Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Oct. 26, 2020 | Feb. 28, 2020 | |
Document Information [Line Items] | |||
Entity Central Index Key | 0001702744 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Aug. 29, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --08-29 | ||
Document Transition Report | false | ||
Entity File Number | 001-38115 | ||
Entity Registrant Name | The Simply Good Foods Company | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-1038121 | ||
Entity Address, Address Line One | 1225 17th Street, Suite 1000 | ||
Entity Address, City or Town | Denver | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80202 | ||
City Area Code | 303 | ||
Local Phone Number | 633-2840 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | SMPL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,800,000 | ||
Share Price | $ 22.06 | ||
Entity Common Stock, Shares Outstanding | 95,683,897 | ||
Amendment Flag | false | ||
Documents Incorporated by Reference [Text Block] | Certain portions of the registrant’s definitive proxy statement, in connection with its 2021 annual meeting of stockholders, to be filed within 120 days after the end of fiscal year ended August 29, 2020 , are incorporated by reference into Part III of this Annual Report on Form 10‑K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 95,847 | $ 266,341 |
Accounts receivable, net | 89,740 | 44,240 |
Inventories | 59,085 | 38,085 |
Prepaid expenses | 3,644 | 2,882 |
Other current assets | 11,947 | 6,059 |
Total current assets | 260,263 | 357,607 |
Long-term assets: | ||
Property and equipment, net | 11,850 | 2,456 |
Intangible assets, net | 1,158,768 | 306,139 |
Goodwill | 544,774 | 471,427 |
Other long-term assets | 32,790 | 4,021 |
Total assets | 2,008,445 | 1,141,650 |
Current liabilities: | ||
Accounts payable | 32,240 | 15,730 |
Accrued interest | 960 | 1,693 |
Accrued expenses and other current liabilities | 38,007 | 29,933 |
Current maturities of long-term debt | 271 | 676 |
Total current liabilities | 71,478 | 48,032 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 596,879 | 190,259 |
Deferred income taxes | 84,352 | 65,383 |
Other long-term liabilities | 22,765 | 532 |
Total liabilities | 775,474 | 304,206 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value, 600,000,000 shares authorized, 95,751,845 and 81,973,284 issued at August 29, 2020 and August 31, 2019, respectively | 958 | 820 |
Treasury stock, 98,234 and 98,234 shares at cost at August 29, 2020 and August 31, 2019, respectively | (2,145) | (2,145) |
Additional paid-in-capital | 1,094,507 | 733,775 |
Retained earnings | 140,530 | 105,830 |
Accumulated other comprehensive loss | (879) | (836) |
Total stockholders' equity | 1,232,971 | 837,444 |
Total liabilities and stockholders' equity | $ 2,008,445 | $ 1,141,650 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Aug. 29, 2020 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock shares issued (in shares) | 95,751,845 | 81,973,284 |
Common stock shares outstanding (in shares) | 95,653,611 | 81,875,050 |
Treasury stock (in shares) | 98,234 | 98,234 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 816,641 | $ 523,383 | $ 431,429 |
Cost of goods sold | 492,313 | 305,978 | 251,063 |
Gross profit | 324,328 | 217,405 | 180,366 |
Operating expenses: | |||
Selling and marketing | 94,469 | 67,488 | 59,092 |
General and administrative | 106,251 | 61,972 | 49,635 |
Depreciation and amortization | 15,259 | 7,496 | 7,498 |
Business transaction costs | 27,125 | 7,107 | 2,259 |
Loss on impairment | 3,000 | 0 | 0 |
Loss (gain) in fair value change of contingent consideration - TRA liability | 0 | 533 | (2,848) |
Total operating expenses | 246,104 | 144,596 | 115,636 |
Income from operations | 78,224 | 72,809 | 64,730 |
Other income (expense): | |||
Interest income | 1,516 | 3,826 | 0 |
Interest expense | (32,813) | (13,627) | (12,551) |
Gain of settlement of TRA liability | 0 | 1,534 | 0 |
Gain (loss) on foreign currency transactions | 658 | (452) | 97 |
Other income | 441 | 196 | 815 |
Total other expense | (30,198) | (8,523) | (11,639) |
Income before income taxes | 48,026 | 64,286 | 53,091 |
Income tax expense (benefit) | 13,326 | 16,750 | (17,364) |
Net income | 34,700 | 47,536 | 70,455 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (43) | (38) | (817) |
Comprehensive income | $ 34,657 | $ 47,498 | $ 69,638 |
Earnings per share from net income: | |||
Basic (in dollars per share) | $ 0.37 | $ 0.59 | $ 1 |
Diluted (in dollars per share) | $ 0.35 | $ 0.56 | $ 0.96 |
Weighted average shares outstanding: | |||
Basic (in shares) | 93,968,953 | 80,734,091 | 70,582,149 |
Diluted (in shares) | 98,343,722 | 85,243,909 | 73,681,355 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Operating activities | |||
Net income | $ 34,700 | $ 47,536 | $ 70,455 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 16,007 | 7,644 | 7,672 |
Amortization of deferred financing costs and debt discount | 3,508 | 1,352 | 1,312 |
Stock compensation expense | 7,636 | 5,501 | 4,029 |
Loss on impairment | 3,000 | 0 | 0 |
Loss (gain) in fair value change of contingent consideration - TRA liability | 0 | 533 | (2,848) |
Gain on settlement of TRA liability | 0 | (1,534) | 0 |
Unrealized loss (gain) on foreign currency transactions | (658) | 452 | (97) |
Deferred income taxes | 8,216 | 10,908 | (21,108) |
Loss on disposal of property and equipment | 0 | 6 | 128 |
Amortization of operating lease right-of-use asset | 3,848 | 0 | 0 |
Other | (389) | 0 | 0 |
Changes in operating assets and liabilities, net of acquisition: | |||
Accounts receivable, net | (18,288) | (7,985) | 267 |
Inventories | 23,880 | (8,272) | (1,081) |
Prepaid expenses | 680 | (824) | 847 |
Other current assets | (5,022) | (2,155) | 3,094 |
Accounts payable | (8,736) | 4,734 | (3,603) |
Accrued interest | (733) | 1,111 | 21 |
Accrued expenses and other current liabilities | (5,572) | 13,961 | 1,962 |
Other | (3,156) | 74 | (12) |
Net cash provided by operating activities | 58,921 | 73,042 | 61,038 |
Investing activities | |||
Purchases of property and equipment | (1,736) | (1,037) | (1,770) |
Proceeds from sale of property and equipment | 0 | 0 | 14 |
Issuance of note receivable | (500) | (750) | 0 |
Proceeds from note receivable | 1,250 | 0 | 0 |
Acquisition of business, net of cash acquired | (982,075) | 0 | (1,757) |
Payments to Acquire Intangible Assets | (933) | 0 | 0 |
Net cash used in investing activities | (983,994) | (1,787) | (3,513) |
Financing activities | |||
Proceeds from option exercises | 4,206 | 706 | 120 |
Cash received from warrant exercises | 0 | 113,464 | 232 |
Tax payments related to issuance of restricted stock units | (191) | (181) | (120) |
Proceeds from Issuance of Common Stock | 352,542 | 0 | 0 |
Equity issuance costs | (3,323) | 0 | 0 |
Repurchase of common stock | 0 | (2,145) | 0 |
Payments on finance lease obligations | (374) | 0 | 0 |
Principal payments of long-term debt | (50,000) | (2,000) | (1,500) |
Repayments of revolving credit facility | (25,000) | 0 | 0 |
Proceeds from issuance of long term debt | 460,000 | 0 | 0 |
Proceeds from revolving credit facility | 25,000 | 0 | 0 |
Deferred financing costs | (8,208) | 0 | (319) |
Settlement of TRA liability | 0 | (26,468) | 0 |
Net cash provided by (used in) financing activities | 754,652 | 83,376 | (1,587) |
Cash and cash equivalents | |||
Net (decrease) increase in cash | (170,421) | 154,631 | 55,938 |
Effect of exchange rate on cash | (73) | (261) | (468) |
Cash at beginning of period | 266,341 | 111,971 | 56,501 |
Cash and cash equivalents at end of period | 95,847 | 266,341 | 111,971 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 30,038 | 11,164 | 11,218 |
Cash paid for taxes | 4,530 | 7,451 | 4,577 |
Operating lease right-of-use assets recognized at ASU 2016-02 transition | 5,102 | 0 | 0 |
Finance lease right-of-use assets recognized at ASU 2016-02 transition | 1,185 | 0 | 0 |
Operating lease right-of-use assets recognized after ASU 2016-02 transition | $ 3,554 | $ 0 | $ 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | Treasury Stock |
Balance, Treasury (in shares) at Aug. 26, 2017 | 0 | |||||
Balance (in shares) at Aug. 26, 2017 | 70,562,477 | |||||
Balance at Aug. 26, 2017 | $ 598,702 | $ 706 | $ 610,138 | $ (12,161) | $ 19 | $ 0 |
Condensed Statement of Stockholders' Equity | ||||||
Net income | 70,455 | 70,455 | ||||
Stock compensation | 4,029 | 4,029 | ||||
Foreign currency translation adjustment | (817) | (817) | ||||
Issuance of Restricted Stock Units (in shares) | 12,986 | |||||
Issuance of Restricted Stock Units | (120) | (120) | ||||
Exercise of options to purchase common stock (in shares) | 10,000 | |||||
Exercise of options to purchase common stock | 120 | 120 | ||||
Warrant conversion (shares) | 20,212 | |||||
Warrant conversion | 232 | 232 | ||||
Balance, Treasury (in shares) at Aug. 25, 2018 | 0 | |||||
Balance (in shares) at Aug. 25, 2018 | 70,605,675 | |||||
Balance at Aug. 25, 2018 | 672,601 | $ 706 | 614,399 | 58,294 | (798) | $ 0 |
Condensed Statement of Stockholders' Equity | ||||||
Net income | 47,536 | 47,536 | ||||
Stock compensation | 5,501 | 5,501 | ||||
Foreign currency translation adjustment | $ (38) | (38) | ||||
Repurchase of common stock | 98,234 | 98,234 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ (2,145) | $ (2,145) | ||||
Issuance of Restricted Stock Units (in shares) | 80,293 | |||||
Issuance of Restricted Stock Units | (181) | $ 1 | (182) | |||
Exercise of options to purchase common stock (in shares) | 87,017 | |||||
Exercise of options to purchase common stock | 706 | $ 1 | 705 | |||
Warrant conversion (shares) | 11,200,299 | |||||
Warrant conversion | $ 113,464 | $ 112 | 113,352 | |||
Balance, Treasury (in shares) at Aug. 31, 2019 | 98,234 | 98,234 | ||||
Balance (in shares) at Aug. 31, 2019 | 81,973,284 | 81,973,284 | ||||
Balance at Aug. 31, 2019 | $ 837,444 | $ 820 | 733,775 | 105,830 | (836) | $ (2,145) |
Condensed Statement of Stockholders' Equity | ||||||
Net income | 34,700 | 34,700 | ||||
Stock compensation | 7,636 | 7,636 | ||||
Foreign currency translation adjustment | (43) | (43) | ||||
Stock Issued During Period, Shares, New Issues | 13,379,205 | |||||
Stock Issued During Period, Value, New Issues | $ 349,219 | $ 134 | 349,085 | |||
Repurchase of common stock | 0 | |||||
Issuance of Restricted Stock Units (in shares) | 58,974 | |||||
Issuance of Restricted Stock Units | $ (191) | $ 1 | (192) | |||
Exercise of options to purchase common stock (in shares) | 340,382 | |||||
Exercise of options to purchase common stock | $ 4,206 | $ 3 | 4,203 | |||
Balance, Treasury (in shares) at Aug. 29, 2020 | 98,234 | 98,234 | ||||
Balance (in shares) at Aug. 29, 2020 | 95,751,845 | 95,751,845 | ||||
Balance at Aug. 29, 2020 | $ 1,232,971 | $ 958 | $ 1,094,507 | $ 140,530 | $ (879) | $ (2,145) |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 12 Months Ended |
Aug. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation Description of Business The Simply Good Foods Company (“Simply Good Foods” or the "Company") was formed by Conyers Park Acquisition Corp. (“Conyers Park”) on March 30, 2017. On April 10, 2017, Conyers Park and NCP-ATK Holdings, Inc., among others, entered into a definitive merger agreement (the “Merger Agreement”), pursuant to which on July 7, 2017 , Conyers Park merged into Simply Good Foods and as a result acquired the companies which conducted the Atkins® brand business (the “Acquisition of Atkins”). The common stock of Simply Good Foods is listed on the Nasdaq Capital Market under the symbol “SMPL." On August 21, 2019, the Company's wholly-owned subsidiary Simply Good Foods USA, Inc., formerly known as Atkins Nutritionals, Inc. (“Simply Good USA”) entered into a Stock and Unit Purchase Agreement (the "Purchase Agreement") to acquire Quest Nutrition, LLC ("Quest"), a healthy lifestyle food company (the "Acquisition of Quest"). On November 7, 2019, pursuant to the Purchase Agreement, Simply Good USA completed the Acquisition of Quest, via Simply Good USA’s direct or indirect acquisition of 100% of the equity interests of Voyage Holdings, LLC (“Voyage Holdings”), and VMG Quest Blocker, Inc. (“Voyage Blocker” and, together with Voyage Holdings, the “Target Companies”) for a cash purchase price of approximately $1.0 billion (subject to customary adjustments for the Target Companies’ levels of cash, indebtedness, net working capital and transaction expenses as of the closing date). The Simply Good Foods Company 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. The Company’s nutritious snacking platform consists of the following core brands that specialize in providing products for consumers that follow certain nutritional philosophies, dietary approaches and/or health-and-wellness trends: Atkins® for those following a low-carb lifestyle; and Quest® for consumers seeking to partner with a brand that makes the foods they crave work for them, not against them, through a variety of protein-rich foods and beverages that also limit sugars and simple carbs. The Company distributes its products in major retail channels, primarily in North America, including grocery, club and mass merchandise, as well as through e-commerce, convenience, specialty and other channels. The Company's portfolio of nutritious snacking brands gives it a strong platform with which to introduce new products, expand distribution, and attract new consumers to its products. The Company's platform also positions it to continue to selectively pursue acquisition opportunities of brands in the nutritious snacking category. Based on the duration and severity of economic effects from the novel coronavirus ("COVID-19") pandemic, including but not limited to stock market volatility, the potential for (i) continued increased rates of reported cases of COVID-19 (which has been referred to as a second wave), (ii) unexpected supply chain disruptions, (iii) changes to customer operations, (iv) continued or additional changes in consumer purchasing and consumption behavior beyond those evidenced to date, and (v) the closure of customer establishments, the Company remains uncertain of the ultimate effect COVID-19 could have on its business. Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The Company maintains its accounting records on a 52 / 53 -week fiscal year, ending on the last Saturday in August. The financial information presented within the Company's consolidated financial statements has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying financial statements include Consolidated Balance Sheets for the periods ended August 29, 2020 and August 31, 2019 . The remaining financial statements include the fifty-two week period ended August 29, 2020 , the fifty-three week period ended August 31, 2019 , and the fifty-two week period ended August 25, 2018 . The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Simply Good Foods and its subsidiaries on a consolidated basis. Reclassification of Prior Year Amounts Certain prior year amounts have been reclassified to conform to the current year presentation including (i) Selling expenses and Marketing expenses, which have been combined as Selling and marketing expenses on the Consolidated Statements of Operations and Comprehensive Income and (ii) Other operating expense , which has been combined with General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. |
Change in Accounting Principle
Change in Accounting Principle (Notes) | 12 Months Ended |
Aug. 29, 2020 | |
Change in Accounting Principle [Abstract] | |
Changes in Accounting Principles | Change in Accounting Principle During the fourth quarter ended August 31, 2019, the Company changed its accounting principle related to the presentation of third-party delivery costs associated with shipping and handling activities previously included as operating expenses in Distribution in the Consolidated Statements of Operations and Comprehensive Income. The Company now presents these expenses within Cost of goods sold in the Consolidated Statements of Operations and Comprehensive Income. In connection with the change in accounting principle, the Company also changed its definition of shipping and handling costs to include costs paid to third-party warehouse operators associated with delivering product to a customer, previously included in General and administrative , and Depreciation and amortization of the assets at the third-party warehouse, previously included in Depreciation and amortization . Under the previous definition of shipping and handling costs, the Company only included delivery costs in Distribution . The accounting policy change was applied retrospectively to all periods presented and the Consolidated Statements of Operations and Comprehensive Income reflect the effect of this accounting principle change for all periods presented. The effect of the adjustment is as follows in thousands: Fifty-Two Weeks Ended August 25, 2018 As Reported Change in Accounting Principle and Presentation Other Operating Expense (1) As Adjusted Cost of goods sold $ 223,873 $ 27,190 $ — $ 251,063 Distribution 19,685 (19,685 ) — — General and administrative 56,333 (7,331 ) 633 49,635 Depreciation and amortization $ 7,672 $ (174 ) $ — $ 7,498 (1 ) Other operating expenses have been combined with General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Business Combination On November 7, 2019 , pursuant to the Purchase Agreement, the Company completed the Acquisition of Quest for a cash purchase price of approximately $1.0 billion , subject to customary post-closing adjustments. The Acquisition of Quest was accounted for using the acquisition method of accounting prescribed by Accounting Standard Codification ("ASC") Topic 805, Business Combinations (“ASC 805”), whereby the results of operations, including the revenues and earnings of Quest, are included in the financial statements from the date of acquisition. Additionally, assets acquired and liabilities assumed were recognized at their fair values based on widely accepted valuation techniques in accordance with ASC Topic 820, Fair Value Measurements, as of the closing date. The process for estimating fair values requires the use of significant estimates, assumptions and judgments, including determining the timing and estimates of future cash flows and developing appropriate discount rates. ASC 805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of acquisition date. The Company expects to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable within the measurement period, but not to exceed one year from the acquisition date. Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1. Valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and require significant judgment. There were no significant transfers between levels during any period presented. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, deposits available on demand and other short-term, highly liquid investments with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. Accounts Receivable, Net Accounts receivable, net consists primarily of trade receivables, net of allowances for doubtful accounts, returns and trade promotions. The Company sells its products for cash or on credit terms, which are established in accordance with local and industry practices and typically require payment within 30 days of delivery and may allow discounts for early payment. The Company estimates an allowance for doubtful accounts based upon a review of outstanding receivables, historical collection information and an analysis of customer data. Accounts receivable are written off when determined to be uncollectible. At August 29, 2020 and August 31, 2019 , the allowance for doubtful accounts was $0.5 million and $0.6 million , respectively. Inventories Inventories are valued at the lower of cost or net realizable value on a first-in, first-out basis, adjusted for the value of inventory that is determined to be excess, obsolete, expired or unsaleable. Obsolete inventory is reserved at 50% for inventory four to six months from expiration, and 100% for items within three months of expiration. Reserves are also taken for certain products or packaging materials when it is determined their cost may not be recoverable. At August 29, 2020 and August 31, 2019 , the provision for obsolete inventory was $0.5 million and $0.4 million , respectively. Property and Equipment, Net Property and equipment, net is stated at the allocated fair value for acquired assets. Additions to property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. The general ranges of estimated useful lives are: Furniture and fixtures 7 years Computer equipment, software and website development costs 3 - 5 years Machinery and equipment 7 years Office equipment 3 - 5 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful life of the improvement utilizing the straight-line method. The Company performs impairment tests for Property and equipment, net when circumstances indicate that the carrying value of the asset may not be recoverable. There were no indicators of impairment in the fifty-two week period ended August 29, 2020 , the fifty-three week period ended August 31, 2019 , or the fifty-two week period ended August 25, 2018 . Goodwill and Intangible Assets, Net Goodwill and Intangible assets, net result primarily from the Business Combination and acquisitions. Intangible assets primarily include brands and trademarks with indefinite lives and customer-related relationships with finite lives. Upon acquisition, the purchase price is first allocated to identifiable assets and liabilities, including customer-related intangible assets and trademarks, with any remaining purchase price recorded as Goodwill . Goodwill and indefinite-lived intangible assets are not amortized but instead are tested for impairment at least annually, or more frequently if indicators of impairment exist. The Company conducts its annual impairment tests at the beginning of the fourth fiscal quarter. Goodwill and indefinite-lived intangible assets are assessed using either a qualitative or quantitative approach to determine whether it is more likely than not that the fair values of the reporting units are less than their carrying amounts. The qualitative assessment evaluates factors including macro-economic conditions, industry-specific and company-specific considerations, legal and regulatory environments, and historical performance. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative assessment is performed. Otherwise, no further assessment is required. The quantitative approach compares the estimated fair value of the reporting unit to its carrying amount, including goodwill. Impairment is indicated if the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, and an impairment charge is recognized for the differential. For fiscal year 2020, the Company elected to perform both qualitative and quantitative assessments of its goodwill and indefinite-lived intangible assets. During the fourth quarter of fiscal 2020, the Company determined there were indicators of impairment related to the SimplyProtein brand intangible asset. Therefore, the Company performed a quantitative assessment of its brand intangible asset, which indicated the fair value exceeded the carrying value, resulting in a loss on impairment of $3.0 million in the fifty-two week period ended August 29, 2020 . There were no impairment charges related to goodwill in the fifty-two week period ended August 29, 2020 . Additionally, for fiscal year 2019, we elected to perform quantitative assessments of goodwill and indefinite-lived intangible assets. No impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-three week period ended August 31, 2019 . The Company performed qualitative assessments of goodwill and indefinite-lived intangible assets for fiscal year 2018 . The qualitative assessments determined that it was more likely than not the reporting unit, brands and trademarks had a fair value in excess of their carrying value. Accordingly, no further impairment assessment was necessary, and no impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-two week period ended August 25, 2018 . Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Property and Equipment, Net” significant accounting policy. Deferred Financing Costs and Debt Discounts Costs incurred in obtaining long-term financing paid to parties other than creditors are considered a deferred financing cost and are amortized over the terms of the long-term financing agreements using the effective-interest method. Amounts paid to creditors are recorded as a reduction in the proceeds received by the creditor and are considered a discount on the issuance of debt. Income Taxes Income taxes include federal, state and foreign taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the differences between the financial statement balances and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the fiscal year that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. Leases Contracts are evaluated to determine whether they contain a lease at inception. Leases are classified as either finance leases or operating leases based on criteria in ASC Topic 842, Leases. The Company’s operating leases are generally comprised of real estate and certain equipment used in warehousing products. The Company’s finance leases are generally comprised of warehouse equipment. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The majority of the Company's leases do not provide an implicit rate; therefore, the Company uses its secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments for those leases. The Company's incremental borrowing rate for a lease is the rate of interest it would pay to borrow on a collateralized basis over a similar term to the lease in a similar economic environment. The Company applied incremental borrowing rates using a portfolio approach. Right-of-use assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term operating leases that have a term of one year or less. The Company monitors for triggering events or conditions that require a reassessment of its leases. When the reassessment requires a re-measurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset. Additionally, the Company reviewed for impairment indicators of its right-of-use assets and other long-lived assets as described in the “Property and Equipment, Net” significant accounting policy. Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. The Company has determined that fulfilling and delivering products is a single performance obligation. Revenue is recognized at the point in time when the Company has satisfied its performance obligation and the customer has obtained control of the products. This generally occurs when the product is delivered to or picked up by the customer based on applicable shipping terms, which is typically within 30 days. Revenue is measured as the amount of consideration expected to be received in exchange for fulfilled product orders, including estimates of variable consideration. The most common forms of variable consideration include trade promotions, such as consumer incentives, coupon redemptions and other marketing activities, allowances for unsaleable product, and any additional amounts where a distinct good or service cannot be identified or the value cannot be reasonably estimated. Trade promotions are recorded as a reduction to net sales with a corresponding reduction to accounts receivable at the time of revenue recognition for the underlying sale. The recognition of trade promotions requires management to make estimates regarding the volume of incentive that will be redeemed and their total cost. At August 29, 2020 and August 31, 2019 , the allowance for trade promotions was $25.2 million and $10.3 million , respectively. Estimates of variable consideration are made using various information including historical data on performance of similar trade promotional activities, market data from IRI, and the Company’s best estimate of current activity. The Company reviews these estimates regularly and makes revisions as necessary. Revisions can include changes for consideration paid to customers that lack sufficient evidence to support a distinct good or service assertion, or for which a reasonably estimable fair value cannot be determined, primarily related to the Company's assessments of cooperative advertising programs. Uncertainties related to the estimate of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration. Adjustments to variable consideration are recognized in the period the adjustments are identified and have historically been insignificant. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. The Company provides standard assurance type warranties that its products will comply with all agreed-upon specifications. No services beyond an assurance type warranty are provided to customers. While customers generally have a right to return defective or non-conforming products, past experience has demonstrated that product returns have been immaterial. Customer remedies for defective or non-conforming products may include a refund or exchange. As a result, the right of return is estimated and recorded as a reduction in revenue at the time of sale, if necessary. The Company's customer contracts identify product quantity, price and payment terms. Payment terms are granted consistent with industry standards. Although some payment terms may be more extended, the majority of the Company's payment terms are less than 60 days. As a result, revenue is not adjusted for the effects of a significant financing component. Amounts billed and due from customers are classified as Accounts receivable, net on the Consolidated Balance Sheets. The Company utilizes third-party contract manufacturers for the manufacture of its products. The Company has evaluated whether the it is the principal or agent in these relationships. The Company has determined that it is the principal in all cases, as it maintains the responsibility for fulfillment, risk of loss and establishes the price. In accordance with ASC Topic 606, Revenue from Contracts with Customers, the Company has elected the practical expedient to expense the incremental costs to obtain a contract, because the amortization period would be less than one year, and the practical expedient for shipping and handling costs. Shipping and handling costs incurred to deliver products to customers are accounted for as fulfillment activities, rather than a promised service, and as such are included in Cost of goods sold in the Consolidated Statements of Operations and Comprehensive Income. Revenues from transactions with external customers for each of the Company's products would be impracticable to disclose and management does not view its business by product line. For revenue disaggregated by geographic area and brand refer to Note 17 , Segment and Customer Information . Cost of Goods Sold Costs of goods sold represent costs directly related to the manufacture and distribution of the Company's products. Such costs include raw materials, co-manufacturing costs, packaging, shipping and handling, third-party distribution and depreciation of distribution center equipment and leasehold improvements. Shipping and Handling Costs Shipping and handling costs include costs paid to third-party warehouse operators associated with delivering product to customers and depreciation and amortization of assets at the third-party warehouse. Shipping and handling costs are recognized in Cost of goods sold . Costs of $49.8 million for the fifty-two week period ended August 29, 2020 , $32.3 million for the fifty-three week period ended August 31, 2019 , and $27.2 million for the fifty-two week period ended August 25, 2018 were recorded relating to products shipped to customers. Advertising Costs Production costs related to television commercials are expensed when first aired. All other advertising costs are expensed when incurred through Selling and marketing . Total advertising costs were $55.3 million for the fifty-two week period ended August 29, 2020 , $35.4 million for the fifty-three week period ended August 31, 2019 , and $34.0 million for the fifty-two week period ended August 25, 2018 . Production costs related to television commercials not yet aired are included in Prepaid expenses in the accompanying Consolidated Balance Sheets. There were no productions costs related to television commercials not yet aired at August 29, 2020 or August 31, 2019 . Research and Development Activities The Company’s research and development activities primarily consist of generating and testing new product concepts, new flavors and packaging. The Company expenses research and development costs as incurred related to compensation, facility costs, consulting and supplies. Research and development activities are primarily internal and associated costs are included in General and administrative . The Company’s total research and development expenses were $4.0 million for the fifty-two week period ended August 29, 2020 , $2.2 million for the fifty-three week period ended August 31, 2019 , and $2.5 million for the fifty-two week period ended August 25, 2018 . Share-Based Compensation The Company uses share-based compensation, including stock options, restricted stock units and performance stock units, to provide long-term performance incentives for its employees and directors. Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on their grant-date fair value. Forfeitures are recognized as they occur. Share-based compensation expense is included in General and administrative. Defined Contribution Plan The Company sponsors defined contribution plans to provide retirement benefits to its employees. The Company's 401(k) plan and similar plans for non-domestic employees are based on a portion of eligible pay up to a defined maximum. All matching contributions are made in cash. Expense associated with defined contribution plans was $1.3 million for the fifty-two week period ended August 29, 2020 , $0.6 million for the fifty-three week period ended August 31, 2019 , and $0.4 million for the fifty-two week period ended August 25, 2018 . Foreign Currency Translation For all foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated into U.S. dollars using the exchange rate in effect at the end of each reporting period. Income statement accounts are translated at the average exchange rate prevailing during each reporting period. Translation adjustments are recorded as a component of Other comprehensive income (loss) . Gains or losses resulting from transactions in foreign currencies are included in Other income (expense) . Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments of this ASU should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies disclosure requirements on fair value measurements of Accounting Standards Codification (“ASC”) 820. This ASU is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted including in any interim period for which financial statements have not yet been issued. Entities are permitted to early adopt the eliminated or modified disclosure requirements and delay the adoption new disclosure requirements until their effective date. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not anticipate adoption of this ASU will be material to its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted.. The Company does not expect that the adoption of this new guidance will have a material effect on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. ASU 2018-11 provides entities another option for transition, allowing entities to not apply the new standard in the comparative periods they present in their financial statements in the year of adoption. The amendments provide the option for the ASU to be applied at the beginning of the period adopted using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. On September 1, 2019, the Company adopted ASU No. 2016-02 using the alternative transition method under ASU No. 2018-11, which permits application of the new lease guidance at the beginning of the period of adoption, with comparative periods continuing to be reporting under Topic 840. Upon adoption, the Company recorded the following within the Condensed Consolidated Balance Sheet: operating lease right-of-use assets of $5.1 million included within Other long-term assets, current operating lease liabilities of $2.0 million included within Accrued expenses and other current liabilities, long-term operating lease liabilities of $3.8 million included within Other long-term liabilities, finance lease right-of-use assets of $1.2 million included within Property and equipment, net, current finance lease liabilities of $0.2 million included within Current maturities of long term debt, and long-term finance lease liabilities of $1.0 million included within Long-term debt less current maturities . Following the Acquisition of Quest, the Company recorded the following amounts in the Condensed Consolidated Balance Sheet as of the closing date on November 7, 2019: operating lease right-of-use assets of $21.1 million included within Other long-term assets, current operating lease liabilities of $2.0 million included within Accrued expenses and other current liabilities, and long-term operating lease liabilities of $18.9 million included within Other long-term liabilities. The adoption of these ASUs did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The guidance provided a number of optional practical expedients in adoption. The Company elected to adopt the package of practical expedients permitted under the transition guidance within the standard, which among other things, permits it to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company did not elect the use-of-hindsight practical expedient or the practical expedient pertaining to land easements, the latter not being applicable. Additionally, the Company elected to include both lease and non-lease components as a single component for all asset classes in which the Company is the lessee. For additional information regarding leases, refer to Note 11 . In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU simplifies aspects of share-based compensation issued to non-employees by aligning the guidance with accounting for employee share-based compensation. The Company adopted this ASU as of the first day of fiscal 2020. The adoption of this ASU did not have a material effect on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this ASU as of the first day of fiscal 2020. The adoption of this ASU did not have a material effect on the consolidated financial statements. |
Business Combination (Notes)
Business Combination (Notes) | 12 Months Ended |
Aug. 29, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combination On August 21, 2019 , Simply Good USA entered into the Purchase Agreement with VMG Voyage Holdings, LLC, VMG Tax-Exempt II, L.P., Voyage Employee Holdings, LLC, and other sellers defined in the Purchase Agreement. On November 7, 2019 , pursuant to the Purchase Agreement, Simply Good USA completed the Acquisition of Quest for a cash purchase price at closing of $988.9 million subject to customary post-closing adjustments. Simply Good USA acquired Quest as a part of the Company's vision 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. Quest is a healthy lifestyle food company offering a variety of bars, cookies, chips, ready-to-drink shakes and pizzas that compete in many of the attractive, fast growing sub-segments within the nutritional snacking category. The Acquisition of Quest was funded by the Company through a combination of cash, equity and debt financing. Total consideration paid on the closing date was $988.9 million . Cash sources of funding included $195.3 million of cash on hand, net proceeds of approximately $350.0 million from an underwritten public offering of common stock, and $443.6 million in new term loan debt. In the third fiscal quarter of 2020, the Company received a post-closing release from escrow of approximately $2.1 million related to net working capital adjustments, resulting in a total net consideration paid of $986.8 million as of August 29, 2020 . Business transaction costs within the Consolidated Statements of Operations and Comprehensive Income for fifty-two week period ended August 29, 2020 was $27.1 million , which included $14.5 million of transaction advisory fees related to the Acquisition of Quest, $3.2 million of banker commitment fees, $6.1 million of non-deferrable debt issuance costs related to the incremental term loan, and $3.3 million of other costs, including legal, due diligence, and accounting fees. Included in the transaction advisory fees paid for the Acquisition of Quest is $12.0 million paid to Centerview Partners LLC, an investment banking firm that served as the lead financial advisor to the Company for this transaction. Three members of the Company’s Board of Directors, Messrs. Kilts, West, and Ratzan, have business relationships with certain partners of Centerview Partners LLC (including relating to Centerview Capital Consumer, a private equity firm and affiliate of Conyers Park Sponsor LLC), but they are not themselves partners, executives or employees of Centerview Partners LLC, and Centerview Partners LLC is not a related party of the Company pursuant to applicable rules and policies. The advisory fee paid to Centerview Partners LLC represents approximately 1.2% of the total cash purchase price paid by the Company on the closing date of the Acquisition of Quest. All transaction advisory fees relating to the Acquisition of Quest were approved by the Company’s Audit Committee. The following table sets forth the preliminary purchase price allocation of the Acquisition of Quest to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. The preliminary November 7, 2019 fair value is as follows in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 26,537 Inventories 44,032 Prepaid assets 1,214 Other current assets 3,812 Property and equipment, net (1) 9,843 Intangible assets, net (2) 868,375 Other long-term assets 20,997 Liabilities assumed: Accounts payable 25,200 Other current liabilities 11,237 Deferred income taxes (3) 10,754 Other long-term liabilities 18,891 Total identifiable net assets 913,473 Goodwill (4) 73,347 Total assets acquired and liabilities assumed $ 986,820 (1) Property and equipment, net primarily consists of leasehold improvements for the Quest headquarters of $6.9 million , furniture and fixtures of $2.2 million , and equipment of $0.7 million . The Quest headquarters lease ends in April 2029. The useful lives of the leasehold improvements, furniture and fixtures, and equipment is consistent with the Company's accounting policies. (2) Intangible assets were recorded at fair value consistent with ASC 820 as a result of the Acquisition of Quest. Intangible assets consist of $750.0 million of indefinite brand and trademark, $115.0 million of amortizable customer relationships, and $3.4 million of internally developed software. The useful lives of the intangible assets are disclosed in Note 6 of the consolidated financial statements. The fair value measurement of the assets and liabilities was based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3 fair market values were determined using a variety of information, including estimated future cash flows and market comparable data and companies. The fair values of the intangible assets were estimated using inputs primarily from the income approach and the with/without method, which estimates the value using the cash flow impact in a hypothetical scenario where the customer relationships are not in place. The significant assumptions used in estimating the fair value of the intangible assets include the estimated life the asset will contribute to cash flows, profitability, and the estimated discount rate. (3) Primarily as a result of the fair value attributable to the identifiable intangible assets, the deferred income tax liability was $10.8 million . (4) Goodwill was recorded at fair value consistent with ASC 820 as a result of the Acquisition of Quest. Amounts recorded for goodwill created in an acquisition structured as a stock purchase for tax are generally not expected to be deductible for tax purposes. Amounts recorded for goodwill resulting in a tax basis step-up are generally expected to be deductible for tax purposes. Tax deductible Goodwill is estimated to be $67.7 million . Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The final determination of the fair value of the assets acquired and liabilities assumed is expected to be completed in the first fiscal quarter of 2021. Since the initial preliminary estimates reported in the first fiscal quarter of 2020, the Company has updated certain amounts reflected in the preliminary purchase price allocation, as summarized in the fair values of assets acquired and liabilities assumed as set forth above. Specifically, the carrying amount of the intangible assets, net were increased by $20.0 million as a result of valuation adjustments related to the Company's finalization of tax attributes, which also resulted in a decrease to deferred income taxes of $3.2 million . Additionally, accounts receivable, net decreased $3.1 million and inventories increased $0.9 million due to fair value measurement period adjustments, and the carrying amount of property and equipment, net decreased by $0.5 million to reflect its estimated fair value. As a result of these adjustments and the change in total net consideration paid of approximately $2.1 million related to net working capital adjustments discussed above, goodwill has decreased $22.7 million . Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. The final fair value determination of the assets acquired and liabilities assumed will be completed prior to one year from the transaction completion, consistent with ASC 805. The results of Quest's operations have been included in the Simply Good Foods' Consolidated Financial Statements since November 7, 2019, the date of acquisition. The following table provides net sales from the acquired Quest business included in the Company's results: 52-Weeks Ended (In thousands) August 29, 2020 Net sales $ 286,803 Unaudited Pro Forma Financial Information Pro forma financial information is not intended to represent or be indicative of the actual results of operations of the combined business that would have been reported had the Acquisition of Quest been completed at the beginning of the fiscal year 2019, nor is it representative of future operating results of the Company. This unaudited pro forma combined financial information is prepared based on Article 11 of Regulation S-X period end guidance. The Company and the legacy Quest entity have different fiscal year ends, with Simply Good Foods’ fiscal year being the last Saturday of August while the legacy Quest business fiscal year end was December 31. Because the year ends differ by more than 93 days, Quest's financial information is required to be adjusted to a period within 93 days of Simply Good Foods’ fiscal period end. For the purposes of preparing the unaudited pro forma combined financial information for the fifty-three week period ended August 31, 2019 , the Company added Quest’s unaudited consolidated statement of operations for the six months ended June 30, 2019 to Quest's unaudited consolidated statement of operations for the six months ended December 31, 2018, which was derived by deducting the historical unaudited consolidated statement of operations for the six months ended June 30, 2018, from the unaudited consolidated statement of operations for the fiscal year ended December 31, 2018. In addition to the above period end adjustments, the pro forma results include certain adjustments, as required under ASC 805, which are different than Article 11 pro forma requirements. ASC 805 requires pro forma adjustments to reflect the effects of fair value adjustments, transaction costs, capital structure changes, the tax effects of such adjustments, and also requires nonrecurring adjustments be prepared as though the Acquisition of Quest had occurred as of the beginning of the earliest period presented. The adjustments to the historical Quest financial results include the exclusion of legacy derivatives and interest expense that were settled in the execution of the Acquisition of Quest. Additional adjustments include non-recurring transaction costs and the portion of the inventory fair value adjustment recorded by the Company during the fifty-two week period ended August 29, 2020 . Both periods were further adjusted to reflect a full period of (a) fair value adjustments related to inventory and incremental customer relationship amortization, (b) interest expense with the higher principal and interest rates associated with the Company's new term loan debt incurred to finance, in part, the Acquisition of Quest, and (c) the effects of the adjustments on income taxes and net income. The following unaudited pro forma combined financial information presents combined results of the Company and Quest as if the Acquisition of Quest has occurred at the beginning of fiscal 2019: 52-Weeks Ended 53-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 Net sales $ 885,044 $ 832,254 Gross profit 355,395 317,480 Net income $ 59,090 $ 30,143 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Aug. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net , as presented with the Consolidated Balance Sheets, are summarized as follows: (In thousands) August 29, 2020 August 31, 2019 Furniture and fixtures $ 3,197 $ 715 Computer equipment and software 1,062 956 Machinery and equipment 1,135 385 Website development costs — 2,237 Leasehold improvements 8,137 361 Finance lease right-of-use-assets 1,185 — Construction in progress — 139 Property and equipment, gross 14,716 4,793 Less: accumulated depreciation (2,866 ) (2,337 ) Property and equipment, net $ 11,850 $ 2,456 The increase in Property and equipment, net as of August 29, 2020 as compared to August 31, 2019 was primarily a result of the Acquisition of Quest. Total depreciation expense was $1.8 million for the fifty-two week period ended August 29, 2020 , $1.1 million for the fifty-three week period ended August 31, 2019 , and $1.2 million for the fifty-two week period ended August 25, 2018 . General and administrative includes a $0.1 million loss on disposal of property and equipment in the fifty-two week period ended August 25, 2018 . |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Aug. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Goodwill and Intangibles Changes to Goodwill during the fifty-two week period ended August 29, 2020 were as follows: (In thousands) Goodwill Balance as of August 31, 2019 $ 471,427 Acquisition of business 73,347 Balance as of August 29, 2020 $ 544,774 The change in Goodwill during the fifty-two week period ended August 29, 2020 was the result of the acquisition method of accounting related to the Acquisition of Quest as described in Note 4 . There were no changes in the Company's goodwill in the fifty-three week period ended August 31, 2019 . There were no impairment charges related to goodwill in the fifty-two week period ended August 29, 2020 or since the inception of the Company. Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years 5,967 2,645 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 August 31, 2019 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 232,000 $ — $ 232,000 Intangible assets with finite lives: Customer relationships 15 years 59,000 8,382 50,618 Proprietary recipes and formulas 7 years 7,000 2,131 4,869 Licensing agreements 14 years 22,000 3,348 18,652 $ 320,000 $ 13,861 $ 306,139 Intangible assets, net changed due to the Acquisition of Quest, amortization expense, and an impairment loss related to brand and trademark intangible assets. During the fourth quarter of fiscal 2020, the Company determined there were indicators of impairment related to the SimplyProtein brand intangible asset. Therefore, the Company performed a quantitative assessment of its brand intangible asset, which indicated its fair value exceeded its carrying value, resulting in a loss on impairment of $3.0 million . Amortization expense related to intangible assets was $14.0 million for the fifty-two week period ended August 29, 2020 , $6.5 million for the fifty-three week period ended August 31, 2019 , and $6.5 million for the fifty-two week period ended August 25, 2018 . Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization 2021 $ 15,446 2022 15,212 2023 14,938 2024 14,281 2025 13,171 Thereafter 106,720 Total $ 179,768 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Aug. 29, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities in the Consolidated Balance Sheets were comprised of the following: (In thousands) August 29, 2020 August 31, 2019 Accrued professional fees $ 3,125 $ 8,903 Accrued advertising allowances and claims 2,625 2,095 Accrued bonus expenses 12,261 10,908 Accrued freight expenses 1,795 1,791 Accrued payroll-related expenses 2,179 841 Accrued commissions 1,789 932 Income taxes payable 839 382 VAT payable 2,367 1,787 Accrued restructuring 4,139 — Other accrued expenses 2,559 2,294 Current operating lease liabilities 4,329 — Accrued expenses and other current liabilities $ 38,007 $ 29,933 The increase in Accrued expenses and other current liabilities as of August 29, 2020 as compared to August 31, 2019 was primarily a result of the Acquisition of Quest. |
Long-Term Debt and Line of Cred
Long-Term Debt and Line of Credit | 12 Months Ended |
Aug. 29, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Line of Credit | Long-Term Debt and Line of Credit On July 7, 2017, the Company entered into a credit agreement with Barclays Bank PLC and other parties (as amended to date, the "Credit Agreement"). The Credit Agreement provides for (i) a term facility of $200.0 million (“Term Facility”) with a seven-year maturity and (ii) a revolving credit facility of up to $75.0 million (the “Revolving Credit Facility”) with a five-year maturity. Substantially concurrent with the consummation of the Acquisition of Atkins, the full $200.0 million of the Term Facility (the “Term Loan”) was drawn. The interest rate per annum is based on either (i) a base rate equaling the higher of (a) the “prime rate”, (b) the federal funds effective rate plus 0.50% and (c) the Euro-currency rate applicable for an interest period of one month plus 1.00% plus (x) 3.00% margin for Term Loan or (y) 2.00% margin for Revolving Credit Facility, or (ii) London Interbank Offered Rate (“LIBOR”) adjusted for statutory reserve requirements, plus (x) 4.00% margin for the Term Loan subject to a floor of 1.00% or (y) 3.00% margin for the Revolving Credit Facility. As security for the payment or performance of its debt, the Company has pledged certain equity interests in its subsidiaries. On March 16, 2018 (the “Amendment Date”), the Company entered into an amendment (the “Repricing Amendment”) to the Credit Agreement. As a result of the Repricing Amendment, the interest rate on the Term Loan was reduced and, as of the Amendment Date, such loans had an interest rate equal to, at the Company's option, either LIBOR plus an applicable margin of 3.50% or a base rate plus an applicable margin of 2.50% . The Repricing Amendment did not change the interest rate on the Revolving Credit Facility. The Revolving Credit Facility continued to bear interest based upon the Company's consolidated net leverage ratio as of the last financial statements delivered to the administrative agent. No additional debt was incurred, or any proceeds received, by the Company in connection with the Repricing Amendment. The incremental fees paid to the administrative agent are reflected as additional debt discount and are amortized over the terms of the long-term financing agreements using the effective-interest method. On November 7, 2019, the Company entered into an amendment (the “Incremental Facility Amendment”) to the Credit Agreement to increase the principal borrowed on the Term Facility by $460.0 million . The Term Facility together with the incremental borrowing make up the Initial Term Loans (as defined in the Incremental Facility Amendment) and as of the Amendment No. 2 Effective Date (as defined in the Incremental Facility Amendment), the Initial Term Loans bear interest at a rate equal to, at the Company's option, either LIBOR plus an applicable margin of 3.75% or a base rate plus an applicable margin of 2.75% . The Incremental Facility Amendment was executed to partially finance the Acquisition of Quest. No amounts under the Term Facility were repaid as a result of the execution of the Incremental Facility Amendment. During the third fiscal quarter of 2020, the Company borrowed $25.0 million under the Revolving Credit Facility. This was a precautionary measure to preserve financial flexibility and to maintain liquidity in response to the spread of COVID-19 and uncertainty around consumer behavior. The Company used the proceeds of the Revolving Credit Facility to meet initial elevated customer orders in response to COVID-19, build finished goods inventory of some of its high velocity items, support working capital and support general corporate purposes. In the fourth fiscal quarter of 2020, the Company repaid the $25.0 million borrowing under the Revolving Credit Facility. The Company may repay borrowings under the Revolving Credit Facility at any time without penalty. As of August 29, 2020 and August 31, 2019 , there were no amounts drawn against the Revolving Credit Facility. The Credit Agreement contains certain financial and other covenants that limit our ability to, among other things, incur and/or undertake asset sales and other dispositions, liens, indebtedness, certain acquisitions and investments, consolidations, mergers, reorganizations and other fundamental changes, payment of dividends and other distributions to equity and warrant holders, and prepayments of material subordinated debt, in each case, subject to customary exceptions materially consistent with credit facilities of such type and size. The Revolving Credit Facility has a maximum total net leverage ratio equal to or less than 6.25 :1.00 (with a reduction to 6.00 :1.00 on the third anniversary of the closing date of the credit facilities) contingent on credit extensions in excess of 30% of the total amount of commitments available under the Revolving Credit Facility. Any failure to comply with the restrictions of the credit facilities may result in an event of default. The Company was in compliance with all financial covenants as of August 29, 2020 and August 31, 2019 , respectively. Long-term debt consists of the following: (In thousands) August 29, 2020 August 31, 2019 Term Facility (effective rate of 4.8% at August 29, 2020) $ 606,500 $ 196,500 Finance lease liabilities (effective rate of 5.6% at August 29, 2020) 922 — Less: Deferred financing fees 10,272 5,565 Total debt 597,150 190,935 Less: Current maturities, net of deferred financing fees of $0.0 million at August 29, 2020 and $1.3 million at August 31, 2019, respectively — 676 Less: Current finance lease liabilities 271 — Long-term debt, net of deferred financing fees $ 596,879 $ 190,259 As of August 29, 2020 , aggregate principal maturities of debt for each of the next five fiscal years and thereafter are as follows: (In thousands) Principal Maturities 2021 $ 236 2022 282 2023 262 2024 606,642 2025 — Total debt $ 607,422 The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended August 29, 2020 . As of August 29, 2020 , the Company had letters of credit in the amount of $5.9 million outstanding. Our letters of credit offset against the availability of the Revolving Credit Facility. These letters of credit exist to support three of the Company's leased buildings and insurance programs relating to workers' compensation. No amounts were drawn against these letters of credit at August 29, 2020 . The Company utilizes market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates. The Company carries debt at historical cost and discloses fair value. As of August 29, 2020 and August 31, 2019 , the book value of the Company’s debt approximated fair value. The estimated fair value of the Term Loan is valued based on observable inputs and classified as Level 2 in the fair value hierarchy. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Aug. 29, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 – Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 – Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 – Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. A loss of $0.5 million and a benefit of $2.8 million was charged to the Loss (gain) in fair value change of contingent consideration - TRA liability for the fifty-three week period ended August 31, 2019 and fifty-two week period ended August 25, 2018 , respectively. The Company settled the Income Tax Receivable Agreement (the “TRA”) during the fifty-three week period ended August 31, 2019 , which resulted in a $1.5 million gain. Following the settlement of the TRA liability, the Company did no t have any Level 3 financial assets or liabilities as of August 29, 2020 or August 31, 2019 . Refer to Note 10 , Income Taxes , for additional details regarding the TRA liability settlement. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The sources of income before income taxes are as follows: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Domestic $ 47,480 $ 64,244 $ 49,748 Foreign 546 42 3,343 Total income before income taxes $ 48,026 $ 64,286 $ 53,091 Income tax expense (benefit) was comprised of the following: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Current: Federal $ 3,056 $ 2,784 $ 2,584 State and local 1,835 2,684 159 Foreign 219 374 1,001 Total current expense $ 5,110 $ 5,842 $ 3,744 Deferred: Federal $ 6,747 $ 9,976 $ (21,223 ) State and local 1,637 1,086 (26 ) Foreign (168 ) (154 ) 141 Total deferred income tax expense (benefit) 8,216 10,908 (21,108 ) Total tax expense (benefit) $ 13,326 $ 16,750 $ (17,364 ) A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Statutory income tax expense: 21.0 % 21.0 % 25.5 % State income tax expense, net of federal 5.0 3.9 3.1 Valuation allowance (1.2 ) (0.6 ) 0.6 Taxes on foreign income above the U.S. tax 0.1 0.2 0.4 Tax Cuts and Jobs Act — — (58.4 ) Change in tax rate 1.5 1.5 (4.0 ) Non-deductible transaction costs 0.1 — — TRA contingent consideration — (0.4 ) (1.5 ) Other permanent items 1.2 0.5 1.6 Income tax expense (benefit) 27.7 % 26.1 % (32.7 )% The comparability of the Company's operating results of fiscal 2018 as compared to subsequent fiscal years 2019 and 2020 was effected by the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was enacted on December 22, 2017. The Tax Act introduced significant changes to U.S. income tax law including reducing the U.S. federal statutory tax rate from 35% to 21% and imposing new taxes on certain foreign-sourced earnings and certain intercompany payments. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company made reasonable estimates of the effects and recorded provisional amounts in its financial statements as of fiscal 2018 in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB 118”). During the period ended February 23, 2019, the Company completed its accounting for the Tax Act with no material adjustment to the provisional estimates recorded. For the Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Act, the Company completed its assessment during the second quarter of 2019 and, effective August 26, 2018, elected an accounting policy to record GILTI as period costs if and when incurred. Additionally, the Company concluded that it had not met the threshold requirements of the base erosion and anti-abuse tax. Although the measurement period has closed, further technical guidance related to the Tax Act, including final regulations on a broad range of topics, is expected to be issued. In accordance with Accounting Standards Codification (ASC) 740, the Company will recognize any effects of the guidance in the period that such guidance is issued. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities at August 29, 2020 and August 31, 2019 were as follows: (In thousands) August 29, 2020 August 31, 2019 Deferred tax assets Accounts receivable allowances $ 2,427 $ 2,601 Inventories write-downs 92 67 Accrued expenses 3,968 3,680 Net operating loss carryforwards 3,837 4,179 Share-based compensation 2,770 1,755 Tax credits 256 351 Lease liabilities 6,785 — Other 3,714 2,247 Deferred tax assets 23,849 14,880 Valuation allowance (3,190 ) (3,786 ) Deferred tax asset, net of valuation allowance $ 20,659 $ 11,094 Deferred tax liabilities: Prepaid expense $ (514 ) $ (474 ) Excess tax over book depreciation (2,278 ) (169 ) Website development costs (816 ) (226 ) Intangible assets (94,398 ) (74,431 ) Lease right-of-use assets (6,442 ) — Other (563 ) (1,177 ) Deferred tax liabilities (105,011 ) (76,477 ) Net deferred tax liabilities $ (84,352 ) $ (65,383 ) The Company had state net operating loss carryforwards of $11.9 million and $12.2 million and foreign net operating losses of $12.8 million and $14.2 million at August 29, 2020 and August 31, 2019 , respectively. The state net operating loss carryforwards will begin to expire in 2021. As of August 29, 2020 , the Company has recorded total valuation allowances of $3.2 million , of which $2.9 million relates to valuation allowances on deferred tax assets related to foreign net operating loss carryforwards. The majority of this amount represents a full valuation allowance on the deferred tax assets of foreign entities within the United Kingdom, Netherlands, and Spain. Of the valuation allowance on deferred tax assets, $0.3 million relates to state net operating losses. During the fifty-two week period ended August 29, 2020 , there was a $1.4 million decrease to the tax loss carryforwards in foreign jurisdictions. As the carryforwards were generated in jurisdictions where the Company has historically recognized book losses or does not have strong future earnings projections, the Company concluded it is more likely than not that the operating losses would not be realized, and thus maintained a full valuation allowance against the associated deferred tax assets. During the fifty-two week period ended August 29, 2020 , the Company changed its intentions and determined to not indefinitely reinvest its foreign earnings within its subsidiaries in the United Kingdom, Spain, and Canada. The change in assertion did not result in recognition of tax liabilities related to these jurisdictions. It is the Company’s intention to reinvest the earnings of its other non-U.S. subsidiaries in those operations. As of August 29, 2020 , the Company has not made a provision for U.S. or additional foreign withholding taxes for any outside basis differences inherent in its investments in foreign subsidiaries that are indefinitely reinvested. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. As of August 29, 2020 and August 31, 2019 , the Company has no unrecognized tax benefits. The Company records interest and penalties associated with unrecognized tax benefits as a component of tax expense. As of August 29, 2020 and August 31, 2019 , the Company has no t accrued interest or penalties on unrecognized tax benefits, as there is no position recorded as of these fiscal years. No changes to the uncertain tax position balance are anticipated within the next 12 months, and are not expected to materially affect the financial statements. As of August 29, 2020 , tax years 2014 to 2019 remain subject to examination in the United States and the tax years 2014 to 2019 remain subject to examination in other major foreign jurisdictions where the Company conducts business. State income tax returns are generally subject to examination for a period of three to five years after the filing of the respective return. Tax Receivable Agreement Concurrent with the Acquisition of Atkins, the Company entered into the TRA with the historical stockholders of Atkins. The TRA was valued based on the future expected payments under the terms of the agreement. The TRA provides for the payment by Simply Good Foods to the Atkins’ selling equity holders for certain federal, state, local and non-U.S. tax benefits deemed realized in post-closing taxable periods by Simply Good Foods, Conyers Park, Atkins and Atkins’ eligible subsidiaries from the use of up to $100 million of the following tax attributes: (i) net operating losses available to be carried forward as of the closing of the Business Combination, (ii) certain deductions generated by the consummation of the business transaction and (iii) remaining depreciable tax basis from the 2003 acquisition of Atkins Nutritionals, Inc. The Company re-measured the TRA in the second fiscal quarter of 2018 due to the Tax Act. The second quarter assessment of these changes resulted in a provisional one-time gain of $4.7 million , recognized in Loss (gain) in fair value change of contingent consideration - TRA liability . During the first fiscal quarter of 2019, the Company entered into a termination agreement (the “Termination Agreement”) with Atkins Holdings, LLC and Roark Capital Acquisition, LLC. Pursuant to the Termination Agreement, the Company paid $26.5 million to settle the TRA in full. Under the Termination Agreement, each of the parties thereto agreed to terminate the TRA and to release any and all obligations and liabilities of the other parties thereunder effective as of the receipt of the termination payment. The Company recorded a $0.5 million loss on the fair value change in the TRA liability through the settlement on November 14, 2018 and recognized a gain of $1.5 million in connection with the execution of the Termination Agreement and final cash payment. |
