What changed in this filing

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Item 1. Financial Statements

2023-06-29 compared with 2023-04-05 · 105 added, 83 removed, 435 unchanged (30% of the section changed)

3 unchanged sentences

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

February 25, 2023 August 27, 2022

May 27, 2023 August 27, 2022

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, 101,873,171 and 101,322,834 shares issued at February 25, 2023 and August 27, 2022, respectively 1,019 1,013

Treasury stock, 2,365,100 shares and 1,818,754 shares at cost at February 25, 2023 and August 27, 2022, respectively ( 78,451 ) ( 62,003 )

Common stock, $0.01 par value, 600,000,000 shares authorized, 101,912,526 and 101,322,834 shares issued at May 27, 2023 and August 27, 2022, respectively 1,019 1,013

Treasury stock, 2,365,100 shares and 1,818,754 shares at cost at May 27, 2023 and August 27, 2022, respectively ( 78,451 ) ( 62,003 )

Additional paid-in-capital

11 unchanged sentences

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

May 27, 2023 May 28, 2022 May 27, 2023 May 28, 2022

Net sales $ 324,792 $ 316,531 $ 922,254 $ 894,514

11 unchanged sentences

Loss in fair value change of warrant liability — — — ( 30,062 )

(Loss) gain on foreign currency transactions ( 214 ) 780 ( 106 ) 427

Gain on foreign currency transactions 180 76 74 503

Other income 4 17 10 26

16 unchanged sentences

(Unaudited, dollars in thousands)

Twenty-Six Weeks Ended

February 25, 2023 February 26, 2022

Thirty-Nine Weeks Ended

May 27, 2023 May 28, 2022

Operating activities

38 unchanged sentences

Cash and cash equivalents

Net decrease in cash ( 4,296 ) ( 23,613 )

Net increase (decrease) in cash 1,387 ( 18,396 )

Effect of exchange rate on cash ( 87 ) ( 229 )

2 unchanged sentences

$ 68,794 $ 56,720

Twenty-Six Weeks Ended

February 25, 2023 February 26, 2022

Thirty-Nine Weeks Ended

May 27, 2023 May 28, 2022

Supplemental disclosures of cash flow information

7 unchanged sentences

Non-cash credits for repayment of note receivable $ 221 $ —

Non-cash additions to intangible assets $ 120 $ —

See accompanying notes to the unaudited consolidated financial statements.

18 unchanged sentences

Balance at February 25, 2023 101,873,171 $ 1,019 2,365,100 ( 78,451 ) 1,295,584 $ 275,883 ( 2,120 ) 1,491,915

Net income — — — — — $ 35,431 — 35,431

Stock-based compensation — — — — 3,844 — — 3,844

Foreign currency translation adjustments — — — — — — ( 262 ) ( 262 )

Shares issued upon vesting of restricted stock units 18,960 1 — — ( 355 ) — — ( 354 )

Exercise of options to purchase common stock 20,395 ( 1 ) — — 245 — — 244

Balance at May 27, 2023 101,912,526 1,019 2,365,100 ( 78,451 ) 1,299,318 311,314 ( 2,382 ) 1,530,818

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

6 unchanged sentences

Exercise of options to purchase common stock 19,804 — — — 274 — — 274

Warrant conversion — — — — — — — —

Balance at November 27, 2021 96,130,441 $ 961 98,234 $ ( 2,145 ) $ 1,084,690 $ 126,959 $ ( 858 ) $ 1,209,607

8 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

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

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

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

See accompanying notes to the unaudited consolidated financial statements.

43 unchanged sentences

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

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) May 27, 2023 May 28, 2022 May 27, 2023 May 28, 2022

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 $ 0.4 million and $ 0.2 million for the thirteen and twenty-six weeks ended February 25, 2023, respectively.

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.

As of February 25, 2023 and August 27, 2022, the allowances for doubtful accounts related to these accounts receivable were $ 1.8 million and $ 1.2 million, respectively.

Additionally, as of February 25, 2023, the Company had an expected credit loss reserve of $ 1.0 million on a $ 3.0 million note receivable related to the Company’s sale of its SimplyProtein® brand and related assets during its fiscal year 2021.

