Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Aug. 27, 2022 | Oct. 17, 2022 | Feb. 25, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Document Information [Line Items] | |||||
Entity Central Index Key | 0001702744 | ||||
Document Type | 10-K | ||||
Current Fiscal Year End Date | --08-27 | ||||
Document Fiscal Year Focus | 2022 | ||||
Document Fiscal Period Focus | FY | ||||
Amendment Flag | false | ||||
Document Annual Report | true | ||||
Document Period End Date | Aug. 27, 2022 | ||||
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 | $ 3,300 | ||||
Share price | $ 38.99 | $ 35.35 | $ 25.39 | ||
Entity Common Stock, Shares Outstanding | 98,993,701 | ||||
Auditor Name | Deloitte & Touche LLP | ||||
Auditor Firm ID | 34 | ||||
Auditor Location | Denver, Colorado | ||||
Documents Incorporated by Reference [Text Block] | Certain portions of the registrant’s definitive proxy statement, in connection with its 2023 annual meeting of stockholders, to be filed within 120 days after the end of fiscal year ended August 27, 2022, 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. 27, 2022 | Aug. 28, 2021 |
Current assets: | ||
Cash | $ 67,494 | $ 75,345 |
Accounts receivable, net | 132,667 | 111,456 |
Inventories | 125,479 | 97,269 |
Prepaid expenses | 5,027 | 4,902 |
Other current assets | 20,934 | 9,694 |
Total current assets | 351,601 | 298,666 |
Long-term assets: | ||
Property and equipment, net | 18,157 | 16,584 |
Intangible assets, net | 1,123,258 | 1,139,041 |
Goodwill | 543,134 | 543,134 |
Other long-term assets | 58,099 | 54,792 |
Total assets | 2,094,249 | 2,052,217 |
Current liabilities: | ||
Accounts payable | 62,149 | 59,713 |
Accrued interest | 160 | 60 |
Accrued expenses and other current liabilities | 39,675 | 53,606 |
Current maturities of long-term debt | 264 | 285 |
Total current liabilities | 102,248 | 113,664 |
Long-term liabilities: | ||
Long-term debt, less current maturities | 403,022 | 451,269 |
Deferred income taxes | 105,676 | 93,755 |
Warrant liability | 0 | 159,835 |
Other long-term liabilities | 44,639 | 44,890 |
Total liabilities | 655,585 | 863,413 |
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, 101,322,834 and 95,882,908 issued at August 27, 2022 and August 28, 2021, respectively | 1,013 | 959 |
Treasury stock, 1,818,754 shares and 98,234 shares at cost at August 27, 2022 and August 28, 2021, respectively | (62,003) | (2,145) |
Additional paid-in-capital | 1,287,224 | 1,085,001 |
Retained earnings | 214,381 | 105,807 |
Accumulated other comprehensive loss | (1,951) | (818) |
Total stockholders’ equity | 1,438,664 | 1,188,804 |
Total liabilities and stockholders’ equity | $ 2,094,249 | $ 2,052,217 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Aug. 27, 2022 | Aug. 28, 2021 |
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) | 101,322,834 | 95,882,908 |
Common stock shares outstanding (in shares) | 99,504,080 | 95,784,674 |
Treasury stock (in shares) | 1,818,754 | 98,234 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 1,168,678 | $ 1,005,613 | $ 816,641 |
Cost of goods sold | 723,117 | 595,847 | 492,313 |
Gross profit | 445,561 | 409,766 | 324,328 |
Operating expenses: | |||
Selling and marketing | 121,685 | 112,928 | 94,469 |
General and administrative | 103,832 | 106,181 | 106,251 |
Depreciation and amortization | 17,285 | 16,982 | 15,259 |
Business transaction costs | 0 | 0 | 27,125 |
Loss on impairment | 0 | 0 | 3,000 |
Total operating expenses | 242,802 | 236,091 | 246,104 |
Income from operations | 202,759 | 173,675 | 78,224 |
Other income (expense): | |||
Interest income | 15 | 84 | 1,516 |
Interest expense | (21,881) | (31,557) | (32,813) |
(Loss) gain in fair value change of warrant liability | (30,062) | (66,197) | 30,938 |
Gain on legal settlement | 0 | 5,000 | 0 |
Gain (loss) on foreign currency transactions | 191 | (5) | 658 |
Other (expense) income | (453) | (140) | 441 |
Total other (expense) income | (52,190) | (92,815) | 740 |
Income before income taxes | 150,569 | 80,860 | 78,964 |
Income tax expense | 41,995 | 39,980 | 13,326 |
Net income | 108,574 | 40,880 | 65,638 |
Other comprehensive income: | |||
Foreign currency translation, net of reclassification adjustments | (1,133) | 61 | (43) |
Comprehensive income | $ 107,441 | $ 40,941 | $ 65,595 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.10 | $ 0.43 | $ 0.70 |
Diluted (in dollars per share) | $ 1.08 | $ 0.42 | $ 0.35 |
Weighted average shares outstanding: | |||
Basic (in shares) | 98,754,913 | 95,743,413 | 93,968,953 |
Diluted (in shares) | 100,589,156 | 97,365,598 | 98,343,722 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Operating activities | |||
Net income | $ 108,574 | $ 40,880 | $ 65,638 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 19,299 | 18,174 | 16,007 |
Amortization of deferred financing costs and debt discount | 2,559 | 4,636 | 3,508 |
Stock compensation expense | 11,697 | 8,265 | 7,636 |
Loss on impairment | 0 | 0 | 3,000 |
Loss (gain) in fair value change of warrant liability | 30,062 | 66,197 | (30,938) |
Estimated credit losses | 601 | 1,114 | 0 |
Unrealized (gain) loss on foreign currency transactions | (191) | 5 | (658) |
Deferred income taxes | 11,789 | 9,403 | 8,216 |
Amortization of operating lease right-of-use asset | 6,620 | 5,051 | 3,848 |
Loss on operating lease right-of-use asset impairment | 0 | 686 | 0 |
Gain on lease termination | (30) | (156) | 0 |
Other | 681 | (16) | (389) |
Changes in operating assets and liabilities, net of acquisition: | |||
Accounts receivable, net | (21,796) | (22,284) | (18,288) |
Inventories | (29,508) | (39,349) | 23,880 |
Prepaid expenses | (138) | (1,202) | 680 |
Other current assets | (11,739) | 2,322 | (5,022) |
Accounts payable | 2,878 | 25,923 | (8,736) |
Accrued interest | 100 | (900) | (733) |
Accrued expenses and other current liabilities | (15,283) | 15,423 | (5,572) |
Other assets and liabilities | (5,536) | (2,083) | (3,156) |
Net cash provided by operating activities | 110,639 | 132,089 | 58,921 |
Investing activities | |||
Purchases of property and equipment | (5,232) | (5,911) | (1,736) |
Issuance of note receivable | (2,400) | (1,600) | (500) |
Proceeds from note receivable | 0 | 0 | 1,250 |
Acquisition of business, net of cash acquired | 0 | 0 | (982,075) |
Proceeds from sale of business | 0 | 5,800 | 0 |
Investments in intangible assets and other assets | (524) | (795) | (933) |
Net cash used in investing activities | (8,156) | (2,506) | (983,994) |
Financing activities | |||
Proceeds from option exercises | 4,343 | 700 | 4,206 |
Tax payments related to issuance of restricted stock units | (3,660) | (435) | (191) |
Proceeds from issuance of common stock | 0 | 0 | 352,542 |
Equity issuance costs | 0 | 0 | (3,323) |
Repurchase of common stock | (59,858) | 0 | 0 |
Payments on finance lease obligations | (313) | (314) | (374) |
Principal payments of long-term debt | (50,000) | (150,000) | (50,000) |
Repayments of Revolving Credit Facility | 0 | 0 | (25,000) |
Proceeds from issuance of long-term debt | 0 | 0 | 460,000 |
Proceeds from Revolving Credit Facility | 0 | 0 | 25,000 |
Deferred financing costs | (544) | 0 | (8,208) |
Net cash (used in) provided by financing activities | (110,032) | (150,049) | 754,652 |
Net decrease in cash | (7,549) | (20,466) | (170,421) |
Effect of exchange rate on cash | (302) | (36) | (73) |
Cash at beginning of period | 75,345 | ||
Cash at end of period | 67,494 | 75,345 | 95,847 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 19,222 | 27,821 | 30,038 |
Cash paid for taxes | 49,181 | 32,190 | 4,530 |
Non-cash proceeds from sale of business | 0 | 3,000 | 0 |
Non-cash additions to property and equipment | 743 | 1,203 | 0 |
Non-cash additions to intangible assets and other assets | 86 | 218 | 0 |
Issuance of common stock in extinguishment of warrant liabilities | 189,897 | 0 | 0 |
Operating lease right-of-use assets recognized after ASU 2016-02 transition | 6,872 | 26,222 | 3,554 |
Operating lease right-of-use assets recognized at ASU 2016-02 transition | 0 | 0 | 5,102 |
Finance lease right-of-use assets recognized at ASU 2016-02 transition | $ 0 | $ 0 | $ 1,185 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income |
Condensed Statement of Stockholders' Equity | ||||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,322,834 and 95,882,908 issued at August 27, 2022 and August 28, 2021, respectively | $ 820 | |||||
Treasury stock, 1,818,754 shares and 98,234 shares at cost at August 27, 2022 and August 28, 2021, respectively | (2,145) | |||||
Additional paid-in-capital | 715,740 | |||||
Retained earnings | (711) | |||||
Accumulated other comprehensive loss | $ (836) | |||||
Beginning balance (in shares) at Aug. 31, 2019 | 81,973,284 | |||||
Beginning balance, Treasury (in shares) at Aug. 31, 2019 | 98,234 | |||||
Beginning balance at Aug. 31, 2019 | $ 712,868 | |||||
Condensed Statement of Stockholders' Equity | ||||||
Net income | 65,638 | $ 65,638 | ||||
Stock-based compensation | 7,636 | $ 7,636 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (43) | $ (43) | ||||
Shares issued upon vesting of restricted stock units (in shares) | 58,974 | |||||
Shares issued upon vesting 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 | |||
Repurchase of common stock (in shares) | 0 | |||||
Public equity offering (in shares) | 13,379,205 | |||||
Public equity offering | $ 349,219 | $ 134 | 349,085 | |||
Ending balance (in shares) at Aug. 29, 2020 | 95,751,845 | |||||
Ending balance, Treasury (in shares) at Aug. 29, 2020 | 98,234 | |||||
Ending balance at Aug. 29, 2020 | $ 1,139,333 | |||||
Condensed Statement of Stockholders' Equity | ||||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,322,834 and 95,882,908 issued at August 27, 2022 and August 28, 2021, respectively | 958 | |||||
Treasury stock, 1,818,754 shares and 98,234 shares at cost at August 27, 2022 and August 28, 2021, respectively | (2,145) | |||||
Additional paid-in-capital | 1,076,472 | |||||
Retained earnings | 64,927 | |||||
Accumulated other comprehensive loss | (879) | |||||
Net income | 40,880 | 40,880 | ||||
Stock-based compensation | 8,265 | 8,265 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 61 | 61 | ||||
Shares issued upon vesting of restricted stock units (in shares) | 72,755 | |||||
Shares issued upon vesting of restricted stock units | (435) | $ 1 | (436) | |||
Exercise of options to purchase common stock (in shares) | 58,308 | |||||
Exercise of options to purchase common stock | $ 700 | $ 0 | 700 | |||
Repurchase of common stock (in shares) | 0 | |||||
Ending balance (in shares) at Aug. 28, 2021 | 95,882,908 | |||||
Ending balance, Treasury (in shares) at Aug. 28, 2021 | 98,234 | |||||
Ending balance at Aug. 28, 2021 | $ 1,188,804 | |||||
Condensed Statement of Stockholders' Equity | ||||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,322,834 and 95,882,908 issued at August 27, 2022 and August 28, 2021, respectively | 959 | |||||
Treasury stock, 1,818,754 shares and 98,234 shares at cost at August 27, 2022 and August 28, 2021, respectively | (2,145) | |||||
Additional paid-in-capital | 1,085,001 | |||||
Retained earnings | 105,807 | |||||
Accumulated other comprehensive loss | (818) | |||||
Net income | 108,574 | $ 108,574 | ||||
Stock-based compensation | 11,697 | 11,697 | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 14 | 14 | ||||
Foreign currency translation, net of reclassification adjustments | (1,147) | $ (1,147) | ||||
Shares issued upon vesting of restricted stock units (in shares) | 256,374 | |||||
Shares issued upon vesting of restricted stock units | (3,660) | $ 3 | (3,663) | |||
Exercise of options to purchase common stock (in shares) | 352,791 | |||||
Exercise of options to purchase common stock | $ 4,343 | $ 3 | 4,340 | |||
Repurchase of common stock (in shares) | 1,720,520 | 1,720,520 | ||||
Repurchase of common stock | $ (59,858) | $ (59,858) | ||||
Warrant conversion | $ 189,897 | $ 48 | $ 189,849 | |||
Warrant conversion (shares) | 4,830,761 | |||||
Ending balance (in shares) at Aug. 27, 2022 | 101,322,834 | |||||
Ending balance, Treasury (in shares) at Aug. 27, 2022 | 1,818,754 | |||||
Ending balance at Aug. 27, 2022 | $ 1,438,664 | |||||
Condensed Statement of Stockholders' Equity | ||||||
Common stock, $0.01 par value, 600,000,000 shares authorized, 101,322,834 and 95,882,908 issued at August 27, 2022 and August 28, 2021, respectively | 1,013 | |||||
Treasury stock, 1,818,754 shares and 98,234 shares at cost at August 27, 2022 and August 28, 2021, respectively | (62,003) | |||||
Additional paid-in-capital | 1,287,224 | |||||
Retained earnings | 214,381 | |||||
Accumulated other comprehensive loss | $ (1,951) |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 12 Months Ended |
Aug. 27, 2022 | |
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”) is a consumer packaged food and beverage company that aims to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements, and other product offerings. The product portfolio the Company develops, markets and sells consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Atkins®, Atkins Endulge®, Quest® and Quest Hero TM brand names. Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space. The Company’s nutritious snacking platform consists of brands that specialize in providing products for consumers that follow certain nutritional philosophies and health-and-wellness trends: Atkins® for those following a low-carb lifestyle and Quest® for consumers seeking 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 common stock of Simply Good Foods is listed on the Nasdaq Capital Market under the symbol “SMPL.” While the Company’s business has improved from the end of fiscal year 2021, driven in part by the increasing normalization of consumer mobility and shopper traffic patterns in brick-and-mortar retailers versus prior periods that were pressured by COVID-19 movement restrictions, the ultimate effect COVID-19, supply chain challenges, cost pressures, and the overall effects of the current high inflation environment on consumer purchasing patterns could have on our business continues to be not fully known. Additionally, management is continuing to monitor the conflict in Ukraine, especially regarding the availability and cost of raw materials that are produced in this region and Europe in general. Management is also monitoring for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary costs resulting either directly or indirectly from the crisis in Eastern Europe. Factors contributing to the uncertainty described above, among other things, include (i) continued supply chain disruptions, including disruptions resulting from labor shortages and other cost pressures, (ii) changes to customer operations, (iii) a reversal in improving consumer purchasing and consumption behavior, and (iv) unforeseen business disruptions or other effects due to current global geopolitical tensions, including relating directly or indirectly to the Ukraine crisis. 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 27, 2022 and August 28, 2021. The remaining financial statements include the fifty-two weeks ended August 27, 2022, the fifty-two weeks ended August 28, 2021, and the fifty-two weeks ended August 29, 2020. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Aug. 27, 2022 | |
