What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-10-26 compared with 2020-10-28 · 193 added, 125 removed, 188 unchanged (63% of the section changed)

The Simply Good Foods Company is a highly-focused consumer packaged food and beverage company that aims to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements.

The product portfolio we develop, market and sell consists primarily of nutrition bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Atkins®, Atkins Endulge® and Quest® brand names.

Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with investment opportunities in the snacking space and broader food category.

The Simply Good Foods Company is a consumer packaged food and beverage company that aims to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements.

The product portfolio we develop, market and sell consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Atkins®, Atkins Endulge®, and Quest® 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:

3 unchanged sentences

We believe snacking occasions have been on the rise in recent years as consumers desire more convenient, healthy and delicious foods, snacks, and meal replacements.

We believe our emphasis on product formats such as our nutrition and protein bars, cookies and RTD shakes positions us to fill important needs for consumers.

We believe our emphasis on product formats such as our protein bars, cookies, chips, and RTD shakes positions us to fill important needs for consumers.

We believe a number of existing and emerging consumer trends within the U.S.

food and beverage industry will continue to both drive the growth of the nutritional snacking category and increase the demand for our product offerings.

Some of these trends include increased consumption of smaller, more frequent meals throughout the day, consumers’ strong preference for convenient, “better-for-you” snacks, consumers’ greater focus on health and wellness, and consumers’ moves toward limiting carbohydrate and sugar consumption, as well as the trend of consumers seeking to add convenient sources of protein and fiber to their diets.

With our Atkins brand, we strive to offer a compelling line of nutrition bars, RTD shakes and confections, and with our Quest brand, we strive to offer an attractive line up of protein bars, cookies, pizza, protein chips, RTD shakes and confections, which target these existing and emerging consumer trends.

Some of these trends include increased consumption of smaller, more frequent meals throughout the day, consumers’ strong preference for convenient, “better-for-you” snacks, consumers’ greater focus on health and wellness, and consumers’ movement toward limiting carbohydrate and sugar consumption, as well as the trend of consumers seeking to add convenient sources of protein and fiber to their diets.

With our Atkins brand, we strive to offer a compelling line of protein bars, RTD shakes, cookies, and confections, and with our Quest brand, we strive to offer an attractive line up of protein bars, cookies, pizza, protein chips, RTD shakes, and confections, which target these existing and emerging consumer trends.

Our sales, marketing, and research and development capabilities enable us to distribute products to a national customer base across a spectrum of retail channels, including the mass merchandise, grocery, and drug channels, club stores, e-commerce, and small format retail such as convenience stores and gas stations.

5 unchanged sentences

Quest also has an extremely loyal following and strong appeal among consumers ages 18-35, which complements Atkins’ strength among consumers ages 35+.

We also believe the Quest Acquisition will allow us to benefit from Quest's existing relationships and effectiveness within certain channels of trade, such as e-commerce and the small format channel, and leverage Quest’s social media-based marketing capabilities.

We believe we will also benefit from utilizing certain of Quest’s systems, such as its enterprise resource planning (ERP) platform, and associated reporting tools.

The Quest Acquisition allows us to benefit from Quest’s existing relationships and effectiveness within certain channels of trade, such as e-commerce and the small format channel, and leverage Quest’s social media-based marketing capabilities.

We have benefited from utilizing certain of Quest’s systems, such as its enterprise resource planning platform, and associated reporting tools.

Our principal executive offices are located at 1225 17 th Street, Suite 1000, Denver, Colorado, 80202.

Our telephone number is (303) 633-2840.

We also maintain a second major location in El Segundo, California, which serves as the headquarters for our Quest brand’s marketing and research and development leadership along with additional personnel in other company-wide departments.

We maintain a web site at www.thesimplygoodfoodscompany.com .

Recent Developments

Effects of COVID-19

In December 2019, a novel coronavirus disease, or COVID-19, was reported and in January 2020, the World Health Organization, or WHO, declared it a Public Health Emergency of International Concern.

On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law.

The CARES Act provided a substantial stimulus and assistance package intended to address the effect

of the COVID-19 pandemic, including tax relief and government loans, grants and investments.

Additionally, various federal, state and local government-imposed movement restrictions and initiatives have been implemented to reduce the global transmission of COVID-19, including reduced or eliminated food services, the closure of retailing establishments, the promotion of social distancing and the adoption of remote working policies.

During the third quarter of 2020, we actively engaged with the various elements of our value chain, including our customers, contract manufacturers, and logistics and transportation providers, to meet demand for our products and to remain informed of any challenges within our value chain.

Given the unpredictable nature of the COVID-19 pandemic and the initial surge in consumption, we increased finished goods inventory of some of our key products.

Based on information available to us as of the end of our fiscal year, we believe we will be able to deliver our products to meet customer orders on a timely basis, and therefore, we expect our products will continue to be available for purchase to meet consumer meal replacement and snacking needs for the foreseeable future.

We continue to monitor customer and consumer demand, and intend to adapt our plans as needed to continue to drive our business and meet our obligations during the evolving COVID-19 situation.

We implemented remote work arrangements and restricted business travel in mid-March, and to date, these arrangements have not materially affected our ability to maintain our business operations, including the operation of financial reporting systems, internal control over financial reporting, and disclosure controls and procedures.

As describe in more detail below under “Our Strengths,” we believe our lean infrastructure, which allows for significant flexibility, speed-to-market and minimal capital investment, has enabled us to adjust our expenditures to maintain cash flow until the continued reopening of the U.S.

economy causes the return of shopping behavior to more normal patterns and our brand benefits of active nutrition and weight management drive greater better-for-you snacking and meal replacement usage occasions.

As described in more detail under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated results of operations for the full fiscal year ended August 29, 2020 were affected by changes in consumer shopping and consumption behavior due to COVID-19.

After the brief pantry loading period in mid-March 2020, the nutritional snacking category saw a marked decrease in shopping trips (particularly in the mass channel) and fewer usage occasions.