Charges related to credit loss on accounts receivables from transactions with external customers were $ 0.2 million and $ 0.4 million for the thirteen and thirty-nine weeks ended May 27, 2023, respectively.

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.

As of May 27, 2023 and August 27, 2022, the allowances for doubtful accounts related to these accounts receivable were $ 1.8 million and $ 1.2 million, respectively.

Additionally, as of May 27, 2023, the Company had an expected credit loss reserve of $ 1.0 million on a $ 3.0 million note receivable related to the Company’s sale of its SimplyProtein® brand and related assets during its fiscal year 2021.

Goodwill and Intangibles

As of February 25, 2023 and August 27, 2022, Goodwill in the Consolidated Balance Sheets was $ 543.1 million.

There were no impairment charges related to goodwill during the thirteen and twenty-six weeks ended February 25, 2023 or since the inception of the Company.

As of May 27, 2023 and August 27, 2022, Goodwill in the Consolidated Balance Sheets was $ 543.1 million.

There were no impairment charges related to goodwill during the thirteen and thirty-nine weeks ended May 27, 2023 or since the inception of the Company.

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

February 25, 2023

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

18 unchanged sentences

$ 1,182,863 $ 59,605 $ 1,123,258

Changes in Intangible assets, net during the twenty-six weeks ended February 25, 2023 were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 3.9 million and $ 4.0 million for the thirteen weeks ended February 25, 2023 and February 26, 2022, respectively, and $ 7.8 million and $ 7.9 million for the twenty-six weeks ended February 25, 2023 and February 26, 2022, respectively.

There were no impairment charges related to intangible assets during the thirteen and twenty-six weeks ended February 25, 2023 and February 26, 2022.

Changes in Intangible assets, net during the thirty-nine weeks ended May 27, 2023 were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 3.9 million and $ 4.0 million for the thirteen weeks ended May 27, 2023 and May 28, 2022, respectively, and $ 11.8 million and $ 11.9 million for the thirty-nine weeks ended May 27, 2023 and May 28, 2022, respectively.

There were no impairment charges related to intangible assets during the thirteen and thirty-nine weeks ended May 27, 2023 and May 28, 2022.

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

17 unchanged sentences

The 2022 Repricing Amendment, among other things, (i) reduced the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to the effective date of the 2022 Repricing Amendment, (ii) reset the prepayment premium for the existing Initial Term Loans to apply to Repricing Transactions (as defined in the Credit Agreement) that occur within six months after the effective date of the 2022 Repricing Amendment, and (iii) implemented SOFR and related replacement provisions for LIBOR.

Effective as of the 2022 Repricing Amendment dated January 21, 2022, the interest rate per annum is based on either:

On April 25, 2023, the Company entered into the “2023 Repricing Amendment” to the Credit Agreement.

The 2023 Repricing Amendment, (i) reduced the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to April 25, 2023, and (ii) provided for an extension of the maturity date of the Initial Term Loans from July 7, 2024, to March 17, 2027.

The 2023 Repricing Amendment did not change the interest rate on the Revolving Credit Facility, which continues to bear interest based upon the Company’s consolidated net leverage ratio as of the end of the fiscal quarter for which consolidated financial statements are delivered to the Administrative Agent under the Credit Agreement.

No additional debt was incurred, or any proceeds received by the Company in connection with the 2023 Repricing Amendment.

No amounts under the Term Facility were repaid as a result of the execution of the 2023 Repricing Amendment.

Effective as of the 2023 Repricing Amendment, the interest rate per annum for the Initial Term Loans is based on either:

A base rate equaling the higher of (a) the “prime rate,” (b) the federal funds effective rate plus 0.50 %, or (c) the Adjusted Term SOFR Rate (as defined in the Credit Agreement) applicable for an interest period of one month plus 1.00 % plus (x) 1.50 % margin for the Term Loan or (y) 2.00 % margin for the Revolving Credit Facility;

SOFR plus a credit spread adjustment equal to 0.10 % for one-month SOFR, 0.15 % for up to three-month SOFR and 0.25 % for up to six-month SOFR, subject to a floor of 0.50 %, plus (x) 2.50 % margin for the Term Loan or (y) 3.00 % margin for the Revolving Credit Facility.