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 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 “Quest Acquisition”). On November 7, 2019, Simply Good USA completed the Quest Acquisition via Simply Good USA’s acquisition of 100% of the equity interests of Voyage Holdings, LLC, and VMG Quest Blocker, Inc. (the “Target Companies”) for a cash purchase price of approximately $1.0 billion subject to customary post-closing adjustments for the Target Companies’ levels of cash, indebtedness, net working capital and transaction expenses as of the closing date. The Quest Acquisition was accounted for using the acquisition method of accounting prescribed by 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 companies 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. The Company completed its final assessment of purchase price allocation for the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition during the first quarter of fiscal year 2021. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at 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 Cash consists of cash on hand, deposits available on demand and other short-term, highly liquid investments with original maturities of three months or less. Accounts Receivable, Net and Expected Credit Losses 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 its allowance for doubtful accounts and the related expected credit loss based upon the Company’s historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. Accounts receivable are written off when determined to be uncollectible. Charges related to credit loss on accounts receivables from transactions with external customers were approximately $0.1 million, $0.6 million, and $0.5 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. As of August 27, 2022 and August 28, 2021, the allowance for doubtful accounts was $1.2 million and $1.1 million, respectively. Additionally, as of August 27, 2022, the Company had an expected credit loss reserve of $1.0 million on its $3.0 million note receivable related to the SimplyProtein Sale, as defined in Note 5, Goodwill and Intangibles, of which $0.5 million was recorded during each of the fifty-two weeks ended August 27, 2022 and August 28, 2021, 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. Inventories, as presented with the Consolidated Balance Sheets, is summarized as follows: (In thousands) August 27, 2022 August 28, 2021 Finished goods $ 116,047 $ 91,893 Raw materials 10,870 6,007 Reserve for obsolete inventory (1,438) (631) Total inventories $ 125,479 $ 97,269 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 weeks ended August 27, 2022, August 28, 2021, or August 29, 2020. Goodwill and Intangible Assets, Net Goodwill and Intangible assets, net result primarily from the consummation of the business combination between Conyers Park Acquisition Corp. and NCP-ATK Holdings, Inc. on July 7, 2017, which created the Company, and the Quest Acquisition. Intangible assets primarily includes 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 value of a reporting unit or an indefinite-lived intangible asset is less than its carrying amount. 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 or an indefinite-lived intangible asset 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, including goodwill, or the indefinite-lived intangible asset to its carrying amount. Impairment is indicated if the estimated fair value of the reporting unit or indefinite-lived intangible asset is less than the carrying amount, and an impairment charge is recognized for the differential. For fiscal year 2022, the Company performed a qualitative goodwill impairment assessment for its consolidated reporting unit and its indefinite-lived intangible assets. The qualitative assessments did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit and indefinite-lived intangibles had fair values in excess of their carrying values. Accordingly, no further impairment assessment was necessary, and the Company determined neither its reporting unit or any indefinite-lived intangibles were impaired. There were no impairment charges related to goodwill in the fifty-two weeks ended August 27, 2022 or since the inception of the Company. There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 27, 2022 or August 28, 2021. There was a $ 3.0 million 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. Warrant Accounting The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued private placement stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation. As of August 28, 2021, the Company had outstanding liability-classified private warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock (the “Private Warrants”). Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party. Each whole warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of August 27, 2022. During the reporting periods the Private Warrants were outstanding, they were precluded from equity classification, being liability-classified. The Company accounted for these Private Warrants as a derivative warrant liability in accordance with ASC 815-40. Accordingly, the Company recognized the Private Warrants as a liability at fair value and adjusted the Private Warrants to fair value at each reporting period through other income. The fair value adjustments were determined using a Black-Scholes option-pricing methodology (“Black-Scholes model”). The valuation was primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represented a Level 3 measurement within the fair value measurement hierarchy. The periodic remeasurement of the Private Warrants was reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income. 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. As of August 27, 2022 and August 28, 2021, the allowance for trade promotions was $23.9 million and $22.3 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 it is the principal or agent in these relationships. The Company has determined that it is the principal in all cases, as it retains the responsibility for fulfillment and risk of loss, as well as 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 Income 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 15, 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 relating to products shipped to customers were $91.7 million, $66.5 million, and $49.8 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. Advertising Costs Production costs related to television commercials are expensed when first aired. All other advertising costs are expensed when incurred or when the advertising service is received through Selling and marketing . Total advertising costs were $84.3 million, $74.9 million, and $55.3 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. Production costs related to television commercials not yet aired and prepaid advertising services not yet received are included in Prepaid expenses in the accompanying Consolidated Balance Sheets. As of August 27, 2022 and August 28, 2021, total prepaid advertising expenses were $2.0 million and $1.6 million, respectively. 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 $4.1 million, $3.5 million, and $4.0 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. Share-Based Compensation The Company uses share-based compensation, including stock options, restricted stock units, performance stock units, and stock appreciation rights, to provide long-term performance incentives for its employees, directors, and consultants of the Company. 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 $1.1 million, $1.4 million, and $1.3 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. 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 . 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 March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 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 and can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 and December 31, 2022. The amendments of this ASU should be applied on a prospective basis. On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to its credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”), as described in Note 7, Long-Term Debt and Line of Credit. In addition to replacing the London Interbank Offered Rate (“LIBOR”) as the Credit Agreement’s reference rate with the Secured Overnight Financing Rate (“SOFR”), the 2022 Repricing Amendment contemporaneously modified other terms that changed, or had the potential to change, the amount or timing of contractual cash flows as contemplated by the guidance in ASU 2020-04. As such, the contract modifications related to the 2022 Repricing Amendment were outside of the scope of the optional guidance in ASU 2020-04. The Company will continue to monitor the effects of rate reform, if any, on any new or amended contracts through December 31, 2022. The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes. This ASU was 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 GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The Company adopted this ASU as of the first day of fiscal year 2022. The adoption of this ASU did not have a material effect on the consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which provided updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within GAAP. The Company adopted this ASU as of the first day of fiscal year 2022 on a prospective basis. The adoption of this ASU did not have a material effect on the consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements. |
Business Combination
Business Combination | 12 Months Ended |
Aug. 27, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combination On August 21, 2019, Simply Good USA entered into the Purchase Agreement to acquire Quest. On November 7, 2019, Simply Good USA completed the Quest Acquisition 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 Quest Acquisition was funded 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. Business transaction costs within the Consolidated Statements of Income and Comprehensive Income for the fifty-two weeks ended August 29, 2020 was $27.1 million, which included $14.5 million of transaction advisory fees related to the Quest Acquisition, $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 Quest Acquisition was $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 Quest Acquisition. All transaction advisory fees relating to the Quest Acquisition were approved by the Company’s Audit Committee. The following table sets forth the final purchase price allocation of the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition, in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 25,359 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 912,295 Goodwill (4) 74,525 Total assets acquired and liabilities assumed $ 986,820 (1) Property and equipment, net primarily consisted 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 are consistent with the Company’s accounting policies. (2) Intangible assets were recorded at fair value consistent with ASC Topic 820, Fair Value Measurement, as a result of the Quest Acquisition. Intangible assets consisted of $750.0 million of indefinite brands and trademarks, $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 5 of the Consolidated Financial Statements. The fair value measurements of the assets and liabilities were 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 Topic 820, Fair Value Measurement, as a result of the Quest Acquisition. 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 was 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 Company completed its final assessment of purchase price allocation for the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition during the first quarter of fiscal 2021. Since the initial preliminary estimates reported in the first fiscal quarter of 2020, the Company updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of assets acquired and liabilities assumed in the table above. Specifically, the carrying amount of the intangible assets, net 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 $4.3 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 decreased $21.5 million. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date. The results of Quest’s operations have been included in the Company’s 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 Quest Acquisition been completed at the beginning of the fiscal year 2019, nor is it representative of future operating results of the Company. The following unaudited pro forma combined financial information presents combined results of the Company and Quest as if the Quest Acquisition had occurred at the beginning of fiscal 2019: 52-Weeks Ended (In thousands) August 29, 2020 Net sales $ 885,044 Gross profit $ 355,395 Net income $ 90,028 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Aug. 27, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net , as presented with the Consolidated Balance Sheets, is summarized as follows: (In thousands) August 27, 2022 August 28, 2021 Furniture and fixtures $ 7,232 $ 3,100 Computer equipment and software 1,432 1,093 Machinery and equipment 6,292 1,934 Leasehold improvements 9,883 8,219 Finance lease right-of-use-assets 1,185 1,185 Construction in progress 137 6,189 Property and equipment, gross 26,161 21,720 Less: accumulated depreciation (8,004) (5,136) Property and equipment, net $ 18,157 $ 16,584 Total depreciation expense was $3.2 million for the fifty-two weeks ended August 27, 2022, $2.3 million for the fifty-two weeks ended August 28, 2021, and $1.8 million for the fifty-two weeks ended August 29, 2020. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Aug. 27, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Goodwill and Intangibles Changes to Goodwill during the fifty-two weeks ended August 27, 2022 and the fifty-two weeks ended August 28, 2021 were as follows: (In thousands) Goodwill Balance as of August 29, 2020 $ 544,774 Acquisition of business measurement period adjustments 1,178 Sale of business (2,818) Balance as of August 28, 2021 $ 543,134 Balance as of August 27, 2022 $ 543,134 The change in Goodwill attributed to the acquisition of a business during the fifty-two weeks ended August 28, 2021 was the result of subsequent measurement period adjustments made to finalize the acquisition method of accounting for the Quest Acquisition as described in Note 3, Business Combination. Additionally, 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 former Canadian-based management team who had been responsible for this brand prior to the sale transaction (the “SimplyProtein Sale”). In addition to purchasing these assets, the buyer assumed certain liabilities related to the SimplyProtein brand’s business. There was no gain or loss recognized as a result of the SimplyProtein Sale. In conjunction with the SimplyProtein Sale, the Company disposed of $2.8 million of goodwill associated with the SimplyProtein business. During the fifty-two weeks ended August 27, 2022, the Company substantially completed its efforts to fully integrate its operations and organization structure after the Quest Acquisition. The Company aligned the nature of its production processes and the methods used to distribute products to customers for the Atkins® and Quest® brands. The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions. Additionally, the Company’s chief operating decision maker reviews operating results and forecasts at the consolidated level. As a result, the Company determined its operations are organized into one, consolidated operating segment and reporting unit. Previously, during the fifty-two weeks ended August 28, 2021 and August 29, 2020, the Company had two reporting units which were its operating segments, Atkins and Quest. For fiscal year 2022, the Company performed a qualitative goodwill impairment assessment for its consolidated reporting unit. The qualitative assessment did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit had a fair value in excess of its carrying value. Accordingly, no further impairment assessment was necessary, and the Company determined its reporting unit was not impaired. There were no impairment charges related to goodwill in the fifty-two weeks ended August 27, 2022 or since the inception of the Company. Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 27, 2022 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 41,703 $ 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 30,103 $ 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 Changes in Intangible assets, net during the fifty-two weeks ended August 27, 2022 were primarily related to recurring amortization expense. Changes in Intangible assets, net during the fifty-two weeks ended August 28, 2021 were primarily related to the SimplyProtein Sale and recurring amortization expense. In conjunction with the SimplyProtein Sale, the Company sold its SimplyProtein brand intangible asset, which had a carrying value of approximately $5.0 million as of the date of the sale. During the fifty-two weeks ended August 27, 2022, the Company performed qualitative impairment assessments for its indefinite-lived intangible assets. The qualitative assessments did not identify indicators of impairment, and it was determined that it was more likely than not each indefinite-lived intangible asset had fair values in excess of their carrying values. Accordingly, no further impairment assessment was necessary. There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 27, 2022 or August 28, 2021, respectively. There was a $ 3.0 million During the fifty-two weeks ended August 27, 2022, the Company did not identify indicators of impairment related to its finite-lived intangible assets, which are tested for impairment when events or circumstances indicated that the carrying amount may not be recoverable. There were no impairment charges related to the Company’s finite-lived intangible assets in the fifty-two weeks ended August 27, 2022, August 28, 2021, or August 29, 2020, respectively. Amortization expense related to intangible assets was $15.8 million for the fifty-two weeks ended August 27, 2022, $15.6 million for the fifty-two weeks ended August 28, 2021, and $14.0 million for the fifty-two weeks ended August 29, 2020. Estimated future amortization for each of the next five fiscal years and thereafter is as follows: (In thousands) Amortization 2023 $ 15,658 2024 14,917 2025 13,518 2026 13,517 2027 13,517 Thereafter 78,131 Total $ 149,258 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Aug. 27, 2022 | |