Leases (Notes)
Leases (Notes) | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Leases [Abstract] | ||
Leases, ASC 840 Disclosure | Comparative Information as Reported Under Previous Accounting Standards The following comparative information is reported based upon previous accounting standards in effect for the periods presented. Future minimum payments under lease arrangements with a remaining term in excess of one year were as follows as of August 31, 2019 : (In thousands) August 31, 2019 2020 $ 2,546 2021 1,947 2022 1,677 2023 1,093 2024 87 Thereafter 56 Total $ 7,406 For the fifty-three week period ended August 31, 2019 , rent expenses for operating leases were $2.2 million . For the fifty-two week period ended August 25, 2018 , rent expenses for operating leases were $2.4 million . | |
Leases, ASC 842 Disclosure | Leases On September 1, 2019, the Company adopted ASU No. 2016-02, Leases, using the modified retrospective approach under ASU No. 2018-11, which permits application of the new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under ASC Topic 840, Leases. The components of lease expense were as follows: 52-Weeks Ended (In thousands) Statement of Operations Caption August 29, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 5,242 Variable lease cost (1) Cost of goods sold and General and administrative 1,648 Operating lease cost $ 6,890 Short term lease cost General and administrative $ 30 Finance lease cost: Amortization of right-of use assets Cost of goods sold $ 273 Interest on lease liabilities Interest expense 60 Total finance lease cost $ 333 Total lease cost $ 7,253 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. The gross amounts of assets and liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheet Caption August 29, 2020 Assets Operating lease right-of-use assets Other long-term assets $ 25,703 Finance lease right-of-use assets Property and equipment, net 912 Total lease assets $ 26,615 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,329 Finance lease liabilities Current maturities of long-term debt 271 Long-term: Operating lease liabilities Other long-term liabilities 22,764 Finance lease liabilities Long-term debt, less current maturities 651 Total lease liabilities $ 28,015 Future maturities of lease liabilities as of August 29, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2021 $ 5,697 $ 313 2022 4,649 313 2023 4,114 278 2024 4,216 145 2025 3,765 — Thereafter 11,014 — Total lease payments 33,455 1,049 Less: Interest (6,362 ) (127 ) Present value of lease liabilities $ 27,093 $ 922 As of August 29, 2020 , the Company had entered into a lease with estimated total minimum future lease payments of $32.2 million over a 10.0 -year minimum lease term that had not yet commenced, and as a result it is not recorded on the Consolidated Balance Sheets. The Company expects the lease to commence in fiscal year 2021, and the Company has the option to renew the lease for an additional 5.0 years or 10.0 years after the minimum lease term. The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases as of August 29, 2020 were as follows: Operating Leases Finance Leases Weighted-average remaining lease term (in years) 6.97 3.41 Weighted-average discount rate 5.7 % 5.6 % Supplemental and other information related to leases was as follows: 52-Weeks Ended (In thousands) August 29, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 6,534 Operating cash flows from finance leases 18 Financing cash flows from finance leases $ 338 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is a party to certain litigation and claims that are considered normal to the operations of the business. From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any litigation that it believes to be material, and the Company is not aware of any pending or threatened litigation against it that its management believes could have a material adverse effect on its business, operating result, financial condition or cash flows. During the fifty-three week period ended August 31, 2019 , the Company reserved $3.5 million for the potential settlement of class action litigation concerning certain product label claims. During the fifty-two week period ended August 29, 2020 , the Company reserved an additional $0.3 million . The reserve is included within General and administrative in the Consolidated Statements of Operations and Comprehensive Income and the reserve was fully paid into escrow and settled during the fifty-two week period ended August 29, 2020 . As of August 29, 2020 , the Company had $1.3 million reserved for potential settlements, of which $1.2 million were acquired as part of the Acquisition of Quest. Other The Company has entered into endorsement contracts with certain celebrity figures and social media influencers to promote and endorse the Atkins and Quest brands and product lines. These contracts contain endorsement fees, which are expensed ratably over the life of the contract, and performance fees, that are recognized at the time of achievement. Based on the terms of the contracts in place and achievement of performance conditions as of August 29, 2020 the Company will be required to make payments of $2.9 million over the next year. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 12 Months Ended |
Aug. 29, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Public Equity Offering On October 9, 2019, the Company completed an underwritten public offering of 13,379,205 shares of common stock at a price to the public of $26.35 per share. The Company paid underwriting discounts and commissions of $0.19 per share resulting in net proceeds to the Company of $26.16 per share, or approximately $350.0 million (the “Offering”). The Company paid $0.8 million for legal, accounting and registrations fees related to the Offering. The net proceeds were used to pay a portion of the purchase price and related fees and expenses for the Acquisition of Quest. Equity Warrants Prior to the Acquisition of Atkins, Conyers Park issued 13,416,667 public warrants and 6,700,000 private placement warrants. The Company assumed the Conyers Park equity warrants in connection with the Acquisition of Atkins. As a result of the Acquisition of Atkins, the warrants issued by Conyers Park were no longer exercisable for shares of Conyers Park common stock, but were instead exercisable for common stock of the Company. All other features of the warrants were unchanged. From August 26, 2018 through October 5, 2018, public warrants to purchase an aggregate of 9,866,451 shares of the Company’s common stock were exercised for cash at an exercise price of $11.50 per share, resulting in aggregate gross proceeds to the Company of $113.5 million . On October 4, 2018, the Company delivered a notice for the redemption (the “Redemption Notice”) of all of its public warrants that remained unexercised immediately after November 5, 2018. Exercises of public warrants following the Redemption Notice were required to be done on a cashless basis. Accordingly, holders were no longer permitted to exercise public warrants in exchange for payment in cash of $11.50 per share. Instead, a holder exercising a public warrant was deemed to have paid the $11.50 per share exercise price by the surrender of 0.61885 of a share of common stock that the holder would have been entitled to receive upon a cash exercise of each public warrant. Exercising holders received 0.38115 of a share of the Company’s common stock for each public warrant surrendered for exercise. Following the Redemption Notice, 3,499,639 public warrants were exercised on a cashless basis. An aggregate of 1,333,848 shares of the Company’s common stock were issued in connection with these exercises of the public warrants. All remaining public warrants were redeemed as of November 5, 2018 for an immaterial amount. The Company’s private placement warrants to purchase 6,700,000 shares of the Company’s common stock remain outstanding. Stock Repurchase Program On November 13, 2018, the Company announced that its Board of Directors had adopted a $50.0 million stock repurchase program. Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions. The stock repurchase program does not obligate the Company to acquire any specific number of shares or acquire shares over any specific period of time. The stock repurchase program may be suspended or discontinued at any time by the Company, and does not have an expiration date. During the fifty-two week period ended August 29, 2020 , the Company did no t repurchase any shares of common stock. During the fifty-three week period ended August 31, 2019 , the Company repurchased 98,234 shares of common stock at an average share price of $21.83 per share. As of August 29, 2020 , approximately $47.9 million remained available under the stock repurchase program. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Aug. 29, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is based on the weighted average number of common shares issued and outstanding. In periods in which the Company has net income, diluted earnings per share is based on the weighted average number of common shares issued and outstanding and the effect of all dilutive common stock equivalents outstanding during each period. In periods in which the Company has a net loss, diluted earnings per share is based on the weighted average number of common shares issued and outstanding as the effect of including common stock equivalents outstanding would be anti-dilutive. The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands, except share and per share data) August 29, 2020 August 31, 2019 August 25, 2018 Basic earnings per share computation: Numerator: Net income available to common stock stockholders $ 34,700 $ 47,536 $ 70,455 Denominator: Weighted average common shares - basic 93,968,953 80,734,091 70,582,149 Basic earnings per share from net income $ 0.37 $ 0.59 $ 1.00 Diluted earnings per share computation: Numerator: Net income available to common stock stockholders $ 34,700 $ 47,536 $ 70,455 Denominator: Weighted average common shares outstanding - basic 93,968,953 80,734,091 70,582,149 Public and private warrants 3,327,656 3,615,198 3,006,073 Employee stock options 1,001,542 801,700 43,779 Non-vested shares 45,571 92,920 49,354 Weighted average common shares - diluted 98,343,722 85,243,909 73,681,355 Diluted earnings per share from net income $ 0.35 $ 0.56 $ 0.96 Earnings per share calculations for the fifty-two week period ended August 29, 2020 , fifty-three week period ended August 31, 2019 , and fifty-two week period ended August 25, 2018 excluded 0.6 million , 0.2 million and 0.2 million shares of stock options, respectively, that would have been anti-dilutive. An immaterial number of non-vested shares were excluded from earnings per share calculations for the fifty-two week period ended August 29, 2020 , fifty-three week period ended August 31, 2019 , and fifty-two week period ended August 25, 2018 . |
Omnibus Incentive Plan
Omnibus Incentive Plan | 12 Months Ended |
Aug. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Omnibus Incentive Plan | Omnibus Incentive Plan Stock-based compensation includes stock options, restricted stock unit, performance stock unit awards and stock appreciation rights, which are awarded to employees, directors, and consultants of the Company. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award based on their grant date fair value. Stock-based compensation expense is included within General and administrative expense, which is the same financial statement caption where the recipient’s other compensation is reported. The Company recorded stock-based compensation expense of $7.6 million in the fifty-two week period ended August 29, 2020 , $5.5 million in the fifty-three week period ended August 31, 2019 , and $4.0 million in the fifty-two week period ended August 25, 2018 . In July 2017, the Company's stockholders approved the 2017 Omnibus Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the issuance of a maximum of 9,067,917 shares of stock-denominated awards to directors, employees, officers and agents of the Company. As of August 29, 2020 , there were 5.2 million shares available for grant under the Incentive Plan. Stock Options Stock options granted under the Incentive Plan are granted at a price equal to or more than the fair value of common stock on the date the option is granted. Stock options under the Incentive Plan generally become exercisable ratably over three years from the date of grant and must be exercised within ten years from the date of grant. The following table summarizes stock option activity for the fifty-two week period ended August 29, 2020 : (In thousands, except share and per share data) Shares Weighted average Weighted average remaining contractual life Aggregate intrinsic Outstanding as of August 31, 2019 2,748,735 $ 13.35 8.13 $ 44,743 Granted 229,024 23.87 Exercised (340,382 ) 12.36 Forfeited (21,478 ) 21.92 Outstanding as of August 29, 2020 2,615,899 $ 14.33 7.29 $ 28,927 Vested and expected to vest as of August 29, 2020 2,615,899 $ 14.33 7.29 $ 28,927 Exercisable as of August 29, 2020 2,082,569 $ 12.65 7.00 $ 26,537 The following table summarizes information about stock options outstanding at August 29, 2020 : Range of Exercise Prices Number Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Number Exercisable Weighted-Average Exercise Price $ 12.00 - 14.99 1,938,833 $ 12.04 6.90 1,893,950 $ 12.02 $ 15.00 - 17.99 117,553 16.88 7.89 78,368 16.88 $ 18.00 - 20.99 293,465 19.89 8.02 94,507 19.89 $ 21.00 - 23.99 48,396 21.85 9.56 4,462 21.49 $ 24.00 - 26.99 217,652 24.19 8.91 11,282 24.08 2,615,899 $ 14.33 7.29 2,082,569 $ 12.65 The weighted average fair value of options granted during the fifty-two week period ended August 29, 2020 , fifty-three week period ended August 31, 2019 , and fifty-two week period ended August 25, 2018 were $7.79 , $7.10 and $4.60 , respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option Pricing Model based on the following assumptions: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended August 29, 2020 August 31, 2019 August 25, 2018 Expected volatility 30.27 % - 33.82% 29.30 % - 32.09% 26.72 % - 27.50% Expected dividend yield —% —% — % Expected option term 6 6 6 Risk-free rate of return 0.38 % - 1.8% 1.82 % - 3.13% 1.98 % - 2.79% Expected term is estimated using the simplified method, which takes into account vesting and contractual term. The simplified method is being used to calculate expected term instead of historical experience due to a lack of relevant historical data resulting from changes in option vesting schedules and changes in the pool of employees receiving option grants. Due to a lack of sufficient trading history for the Company's common stock, expected stock price volatility is based on a sampling of comparable publicly traded companies. The Company believes a sample of comparable publicly traded companies most closely models the nature of the business and stock price volatility. The risk-free rates are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. Future annual dividends over the expected term are estimated to be nil . As of August 29, 2020 , $2.3 million of total unrecognized compensation cost related to stock option plans that will be recognized over a weighted average period of 1.6 years . During the fifty-two week period ended August 29, 2020 , fifty-three week period ended August 31, 2019 , and fifty-two week period ended August 25, 2018 , the Company received $4.2 million , $0.7 million , and $0.1 million in cash from stock option exercises, respectively. Restricted Stock Units Restricted stock units granted under the Incentive Plan are granted at a price equal to closing market price of the Company's common stock on the date of grant. Restricted stock units under the Incentive Plan generally vest over three years . The following table summarizes restricted stock unit activity for the fifty-two week period ended August 29, 2020 : Units Weighted average Non-vested as of August 31, 2019 92,400 $ 17.50 Granted 193,533 23.17 Vested (67,354 ) 17.07 Forfeited (10,556 ) 19.45 Non-vested as of August 29, 2020 208,023 $ 22.82 As of August 29, 2020 , the Company had $3.0 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.9 years . Performance Stock Units During the fifty-two week period ended August 29, 2020 , the Board of Directors granted performance stock units under the Company's equity compensation plan. Performance stock units vest in a range between 0% and 200% based upon certain performance criteria over a period of three years . Performance stock units were valued using a Monte-Carlo simulation. The following table summarizes performance stock unit activity for the fifty-two week period ended August 29, 2020 : Units Weighted average Non-vested as of August 31, 2019 192,389 $ 11.93 Granted 121,288 27.39 Vested — — Forfeited (18,421 ) 17.62 Non-vested as of August 29, 2020 295,256 $ 17.93 As of August 29, 2020 , the Company had $3.2 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.6 years . Stock Appreciation Rights Stock appreciation rights ("SARs") permit the holder to participate in the appreciation of the Company's common stock price. The Company's SARs settle in shares of its common stock once the applicable vesting criteria has been met. SARs cliff vest three years from the date of grant and must be exercised within ten years . The following table summarizes SARs activity for the fifty-two week period ended August 29, 2020 : Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 31, 2019 — $ — Granted 150,000 24.20 Exercised — — Forfeited — — Outstanding as of August 29, 2020 150,000 $ 24.20 9.18 Vested and expected to vest as of August 29, 2020 150,000 $ 24.20 9.18 Exercisable as of August 29, 2020 — $ — 0.00 As of August 29, 2020 , the Company had $0.3 million of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 2.2 years . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Aug. 29, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Tax Receivable Agreement During the fifty-three week period ended August 31, 2019, the Company entered into the Termination Agreement, pursuant to which, the Company paid $26.5 million to settle the TRA (the “Termination Payment”), which provided former stockholders of Atkins with payments for federal, state, local and non-U.S. tax benefits deemed realized by the Company. Under the Termination Agreement, each of the parties thereto agreed to terminate the TRA and to release and discharge any and all obligations and liabilities of the other parties thereunder effective as of the exchange agent’s receipt of the Termination Payment. Richard Laube, a former director of the Company, Joseph Scalzo, President and Chief Executive Officer and a director of the Company, and Scott Parker, Chief Marketing Officer, were each former stockholders of Atkins and received their respective pro rata share of the Termination Payment as additional consideration for their former stock ownership in accordance with the terms of the Merger Agreement. The TRA liability and subsequent settlement are discussed in Note 10 , Income Taxes . Merger Agreement Working Capital Adjustment In the first quarter of fiscal 2018, pursuant to the terms of the Merger Agreement, Simply Good Foods paid a working capital adjustment of $1.8 million to the former owners of Atkins, which resulted in an increase to the previously recognized goodwill. |
Segment and Customer Informatio