This affected our portable and convenient on-the-go products, especially the nutrition and protein bar portion of our business for both our Atkins and Quest brands.

As home confinement restrictions began to ease, shopping trips steadily improved from their lowest point and consumer interest in weight management and active nutrition began to improve.

During the fourth fiscal quarter of 2020, the improvement in category trends plateaued.

While our Quest brand has outperformed its portion of the nutritious snaking segment, the performance of our Atkins brand, which is part of the weight management portion of the market, has remained slower due to the temporary softer interest in weight management for consumers, fewer on-the-go usage occasions and weakness in the mass channel that has experienced reduced shopper traffic during the pandemic.

We believe the severity and duration of the COVID-19 pandemic is uncertain and such uncertainty will likely continue during our 2021 fiscal year.

We also believe demand for our products has strengthened, but there will likely continue to be irregularity in third party reported retail takeaway data for our products until the more fulsome reopening of the U.S.

economy and the associated return of shopping behavior to more normal patterns and our brand benefits of active nutrition and weight management drive more better-for-you snacking and meal replacement usage occasions.

Please also see the information under Item 1A.

“Risk Factors” for additional information regarding the risks of pandemics, such as COVID-19.

SimplyProtein® Brand Sale

Effective September 24, 2020, we sold the assets exclusively related to the Company’s SimplyProtein® brand of products to a newly formed entity led by the Company’s Canadian-based management team who had been responsible for this brand prior to the sale transaction.

In addition to purchasing these assets, the buyer assumed certain liabilities related to the SimplyProtein brand’s business.

The transaction enables our management to focus its full time and our resources on our core Atkins® and Quest® branded businesses and other strategic initiatives.

Information in this Form 10-K includes information with respect to the Simply Protein business as the sale was effective after the end of the 2020 fiscal year.

Our consolidated results of operations for the fiscal year ended August 28, 2021 continued to be affected by the significant changes in consumer shopping and consumption behavior patterns due to COVID-19 which had begun during our third quarter in fiscal 2020.

Our business did improve during the course of fiscal year 2021, driven by increasing consumer mobility and improving shopper traffic in brick and mortar retailers versus the prior periods that were pressured by COVID-19 movement restrictions.

We believe there is a high correlation of consumer mobility to the consumption of our products.

As shopper traffic within brick and mortar retailers improves, particularly in the mass and convenience store channels, and as consumers spend more time away from home, our business, particularly bars, performs well.

There is still uncertainty related to the sustainability of improving consumer mobility and shopping trips observed in

the second half of fiscal year 2021.

While our Quest brand has outperformed its portion of the nutritious snacking segment, the performance of our Atkins brand, which is part of the weight management portion of the market, has improved at a slower rate.

However, the Atkins brand performance for the fifty-two weeks ended August 28, 2021 has improved during the course of fiscal year 2021, primarily due to increasing consumer mobility and improving shopper traffic in brick and mortar retailers.

During fiscal year 2022, we expect our business performance will continue to be correlated primarily to the level of consumer mobility, which includes the rate at which consumers return to working outside the home.

Beginning in the third quarter of 2020, we actively engaged with the various elements of our value chain, including our retail customers, contract manufacturers, and logistics and transportation providers, to meet demand for our products and to remain informed of any challenges within our value chain.

In the fourth quarter of 2020 and continuing into fiscal year 2021, consumer consumption habits became steadier, however inventory levels remain variable.

Based on information available to us as of the date of this Report, we believe we will be able to deliver our products to meet customer orders on a timely basis, and therefore, we expect our products will continue to be available for purchase to meet consumer meal replacement and snacking needs for the foreseeable future.

We continue to monitor customer and consumer demand along with our logistics capabilities to deliver products to our retail customers on a timely and consistent basis, and intend to adapt our plans as needed to continue to drive our business and meet our obligations during the continuing and evolving COVID-19 situation.

We remain uncertain of the ultimate effect COVID-19 could have on our business notwithstanding the distribution of several U.S.

government approved vaccines and the easing of movement restrictions.

This uncertainty stems from the potential for, among other things, (i) the presence of current mutations of COVID-19 which have resulted in increased rates of reported cases for which currently approved vaccines are not as effective along with the possibility of future mutations occurring for which current approved vaccines are less effective, (ii) unexpected supply chain disruptions, including disruptions resulting from labor shortages or other human capital challenges, (iii) changes to customer operations, (iv) a reversal in recently improving consumer purchasing and consumption behavior, and (v) the closure of customer establishments.

Our Strengths

Powerful brands with strong consumer awareness and loyalty .

We are a leader in the fast growing nutritional snacking category, and both the Atkins and Quest brands are leading brands with scale in nutrition and protein bars for both brands, RTD shakes and confections for the Atkins brand, and chips, cookies and pizza for the Quest brand.

We are a leader in the fast growing nutritional snacking category, and both the Atkins and Quest brands are leading brands with scale in protein bars, confections, and cookies for both brands, RTD shakes for the Atkins brand, and chips and pizza for the Quest brand.

Our highly focused snacking portfolio provides us with a leading position within retailers’ nutrition and wellness aisles, resulting in meaningful shelf space.

Our brands are able to appeal to both consumers interested in an active lifestyle who are seeking protein rich, low-carb snacking options and weight management program consumers, which makes our brands highly attractive and strategic for a diverse set of retailers across various distribution channels.

Our brands are able to appeal to both consumers interested in an active lifestyle who are seeking protein-rich, low-carb snacking options as well as weight management program consumers, which makes our brands highly attractive and strategic for a diverse set of retailers across various distribution channels.

Aligned with consumer mega trends.

10 unchanged sentences

We pride ourselves on knowing our consumers and mining insights that lead to new products and ideas.

We believe that we have the ability to leverage our strong relationships with our retail customers and distributors, a strong brand building track record, and category management expertise to help new products, brands and brand extensions gain distribution and consumer recognition, allowing us to continue to successfully expand our snacking platform.

We believe we can leverage our strong relationships with our retail customers and distributors, a strong brand building track record, and category management expertise to help new products, brands and brand extensions gain distribution and consumer recognition, allowing us to continue to successfully expand our snacking platform.

