What changed in this filing

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Item 1. Financial Statements

2022-06-30 compared with 2022-04-06 · 127 added, 116 removed, 441 unchanged (36% of the section changed)

3 unchanged sentences

(Unaudited, dollars in thousands, except share and per share data)

February 26, 2022 August 28, 2021

May 28, 2022 August 28, 2021

Current assets:

39 unchanged sentences

Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued

Common stock, $0.01 par value, 600,000,000 shares authorized, 101,070,881 and 95,882,908 shares issued at February 26, 2022 and August 28, 2021, respectively 1,011 959

Treasury stock, 669,755 shares and 98,234 shares at cost at February 26, 2022 and August 28, 2021, respectively ( 22,539 ) ( 2,145 )

Common stock, $0.01 par value, 600,000,000 shares authorized, 101,315,226 and 95,882,908 shares issued at May 28, 2022 and August 28, 2021, respectively 1,013 959

Treasury stock, 887,976 shares and 98,234 shares at cost at May 28, 2022 and August 28, 2021, respectively ( 30,649 ) ( 2,145 )

Additional paid-in-capital

9 unchanged sentences

The Simply Good Foods Company and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited, dollars in thousands, except share and per share data)

Thirteen Weeks Ended Twenty-Six Weeks Ended

February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Thirteen Weeks Ended Thirty-Nine Weeks Ended

May 28, 2022 May 29, 2021 May 28, 2022 May 29, 2021

Net sales $ 316,531 $ 284,001 $ 894,514 $ 745,760

11 unchanged sentences

Loss in fair value change of warrant liability — ( 35,833 ) ( 30,062 ) ( 60,714 )

Gain on foreign currency transactions 780 975 427 984

Gain on legal settlement — 5,000 — 5,000

Gain (loss) on foreign currency transactions 76 ( 272 ) 503 712

Other income 17 70 26 229

Total other expense ( 4,788 ) ( 39,019 ) ( 46,060 ) ( 79,121 )

Income (loss) before income taxes 28,710 ( 18,901 ) 62,685 32,426

Income before income taxes 50,488 21,303 113,173 53,729

Income tax expense 11,654 15,408 34,726 31,095

Net income (loss) $ 18,461 $ ( 26,214 ) $ 39,613 $ 16,739

Other comprehensive income (loss):

Net income $ 38,834 $ 5,895 $ 78,447 $ 22,634

Other comprehensive income:

Foreign currency translation, net of reclassification adjustments $ ( 72 ) $ 95 $ ( 820 ) $ 293

Comprehensive income (loss) $ 17,753 $ ( 25,971 ) $ 38,865 $ 16,937

Earnings (loss) per share from net income (loss):

Comprehensive income $ 38,762 $ 5,990 $ 77,627 $ 22,927

Earnings per share from net income:

Basic $ 0.39 $ 0.06 $ 0.80 $ 0.24

7 unchanged sentences

(Unaudited, dollars in thousands)

Twenty-Six Weeks Ended

February 26, 2022 February 27, 2021

Thirty-Nine Weeks Ended

May 28, 2022 May 29, 2021

Operating activities

45 unchanged sentences

$ 56,720 $ 90,173

Twenty-Six Weeks Ended

February 26, 2022 February 27, 2021

Thirty-Nine Weeks Ended

May 28, 2022 May 29, 2021

Supplemental disclosures of cash flow information

29 unchanged sentences

Balance at February 26, 2022 101,070,881 $ 1,011 669,755 $ ( 22,539 ) $ 1,278,728 $ 145,420 $ ( 1,566 ) $ 1,401,054

Net income — — — — — 38,834 — 38,834

Stock-based compensation — — — — 2,994 — — 2,994

Foreign currency translation adjustments — — — — — — ( 72 ) ( 72 )

Repurchase of common stock — — 218,221 ( 8,110 ) — — — ( 8,110 )

