, the Company believes it is well positioned to deliver
on its objectives. Therefore, the Company reaffirms its prior full
year outlook and anticipates the following for the full fiscal year
2023:
- Net sales to increase slightly
greater than the 4-6% long-term algorithm. Included in the sales
outlook is a headwind of almost 1 percentage point related to the
previously discussed agreement to license the Quest frozen pizza
business;
- Gross margin will decline versus
last year, although at a lower rate than fiscal 2022;
- Adjusted EBITDA(4,6) to increase, but slightly less than the
net sales growth rate; and,
- Adjusted Diluted EPS(3,6) to
increase less than the Adjusted EBITDA(4,6) growth rate primarily
due to higher interest expense from an increase in the variable
interest rate related to its term loan debt.
___________________________________(1) All
comparisons for the third quarter ended May 27, 2023 versus
the third quarter ended May 28, 2022. (2) Reflects, for the
reporting period, the Company’s private warrants to purchase shares
of common stock now being classified as a liability and measured at
fair value, with changes in fair value each period reported in
earnings in accordance with Accounting Standards Codification
815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity,
which affected Net income and fully diluted shares outstanding.(3)
Adjusted Diluted Earnings Per Share is a non-GAAP financial
measure. Please refer to “Reconciliation of Adjusted Diluted
Earnings Per Share” in this press release for an explanation and
reconciliation of this non-GAAP financial measure.(4) Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") is a non-GAAP financial measure. Please refer to
“Reconciliation of EBITDA and Adjusted EBITDA” in this press
release for an explanation and reconciliation of this non-GAAP
financial measure.(5) Net Debt to Adjusted EBITDA is a non-GAAP
financial measure. Please refer to “Reconciliation of Net Debt to
Adjusted EBITDA” in this press release for an explanation and
reconciliation of this non-GAAP financial measure.(6) The Company
does not provide a forward-looking reconciliation of Adjusted
Diluted Earnings Per Share to Earnings Per Share or Adjusted EBITDA
to Net Income, the most directly comparable GAAP financial
measures, expected for 2023, because we are unable to provide such
a reconciliation without unreasonable effort due to the
unavailability of reliable estimates for certain components of
consolidated net income and the respective reconciliations, and the
inherent difficulty of predicting what the changes in these
components will be throughout the fiscal year. As these items may
vary greatly between periods, we are unable to address the probable
significance of the unavailable information, which could
significantly affect our future financial results.
Conference Call and Webcast
InformationThe Company will host a conference call with
members of the executive management team to discuss these results
today, Thursday, June 29, 2023, at 7:00 a.m. Mountain time
(9:00 a.m. Eastern time). Investors interested in participating in
the live call can dial 877-407-0792 from the U.S. and International
callers can dial 201-689-8263. In addition, the call and
accompanying presentation slides will be broadcast live over the
Internet hosted at the “Investor Relations” section of the
Company's website at http://www.thesimplygoodfoodscompany.com. A
telephone replay will be available approximately two hours after
the call concludes and will be available through July 6, 2023, by
dialing 844-512-2921 from the U.S., or 412-317-6671 from
international locations, and entering confirmation code
13739942.
About The Simply Good Foods
CompanyThe Simply Good Foods Company (Nasdaq: SMPL),
headquartered in Denver, Colorado, is a consumer packaged food and
beverage company that aims to lead the nutritious snacking movement
with trusted brands that offer a variety of convenient, innovative,
great-tasting, better-for-you snacks and meal replacements, and
other product offerings. The product portfolio we develop, market
and sell consists primarily of protein bars, ready-to-drink (“RTD”)
shakes, sweet and salty snacks and confectionery products marketed
under the Atkins®, Atkins Endulge®, Quest® and Quest Hero™ brand
names. Simply Good Foods is poised to expand its wellness platform
through innovation and organic growth along with acquisition
opportunities in the nutritional snacking space. For more
information, please refer to
http://www.thesimplygoodfoodscompany.com.
