The Simply Good Foods Company Reports Fiscal Second Quarter 2025 Financial Results and Reaffirms Fiscal Year 2025 Outlook
Simply Good Foods (NASDAQ: SMPL) reported strong Q2 2025 financial results, with net sales increasing 15.2% to $359.7 million. Net income rose to $36.7 million, with earnings per diluted share of $0.36. The company's performance was boosted by the OWYN acquisition, which contributed $33.8 million to reported net sales growth.
Key highlights include:
- Organic net sales grew 4.4%, driven by Quest brand performance
- Total retail takeaway increased 7%, with Quest and OWYN showing strong growth of 13% and 52% respectively
- Adjusted EBITDA reached $68.0 million, up from $57.8 million
- Cash flow from operations was $63.3 million
The company reaffirmed its fiscal year 2025 outlook, expecting net sales growth of 8.5% to 10.5% and Adjusted EBITDA growth of 4% to 6%. OWYN's fiscal year 2025 net sales are projected to be in the $140-150 million range.
Simply Good Foods (NASDAQ: SMPL) ha riportato risultati finanziari solidi per il secondo trimestre del 2025, con vendite nette in aumento del 15,2% a 359,7 milioni di dollari. L'utile netto è aumentato a 36,7 milioni di dollari, con un utile per azione diluita di 0,36 dollari. La performance dell'azienda è stata sostenuta dall'acquisizione di OWYN, che ha contribuito con 33,8 milioni di dollari alla crescita delle vendite nette riportate.
I punti salienti includono:
- Le vendite nette organiche sono cresciute del 4,4%, trainate dalla performance del marchio Quest
- Il totale delle vendite al dettaglio è aumentato del 7%, con Quest e OWYN che mostrano una forte crescita rispettivamente del 13% e del 52%
- Il EBITDA rettificato ha raggiunto 68,0 milioni di dollari, in aumento rispetto ai 57,8 milioni di dollari
- Il flusso di cassa dalle operazioni è stato di 63,3 milioni di dollari
L'azienda ha confermato le previsioni per l'anno fiscale 2025, prevedendo una crescita delle vendite nette dell'8,5% al 10,5% e una crescita dell'EBITDA rettificato del 4% al 6%. Le vendite nette di OWYN per l'anno fiscale 2025 sono previste nella fascia di 140-150 milioni di dollari.
Simply Good Foods (NASDAQ: SMPL) reportó sólidos resultados financieros para el segundo trimestre de 2025, con ventas netas que aumentaron un 15,2% a 359,7 millones de dólares. El ingreso neto creció a 36,7 millones de dólares, con ganancias por acción diluida de 0,36 dólares. El desempeño de la compañía se vio impulsado por la adquisición de OWYN, que contribuyó con 33,8 millones de dólares al crecimiento de las ventas netas reportadas.
Los aspectos destacados incluyen:
- Las ventas netas orgánicas crecieron un 4,4%, impulsadas por el desempeño de la marca Quest
- El total de ventas minoristas aumentó un 7%, con Quest y OWYN mostrando un fuerte crecimiento del 13% y 52% respectivamente
- El EBITDA ajustado alcanzó los 68,0 millones de dólares, en comparación con los 57,8 millones de dólares
- El flujo de efectivo de las operaciones fue de 63,3 millones de dólares
La compañía reafirmó su perspectiva para el año fiscal 2025, esperando un crecimiento de ventas netas del 8,5% al 10,5% y un crecimiento del EBITDA ajustado del 4% al 6%. Se proyecta que las ventas netas de OWYN para el año fiscal 2025 estén en el rango de 140-150 millones de dólares.
Simply Good Foods (NASDAQ: SMPL)은 2025년 2분기 재무 결과를 발표했으며, 순매출이 15.2% 증가하여 3억 5,970만 달러에 달했습니다. 순이익은 3,670만 달러로 증가했으며, 희석 주당 순이익은 0.36달러입니다. 회사의 성장은 OWYN 인수로 인해 강화되었으며, 이는 보고된 순매출 성장에 3,380만 달러를 기여했습니다.
주요 하이라이트는 다음과 같습니다:
- 유기농 순매출이 4.4% 증가했으며, Quest 브랜드의 성과에 의해 촉진되었습니다.