Asset-light business with strong cash generation .

4 unchanged sentences

Simply Good Foods has an experienced team of industry veterans with extensive experience across multiple branded consumer products, food and nutrition categories.

For example, our President and Chief Executive Officer, Joseph Scalzo, has significant experience operating packaged foods businesses, having served in various leadership roles at Dean Foods, WhiteWave Foods, The Gillette Company, The Coca-Cola Company, and The Procter & Gamble Company.

For example, our President and Chief Executive Officer, Joseph

Scalzo, has significant experience operating packaged goods businesses, having served in various leadership roles at Dean Foods, WhiteWave Foods, The Gillette Company, The Coca-Cola Company, and The Procter & Gamble Company.

Our management team’s extensive experience is complemented by the significant industry expertise of our directors James Kilts, the former Chief Executive Officer of The Gillette Company and Nabisco, and former President of Kraft USA and Oscar Mayer, and David West, the former Chief Executive Officer of Big Heart Pet Brands and The Hershey Company.

Our management team’s deep expertise and proven record of accomplishment in managing brands and operating packaged food businesses is a key driver of our success and positions Simply Good Foods as an attractive vehicle for future long-term growth within the snacking space and broader food category.

Our Strategies

Leverage platform to expand in attractive food and snacking categories .

Management believes the fragmented snacking category presents a substantial opportunity for consolidation and the opportunity to build, through disciplined acquisitions, a leading platform in the snacking space and broader food category.

As a leader in nutritious snacking, we believe we have the unique capability to leverage our operating platform and customer relationships to expand beyond the Atkins and Quest brands.

Management believes the fragmented snacking category presents an opportunity for consolidation and the opportunity to build, through disciplined acquisitions, a leading platform in the nutritional snacking space.

As a leader in nutritious snacking, we believe we have the unique capability to leverage our operating platform, product innovation expertise and customer relationships to expand beyond the Atkins and Quest brands.

In addition, we believe the nutritious snacking category will continue to grow given its relatively low household penetration and favorable consumer trends of snacking, health and wellness, convenience, and on-the-go consumption.

1 unchanged sentence

Over time, we expect to continue seeking to identify and evaluate acquisition opportunities to complement our platform, and we see significant opportunity for growth and synergies in complementary adjacent snacking categories such as the “better-for-you” eating space.

Innovate and expand the portfolio of product offerings to meet consumer demand for “cleaner labels,” higher protein products and new product forms.

Management expects that our ongoing efforts to meet consumer demand for “cleaner labels” will be effective at reaching self-directed low carbohydrate consumers who are focused on overall health, wellness and “clean eating,” as part of their active lifestyle or for weight management.

Management is committed to continually finding new and innovative formulations to reduce the number of product ingredients, as well as using “better for you” ingredients like nuts, fiber and whey protein in its existing products, while maintaining and improving taste and quality.

In addition, we intend to continue to enhance, strengthen and expand our product offerings with new and innovative flavors and forms, simple ingredients and packaging alternatives, all while maintaining a commitment to delivering products that meet our nutritional profile and provide the convenience that consumers crave.

Our in-house research and development laboratories allow us to develop new products internally and bring them to market quickly through our contract manufacturing network without diverging from high standards of taste, quality, safety and nutritional content.

Innovate and expand the portfolio of product offerings to meet consumer demand for higher protein products and new product forms.

We intend to continue to enhance, strengthen and expand our product offerings with new and innovative flavors and forms and packaging alternatives, all while maintaining a commitment to delivering products that meet our nutritional profile and provide the convenience that consumers crave.

Additionally, we intend to satisfy developing and changing consumer preferences through the pursuit of merger and acquisition transactions.

Expand distribution in white space opportunities.

In the fifty-two week period ended August 29, 2020 , approximately 75% Atkins’ gross sales in the U.S.

were through the mass retailer and grocery distribution channels and approximately 52% of Quest’s gross sales in the U.S.

In the fifty-two weeks ended August 28, 2021, approximately 76% of Atkins’ gross sales in the U.S.

and approximately 53% of Quest’s gross sales in the U.S.

were through the mass retailer and grocery distribution channels.

Our management believes there is opportunity for the brand to penetrate further those channels as well as other distribution channels such as convenience and club stores.

In addition, while shoppers have become heavier consumers of e-commerce purchases generally, only approximately 9% of Atkins’ gross sales for the fifty-two week period ended

August 29, 2020 were through its e-commerce channel, while approximately 21% of Quest’s gross sales for the same period were through its e-commerce channel.

Our management believes there is opportunity for the brands to further penetrate those channels as well as other distribution channels such as convenience and club stores.

In addition, while shoppers have increased e-commerce purchases generally, approximately 9% of Atkins’ gross sales for the fifty-two weeks ended August 28, 2021 were through its e-commerce channel as compared to approximately 24% of Quest’s gross sales for the same period were through its e-commerce channel.

We intend to leverage our brand recognition to develop further the distribution channels through which we reach consumers, including through the continued expansion of the e-commerce channel.

Continue our marketing efforts to our loyal consumer bases.

We intend to continue to expand our marketing efforts to retain our existing loyal consumer base for both the Atkins and Quest brands.

Consumers who purchase our products have shown a strong affinity for both the Atkins and Quest brands as evidenced by a relatively high level of servings per buyer, per year.

For our Atkins brand, our historic core target consumer base has been individuals participating in branded weight management programs and for the Quest brand, it has been individuals pursuing a performance-based, active and athletic lifestyle.

Continue our marketing efforts to increase household penetration.

We intend to expand our marketing efforts to bring first-time buyers into the Atkins and Quest brand franchises.

Consumers who have tried our Atkins and Quest products have a relatively high repeat buying rate and long-term buying behavior, as evidenced by servings per buyer, per year.

For our Atkins brand, our historic consumer base has been people interested in weight loss, and for the Quest brand it has been individuals pursuing a performance-based active and athletic lifestyle.