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 27, 2022 August 28, 2021 Accrued professional fees $ 1,039 $ 2,124 Accrued advertising allowances and claims 3,856 4,309 Accrued bonus expenses 12,761 16,689 Accrued freight expenses 2,065 2,812 Accrued payroll-related expenses 1,995 1,871 Accrued commissions 1,422 1,909 Income taxes payable 223 9,020 VAT payable 5,171 4,386 Accrued restructuring — 851 Accrued capital expenditures 350 788 Other accrued expenses 4,544 5,059 Current operating lease liabilities 6,249 3,788 Accrued expenses and other current liabilities $ 39,675 $ 53,606 |
Long-Term Debt and Line of Cred
Long-Term Debt and Line of Credit | 12 Months Ended |
Aug. 27, 2022 | |
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 at that time provided for (i) a term facility of $200.0 million (“Term Facility”) with a seven five On November 7, 2019, the Company entered into a second 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). The Incremental Facility Amendment was executed to partially finance the acquisition of Quest Nutrition, LLC on November 7, 2019. No amounts under the Term Facility were repaid as a result of the execution of the Incremental Facility Amendment. Effective as of December 16, 2021, the Company entered into a third amendment (the “Extension Amendment”) to the Credit Agreement. The Extension Amendment provided for an extension of the stated maturity date of the Revolving Commitments and Revolving Loans (each as defined in the Credit Agreement) from July 7, 2022 to the earlier of (i) 91 days prior to the maturity date of the Initial Term Loans on July 7, 2024 and (ii) December 16, 2026. On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to the Credit Agreement. The 2022 Repricing Amendment, among other things, (i) reduced the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to the effective date of the 2022 Repricing Amendment, (ii) reset the prepayment premium for the existing Initial Term Loans to apply to Repricing Transactions (as defined in the Credit Agreement) that occur within six months after the effective date of the 2022 Repricing Amendment, and (iii) implemented the Secured Overnight Financing Rate (“SOFR”) and related replacement provisions for the London Interbank Offered Rate (“LIBOR”). Effective as of the 2022 Repricing Amendment dated January 21, 2022, 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%, or (c) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) applicable for an interest period of one month plus 1.00% plus (x) 2.25% margin for the Term Loan or (y) 2.00% margin for the Revolving Credit Facility; or ii. SOFR plus a credit spread adjustment equal to 0.10% for one-month SOFR, 0.15% for up to three-month SOFR and 0.25% for up to six-month SOFR, subject to a floor of 0.50%, plus (x) 3.25% margin for the Term Loan or (y) 3.00% margin for the Revolving Credit Facility. The Simply Good Foods Company is not a borrower under the Credit Agreement and has not provided a guarantee of the Credit Agreement. Simply Good Foods USA, Inc., is the administrative borrower and certain other subsidiary holding companies are co-borrowers under the Credit Agreement. Each of the Company’s domestic subsidiaries that is not a named borrower under the Credit Agreement has provided a guarantee on a secured basis. As security for the payment or performance of the debt under the Credit Agreement, the borrowers and the guarantors have pledged certain equity interests in their respective subsidiaries and granted the lenders a security interest in substantially all of their domestic assets. All guarantors other than Quest Nutrition, LLC are holding companies with no assets other than their investments in their respective subsidiaries. The Credit Agreement contains certain financial and other covenants that limit the Company’s 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 6.00:1.00 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 27, 2022 and August 28, 2021, respectively. Long-term debt consists of the following: (In thousands) August 27, 2022 August 28, 2021 Term Facility (effective rate of 6.2% at August 27, 2022) $ 406,500 $ 456,500 Finance lease liabilities (effective rate of 5.6% at August 27, 2022) 406 690 Less: Deferred financing fees 3,620 5,636 Total debt 403,286 451,554 Less: Current finance lease liabilities 264 285 Long-term debt, net of deferred financing fees $ 403,022 $ 451,269 As of August 27, 2022, the Company had letters of credit in the amount of $3.5 million outstanding. These letters of credit offset against the $75.0 million availability of the Revolving Credit Facility and 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 27, 2022. The Company is not required to make principal payments on the Term Facility over the twelve months following the period ended August 27, 2022. The outstanding balance of the Term Facility is due upon its maturity in July 2024. As of August 27, 2022, aggregate principal maturities of debt for each of the next five fiscal years and thereafter are as follows: (In thousands) Principal maturities 2023 $ 264 2024 406,642 2025 — 2026 — 2027 — Thereafter — Total debt $ 406,906 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 27, 2022 and August 28, 2021, 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. 27, 2022 | |
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 used: 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. Level 3 Measurements As of August 28, 2021, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party. On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result of Conyers Park’s election to exercise the Private Warrants, there were no outstanding liability-classified Private Warrants as of August 27, 2022. Refer to Note 12, Stockholders’ Equity, for additional details regarding the cashless exercise of the Private Warrants. The Company utilized the Black-Scholes model to estimate the fair value of the Private Warrants at each reporting date. The application of the Black-Scholes model utilizes significant assumptions, including volatility. Significant judgment is required in determining the expected volatility, historically the key assumption, of the Private Warrants. In order to determine the most accurate measure of this volatility, the Company measured expected volatility based on several inputs, including considering a peer group of publicly traded companies, the Company’s implied volatility based on traded options, the implied volatility of comparable warrants, and the implied volatility of any outstanding public warrants during the periods they were outstanding. As a result of the unobservable inputs that were used to determine the expected volatility of the Private Warrants, the fair value measurement of these warrants reflected a Level 3 measurement within the fair value measurement hierarchy. There were no Private Warrants outstanding as of August 27, 2022. As of August 28, 2021 and August 29, 2020, the Company had 6,700,000 Private Warrants outstanding with a fair value price per Private Warrant of $23.86 and $13.98, respectively. The table below summarizes the inputs used to calculate the fair value of the warrant liability at each of the following reporting dates: August 28, 2021 August 29, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 35.35 $ 25.39 Dividend yield — % — % Expected term (in years) 0.86 1.85 Risk-free interest rate 0.06 % 0.14 % Expected volatility 21.70 % 29.20 % Per share value of warrants $ 23.86 $ 13.98 The periodic remeasurement of the warrant liability has been reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income. The adjustments for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 resulted in a loss of $30.1 million, a loss of $66.2 million and a gain of $30.9 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 27, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The sources of income before income taxes are as follows: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Domestic $ 148,080 $ 79,526 $ 78,418 Foreign 2,489 1,334 546 Total income before income taxes $ 150,569 $ 80,860 $ 78,964 Income tax expense was comprised of the following: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Current: Federal $ 22,733 $ 23,225 $ 3,056 State and local 6,226 5,800 1,835 Foreign 1,247 1,552 219 Total current expense $ 30,206 $ 30,577 $ 5,110 Deferred: Federal $ 11,218 $ 5,982 $ 6,747 State and local 1,614 3,096 1,637 Foreign (1,043) 325 (168) Total deferred income tax expense 11,789 9,403 8,216 Total tax expense $ 41,995 $ 39,980 $ 13,326 A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Statutory income tax expense: 21.0 % 21.0 % 21.0 % Change in fair value of warrant liabilities 5.0 20.5 (10.8) State income tax expense, net of federal 4.2 4.3 5.0 Valuation allowance (1.5) (1.2) (1.2) Taxes on foreign income above the U.S. tax 1.3 1.6 0.1 Change in tax rate (0.2) 1.8 1.5 Non-deductible transaction costs — — 0.1 Other permanent items (1.9) 1.4 1.2 Income tax expense 27.9 % 49.4 % 16.9 % The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities at August 27, 2022 and August 28, 2021 were as follows: (In thousands) August 27, 2022 August 28, 2021 Deferred tax assets Accounts receivable allowances $ 1,519 $ 2,353 Inventories write-downs 277 71 Accrued expenses 4,330 4,089 Net operating loss carryforwards 149 2,394 Share-based compensation 3,430 3,265 Tax credits 86 173 Lease liabilities 12,733 12,271 Other 5,985 5,665 Deferred tax assets 28,509 30,281 Valuation allowance — (2,218) Deferred tax asset, net of valuation allowance $ 28,509 $ 28,063 Deferred tax liabilities: Prepaid expense $ (699) $ (748) Excess tax over book depreciation (3,776) (2,121) Website development costs (403) (659) Intangible assets (116,682) (105,997) Lease right-of-use assets (11,660) (11,709) Other (833) (584) Deferred tax liabilities (134,053) (121,818) Net deferred tax liabilities $ (105,544) $ (93,755) The Company had state net operating loss carryforwards of $2.1 million and $2.5 million and foreign net operating losses of $0.0 million and $9.4 million at August 27, 2022 and August 28, 2021, respectively. The state net operating loss carryforwards will begin to expire in 2029. As of August 27, 2022, the Company has no valuation allowances on its deferred tax assets. The Company had previously recorded a valuation allowance of $2.2 million on deferred tax assets related to foreign net operating loss carryforwards generated within the United Kingdom and the Netherlands. As of August 27, 2022, the Company no longer had operations in either jurisdiction. Accordingly, during the fifty-two weeks ended August 27, 2022, the Company wrote off the United Kingdom and Netherlands net operating loss carryforwards and the corresponding $2.2 million valuation allowance as the net operating loss carryforwards were no longer utilizable. As of August 27, 2022, the Company does not intend to indefinitely reinvest its foreign earnings within its subsidiary in Canada and has not recognized any tax liabilities related to this jurisdiction. It is the Company’s intention to reinvest the earnings of its other non-U.S. subsidiaries in its Australia and New Zealand operations. As of August 27, 2022, 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 27, 2022 and August 28, 2021, 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 27, 2022 and August 28, 2021, the Company has not 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 27, 2022, tax years 2016 to 2021 remain subject to examination in the United States and the tax years 2016 to 2021 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. |
Leases
Leases | 12 Months Ended |
Aug. 27, 2022 | |
Leases [Abstract] | |
Leases, ASC 842 Disclosure | Leases The components of lease expense were as follows. 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) Statement of Operations Caption August 27, 2022 August 28, 2021 August 29, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 9,077 $ 6,752 $ 5,242 Variable lease cost (1) Cost of goods sold and General and administrative 3,068 1,681 1,648 Total operating lease cost $ 12,145 $ 8,433 $ 6,890 Short-term lease cost General and administrative $ — $ — $ 30 Finance lease cost: Amortization of right-of use assets Cost of goods sold $ 273 $ 273 $ 273 Interest on lease liabilities Interest expense 30 45 60 Total finance lease cost $ 303 $ 318 $ 333 Total lease cost $ 12,448 $ 8,751 $ 7,253 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. In conjunction with the Company’s restructuring activities as discussed in Note 16, Restructuring and Related Charges, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the fifty-two weeks ended August 27, 2022 and a $0.5 million impairment charge, net of a gain on lease termination, related to its leases in Toronto, Ontario and the Netherlands in the fifty-two weeks ended August 28, 2021. The effect of these restructuring activities has been included within General and administrative on the Consolidated Statements of Income and Comprehensive Income. Refer to Note 16, Restructuring and Related Charges, for additional information regarding restructuring activities. The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption August 27, 2022 August 28, 2021 Assets Operating lease right-of-use assets Other long-term assets $ 46,460 $ 46,197 Finance lease right-of-use assets Property and equipment, net 367 640 Total lease assets $ 46,827 $ 46,837 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 6,249 $ 3,788 Finance lease liabilities Current maturities of long-term debt 264 285 Long-term: Operating lease liabilities Other long-term liabilities 44,482 44,892 Finance lease liabilities Long-term debt, less current maturities 142 405 Total lease liabilities $ 51,137 $ 49,370 Future maturities of lease liabilities as of August 27, 2022 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2023 $ 8,452 $ 278 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 60,320 423 Less: Interest (9,589) (17) Present value of lease liabilities $ 50,731 $ 406 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: August 27, 2022 August 28, 2021 Weighted-average remaining lease term (in years) Operating leases 7.27 8.38 Finance leases 1.51 2.44 Weighted-average discount rate Operating leases 4.7 % 4.9 % Finance leases 5.6 % 5.6 % Supplemental and other information related to leases was as follows: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 9,656 $ 7,622 $ 6,534 Operating cash flows from finance leases $ 631 $ 37 $ 18 Financing cash flows from finance leases $ 313 $ 314 $ 338 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 27, 2022 | |