- 총 소매 매출이 7% 증가했으며, Quest와 OWYN은 각각 13%와 52%의 강력한 성장을 보였습니다.
- 조정 EBITDA는 6,800만 달러에 도달했으며, 이는 5,780만 달러에서 증가한 수치입니다.
- 운영으로부터의 현금 흐름은 6,330만 달러였습니다.
회사는 2025 회계연도 전망을 재확인하며, 순매출 성장률을 8.5%에서 10.5%로, 조정 EBITDA 성장률을 4%에서 6%로 예상하고 있습니다. OWYN의 2025 회계연도 순매출은 1억 4천만 달러에서 1억 5천만 달러 범위로 예상됩니다.
Simply Good Foods (NASDAQ: SMPL) a annoncé des résultats financiers solides pour le deuxième trimestre 2025, avec des ventes nettes en hausse de 15,2% à 359,7 millions de dollars. Le revenu net a augmenté à 36,7 millions de dollars, avec un bénéfice par action diluée de 0,36 dollar. La performance de l'entreprise a été renforcée par l'acquisition d'OWYN, qui a contribué à hauteur de 33,8 millions de dollars à la croissance des ventes nettes rapportées.
Les points clés incluent:
- Les ventes nettes organiques ont augmenté de 4,4%, soutenues par la performance de la marque Quest
- Le total des ventes au détail a augmenté de 7%, avec Quest et OWYN affichant une forte croissance de 13% et 52% respectivement
- Le EBITDA ajusté a atteint 68,0 millions de dollars, en hausse par rapport à 57,8 millions de dollars
- Le flux de trésorerie provenant des opérations s'est élevé à 63,3 millions de dollars
L'entreprise a confirmé ses prévisions pour l'exercice 2025, s'attendant à une croissance des ventes nettes de 8,5% à 10,5% et à une croissance de l'EBITDA ajusté de 4% à 6%. Les ventes nettes d'OWYN pour l'exercice 2025 devraient se situer entre 140 et 150 millions de dollars.
Simply Good Foods (NASDAQ: SMPL) hat starke Finanzzahlen für das zweite Quartal 2025 gemeldet, mit einem Anstieg des Nettoumsatzes um 15,2% auf 359,7 Millionen Dollar. Der Nettogewinn stieg auf 36,7 Millionen Dollar, mit einem Gewinn pro verwässerter Aktie von 0,36 Dollar. Die Leistung des Unternehmens wurde durch die Übernahme von OWYN gestärkt, die 33,8 Millionen Dollar zum gemeldeten Umsatzwachstum beitrug.
Wichtige Höhepunkte sind:
- Die organischen Nettoumsätze stiegen um 4,4%, angetrieben durch die Leistung der Marke Quest
- Der gesamte Einzelhandelsumsatz stieg um 7%, wobei Quest und OWYN ein starkes Wachstum von 13% bzw. 52% zeigten
- Das bereinigte EBITDA erreichte 68,0 Millionen Dollar, ein Anstieg von 57,8 Millionen Dollar
- Der Cashflow aus dem operativen Geschäft betrug 63,3 Millionen Dollar
Das Unternehmen bestätigte seinen Ausblick für das Geschäftsjahr 2025 und erwartet ein Umsatzwachstum von 8,5% bis 10,5% sowie ein bereinigtes EBITDA-Wachstum von 4% bis 6%. Die Nettoumsätze von OWYN für das Geschäftsjahr 2025 werden in einer Spanne von 140-150 Millionen Dollar prognostiziert.
- Net sales increased 15.2% to $359.7 million
- Net income grew 10.9% to $36.7 million
- Adjusted EBITDA increased 18% to $68.0 million
- Strong Quest and OWYN retail growth of 13% and 52% respectively
- Repaid $50 million of term loan debt in Q2, total $100 million year-to-date
- Gross margin declined 120 basis points to 36.2%
- International organic sales declined $2.1 million
- Atkins retail takeaway decreased 10%
- Operating expenses increased by $6.6 million
- Cash flow from operations decreased to $63.3 million from $94.0 million
Insights
Simply Good Foods delivered a solid Q2 fiscal 2025 performance with
Revenue performance shows interesting brand dynamics: Quest growing at
The gross margin decline of 120 basis points to
Management's reaffirmation of FY2025 guidance (net sales growth of
DENVER, April 09, 2025 (GLOBE NEWSWIRE) -- 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 twenty-six weeks ended March 1, 2025. The acquisition of Only What You Need, Inc. ("OWYN") was completed on June 13, 2024. Therefore, the Company's year-ago performance for the thirteen and twenty-six weeks ended February 24, 2024, does not include results of the OWYN business. The reference to "organic" or "legacy" Simply Good Foods in this press release encompasses Simply Good Foods' business excluding OWYN.