Forward Looking
StatementsCertain statements made herein are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by or include words such as “will”, “expect”, “intends”
or other similar words, phrases or expressions. These statements
relate to future events or our future financial or operational
performance and involve known and unknown risks, uncertainties and
other factors that could cause our actual results, levels of
activity, performance or achievement to differ materially from
those expressed or implied by these forward-looking statements. We
caution that these forward-looking statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Undue reliance should not be placed
on forward-looking statements. These statements reflect our current
views with respect to future events, are based on assumptions and
are subject to risks and uncertainties. These forward-looking
statements include, among other things, statements regarding the
effect of the novel coronavirus (“COVID-19”) on our business,
financial condition and results of operations, our ability to
continue to operate at a profit, the sufficiency of our sources of
liquidity and capital, our ability to maintain current operation
levels, our ability to maintain and gain market acceptance for our
products or new products, our ability to capitalize on attractive
opportunities, our ability to respond to competition and changes in
the economy, unexpected costs, the amounts of or changes with
respect to certain anticipated restructuring, raw materials and
other costs, difficulties and delays in achieving the synergies and
cost savings in connection with the Quest Acquisition, changes in
the business environment in which we operate including general
financial, economic, capital market, regulatory and political
conditions affecting us and the industry in which we operate,
unforeseen business disruptions or other effects due to current
global geopolitical tensions, including relating to Ukraine,
changes in consumer preferences and purchasing habits, our ability
to maintain adequate product inventory levels to timely supply
customer orders, changes in taxes, tariffs, duties, governmental
laws and regulations, the availability of or competition for other
brands, assets or other opportunities for investment by us or to
expand our business, competitive product and pricing activity,
difficulties of managing growth profitably, the loss of one or more
members of our management team, expansion of our wellness platform
and other risks and uncertainties indicated in the Company’s Form
10-K, Form 10-Q, and Form 8-K reports (including all amendments to
those reports) filed with the U.S. Securities and Exchange
Commission from time to time. In addition, forward-looking
statements provide the Company’s expectations, plans or forecasts
of future events and views as of the date of this communication.
Except as required by law, the Company undertakes no obligation to
update such statements to reflect events or circumstances arising
after such date and cautions investors not to place undue reliance
on any such forward-looking statements. These forward-looking
statements should not be relied upon as representing the Company’s
assessments as of any date subsequent to the date of this
communication.
Investor ContactMark
PogharianVice President, Investor Relations, Treasury and Business
Development The Simply Good Foods Company (720)
768-2681mpogharian@simplygoodfoodsco.com
The Simply Good Foods Company and
Subsidiaries |
Consolidated Balance Sheets |
(Unaudited, dollars in thousands, except share and per share
data) |
|
|
|
May 27, 2023 |
|
August 27, 2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
68,794 |
|
|
$ |
67,494 |
|
Accounts receivable, net |
|
|
145,430 |
|
|
|
132,667 |
|
Inventories |
|
|
105,437 |
|
|
|
125,479 |
|
Prepaid expenses |
|
|
5,759 |
|
|
|
5,027 |
|
Other current assets |
|
|
24,390 |
|
|
|
20,934 |
|
Total current assets |
|
|
349,810 |
|
|
|
351,601 |
|
|
|
|
|
|
Long-term assets: |
|
|
|
|
Property and equipment, net |
|
|
24,414 |
|
|
|
18,157 |
|
Intangible assets, net |
|
|
1,111,865 |
|
|
|
1,123,258 |
|
Goodwill |
|
|
543,134 |
|
|
|
543,134 |
|
Other long-term assets |
|
|
50,778 |
|
|
|
58,099 |
|
Total assets |
|
$ |
2,080,001 |