Shares issued upon vesting of restricted stock units 11,358 — — — ( 247 ) — — ( 247 )

Exercise of options to purchase common stock 232,987 2 — — 2,867 — — 2,869

Balance at May 28, 2022 101,315,226 $ 1,013 887,976 $ ( 30,649 ) $ 1,284,342 $ 184,254 $ ( 1,638 ) $ 1,437,322

Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total

7 unchanged sentences

Balance at November 28, 2020 95,818,871 $ 958 98,234 $ ( 2,145 ) $ 1,077,538 $ 107,880 $ ( 924 ) $ 1,183,307

Net income — — — — — ( 26,214 ) — ( 26,214 )

Net loss — — — — — ( 26,214 ) — ( 26,214 )

Stock-based compensation — — — — 2,484 — — 2,484

3 unchanged sentences

Balance at February 27, 2021 95,856,715 $ 959 98,234 $ ( 2,145 ) $ 1,080,340 $ 81,666 $ ( 681 ) $ 1,160,139

Net income — — — — — 5,895 — 5,895

Stock-based compensation — — — — 2,172 — — 2,172

Foreign currency translation adjustments — — — — — — 95 95

Shares issued upon vesting of restricted stock units 4,683 — — — ( 68 ) — — ( 68 )

Exercise of options to purchase common stock 14,380 — — — 173 — — 173

Balance at May 29, 2021 95,875,778 $ 959 98,234 $ ( 2,145 ) $ 1,082,617 $ 87,561 $ ( 586 ) $ 1,168,406

See accompanying notes to the unaudited condensed consolidated financial statements.

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The results reported in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire fiscal year and should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended August 28, 2021, included in the Company’s Annual Report on Form 10-K (“Annual Report”) filed with the SEC on October 26, 2021.

While the Company’s business has continued to improve 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, and other related cost pressures on the business continues to be not fully known.

Additionally, management is monitoring the conflict in Ukraine and any broader economic effects from the crisis, especially on the availability and cost of raw materials that are produced in this region.

Factors contributing to this uncertainty, 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 recently improving consumer purchasing and consumption behavior, and (iv) unforeseen business disruptions or other effects due to current global geopolitical tensions, including relating to Ukraine.

While the Company’s business has continued to improve 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.

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.

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.

Summary of Significant Accounting Policies

23 unchanged sentences

The following is a summary of revenue disaggregated by geographic area and core brands:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) May 28, 2022 May 29, 2021 May 28, 2022 May 29, 2021

North America (1)

5 unchanged sentences

(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.

Charges related to credit loss on accounts receivables from transactions with external customers were immaterial for the thirteen and twenty-six weeks ended February 26, 2022 and February 27, 2021.

As of February 26, 2022 and August 28, 2021, the allowances for doubtful accounts related to these accounts receivable were $ 1.1 million.

Charges related to credit loss on accounts receivables from transactions with external customers were $ 0.2 million and $ 0.1 million for the thirteen and thirty-nine weeks ended May 28, 2022, respectively, and were $ 0.6 million and $ 0.7 million for the thirteen and thirty-nine weeks ended May 29, 2021, respectively.

As of May 28, 2022 and August 28, 2021, the allowances for doubtful accounts related to these accounts receivable were $ 1.3 million and $ 1.1 million, respectively.

Goodwill and Intangibles

As of February 26, 2022 and August 28, 2021, Goodwill in the Condensed Consolidated Balance Sheets was $ 543.1 million.

There were no impairment charges related to goodwill during the thirteen and twenty-six weeks ended February 26, 2022 or since the inception of the Company.

As of May 28, 2022 and August 28, 2021, Goodwill in the Condensed Consolidated Balance Sheets was $ 543.1 million.

There were no impairment charges related to goodwill during the thirteen and thirty-nine weeks ended May 28, 2022 or since the inception of the Company.