For both the Atkins and the Quest brands, we have an active and growing digital and social presence, using a comprehensive approach of search, banner, and search engine optimization efforts.

4 unchanged sentences

For our Atkins brand, we use targeted broadcast and streaming television and print ads with a celebrity-based campaign that attempts to motivate potential programmatic weight loss consumers to try the Atkins approach to healthier eating and weight loss as these Atkins consumers are our most loyal, profitable and frequent purchasers.

For our Quest brand, we use targeted streaming television ads and an extensive network of social media influencers who prompt our Quest brand products through their online posts to motivate new buyers and new product introductions.

For our Quest brand, we have recently launched a national, targeted broadcast ad campaign, and continue to leverage targeted streaming television ads and an extensive network of social media influencers who prompt our Quest brand products through their online posts to motivate new buyers and new product introductions.

Further develop our brand marketing strategies to reach consumers beyond our core historic buyers.

We intend to continue to make focused changes to our approach to consumer outreach to attract consumers beyond our historic core buyers.

For the Atkins brand, we intend to continue our marketing efforts to attract self-directed low carbohydrate eaters (those individuals not on a program diet) who buy and consume our Atkins products, despite the fact that historically, Atkins’ marketing and advertising have not been targeted towards them.

For the Atkins brand, we intend to continue our marketing efforts to attract self-directed low-carbohydrate eaters (those individuals not on a program diet) who buy and consume our Atkins products.

For our Quest brand, we intend to continue our marketing efforts to reach consumers who are seeking products that are aligned with their choice to pursue a healthy and active lifestyle.

We also note the Atkins brand has approximately 80% aided brand awareness with U.S.

We also note the Atkins brand has

approximately 93% aided brand awareness with U.S.

consumers and the Quest brand has approximately 77% aided brand awareness with U.S.

2 unchanged sentences

Our mission is to empower healthy lives through smart and satisfying nutrition.

Core Products - Atkins

Our core Atkins brand products consist of nutrition bars, RTD shakes and confections.

Nutrition Bars.

To keep on-the-go consumers energized and fueled, our Atkins nutrition bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

Atkins offers two main types of nutrition bars:

Core Atkins Products

Our core Atkins brand products consist of protein bars, RTD shakes, cookies and confections.

Protein Bars.

To keep on-the-go consumers energized and fueled, our Atkins bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

Atkins offers two main types of bars:

Atkins Meal Bars and Atkins Snack Bars.

Atkins Meal Bars contain 13 to 17 grams of protein and are available in more than 10 different flavors.

With 2 to 4 grams of net carbs, Atkins Snack Bars contain 7 to 13 grams of protein.

Atkins offers 15 varieties of Atkins Snack Bars.

Atkins Snack Bars contain 7 to 13 grams of protein, with 2 to 4 grams of net carbs, and are available in 15 different varieties.

Our rich and creamy Atkins RTD shakes contain 10 to 15 grams of protein, as well as other important vitamins and minerals.

1 unchanged sentence

Our Atkins’ Plus RTD shakes contain 30 grams of protein, for our consumers seeking higher protein content.

We believe our Atkins Endulge ® line, which is designed to satisfy consumers’ sweet cravings, and which we call Treats, consists of delicious desserts without all of the added sugar.

Our Atkins Endulge ® line, which is designed to satisfy consumers’ sweet cravings, and which we call Treats, consists of delicious desserts without all of the added sugar.

Atkins offers a variety of different Treats, such as peanut butter cups and pecan caramel clusters, each with only 1 gram of sugar or less and low net carbs, providing consumers with the option to indulge.

First launched in fiscal year 2021, Atkins’ soft and chewy cookie products are a convenient source of high-protein combined with low net carbs and low-sugar.

These sweet tasting cookies are available in double chocolate chip, peanut butter and chocolate chip.

Atkins’ cookies contain approximately 10 grams of protein, 3 grams of net carbs and approximately 1 gram of sugar or less depending on the flavor.

Licensed Frozen Meals.

Atkins signed a renewable seven-year license agreement with Bellisio Foods, Inc., or “Bellisio”, effective September 1, 2016, to license its frozen meals business.

Atkins signed a license agreement with Bellisio Foods, Inc., or “Bellisio,” to license its frozen meals business.

Bellisio manufactures, distributes, markets, promotes and sells Atkins frozen food products under the Atkins licensed marks.

3 unchanged sentences

While provided free of charge, we also offer over 1,600 protein-rich, low-carbohydrate and low-sugar recipes designed to help consumers achieve and maintain a healthy lifestyle, while still enjoying delicious food.

Core Products - Quest

Our core Quest brand products consist of protein bars, cookies, chips, thin crust pizza and RTDs.

Core Quest Products

Our core Quest brand products consist of protein bars, cookies, chips, confections and thin crust pizza.

Protein Bars.

To keep on-the-go consumers energized and fueled, our Quest protein bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

The typical Quest nutrition bar profile contains about 20 grams of protein, 5 grams or less of net carbs and about 1 gram of sugar.

Quest offers more than 25 different flavors of nutrition bars.

To keep on-the-go consumers energized and fueled, our Quest bars offer a convenient and effective solution, providing consumers with protein, fiber and a delicious taste.

The typical Quest bar profile contains about 20 grams of protein, 5 grams or less of net carbs and about 1 gram of sugar.

Quest offers more than 25 different flavors of protein bars.

First launched in 2018, Quest’s cookie products are a convenient source of high-protein combined with low net carbs and low-sugar.

Available in a variety of flavors including Chocolate Chip, Peanut Butter, Oatmeal Raisin and Snickerdoodle, Quest’s cookies typically contain about 15 grams of protein, 4 grams or less of net carbs and less than 1 gram of sugar.

Quest’s protein chips, including the tortilla-style chips launched in spring 2018, quickly became a very high selling product which offers a very attractive nutrition profile when compare to conventional chip products.

Offering in flavors including nacho cheese, ranch, chili lime BBQ, sour cream & onion and cheddar & sour cream, Quest’s chips typically contain about 18 grams of protein, about 4 grams of net carbs, and around 6 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand.