|
|
$ |
2,094,249 |
|
|
|
|
|
|
Liabilities and stockholders’
equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
45,867 |
|
|
$ |
62,149 |
|
Accrued interest |
|
|
43 |
|
|
|
160 |
|
Accrued expenses and other current liabilities |
|
|
25,166 |
|
|
|
39,675 |
|
Current maturities of long-term debt |
|
|
199 |
|
|
|
264 |
|
Total current liabilities |
|
|
71,275 |
|
|
|
102,248 |
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
Long-term debt, less current maturities |
|
|
320,900 |
|
|
|
403,022 |
|
Deferred income taxes |
|
|
117,281 |
|
|
|
105,676 |
|
Other long-term liabilities |
|
|
39,727 |
|
|
|
44,639 |
|
Total liabilities |
|
|
549,183 |
|
|
|
655,585 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Preferred stock, $0.01 par value, 100,000,000 shares authorized,
none issued |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 600,000,000 shares authorized,
101,912,526 and 101,322,834 shares issued at May 27, 2023 and
August 27, 2022, respectively |
|
|
1,019 |
|
|
|
1,013 |
|
Treasury stock, 2,365,100 shares and 1,818,754 shares at cost at
May 27, 2023 and August 27, 2022, respectively |
|
|
(78,451 |
) |
|
|
(62,003 |
) |
Additional paid-in-capital |
|
|
1,299,318 |
|
|
|
1,287,224 |
|
Retained earnings |
|
|
311,314 |
|
|
|
214,381 |
|
Accumulated other comprehensive loss |
|
|
(2,382 |
) |
|
|
(1,951 |
) |
Total stockholders’ equity |
|
|
1,530,818 |
|
|
|
1,438,664 |
|
Total liabilities and
stockholders’ equity |
|
$ |
2,080,001 |
|
|
$ |
2,094,249 |
|
The Simply Good Foods Company and
Subsidiaries |
Consolidated Statements of Income and Comprehensive
Income |
(Unaudited, dollars in thousands, except share and per share
data) |
|
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
May 27, 2023 |
|
May 28, 2022 |
|
May 27, 2023 |
|
May 28, 2022 |
Net sales |
|
$ |
324,792 |
|
|
$ |
316,531 |
|
|
$ |
922,254 |
|
|
$ |
894,514 |
|
Cost of goods sold |
|
|
205,546 |
|
|
|
197,883 |
|
|
|
589,284 |
|
|
|
550,788 |
|
Gross profit |
|
|
119,246 |
|
|
|
118,648 |
|
|
|
332,970 |
|
|
|
343,726 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling and marketing |
|
|
30,168 |
|
|
|
32,334 |
|
|
|
88,650 |
|
|
|
94,816 |
|
General and administrative |
|
|
30,510 |
|
|
|
26,721 |
|
|
|
82,085 |
|
|
|
76,711 |
|
Depreciation and amortization |
|
|
4,363 |
|
|
|
4,317 |
|
|
|
13,035 |
|
|
|
12,966 |
|
Total operating expenses |
|
|
65,041 |
|
|
|
63,372 |
|
|
|
183,770 |
|
|
|
184,493 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
54,205 |
|
|
|
55,276 |
|
|
|
149,200 |
|
|
|
159,233 |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
407 |
|
|
|
— |
|
|
|
660 |
|
|
|
1 |
|
Interest expense |
|
|
(7,649 |
) |
|
|
(4,881 |
) |
|
|
(23,201 |
) |
|
|
(16,528 |
) |
Loss in fair value change of warrant liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(30,062 |
) |
Gain on foreign currency transactions |
|
|
180 |
|
|
|
76 |
|
|
|
74 |
|
|
|
503 |
|
Other income |
|
|
4 |
|
|
|
17 |
|
|
|
10 |
|
|
|
26 |
|
Total other expense |
|
|
(7,058 |
) |
|
|
(4,788 |
) |
|
|
(22,457 |
) |
|
|
(46,060 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
47,147 |
|
|
|
50,488 |
|
|
|
126,743 |
|
|
|
113,173 |
|
Income tax expense |
|
|
11,716 |
|
|
|
11,654 |
|
|
|
29,810 |
|
|
|
34,726 |
|
Net income |
|
$ |
35,431 |
|
|
$ |
38,834 |
|
|
$ |
96,933 |
|
|
$ |
78,447 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
Foreign currency translation, net of reclassification
adjustments |
|
|
(262 |
) |
|
|
(72 |
) |
|
|
(431 |
) |
|
|
(820 |
) |
Comprehensive income |
|
$ |
35,169 |
|
|
$ |
38,762 |
|
|
$ |
96,502 |
|
|
$ |
77,627 |
|
|
|
|
|
|
|
|
|
|
Earnings per share from net
income: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.36 |
|
|
$ |
0.39 |
|
|
$ |
0.98 |
|
|
$ |
0.80 |
|
Diluted |
|
$ |
0.35 |
|
|
$ |
0.38 |
|
|
$ |
0.96 |
|
|
$ |
0.78 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
99,518,546 |
|
|
|
100,426,227 |
|
|
|
99,404,174 |
|
|
|
98,294,114 |
|
Diluted |
|
|
100,909,972 |
|
|
|
102,237,457 |
|
|
|
100,847,970 |
|
|
|
100,190,068 |
|
The Simply Good Foods Company and
Subsidiaries |
Consolidated Statements of Cash Flows |
(Unaudited, dollars in thousands) |
|
|
|
Thirty-Nine Weeks Ended |
|
|
May 27, 2023 |
|
May 28, 2022 |