Second Quarter Summary:(1)
- Net sales of
$359.7 million versus$312.2 million - Net income of
$36.7 million versus$33.1 million - Earnings per diluted share (“EPS”) of
$0.36 versus$0.33 - Adjusted Diluted EPS(2) of
$0.46 versus$0.40 - Adjusted EBITDA(3)
$68.0 million versus$57.8 million
Reaffirming Fiscal Year 2025(4) Outlook:
- Net sales expected to increase
8.5% to10.5% - Adjusted EBITDA expected to increase
4% to6% - The fifty-third week in fiscal year 2024 is an approximately 2-percentage point headwind to both Net Sales and Adjusted EBITDA growth in fiscal year 2025 and is incorporated in the outlook above
"I am very pleased with our second quarter and first half results. We are executing well, adding new doors, winning with innovation, and driving brand awareness and household penetration of our brands" said Geoff Tanner, President and Chief Executive Officer of Simply Good Foods. "Simply Good Foods grew second quarter retail takeaway
Second Quarter 2025 Results
Net sales increased
Total Simply Good Foods retail takeaway(6) increased about
Gross profit was
Operating expenses of
One-time Business Transaction costs related to the OWYN Acquisition were
Net interest income and interest expense was
Net income of
Adjusted EBITDA, a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, was
Reported earnings per diluted share (“Diluted EPS”) were
Adjusted Diluted EPS, a non-GAAP financial measure used by the Company that makes certain adjustments to Diluted EPS calculated under GAAP, was
Year-to-Date Second Quarter Fiscal Year 2025 Highlights vs. Year-to-Date Second Quarter 2024
- Net sales were
$700.9 million versus$620.9 million - Net income of
$74.9 million versus$68.7 million - Earnings per diluted share (“EPS”) of
$0.74 versus$0.68 - Adjusted Diluted EPS of
$0.95 versus$0.82 - Adjusted EBITDA of
$138.1 million versus$119.8 million
Net sales increased
Total Simply Good Foods retail takeaway increased about
Gross profit was
Operating expenses of
One-time Business Transaction costs related to the OWYN Acquisition were
Net interest income and interest expense was
Net income was
Adjusted EBITDA, a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, was
Reported earnings per diluted share ("Diluted EPS") were
Adjusted Diluted EPS, a non-GAAP financial measure used by the Company that makes certain adjustments to Diluted EPS calculated under GAAP, was
Balance Sheet and Cash Flow
At the end of the second quarter of fiscal year 2025, the Company had cash of
As of March 1, 2025, the Company's trailing twelve-month Net Debt to Adjusted EBITDA ratio was 0.7x(7).
CFO Succession Plan
On January 28, 2025, the Company announced Chief Financial Officer Shaun Mara's plan to retire, effective July 3, 2025. In connection with Mr. Mara's retirement, the Company also announced the hiring of Christopher J. Bealer as Senior Vice President of Finance, as of April 1, 2025. Mr. Bealer is expected to succeed Mr. Mara as Chief Financial Officer upon Mr. Mara's retirement.
Fiscal Year 2025 Outlook
Due to solid retail takeaway and strong Adjusted EBITDA growth to start the year, the Company reaffirms its fiscal year 2025 outlook. The Company expects organic net sales growth to be driven primarily by volume. The Company is also reaffirming its outlook for gross margin, which is still expected to decline approximately 200 basis points versus fiscal year 2024, with favorable commodity expenses year-to-date, ongoing productivity and cost savings initiatives, and pricing expected to be offset by higher input costs in the second half, as well as preliminary estimates of expected costs related to recently announced tariffs.