Segment and Customer Information | 12 Months Ended |
Aug. 29, 2020 | |
Segment Reporting [Abstract] | |
Segment and Customer Information | Segment and Customer Information Following the Acquisition of Quest, the Company's operations are organized into two operating segments, Atkins and Quest, which are aggregated into one reporting segment due to similar financial, economic and operating characteristics. The operating segments are also similar in the following areas: (a) the nature of the products; (b) the nature of the production processes; (c) the methods used to distribute products to customers; (d) the type of customer for the products; and, (e) the nature of the regulatory environment. Reconciliations of the totals of reported segment revenue, profit or loss measurement, assets and other significant items reported by segment to the corresponding GAAP totals is not applicable to the Company as it only has one reportable segment. Additionally, revenues from transactions with external customers for each of Simply Good Foods’ products would be impracticable to disclose and management does not view its business by product line. The following is a summary of revenue disaggregated by geographic area and brand: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Net sales North America $ 501,472 $ 498,196 $ 405,055 International 28,366 25,187 26,374 Total Atkins 529,838 523,383 431,429 Quest (1) 286,803 — — Total $ 816,641 $ 523,383 $ 431,429 (1) Quest net sales are primarily in North America. The following is a summary long lived assets by geographic area: (In thousands) August 29, 2020 August 31, 2019 Long lived assets North America $ 11,841 $ 2,437 International 9 19 Total $ 11,850 $ 2,456 Significant Customers As a result of the Acquisition of Quest, the Company's exposure to credit risk concentrated in one customer was reduced during 2020. Credit risk for the Company was concentrated in two customers who comprised more than 10% of the Company’s total sales for the fifty-two week period ended August 29, 2020 . For the fifty-three week period ended August 31, 2019 and the fifty-two week period ended August 25, 2018 , credit risk for the Company was concentrated in one customer who comprised more than 10% of the Company’s total sales. 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended August 29, 2020 August 31, 2019 August 25, 2018 Customer 1 34 % 44 % 43 % Customer 2 10 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. At August 29, 2020 and August 31, 2019 , the following amounts of the Company’s accounts receivable, net were related to these significant customers for the periods in which the customers were significant: (In thousands) August 29, 2020 August 31, 2019 Customer 1 $ 34,411 38 % $ 17,386 39 % Customer 2 $ 12,345 14 % n/a n/a n/a - Not applicable as the customer was not significant as of this date. No other customers of the Company accounted for more than 10% of sales during these periods. The Company generally does not require collateral from its customers and has not incurred any significant losses on uncollectible accounts receivable. |
Restructuring and related charg
Restructuring and related charges (Notes) | 12 Months Ended |
Aug. 29, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and related charges | Restructuring and Related Charges In May 2020, the Company announced certain restructuring activities in conjunction with the implementation of the Company’s future-state organization design, which creates a fully integrated organization with its completed Acquisition of Quest. The new organization design became effective on August 31, 2020. These restructuring plans primarily include workforce reductions and changes in management structure. The one-time termination benefits and employee severance costs to be incurred in relation to these restructuring activities are accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits, respectively. The Company recognizes a liability and the related expense for these restructuring costs when the liability is incurred and can be measured. Restructuring accruals are based upon management estimates at the time and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded. For the fifty-two week period ended August 29, 2020 , the Company incurred $5.5 million of costs for these restructuring activities which have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income. Overall, the Company expects to incur a total of approximately $8.1 million in restructuring costs, including the $5.5 million referenced above. The one-time termination benefits and employee severance costs are to be paid throughout fiscal 2021 and the first quarter of fiscal 2022. Changes to the restructuring liability during the fifty-two week period ended August 29, 2020 were as follows: (in thousands) Termination benefits and severance Other Restructuring Liability Balance as of August 31, 2019 $ — $ — $ — Charges 4,139 1,388 5,527 Cash payments — (1,388 ) (1,388 ) Non-cash settlements or adjustments — — — Balance as of August 29, 2020 $ 4,139 $ — $ 4,139 |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Aug. 29, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data Summarized quarterly financial data: 52-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended (In thousands, except per share amounts) August 29, 2020 August 29, 2020 May 30, 2020 February 29, 2020 November 30, 2019 Net sales $ 816,641 $ 222,286 $ 215,101 $ 227,101 $ 152,153 Gross profit $ 324,328 $ 88,102 $ 88,626 $ 85,394 $ 62,206 Income from operations $ 78,224 $ 24,832 $ 31,108 $ 25,269 $ (2,985 ) Net income $ 34,700 $ 12,427 $ 16,409 $ 10,657 $ (4,793 ) Earnings per share from net income: Basic $ 0.37 $ 0.13 $ 0.17 $ 0.11 $ (0.05 ) Diluted $ 0.35 $ 0.12 $ 0.17 $ 0.11 $ (0.05 ) 53-Weeks Ended 14-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended (In thousands, except per share amounts) August 31, 2019 August 31, 2019 May 25, 2019 February 23, 2019 November 24, 2018 Net sales $ 523,383 $ 139,184 $ 139,468 $ 123,800 $ 120,931 Gross profit (1) $ 217,405 $ 59,173 $ 56,657 $ 49,655 $ 51,920 Income from operations $ 72,809 $ 12,115 $ 20,510 $ 19,002 $ 21,182 Net income $ 47,536 $ 6,091 $ 13,466 $ 12,722 $ 15,257 Earnings per share from net income: Basic $ 0.59 $ 0.07 $ 0.16 $ 0.16 $ 0.20 Diluted $ 0.56 $ 0.07 $ 0.16 $ 0.15 $ 0.18 (1) During the fifty-three weeks period ended August 31, 2019, certain reclassifications were made to previously reported amounts to conform to the current presentation. On the consolidated statement of operations, inbound freight previously included in Distribution, distribution center expenses previously included in General and administrative , and depreciation for equipment used in warehouse operations were reclassified to Cost of goods sold . Including these expenses in Cost of goods sold better aligned costs with the related revenue. As a result, the first three quarters of fiscal year 2019 have been adjusted on a retrospective basis to reflect the reclassification. For additional information on the change in accounting principle, see Note 2. Earnings per common share amounts are computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share amounts may not equal the quarterly earnings per share amounts or the annual earnings per share amounts due to rounding. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Aug. 29, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Effective September 24, 2020, the Company sold the assets exclusively related to its SimplyProtein® brand of products for approximately $8.8 million of consideration, including cash of $5.8 million and a note receivable for $3.0 million , to a newly formed entity led by the Company’s Canadian-based management team who had been responsible for this brand prior to the sale transaction. In addition to purchasing these assets, the buyer assumed certain liabilities related to the SimplyProtein brand’s business. The transaction enables management to focus its full time and Company’s resources on its core Atkins® and Quest® branded businesses and other strategic initiatives. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The Company maintains its accounting records on a 52 / 53 -week fiscal year, ending on the last Saturday in August. The financial information presented within the Company's consolidated financial statements has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying financial statements include Consolidated Balance Sheets for the periods ended August 29, 2020 and August 31, 2019 . The remaining financial statements include the fifty-two week period ended August 29, 2020 , the fifty-three week period ended August 31, 2019 , and the fifty-two week period ended August 25, 2018 . The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Simply Good Foods and its subsidiaries on a consolidated basis. |
Reclassification of Prior Year Amounts | Reclassification of Prior Year Amounts Certain prior year amounts have been reclassified to conform to the current year presentation including (i) Selling expenses and Marketing expenses, which have been combined as Selling and marketing expenses on the Consolidated Statements of Operations and Comprehensive Income and (ii) Other operating expense , which has been combined with General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Business Combinations | Business Combination On November 7, 2019 , pursuant to the Purchase Agreement, the Company completed the Acquisition of Quest for a cash purchase price of approximately $1.0 billion , subject to customary post-closing adjustments. The Acquisition of Quest was accounted for using the acquisition method of accounting prescribed by Accounting Standard Codification ("ASC") Topic 805, Business Combinations (“ASC 805”), whereby the results of operations, including the revenues and earnings of Quest, are included in the financial statements from the date of acquisition. Additionally, assets acquired and liabilities assumed were recognized at their fair values based on widely accepted valuation techniques in accordance with ASC Topic 820, Fair Value Measurements, as of the closing date. The process for estimating fair values requires the use of significant estimates, assumptions and judgments, including determining the timing and estimates of future cash flows and developing appropriate discount rates. ASC 805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date. Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of acquisition date. The Company expects to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable within the measurement period, but not to exceed one year from the acquisition date. |
Fair Value Measurements | Fair Value Measurements Fair value represents the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1. Valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and require significant judgment. There were no significant transfers between levels during any period presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, deposits available on demand and other short-term, highly liquid investments with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consists primarily of trade receivables, net of allowances for doubtful accounts, returns and trade promotions. The Company sells its products for cash or on credit terms, which are established in accordance with local and industry practices and typically require payment within 30 days of delivery and may allow discounts for early payment. The Company estimates an allowance for doubtful accounts based upon a review of outstanding receivables, historical collection information and an analysis of customer data. Accounts receivable are written off when determined to be uncollectible. At August 29, 2020 and August 31, 2019 , the allowance for doubtful accounts was $0.5 million and $0.6 million , respectively. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value on a first-in, first-out basis, adjusted for the value of inventory that is determined to be excess, obsolete, expired or unsaleable. Obsolete inventory is reserved at 50% for inventory four to six months from expiration, and 100% for items within three months of expiration. Reserves are also taken for certain products or packaging materials when it is determined their cost may not be recoverable. At August 29, 2020 and August 31, 2019 , the provision for obsolete inventory was $0.5 million and $0.4 million , respectively. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is stated at the allocated fair value for acquired assets. Additions to property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. The general ranges of estimated useful lives are: Furniture and fixtures 7 years Computer equipment, software and website development costs 3 - 5 years Machinery and equipment 7 years Office equipment 3 - 5 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful life of the improvement utilizing the straight-line method. The Company performs impairment tests for Property and equipment, net when circumstances indicate that the carrying value of the asset may not be recoverable. There were no indicators of impairment in the fifty-two week period ended August 29, 2020 , the fifty-three week period ended August 31, 2019 , or the fifty-two week period ended August 25, 2018 . |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill and Intangible assets, net result primarily from the Business Combination and acquisitions. Intangible assets primarily include brands and trademarks with indefinite lives and customer-related relationships with finite lives. Upon acquisition, the purchase price is first allocated to identifiable assets and liabilities, including customer-related intangible assets and trademarks, with any remaining purchase price recorded as Goodwill . Goodwill and indefinite-lived intangible assets are not amortized but instead are tested for impairment at least annually, or more frequently if indicators of impairment exist. The Company conducts its annual impairment tests at the beginning of the fourth fiscal quarter. Goodwill and indefinite-lived intangible assets are assessed using either a qualitative or quantitative approach to determine whether it is more likely than not that the fair values of the reporting units are less than their carrying amounts. The qualitative assessment evaluates factors including macro-economic conditions, industry-specific and company-specific considerations, legal and regulatory environments, and historical performance. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative assessment is performed. Otherwise, no further assessment is required. The quantitative approach compares the estimated fair value of the reporting unit to its carrying amount, including goodwill. Impairment is indicated if the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, and an impairment charge is recognized for the differential. For fiscal year 2020, the Company elected to perform both qualitative and quantitative assessments of its goodwill and indefinite-lived intangible assets. During the fourth quarter of fiscal 2020, the Company determined there were indicators of impairment related to the SimplyProtein brand intangible asset. Therefore, the Company performed a quantitative assessment of its brand intangible asset, which indicated the fair value exceeded the carrying value, resulting in a loss on impairment of $3.0 million in the fifty-two week period ended August 29, 2020 . There were no impairment charges related to goodwill in the fifty-two week period ended August 29, 2020 . Additionally, for fiscal year 2019, we elected to perform quantitative assessments of goodwill and indefinite-lived intangible assets. No impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-three week period ended August 31, 2019 . The Company performed qualitative assessments of goodwill and indefinite-lived intangible assets for fiscal year 2018 . The qualitative assessments determined that it was more likely than not the reporting unit, brands and trademarks had a fair value in excess of their carrying value. Accordingly, no further impairment assessment was necessary, and no impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-two week period ended August 25, 2018 . Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Property and Equipment, Net” significant accounting policy. |
Deferred Financing Costs and Debt Discounts | Deferred Financing Costs and Debt Discounts Costs incurred in obtaining long-term financing paid to parties other than creditors are considered a deferred financing cost and are amortized over the terms of the long-term financing agreements using the effective-interest method. Amounts paid to creditors are recorded as a reduction in the proceeds received by the creditor and are considered a discount on the issuance of debt. |
Income Taxes | Income Taxes Income taxes include federal, state and foreign taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the differences between the financial statement balances and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the fiscal year that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. |
Leases | Leases Contracts are evaluated to determine whether they contain a lease at inception. Leases are classified as either finance leases or operating leases based on criteria in ASC Topic 842, Leases. The Company’s operating leases are generally comprised of real estate and certain equipment used in warehousing products. The Company’s finance leases are generally comprised of warehouse equipment. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The majority of the Company's leases do not provide an implicit rate; therefore, the Company uses its secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments for those leases. The Company's incremental borrowing rate for a lease is the rate of interest it would pay to borrow on a collateralized basis over a similar term to the lease in a similar economic environment. The Company applied incremental borrowing rates using a portfolio approach. Right-of-use assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term operating leases that have a term of one year or less. The Company monitors for triggering events or conditions that require a reassessment of its leases. When the reassessment requires a re-measurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset. Additionally, the Company reviewed for impairment indicators of its right-of-use assets and other long-lived assets as described in the “Property and Equipment, Net” significant accounting policy. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when performance obligations under the terms of a contract with its customer are satisfied. The Company has determined that fulfilling and delivering products is a single performance obligation. Revenue is recognized at the point in time when the Company has satisfied its performance obligation and the customer has obtained control of the products. This generally occurs when the product is delivered to or picked up by the customer based on applicable shipping terms, which is typically within 30 days. Revenue is measured as the amount of consideration expected to be received in exchange for fulfilled product orders, including estimates of variable consideration. The most common forms of variable consideration include trade promotions, such as consumer incentives, coupon redemptions and other marketing activities, allowances for unsaleable product, and any additional amounts where a distinct good or service cannot be identified or the value cannot be reasonably estimated. Trade promotions are recorded as a reduction to net sales with a corresponding reduction to accounts receivable at the time of revenue recognition for the underlying sale. The recognition of trade promotions requires management to make estimates regarding the volume of incentive that will be redeemed and their total cost. At August 29, 2020 and August 31, 2019 , the allowance for trade promotions was $25.2 million and $10.3 million , respectively. Estimates of variable consideration are made using various information including historical data on performance of similar trade promotional activities, market data from IRI, and the Company’s best estimate of current activity. The Company reviews these estimates regularly and makes revisions as necessary. Revisions can include changes for consideration paid to customers that lack sufficient evidence to support a distinct good or service assertion, or for which a reasonably estimable fair value cannot be determined, primarily related to the Company's assessments of cooperative advertising programs. Uncertainties related to the estimate of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration. Adjustments to variable consideration are recognized in the period the adjustments are identified and have historically been insignificant. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. The Company provides standard assurance type warranties that its products will comply with all agreed-upon specifications. No services beyond an assurance type warranty are provided to customers. While customers generally have a right to return defective or non-conforming products, past experience has demonstrated that product returns have been immaterial. Customer remedies for defective or non-conforming products may include a refund or exchange. As a result, the right of return is estimated and recorded as a reduction in revenue at the time of sale, if necessary. The Company's customer contracts identify product quantity, price and payment terms. Payment terms are granted consistent with industry standards. Although some payment terms may be more extended, the majority of the Company's payment terms are less than 60 days. As a result, revenue is not adjusted for the effects of a significant financing component. Amounts billed and due from customers are classified as Accounts receivable, net on the Consolidated Balance Sheets. The Company utilizes third-party contract manufacturers for the manufacture of its products. The Company has evaluated whether the it is the principal or agent in these relationships. The Company has determined that it is the principal in all cases, as it maintains the responsibility for fulfillment, risk of loss and establishes the price. In accordance with ASC Topic 606, Revenue from Contracts with Customers, the Company has elected the practical expedient to expense the incremental costs to obtain a contract, because the amortization period would be less than one year, and the practical expedient for shipping and handling costs. Shipping and handling costs incurred to deliver products to customers are accounted for as fulfillment activities, rather than a promised service, and as such are included in Cost of goods sold in the Consolidated Statements of Operations and Comprehensive Income. Revenues from transactions with external customers for each of the Company's products would be impracticable to disclose and management does not view its business by product line. For revenue disaggregated by geographic area and brand refer to Note 17 , Segment and Customer Information . |