Operating activities |
|
|
|
|
Net income |
|
$ |
96,933 |
|
|
$ |
78,447 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
15,044 |
|
|
|
14,398 |
|
Amortization of deferred financing costs and debt discount |
|
|
2,011 |
|
|
|
2,073 |
|
Stock compensation expense |
|
|
10,456 |
|
|
|
8,691 |
|
Change in fair value change of warrant liability |
|
|
— |
|
|
|
30,062 |
|
Estimated credit losses |
|
|
206 |
|
|
|
148 |
|
Unrealized loss (gain) on foreign currency transactions |
|
|
(74 |
) |
|
|
(503 |
) |
Deferred income taxes |
|
|
11,696 |
|
|
|
14,140 |
|
Amortization of operating lease right-of-use asset |
|
|
5,018 |
|
|
|
4,955 |
|
Gain on lease termination |
|
|
— |
|
|
|
(30 |
) |
Other |
|
|
759 |
|
|
|
345 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable, net |
|
|
(13,334 |
) |
|
|
(35,269 |
) |
Inventories |
|
|
19,444 |
|
|
|
(15,006 |
) |
Prepaid expenses |
|
|
(745 |
) |
|
|
(170 |
) |
Other current assets |
|
|
(1,595 |
) |
|
|
(37,288 |
) |
Accounts payable |
|
|
(16,115 |
) |
|
|
5,585 |
|
Accrued interest |
|
|
(117 |
) |
|
|
154 |
|
Accrued expenses and other current liabilities |
|
|
(15,030 |
) |
|
|
676 |
|
Other assets and liabilities |
|
|
(4,145 |
) |
|
|
(4,045 |
) |
Net cash provided by operating
activities |
|
|
110,412 |
|
|
|
67,363 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
Purchases of property and equipment |
|
|
(10,108 |
) |
|
|
(4,696 |
) |
Issuance of note receivable |
|
|
— |
|
|
|
(2,400 |
) |
Investments in intangible and other assets |
|
|
(338 |
) |
|
|
(187 |
) |
Net cash used in investing
activities |
|
|
(10,446 |
) |
|
|
(7,283 |
) |
|
|
|
|
|
Financing activities |
|
|
|
|
Proceeds from option exercises |
|
|
5,035 |
|
|
|
4,343 |
|
Tax payments related to issuance of restricted stock units and
performance stock units |
|
|
(2,755 |
) |
|
|
(3,536 |
) |
Payments on finance lease obligations |
|
|
(217 |
) |
|
|
(235 |
) |
Repurchase of common stock |
|
|
(16,448 |
) |
|
|
(28,504 |
) |
Principal payments of long-term debt |
|
|
(81,500 |
) |
|
|
(50,000 |
) |
Deferred financing costs |
|
|
(2,694 |
) |
|
|
(544 |
) |
Net cash used in financing
activities |
|
|
(98,579 |
) |
|
|
(78,476 |
) |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Net increase (decrease) in cash |
|
|
1,387 |
|
|
|
(18,396 |
) |
Effect of exchange rate on cash |
|
|
(87 |
) |
|
|
(229 |
) |
Cash at beginning of period |
|
|
67,494 |
|
|
|
75,345 |
|
Cash and cash equivalents at
end of period |
|
$ |
68,794 |
|
|
$ |
56,720 |
|
Reconciliation of EBITDA and Adjusted
EBITDA
EBITDA and Adjusted EBITDA.
EBITDA and Adjusted EBITDA are non-GAAP financial measures commonly
used in our industry and should not be construed as alternatives to
net income as an indicator of operating performance or as
alternatives to cash flow provided by operating activities as a
measure of liquidity (each as determined in accordance with GAAP).
Simply Good Foods defines EBITDA as net income or loss before
interest income, interest expense, income tax expense, depreciation
and amortization, and Adjusted EBITDA as further adjusted to
exclude the following items: stock-based compensation expense, term
loan transaction fees, executive transition costs, integration
costs, restructuring costs, loss in fair value change of warrant
liability, and other non-core expenses. The Company believes that
EBITDA and Adjusted EBITDA, when used in conjunction with net
income, are useful to provide additional information to investors.
Management of the Company uses EBITDA and Adjusted EBITDA to
supplement net income because these measures reflect operating
results of the on-going operations, eliminate items that are not
directly attributable to the Company’s underlying operating
performance, enhance the overall understanding of past financial
performance and future prospects, and allow for greater
transparency with respect to the key metrics the Company’s
management uses in its financial and operational decision making.
The Company also believes that EBITDA and Adjusted EBITDA are
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in its industry.
EBITDA and Adjusted EBITDA may not be comparable to other similarly
titled captions of other companies due to differences in the
non-GAAP calculation.