Therefore, the Company anticipates the following in fiscal year 2025:
- Net Sales expected to increase
8.5% to10.5% - OWYN fiscal year 2025 Net Sales expected to be in the
$140 -150 million range
- OWYN fiscal year 2025 Net Sales expected to be in the
- Adjusted EBITDA expected to increase
4% to6% - The fifty-third week in fiscal year 2024 is an approximately 2-percentage point headwind to both Net Sales and Adjusted EBITDA growth in fiscal year 2025 and incorporated in the outlook above
- Assuming a comparable full year of OWYN results are included in fiscal year 2024, as well as the exclusion of the fifty-third week in fiscal year 2024, fiscal year 2025 is expected to be in line with the Company's long-term algorithm; net sales growth in the 4
-6% range and Adjusted EBITDA growth slightly greater than the net sales increase
The foregoing outlook assumes current economic conditions and consumer purchasing behavior remain generally consistent over the balance of the Company's fiscal year.
___________________________________
(1) All comparisons for the second quarter or fiscal year-to-date period ended March 1, 2025, versus the comparable year-ago period ended February 24, 2024.
(2) Adjusted Diluted Earnings Per Share is a non-GAAP financial measure. The Company excludes acquisition-related costs, such as business transaction costs, integration expense and depreciation and amortization expense in calculating Adjusted Diluted Earnings Per Share. 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.
(3) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP financial measure. Please refer to the "Reconciliation of EBITDA and Adjusted EBITDA" in this press release for an explanation and reconciliation of this non-GAAP financial measure.
(4) The Company does not provide a forward-looking reconciliation of expected fiscal year 2025 Adjusted EBITDA to Net Income, the most directly comparable GAAP financial measure, 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.
(5) "Organic" or "Legacy" growth refers to combined performance of the Company prior to the acquisition of OWYN on June 13, 2024, specifically including the Quest and Atkins brands in North America, as well as the International business.
(6) Combined Quest, Atkins, and OWYN IRI MULO++C store and Company unmeasured channel estimate for the 13-weeks ending March 2, 2025, vs. the comparable 13-week year ago period.
(7) 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 Company's trailing twelve month Adjusted EBITDA, as previously defined. The Company does not provide a forward-looking reconciliation of Net Debt to Adjusted EBITDA to Net Debt to Consolidated Net Income, the most directly comparable GAAP financial measures, expected for fiscal year 2025, 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 Information
The Company will host a conference call with members of the executive management team to discuss these results today, Wednesday, April 9, 2025, at 6:30 a.m. Mountain time (8:30 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 April 16, 2025, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13751795.
About The Simply Good Foods Company
The Simply Good Foods Company (Nasdaq: SMPL), headquartered in Denver, Colorado, is a consumer packaged food and beverage company that is bringing nutritious snacking with ambitious goals to raise the bar on what food can be with trusted brands and innovative products. Our product portfolio consists primarily of protein bars, ready-to-drink (RTD) shakes, sweet and salty snacks, and confectionery products marketed under the Atkins, Quest, and OWYN brands. We are a company that aims to lead the nutritious snacking movement and is poised to expand our healthy lifestyle platform through innovation, organic growth, and investment opportunities in the snacking space. To learn more, visit http://www.thesimplygoodfoodscompany.com.
Investor Contact
Joshua Levine
Vice President, Investor Relations and Treasury
The Simply Good Foods Company
jlevine@simplygoodfoodsco.com
Forward Looking Statements
Certain 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 you that these forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance 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 risks and uncertainties relate to, among other things, our ability to achieve our estimates of OWYN’s net sales and Adjusted EBITDA and our anticipated synergies from the OWYN Acquisition, our net leverage ratio post-acquisition, our Adjusted EPS post-acquisition, our ability to maintain OWYN personnel and effectively integrate OWYN, our operations being dependent on changes in consumer preferences and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints and inflationary pressure on us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the effect pandemics or other global disruptions on our business, financial condition and results of operations, the sufficiency of our sources of liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, 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 including changes regarding inflation and increasing ingredient and packaging costs and labor challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions, changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical conditions affecting us and the industry in which we operate, 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, potential for increased costs and harm to our business resulting from unauthorized access of the information technology systems we use in our business, 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.