Cost of Goods Sold | Cost of Goods Sold Costs of goods sold represent costs directly related to the manufacture and distribution of the Company's products. Such costs include raw materials, co-manufacturing costs, packaging, shipping and handling, third-party distribution and depreciation of distribution center equipment and leasehold improvements. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs include costs paid to third-party warehouse operators associated with delivering product to customers and depreciation and amortization of assets at the third-party warehouse. Shipping and handling costs are recognized in Cost of goods sold . Costs of $49.8 million for the fifty-two week period ended August 29, 2020 , $32.3 million for the fifty-three week period ended August 31, 2019 , and $27.2 million for the fifty-two week period ended August 25, 2018 were recorded relating to products shipped to customers. |
Advertising Cost | Advertising Costs Production costs related to television commercials are expensed when first aired. All other advertising costs are expensed when incurred through Selling and marketing . Total advertising costs were $55.3 million for the fifty-two week period ended August 29, 2020 , $35.4 million for the fifty-three week period ended August 31, 2019 , and $34.0 million for the fifty-two week period ended August 25, 2018 . Production costs related to television commercials not yet aired are included in Prepaid expenses in the accompanying Consolidated Balance Sheets. There were no productions costs related to television commercials not yet aired at August 29, 2020 or August 31, 2019 . |
Research and Development Expense | Research and Development Activities The Company’s research and development activities primarily consist of generating and testing new product concepts, new flavors and packaging. The Company expenses research and development costs as incurred related to compensation, facility costs, consulting and supplies. Research and development activities are primarily internal and associated costs are included in General and administrative . The Company’s total research and development expenses were $4.0 million for the fifty-two week period ended August 29, 2020 , $2.2 million for the fifty-three week period ended August 31, 2019 , and $2.5 million for the fifty-two week period ended August 25, 2018 . |
Share-based Compensation | Share-Based Compensation The Company uses share-based compensation, including stock options, restricted stock units and performance stock units, to provide long-term performance incentives for its employees and directors. Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on their grant-date fair value. Forfeitures are recognized as they occur. Share-based compensation expense is included in General and administrative. |
Defined Contribution Plan | Defined Contribution Plan The Company sponsors defined contribution plans to provide retirement benefits to its employees. The Company's 401(k) plan and similar plans for non-domestic employees are based on a portion of eligible pay up to a defined maximum. All matching contributions are made in cash. Expense associated with defined contribution plans was $1.3 million for the fifty-two week period ended August 29, 2020 , $0.6 million for the fifty-three week period ended August 31, 2019 , and $0.4 million for the fifty-two week period ended August 25, 2018 . |
Foreign Currency Translations | Foreign Currency Translation For all foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated into U.S. dollars using the exchange rate in effect at the end of each reporting period. Income statement accounts are translated at the average exchange rate prevailing during each reporting period. Translation adjustments are recorded as a component of Other comprehensive income (loss) . Gains or losses resulting from transactions in foreign currencies are included in Other income (expense) . |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments of this ASU should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies disclosure requirements on fair value measurements of Accounting Standards Codification (“ASC”) 820. This ASU is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted including in any interim period for which financial statements have not yet been issued. Entities are permitted to early adopt the eliminated or modified disclosure requirements and delay the adoption new disclosure requirements until their effective date. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements and does not anticipate adoption of this ASU will be material to its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of U.S. GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted.. The Company does not expect that the adoption of this new guidance will have a material effect on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. ASU 2018-11 provides entities another option for transition, allowing entities to not apply the new standard in the comparative periods they present in their financial statements in the year of adoption. The amendments provide the option for the ASU to be applied at the beginning of the period adopted using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. On September 1, 2019, the Company adopted ASU No. 2016-02 using the alternative transition method under ASU No. 2018-11, which permits application of the new lease guidance at the beginning of the period of adoption, with comparative periods continuing to be reporting under Topic 840. Upon adoption, the Company recorded the following within the Condensed Consolidated Balance Sheet: operating lease right-of-use assets of $5.1 million included within Other long-term assets, current operating lease liabilities of $2.0 million included within Accrued expenses and other current liabilities, long-term operating lease liabilities of $3.8 million included within Other long-term liabilities, finance lease right-of-use assets of $1.2 million included within Property and equipment, net, current finance lease liabilities of $0.2 million included within Current maturities of long term debt, and long-term finance lease liabilities of $1.0 million included within Long-term debt less current maturities . Following the Acquisition of Quest, the Company recorded the following amounts in the Condensed Consolidated Balance Sheet as of the closing date on November 7, 2019: operating lease right-of-use assets of $21.1 million included within Other long-term assets, current operating lease liabilities of $2.0 million included within Accrued expenses and other current liabilities, and long-term operating lease liabilities of $18.9 million included within Other long-term liabilities. The adoption of these ASUs did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The guidance provided a number of optional practical expedients in adoption. The Company elected to adopt the package of practical expedients permitted under the transition guidance within the standard, which among other things, permits it to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company did not elect the use-of-hindsight practical expedient or the practical expedient pertaining to land easements, the latter not being applicable. Additionally, the Company elected to include both lease and non-lease components as a single component for all asset classes in which the Company is the lessee. For additional information regarding leases, refer to Note 11 . In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU simplifies aspects of share-based compensation issued to non-employees by aligning the guidance with accounting for employee share-based compensation. The Company adopted this ASU as of the first day of fiscal 2020. The adoption of this ASU did not have a material effect on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this ASU as of the first day of fiscal 2020. The adoption of this ASU did not have a material effect on the consolidated financial statements. |
Change in Accounting Principl_2
Change in Accounting Principle (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Change in Accounting Principle [Abstract] | |
Change in Accounting Principle | The effect of the adjustment is as follows in thousands: Fifty-Two Weeks Ended August 25, 2018 As Reported Change in Accounting Principle and Presentation Other Operating Expense (1) As Adjusted Cost of goods sold $ 223,873 $ 27,190 $ — $ 251,063 Distribution 19,685 (19,685 ) — — General and administrative 56,333 (7,331 ) 633 49,635 Depreciation and amortization $ 7,672 $ (174 ) $ — $ 7,498 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and equipment, useful lives | The general ranges of estimated useful lives are: Furniture and fixtures 7 years Computer equipment, software and website development costs 3 - 5 years Machinery and equipment 7 years Office equipment 3 - 5 years |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table sets forth the preliminary purchase price allocation of the Acquisition of Quest to the estimated fair value of the net assets acquired at the date of acquisition. The preliminary purchase price allocation may be adjusted as a result of the finalization of our purchase price allocation procedures related to the assets acquired and liabilities assumed. The preliminary November 7, 2019 fair value is as follows in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 26,537 Inventories 44,032 Prepaid assets 1,214 Other current assets 3,812 Property and equipment, net (1) 9,843 Intangible assets, net (2) 868,375 Other long-term assets 20,997 Liabilities assumed: Accounts payable 25,200 Other current liabilities 11,237 Deferred income taxes (3) 10,754 Other long-term liabilities 18,891 Total identifiable net assets 913,473 Goodwill (4) 73,347 Total assets acquired and liabilities assumed $ 986,820 |
Revenues of Acquired Entity | The results of Quest's operations have been included in the Simply Good Foods' Consolidated Financial Statements since November 7, 2019, the date of acquisition. The following table provides net sales from the acquired Quest business included in the Company's results: 52-Weeks Ended (In thousands) August 29, 2020 Net sales $ 286,803 |
Pro Forma Acquisition Information | The following unaudited pro forma combined financial information presents combined results of the Company and Quest as if the Acquisition of Quest has occurred at the beginning of fiscal 2019: 52-Weeks Ended 53-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 Net sales $ 885,044 $ 832,254 Gross profit 355,395 317,480 Net income $ 59,090 $ 30,143 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment, net , as presented with the Consolidated Balance Sheets, are summarized as follows: (In thousands) August 29, 2020 August 31, 2019 Furniture and fixtures $ 3,197 $ 715 Computer equipment and software 1,062 956 Machinery and equipment 1,135 385 Website development costs — 2,237 Leasehold improvements 8,137 361 Finance lease right-of-use-assets 1,185 — Construction in progress — 139 Property and equipment, gross 14,716 4,793 Less: accumulated depreciation (2,866 ) (2,337 ) Property and equipment, net $ 11,850 $ 2,456 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes to Goodwill during the fifty-two week period ended August 29, 2020 were as follows: (In thousands) Goodwill Balance as of August 31, 2019 $ 471,427 Acquisition of business 73,347 Balance as of August 29, 2020 $ 544,774 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years 5,967 2,645 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 August 31, 2019 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 232,000 $ — $ 232,000 Intangible assets with finite lives: Customer relationships 15 years 59,000 8,382 50,618 Proprietary recipes and formulas 7 years 7,000 2,131 4,869 Licensing agreements 14 years 22,000 3,348 18,652 $ 320,000 $ 13,861 $ 306,139 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 29, 2020 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 979,000 $ — $ 979,000 Intangible assets with finite lives: Customer relationships 15 years 174,000 18,503 155,497 Proprietary recipes and formulas 7 years 7,000 3,131 3,869 Licensing agreements 14 years 22,000 4,920 17,080 Software and website development costs 3 - 5 years 5,967 2,645 3,322 $ 1,187,967 $ 29,199 $ 1,158,768 August 31, 2019 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 232,000 $ — $ 232,000 Intangible assets with finite lives: Customer relationships 15 years 59,000 8,382 50,618 Proprietary recipes and formulas 7 years 7,000 2,131 4,869 Licensing agreements 14 years 22,000 3,348 18,652 $ 320,000 $ 13,861 $ 306,139 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization 2021 $ 15,446 2022 15,212 2023 14,938 2024 14,281 2025 13,171 Thereafter 106,720 Total $ 179,768 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and other current liabilities in the Consolidated Balance Sheets were comprised of the following: (In thousands) August 29, 2020 August 31, 2019 Accrued professional fees $ 3,125 $ 8,903 Accrued advertising allowances and claims 2,625 2,095 Accrued bonus expenses 12,261 10,908 Accrued freight expenses 1,795 1,791 Accrued payroll-related expenses 2,179 841 Accrued commissions 1,789 932 Income taxes payable 839 382 VAT payable 2,367 1,787 Accrued restructuring 4,139 — Other accrued expenses 2,559 2,294 Current operating lease liabilities 4,329 — Accrued expenses and other current liabilities $ 38,007 $ 29,933 |
Long-Term Debt and Line of Cr_2
Long-Term Debt and Line of Credit (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following: (In thousands) August 29, 2020 August 31, 2019 Term Facility (effective rate of 4.8% at August 29, 2020) $ 606,500 $ 196,500 Finance lease liabilities (effective rate of 5.6% at August 29, 2020) 922 — Less: Deferred financing fees 10,272 5,565 Total debt 597,150 190,935 Less: Current maturities, net of deferred financing fees of $0.0 million at August 29, 2020 and $1.3 million at August 31, 2019, respectively — 676 Less: Current finance lease liabilities 271 — Long-term debt, net of deferred financing fees $ 596,879 $ 190,259 |
Principal maturities of debt | As of August 29, 2020 , aggregate principal maturities of debt for each of the next five fiscal years and thereafter are as follows: (In thousands) Principal Maturities 2021 $ 236 2022 282 2023 262 2024 606,642 2025 — Total debt $ 607,422 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The sources of income before income taxes are as follows: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Domestic $ 47,480 $ 64,244 $ 49,748 Foreign 546 42 3,343 Total income before income taxes $ 48,026 $ 64,286 $ 53,091 |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) was comprised of the following: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Current: Federal $ 3,056 $ 2,784 $ 2,584 State and local 1,835 2,684 159 Foreign 219 374 1,001 Total current expense $ 5,110 $ 5,842 $ 3,744 Deferred: Federal $ 6,747 $ 9,976 $ (21,223 ) State and local 1,637 1,086 (26 ) Foreign (168 ) (154 ) 141 Total deferred income tax expense (benefit) 8,216 10,908 (21,108 ) Total tax expense (benefit) $ 13,326 $ 16,750 $ (17,364 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Statutory income tax expense: 21.0 % 21.0 % 25.5 % State income tax expense, net of federal 5.0 3.9 3.1 Valuation allowance (1.2 ) (0.6 ) 0.6 Taxes on foreign income above the U.S. tax 0.1 0.2 0.4 Tax Cuts and Jobs Act — — (58.4 ) Change in tax rate 1.5 1.5 (4.0 ) Non-deductible transaction costs 0.1 — — TRA contingent consideration — (0.4 ) (1.5 ) Other permanent items 1.2 0.5 1.6 Income tax expense (benefit) 27.7 % 26.1 % (32.7 )% |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities at August 29, 2020 and August 31, 2019 were as follows: (In thousands) August 29, 2020 August 31, 2019 Deferred tax assets Accounts receivable allowances $ 2,427 $ 2,601 Inventories write-downs 92 67 Accrued expenses 3,968 3,680 Net operating loss carryforwards 3,837 4,179 Share-based compensation 2,770 1,755 Tax credits 256 351 Lease liabilities 6,785 — Other 3,714 2,247 Deferred tax assets 23,849 14,880 Valuation allowance (3,190 ) (3,786 ) Deferred tax asset, net of valuation allowance $ 20,659 $ 11,094 Deferred tax liabilities: Prepaid expense $ (514 ) $ (474 ) Excess tax over book depreciation (2,278 ) (169 ) Website development costs (816 ) (226 ) Intangible assets (94,398 ) (74,431 ) Lease right-of-use assets (6,442 ) — Other (563 ) (1,177 ) Deferred tax liabilities (105,011 ) (76,477 ) Net deferred tax liabilities $ (84,352 ) $ (65,383 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Leases [Abstract] | |
Components of lease expense | The components of lease expense were as follows: 52-Weeks Ended (In thousands) Statement of Operations Caption August 29, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 5,242 Variable lease cost (1) Cost of goods sold and General and administrative 1,648 Operating lease cost $ 6,890 Short term lease cost General and administrative $ 30 Finance lease cost: Amortization of right-of use assets Cost of goods sold $ 273 Interest on lease liabilities Interest expense 60 Total finance lease cost $ 333 Total lease cost $ 7,253 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. |
Lease assets and liabilities | The gross amounts of assets and liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheet Caption August 29, 2020 Assets Operating lease right-of-use assets Other long-term assets $ 25,703 Finance lease right-of-use assets Property and equipment, net 912 Total lease assets $ 26,615 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 4,329 Finance lease liabilities Current maturities of long-term debt 271 Long-term: Operating lease liabilities Other long-term liabilities 22,764 Finance lease liabilities Long-term debt, less current maturities 651 Total lease liabilities $ 28,015 |
Future maturities of operating lease liabilities | Future maturities of lease liabilities as of August 29, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2021 $ 5,697 $ 313 2022 4,649 313 2023 4,114 278 2024 4,216 145 2025 3,765 — Thereafter 11,014 — Total lease payments 33,455 1,049 Less: Interest (6,362 ) (127 ) Present value of lease liabilities $ 27,093 $ 922 |
Future maturities of finance lease liabilities | Future maturities of lease liabilities as of August 29, 2020 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2021 $ 5,697 $ 313 2022 4,649 313 2023 4,114 278 2024 4,216 145 2025 3,765 — Thereafter 11,014 — Total lease payments 33,455 1,049 Less: Interest (6,362 ) (127 ) Present value of lease liabilities $ 27,093 $ 922 |
Weighted-average remaining lease terms and discount rates | The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases as of August 29, 2020 were as follows: Operating Leases Finance Leases Weighted-average remaining lease term (in years) 6.97 3.41 Weighted-average discount rate 5.7 % 5.6 % |
Supplemental cash flow information related to leases | Supplemental and other information related to leases was as follows: 52-Weeks Ended (In thousands) August 29, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 6,534 Operating cash flows from finance leases 18 Financing cash flows from finance leases $ 338 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands, except share and per share data) August 29, 2020 August 31, 2019 August 25, 2018 Basic earnings per share computation: Numerator: Net income available to common stock stockholders $ 34,700 $ 47,536 $ 70,455 Denominator: Weighted average common shares - basic 93,968,953 80,734,091 70,582,149 Basic earnings per share from net income $ 0.37 $ 0.59 $ 1.00 Diluted earnings per share computation: Numerator: Net income available to common stock stockholders $ 34,700 $ 47,536 $ 70,455 Denominator: Weighted average common shares outstanding - basic 93,968,953 80,734,091 70,582,149 Public and private warrants 3,327,656 3,615,198 3,006,073 Employee stock options 1,001,542 801,700 43,779 Non-vested shares 45,571 92,920 49,354 Weighted average common shares - diluted 98,343,722 85,243,909 73,681,355 Diluted earnings per share from net income $ 0.35 $ 0.56 $ 0.96 |
Omnibus Incentive Plan (Tables)
Omnibus Incentive Plan (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock options activity | The following table summarizes stock option activity for the fifty-two week period ended August 29, 2020 : (In thousands, except share and per share data) Shares Weighted average Weighted average remaining contractual life Aggregate intrinsic Outstanding as of August 31, 2019 2,748,735 $ 13.35 8.13 $ 44,743 Granted 229,024 23.87 Exercised (340,382 ) 12.36 Forfeited (21,478 ) 21.92 Outstanding as of August 29, 2020 2,615,899 $ 14.33 7.29 $ 28,927 Vested and expected to vest as of August 29, 2020 2,615,899 $ 14.33 7.29 $ 28,927 Exercisable as of August 29, 2020 2,082,569 $ 12.65 7.00 $ 26,537 |
Schedule of stock option exercise price ranges | The following table summarizes information about stock options outstanding at August 29, 2020 : Range of Exercise Prices Number Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Life (Years) Number Exercisable Weighted-Average Exercise Price $ 12.00 - 14.99 1,938,833 $ 12.04 6.90 1,893,950 $ 12.02 $ 15.00 - 17.99 117,553 16.88 7.89 78,368 16.88 $ 18.00 - 20.99 293,465 19.89 8.02 94,507 19.89 $ 21.00 - 23.99 48,396 21.85 9.56 4,462 21.49 $ 24.00 - 26.99 217,652 24.19 8.91 11,282 24.08 2,615,899 $ 14.33 7.29 2,082,569 $ 12.65 |