In connection with the closing of the 2023 Repricing Amendment, the Company expensed $ 2.4 million primarily for third-party fees and capitalized an additional $ 2.7 million primarily for the payment of upfront lender fees (original issue discount).

The Simply Good Foods Company is not a borrower under the Credit Agreement and has not provided a guarantee of the Credit Agreement.

4 unchanged sentences

The Credit Agreement contains certain financial and other covenants that limit the Company’s ability to, among other things, incur and/or undertake asset sales and other dispositions, liens, indebtedness, certain acquisitions and investments, consolidations, mergers, reorganizations and other fundamental changes, payment of dividends and other distributions to equity and warrant holders, and prepayments of material subordinated debt, in each case, subject to customary exceptions materially consistent with credit facilities of such type and size.

The Revolving Credit Facility has a maximum total net leverage ratio equal to or less than 6.00 :1.00 contingent on credit extensions in excess of 30 % of the total amount of commitments available under the Revolving Credit Facility.

The Revolving Credit Facility has a maximum total net leverage ratio equal to or less than 6.00 :1.00 contingent on credit

extensions in excess of 30 % of the total amount of commitments available under the Revolving Credit Facility.

Any failure to comply with the restrictions of the credit facilities may result in an event of default.

The Company was in compliance with all covenants as of February 25, 2023 and August 27, 2022, respectively.

The Company was in compliance with all covenants as of May 27, 2023 and August 27, 2022, respectively.

Long-term debt consists of the following:

(In thousands) February 25, 2023 August 27, 2022

Term Facility (effective rate of 8.0% at February 25, 2023)

(In thousands) May 27, 2023 August 27, 2022

Term Facility (effective rate of 7.7% at May 27, 2023)

$ 325,000 $ 406,500

Finance lease liabilities (effective rate of 5.6% at February 25, 2023)

Finance lease liabilities (effective rate of 5.6% at May 27, 2023)

Deferred financing fees 4,103 3,620

2 unchanged sentences

Long-term debt, net of deferred financing fees $ 320,900 $ 403,022

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended February 25, 2023.

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

As of February 25, 2023, the Company had letters of credit in the amount of $ 3.5 million outstanding.

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended May 27, 2023.

The outstanding balance of the Term Facility is due upon its maturity in March 2027.

As of May 27, 2023, 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 25, 2023.

No amounts were drawn against these letters of credit at May 27, 2023.

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 25, 2023 and August 27, 2022, the book value of the Company’s debt approximated fair value.

As of May 27, 2023 and August 27, 2022, 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.

7 unchanged sentences

Level 3 Measurements

During the thirteen and twenty-six weeks ended February 26, 2022, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

During the thirty-nine weeks ended May 28, 2022, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party, and were exercised on a cashless basis on January 7, 2022 resulting in a net issuance of 4,830,761 shares of the Company’s common stock.

As a result, there were no outstanding liability-classified Private Warrants as of February 25, 2023 and August 27, 2022.

As a result, there were no outstanding liability-classified Private Warrants as of May 27, 2023 and August 27, 2022.

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

5 unchanged sentences

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

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

The adjustment for the thirty-nine weeks ended May 28, 2022 was a gain of $ 30.1 million.

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

Twenty-Six Weeks Ended

(In thousands) February 25, 2023 February 26, 2022

Thirty-Nine Weeks Ended

(In thousands) May 27, 2023 May 28, 2022

Income before income taxes $ 126,743 $ 113,173

Income tax expense $ 18,094 $ 23,072

Provision for income taxes $ 29,810 $ 34,726

Effective tax rate 23.5 % 30.7 %

The effective tax rate for the twenty-six weeks ended February 25, 2023 was 14.1 % less than the effective tax rate for the twenty-six weeks ended February 26, 2022, which was primarily driven by the non-cash change in the fair value of the warrant liability in the prior fiscal period and other permanent differences.