The following unaudited table provides a
reconciliation of EBITDA and Adjusted EBITDA to its most directly
comparable GAAP measure, which is net income, for the thirteen and
thirty-nine weeks ended May 27, 2023 and May 28,
2022:
(In
thousands) |
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
May 27, 2023 |
|
May 28, 2022 |
|
May 27, 2023 |
|
May 28, 2022 |
Net income |
|
$ |
35,431 |
|
|
$ |
38,834 |
|
|
$ |
96,933 |
|
|
$ |
78,447 |
|
Interest income |
|
|
(407 |
) |
|
|
— |
|
|
|
(660 |
) |
|
|
(1 |
) |
Interest expense |
|
|
7,649 |
|
|
|
4,881 |
|
|
|
23,201 |
|
|
|
16,528 |
|
Income tax expense |
|
|
11,716 |
|
|
|
11,654 |
|
|
|
29,810 |
|
|
|
34,726 |
|
Depreciation and
amortization |
|
|
5,140 |
|
|
|
4,826 |
|
|
|
15,044 |
|
|
|
14,398 |
|
EBITDA |
|
|
59,529 |
|
|
|
60,195 |
|
|
|
164,328 |
|
|
|
144,098 |
|
Stock-based compensation expense |
|
|
4,124 |
|
|
|
2,994 |
|
|
|
10,456 |
|
|
|
8,691 |
|
Executive transition costs |
|
|
737 |
|
|
|
— |
|
|
|
1,158 |
|
|
|
— |
|
Integration of Quest |
|
|
— |
|
|
|
175 |
|
|
|
— |
|
|
|
468 |
|
Restructuring |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98 |
|
Loss in fair value change of warrant liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
30,062 |
|
Term loan transaction fees |
|
|
2,423 |
|
|
|
— |
|
|
|
2,423 |
|
|
|
— |
|
Other (1) |
|
|
(178 |
) |
|
|
(73 |
) |
|
|
(64 |
) |
|
|
(331 |
) |
Adjusted EBITDA |
|
$ |
66,635 |
|
|
$ |
63,291 |
|
|
$ |
178,301 |
|
|
$ |
183,086 |
|
(1) Other items
consist principally of exchange impact of foreign currency
transactions and other expenses. |
Reconciliation of Adjusted Diluted
Earnings Per Share
Adjusted Diluted Earnings per
Share. Adjusted Diluted Earnings per Share is a non-GAAP
financial measure commonly used in our industry and should not be
construed as an alternative to diluted earnings per share as an
indicator of operating performance. Simply Good Foods defines
Adjusted Diluted Earnings Per Share as diluted earnings per share
before depreciation and amortization, loss in fair value change of
warrant liability, stock-based compensation expense, term loan
transaction fees, executive transition costs, and other non-core
expenses, on a theoretical tax effected basis of such adjustments.
The tax effect of such adjustments to Adjusted Diluted Earnings Per
Share is calculated by applying an overall assumed statutory tax
rate to each gross adjustment as shown in the reconciliation to
Adjusted EBITDA, as previously defined. The assumed statutory tax
rate reflects a normalized effective tax rate estimated based on
assumptions regarding the Company's statutory and effective tax
rate for each respective reporting period, including the current
and deferred tax effects of each adjustment, and is adjusted for
the effects of tax reform, if any. The Company consistently applies
the overall assumed statutory tax rate to periods throughout each
fiscal year and reassesses the overall assumed statutory rate on
annual basis. The Company believes that the inclusion of these
supplementary adjustments in presenting Adjusted Diluted Earnings
per Share, when used in conjunction with diluted earnings per
share, are appropriate to provide additional information to
investors, reflects more accurately operating results of the
on-going operations, enhances the overall understanding of past
financial performance and future prospects and allows for greater
transparency with respect to the key metrics the Company uses in
its financial and operational decision making. The Company also
believes that Adjusted Diluted Earnings per Share is frequently
used by securities analysts, investors and other interested parties
in the evaluation of companies in its industry. Adjusted Diluted
Earnings per Share may not be comparable to other similarly titled
captions of other companies due to differences in the non-GAAP
calculation.