Schedule of stock options valuation assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option Pricing Model based on the following assumptions: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended August 29, 2020 August 31, 2019 August 25, 2018 Expected volatility 30.27 % - 33.82% 29.30 % - 32.09% 26.72 % - 27.50% Expected dividend yield —% —% — % Expected option term 6 6 6 Risk-free rate of return 0.38 % - 1.8% 1.82 % - 3.13% 1.98 % - 2.79% |
Schedule of restricted stock units activity | The following table summarizes restricted stock unit activity for the fifty-two week period ended August 29, 2020 : Units Weighted average Non-vested as of August 31, 2019 92,400 $ 17.50 Granted 193,533 23.17 Vested (67,354 ) 17.07 Forfeited (10,556 ) 19.45 Non-vested as of August 29, 2020 208,023 $ 22.82 |
Schedule of non-vested performance-based units activity | The following table summarizes performance stock unit activity for the fifty-two week period ended August 29, 2020 : Units Weighted average Non-vested as of August 31, 2019 192,389 $ 11.93 Granted 121,288 27.39 Vested — — Forfeited (18,421 ) 17.62 Non-vested as of August 29, 2020 295,256 $ 17.93 |
Schedule of stock appreciation rights activity | The following table summarizes SARs activity for the fifty-two week period ended August 29, 2020 : Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 31, 2019 — $ — Granted 150,000 24.20 Exercised — — Forfeited — — Outstanding as of August 29, 2020 150,000 $ 24.20 9.18 Vested and expected to vest as of August 29, 2020 150,000 $ 24.20 9.18 Exercisable as of August 29, 2020 — $ — 0.00 |
Segment and Customer Informat_2
Segment and Customer Information (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following is a summary of revenue disaggregated by geographic area and brand: 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended (In thousands) August 29, 2020 August 31, 2019 August 25, 2018 Net sales North America $ 501,472 $ 498,196 $ 405,055 International 28,366 25,187 26,374 Total Atkins 529,838 523,383 431,429 Quest (1) 286,803 — — Total $ 816,641 $ 523,383 $ 431,429 (1) Quest net sales are primarily in North America. The following is a summary long lived assets by geographic area: (In thousands) August 29, 2020 August 31, 2019 Long lived assets North America $ 11,841 $ 2,437 International 9 19 Total $ 11,850 $ 2,456 |
Schedules of Concentration of Risk, by Risk Factor | For the fifty-three week period ended August 31, 2019 and the fifty-two week period ended August 25, 2018 , credit risk for the Company was concentrated in one customer who comprised more than 10% of the Company’s total sales. 52-Weeks Ended 53-Weeks Ended 52-Weeks Ended August 29, 2020 August 31, 2019 August 25, 2018 Customer 1 34 % 44 % 43 % Customer 2 10 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. At August 29, 2020 and August 31, 2019 , the following amounts of the Company’s accounts receivable, net were related to these significant customers for the periods in which the customers were significant: (In thousands) August 29, 2020 August 31, 2019 Customer 1 $ 34,411 38 % $ 17,386 39 % Customer 2 $ 12,345 14 % n/a n/a n/a - Not applicable as the customer was not significant as of this date. |
Restructuring and related cha_2
Restructuring and related charges (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | Changes to the restructuring liability during the fifty-two week period ended August 29, 2020 were as follows: (in thousands) Termination benefits and severance Other Restructuring Liability Balance as of August 31, 2019 $ — $ — $ — Charges 4,139 1,388 5,527 Cash payments — (1,388 ) (1,388 ) Non-cash settlements or adjustments — — — Balance as of August 29, 2020 $ 4,139 $ — $ 4,139 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Aug. 29, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Summarized quarterly financial data: 52-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended (In thousands, except per share amounts) August 29, 2020 August 29, 2020 May 30, 2020 February 29, 2020 November 30, 2019 Net sales $ 816,641 $ 222,286 $ 215,101 $ 227,101 $ 152,153 Gross profit $ 324,328 $ 88,102 $ 88,626 $ 85,394 $ 62,206 Income from operations $ 78,224 $ 24,832 $ 31,108 $ 25,269 $ (2,985 ) Net income $ 34,700 $ 12,427 $ 16,409 $ 10,657 $ (4,793 ) Earnings per share from net income: Basic $ 0.37 $ 0.13 $ 0.17 $ 0.11 $ (0.05 ) Diluted $ 0.35 $ 0.12 $ 0.17 $ 0.11 $ (0.05 ) 53-Weeks Ended 14-Weeks Ended 13-Weeks Ended 13-Weeks Ended 13-Weeks Ended (In thousands, except per share amounts) August 31, 2019 August 31, 2019 May 25, 2019 February 23, 2019 November 24, 2018 Net sales $ 523,383 $ 139,184 $ 139,468 $ 123,800 $ 120,931 Gross profit (1) $ 217,405 $ 59,173 $ 56,657 $ 49,655 $ 51,920 Income from operations $ 72,809 $ 12,115 $ 20,510 $ 19,002 $ 21,182 Net income $ 47,536 $ 6,091 $ 13,466 $ 12,722 $ 15,257 Earnings per share from net income: Basic $ 0.59 $ 0.07 $ 0.16 $ 0.16 $ 0.20 Diluted $ 0.56 $ 0.07 $ 0.16 $ 0.15 $ 0.18 |
Nature of Operations and Prin_2
Nature of Operations and Principles of Consolidation (Details) $ in Millions | Nov. 07, 2019USD ($) |
Acquisition of Quest | |
Entity Information | |
Payments to Acquire Businesses, Gross | $ 988.9 |
Change in Accounting Principl_3
Change in Accounting Principle (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Change in Accounting Principle | |||
Cost of goods sold | $ 492,313 | $ 305,978 | $ 251,063 |
Distribution | 0 | ||
General and administrative | 106,251 | 61,972 | 49,635 |
Depreciation and amortization | $ 15,259 | $ 7,496 | 7,498 |
Change in accounting principle and presentation | |||
Change in Accounting Principle | |||
Cost of goods sold | 27,190 | ||
Distribution | (19,685) | ||
General and administrative | (7,331) | ||
Depreciation and amortization | (174) | ||
Other operating expense | |||
Change in Accounting Principle | |||
Cost of goods sold | 0 | ||
Distribution | 0 | ||
General and administrative | 633 | ||
Depreciation and amortization | 0 | ||
Under previous method | |||
Change in Accounting Principle | |||
Cost of goods sold | 223,873 | ||
Distribution | 19,685 | ||
General and administrative | 56,333 | ||
Depreciation and amortization | $ 7,672 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Nov. 07, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Accounts receivable, net | ||||
Allowance for doubtful accounts | $ 500,000 | $ 600,000 | ||
Inventories | ||||
Reserve for inventory four to six months from expiration | 50.00% | |||
Reserve for inventory within three months of expiration | 100.00% | |||
Provision for obsolete inventory | $ 500,000 | 400,000 | ||
Property, Plant and Equipment | ||||
Impairment of Long-Lived Assets Held-for-use | 0 | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 3,000,000 | |||
CustomerTradeAllowance | 25,200,000 | 10,300,000 | ||
Cost of goods sold | 492,313,000 | 305,978,000 | $ 251,063,000 | |
Advertising expense | 55,300,000 | 35,400,000 | 34,000,000 | |
Production costs | 0 | |||
Research and development expenses | 4,000,000 | 2,200,000 | 2,500,000 | |
Defined contribution plan expense | 1,300,000 | 600,000 | 400,000 | |
Shipping and Handling | ||||
Property, Plant and Equipment | ||||
Cost of goods sold | $ 49,800,000 | $ 32,300,000 | $ 27,200,000 | |
Furniture and fixtures | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 7 years | |||
Computer equipment, software and website development | Minimum | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 3 years | |||
Computer equipment, software and website development | Maximum | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 5 years | |||
Machinery and equipment | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 7 years | |||
Office equipment | Minimum | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 3 years | |||
Office equipment | Maximum | ||||
Property, Plant and Equipment | ||||
Estimated useful lives | 5 years | |||
Acquisition of Quest | ||||
Entity Information | ||||
Payments to Acquire Businesses, Gross | $ 988,900,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Aug. 29, 2020 | Nov. 07, 2019 | Sep. 01, 2019 | Aug. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 25,703 | |||
Operating Lease, Liability, Current | 4,329 | $ 0 | ||
Finance Lease, Right-of-Use Asset | 912 | |||
Finance Lease, Liability, Noncurrent | 651 | |||
Other long -term assets | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 21,100 | |||
Other long -term assets | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 5,100 | |||
Accrued expenses and other current liabilities | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Liability, Current | $ 4,329 | 2,000 | ||
Accrued expenses and other current liabilities | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Liability, Current | 2,000 | |||
Property and equipment, net | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Finance Lease, Right-of-Use Asset | 1,200 | |||
Current maturities of long-term debt | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Liability, Noncurrent | $ 18,900 | |||
Current maturities of long-term debt | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating Lease, Liability, Noncurrent | 3,800 | |||
Long-term debt less current maturities | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Finance Lease, Liability, Noncurrent | $ 1,000 |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) $ in Thousands | Nov. 07, 2019 | Oct. 09, 2019 | Aug. 21, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Business Acquisition [Line Items] | ||||||
Proceeds from Issuance or Sale of Equity | $ 350,000 | |||||
Business transaction costs | $ 27,125 | $ 7,107 | $ 2,259 | |||
Acquisition of Quest | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Date of Acquisition Agreement | Aug. 21, 2019 | |||||
Business Acquisition, Effective Date of Acquisition | Nov. 7, 2019 | |||||
Payments to Acquire Businesses, Gross | $ 988,900 | |||||
Payments to Acquire Business Cash on Hand | 195,300 | |||||
Proceeds from Issuance or Sale of Equity | $ 350,000 | |||||
Proceeds from long-term credit facility | 443,600 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | 2,100 | |||||
Business Combination, Consideration Transferred, Net | 986,800 | |||||
Business transaction costs | 27,100 | |||||
Business Transaction Costs, Advisory Fees | $ 12,000 | 14,500 | ||||
Business Transaction Costs, Banker Commitment Fees | 3,200 | |||||
Business Transaction Costs, Non-deferrable debt issuance costs | 6,100 | |||||
Business Transaction Costs, Legal | $ 3,300 |
Business Combination (Details 2
Business Combination (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | Nov. 07, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 544,774 | $ 471,427 | ||
Goodwill, Purchase Accounting Adjustments | (22,700) | $ 1,800 | ||
Net sales | 816,641 | $ 523,383 | $ 431,429 | |
Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 4,745 | |||
Accounts receivable, net | 26,537 | |||
Inventories | 44,032 | |||
Prepaid assets | 1,214 | |||
Other current assets | 3,812 | |||
Property and equipment, net | 9,843 | |||
Intangible assets, net | 868,375 | |||
Other long-term assets | 20,997 | |||
Accounts payable | 25,200 | |||
Other current liabilities | 11,237 | |||
Deferred income taxes | 10,754 | |||
Other long-term liabilities | 18,891 | |||
Total identifiable net assets | 913,473 | |||
Goodwill | 73,347 | |||
Total assets acquired and liabilities assumed | 986,820 | |||
Quest | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Net sales | 286,803 | |||
Leasehold improvements | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Property and equipment, net | 6,900 | |||
Furniture and fixtures | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Property and equipment, net | 2,200 | |||
Equipment | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Property and equipment, net | 700 | |||
Brands and trademarks | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | 750,000 | |||
Customer relationships | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | 115,000 | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 67,700 | |||
Computer Software, Intangible Asset | Acquisition of Quest | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, net | $ 3,400 | |||
Intangible assets, net | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Measurement Period Adjustment, Fair Value | (20,000) | |||
Deferred income taxes | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Measurement Period Adjustment, Fair Value | (3,200) | |||
Accounts receivable, net | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Measurement Period Adjustment, Fair Value | (3,100) | |||
Inventories | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Measurement Period Adjustment, Fair Value | 900 | |||
Property and equipment, net | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Measurement Period Adjustment, Fair Value | $ (500) |
Business Combination (Details 3
Business Combination (Details 3) - Acquisition of Quest - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Business Acquisition [Line Items] | ||
Net sales, pro forma | $ 885,044 | $ 832,254 |
Gross profit, pro forma | 355,395 | 317,480 |
Net income, pro forma | $ 59,090 | $ 30,143 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Property and Equipment | |||
Property and equipment, gross | $ 14,716 | $ 4,793 | |
Less: accumulated depreciation | (2,866) | (2,337) | |
Property and equipment, net | 11,850 | 2,456 | |
Depreciation and amortization | 1,800 | 1,100 | $ 1,200 |
Loss on disposal of property and equipment | 0 | 6 | $ 128 |
Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 3,197 | 715 | |
Computer equipment and software | |||
Property and Equipment | |||
Property and equipment, gross | 1,062 | 956 | |
Machinery and equipment | |||
Property and Equipment | |||
Property and equipment, gross | 1,135 | 385 | |
Website development costs | |||
Property and Equipment | |||
Property and equipment, gross | 0 | 2,237 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 8,137 | 361 | |
Finance lease right-of-use assets | |||
Property and Equipment | |||
Property and equipment, gross | 1,185 | 0 | |
Construction in progress | |||
Property and Equipment | |||
Property and equipment, gross | $ 0 | $ 139 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Goodwill (Details) - USD ($) | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Goodwill | ||
Beginning Balance | $ 471,427,000 | |
Acquisition of a business | 73,347,000 | $ 0 |
Ending Balance | 544,774,000 | $ 471,427,000 |
Goodwill impairment charges | $ 0 |
Goodwill and Intangibles - Sc_2
Goodwill and Intangibles - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Intangible assets | |||
Intangible assets, Gross carrying amount | $ 1,187,967 | $ 320,000 | |
Accumulated amortization | (29,199) | (13,861) | |
Intangible assets, Net carrying amount | 1,158,768 | 306,139 | |
Finite-lived intangible assets, Net carrying amount | 179,768 | ||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 3,000 | ||
Amortization of Intangible Assets | 14,000 | $ 6,500 | $ 6,500 |
Estimated future amortization expense | |||
2020 | 15,446 | ||
2021 | 15,212 | ||
2022 | 14,938 | ||
2023 | 14,281 | ||
2024 | 13,171 | ||
Thereafter | $ 106,720 | ||
Customer relationships | |||
Intangible assets with indefinite life: | |||
Useful life | 15 years | 15 years | |
Intangible assets | |||
Finite-lived intangible assets, Gross carrying amount | $ 174,000 | $ 59,000 | |
Accumulated amortization | (18,503) | (8,382) | |
Finite-lived intangible assets, Net carrying amount | $ 155,497 | $ 50,618 | |
Proprietary recipes and formulas | |||
Intangible assets with indefinite life: | |||
Useful life | 7 years | 7 years | |
Intangible assets | |||
Finite-lived intangible assets, Gross carrying amount | $ 7,000 | $ 7,000 | |
Accumulated amortization | (3,131) | (2,131) | |
Finite-lived intangible assets, Net carrying amount | $ 3,869 | $ 4,869 | |
Licensing agreements | |||
Intangible assets with indefinite life: | |||
Useful life | 14 years | 14 years | |
Intangible assets | |||
Finite-lived intangible assets, Gross carrying amount | $ 22,000 | $ 22,000 | |
Accumulated amortization | (4,920) | (3,348) | |
Finite-lived intangible assets, Net carrying amount | 17,080 | 18,652 | |
Software and website development costs | |||
Intangible assets | |||
Finite-lived intangible assets, Gross carrying amount | 5,967 | ||
Accumulated amortization | (2,645) | ||
Finite-lived intangible assets, Net carrying amount | 3,322 | ||
Brands and trademarks | |||
Intangible assets with indefinite life: | |||
Indefinite-lived intangible assets | $ 979,000 | $ 232,000 | |
Maximum | Software and website development costs | |||
Intangible assets with indefinite life: | |||
Useful life | 5 years | ||
Minimum | Software and website development costs | |||
Intangible assets with indefinite life: | |||
Useful life | 3 years |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued professional fees | $ 3,125 | $ 8,903 |
Accrued advertising allowances and claims | 2,625 | 2,095 |
Accrued bonus expenses | 12,261 | 10,908 |
Accrued freight expenses | 1,795 | 1,791 |
Accrued payroll-related expenses | 2,179 | 841 |
Accrued commissions | 1,789 | 932 |
Income taxes payable | 839 | 382 |
VAT payable | 2,367 | 1,787 |
Restructuring Reserve | 4,139 | 0 |
Other accrued expenses | 2,559 | 2,294 |
Operating Lease, Liability, Current | 4,329 | 0 |
Accrued expenses and other current liabilities | $ 38,007 | $ 29,933 |
Long-Term Debt and Line of Cr_3
Long-Term Debt and Line of Credit - Narrative (Details) - USD ($) | Nov. 07, 2019 | Mar. 16, 2018 | Jul. 07, 2017 | Aug. 29, 2020 | May 30, 2020 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 |
Debt Instrument | ||||||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 236,000 | $ 236,000 | ||||||
Proceeds from revolving credit facility | 25,000,000 | $ 0 | $ 0 | |||||
Repayments of revolving credit facility | 25,000,000 | 0 | $ 0 | |||||
Barclays Bank PLC and Other Parties | ||||||||
Debt Instrument | ||||||||
Letters of credit outstanding | 5,900,000 | 5,900,000 | ||||||
Barclays Bank PLC and Other Parties | Term Loan | ||||||||
Debt Instrument | ||||||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 0 | 0 | ||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Base Rate | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 2.75% | 0.50% | ||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Eurocurrency | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 1.00% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 3.75% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | ||||||||
Debt Instrument | ||||||||
Borrowing capacity | $ 200,000,000 | |||||||
Maturity period | 7 years | |||||||
Proceeds from long-term credit facility | $ 460,000,000 | $ 200,000,000 | ||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | Base Rate | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 2.50% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | Eurocurrency | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 3.00% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 3.50% | 4.00% | ||||||
Interest rate floor | 1.00% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | ||||||||
Debt Instrument | ||||||||
Borrowing capacity | $ 75,000,000 | |||||||
Maturity period | 5 years | |||||||
Net leverage ratio (equal to or less than) | 6.25 | |||||||
Net leverage ratio post reduction (equal to or less than) | 6 | |||||||
Percent of commitments (in excess of) | 30.00% | |||||||
Proceeds from revolving credit facility | $ 25,000,000 | |||||||
Repayments of revolving credit facility | 25,000,000 | |||||||
Amount outstanding on revolving credit facility | $ 0 | $ 0 | $ 0 | |||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | Eurocurrency | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 2.00% | |||||||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate | 3.00% |
Long-Term Debt and Line of Cr_4
Long-Term Debt and Line of Credit - Schedule of Debt (Details) - USD ($) | Aug. 29, 2020 | Aug. 31, 2019 |
Line of credit facility | ||
Long-term debt under Credit Agreement | $ 606,500,000 | $ 196,500,000 |
Finance lease liabilities | 922,000 | 0 |
Less: Deferred financing fees | 10,272,000 | 5,565,000 |
Total debt | 597,150,000 | 190,935,000 |
Current maturities of long-term Credit Agreement, net of deferred financing fees | 0 | 676,000 |
Less: Current finance lease liabilities | 271,000 | 0 |
Long-term debt, net of deferred financing fees | 596,879,000 | 190,259,000 |
Deferred financing fees, current | 0 | $ 1,300,000 |
Aggregate principal maturities | ||
2021 | 236,000 | |
2022 | 282,000 | |
2023 | 262,000 | |
2024 | 606,642,000 | |
2025 | 0 | |
Total debt | $ 607,422,000 | |
Finance leases [Member] | ||
Line of credit facility | ||
Effective Interest Rate | 5.60% | |
Term Loan | ||
Line of credit facility | ||
Effective Interest Rate, Line of Credit Facility | 4.80% | |
Term Loan | Barclays Bank PLC and Other Parties | ||
Aggregate principal maturities | ||
2021 | $ 0 | |
Revolving Credit Facility | ||
Line of credit facility | ||
Effective Interest Rate, Line of Credit Facility | 0.00% |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Feb. 24, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Liabilities | ||||
Gain of settlement of TRA liability | $ 0 | $ 1,534 | $ 0 | |
Change in fair value of contingent consideration | $ 4,700 | 0 | 533 | (2,848) |
Level 3 | ||||
Liabilities | ||||
TRA liability | $ 0 | 0 | ||
Acquisition of Atkins | ||||
Liabilities | ||||
Gain of settlement of TRA liability | 1,500 | |||
Change in fair value of contingent consideration | $ 500 | $ 2,800 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Feb. 24, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | Jul. 07, 2017 | |
Entity Information | |||||
Valuation allowance | $ (3,190) | $ (3,786) | |||
Unrecognized tax benefits | 0 | 0 | |||
Accrued interest or penalties on unrecognized tax benefits | 0 | ||||
Tax Receivable Agreement | |||||
Loss (gain) in fair value change of contingent consideration - TRA liability | $ 4,700 | 0 | 533 | $ (2,848) | |
Payment of TRA liability | 0 | 26,468 | 0 | ||
Gain of settlement of TRA liability | 0 | 1,534 | 0 | ||
Acquisition of Atkins | |||||
Tax Receivable Agreement | |||||
TRA contingent payment (up to) | $ 100,000 | ||||
Loss (gain) in fair value change of contingent consideration - TRA liability | 500 | $ 2,800 | |||
Gain of settlement of TRA liability | 1,500 | ||||