| The Simply Good Foods Company and Subsidiaries Consolidated Balance Sheets (Unaudited, dollars in thousands, except share and per share data) | ||||||||
| March 1, 2025 | August 31, 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 103,682 | $ | 132,530 | ||||
| Accounts receivable, net | 157,145 | 150,721 | ||||||
| Inventories | 163,734 | 142,107 | ||||||
| Prepaid expenses | 9,872 | 5,730 | ||||||
| Other current assets | 10,034 | 9,192 | ||||||
| Total current assets | 444,467 | 440,280 | ||||||
| Long-term assets: | ||||||||
| Property and equipment, net | 22,790 | 24,830 | ||||||
| Intangible assets, net | 1,329,451 | 1,336,466 | ||||||
| Goodwill | 589,974 | 591,687 | ||||||
| Other long-term assets | 40,498 | 42,881 | ||||||
| Total assets | $ | 2,427,180 | $ | 2,436,144 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 75,065 | $ | 58,559 | ||||
| Accrued interest | 59 | 265 | ||||||
| Accrued expenses and other current liabilities | 29,026 | 49,791 | ||||||
| Total current liabilities | 104,150 | 108,615 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, less current maturities | 298,537 | 397,485 | ||||||
| Deferred income taxes | 172,452 | 166,012 | ||||||
| Other long-term liabilities | 34,284 | 36,546 | ||||||
| Total liabilities | 609,423 | 708,658 | ||||||
| See commitments and contingencies (Note 10) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 1,034 | 1,025 | ||||||
| Treasury stock, 2,365,100 shares and 2,365,100 shares at cost at March 1, 2025, and August 31, 2024, respectively | (78,451 | ) | (78,451 | ) | ||||
| Additional paid-in-capital | 1,335,892 | 1,319,686 | ||||||
| Retained earnings | 562,134 | 487,265 | ||||||
| Accumulated other comprehensive loss | (2,852 | ) | (2,039 | ) | ||||
| Total stockholders’ equity | 1,817,757 | 1,727,486 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,427,180 | $ | 2,436,144 | ||||
| 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 | Twenty-Six Weeks Ended | |||||||||||||||
| March 1, 2025 | February 24, 2024 | March 1, 2025 | February 24, 2024 | |||||||||||||
| Net sales | $ | 359,655 | $ | 312,199 | $ | 700,923 | $ | 620,877 | ||||||||
| Cost of goods sold | 229,518 | 195,329 | 440,300 | 388,889 | ||||||||||||
| Gross profit | 130,137 | 116,870 | 260,623 | 231,988 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | 35,078 | 34,643 | 68,072 | 66,633 | ||||||||||||
| General and administrative | 36,013 | 29,933 | 74,077 | 56,883 | ||||||||||||
| Depreciation and amortization | 4,148 | 4,211 | 8,308 | 8,569 | ||||||||||||
| Business transaction costs | 177 | — | 820 | — | ||||||||||||
| Total operating expenses | 75,416 | 68,787 | 151,277 | 132,085 | ||||||||||||
| Income from operations | 54,721 | 48,083 | 109,346 | 99,903 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 701 | 924 | 1,477 | 2,014 | ||||||||||||
| Interest expense | (6,338 | ) | (5,596 | ) | (14,199 | ) | (11,630 | ) | ||||||||
| (Loss) gain on foreign currency transactions | (125 | ) | (23 | ) | (5 | ) | 203 | |||||||||
| Other income | 19 | — | 34 | 6 | ||||||||||||
| Total other income (expense) | (5,743 | ) | (4,695 | ) | (12,693 | ) | (9,407 | ) | ||||||||
| Income before income taxes | 48,978 | 43,388 | 96,653 | 90,496 | ||||||||||||
| Income tax expense | 12,231 | 10,265 | 21,784 | 21,812 | ||||||||||||
| Net income | $ | 36,747 | $ | 33,123 | $ | 74,869 | $ | 68,684 | ||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation, net of reclassification adjustments | (426 | ) | (15 | ) | (813 | ) | 257 | |||||||||
| Comprehensive income | $ | 36,321 | $ | 33,108 | $ | 74,056 | $ | 68,941 | ||||||||
| Earnings per share from net income: | ||||||||||||||||