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 results, financial condition or cash flows. During the fifty-two weeks ended August 28, 2021, the Company received a $5.0 million gain on a legal settlement, which has been presented as an item within Other income (expense) in the Consolidated Statements of Income and Comprehensive Income. Other The Company enters 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 contracts in place and achievement of performance conditions as of August 27, 2022, the Company will be required to make payments of $0.9 million over the next year. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Aug. 27, 2022 | |
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 Quest Acquisition. Warrants to Purchase Common Stock As of August 28, 2021, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock. Such Private Warrants were held by Conyers Park, a related party. Each whole warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of August 27, 2022. As discussed in Note 8, Fair Value of Financial Instruments, the liability-classified warrants were remeasured on a recurring basis, primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represents a Level 3 measurement within the fair value measurement hierarchy. The periodic fair value remeasurements of the warrant liability, including the cashless exercise and the settlement of the warrant liability, have been reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income. Stock Repurchase Program The Company adopted a $50.0 million stock repurchase program on November 13, 2018. On April 13, 2022, the Company announced that its Board of Directors had approved the addition of $50.0 million to its stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $100.0 million. 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 weeks ended August 27, 2022, the Company repurchased 1,720,520 shares of common stock at an average share price of $34.79 per share. The Company did not repurchase any shares of common stock during the fifty-two weeks ended August 28, 2021 or August 29, 2020. As of August 27, 2022, approximately $38.0 million remained available under the stock repurchase program. Accumulated Other Comprehensive Loss During the fifty-two weeks ended August 27, 2022, the Company recognized a foreign currency translation gain of $1.1 million related to the liquidation of a foreign subsidiary. The gain is reflected as a component of Other income (expense) in Gain (loss) on foreign currency transactions within the Consolidated Statements of Income and Comprehensive Income. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Aug. 27, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings or loss per share is based on the weighted average number of common shares issued and outstanding. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all potentially dilutive securities, including the Company’s employee stock options, non-vested stock units, and Private Warrants for the periods during which they were outstanding. During periods when the effect of the outstanding Private Warrants was dilutive, the Company assumed share settlement of the instruments as of the beginning of the reporting period and adjusted the numerator to remove the change in fair value of the warrant liability and adjusted the denominator to include the dilutive shares, calculated using the treasury stock method. During periods when the effect of the outstanding Private Warrants was anti-dilutive, the share settlement was excluded. In periods in which the Company has a net loss, diluted loss 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 52-Weeks Ended 52-Weeks Ended (In thousands, except share and per share data) August 27, 2022 August 28, 2021 August 29, 2020 Basic earnings per share computation: Numerator: Net income available to common stock stockholders $ 108,574 $ 40,880 $ 65,638 Denominator: Weighted average common shares outstanding – basic 98,754,913 95,743,413 93,968,953 Basic earnings per share from net income $ 1.10 $ 0.43 $ 0.70 Diluted earnings per share computation: Numerator: Net income available to common stock stockholders $ 108,574 $ 40,880 $ 65,638 Gain in fair value change of warrant liability — — (30,938) Numerator for diluted earnings per share $ 108,574 $ 40,880 $ 34,700 Denominator: Weighted average common shares outstanding – basic 98,754,913 95,743,413 93,968,953 Private Warrants — — 3,327,656 Employee stock options 1,578,329 1,311,889 1,001,542 Non-vested stock units 255,914 310,296 45,571 Weighted average common shares – diluted 100,589,156 97,365,598 98,343,722 Diluted earnings per share from net income $ 1.08 $ 0.42 $ 0.35 Diluted earnings per share calculations for the fifty-two weeks ended August 27, 2022 and August 28, 2021 excluded 0.7 million and 4.1 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive. Diluted earnings per share calculations for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 excluded 0.3 million shares, an immaterial number of shares, and 0.6 million shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive. Diluted earnings per share calculations for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 excluded an immaterial number of non-vested stock units that would have been anti-dilutive. |
Omnibus Incentive Plan
Omnibus Incentive Plan | 12 Months Ended |
Aug. 27, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Omnibus Incentive Plan | Omnibus Incentive Plan Stock-based compensation includes stock options, restricted stock units, 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 its 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. For the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, the Company recorded stock-based compensation expense of $11.7 million, $8.3 million, and $7.6 million, respectively. 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 27, 2022, there were 3.9 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 weeks ended August 27, 2022: (In thousands, except share and per share data) Shares underlying options Weighted average Weighted average remaining life Aggregate intrinsic Outstanding as of August 28, 2021 2,993,163 $ 16.31 6.83 $ 57,227 Granted 138,479 40.88 Exercised (352,791) 12.31 Forfeited (2,300) 19.89 Outstanding as of August 27, 2022 2,776,551 $ 18.04 6.10 $ 39,702 Vested and expected to vest as of August 27, 2022 2,776,551 $ 18.04 6.10 $ 39,702 Exercisable as of August 27, 2022 2,191,573 $ 14.54 5.43 $ 37,191 The following table summarizes information about stock options outstanding at August 27, 2022: Range of Exercise Prices Number outstanding Weighted average Weighted average remaining life (years) Number exercisable Weighted average $ 12.00 - 17.77 1,655,003 $ 12.38 4.97 1,655,003 $ 12.38 $ 17.78 - 23.55 588,458 20.23 7.21 397,751 20.15 $ 23.56 - 29.33 194,611 24.33 7.18 138,819 24.25 $ 29.34 - 35.11 — — 0.00 — — $ 35.12 - 40.88 338,479 38.33 9.06 — — 2,776,551 $ 18.04 6.10 2,191,573 $ 14.54 The weighted average fair value of options granted during the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 were $15.32, $9.99 and $7.79, 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 52-Weeks Ended 52-Weeks Ended August 27, 2022 August 28, 2021 August 29, 2020 Expected volatility 37.07% 36.80 % - 38.75% 30.27 % - 33.82% Expected dividend yield —% —% —% Expected option term 6 6 6 Risk-free rate of return 1.26% 0.80 % - 0.935% 0.38 % - 1.80% Because the Company’s Incentive Plan has not been in place for a sufficient amount of time as compared to the expected stock option terms nor does the Company have sufficient history with changes in option vesting schedules and changes in the pool of employees receiving option grants, the Company estimates the expected term using its historical experience of the time awards have been outstanding as well as an expected time outstanding, which takes into account the award vesting and contractual term. Additionally, due to a lack of sufficient trading history for the Company’s common stock, expected stock price volatility is based on a combination of a sampling of comparable publicly traded companies and the Company’s historical common stock price activity. The Company believes the sample of comparable publicly traded companies used as inputs to its expected stock price volatility 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 27, 2022, the Company had $4.3 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 weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, the Company received $4.3 million, $0.7 million, and $4.2 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 weeks ended August 27, 2022: Units Weighted average Non-vested as of August 28, 2021 496,334 $ 24.56 Granted 171,795 39.97 Vested (180,096) 23.14 Forfeited (35,030) 28.71 Non-vested as of August 27, 2022 453,003 $ 30.68 As of August 27, 2022, the Company had $8.4 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.4 years. Performance Stock Units During the fifty-two weeks ended August 27, 2022, 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 in a three The following table summarizes performance stock unit activity for the fifty-two weeks ended August 27, 2022: Units Weighted average Non-vested as of August 28, 2021 380,097 $ 19.31 Granted 50,212 63.42 Vested (166,688) 11.93 Forfeited (8,598) 19.33 Non-vested as of August 27, 2022 255,023 $ 32.82 As of August 27, 2022, the Company had $3.6 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.0 years. Stock Appreciation Rights Stock appreciation rights (“SARs”) permit the holder to participate in the appreciation of the Company’s common stock price and are awarded to non-employee, consultants of the Company. 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 weeks ended August 27, 2022: Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 28, 2021 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of August 27, 2022 150,000 $ 24.20 7.18 Vested and expected to vest as of August 27, 2022 150,000 $ 24.20 7.18 Exercisable as of August 27, 2022 — $ — 0.00 As of August 27, 2022, the Company had an immaterial amount of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 0.2 years. |
Segment and Customer Informatio
Segment and Customer Information | 12 Months Ended |
Aug. 27, 2022 | |
Segment Reporting [Abstract] | |
Segment and Customer Information | Segment and Customer Information During the fifty-two weeks ended August 27, 2022, the Company substantially completed its efforts to fully integrate its operations and organization structure after the Quest Acquisition. The Company aligned the nature of its production processes and the methods used to distribute products to customers for the Atkins® and Quest® brands. The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions. Additionally, the Company’s chief operating decision maker reviews operating results and forecasts at the consolidated level. As a result, the Company determined its operations are organized into one, consolidated operating segment and reportable segment. Previously, during the fifty-two weeks ended August 28, 2021 and August 29, 2020, the Company had two operating segments, Atkins and Quest, which were aggregated into one reporting segment due to similar financial, economic and operating characteristics. Reconciliation 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 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 North America (1) Atkins $ 540,328 $ 506,860 $ 501,472 Quest 593,943 453,619 286,803 Total North America 1,134,271 960,479 788,275 International 34,407 45,134 28,366 Total $ 1,168,678 $ 1,005,613 $ 816,641 (1) The North America geographic area consists of net sales substantially related to the United States and there is no individual foreign country to which more than 10% of the Company’s net sales are attributed or that is otherwise deemed individually material. The following is a summary of long lived assets by geographic area: (In thousands) August 27, 2022 August 28, 2021 Long lived assets North America (1) $ 18,157 $ 16,584 Total $ 18,157 $ 16,584 (1) The North America geographic area consists of long-lived assets substantially related to the United States and there is no individual foreign country in which more than 10% of the Company’s long-lived assets are located or that is otherwise deemed individually material. Significant Customers Credit risk for the Company was concentrated in three customers who each comprised more than 10% of the Company’s total sales for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020. 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended August 27, 2022 August 28, 2021 August 29, 2020 Customer 1 31 % 31 % 34 % Customer 2 13 % 12 % 10 % Customer 3 10 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. At August 27, 2022 and August 28, 2021, 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 27, 2022 August 28, 2021 Customer 1 $ 44,638 34 % $ 37,483 34 % Customer 2 $ 21,829 16 % $ 27,962 25 % Customer 3 $ 18,521 14 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. 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 | 12 Months Ended |
Aug. 27, 2022 | |
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 created a fully integrated organization with its completed Quest Acquisition. The new organization design became effective on August 31, 2020. These restructuring plans primarily included workforce reductions, changes in management structure, and the relocation of business activities from one location to another. The Company substantially completed its restructuring activities during the fifty-two weeks ended August 27, 2022. Since the announcement of the restructuring activities in May 2020, the Company incurred aggregate restructuring and restructuring-related costs of $9.9 million. The one-time termination benefits and employee severance costs incurred in relation to these restructuring activities were accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, and ASC Topic 712, Compensation - Nonretirement Post-employment Benefits, respectively. The Company recognized a liability and the related expense for these restructuring costs when the liability was incurred and could be measured. Restructuring accruals were based upon management estimates at the time and could change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded. The effect of these restructuring activities was included within General and administrative on the Consolidated Statements of Income and Comprehensive Income. Changes to the restructuring liability during the fifty-two weeks ended August 27, 2022 and August 28, 2021 were as follows: (In thousands) Termination benefits and severance Other Restructuring liability Balance as of August 29, 2020 $ 4,139 $ — $ 4,139 Charges 3,458 342 3,800 Cash payments (6,746) (342) (7,088) Balance as of August 28, 2021 $ 851 $ — $ 851 Charges 52 76 128 Cash payments (903) (76) (979) Balance as of August 27, 2022 $ — $ — $ — 0.1 million |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Policies) | 12 Months Ended |