The effective tax rate for the thirty-nine weeks ended May 27, 2023 was 7.2 % less than the effective tax rate for the thirty-nine weeks ended May 28, 2022, which was primarily driven by the non-cash change in the fair value of the warrant liability in the prior fiscal period 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 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) Statements of Operations Caption May 27, 2023 May 28, 2022 May 27, 2023 May 28, 2022

Operating lease cost:

12 unchanged sentences

The right-of-use assets and corresponding liabilities related to both operating and finance leases are as follows:

(In thousands) Balance Sheets Caption February 25, 2023 August 27, 2022

(In thousands) Balance Sheets Caption May 27, 2023 August 27, 2022

Operating lease right-of-use assets Other long-term assets $ 41,444 $ 46,460

6 unchanged sentences

Total lease liabilities $ 46,531 $ 51,137

Future maturities of lease liabilities as of February 25, 2023 were as follows:

Future maturities of lease liabilities as of May 27, 2023 were as follows:

(In thousands) Operating Leases Finance Leases

7 unchanged sentences

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

February 25, 2023 August 27, 2022

May 27, 2023 August 27, 2022

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 25, 2023 February 26, 2022

Thirty-Nine Weeks Ended

(In thousands) May 27, 2023 May 28, 2022

Cash paid for amounts included in the measurement of lease liabilities

8 unchanged sentences

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 25, 2023, the Company will be required to make payments of $ 3.3 million over the next year.

Based on the terms of the contracts in place and achievement of performance conditions as of May 27, 2023, the Company will be required to make payments of $ 3.3 million over the next year.

Stockholders’ Equity

5 unchanged sentences

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

During the twenty-six weeks ended February 25, 2023, the Company repurchased 546,346 shares of common stock at an average share price of $ 30.11 per share.

The Company did not repurchase any shares of common stock during the thirteen weeks ended February 25, 2023.

During the thirteen and twenty-six weeks ended February 26, 2022, the Company repurchased 571,271 shares of common stock at an average share price of $ 35.68 per share.

As of February 25, 2023, approximately $ 71.5 million remained available under the stock repurchase program.

The Company did not repurchase any shares of common stock during the thirteen weeks ended May 27, 2023.

During the thirty-nine weeks ended May 27, 2023, the Company repurchased 546,346 shares of common stock at an average share price of $ 30.11 per share.

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 .

As of May 27, 2023, approximately $ 71.5 million remained available under the stock repurchase program.

Warrants to Purchase Common Stock

During the thirteen and thirty-nine weeks ended May 28, 2022, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

Such Private Warrants were held by Conyers Park, a related party.

1 unchanged sentence

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 25, 2023 and August 27, 2022.

As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of May 27, 2023 and August 27, 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.

7 unchanged sentences

The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands, except per share data) February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands, except per share data) May 27, 2023 May 28, 2022 May 27, 2023 May 28, 2022

Basic earnings per share computation:

10 unchanged sentences

Diluted earnings per share from net income $ 0.35 $ 0.38 $ 0.96 $ 0.78

Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 25, 2023 excluded 0.6 million and 0.5 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 0.3 million and 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 twenty-six weeks ended February 25, 2023 excluded 0.1 million non-vested stock units and 0.1 million non-vested stock units, 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 and 0.1 million of non-vested stock units, respectively, that would have been anti-dilutive.

The 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.

Diluted earnings per share calculations for the thirteen and thirty-nine weeks ended May 27, 2023 excluded 0.7 million 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 thirty-nine weeks ended May 28, 2022 excluded 0.3 million and 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 27, 2023 excluded an immaterial amount of non-vested stock units that would have been anti-dilutive.

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

The 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.

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 $ 3.0 million and $ 3.1 million in the thirteen weeks ended February 25, 2023 and February 26, 2022, respectively, and $ 6.3 million and $ 5.7 million in the twenty-six weeks ended February 25, 2023 and February 26, 2022, respectively.

The Company recorded stock-based compensation expense of $ 4.1 million and $ 3.0 million in the thirteen weeks ended May 27, 2023 and May 28, 2022, respectively, and $ 10.5 million and $ 8.7 million in the thirty-nine weeks ended May 27, 2023 and May 28, 2022, respectively.