Quest’s protein chips, including the tortilla-style chips launched in spring 2018, quickly became a high-selling product offering an attractive nutrition profile when compared to conventional chip products.

Offered in flavors including nacho cheese, ranch, chili lime, BBQ, sour cream & onion, and cheddar & sour cream, Quest’s chips typically contain about 18 grams of protein, about 4 grams of net carbs, and around 6 grams of fat compared to 2 grams of protein, 15 grams of net carbs and 8 grams of fat for a well-known leading conventional brand.

Launched in fiscal year 2021, confections include peanut butter cups and “fudgey” brownie and “gooey” caramel candy bites sold in a variety of packaging.

The peanut butter cups feature a nutrition profile for two cups of 11 grams of protein, 1 gram of net carbs, less than 1 gram of sugar and 4 grams of fiber.

The candy bites feature a nutrition profile of 5 grams of protein, 1 gram of net carbs, less than 1 gram of sugar, and candy bars feature 4 grams of fiber to 12 grams of protein, 3 grams of net carbs, 1 gram of sugar and 9 grams of fiber.

Launched in summer 2018, Quest’s thin crust frozen pizza offers consumers a pizza experience with an improved nutritional profile versus other leading frozen pizza brands.

Sold in a variety of topping combinations including 4-cheese, uncured pepperoni, and supreme, Quest’s pizzas feature a nutrition profile that generally supplies about 29 grams of protein, 6 grams of net carbs or less, around 3 grams of sugar and about 18 grams of fiber compared to 12 grams of protein, 32 grams of net carbs, 2 grams of sugar and 1 gram of fiber for a well-known leading frozen pizza brand.

Quest’s RTD shakes contain 30 grams of dairy protein, a good source of iron and are rich in calcium.

Available in vanilla, chocolate and salted caramel flavors, Quest’s RTD shakes are made with high quality ingredients and are designed to provide energy balance through the day.

Marketing, Advertising and Consumer Outreach

2 unchanged sentences

We also use online resources, including social media sites, to communicate with consumers and build interest in our brands.

We use coupons (freestanding insert newspaper, store register, on-pack, online and direct mail coupons) to help stimulate product trial and repeat purchases by providing consumers with economic incentives.

Our advertising and use of online resources is aimed at increasing consumer preference and usage of our brands.

Our advertising and use of online resources are aimed at increasing consumer preference and usage of our brands.

Our trade promotions focus on obtaining retail feature and display support, achieving optimum retail product prices and securing retail shelf space.

We use coupons (freestanding insert newspaper, store register, on-pack and online mail coupons) to help stimulate product trial and repeat purchases by providing consumers with economic incentives.

The mix of these marketing activities varies between the Atkins and Quest brands.

6 unchanged sentences

Beyond the core historic consumers for each of our brands, we believe there is significant opportunity to increase household penetration for our products by expanding our marketing, product offerings and educational efforts to consumers who are focused more generally on long-term healthy living.

In the fifty-two week period ended August 29, 2020 , approximately 29% of Selling and marketing expenses were spent on television advertising for the Atkins' brand.

In the fifty-two weeks ended August 28, 2021, approximately 66% of Selling and marketing expenses were spent on advertising costs.

Product Innovation

11 unchanged sentences

By developing new products, prototypes and adjacencies in-house, we facilitate our core competencies in product innovation, and enhance our speed to market.

In addition, as part of our innovation process, we collaborate with nationally recognized third-party flavor houses and product development firms for new product development and then conduct our own proprietary consumer research to identify and improve upon new product concepts.

We plan to continue to conduct extensive consumer research in order to develop successful new products including product flavor and concept testing, marketing and trend analysis and consumer prototype testing.

Management also believes the fragmented snacking category presents a substantial opportunity for consolidation and the opportunity to build, through disciplined acquisitions, a leading platform in the snacking space and broader food category.

In addition, as part of our innovation process, we collaborate with nationally recognized third-party flavor providers and product development firms for new product development and then conduct our own proprietary consumer research to identify and improve upon new product concepts.

We plan to continue conducting extensive consumer research to develop successful new products including product flavor and concept testing, marketing and trend analysis, and consumer prototype testing.

Management also believes the fragmented snacking category presents an opportunity for consolidation and the opportunity to build, through disciplined acquisitions, a leading platform in the nutritional snacking space.

As a leader in nutritious snacking, management believes we have the unique capability to leverage our operating platform and customer relationships to expand beyond our current brands.

Our experienced management team has deep expertise in brand building to expand the business into additional brands and products in the snacking segment.

Our experienced management team has deep expertise in brand building to expand the business into additional brands and products in the nutritional snacking segment.

Simply Good Foods is actively seeking to identify and evaluate new acquisition opportunities to complement our existing portfolio, and sees significant opportunity for growth and synergies in complementary adjacent snacking categories such as sports/active and adult nutritional snacks, salty snacks and protein snacks, as well as in the “better-for-you” eating space.

1 unchanged sentence

We own numerous domestic and international trademarks and other proprietary rights that are important to our business.

Depending upon the jurisdiction, trademarks are valid as long as they are used in the regular course of trade and/or their registrations are properly maintained.

Depending upon the jurisdiction, trademarks are valid if they are used in the regular course of trade and/or their registrations are properly maintained.

We believe the protection of our trademarks, copyrights, patents, domain names, trade dress and trade secrets are important to our success.

1 unchanged sentence

We also own virtually all of the recipes and specifications to our products.

We compete primarily with nutritional snacking brands in large retail and ecommerce environments.

We compete primarily with nutritional snacking brands in large retail and e-commerce environments.

The nutritional snacking industry is fragmented and highly competitive and includes a number of diverse competitors.

Our identified branded competitors include, but are not limited to, CLIF Bar, KIND bars, Special K, Slimfast, Muscle Milk, ONE bar, Pure Protein, Premier Nutrition and think!.