Aug. 27, 2022 | |
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 27, 2022 and August 28, 2021. The remaining financial statements include the fifty-two weeks ended August 27, 2022, the fifty-two weeks ended August 28, 2021, and the fifty-two weeks ended August 29, 2020. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Aug. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 Combination | Business Combination 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 “Quest Acquisition”). On November 7, 2019, Simply Good USA completed the Quest Acquisition via Simply Good USA’s acquisition of 100% of the equity interests of Voyage Holdings, LLC, and VMG Quest Blocker, Inc. (the “Target Companies”) for a cash purchase price of approximately $1.0 billion subject to customary post-closing adjustments for the Target Companies’ levels of cash, indebtedness, net working capital and transaction expenses as of the closing date. The Quest Acquisition was accounted for using the acquisition method of accounting prescribed by 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 companies 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. The Company completed its final assessment of purchase price allocation for the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition during the first quarter of fiscal year 2021. Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at 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 | Cash Cash consists of cash on hand, deposits available on demand and other short-term, highly liquid investments with original maturities of three months or less. |
Accounts Receivable, Net and Expected Credit Losses | Accounts Receivable, Net and Expected Credit Losses 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 its allowance for doubtful accounts and the related expected credit loss based upon the Company’s historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts. Accounts receivable are written off when determined to be uncollectible. Charges related to credit loss on accounts receivables from transactions with external customers were approximately $0.1 million, $0.6 million, and $0.5 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. As of August 27, 2022 and August 28, 2021, the allowance for doubtful accounts was $1.2 million and $1.1 million, respectively. Additionally, as of August 27, 2022, the Company had an expected credit loss reserve of $1.0 million on its $3.0 million note receivable related to the SimplyProtein Sale, as defined in Note 5, Goodwill and Intangibles, of which $0.5 million was recorded during each of the fifty-two weeks ended August 27, 2022 and August 28, 2021, 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. Inventories, as presented with the Consolidated Balance Sheets, is summarized as follows: (In thousands) August 27, 2022 August 28, 2021 Finished goods $ 116,047 $ 91,893 Raw materials 10,870 6,007 Reserve for obsolete inventory (1,438) (631) Total inventories $ 125,479 $ 97,269 |
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 weeks ended August 27, 2022, August 28, 2021, or August 29, 2020. |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill and Intangible assets, net result primarily from the consummation of the business combination between Conyers Park Acquisition Corp. and NCP-ATK Holdings, Inc. on July 7, 2017, which created the Company, and the Quest Acquisition. Intangible assets primarily includes 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 value of a reporting unit or an indefinite-lived intangible asset is less than its carrying amount. 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 or an indefinite-lived intangible asset 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, including goodwill, or the indefinite-lived intangible asset to its carrying amount. Impairment is indicated if the estimated fair value of the reporting unit or indefinite-lived intangible asset is less than the carrying amount, and an impairment charge is recognized for the differential. For fiscal year 2022, the Company performed a qualitative goodwill impairment assessment for its consolidated reporting unit and its indefinite-lived intangible assets. The qualitative assessments did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit and indefinite-lived intangibles had fair values in excess of their carrying values. Accordingly, no further impairment assessment was necessary, and the Company determined neither its reporting unit or any indefinite-lived intangibles were impaired. There were no impairment charges related to goodwill in the fifty-two weeks ended August 27, 2022 or since the inception of the Company. There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 27, 2022 or August 28, 2021. There was a $ 3.0 million |
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. |
Warrant Accounting | Warrant Accounting The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued private placement stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation. As of August 28, 2021, the Company had outstanding liability-classified private warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock (the “Private Warrants”). Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party. Each whole warrant entitled the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock. As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of August 27, 2022. During the reporting periods the Private Warrants were outstanding, they were precluded from equity classification, being liability-classified. The Company accounted for these Private Warrants as a derivative warrant liability in accordance with ASC 815-40. Accordingly, the Company recognized the Private Warrants as a liability at fair value and adjusted the Private Warrants to fair value at each reporting period through other income. The fair value adjustments were determined using a Black-Scholes option-pricing methodology (“Black-Scholes model”). The valuation was primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represented a Level 3 measurement within the fair value measurement hierarchy. The periodic remeasurement of the Private Warrants was reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income. |
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. As of August 27, 2022 and August 28, 2021, the allowance for trade promotions was $23.9 million and $22.3 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 it is the principal or agent in these relationships. The Company has determined that it is the principal in all cases, as it retains the responsibility for fulfillment and risk of loss, as well as 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 Income 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 15, 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 relating to products shipped to customers were $91.7 million, $66.5 million, and $49.8 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. |
Advertising Cost | Advertising Costs Production costs related to television commercials are expensed when first aired. All other advertising costs are expensed when incurred or when the advertising service is received through Selling and marketing . Total advertising costs were $84.3 million, $74.9 million, and $55.3 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. Production costs related to television commercials not yet aired and prepaid advertising services not yet received are included in Prepaid expenses in the accompanying Consolidated Balance Sheets. As of August 27, 2022 and August 28, 2021, total prepaid advertising expenses were $2.0 million and $1.6 million, respectively. |
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 $4.1 million, $3.5 million, and $4.0 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. |
Share-Based Compensation | Share-Based Compensation The Company uses share-based compensation, including stock options, restricted stock units, performance stock units, and stock appreciation rights, to provide long-term performance incentives for its employees, directors, and consultants of the Company. 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 $1.1 million, $1.4 million, and $1.3 million for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020, respectively. |
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 . 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 March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 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 and can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 and December 31, 2022. The amendments of this ASU should be applied on a prospective basis. On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to its credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”), as described in Note 7, Long-Term Debt and Line of Credit. In addition to replacing the London Interbank Offered Rate (“LIBOR”) as the Credit Agreement’s reference rate with the Secured Overnight Financing Rate (“SOFR”), the 2022 Repricing Amendment contemporaneously modified other terms that changed, or had the potential to change, the amount or timing of contractual cash flows as contemplated by the guidance in ASU 2020-04. As such, the contract modifications related to the 2022 Repricing Amendment were outside of the scope of the optional guidance in ASU 2020-04. The Company will continue to monitor the effects of rate reform, if any, on any new or amended contracts through December 31, 2022. The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes. This ASU was 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 GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. The Company adopted this ASU as of the first day of fiscal year 2022. The adoption of this ASU did not have a material effect on the consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which provided updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within GAAP. The Company adopted this ASU as of the first day of fiscal year 2022 on a prospective basis. The adoption of this ASU did not have a material effect on the consolidated financial statements. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of inventories | Inventories, as presented with the Consolidated Balance Sheets, is summarized as follows: (In thousands) August 27, 2022 August 28, 2021 Finished goods $ 116,047 $ 91,893 Raw materials 10,870 6,007 Reserve for obsolete inventory (1,438) (631) Total inventories $ 125,479 $ 97,269 |
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. 27, 2022 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table sets forth the final purchase price allocation of the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition, in thousands: Assets acquired: Cash and cash equivalents $ 4,745 Accounts receivable, net 25,359 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 912,295 Goodwill (4) 74,525 Total assets acquired and liabilities assumed $ 986,820 (1) Property and equipment, net primarily consisted 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 are consistent with the Company’s accounting policies. (2) Intangible assets were recorded at fair value consistent with ASC Topic 820, Fair Value Measurement, as a result of the Quest Acquisition. Intangible assets consisted of $750.0 million of indefinite brands and trademarks, $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 5 of the Consolidated Financial Statements. The fair value measurements of the assets and liabilities were 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 Topic 820, Fair Value Measurement, as a result of the Quest Acquisition. 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 was 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. |
Revenues of Acquired Entity | The results of Quest’s operations have been included in the Company’s 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 Quest Acquisition had occurred at the beginning of fiscal 2019: 52-Weeks Ended (In thousands) August 29, 2020 Net sales $ 885,044 Gross profit $ 355,395 Net income $ 90,028 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment, net , as presented with the Consolidated Balance Sheets, is summarized as follows: (In thousands) August 27, 2022 August 28, 2021 Furniture and fixtures $ 7,232 $ 3,100 Computer equipment and software 1,432 1,093 Machinery and equipment 6,292 1,934 Leasehold improvements 9,883 8,219 Finance lease right-of-use-assets 1,185 1,185 Construction in progress 137 6,189 Property and equipment, gross 26,161 21,720 Less: accumulated depreciation (8,004) (5,136) Property and equipment, net $ 18,157 $ 16,584 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes to Goodwill during the fifty-two weeks ended August 27, 2022 and the fifty-two weeks ended August 28, 2021 were as follows: (In thousands) Goodwill Balance as of August 29, 2020 $ 544,774 Acquisition of business measurement period adjustments 1,178 Sale of business (2,818) Balance as of August 28, 2021 $ 543,134 Balance as of August 27, 2022 $ 543,134 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 27, 2022 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 41,703 $ 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 30,103 $ 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net in the Consolidated Balance Sheets consist of the following: August 27, 2022 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 41,703 $ 132,297 Licensing agreements 13 years 22,000 8,581 13,419 Proprietary recipes and formulas 7 years 7,000 5,131 1,869 Software and website development costs 3 - 5 years 5,863 4,190 1,673 $ 1,182,863 $ 59,605 $ 1,123,258 August 28, 2021 (In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying amount Intangible assets with indefinite life: Brands and trademarks Indefinite life $ 974,000 $ — $ 974,000 Intangible assets with finite lives: Customer relationships 15 years $ 174,000 $ 30,103 $ 143,897 Licensing agreements 13 years 22,000 6,664 15,336 Proprietary recipes and formulas 7 years 7,000 4,131 2,869 Software and website development costs 3 - 5 years 5,560 2,924 2,636 Intangible assets in progress 3 - 5 years 303 — 303 $ 1,182,863 $ 43,822 $ 1,139,041 |
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 2023 $ 15,658 2024 14,917 2025 13,518 2026 13,517 2027 13,517 Thereafter 78,131 Total $ 149,258 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities in the Consolidated Balance Sheets were comprised of the following: (In thousands) August 27, 2022 August 28, 2021 Accrued professional fees $ 1,039 $ 2,124 Accrued advertising allowances and claims 3,856 4,309 Accrued bonus expenses 12,761 16,689 Accrued freight expenses 2,065 2,812 Accrued payroll-related expenses 1,995 1,871 Accrued commissions 1,422 1,909 Income taxes payable 223 9,020 VAT payable 5,171 4,386 Accrued restructuring — 851 Accrued capital expenditures 350 788 Other accrued expenses 4,544 5,059 Current operating lease liabilities 6,249 3,788 Accrued expenses and other current liabilities $ 39,675 $ 53,606 |
Long-Term Debt and Line of Cr_2
Long-Term Debt and Line of Credit (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following: (In thousands) August 27, 2022 August 28, 2021 Term Facility (effective rate of 6.2% at August 27, 2022) $ 406,500 $ 456,500 Finance lease liabilities (effective rate of 5.6% at August 27, 2022) 406 690 Less: Deferred financing fees 3,620 5,636 Total debt 403,286 451,554 Less: Current finance lease liabilities 264 285 Long-term debt, net of deferred financing fees $ 403,022 $ 451,269 |
Principal maturities of debt | As of August 27, 2022, aggregate principal maturities of debt for each of the next five fiscal years and thereafter are as follows: (In thousands) Principal maturities 2023 $ 264 2024 406,642 2025 — 2026 — 2027 — Thereafter — Total debt $ 406,906 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | August 28, 2021 August 29, 2020 Exercise price $ 11.50 $ 11.50 Stock price $ 35.35 $ 25.39 Dividend yield — % — % Expected term (in years) 0.86 1.85 Risk-free interest rate 0.06 % 0.14 % Expected volatility 21.70 % 29.20 % Per share value of warrants $ 23.86 $ 13.98 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