The following unaudited tables below provide a
reconciliation of Adjusted Diluted Earnings Per Share to its most
directly comparable GAAP measure, which is diluted earnings per
share, for the thirteen and thirty-nine weeks ended May 27,
2023 and May 28, 2022:
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
May 27, 2023 |
|
May 28, 2022 |
|
May 27, 2023 |
|
May 28, 2022 |
Diluted earnings per share |
|
$ |
0.35 |
|
|
$ |
0.38 |
|
|
$ |
0.96 |
|
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.15 |
|
|
|
0.14 |
|
Stock-based compensation
expense |
|
|
0.04 |
|
|
|
0.03 |
|
|
|
0.10 |
|
|
|
0.09 |
|
Executive transition
costs |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Term loan transaction
fees |
|
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Other (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tax effects of adjustments
(2) |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
|
|
(0.07 |
) |
|
|
(0.06 |
) |
Loss in fair value change of
warrant liability (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.30 |
|
Dilution impact from
adjustments (3, 4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.03 |
) |
Rounding (5) |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
Adjusted diluted earnings per
share |
|
$ |
0.44 |
|
|
$ |
0.44 |
|
|
$ |
1.18 |
|
|
$ |
1.23 |
|
(1) Other items consist principally of exchange impact of foreign
currency transactions and other expenses. |
(2) This line item reflects the aggregate tax effect of all non-tax
adjustments reflected in the preceding line items of the table. The
tax effect of each adjustment is computed (i) by dividing the gross
amount of the adjustment, as shown in the Adjusted EBITDA
reconciliation, by the number of diluted weighted average shares
outstanding for the applicable fiscal period and (ii) applying an
overall assumed statutory tax rate of 25% for the thirteen and
thirty-nine weeks ended May 27, 2023 and 26% for the thirteen
and thirty-nine weeks ended May 28, 2022. |
(3) Diluted earnings per share includes the fair value loss and
related exclusion of anti-dilutive shares related to the Private
Warrants in accordance with GAAP. With respect to the Company's
non-GAAP measure, the non-cash fair value loss is reversed. The
fair value adjustments are a permanent tax difference and do not
effect tax expense. Note, mark to market gain adjustments are
already excluded from the numerator, and dilutive shares are
included, in calculating diluted earnings per share in accordance
with GAAP. |
(4) As noted above, the Company excludes the non-cash fair value
loss related to its private warrant liabilities. The Company
subsequently considers the dilutive share count effect of such
adjustment such that the shares excluded in accordance with GAAP
are included in this non-GAAP measure. |
(5) Adjusted Diluted Earnings Per Share amounts are computed
independently for each quarter. Therefore, the sum of the quarterly
Adjusted Diluted Earnings Per Share amounts may not equal the year
to date Adjusted Diluted Earnings Per Share amounts due to
rounding. |
Reconciliation of Net Debt to Adjusted
EBITDA
Net Debt to Adjusted EBITDA.
Net Debt to Adjusted EBITDA is a non-GAAP financial measure which
Simply Good Foods defines as the total debt outstanding under our
credit agreement with Barclays Bank PLC and other parties (“Credit
Agreement”), reduced by cash and cash equivalents, and divided by
the trailing twelve months of Adjusted EBITDA, as previously
defined.
The following unaudited table below provides a
reconciliation of Net Debt to its most directly comparable GAAP
measure, which is total debt, and the calculation of the Net Debt
to Adjusted EBITDA as of May 27, 2023:
(In
thousands) |
|
May 27, 2023 |
Total debt to Net Debt: |
|
|
Current maturities of long-term debt |
|
$ |
199 |
|
Long-term debt, less current maturities |
|
|
320,900 |
|
Total debt |
|
|
321,099 |
|
Less: Deferred financing fees |
|
|
4,103 |
|
Less: Finance lease liabilities |
|
|
(202 |
) |
Total debt outstanding under the Credit Agreement |
|
|
325,000 |
|
Less: Cash |
|
|
(68,794 |
) |
Net Debt |
|
$ |
256,206 |
|
|
|
|
Trailing twelve months
Adjusted EBITDA: |
|
|
Add: Adjusted EBITDA for the thirty-nine weeks ended May 27,
2023 |
|
$ |
178,301 |
|
Add: Adjusted EBITDA for the fiscal year ended August 27, 2022 |
|
|
234,043 |
|
Less: Adjusted EBITDA for the thirty-nine weeks ended May 28,
2022 |
|
|
(183,086 |
) |
Trailing twelve months Adjusted EBITDA as of May 27, 2023 |
|
$ |
229,258 |
|
|
|
|
Net Debt to Adjusted
EBITDA |
|
|
1.1 |
x |
Simply Good Foods (NASDAQ:SMPL)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Simply Good Foods (NASDAQ:SMPL)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024