Intangible assets, net in the Condensed Consolidated Balance Sheets consists of the following:

February 26, 2022

(In thousands) Useful life Gross carrying amount Accumulated amortization Net carrying

18 unchanged sentences

$ 1,182,863 $ 43,822 $ 1,139,041

Changes in Intangible assets, net during the twenty-six weeks ended February 26, 2022 were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 4.0 million and $ 3.9 million for the thirteen weeks ended February 26, 2022 and February 27, 2021, respectively, and $ 7.9 million and $ 7.7 million for the twenty-six weeks ended February 26, 2022 and February 27, 2021, respectively.

There were no impairment charges related to intangible assets during the thirteen and twenty-six weeks ended February 26, 2022 and February 27, 2021.

Changes in Intangible assets, net during the thirty-nine weeks ended May 28, 2022 were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 4.0 million and $ 3.8 million for the thirteen weeks ended May 28, 2022 and May 29, 2021, respectively, and $ 11.9 million and $ 11.6 million for the thirty-nine weeks ended May 28, 2022 and May 29, 2021, respectively.

There were no impairment charges related to intangible assets during the thirteen and thirty-nine weeks ended May 28, 2022 and May 29, 2021.

Estimated future amortization for each of the next five fiscal years and thereafter is as follows:

28 unchanged sentences

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 February 26, 2022 and August 28, 2021, respectively.

The Company was in compliance with all financial covenants as of May 28, 2022 and August 28, 2021, respectively.

Long-term debt consists of the following:

(In thousands) February 26, 2022 August 28, 2021

Term Facility (effective rate of 3.8% at February 26, 2022)

(In thousands) May 28, 2022 August 28, 2021

Term Facility (effective rate of 4.7% at May 28, 2022)

$ 406,500 $ 456,500

Finance lease liabilities (effective rate of 5.6% at February 26, 2022)

Finance lease liabilities (effective rate of 5.6% at May 28, 2022)

Deferred financing fees 4,107 5,636

2 unchanged sentences

Long-term debt, net of deferred financing fees $ 402,594 $ 451,269

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended February 26, 2022.

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended May 28, 2022.

The outstanding balance of the Term Facility is due upon its maturity in July 2024.

As of February 26, 2022, the Company had letters of credit in the amount of $ 3.5 million outstanding.

As of May 28, 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 February 26, 2022.

No amounts were drawn against these letters of credit at May 28, 2022.

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 February 26, 2022 and August 28, 2021, the book value of the Company’s debt approximated fair value.

As of May 28, 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.

10 unchanged sentences

On January 7, 2022, Conyers Park elected to exercise the Private Warrants 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 February 26, 2022.

As a result of Conyers Park’s election to exercise the Private Warrants, there were no outstanding liability-classified Private Warrants as of May 28, 2022.

Refer to Note 10, Stockholders’ Equity, for additional details regarding the cashless exercise of the Private Warrants.

4 unchanged sentences

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 reflects a Level 3 measurement within the fair value measurement hierarchy.

There were no Private Warrants outstanding as of February 26, 2022.

There were no Private Warrants outstanding as of May 28, 2022.

As of August 28, 2021, the Company had 6,700,000 Private Warrants outstanding with a fair value price per Private Warrant of $ 23.86 , resulting in a $ 159.8 million total warrant liability.

8 unchanged sentences

Per share value of warrants $ 23.86

The periodic remeasurement of the warrant liability has been reflected in Loss in fair value change of warrant liability within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The adjustments for the thirteen and twenty-six weeks ended February 26, 2022 were a loss of $ 12.7 million and $ 30.1 million, respectively.

The adjustments for the thirteen and twenty-six weeks ended February 27, 2021 were a loss of $ 45.3 million and $ 24.9 million, respectively.

The adjustments for the thirty-nine weeks ended May 28, 2022 resulted in a loss of $ 30.1 million, and the adjustments for the thirteen and thirty-nine weeks ended May 29, 2021 were losses of $ 35.8 million and $ 60.7 million, respectively.