| Basic | $ | 0.36 | $ | 0.33 | $ | 0.74 | $ | 0.69 | ||||||||
| Diluted | $ | 0.36 | $ | 0.33 | $ | 0.74 | $ | 0.68 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 101,040,501 | 99,905,643 | 100,724,155 | 99,767,769 | ||||||||||||
| Diluted | 101,821,229 | 101,276,575 | 101,674,934 | 101,212,408 | ||||||||||||
| The Simply Good Foods Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited, dollars in thousands) | ||||||||
| Twenty-Six Weeks Ended | ||||||||
| March 1, 2025 | February 24, 2024 | |||||||
| Operating activities | ||||||||
| Net income | $ | 74,869 | $ | 68,684 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 10,135 | 10,792 | ||||||
| Amortization of deferred financing costs and debt discount | 951 | 992 | ||||||
| Stock compensation expense | 8,792 | 8,736 | ||||||
| Estimated credit losses (gains) | 101 | (140 | ) | |||||
| Unrealized gain (loss) on foreign currency transactions | 5 | (203 | ) | |||||
| Deferred income taxes | 6,440 | 7,722 | ||||||
| Amortization of operating lease right-of-use asset | 3,369 | 3,489 | ||||||
| Other | 168 | (552 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (7,028 | ) | (1,911 | ) | ||||
| Inventories | (22,445 | ) | 820 | |||||
| Prepaid expenses | (4,189 | ) | (5,447 | ) | ||||
| Other current assets | (987 | ) | (9,220 | ) | ||||
| Accounts payable | 16,566 | 2,399 | ||||||
| Accrued interest | (206 | ) | (564 | ) | ||||
| Accrued expenses and other current liabilities | (19,470 | ) | 11,076 | |||||
| Other assets and liabilities | (3,804 | ) | (2,682 | ) | ||||
| Net cash provided by operating activities | 63,267 | 93,991 | ||||||
| Investing activities | ||||||||
| Purchases of property and equipment | (802 | ) | (1,087 | ) | ||||
| Acquisition of business, net of cash acquired | 1,713 | — | ||||||
| Investments in intangible and other assets | (911 | ) | (191 | ) | ||||
| Net cash used in investing activities | — | (1,278 | ) | |||||
| Financing activities | ||||||||
| Proceeds from option exercises | 10,136 | 3,015 | ||||||
| Tax payments related to issuance of restricted stock units and performance stock units | (2,522 | ) | (3,750 | ) | ||||
| Payments on finance lease obligations | — | (121 | ) | |||||
| Cash received on repayment of note receivable | — | 1,200 | ||||||
| Principal payments of long-term debt | (100,000 | ) | (45,000 | ) | ||||
| Net cash used in financing activities | (92,386 | ) | (44,656 | ) | ||||
| Cash and cash equivalents | ||||||||
| Net (decrease) increase in cash | (29,119 | ) | 48,057 | |||||
| Effect of exchange rate on cash | 271 | 104 | ||||||
| Cash at beginning of period | 132,530 | 87,715 | ||||||
| Cash and cash equivalents at end of period | $ | 103,682 | $ | 135,876 | ||||
Net Sales by Geographic Area and Brands
The following is a summary of revenue disaggregated by geographic area and brands:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||
| (In thousands) | March 1, 2025 | February 24, 2024 | March 1, 2025 | February 24, 2024 | ||||||||
| North America(1) | ||||||||||||
| Atkins | $ | 108,650 | $ | 122,755 | $ | 216,818 | $ | 242,253 | ||||
| Quest | 210,771 | 180,874 | 402,708 | 362,337 | ||||||||
| OWYN | 33,806 | — | 66,060 | — | ||||||||
| Total North America | 353,227 | 303,629 | 685,586 | 604,590 | ||||||||
| International | 6,428 | 8,570 | 15,337 | 16,287 | ||||||||
| Total net sales | $ | 359,655 | $ | 312,199 | $ | 700,923 | $ | 620,877 | ||||
| (1)The North America geographic area consists of net sales substantially related to the United States and there is no individual foreign country to which more than | ||||||||||||