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 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Domestic $ 148,080 $ 79,526 $ 78,418 Foreign 2,489 1,334 546 Total income before income taxes $ 150,569 $ 80,860 $ 78,964 |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense was comprised of the following: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Current: Federal $ 22,733 $ 23,225 $ 3,056 State and local 6,226 5,800 1,835 Foreign 1,247 1,552 219 Total current expense $ 30,206 $ 30,577 $ 5,110 Deferred: Federal $ 11,218 $ 5,982 $ 6,747 State and local 1,614 3,096 1,637 Foreign (1,043) 325 (168) Total deferred income tax expense 11,789 9,403 8,216 Total tax expense $ 41,995 $ 39,980 $ 13,326 |
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 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Statutory income tax expense: 21.0 % 21.0 % 21.0 % Change in fair value of warrant liabilities 5.0 20.5 (10.8) State income tax expense, net of federal 4.2 4.3 5.0 Valuation allowance (1.5) (1.2) (1.2) Taxes on foreign income above the U.S. tax 1.3 1.6 0.1 Change in tax rate (0.2) 1.8 1.5 Non-deductible transaction costs — — 0.1 Other permanent items (1.9) 1.4 1.2 Income tax expense 27.9 % 49.4 % 16.9 % |
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 27, 2022 and August 28, 2021 were as follows: (In thousands) August 27, 2022 August 28, 2021 Deferred tax assets Accounts receivable allowances $ 1,519 $ 2,353 Inventories write-downs 277 71 Accrued expenses 4,330 4,089 Net operating loss carryforwards 149 2,394 Share-based compensation 3,430 3,265 Tax credits 86 173 Lease liabilities 12,733 12,271 Other 5,985 5,665 Deferred tax assets 28,509 30,281 Valuation allowance — (2,218) Deferred tax asset, net of valuation allowance $ 28,509 $ 28,063 Deferred tax liabilities: Prepaid expense $ (699) $ (748) Excess tax over book depreciation (3,776) (2,121) Website development costs (403) (659) Intangible assets (116,682) (105,997) Lease right-of-use assets (11,660) (11,709) Other (833) (584) Deferred tax liabilities (134,053) (121,818) Net deferred tax liabilities $ (105,544) $ (93,755) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Leases [Abstract] | |
Components of lease expense | The components of lease expense were as follows. 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) Statement of Operations Caption August 27, 2022 August 28, 2021 August 29, 2020 Operating lease cost: Lease cost Cost of goods sold and General and administrative $ 9,077 $ 6,752 $ 5,242 Variable lease cost (1) Cost of goods sold and General and administrative 3,068 1,681 1,648 Total operating lease cost $ 12,145 $ 8,433 $ 6,890 Short-term lease cost General and administrative $ — $ — $ 30 Finance lease cost: Amortization of right-of use assets Cost of goods sold $ 273 $ 273 $ 273 Interest on lease liabilities Interest expense 30 45 60 Total finance lease cost $ 303 $ 318 $ 333 Total lease cost $ 12,448 $ 8,751 $ 7,253 (1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs. |
Lease assets and liabilities | The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows: (In thousands) Balance Sheets Caption August 27, 2022 August 28, 2021 Assets Operating lease right-of-use assets Other long-term assets $ 46,460 $ 46,197 Finance lease right-of-use assets Property and equipment, net 367 640 Total lease assets $ 46,827 $ 46,837 Liabilities Current: Operating lease liabilities Accrued expenses and other current liabilities $ 6,249 $ 3,788 Finance lease liabilities Current maturities of long-term debt 264 285 Long-term: Operating lease liabilities Other long-term liabilities 44,482 44,892 Finance lease liabilities Long-term debt, less current maturities 142 405 Total lease liabilities $ 51,137 $ 49,370 |
Future maturities of operating lease liabilities | Future maturities of lease liabilities as of August 27, 2022 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2023 $ 8,452 $ 278 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 60,320 423 Less: Interest (9,589) (17) Present value of lease liabilities $ 50,731 $ 406 |
Future maturities of finance lease liabilities | Future maturities of lease liabilities as of August 27, 2022 were as follows: (In thousands) Operating Leases Finance Leases Fiscal year ending: 2023 $ 8,452 $ 278 2024 9,424 145 2025 8,680 — 2026 6,880 — 2027 7,036 — Thereafter 19,848 — Total lease payments 60,320 423 Less: Interest (9,589) (17) Present value of lease liabilities $ 50,731 $ 406 |
Weighted-average remaining lease terms and discount rates | The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows: August 27, 2022 August 28, 2021 Weighted-average remaining lease term (in years) Operating leases 7.27 8.38 Finance leases 1.51 2.44 Weighted-average discount rate Operating leases 4.7 % 4.9 % Finance leases 5.6 % 5.6 % |
Supplemental cash flow information related to leases | Supplemental and other information related to leases was as follows: 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 9,656 $ 7,622 $ 6,534 Operating cash flows from finance leases $ 631 $ 37 $ 18 Financing cash flows from finance leases $ 313 $ 314 $ 338 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
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 52-Weeks Ended 52-Weeks Ended (In thousands, except share and per share data) August 27, 2022 August 28, 2021 August 29, 2020 Basic earnings per share computation: Numerator: Net income available to common stock stockholders $ 108,574 $ 40,880 $ 65,638 Denominator: Weighted average common shares outstanding – basic 98,754,913 95,743,413 93,968,953 Basic earnings per share from net income $ 1.10 $ 0.43 $ 0.70 Diluted earnings per share computation: Numerator: Net income available to common stock stockholders $ 108,574 $ 40,880 $ 65,638 Gain in fair value change of warrant liability — — (30,938) Numerator for diluted earnings per share $ 108,574 $ 40,880 $ 34,700 Denominator: Weighted average common shares outstanding – basic 98,754,913 95,743,413 93,968,953 Private Warrants — — 3,327,656 Employee stock options 1,578,329 1,311,889 1,001,542 Non-vested stock units 255,914 310,296 45,571 Weighted average common shares – diluted 100,589,156 97,365,598 98,343,722 Diluted earnings per share from net income $ 1.08 $ 0.42 $ 0.35 |
Omnibus Incentive Plan (Tables)
Omnibus Incentive Plan (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock options activity | The following table summarizes stock option activity for the fifty-two weeks ended August 27, 2022: (In thousands, except share and per share data) Shares underlying options Weighted average Weighted average remaining life Aggregate intrinsic Outstanding as of August 28, 2021 2,993,163 $ 16.31 6.83 $ 57,227 Granted 138,479 40.88 Exercised (352,791) 12.31 Forfeited (2,300) 19.89 Outstanding as of August 27, 2022 2,776,551 $ 18.04 6.10 $ 39,702 Vested and expected to vest as of August 27, 2022 2,776,551 $ 18.04 6.10 $ 39,702 Exercisable as of August 27, 2022 2,191,573 $ 14.54 5.43 $ 37,191 |
Schedule of stock option exercise price ranges | The following table summarizes information about stock options outstanding at August 27, 2022: Range of Exercise Prices Number outstanding Weighted average Weighted average remaining life (years) Number exercisable Weighted average $ 12.00 - 17.77 1,655,003 $ 12.38 4.97 1,655,003 $ 12.38 $ 17.78 - 23.55 588,458 20.23 7.21 397,751 20.15 $ 23.56 - 29.33 194,611 24.33 7.18 138,819 24.25 $ 29.34 - 35.11 — — 0.00 — — $ 35.12 - 40.88 338,479 38.33 9.06 — — 2,776,551 $ 18.04 6.10 2,191,573 $ 14.54 |
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 52-Weeks Ended 52-Weeks Ended August 27, 2022 August 28, 2021 August 29, 2020 Expected volatility 37.07% 36.80 % - 38.75% 30.27 % - 33.82% Expected dividend yield —% —% —% Expected option term 6 6 6 Risk-free rate of return 1.26% 0.80 % - 0.935% 0.38 % - 1.80% |
Schedule of restricted stock units activity | The following table summarizes restricted stock unit activity for the fifty-two weeks ended August 27, 2022: Units Weighted average Non-vested as of August 28, 2021 496,334 $ 24.56 Granted 171,795 39.97 Vested (180,096) 23.14 Forfeited (35,030) 28.71 Non-vested as of August 27, 2022 453,003 $ 30.68 |
Schedule of non-vested performance-based units activity | The following table summarizes performance stock unit activity for the fifty-two weeks ended August 27, 2022: Units Weighted average Non-vested as of August 28, 2021 380,097 $ 19.31 Granted 50,212 63.42 Vested (166,688) 11.93 Forfeited (8,598) 19.33 Non-vested as of August 27, 2022 255,023 $ 32.82 |
Schedule of stock appreciation rights activity | The following table summarizes SARs activity for the fifty-two weeks ended August 27, 2022: Shares Underlying SARs Weighted average Weighted average remaining contractual life (in years) Outstanding as of August 28, 2021 150,000 $ 24.20 Granted — — Exercised — — Forfeited — — Outstanding as of August 27, 2022 150,000 $ 24.20 7.18 Vested and expected to vest as of August 27, 2022 150,000 $ 24.20 7.18 Exercisable as of August 27, 2022 — $ — 0.00 |
Segment and Customer Informat_2
Segment and Customer Information (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
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 52-Weeks Ended 52-Weeks Ended (In thousands) August 27, 2022 August 28, 2021 August 29, 2020 North America (1) Atkins $ 540,328 $ 506,860 $ 501,472 Quest 593,943 453,619 286,803 Total North America 1,134,271 960,479 788,275 International 34,407 45,134 28,366 Total $ 1,168,678 $ 1,005,613 $ 816,641 (1) The North America geographic area consists of net sales substantially related to the United States and there is no individual foreign country to which more than 10% of the Company’s net sales are attributed or that is otherwise deemed individually material. The following is a summary of long lived assets by geographic area: (In thousands) August 27, 2022 August 28, 2021 Long lived assets North America (1) $ 18,157 $ 16,584 Total $ 18,157 $ 16,584 (1) The North America geographic area consists of long-lived assets substantially related to the United States and there is no individual foreign country in which more than 10% of the Company’s long-lived assets are located or that is otherwise deemed individually material. |
Schedules of Concentration of Risk, by Risk Factor | Credit risk for the Company was concentrated in three customers who each comprised more than 10% of the Company’s total sales for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020. 52-Weeks Ended 52-Weeks Ended 52-Weeks Ended August 27, 2022 August 28, 2021 August 29, 2020 Customer 1 31 % 31 % 34 % Customer 2 13 % 12 % 10 % Customer 3 10 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. At August 27, 2022 and August 28, 2021, 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 27, 2022 August 28, 2021 Customer 1 $ 44,638 34 % $ 37,483 34 % Customer 2 $ 21,829 16 % $ 27,962 25 % Customer 3 $ 18,521 14 % n/a n/a n/a - Not applicable as the customer was not significant during these fiscal years. |
Restructuring and related cha_2
Restructuring and related charges (Tables) | 12 Months Ended |
Aug. 27, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | Changes to the restructuring liability during the fifty-two weeks ended August 27, 2022 and August 28, 2021 were as follows: (In thousands) Termination benefits and severance Other Restructuring liability Balance as of August 29, 2020 $ 4,139 $ — $ 4,139 Charges 3,458 342 3,800 Cash payments (6,746) (342) (7,088) Balance as of August 28, 2021 $ 851 $ — $ 851 Charges 52 76 128 Cash payments (903) (76) (979) Balance as of August 27, 2022 $ — $ — $ — |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||||||
Nov. 07, 2019 | Aug. 21, 2019 | Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Jan. 07, 2022 | Sep. 24, 2020 | Jul. 06, 2017 | |
Entity Information | ||||||||
Credit loss charges on accounts receivable | $ 100,000 | $ 600,000 | $ 500,000 | |||||
Allowance for doubtful accounts | 1,200,000 | 1,100,000 | ||||||
Reserve for credit loss on note receivable | 1,000,000 | |||||||
Note receivable from SimplyProtein Sale | $ 3,000,000 | |||||||
Allowance for Credit Loss, Period Increase (Decrease) | $ 500,000 | 500,000 | ||||||
Reserve for inventory four to six months from expiration | 50% | |||||||
Reserve for inventory within three months of expiration | 100% | |||||||
Finished goods | $ 116,047,000 | 91,893,000 | ||||||
Raw materials | 10,870,000 | 6,007,000 | ||||||
Reserve for obsolete inventory | (1,438,000) | (631,000) | ||||||
Inventories | 125,479,000 | 97,269,000 | ||||||
Impairment of property and equipment | 0 | |||||||
Goodwill impairment charges | 0 | |||||||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill) | Loss on impairment | |||||||
Shares, Issued | 4,830,761 | |||||||
CustomerTradeAllowance | 23,900,000 | 22,300,000 | ||||||
Cost of goods sold | 723,117,000 | 595,847,000 | $ 492,313,000 | |||||
Advertising expense | 84,300,000 | 74,900,000 | 55,300,000 | |||||
Prepaid advertising | 2,000,000 | 1,600,000 | ||||||
Research and development expenses | 4,100,000 | 3,500,000 | 4,000,000 | |||||
Defined contribution plan expense | $ 1,100,000 | $ 1,400,000 | $ 1,300,000 | |||||
Private Warrants | ||||||||
Entity Information | ||||||||
Outstanding warrant issued (in shares) | 0 | 6,700,000 | 6,700,000 | |||||
Warrant price per share (in dollars per share) | $ 11.50 | $ 11.50 | $ 11.50 | |||||
Shipping and Handling | ||||||||
Entity Information | ||||||||
Cost of goods sold | $ 91,700,000 | $ 66,500,000 | $ 49,800,000 | |||||
Furniture and fixtures | ||||||||
Entity Information | ||||||||
Estimated useful lives | 7 years | |||||||
Computer equipment, software and website development | Minimum | ||||||||
Entity Information | ||||||||
Estimated useful lives | 3 years | |||||||
Computer equipment, software and website development | Maximum | ||||||||
Entity Information | ||||||||
Estimated useful lives | 5 years | |||||||
Machinery and equipment | ||||||||
Entity Information | ||||||||
Estimated useful lives | 7 years | |||||||
Office equipment | Minimum | ||||||||
Entity Information | ||||||||
Estimated useful lives | 3 years | |||||||
Office equipment | Maximum | ||||||||
Entity Information | ||||||||
Estimated useful lives | 5 years | |||||||
Acquisition of Quest | ||||||||
Entity Information | ||||||||
Agreement date of Quest Acquisition | Aug. 21, 2019 | |||||||
Effective date of Quest Acquisition | Nov. 07, 2019 | |||||||
Quest Acquisition gross consideration | $ 988,900,000 |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Nov. 07, 2019 | Oct. 09, 2019 | Aug. 21, 2019 | Nov. 27, 2021 | May 29, 2021 | Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Business Acquisition [Line Items] | ||||||||
Quest Acquisition consideration - common stock offering | $ 350,000 | |||||||
Business transaction costs | $ 0 | $ 0 | $ 27,125 | |||||
Acquisition of Quest | ||||||||
Business Acquisition [Line Items] | ||||||||
Agreement date of Quest Acquisition | Aug. 21, 2019 | |||||||
Effective date of Quest Acquisition | Nov. 07, 2019 | |||||||
Quest Acquisition gross consideration | $ 988,900 | |||||||
Quest Acquisition consideration - cash on hand | 195,300 | |||||||
Quest Acquisition consideration - common stock offering | $ 350,000 | |||||||
Quest Acquisition consideration - term loan | $ 443,600 | |||||||
Post-closing release from escrow | $ 2,100 | |||||||
Quest Acquisition net consideration | $ 986,800 | |||||||
Business transaction costs | 27,100 | |||||||
Acquisition of Quest | Transaction advisory | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs | 14,500 | |||||||