State and local | |||||
Entity Information | |||||
Operating loss carryforwards | 11,900 | 12,200 | |||
Operating loss carryforwards, valuation allowance | 300 | ||||
Foreign | |||||
Entity Information | |||||
Operating loss carryforwards | 12,800 | $ 14,200 | |||
Increase in operating loss carryforward | 1,400 | ||||
Operating loss carryforwards, valuation allowance | $ 2,900 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Current: | |||
Federal | $ 3,056 | $ 2,784 | $ 2,584 |
State and local | 1,835 | 2,684 | 159 |
Foreign | 219 | 374 | 1,001 |
Total current | 5,110 | 5,842 | 3,744 |
Deferred: | |||
Federal | 6,747 | 9,976 | (21,223) |
State and local | 1,637 | 1,086 | (26) |
Foreign | (168) | (154) | 141 |
Total deferred income tax expense (benefit) | 8,216 | 10,908 | (21,108) |
Income tax expense (benefit) | 13,326 | 16,750 | (17,364) |
Components of income before income taxes | |||
Domestic | 47,480 | 64,244 | 49,748 |
Foreign | 546 | 42 | 3,343 |
Income before income taxes | $ 48,026 | $ 64,286 | $ 53,091 |
Effective rate reconciliation | |||
Statutory income tax expense | 21.00% | 21.00% | 25.50% |
State income tax expense, net of federal | 5.00% | 3.90% | 3.10% |
Valuation allowance | (1.20%) | (0.60%) | 0.60% |
Taxes on foreign income above (below) the U.S. tax | 0.10% | 0.20% | 0.40% |
Tax Cuts and Jobs Act | 0.00% | 0.00% | (58.40%) |
Change In State Tax Rate | 1.50% | 1.50% | (4.00%) |
Non-deductible transaction costs | 0.10% | 0.00% | 0.00% |
TRA contingent consideration | 0.00% | (0.40%) | (1.50%) |
Other permanent items | 1.20% | 0.50% | 1.60% |
Income tax expense (benefit) | 27.70% | 26.10% | (32.70%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Aug. 29, 2020 | Aug. 31, 2019 |
Deferred tax assets | ||
Accounts receivable allowances | $ 2,427 | $ 2,601 |
Inventories write-downs | 92 | 67 |
Accrued expenses | 3,968 | 3,680 |
Net operating loss carryforwards | 3,837 | 4,179 |
Share-based compensation | 2,770 | 1,755 |
Tax credits | 256 | 351 |
Lease liabilities | 6,785 | 0 |
Other | 3,714 | 2,247 |
Deferred tax assets | 23,849 | 14,880 |
Valuation allowance | (3,190) | (3,786) |
Deferred tax assets, net of valuation allowance | 20,659 | 11,094 |
Deferred tax liabilities | ||
Prepaid expense | (514) | (474) |
Excess tax over book depreciation | (2,278) | (169) |
Website development costs | (816) | (226) |
Intangible assets | (94,398) | (74,431) |
Lease right-of-use assets | (6,442) | 0 |
Other | (563) | (1,177) |
Deferred tax liabilities | (105,011) | (76,477) |
Net deferred tax liabilities | $ (84,352) | $ (65,383) |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Nov. 07, 2019 | Aug. 31, 2019 | |
Components of lease expense | |||
Operating Lease, Cost | $ 5,242 | ||
Variable Lease, Cost | 1,648 | ||
Operating Lease, Expense | 6,890 | ||
Short-term Lease, Cost | 30 | ||
Finance Lease, Right-of-Use Asset, Amortization | 273 | ||
Finance Lease, Interest Expense | 60 | ||
Finance lease cost | 333 | ||
Lease, Cost | 7,253 | ||
Lease assets and liabilities | |||
Operating Lease, Right-of-Use Asset | 25,703 | ||
Finance Lease, Right-of-Use Asset | 912 | ||
Total lease right of use asset | 26,615 | ||
Operating Lease, Liability, Current | 4,329 | $ 0 | |
Finance Lease, Liability, Current | 271 | 0 | |
Finance Lease, Liability, Noncurrent | 651 | ||
Total lease liability | 28,015 | ||
Future maturities of operating lease liabilities | |||
2021 | 5,697 | ||
2022 | 4,649 | ||
2023 | 4,114 | ||
2024 | 4,216 | ||
2025 | 3,765 | ||
Thereafter | 11,014 | ||
Total operating lease payments | 33,455 | ||
Less: Interest | (6,362) | ||
Present value of operating lease liabilities | 27,093 | ||
Future maturities of finance lease liabilities | |||
2021 | 313 | ||
2022 | 313 | ||
2023 | 278 | ||
2024 | 145 | ||
2025 | 0 | ||
Thereafter | 0 | ||
Total finance lease payments | 1,049 | ||
Less: Interest | (127) | ||
Present value of finance lease liabilities | 922 | $ 0 | |
Operating leases not yet commenced | |||
Expected payments of operating lease not yet commenced | $ 32,200 | ||
Term of operating lease not yet commenced | 10 years | ||
Supplemental cash flow information related to leases | |||
Operating cash flows from operating leases | $ 6,534 | ||
Operating cash flows from finance leases | 18 | ||
Financing cash flow from finance leases | $ 338 | ||
Operating Lease, Weighted Average Remaining Lease Term | 6 years 11 months 19 days | ||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 4 months 28 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 5.70% | ||
Finance Lease, Weighted Average Discount Rate, Percent | 5.60% | ||
Minimum | |||
Operating leases not yet commenced | |||
Renewal term lease not yet commenced | 5 years | ||
Maximum | |||
Operating leases not yet commenced | |||
Renewal term lease not yet commenced | 10 years | ||
Other long-term liabilities | |||
Lease assets and liabilities | |||
Operating Lease, Liability, Noncurrent | $ 22,764 | ||
Accrued expenses and other current liabilities | |||
Lease assets and liabilities | |||
Operating Lease, Liability, Current | $ 4,329 | $ 2,000 |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Aug. 31, 2019 | Aug. 25, 2018 | |
Leases [Abstract] | ||
Rent Expense | $ 2,200 | $ 2,400 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 | 2,546 | |
2021 | 1,947 | |
2022 | 1,677 | |
2023 | 1,093 | |
2024 | 87 | |
Thereafter | 56 | |
Total | $ 7,406 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Celebrity endorsement payment obligation | $ 2.9 | |
Potential settlement accrual | 0.3 | $ 3.5 |
Loss Contingency Accrual | 1.3 | |
Loss contingency acquired | $ 1.2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 09, 2019 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | Jul. 06, 2017 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |||||
Common stock shares issued (in shares) | 13,379,205 | 95,751,845 | 81,973,284 | ||
Shares Issued, Price Per Share | $ 26.35 | ||||
Shares Issued, Underwriting Discounts and Commissions, Price per Share | 0.19 | ||||
Price Per Share Received Net Of Offering Costs | $ 26.16 | ||||
Proceeds from Issuance or Sale of Equity | $ 350,000 | ||||
Equity Issuance costs, Legal | $ 800 | ||||
Warrants and Rights Note Disclosure [Abstract] | |||||
Number of Warrants Exercised in Exchange for Common Stock | 9,866,451 | ||||
Cash received from warrant exercises | $ 0 | $ 113,464 | $ 232 | ||
Common Shares Surrendered For Each Public Warrant Surrendered | 0.61885 | ||||
Common Shares Received for each Public Warrant Surrendered | 0.38115 | ||||
Public Warrants Exercised | 3,499,639 | ||||
Common Shares Issued for Public Warrant Exercises (in shares) | 1,333,848 | ||||
Public Warrants [Member] | |||||
Warrants and Rights Note Disclosure [Abstract] | |||||
Warrant issued (in shares) | 13,416,667 | ||||
Warrant price per share (in dollars per share) | $ 11.50 | ||||
Private Placement Warrants [Member] | |||||
Warrants and Rights Note Disclosure [Abstract] | |||||
Warrant issued (in shares) | 6,700,000 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Aug. 29, 2020 | Aug. 31, 2019 | |
Stock Repurchase Program | ||
Stock Repurchase Program, Authorized Amount | $ 50 | |
Repurchase of common stock | 0 | 98,234 |
Treasury Stock Acquired, Average Cost Per Share | $ 21.83 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 47.9 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 29, 2020 | May 30, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | May 25, 2019 | Feb. 23, 2019 | Nov. 24, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Numerator: | |||||||||||
Net income available to common stock stockholders | $ 12,427 | $ 16,409 | $ 10,657 | $ (4,793) | $ 6,091 | $ 13,466 | $ 12,722 | $ 15,257 | $ 34,700 | $ 47,536 | $ 70,455 |
Denominator: | |||||||||||
Weighted average common shares - basic (in shares) | 93,968,953 | 80,734,091 | 70,582,149 | ||||||||
Basic earnings per share from net income (in dollars per share) | $ 0.13 | $ 0.17 | $ 0.11 | $ (0.05) | $ 0.07 | $ 0.16 | $ 0.16 | $ 0.20 | $ 0.37 | $ 0.59 | $ 1 |
Numerator: | |||||||||||
Net income available to common stock stockholders | $ 12,427 | $ 16,409 | $ 10,657 | $ (4,793) | $ 6,091 | $ 13,466 | $ 12,722 | $ 15,257 | $ 34,700 | $ 47,536 | $ 70,455 |
Denominator: | |||||||||||
Weighted average common shares - basic (in shares) | 93,968,953 | 80,734,091 | 70,582,149 | ||||||||
Warrant conversion (in shares) | 3,327,656 | 3,615,198 | 3,006,073 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 45,571 | 92,920 | 49,354 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Stock Options | 1,001,542 | 801,700 | 43,779 | ||||||||
Weighted average common shares - diluted (in shares) | 98,343,722 | 85,243,909 | 73,681,355 | ||||||||
Diluted earnings per share from net income (in dollars per share) | $ 0.12 | $ 0.17 | $ 0.11 | $ (0.05) | $ 0.07 | $ 0.16 | $ 0.15 | $ 0.18 | $ 0.35 | $ 0.56 | $ 0.96 |
Antidilutive stock options excluded from computation of earnings per share | 600,000 | 200,000 | 200,000 |
Omnibus Incentive Plan (Details
Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | Jul. 07, 2017 | |
Share-based Compensation | ||||
Stock compensation expense | $ 7,636 | $ 5,501 | $ 4,029 | |
Incentive Plan | ||||
Share-based Compensation | ||||
Number of shares authorized | 9,067,917 | |||
Number of shares available for grant | 5,200,000 |
Omnibus Incentive Plan Stock Op
Omnibus Incentive Plan Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Additional disclosures | |||
Proceeds from option exercises | $ 4,206 | $ 706 | $ 120 |
Employee stock options | |||
Shares | |||
Outstanding at beginning of period (in shares) | 2,748,735 | ||
Granted (in shares) | 229,024 | ||
Exercised (in shares) | (340,382) | ||
Forfeited (in shares) | (21,478) | ||
Outstanding at end of period (in shares) | 2,615,899 | 2,748,735 | |
Vested or expected to vest (in shares) | 2,615,899 | ||
Exercisable (in shares) | 2,082,569 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 13.35 | ||
Granted (in dollars per share) | 23.87 | ||
Exercised (in dollars per share) | 12.36 | ||
Forfeited (in dollars per share) | 21.92 | ||
Outstanding at end of period (in dollars per share) | 14.33 | $ 13.35 | |
Vested or expected to vest (in dollars per share) | 14.33 | ||
Exercisable (in dollars per share) | $ 12.65 | ||
Weighted average remaining contractual life (if years) | |||
Outstanding at end of period, contractual life | 7 years 3 months 14 days | 8 years 1 month 17 days | |
Vested or expected to vest, contractual life | 7 years 3 months 14 days | ||
Exercisable, contractual life | 7 years | ||
Intrinsic value | |||
Outstanding, intrinsic value | $ 28,927 | $ 44,743 | |
Vested and expected to vest, intrinsic value | 28,927 | ||
Exercisable, intrinsic value | $ 26,537 | ||
Additional disclosures | |||
Award vesting period | 3 years | ||
Expiration period | 10 years | ||
Compensation not yet recognized | $ 2,300 | ||
Compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||
Proceeds from option exercises | $ 4,200 | $ 700 | $ 100 |
Omnibus Incentive Plan Range of
Omnibus Incentive Plan Range of Exercise Prices (Details) | 12 Months Ended |
Aug. 29, 2020$ / sharesshares | |
Stock Options, Exercise Price Range | |
Number of outstanding options | shares | 2,615,899 |
Outstanding options, weighted average exercise price | $ 14.33 |
Outstanding options, weighted average remaining contractual term | 7 years 3 months 14 days |
Number of exercisable options | shares | 2,082,569 |
Exercisable options, weighted average exercise price | $ 12.65 |
Exercise Price Range from $12.00 to $14.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 12 |
Exercise price range, upper range limit | $ 14.99 |
Number of outstanding options | shares | 1,938,833 |
Outstanding options, weighted average exercise price | $ 12.04 |
Outstanding options, weighted average remaining contractual term | 6 years 10 months 24 days |
Number of exercisable options | shares | 1,893,950 |
Exercisable options, weighted average exercise price | $ 12.02 |
Exercise Price Range from $15.00 to $17.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 15 |
Exercise price range, upper range limit | $ 17.99 |
Number of outstanding options | shares | 117,553 |
Outstanding options, weighted average exercise price | $ 16.88 |
Outstanding options, weighted average remaining contractual term | 7 years 10 months 20 days |
Number of exercisable options | shares | 78,368 |
Exercisable options, weighted average exercise price | $ 16.88 |
Exercise Price Range from $18.00 to $20.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 18 |
Exercise price range, upper range limit | $ 20.99 |
Number of outstanding options | shares | 293,465 |
Outstanding options, weighted average exercise price | $ 19.89 |
Outstanding options, weighted average remaining contractual term | 8 years 7 days |
Number of exercisable options | shares | 94,507 |
Exercisable options, weighted average exercise price | $ 19.89 |
Exercise Price Range from $21.00 to $23.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 21 |
Exercise price range, upper range limit | $ 23.99 |
Number of outstanding options | shares | 48,396 |
Outstanding options, weighted average exercise price | $ 21.85 |
Outstanding options, weighted average remaining contractual term | 9 years 6 months 21 days |
Number of exercisable options | shares | 4,462 |
Exercisable options, weighted average exercise price | $ 21.49 |
Exercise Price Range from $24.00 to $26.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 24 |
Exercise price range, upper range limit | $ 26.99 |
Number of outstanding options | shares | 217,652 |
Outstanding options, weighted average exercise price | $ 24.19 |
Outstanding options, weighted average remaining contractual term | 8 years 10 months 28 days |
Number of exercisable options | shares | 11,282 |
Exercisable options, weighted average exercise price | $ 24.08 |
Omnibus Incentive Plan Fair Val
Omnibus Incentive Plan Fair Value Assumptions (Details) - Employee stock options - USD ($) | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Share-based Compensation | |||
Weighted average grant date fair value | $ 7.79 | $ 7.10 | $ 4.60 |
Expected volatility, minimum | 30.27% | 29.30% | 26.72% |
Expected volatility, maximum | 33.82% | 32.09% | 27.50% |
Expected dividend rate | 0.00% | 0.00% | 0.00% |
Expected option term | 6 years | 6 years | 6 years |
Risk-free rate of return, minimum | 0.38% | 1.82% | 1.98% |
Risk-free rate of return, maximum | 1.80% | 3.13% | 2.79% |
Expected dividend payments | $ 0 |
Omnibus Incentive Plan Restrict
Omnibus Incentive Plan Restricted Stock Unit Activity (Details) - Non-vested shares $ / shares in Units, $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 92,400 |
Granted in period (in shares) | shares | 193,533 |
Vested in period (in shares) | shares | (67,354) |
Forfeited in period (in shares) | shares | (10,556) |
Non-vested at end of period (in shares) | shares | 208,023 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 17.50 |
Granted (in dollars per share) | $ / shares | 23.17 |
Vested (in dollars per share) | $ / shares | 17.07 |
Forfeited (in dollars per share) | $ / shares | 19.45 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 22.82 |
Additional disclosures | |
Award vesting period | 3 years |
Compensation cost not yet recognized | $ | $ 3 |
Compensation cost not yet recognized, period for recognition | 1 year 10 months 24 days |
Omnibus Incentive Plan Performa
Omnibus Incentive Plan Performance Stock Units Activity (Details) - Performance Stock Units $ / shares in Units, $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($)$ / sharesshares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 192,389 |
Granted in period (in shares) | shares | 121,288 |
Vested in period (in shares) | shares | 0 |
Forfeited in period (in shares) | shares | (18,421) |
Non-vested at end of period (in shares) | shares | 295,256 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 11.93 |
Granted (in dollars per share) | $ / shares | 27.39 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 17.62 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 17.93 |
Additional disclosures | |
Compensation cost not yet recognized | $ | $ 3.2 |
Compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days |
Award vesting period | 3 years |
Minimum | |
Additional disclosures | |
Award vesting rights, percentage | 0.00% |
Maximum | |
Additional disclosures | |
Award vesting rights, percentage | 200.00% |
Omnibus Incentive Plan Stock Ap
Omnibus Incentive Plan Stock Appreciation Rights Activity (Details) - Stock Appreciation Rights (SARs) $ / shares in Units, $ in Millions | 12 Months Ended |
Aug. 29, 2020USD ($)$ / sharesshares | |
Stock Appreciation Rights | |
Outstanding at beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 150,000 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 150,000 |
Vested or expected to vest (in shares) | shares | 150,000 |
Exercisable (in shares) | shares | 0 |
Weighted average exercise price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 24.20 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | 24.20 |
Vested or expected to vest (in dollars per share) | $ / shares | 24.20 |
Exercisable (in dollars per share) | $ / shares | $ 0 |
Weighted average remaining contractual life (if years) | |
Outstanding at end of period, contractual life | 9 years 2 months 4 days |
Vested or expected to vest, contractual life | 9 years 2 months 4 days |
Exercisable, contractual life | 0 years |
Additional disclosures | |
Award vesting period | 3 years |
Expiration period | 10 years |
Compensation cost not yet recognized | $ | $ 0.3 |
Compensation cost not yet recognized, period for recognition | 2 years 2 months 12 days |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Related Party Transaction | |||
Payment of TRA liability | $ 0 | $ 26,468 | $ 0 |
Goodwill, Purchase Accounting Adjustments | $ (22,700) | $ 1,800 | |
Former Majority Stockholder, Atkins | |||
Related Party Transaction | |||
Payment of TRA liability | $ 26,500 |
Segment and Customer Informat_3
Segment and Customer Information (Details) | 12 Months Ended |
Aug. 29, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment and Customer Informat_4
Segment and Customer Information Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 29, 2020 | May 30, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | May 25, 2019 | Feb. 23, 2019 | Nov. 24, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 222,286 | $ 215,101 | $ 227,101 | $ 152,153 | $ 139,184 | $ 139,468 | $ 123,800 | $ 120,931 | |||
Long lived assets | 11,850 | 2,456 | $ 11,850 | $ 2,456 | |||||||
Net sales | 816,641 | 523,383 | $ 431,429 | ||||||||
North America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 501,472 | 498,196 | 405,055 | ||||||||
Long lived assets | 11,841 | 2,437 | 11,841 | 2,437 | |||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 28,366 | 25,187 | 26,374 | ||||||||
Long lived assets | $ 9 | $ 19 | 9 | 19 | |||||||
Atkins | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 529,838 | 523,383 | 431,429 | ||||||||
Quest | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 286,803 | $ 0 | $ 0 |
Segment and Customer Informat_5
Segment and Customer Information - Schedules of Concentration of Risk, by Risk Factor (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Concentration Risk [Line Items] | |||
Accounts receivable, net | $ 89,740 | $ 44,240 | |
Customer 1 | Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 34.00% | 44.00% | 43.00% |
Customer 1 | Customer Concentration Risk | Accounts receivable, net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 38.00% | 39.00% | |
Accounts receivable, net | $ 34,411 | $ 17,386 | |
Customer 2 | Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 10.00% | ||
Customer 2 | Customer Concentration Risk | Accounts receivable, net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 14.00% | ||
Accounts receivable, net | $ 12,345 |
Restructuring and related cha_3
Restructuring and related charges (Details) $ in Thousands | 12 Months Ended |
Aug. 29, 2020USD ($) | |
Restructuring charges and liability | |
Restructuring and Related Cost, Expected Cost | $ 8,100 |
Changes to the restructuring liability | |
Restructuring liability, beginning balance | 0 |
Charges | 5,527 |
Cash payments | (1,388) |
Non-cash settlements or adjustments | 0 |
Restructuring liability, ending balance | 4,139 |
General and administrative expense | |
Restructuring charges and liability | |
Restructuring and Related Cost, Incurred Cost | 5,500 |
Employee-related severance and benefits | |
Changes to the restructuring liability | |
Restructuring liability, beginning balance | 0 |
Charges | 4,139 |
Cash payments | 0 |
Non-cash settlements or adjustments | 0 |
Restructuring liability, ending balance | 4,139 |
Other Restructuring | |
Changes to the restructuring liability | |
Restructuring liability, beginning balance | 0 |
Charges | 1,388 |
Cash payments | (1,388) |
Non-cash settlements or adjustments | 0 |
Restructuring liability, ending balance | $ 0 |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 29, 2020 | May 30, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | May 25, 2019 | Feb. 23, 2019 | Nov. 24, 2018 | Aug. 29, 2020 | Aug. 31, 2019 | Aug. 25, 2018 | |
Entity Information | |||||||||||
Net sales | $ 222,286 | $ 215,101 | $ 227,101 | $ 152,153 | $ 139,184 | $ 139,468 | $ 123,800 | $ 120,931 | |||
Gross profit | 88,102 | 88,626 | 85,394 | 62,206 | 59,173 | 56,657 | 49,655 | 51,920 | $ 324,328 | $ 217,405 | $ 180,366 |
Income from operations | 24,832 | 31,108 | 25,269 | (2,985) | 12,115 | 20,510 | 19,002 | 21,182 | 78,224 | 72,809 | 64,730 |
Net income | $ 12,427 | $ 16,409 | $ 10,657 | $ (4,793) | $ 6,091 | $ 13,466 | $ 12,722 | $ 15,257 | $ 34,700 | $ 47,536 | $ 70,455 |
Earnings per share from net income: | |||||||||||
Basic (in dollars per share) | $ 0.13 | $ 0.17 | $ 0.11 | $ (0.05) | $ 0.07 | $ 0.16 | $ 0.16 | $ 0.20 | $ 0.37 | $ 0.59 | $ 1 |
Diluted (in dollars per share) | $ 0.12 | $ 0.17 | $ 0.11 | $ (0.05) | $ 0.07 | $ 0.16 | $ 0.15 | $ 0.18 | $ 0.35 | $ 0.56 | $ 0.96 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Sep. 24, 2020USD ($) |
Subsequent Event [Line Items] | |
Proceeds from SimplyProtein Sale | $ 8.8 |
Cash proceeds from SimplyProtein Sale | 5.8 |
Note Receivable from SimplyProtein Sale | $ 3 |