The tax expense and the effective tax rate resulting from operations were as follows:

Twenty-Six Weeks Ended

(In thousands) February 26, 2022 February 27, 2021

Thirty-Nine Weeks Ended

(In thousands) May 28, 2022 May 29, 2021

Income before income taxes $ 113,173 $ 53,729

1 unchanged sentence

Effective tax rate 30.7 % 57.9 %

The effective tax rate for the twenty-six weeks ended February 26, 2022 was 11.6 % less than the effective tax rate for the twenty-six weeks ended February 27, 2021, which was primarily driven by the non-cash change in the fair value of the warrant liability and other permanent differences.

The effective tax rate for the thirty-nine weeks ended May 28, 2022 was 27.2 % less than the effective tax rate for the thirty-nine weeks ended May 29, 2021, which was primarily driven by the non-cash change in the fair value of the warrant liability and other permanent differences.

The components of lease expense were as follows:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands) Statements of Operations Caption February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) Statements of Operations Caption May 28, 2022 May 29, 2021 May 28, 2022 May 29, 2021

Operating lease cost:

11 unchanged sentences

(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 13, Restructuring and Related Charges, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the twenty-six weeks ended February 26, 2022 and a $ 0.5 million impairment charge, net of the gain on lease termination, related to its leases in Toronto, Ontario and the Netherlands in the twenty-six weeks ended February 27, 2021.

The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In conjunction with the Company’s restructuring activities as discussed in Note 13, Restructuring and Related Charges, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the thirty-nine weeks ended May 28, 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 thirty-nine weeks ended May 29, 2021.

The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income.

Refer to Note 13, 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 February 26, 2022 August 28, 2021

(In thousands) Balance Sheets Caption May 28, 2022 August 28, 2021

Operating lease right-of-use assets Other long-term assets $ 48,134 $ 46,197

6 unchanged sentences

Total lease liabilities $ 52,419 $ 49,370

Future maturities of lease liabilities as of February 26, 2022 were as follows:

Future maturities of lease liabilities as of May 28, 2022 were as follows:

(In thousands) Operating Leases Finance Leases

7 unchanged sentences

Present value of lease liabilities $ 51,940 $ 479

As of February 26, 2022, the Company had entered into a lease with estimated total minimum future lease payments of $ 1.6 million over a 7.5 -year minimum lease term that had not yet commenced, and as a result it is not recorded on the Condensed Consolidated Balance Sheets.

The Company expects the lease to commence in fiscal year 2022, and the Company has the option to renew the lease for an additional 5.0 years after the minimum lease term.

The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows:

February 26, 2022 August 28, 2021

May 28, 2022 August 28, 2021

Weighted-average remaining lease term (in years)

5 unchanged sentences

Supplemental and other information related to leases was as follows:

Twenty-Six Weeks Ended

(In thousands) February 26, 2022 February 27, 2021

Thirty-Nine Weeks Ended

(In thousands) May 28, 2022 May 29, 2021

Cash paid for amounts included in the measurement of lease liabilities

6 unchanged sentences

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.

As of February 26, 2022 and August 28, 2021, the Company had $ 0.7 million reserved for potential settlements.

The Company has entered into endorsement contracts with certain celebrity figures and social media influencers to promote and endorse the Atkins and Quest brands and product lines.

These contracts contain endorsement fees, which are expensed ratably over the life of the contract, and performance fees, that are recognized at the time of achievement.

Based on the terms of the contracts in place and achievement of performance conditions as of February 26, 2022, the Company will be required to make payments of $ 1.3 million over the next year.

Based on the terms of the contracts in place and achievement of performance conditions as of May 28, 2022, the Company will be required to make payments of $ 0.7 million over the next year.

Stockholders’ Equity

4 unchanged sentences

On January 7, 2022, Conyers Park elected to exercise the Private Warrants 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 February 26, 2022.

As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of May 28, 2022.