Acquisition of Quest | Banker commitment | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs | 3,200 | |||||||
Acquisition of Quest | Debt issuance | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs | 6,100 | |||||||
Acquisition of Quest | Legal, due diligence, and accounting | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs | 3,300 | |||||||
Centerview Partners | Acquisition of Quest | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs, advisory fees percentage | 1.20% | |||||||
Centerview Partners | Acquisition of Quest | Transaction advisory | ||||||||
Business Acquisition [Line Items] | ||||||||
Business transaction costs | $ 12,000 |
Business Combination (Details 2
Business Combination (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Nov. 27, 2021 | Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Nov. 07, 2019 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 543,134 | $ 543,134 | $ 544,774 | ||
Net sales | 1,168,678 | 1,005,613 | 816,641 | ||
Quest | |||||
Business Acquisition [Line Items] | |||||
Net sales | $ 593,943 | $ 453,619 | $ 286,803 | ||
Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 4,745 | ||||
Accounts receivable, net | 25,359 | ||||
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 | 912,295 | ||||
Goodwill | 74,525 | ||||
Total assets acquired and liabilities assumed | 986,820 | ||||
Post-closing release from escrow | $ 2,100 | ||||
Goodwill measurement period adjustments | 21,500 | ||||
Intangible assets, net | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Measurement period adjustment | 20,000 | ||||
Deferred income taxes | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Measurement period adjustment | (3,200) | ||||
Accounts receivable, net | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Measurement period adjustment | 4,300 | ||||
Inventories | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Measurement period adjustment | 900 | ||||
Property and equipment, net | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Measurement period adjustment | $ (500) | ||||
Customer relationships | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 115,000 | ||||
Tax deductible goodwill | 67,700 | ||||
Computer software | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 3,400 | ||||
Brands and trademarks | Acquisition of Quest | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 750,000 | ||||
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 |
Business Combination (Details 3
Business Combination (Details 3) - Acquisition of Quest $ in Thousands | 12 Months Ended |
Aug. 28, 2021 USD ($) | |
Business Acquisition [Line Items] | |
Net sales, pro forma | $ 885,044 |
Gross profit, pro forma | 355,395 |
Net income, pro forma | $ 90,028 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Property and Equipment | |||
Property and equipment, gross | $ 26,161 | $ 21,720 | |
Less: accumulated depreciation | (8,004) | (5,136) | |
Property and equipment, net | 18,157 | 16,584 | |
Depreciation and amortization | 3,200 | 2,300 | $ 1,800 |
Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 7,232 | 3,100 | |
Computer equipment and software | |||
Property and Equipment | |||
Property and equipment, gross | 1,432 | 1,093 | |
Machinery and equipment | |||
Property and Equipment | |||
Property and equipment, gross | 6,292 | 1,934 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 9,883 | 8,219 | |
Finance lease right-of-use assets | |||
Property and Equipment | |||
Property and equipment, gross | 1,185 | 1,185 | |
Construction in progress | |||
Property and Equipment | |||
Property and equipment, gross | $ 137 | $ 6,189 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Sep. 24, 2020 USD ($) | Aug. 27, 2022 USD ($) segment | Aug. 28, 2021 USD ($) segment | |
Goodwill | |||
Beginning balance | $ 543,134 | $ 544,774 | |
Acquisition of a business | 1,178 | ||
Goodwill written off related to SimplyProtein Sale | (2,818) | ||
Ending balance | $ 543,134 | $ 543,134 | |
Proceeds from SimplyProtein Sale | $ 8,800 | ||
Cash proceeds from SimplyProtein Sale | 5,800 | ||
Note receivable from SimplyProtein Sale | 3,000 | ||
Gain (loss) on sale of SimplyProtein | $ 0 | ||
Number of operating segments | segment | 1 | 2 | |
Goodwill impairment charges | $ 0 |
Goodwill and Intangibles - Sc_2
Goodwill and Intangibles - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 24, 2020 | Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Intangible assets: | ||||
Intangible assets, Gross carrying amount | $ 1,182,863 | $ 1,182,863 | ||
Accumulated amortization | (59,605) | (43,822) | ||
Finite-lived intangible assets, Net carrying amount | 149,258 | |||
Intangible assets, Net carrying amount | 1,123,258 | 1,139,041 | ||
Carrying value of SimplyProtein brand intangible asset | $ 5,000 | |||
Amortization of intangible assets | 15,800 | $ 15,600 | $ 14,000 | |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill) | Loss on impairment | |||
Estimated future amortization expense | ||||
2023 | 15,658 | |||
2024 | 14,917 | |||
2025 | 13,518 | |||
2026 | 13,517 | |||
2027 | 13,517 | |||
Thereafter | $ 78,131 | |||
Customer relationships | ||||
Intangible assets: | ||||
Useful life | 15 years | 15 years | ||
Finite-lived intangible assets, Gross carrying amount | $ 174,000 | $ 174,000 | ||
Accumulated amortization | (41,703) | (30,103) | ||
Finite-lived intangible assets, Net carrying amount | $ 132,297 | $ 143,897 | ||
Licensing agreements | ||||
Intangible assets: | ||||
Useful life | 13 years | 13 years | ||
Finite-lived intangible assets, Gross carrying amount | $ 22,000 | $ 22,000 | ||
Accumulated amortization | (8,581) | (6,664) | ||
Finite-lived intangible assets, Net carrying amount | $ 13,419 | $ 15,336 | ||
Proprietary recipes and formulas | ||||
Intangible assets: | ||||
Useful life | 7 years | 7 years | ||
Finite-lived intangible assets, Gross carrying amount | $ 7,000 | $ 7,000 | ||
Accumulated amortization | (5,131) | (4,131) | ||
Finite-lived intangible assets, Net carrying amount | 1,869 | 2,869 | ||
Software and website development costs | ||||
Intangible assets: | ||||
Finite-lived intangible assets, Gross carrying amount | 5,863 | 5,560 | ||
Accumulated amortization | (4,190) | (2,924) | ||
Finite-lived intangible assets, Net carrying amount | 1,673 | 2,636 | ||
Intangible assets in progress | ||||
Intangible assets: | ||||
Finite-lived intangible assets, Gross carrying amount | 303 | |||
Accumulated amortization | 0 | |||
Finite-lived intangible assets, Net carrying amount | 303 | |||
Brands and trademarks | ||||
Intangible assets: | ||||
Indefinite-lived intangible assets | $ 974,000 | $ 974,000 | ||
Minimum | Software and website development costs | ||||
Intangible assets: | ||||
Useful life | 3 years | 3 years | ||
Minimum | Intangible assets in progress | ||||
Intangible assets: | ||||
Useful life | 3 years | |||
Maximum | Software and website development costs | ||||
Intangible assets: | ||||
Useful life | 5 years | 5 years | ||
Maximum | Intangible assets in progress | ||||
Intangible assets: | ||||
Useful life | 5 years |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 |
Accrued Liabilities, Current [Abstract] | |||
Accrued professional fees | $ 1,039 | $ 2,124 | |
Accrued advertising allowances and claims | 3,856 | 4,309 | |
Accrued bonus expenses | 12,761 | 16,689 | |
Accrued freight expenses | 2,065 | 2,812 | |
Accrued payroll-related expenses | 1,995 | 1,871 | |
Accrued commissions | 1,422 | 1,909 | |
Income taxes payable | 223 | 9,020 | |
VAT payable | 5,171 | 4,386 | |
Accrued restructuring | 0 | 851 | $ 4,139 |
Accrued capital expenditures | 350 | 788 | |
Other accrued expenses | 4,544 | 5,059 | |
Current operating lease liabilities | 6,249 | 3,788 | |
Accrued expenses and other current liabilities | $ 39,675 | $ 53,606 |
Long-Term Debt and Line of Cr_3
Long-Term Debt and Line of Credit - Narrative (Details) | Jan. 21, 2022 | Nov. 07, 2019 USD ($) | Jul. 07, 2017 USD ($) | Aug. 27, 2022 USD ($) |
Credit Agreement & Amendments | ||||
Repayments of principal due in next twelve months | $ 264,000 | |||
Effective interest rate, finance lease liabilities | 5.60% | |||
Term Loan | ||||
Credit Agreement & Amendments | ||||
Effective interest rate, Term Facility | 6.20% | |||
Barclays Bank PLC and Other Parties | ||||
Credit Agreement & Amendments | ||||
Letters of credit outstanding | $ 3,500,000 | |||
Barclays Bank PLC and Other Parties | Term Loan | ||||
Credit Agreement & Amendments | ||||
Repayments of principal due in next twelve months | $ 0 | |||
Barclays Bank PLC and Other Parties | Revolving Credit Facility | ||||
Credit Agreement & Amendments | ||||
Net leverage ratio post reduction (equal to or less than) | 6 | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Base Rate | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 0.50% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | SOFR Loan | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 1% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | ||||
Credit Agreement & Amendments | ||||
Borrowing capacity | $ 200,000,000 | |||
Maturity period | 7 years | |||
Proceeds from long-term credit facility | $ 200,000,000 | |||
Incremental long-term debt | $ 460,000,000 | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | SOFR Loan | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 2.25% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | Secured Overnight Financing Rate SOFR | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 3.25% | |||
Interest rate floor | 0.50% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | Three Month Secured Overnight Financing Rate SOFR | ||||
Credit Agreement & Amendments | ||||
Interest rate floor | 0.15% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | Six Month Secured Overnight Financing Rate SOFR | ||||
Credit Agreement & Amendments | ||||
Interest rate floor | 0.25% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Term Loan | One Month Secured Overnight Financing Rate SOFR [Member] | ||||
Credit Agreement & Amendments | ||||
Interest rate floor | 0.10% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | ||||
Credit Agreement & Amendments | ||||
Borrowing capacity | $ 75,000,000 | |||
Maturity period | 5 years | |||
Percent of commitments (in excess of) | 30% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | SOFR Loan | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 2% | |||
Line of Credit Facility | Barclays Bank PLC and Other Parties | Revolving Credit Facility | Secured Overnight Financing Rate SOFR | ||||
Credit Agreement & Amendments | ||||
Basis spread on variable rate | 3% |
Long-Term Debt and Line of Cr_4
Long-Term Debt and Line of Credit - Schedule of Debt (Details) - USD ($) $ in Thousands | Aug. 27, 2022 | Aug. 28, 2021 |
Credit Agreement & Amendments | ||
Term Facility | $ 406,500 | $ 456,500 |
Finance lease liabilities | 406 | 690 |
Less: Deferred financing fees | 3,620 | 5,636 |
Total debt | 403,286 | 451,554 |
Long-term debt, net of deferred financing fees | $ 403,022 | $ 451,269 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current maturities of long-term debt | Current maturities of long-term debt |
Long-Term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | $ 264 | |
2024 | 406,642 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total debt | $ 406,906 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) | 12 Months Ended | ||||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Feb. 25, 2022 | Jul. 06, 2017 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
(Loss) gain in fair value change of warrant liability | $ (30,062,000) | $ (66,197,000) | $ 30,938,000 | ||
Share price | $ 35.35 | $ 25.39 | $ 38.99 | ||
Warrants expected term | 10 months 9 days | 1 year 10 months 6 days | |||
Risk-free interest rate | 0.06% | 0.14% | |||
Expected volatility | 21.70% | 29.20% | |||
Private warrants fair value per share | $ 23.86 | $ 13.98 | |||
Transfers of financial instruments out of Level 3 | $ 0 | $ 0 | $ 0 | ||
Private Warrants | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Outstanding warrant issued (in shares) | 0 | 6,700,000 | 6,700,000 | ||
(Loss) gain in fair value change of warrant liability | $ (30,100,000) | $ 66,200,000 | $ 30,900,000 | ||
Warrant price per share (in dollars per share) | $ 11.50 | $ 11.50 | $ 11.50 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Components of income before income taxes | |||
Domestic | $ 148,080 | $ 79,526 | $ 78,418 |
Foreign | 2,489 | 1,334 | 546 |
Income before income taxes | 150,569 | 80,860 | 78,964 |
Current: | |||
Federal | 22,733 | 23,225 | 3,056 |
State and local | 6,226 | 5,800 | 1,835 |
Foreign | 1,247 | 1,552 | 219 |
Total current | 30,206 | 30,577 | 5,110 |
Deferred: | |||
Federal | 11,218 | 5,982 | 6,747 |
State and local | 1,614 | 3,096 | 1,637 |
Foreign | (1,043) | 325 | (168) |
Total deferred income tax expense (benefit) | 11,789 | 9,403 | 8,216 |
Income tax expense (benefit) | $ 41,995 | $ 39,980 | $ 13,326 |
Effective rate reconciliation | |||
Statutory income tax expense | 21% | 21% | 21% |
Change in fair value of warrant liabilities | 5% | 20.50% | (10.80%) |
State income tax expense, net of federal | 4.20% | 4.30% | 5% |
Valuation allowance | (1.50%) | (1.20%) | (1.20%) |
Taxes on foreign income above (below) the U.S. tax | 1.30% | 1.60% | 0.10% |
Change in state tax rate | (0.20%) | 1.80% | 1.50% |
Non-deductible transaction costs | 0% | 0% | 0.10% |
Other permanent items | (1.90%) | 1.40% | 1.20% |
Income tax expense (benefit) | 27.90% | 49.40% | 16.90% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Aug. 27, 2022 | Aug. 28, 2021 |
Deferred tax assets | ||
Accounts receivable allowances | $ 1,519 | $ 2,353 |
Inventories write-downs | 277 | 71 |
Accrued expenses | 4,330 | 4,089 |
Net operating loss carryforwards | 149 | 2,394 |
Share-based compensation | 3,430 | 3,265 |
Tax credits | 86 | 173 |
Lease liabilities | 12,733 | 12,271 |
Other | 5,985 | 5,665 |
Deferred tax assets | 28,509 | 30,281 |
Valuation allowance | 0 | (2,218) |
Deferred tax assets, net of valuation allowance | 28,509 | 28,063 |
Deferred tax liabilities | ||
Prepaid expense | (699) | (748) |
Excess tax over book depreciation | (3,776) | (2,121) |
Website development costs | (403) | (659) |
Intangible assets | (116,682) | (105,997) |
Lease right-of-use assets | (11,660) | (11,709) |
Other | (833) | (584) |
Deferred tax liabilities | (134,053) | (121,818) |
Net deferred tax liabilities | $ (105,544) | $ (93,755) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Aug. 27, 2022 | Aug. 28, 2021 |
Entity Information | ||
Valuation allowance | $ 0 | $ (2,218) |
Unrecognized tax benefits | 0 | 0 |
Accrued interest or penalties on unrecognized tax benefits | 0 | 0 |
State and local | ||
Entity Information | ||
Operating loss carryforwards | 2,100 | 2,500 |
Foreign | ||
Entity Information | ||
Operating loss carryforwards | $ 0 | $ 9,400 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Lease, Cost [Abstract] | |||
Operating lease cost | $ 9,077 | $ 6,752 | $ 5,242 |
Variable lease cost | 3,068 | 1,681 | 1,648 |
Total operating lease cost | 12,145 | 8,433 | 6,890 |
Short-term lease cost | 0 | 0 | 30 |
Finance lease amortization of right-of-use asset | 273 | 273 | 273 |
Finance lease interest on liabilities | 30 | 45 | 60 |
Total finance lease cost | 303 | 318 | 333 |
Total operating and finance lease cost | $ 12,448 | $ 8,751 | 7,253 |
Lease assets and liabilities | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other long-term assets | Other long-term assets | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net | |
Total lease assets | $ 46,827 | $ 46,837 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current maturities of long-term debt | Current maturities of long-term debt | |