Our identified branded competitors include, but are not limited to, CLIF Bar, KIND bars, Special K, Boost, Slimfast, Muscle Milk, ONE bar, Pure Protein, Premier Nutrition and think!.

We believe that the principal competitive factors in the nutritional snacking and weight management industries are:

• brand awareness and loyalty among consumers;

• ingredients;

• low-carbohydrate, low-sugar, protein-rich versus other nutritional approaches;

• convenience;

• media spending;

5 unchanged sentences

For the manufacture of our products, we subcontract with contract manufacturers, and as a result, our operations are highly flexible and require minimal capital expenditure.

The supply chain for our international business also uses exclusively contract manufacturers, and is completely separate from our North American supply chain, which is described below.

The supply chain for our international business also uses exclusively contract manufacturers.

Supply Chain .

The majority of our products are shipped directly to one central warehouse for the Atkins brand and one for the Quest brand, each of which is a leased warehouse managed by the same third-party logistics provider who then distributes products to customers.

We are in the process of combining these two warehouses into a single warehouse, which we expect to complete in 2021.

For certain customers, RTD shakes are shipped directly from the contract manufacturer to the customer's location.

In addition, our use of demand forecasting and vendor-managed inventory systems enable us to meet shipping demands, ensure timely delivery of orders and offer service levels to our customers.

We are in the process of combining most of our warehouse operations into a newly constructed larger warehouse facility.

We intend to keep one of our original warehouses for a portion of our distribution needs.

A substantial portion of our inventory is shipped directly to our retailers from these centers by the same third-party logistics provider.

Most of our remaining customers pick-up their orders at our distribution centers and make their own arrangements for delivery to their fulfillment network.

For certain customers, RTD shakes are shipped directly from the

contract manufacturer to the customers’ locations.

We believe our use of demand forecasting and vendor-managed inventory systems enables us to meet shipping demands, ensure timely delivery of orders and offer service levels to our customers.

The principal ingredients to manufacture our products include chocolate and other coatings, dairy, proteins, soy, and nuts.

1 unchanged sentence

All of our core ingredients are purchased according to rigorous standards to assure food quality and safety.

These core ingredients are generally available in adequate quantities from several suppliers, and to date, core ingredient supplies have not been affected by the economic effects related to the COVID-19 pandemic.

These core ingredients are generally available in adequate quantities from several suppliers, and to date, core ingredient supplies have largely not been affected by the supply chain challenges related to the COVID-19 pandemic.

We competitively bid with major suppliers to source competitively priced, quality ingredients and packaging that meet our standards.

3 unchanged sentences

We rely on contract manufacturers to manufacture our products.

The contract manufacturers schedule and purchase ingredient inventory independently, according to parameters set in their contracts and forecasts we provide.

The contract manufacturers schedule and receive ingredient and packaging inventory according to parameters set in their contracts and forecasts we provide.

As noted above, some ingredients and packaging are purchased by our contract manufacturers pursuant to framework contracts we have with the applicable suppliers.

Our contract manufacturers are regularly audited by third parties and are required to follow rigorous food safety guidelines.

1 unchanged sentence

We monitor both near-term and long-term capacity as well as fulfillment rates and overall performance of our manufacturing partners and qualify alternate suppliers as needed.

In general, we receive finished products from our contract manufacturers, which includes all packaging and ingredients used, as well as an agreed-upon tolling charge for each item produced.

These finished products are then shipped directly to our respective distribution centers, or shipped directly from the contract manufacturer to the customer, in the case of RTDs to select customers.

We have two leased distribution centers in Greenfield, Indiana, referred to collectively as the Distribution Centers, where we store finished goods.

The Distribution Centers have approximately 579,500 square feet of floor space between the two locations.

In general, we purchase finished products from our contract manufacturers, which includes all packaging and ingredients used, as well as an agreed-upon tolling charge for each item produced.

These finished products are then shipped directly to our distribution centers, or shipped directly from the contract manufacturer to the customer, in the case of RTDs to select customers.

We lease three distribution centers, all in Greenfield, Indiana, referred to collectively as the Distribution Centers, where we store finished goods.

We utilize over 1.35 million square feet of floor space among our Distribution Centers.

Over time, we expect to exit one of the currently operating Distribution Centers once the new facility is fully operational.

Distribution.

For the majority of our customers, our logistics provider distributes the finished goods via truckloads from our Distribution Centers, which first flow through regional terminals.

At the terminals, our orders are consolidated with other company’s products being shipped to the customer.

At the terminals, our orders are consolidated with other companies’ products being shipped to the customer.

The finished goods are then distributed to retailer distribution centers.

1 unchanged sentence

For some products, we ship directly to customers from our contract manufacturer through a third-party logistics provider.

In addition, in some instances, the customer will arrange to pick-up directly finished products from our warehouse.

In some instances, the customer will arrange to pick-up directly finished products from our Distribution Centers.

We have a wide variety of customers across the mass, food, club, drug, and e-commerce channels.

A substantial majority of our sales are generated from a limited number of retailers.

Sales to our largest retailer, Walmart, represented approximately 34% of consolidated sales in fiscal year 2020 , of which approximately 25% is through their mass retail channel and approximately 8% is through their club channel.

Sales to our largest retailer, Walmart, represented approximately 31% of consolidated sales in fiscal year 2021, of which approximately 23% is through their mass retail channel and approximately 8% is through their Sam’s club and e-commerce channels.

Sales to our next largest retailer, Amazon, represented approximately 12% of consolidated sales in fiscal year 2021.

No other customer represents more than 10% of sales.

For addition information, please see the risk factor “ We rely on sales to a limited number of retailers for a substantial majority of our net sales, and losing one or more such retailers may materially harm our business.

For additional information, please see the risk factor “ We rely on sales to a limited number of retailers for a substantial majority of our net sales, and losing one or more such retailers may materially harm our business.

In addition, we maintain “at will” contracts with these retailers, which do not require recurring or minimum purchase amounts of our products.”

We aim to ensure that our consumers may access our brand in the way that best suits their lifestyles by offering home delivery of our products.