As discussed in Note 6, 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 in fair value change of warrant liability within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Stock Repurchase Program

On November 13, 2018, the Company announced that its Board of Directors had adopted a $ 50.0 million 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.

1 unchanged sentence

The stock repurchase program may be suspended or discontinued at any time by the Company and does not have an expiration date.

During the thirteen and twenty-six weeks ended February 26, 2022, the Company repurchased 571,521 shares of common stock at an average share price of $ 35.68 per share.

The Company did not repurchase any shares of common stock during the twenty-six weeks ended February 27, 2021.

As of February 26, 2022, approximately $ 27.5 million remained available under the stock repurchase program.

During the thirteen weeks ended May 28, 2022, the Company repurchased 218,221 shares of common stock at an average share price of $ 37.16 per share.

During the thirty-nine weeks ended May 28, 2022, the Company repurchased 789,742 shares of common stock at an average share price of $ 36.09 per share.

The Company did not repurchase any shares of common stock during the thirty-nine weeks ended May 29, 2021.

As of May 28, 2022, approximately $ 69.3 million remained available under the stock repurchase program.

Accumulated Other Comprehensive Loss

During the thirteen and twenty-six weeks ended February 26, 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 on foreign currency transactions within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

During the thirty-nine weeks ended May 28, 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 Condensed Consolidated Statements of Operations and Comprehensive Income.

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 (loss) per share, basic earnings (loss) 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.

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 is excluded.

In periods in which the Company has a net loss, diluted earnings (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 tables reconcile the numerators and denominators used in the computations of both basic and diluted earnings (loss) per share:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands, except per share data) February 26, 2022 February 27, 2021 February 26, 2022 February 27, 2021

Basic earnings (loss) per share computation:

Net income (loss) available to common stockholders $ 18,461 $ ( 26,214 ) $ 39,613 $ 16,739

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 tables reconcile the numerators and denominators used in the computations of both basic and diluted earnings per share:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands, except per share data) May 28, 2022 May 29, 2021 May 28, 2022 May 29, 2021

Basic earnings per share computation:

Net income available to common stockholders $ 38,834 $ 5,895 $ 78,447 $ 22,634

Weighted average common shares outstanding - basic 100,426,227 95,767,629 98,294,114 95,730,581

Basic earnings (loss) per share from net income (loss) $ 0.19 $ ( 0.27 ) $ 0.41 $ 0.17

Diluted earnings (loss) per share computation:

Net income (loss) available for common stockholders $ 18,461 $ ( 26,214 ) $ 39,613 $ 16,739

Numerator for diluted earnings (loss) per share $ 18,461 $ ( 26,214 ) $ 39,613 $ 16,739

Basic earnings per share from net income $ 0.39 $ 0.06 $ 0.80 $ 0.24

Diluted earnings per share computation:

Net income available for common stockholders $ 38,834 $ 5,895 $ 78,447 $ 22,634

Numerator for diluted earnings per share $ 38,834 $ 5,895 $ 78,447 $ 22,634

Weighted average common shares outstanding - basic 100,426,227 95,767,629 98,294,114 95,730,581

2 unchanged sentences

Weighted average common shares - diluted 102,237,457 97,589,656 100,190,068 97,197,180

Diluted earnings (loss) per share from net income (loss) $ 0.18 $ ( 0.27 ) $ 0.40 $ 0.17

Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 26, 2022 excluded 0.9 million shares and 1.5 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive.

The diluted earnings (loss) per share calculations for the thirteen and twenty-six weeks ended February 27, 2021 excluded 3.9 million shares and 3.6 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 26, 2022 excluded 0.3 million shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

Diluted earnings (loss) per share calculations for the thirteen and twenty-six weeks ended February 27, 2021 excluded 1.4 million 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 thirteen and twenty-six weeks ended February 26, 2022 excluded 0.1 million non-vested stock units that would have been anti-dilutive.