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, executive transition costs, business transaction costs, purchase price accounting inventory step-up, integration costs, term loan transaction fees, 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 twenty-six weeks ended March 1, 2025, and February 24, 2024:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
| (In thousands) | March 1, 2025 | February 24, 2024 | March 1, 2025 | February 24, 2024 | ||||||||||||
| Net income | $ | 36,747 | $ | 33,123 | $ | 74,869 | $ | 68,684 | ||||||||
| Interest income | (701 | ) | (924 | ) | (1,477 | ) | (2,014 | ) | ||||||||
| Interest expense | 6,338 | 5,596 | 14,199 | 11,630 | ||||||||||||
| Income tax expense | 12,231 | 10,265 | 21,784 | 21,812 | ||||||||||||
| Depreciation and amortization | 5,088 | 5,187 | 10,135 | 10,792 | ||||||||||||
| EBITDA | 59,703 | 53,247 | 119,510 | 110,904 | ||||||||||||
| Stock-based compensation expense | 4,948 | 4,568 | 8,792 | 8,736 | ||||||||||||
| Executive transition costs | — | — | — | 366 | ||||||||||||
| Business transaction costs | 177 | — | 820 | — | ||||||||||||
| Inventory step-up | 438 | — | 1,412 | — | ||||||||||||
| Integration of OWYN | 1,955 | — | 6,886 | — | ||||||||||||
| Term loan transaction fees | 715 | — | 715 | — | ||||||||||||
| Other(1) | 65 | 25 | (66 | ) | (201 | ) | ||||||||||
| Adjusted EBITDA | $ | 68,001 | $ | 57,840 | $ | 138,069 | $ | 119,805 | ||||||||
| (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 stock-based compensation expense, executive transition costs, business transaction costs, purchase price accounting inventory step-up, integration costs, term loan transaction fees, 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 twenty-six weeks ended March 1, 2025, and February 24, 2024:
| Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
| March 1, 2025 | February 24, 2024 | March 1, 2025 | February 24, 2024 | |||||||||||||
| Diluted earnings per share | $ | 0.36 | $ | 0.33 | $ | 0.74 | $ | 0.68 | ||||||||
| Depreciation and amortization | 0.05 | 0.05 | 0.10 | 0.11 | ||||||||||||
| Stock-based compensation expense | 0.05 | 0.05 | 0.09 | 0.09 | ||||||||||||
| Business transaction costs | — | — | 0.01 | — | ||||||||||||
| Inventory step-up | — | — | 0.01 | — | ||||||||||||
| Integration of OWYN | 0.02 | — | 0.07 | — | ||||||||||||
| Term loan transaction fees | 0.01 | — | 0.01 | — | ||||||||||||
| Tax effects of adjustments(1) | (0.03 | ) | (0.02 | ) | (0.07 | ) | (0.05 | ) | ||||||||
| Rounding(2) | — | (0.01 | ) | (0.01 | ) | (0.01 | ) | |||||||||
| Adjusted diluted earnings per share | $ | 0.46 | $ | 0.40 | $ | 0.95 | $ | 0.82 | ||||||||
| (1)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 | ||||||||||||||||
| (2)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 Adjusted EBITDA as of March 1, 2025:
| (In thousands) | March 1, 2025 | |||
| Net Debt: | ||||
| Total debt outstanding under the Credit Agreement | $ | 300,000 | ||
| Less: cash and cash equivalents | (103,682) | |||
| Net Debt as of March 1, 2025 | $ | 196,318 | ||
| Trailing twelve months Adjusted EBITDA: | ||||
| Add: Adjusted EBITDA for the twenty-six weeks ended March 1, 2025 | $ | 138,069 | ||
| Add: Adjusted EBITDA for the fiscal year ended August 31, 2024 | 269,130 | |||
| Less: Adjusted EBITDA for the twenty-six weeks ended February 24, 2024 | (119,805) | |||
| Trailing twelve months Adjusted EBITDA as of March 1, 2025 | $ | 287,394 | ||
| Net Debt to Adjusted EBITDA | 0.7 | x | ||
FAQ
What was Simply Good Foods (SMPL) Q2 2025 revenue growth?
How much did OWYN contribute to SMPL's Q2 2025 sales?
What is Simply Good Foods' (SMPL) net sales guidance for FY 2025?
How did Simply Good Foods' brands perform in retail takeaway during Q2 2025?
What was SMPL's debt position at the end of Q2 2025?