We sell our products on Atkins.com, questnutrition.com as well as Amazon.com.

We aim to ensure that our consumers may access our brand in the way that best suits their lifestyles by offering online ordering of our products.

We sell our products on Atkins.com , questnutrition.com as well as Amazon.com , which all deliver our products directly to the location designated by the consumer.

Food Safety and Quality.

7 unchanged sentences

Our products are also sold outside North America.

Our top international sales are in Australia/New Zealand and the Netherlands.

For the fifty-two week period ended August 29, 2020 , international net sales represented approximately 3% of total net sales.

Our international supply chain is self-sufficient and run by a lean team solely focused on international operations.

Our top international sales are in Australia and New Zealand.

For the fifty-two weeks ended August 28, 2021, international net sales represented approximately 4.5% of total net sales.

Our international supply chain is run by a lean team solely focused on international operations.

Similar to U.S.

operations, international operations utilize contract manufacturers for products, and distributors for distributions and sales.

operations, international operations utilize contract manufacturers for products, and distributors for distribution and sales.

Information Technology

We rely heavily on information systems for management of our supply chain, inventory, payment of obligations, collection of cash, human capital management, financial tools and other business processes and procedures.

Our ability to manage our business functions efficiently and effectively depends significantly on the reliability and capacity of these systems.

We have instituted controls, including information technology governance controls that are intended to protect our computer systems and our information technology systems and networks.

We also have business continuity plans that attempt to anticipate and mitigate failures.

However, we cannot control or prevent every potential technology failure, adverse environmental event, third-party service interruption or cybersecurity risk.

We increasingly rely on cloud computing and other technologies that result in third parties holding significant amounts of customer, consumer or employee information on our behalf.

Except for limited information voluntarily submitted by users of our website, we typically do not collect or store consumer data or personal information.

However, third-party providers, including our licensees, contract manufacturers, e-commerce contractors and third-party sellers may do so.

The website operations of such third parties may be affected by reliance on other third-party hardware and software providers, technology changes, risks related to the failure of computer systems through which these website operations are conducted, telecommunications failures, data security breaches and similar disruptions.

Our operations are organized into two operating segments, Atkins and Quest, which are aggregated into one reporting segment due to similar financial, economic and operating characteristics.

3 unchanged sentences

(c) the methods used to distribute products to customers, (d) the type of customer for the products, and (e) the nature of the regulatory environment.

The recently announced restructuring and new organization design creates an efficient and fully integrated organization that will continue to support and build multi-category nutritional snacking brands.

Regulation and Compliance

Along with contract manufacturers, brokers, distributors, ingredients and packaging suppliers, Simply Good Foods is primarily subject to laws and regulations in the United States promulgated by federal, state and local government authorities.

In the United States, the federal agencies governing the manufacture, distribution and advertising of products including, among others, the U.S.

In the United States, the federal agencies governing the manufacture, distribution and advertising of products include, among others, the U.S.

Federal Trade Commission (“FTC”), the U.S.

Food and Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), the U.S.

Environmental Protection Agency and the Occupational Safety and Health Administration and similar state and local agencies.

Under various statutes, these agencies, among other things, prescribe the requirements and establish the standards for quality and safety and regulate marketing and advertising to consumers.

Certain of these agencies, in certain circumstances, must not only approve products, but also review the manufacturing processes and facilities used to produce these products before they can be marketed in the United States.

Environmental Protection Agency, and the Occupational Safety and Health Administration, in addition to similar state and local agencies.

Under various statutes, these agencies prescribe the requirements and establish the standards for quality and safety and regulate marketing and advertising to consumers.

In certain circumstances, these agencies must not only approve products, but also review the manufacturing processes and facilities used to produce these products before they can be marketed in the United States.

Simply Good Foods is subject to labor and employment laws, laws governing advertising, privacy laws, safety regulations and other laws, including consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise.

2 unchanged sentences

Food-Related Regulations

As a manufacturer and distributor of food products, we are subject to a number of food-related regulations, including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA.

As a manufacturer and distributor of food products, we are subject to several food-related regulations, including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA.

This comprehensive regulatory framework governs the manufacture (including composition and ingredients), labeling, packaging and safety of food in the United States.

4 unchanged sentences

We are subject to numerous other federal, state and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products.

Additionally, because of the ingredients in our Quest pizza products we are subject to the rules and regulations promulgated by the USDA, including the Federal Meat Inspection Act.

The USDA regulates certain aspects of food safety, quality, and nutritional labeling of most meat, poultry, and egg products.

Environmental Regulations

We are subject to various state and federal environmental laws, regulations and directives, including the Food Quality Protection Act of 1996, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act and the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended.

We believe that we are in material compliance with the environmental regulations applicable to our business.

We do not expect the cost of our continued compliance to have a material effect on our capital expenditures, earnings, cash flows or competitive position in the foreseeable future.

Governments may in the future implement new laws, regulations and directives aimed to meet certain climate change goals and objectives which could affect our business operations as they relate to ingredient and packaging procurement.

We believe that we are in material compliance with existing environmental regulations applicable to our business.

We do not expect the cost of our continued compliance with existing environmental regulations to have a material effect on our capital expenditures, earnings, cash flows or competitive position in the foreseeable future.

In addition, any asset retirement obligations are not material.

1 unchanged sentence

We are subject to various labeling requirements with respect to our products at the federal, state and local levels.

At the federal level, the FDA has authority to review product labeling, and the FTC may review labeling and advertising materials, including online and television advertisements, to determine if advertising materials are misleading.

At the federal level, the FDA and USDA have authority to review product labeling, and the FTC may review labeling and advertising materials, including online and television advertisements, to determine if advertising materials are misleading.

We are also subject to various state and local consumer protection laws.

We believe we are in material compliance with all labeling laws and regulations applicable to our business.

As of August 29, 2020 , we had approximately 300 employees, including international employees.

None of our U.S.

employees are represented by a labor union or are covered by a collective bargaining agreement.

We believe that we have good relations with our employees.