Diluted earnings (loss) per share calculations for the thirteen and twenty-six weeks ended February 27, 2021 excluded 0.3 million non-vested stock units and an immaterial number of non-vested stock units, respectively, that would have been anti-dilutive.

Diluted earnings per share from net income $ 0.38 $ 0.06 $ 0.78 $ 0.23

Diluted earnings per share calculations for the thirty-nine weeks ended May 28, 2022 excluded 1.0 million shares, issuable upon exercise of Private Warrants, that would have been anti-dilutive.

The diluted earnings per share calculations for the thirteen and thirty-nine weeks ended May 29, 2021 excluded 4.3 million shares and 3.9 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the thirteen and thirty-nine weeks ended May 28, 2022 excluded 0.3 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 thirteen and thirty-nine weeks ended May 29, 2021 excluded an immaterial number of shares and 0.2 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 thirteen and thirty-nine weeks ended May 28, 2022 and May 29, 2021 excluded an immaterial number of non-vested stock units that would have been anti-dilutive.

Omnibus Incentive Plan

2 unchanged sentences

Stock-based compensation expense is included within General and administrative expense, which is the same financial statement caption where the recipient’s other compensation is reported.

The Company recorded stock-based compensation expense of $ 3.1 million and $ 2.5 million in the thirteen weeks ended February 26, 2022 and February 27, 2021, respectively, and $ 5.7 million and $ 3.6 million in the twenty-six weeks ended February 26, 2022 and February 27, 2021, respectively.

The Company recorded stock-based compensation expense of $ 3.0 million and $ 2.2 million in the thirteen weeks ended May 28, 2022 and May 29, 2021, respectively, and $ 8.7 million and $ 5.8 million in the thirty-nine weeks ended May 28, 2022 and May 29, 2021, respectively.

Stock Options

The following table summarizes stock option activity for the twenty-six weeks ended February 26, 2022:

The following table summarizes stock option activity for the thirty-nine weeks ended May 28, 2022:

Shares underlying options Weighted average

4 unchanged sentences

Forfeited ( 2,300 ) 19.89

Outstanding as of February 26, 2022 3,009,538 $ 17.60 6.52

Vested and expected to vest as of February 26, 2022 3,009,538 $ 17.60 6.52

Exercisable as of February 26, 2022 2,397,145 $ 14.23 5.87

As of February 26, 2022, the Company had $ 5.8 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 2.0 years.

During the twenty-six weeks ended February 26, 2022 and February 27, 2021, the Company received $ 1.5 million and $ 0.5 million in cash from stock option exercises, respectively.

Outstanding as of May 28, 2022 2,776,551 $ 18.04 6.35

Vested and expected to vest as of May 28, 2022 2,776,551 $ 18.04 6.35

Exercisable as of May 28, 2022 2,164,158 $ 14.44 5.66

As of May 28, 2022, the Company had $ 5.0 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 1.8 years.

During the thirty-nine weeks ended May 28, 2022 and May 29, 2021, the Company received $ 4.3 million and $ 0.7 million in cash from stock option exercises, respectively.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the twenty-six weeks ended February 26, 2022:

The following table summarizes restricted stock unit activity for the thirty-nine weeks ended May 28, 2022:

Units Weighted average

4 unchanged sentences

Forfeited ( 22,818 ) 26.51

Non-vested as of February 26, 2022 460,307 $ 29.38

As of February 26, 2022, the Company had $ 10.4 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.8 years.

Non-vested as of May 28, 2022 476,166 $ 30.55

As of May 28, 2022, the Company had $ 10.3 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.7 years.

Performance Stock Units

During the twenty-six weeks ended February 26, 2022, the Board of Directors granted performance stock units under the Company’s equity compensation plan.

During the thirty-nine weeks ended May 28, 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 -year period.

Performance stock units were valued using a Monte Carlo simulation.