Stock Options

The following table summarizes stock option activity for the twenty-six weeks ended February 25, 2023:

The following table summarizes stock option activity for the thirty-nine weeks ended May 27, 2023:

Shares underlying options Weighted average

4 unchanged sentences

Forfeited ( 35,624 ) 32.04

Outstanding as of February 25, 2023 2,564,982 $ 19.45 5.86

Vested and expected to vest as of February 25, 2023 2,564,982 $ 19.45 5.86

Exercisable as of February 25, 2023 2,054,267 $ 15.62 5.16

As of February 25, 2023, 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 1.7 years.

During the twenty-six weeks ended February 25, 2023 and February 26, 2022, the Company received $ 4.8 million and $ 1.5 million in cash from stock option exercises, respectively.

Outstanding as of May 27, 2023 2,678,972 $ 20.41 5.86

Vested and expected to vest as of May 27, 2023 2,678,972 $ 20.41 5.86

Exercisable as of May 27, 2023 2,029,757 $ 15.60 4.93

As of May 27, 2023, the Company had $ 6.4 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 27, 2023 and May 28, 2022, the Company received $ 5.0 million and $ 4.3 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 25, 2023:

The following table summarizes restricted stock unit activity for the thirty-nine weeks ended May 27, 2023:

Units Weighted average

4 unchanged sentences

Forfeited ( 48,883 ) 33.38

Non-vested as of February 25, 2023 498,032 $ 35.08

As of February 25, 2023, the Company had $ 13.3 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.7 years.

Non-vested as of May 27, 2023 489,286 $ 35.31

As of May 27, 2023, the Company had $ 11.9 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.5 years.

Performance Stock Units

During the twenty-six weeks ended February 25, 2023, the Company granted performance stock units under its equity compensation plan.

During the thirty-nine weeks ended May 27, 2023, the Company granted performance stock units under its 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 25, 2023:

The following table summarizes performance stock unit activity for the thirty-nine weeks ended May 27, 2023:

Units Weighted average

4 unchanged sentences

Forfeited ( 37,241 ) 31.00

Non-vested as of February 25, 2023 195,959 $ 42.85

As of February 25, 2023, 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 27, 2023 195,959 $ 42.85

As of May 27, 2023, the Company had $ 4.2 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.2 years.

Stock Appreciation Rights

1 unchanged sentence

The Company’s SARs settle in shares of its common stock once the applicable vesting criteria have been met.

The SARs outstanding as of February 25, 2023 cliff vest two years from the date of grant and must be exercised within five years .

The following table summarizes SARs activity for the twenty-six weeks ended February 25, 2023:

The SARs outstanding as of May 27, 2023 cliff vest two years from the date of grant and must be exercised within five years .

The following table summarizes SARs activity for the thirty-nine weeks ended May 27, 2023:

Shares underlying SARs Weighted average

4 unchanged sentences

Forfeited — —

Outstanding as of February 25, 2023 150,000 $ 37.67

The SARs exercised in the twenty-six weeks ended February 25, 2023 resulted in a net issuance of 38,850 shares of the Company’s common stock.

The SARs granted in the twenty-six weeks ended February 25, 2023 are liability-classified;

Outstanding as of May 27, 2023 150,000 $ 37.67

The SARs exercised in the thirty-nine weeks ended May 27, 2023 resulted in a net issuance of 38,850 shares of the Company’s common stock.

The SARs granted in the thirty-nine weeks ended May 27, 2023 are liability-classified;

therefore the related stock-based compensation expense is based on the vesting provisions and the fair value of the awards.

4 unchanged sentences

The Company substantially completed its restructuring activities during the third quarter of fiscal 2022;

therefore no restructuring or restructuring-related costs were incurred in the thirteen and twenty-six weeks ended February 25, 2023.

In the thirteen and twenty-six weeks ended February 26, 2022, the Company incurred $ 0.1 million of restructuring and restructuring-related costs.

therefore no restructuring or restructuring-related costs were incurred in the thirteen and thirty-nine weeks ended May 27, 2023 and the thirteen weeks ended May 28, 2022.

During the thirty-nine weeks ended May 28, 2022, the Company incurred $ 0.1 million of restructuring and restructuring-related costs.

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

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