Human Capital Resources

As of August 28, 2021, our workforce consisted of 263 employees who are largely based in an office or in research and development (“R&D”) lab locations.

Of that total, approximately 91% of our employees were located in the United States, and the rest were located in Canada, Europe, Australia and New Zealand.

Of our total employees, 118 employees were engaged in marketing and sales, 76 were engaged in R&D, operations and quality, and 69 were engaged in administration.

Of our total employees, 18 employees were hourly and 245 were salaried.

No employees were covered by a collective bargaining agreement.

Mission, Vision and Values.

Our vision is 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.

Our mission is to empower healthy lives through smart and satisfying nutrition.

Our values, Act with Integrity, Lead with Innovation, Succeed through Interdependence, Be Empowered, and Bring Passion Every Day, are critical to our success in fulfilling our mission and vision.

Training & Development .

Training and development is critical to our mission’s success, helps our employees grow their career, and is one way we attract, motivate and retain our employees.

We regularly host “Be Empowered” sessions for employees, which are educational classes and networking opportunities that teach our nutrition philosophy and our different business functions.

To develop effective and empowered leaders, we host a series of trainings and informational sessions through our program called the Leadership Playbook.

Our Commitment to Diversity, Equity & Inclusion (“DE&I”).

We recognize the importance of a diverse, equitable and inclusive culture for our employees and its effect on our ability to achieve our mission, so we have made commitments to track and improve our performance in each of these areas.

In July 2021, our Board of Directors formed a Corporate Responsibility & Sustainability committee that has been tasked, among other things, with overseeing human capital resources and DE&I initiatives.

As of August 28, 2021, approximately 53% of our employees globally were women and approximately 35% of U.S.

employees were minorities.

Approximately 17% of our Board of Directors were female, and approximately 8% were minorities.

To improve diversity, equity and inclusion, we committed to interviewing diverse candidates for open corporate leadership positions and require every employee to attend preventing discrimination and harassment training.

In January 2021 we completed a pay equity audit to confirm equity in our pay practices.

We have committed to complete a pay equity audit every year to ensure no inequities arise.

Further, we post every open position or promotional opportunity in the United States that is not confidential and include the job’s pay range to provide pay transparency.

This practice provides every qualified candidate an opportunity to apply while also knowing the range of pay for the role.

We regularly ask our employees to respond to pulse surveys to gather feedback on topics ranging from organization changes to overall engagement and inclusion.

This allows us to keep track of employee engagement and sentiment over time and use this information to inform our strategy and actions to continue to grow and improve.

We have also committed to summarizing results for each survey and providing responses quickly after surveys close.

In August 2021, management hired a third-party DE&I consultant to provide guidance and best practice inputs to our management and the Corporate Responsibility & Sustainability Committee of the Board of Directors, as we continue to make progress on our DE&I efforts.

Total Rewards.

The health, satisfaction and security of our employees and their families are important to us and an important part of reaching our organization's goals.

We offer total rewards packages that include valuable and competitive compensation and benefit plans.

These programs reflect our commitment to attracting and retaining top talent and keeping our staff healthy and secure.

Our compensation philosophy is to pay for performance, and we do so through a mix of base salary, annual short-term incentive and long-term incentive.

We understand that each employee's situation is unique, so we offer benefits that can be shaped and molded by each employee to fit their family's needs.

Our current benefits vary by region, but generally include medical, dental and vision insurance, 401(k) retirement plan, savings accounts, life and disability coverage, and other voluntary benefits.

We also offer time-off benefits including vacation time, flexible vacation for exempt positions, sick leave, and parental leave.

Volunteering and Philanthropy.

For decades, we have had a compelling social purpose – to help ensure all Americans have access to sound nutritional guidance to positively affect overall health outcomes.

This began with the book Dr.

Atkins’ Diet Revolution published in 1972 and continues today with our advocacy for improved dietary guidelines and initiatives to educate consumers and empower them to make the right nutritional choices for themselves and their families.

Further, we do our part to stem food insecurity through volunteering opportunities and company philanthropy, including cash and product donations.

We encourage our employees to volunteer, and as such have organized days of volunteering in the cities where our largest workforces reside.

In Denver, Colorado our team volunteered for the Food Bank of the Rockies, and in El Segundo, California our team volunteered for the Los Angeles Mission.

Also this year, we announced participation in Walmart’s “Fight Hunger.

Spark Change.” campaign.

For each purchase of participating Simply Good Foods products at Walmart from April 5 – May 3, 2021, we donated the monetary equivalent of at least one meal to Feeding America.

Through this program, Simply Good Foods secured at least 500,000 meals for Feeding America.

Employee Safety and Wellbeing Measures.

In response to the COVID-19 pandemic, as of August 28, 2021, we have implemented a number of measures to keep our employees safe:

• All office positions have been encouraged to work from home, and we will not require employees to return to the office until January 2022, at the earliest.

• In our offices and R&D labs where employees are required to physically access special tools or resources to work, we follow local, state and federal guidance by:

◦ Requiring face coverings

◦ Instituting social distancing guidelines

◦ Requiring all employees to complete an online health screening daily

◦ Increasing our deep-cleaning schedule

◦ Making hand sanitizer readily available.

• We limit travel to only business-essential travel.

Further, we also strongly encourage employees to receive a COVID-19 vaccine, so we offered an incentive and lottery once the vaccines were widely available to all adults in the United States.

The portion of our employees who got the vaccine exceeded each of the local and state-level vaccination rates of the general population.

We acknowledge the importance of balance in our employees’ lives to their overall wellbeing, so we offer our employees time off benefits described above to recharge.

We also had two company-wide mental health days and encourage employees to take extra time away from work to recharge late December 2020.

We adopted an employee-friendly parental leave policy in 2020.

To address the fatigue that results from working on a computer from home all day, we implemented “Zoom-free” Wednesday afternoons so employees can step away from their computers to focus on other responsibilities.

When we do return to our offices regularly, it is our current intention that Mondays and Fridays will be flexible remote workdays.

Available Information

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business