The following table summarizes performance stock unit activity for the twenty-six weeks ended February 26, 2022:

The following table summarizes performance stock unit activity for the thirty-nine weeks ended May 28, 2022:

Units Weighted average

4 unchanged sentences

Forfeited ( 8,083 ) 18.82

Non-vested as of February 26, 2022 256,425 $ 32.79

As of February 26, 2022, the Company had $ 5.0 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.5 years.

Non-vested as of May 28, 2022 255,538 $ 32.80

As of May 28, 2022, the Company had $ 4.3 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.3 years.

Stock Appreciation Rights

2 unchanged sentences

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 twenty-six weeks ended February 26, 2022:

The following table summarizes SARs activity for the thirty-nine weeks ended May 28, 2022:

Shares underlying SARs Weighted average

3 unchanged sentences

Forfeited — —

Outstanding as of February 26, 2022 150,000 $ 24.20 7.68

Vested and expected to vest as of February 26, 2022 150,000 $ 24.20 7.68

Exercisable as of February 26, 2022 — $ — 0.00

As of February 26, 2022, the Company had $ 0.1 million of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 0.7 years.

Outstanding as of May 28, 2022 150,000 $ 24.20 7.43

Vested and expected to vest as of May 28, 2022 150,000 $ 24.20 7.43

Exercisable as of May 28, 2022 — $ — 0.00

As of May 28, 2022, the Company had $ 0.1 million of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 0.4 years.

Restructuring and Related Charges

1 unchanged sentence

The new organization design became effective on August 31, 2020.

These restructuring plans primarily include workforce reductions, changes in management structure, and the relocation of business activities from one location to another.

The one-time termination benefits and employee severance costs to be incurred in relation to these restructuring activities are accounted for in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, and ASC Topic 712, Compensation - Nonretirement Postemployment Benefits, respectively.

The Company recognizes a liability and the related expense for these restructuring costs when the liability is incurred and can be measured.

Restructuring accruals are based upon management estimates at the time and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded.

Changes to the restructuring liability during the twenty-six weeks ended February 26, 2022 were as follows:

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 third quarter of fiscal 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 Postemployment 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 Condensed Consolidated Statements of Operations and Comprehensive Income

Changes to the restructuring liability during the thirty-nine weeks ended May 28, 2022 were as follows:

(In thousands) Termination benefits and severance Other Restructuring liability

2 unchanged sentences

Cash payments ( 903 ) ( 76 ) ( 979 )

Balance as of February 26, 2022 $ — $ — $ —

In addition to the restructuring costs shown above, the Company recorded an immaterial gain on lease termination related to its lease in the Netherlands in the twenty-six weeks ended February 26, 2022.

As a result, the Company’s total restructuring and restructuring-related costs incurred in the thirteen and twenty-six weeks ended February 26, 2022 were $ 0.1 million.

The Company incurred a total of $ 1.3 million and $ 3.8 million in restructuring and restructuring-related costs in the thirteen and twenty-six weeks ended February 27, 2021, respectively.

The effect of these restructuring activities has been included within General and administrative on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Since the restructuring activities were announced in May 2020, the Company has incurred aggregate restructuring and restructuring-related costs of $ 9.9 million.

Overall, the Company expects to incur a total of approximately $ 10.1 million in restructuring and restructuring-related costs, which are to be paid through the third quarter of fiscal year 2022.

Balance as of May 28, 2022 $ — $ — $ —

The Company’s total restructuring and restructuring-related costs incurred in the thirty-nine weeks ended May 28, 2022 were $ 0.1 million, which included an immaterial gain on lease termination related to its lease in the Netherlands in addition to the restructuring costs shown above.

Because the Company substantially completed its restructuring activities during the third quarter of fiscal 2022, no such restructuring or restructuring-related costs were incurred in the thirteen weeks ended May 28, 2022.

In the thirteen and thirty-nine weeks ended May 29, 2021, the Company incurred a total of $ 0.2 million and $ 4.0 million in restructuring and restructuring-related costs, respectively.

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-Q

Item 1. Financial Statements