Noncurrent operating lease liabilities | Other long-term liabilities | Other long-term liabilities | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt, less current maturities | Long-term debt, less current maturities | |
Total lease liabilities | $ 51,137 | $ 49,370 | |
Future maturities of operating lease liabilities | |||
2023 | 8,452 | ||
2024 | 9,424 | ||
2025 | 8,680 | ||
2026 | 6,880 | ||
2027 | 7,036 | ||
Thereafter | 19,848 | ||
Total operating lease payments | 60,320 | ||
Less: Interest | (9,589) | ||
Present value of operating lease liabilities | 50,731 | ||
Future maturities of finance lease liabilities | |||
2023 | 278 | ||
2024 | 145 | ||
2025 | 0 | ||
2026 | 0 | ||
2027 | 0 | ||
Thereafter | 0 | ||
Total finance lease payments | 423 | ||
Less: Interest | (17) | ||
Present value of finance lease liabilities | $ 406 | $ 690 | |
Operating lease weighted average remaining lease term | 7 years 3 months 7 days | 8 years 4 months 17 days | |
Finance lease weighted average remaining lease term | 1 year 6 months 3 days | 2 years 5 months 8 days | |
Operating lease weighted average discount rate | 4.70% | 4.90% | |
Finance lease weighted average discount rate | 5.60% | 5.60% | |
Supplemental cash flow information related to leases | |||
Operating cash flows from operating leases | $ 9,656 | $ 7,622 | 6,534 |
Operating cash flows from finance leases | 631 | 37 | 18 |
Financing cash flow from finance leases | $ 313 | 314 | $ 338 |
OperatingLeaseImpairmentLossNetOfGainLossOnTerminationOfLease | $ 500 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Loss Contingencies [Line Items] | |||
Gain on legal settlement | $ 0 | $ 5,000 | $ 0 |
Celebrity endorsement payment obligation | $ 900 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 09, 2019 | Aug. 27, 2022 | Jan. 07, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Aug. 31, 2019 | Jul. 06, 2017 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |||||||
Common stock shares issued (in shares) | 13,379,205 | 101,322,834 | 95,882,908 | 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 | ||||||
Quest Acquisition consideration - common stock offering | $ 350 | ||||||
Equity Issuance costs, Legal | $ 0.8 | ||||||
Warrants and Rights Note Disclosure [Abstract] | |||||||
Shares, Issued | 4,830,761 | ||||||
Private Warrants | |||||||
Warrants and Rights Note Disclosure [Abstract] | |||||||
Outstanding warrant issued (in shares) | 0 | 6,700,000 | 6,700,000 | ||||
Warrant price per share (in dollars per share) | $ 11.50 | $ 11.50 | $ 11.50 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Apr. 13, 2022 | Nov. 13, 2018 | |
Stock Repurchase Program | |||||
Repurchase of common stock (in shares) | 1,720,520 | 0 | 0 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 34.79 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 38 | ||||
Translation Adjustment Functional to Reporting Currency, Increase (Decrease), Gross of Tax | 1.1 | ||||
Treasury Stock | |||||
Stock Repurchase Program | |||||
Stock Repurchase Program, Authorized Amount | $ 100 | $ 50 | $ 50 | ||
Repurchase of common stock (in shares) | 1,720,520 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Numerator: | |||
Net income available to common stock stockholders | $ 108,574 | $ 40,880 | $ 65,638 |
Denominator: | |||
Weighted average common shares - basic (in shares) | 98,754,913 | 95,743,413 | 93,968,953 |
Basic earnings per share from net income (in dollars per share) | $ 1.10 | $ 0.43 | $ 0.70 |
Numerator: | |||
Net income available to common stock stockholders | $ 108,574 | $ 40,880 | $ 65,638 |
Loss (gain) in fair value change of warrant liability | 30,062 | 66,197 | (30,938) |
Numerator for Diluted Earnings | $ 108,574 | $ 40,880 | $ 34,700 |
Denominator: | |||
Weighted average common shares - basic (in shares) | 98,754,913 | 95,743,413 | 93,968,953 |
Employee stock options | 1,578,329 | 1,311,889 | 1,001,542 |
Non-vested stock units | 255,914 | 310,296 | 45,571 |
Weighted average common shares - diluted (in shares) | 100,589,156 | 97,365,598 | 98,343,722 |
Diluted earnings per share from net income (in dollars per share) | $ 1.08 | $ 0.42 | $ 0.35 |
Private Warrants | |||
Numerator: | |||
Loss (gain) in fair value change of warrant liability | $ 30,100 | $ (66,200) | $ (30,900) |
Denominator: | |||
Warrant conversion (in shares) | 0 | 0 | 3,327,656 |
Antidilutive securities excluded from computation of earnings per share | 700,000 | 4,100,000 | |
Non-vested stock units | |||
Denominator: | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 | 0 |
Employee stock options | |||
Denominator: | |||
Antidilutive securities excluded from computation of earnings per share | 300,000 | 600,000 |
Omnibus Incentive Plan (Details
Omnibus Incentive Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | Jul. 07, 2017 | |
Share-based Compensation | ||||
Stock compensation expense | $ 11,697 | $ 8,265 | $ 7,636 | |
Incentive Plan | ||||
Share-based Compensation | ||||
Number of shares authorized | 9,067,917 | |||
Number of shares available for grant | 3,900,000 |
Omnibus Incentive Plan Stock Op
Omnibus Incentive Plan Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Additional disclosures | |||
Proceeds from option exercises | $ 4,343 | $ 700 | $ 4,206 |
Employee stock options | |||
Shares underlying options | |||
Outstanding at beginning of period (in shares) | 2,993,163 | ||
Granted (in shares) | 138,479 | ||
Exercised (in shares) | (352,791) | ||
Forfeited (in shares) | (2,300) | ||
Outstanding at end of period (in shares) | 2,776,551 | 2,993,163 | |
Vested or expected to vest (in shares) | 2,776,551 | ||
Exercisable (in shares) | 2,191,573 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 16.31 | ||
Granted (in dollars per share) | 40.88 | ||
Exercised (in dollars per share) | 12.31 | ||
Forfeited (in dollars per share) | 19.89 | ||
Outstanding at end of period (in dollars per share) | 18.04 | $ 16.31 | |
Vested or expected to vest (in dollars per share) | 18.04 | ||
Exercisable (in dollars per share) | $ 14.54 | ||
Weighted average remaining contractual life (if years) | |||
Outstanding at end of period, contractual life | 6 years 1 month 6 days | 6 years 9 months 29 days | |
Vested or expected to vest, contractual life | 6 years 1 month 6 days | ||
Exercisable, contractual life | 5 years 5 months 4 days | ||
Intrinsic value | |||
Outstanding, intrinsic value | $ 39,702 | $ 57,227 | |
Vested and expected to vest, intrinsic value | 39,702 | ||
Exercisable, intrinsic value | $ 37,191 | ||
Additional disclosures | |||
Award vesting period | 3 years | ||
Expiration period | 10 years | ||
Compensation not yet recognized | $ 4,300 | ||
Compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||
Proceeds from option exercises | $ 4,300 | $ 700 | $ 4,200 |
Omnibus Incentive Plan Range of
Omnibus Incentive Plan Range of Exercise Prices (Details) | 12 Months Ended |
Aug. 27, 2022 $ / shares shares | |
Stock Options, Exercise Price Range | |
Number of outstanding options | shares | 2,776,551 |
Outstanding options, weighted average exercise price | $ 18.04 |
Outstanding options, weighted average remaining contractual term | 6 years 1 month 6 days |
Number of exercisable options | shares | 2,191,573 |
Exercisable options, weighted average exercise price | $ 14.54 |
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 | $ 17.77 |
Number of outstanding options | shares | 1,655,003 |
Outstanding options, weighted average exercise price | $ 12.38 |
Outstanding options, weighted average remaining contractual term | 4 years 11 months 19 days |
Number of exercisable options | shares | 1,655,003 |
Exercisable options, weighted average exercise price | $ 12.38 |
Exercise Price Range from $15.00 to $17.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 17.78 |
Exercise price range, upper range limit | $ 23.55 |
Number of outstanding options | shares | 588,458 |
Outstanding options, weighted average exercise price | $ 20.23 |
Outstanding options, weighted average remaining contractual term | 7 years 2 months 15 days |
Number of exercisable options | shares | 397,751 |
Exercisable options, weighted average exercise price | $ 20.15 |
Exercise Price Range from $18.00 to $20.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 23.56 |
Exercise price range, upper range limit | $ 29.33 |
Number of outstanding options | shares | 194,611 |
Outstanding options, weighted average exercise price | $ 24.33 |
Outstanding options, weighted average remaining contractual term | 7 years 2 months 4 days |
Number of exercisable options | shares | 138,819 |
Exercisable options, weighted average exercise price | $ 24.25 |
Exercise Price Range from $21.00 to $23.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 29.34 |
Exercise price range, upper range limit | $ 35.11 |
Number of outstanding options | shares | 0 |
Outstanding options, weighted average exercise price | $ 0 |
Outstanding options, weighted average remaining contractual term | 0 years |
Number of exercisable options | shares | 0 |
Exercisable options, weighted average exercise price | $ 0 |
Exercise Price Range from $24.00 to $26.99 | |
Stock Options, Exercise Price Range | |
Exercise price range, lower range limit | 35.12 |
Exercise price range, upper range limit | $ 40.88 |
Number of outstanding options | shares | 338,479 |
Outstanding options, weighted average exercise price | $ 38.33 |
Outstanding options, weighted average remaining contractual term | 9 years 21 days |
Number of exercisable options | shares | 0 |
Exercisable options, weighted average exercise price | $ 0 |
Omnibus Incentive Plan Fair Val
Omnibus Incentive Plan Fair Value Assumptions (Details) - Employee stock options - USD ($) | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Share-based Compensation | |||
Weighted average grant date fair value | $ 15.32 | $ 9.99 | $ 7.79 |
Expected volatility, minimum | 37.07% | 36.80% | 30.27% |
Expected volatility, maximum | 38.75% | 33.82% | |
Expected dividend rate | 0% | 0% | 0% |
Expected option term | 6 years | 6 years | 6 years |
Risk-free rate of return, minimum | 1.26% | 0.80% | 0.38% |
Risk-free rate of return, maximum | 0.935% | 1.80% | |
Expected dividend payments | $ 0 |
Omnibus Incentive Plan Restrict
Omnibus Incentive Plan Restricted Stock Unit Activity (Details) - Non-vested stock units $ / shares in Units, $ in Millions | 12 Months Ended |
Aug. 27, 2022 USD ($) $ / shares shares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 496,334 |
Granted in period (in shares) | shares | 171,795 |
Vested in period (in shares) | shares | (180,096) |
Forfeited in period (in shares) | shares | (35,030) |
Non-vested at end of period (in shares) | shares | 453,003 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 24.56 |
Granted (in dollars per share) | $ / shares | 39.97 |
Vested (in dollars per share) | $ / shares | 23.14 |
Forfeited (in dollars per share) | $ / shares | 28.71 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 30.68 |
Additional disclosures | |
Award vesting period | 3 years |
Compensation cost not yet recognized | $ | $ 8.4 |
Compensation cost not yet recognized, period for recognition | 1 year 4 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. 27, 2022 USD ($) $ / shares shares | |
Units | |
Non-vested at beginning of period (in shares) | shares | 380,097 |
Granted in period (in shares) | shares | 50,212 |
Vested in period (in shares) | shares | (166,688) |
Forfeited in period (in shares) | shares | (8,598) |
Non-vested at end of period (in shares) | shares | 255,023 |
Weighted average grant-date fair value | |
Non-vested at beginning of period (in dollars per share) | $ / shares | $ 19.31 |
Granted (in dollars per share) | $ / shares | 63.42 |
Vested (in dollars per share) | $ / shares | 11.93 |
Forfeited (in dollars per share) | $ / shares | 19.33 |
Non-vested at end of period (in dollars per share) | $ / shares | $ 32.82 |
Additional disclosures | |
Award vesting period | 3 years |
Compensation cost not yet recognized | $ | $ 3.6 |
Compensation cost not yet recognized, period for recognition | 1 year |
Minimum | |
Additional disclosures | |
Award vesting rights, percentage | 0% |
Maximum | |
Additional disclosures | |
Award vesting rights, percentage | 200% |
Omnibus Incentive Plan Stock Ap
Omnibus Incentive Plan Stock Appreciation Rights Activity (Details) - Stock Appreciation Rights (SARs) | 12 Months Ended |
Aug. 27, 2022 $ / shares shares | |
Stock Appreciation Rights | |
Outstanding at beginning of period (in shares) | shares | 150,000 |
Granted (in shares) | shares | 0 |
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 | $ 24.20 |
Granted (in dollars per share) | $ / shares | 0 |
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 | 7 years 2 months 4 days |
Vested or expected to vest, contractual life | 7 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, period for recognition | 2 months 12 days |
Segment and Customer Informat_3
Segment and Customer Information (Details) - segment | 12 Months Ended | |
Aug. 27, 2022 | Aug. 28, 2021 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 1 | 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 | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 1,168,678 | $ 1,005,613 | $ 816,641 |
Long lived assets | 18,157 | 16,584 | |
North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,134,271 | 960,479 | 788,275 |
Long lived assets | 18,157 | 16,584 | |
International, Excluding North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 34,407 | 45,134 | 28,366 |
Atkins | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 540,328 | 506,860 | 501,472 |
Quest | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 593,943 | $ 453,619 | $ 286,803 |
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. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Concentration Risk [Line Items] | |||
Accounts receivable, net | $ 132,667 | $ 111,456 | |
Customer 1 | Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 31% | 31% | 34% |
Customer 1 | Customer Concentration Risk | Accounts receivable, net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 34% | 34% | |
Accounts receivable, net | $ 44,638 | $ 37,483 | |
Customer 2 | Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 13% | 12% | 10% |
Customer 2 | Customer Concentration Risk | Accounts receivable, net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 16% | 25% | |
Accounts receivable, net | $ 21,829 | $ 27,962 | |
Customer Three | Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 10% | ||
Customer Three | Customer Concentration Risk | Accounts receivable, net | |||
Concentration Risk [Line Items] | |||
Risk percentage | 14% | ||
Accounts receivable, net | $ 18,521 |
Restructuring and related cha_3
Restructuring and related charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Aug. 27, 2022 | Aug. 28, 2021 | Aug. 29, 2020 | |
Changes to the restructuring liability | |||
Restructuring liability, beginning balance | $ 851 | $ 4,139 | |
Charges | 128 | 3,800 | |
Cash payments | (979) | (7,088) | |
Restructuring liability, ending balance | 0 | 851 | $ 4,139 |
Restructuring and related cost aggregate incurred to date | 9,900 | ||
Restructuring and related cost incurred | $ 100 | 4,300 | 5,500 |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | General and administrative | ||
OperatingLeaseImpairmentLossNetOfGainLossOnTerminationOfLease | 500 | ||
Employee-related severance and benefits | |||
Changes to the restructuring liability | |||
Restructuring liability, beginning balance | $ 851 | 4,139 | |
Charges | 52 | 3,458 | |
Cash payments | (903) | (6,746) | |
Restructuring liability, ending balance | 0 | 851 | 4,139 |
Other restructuring | |||
Changes to the restructuring liability | |||
Restructuring liability, beginning balance | 0 | 0 | |
Charges | 76 | 342 | |
Cash payments | (76) | (342) | |
Restructuring liability, ending balance | $ 0 | $ 0 | $ 0 |
Uncategorized Items - atk-20220
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 266,341,000 |