What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-10-24 compared with 2022-10-21 · 103 added, 226 removed, 837 unchanged (28% of the section changed)

9 unchanged sentences

Summary of Significant Accounting Policies

Business Combination

Property and Equipment, Net

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Simply Good Foods Company and subsidiaries (the "Company") as of August 27, 2022 and August 28, 2021, the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows, for the fifty-two week periods ended August 27, 2022, August 28, 2021, and August 29, 2020 and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of The Simply Good Foods Company and subsidiaries (the "Company") as of August 26, 2023 and August 27, 2022, the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows, for the fifty-two weeks ended August 26, 2023, August 27, 2022, and August 28, 2021 and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 26, 2023 and August 27, 2022, and the results of its operations and its cash flows for each of the three years in the period ended August 26, 2023, in conformity with accounting principles generally accepted in the United States of America.

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Our auditing procedures related to the allowance for trade promotions balance included the following, among others:

• We tested the effectiveness of internal controls over the allowance for trade promotions.

• For a selection of allowance for trade promotions balance recorded as of August 26, 2023, we:

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• We evaluated management’s ability to estimate promotional claims incurred, but not yet received for potential management bias by comparing historical promotional claims received to management’s estimates of the claims to be received.

• For a selection of customer promotional claims resolved after August 27, 2022, we compared that amount to the August 27, 2022 allowance for promotions balance and traced the resolved deduction to a properly recorded sale.

• For a selection of customer promotional claims resolved as of August 26, 2023, we compared that amount to the August 26, 2023 allowance for promotions balance and traced the resolved deduction to an approved trade promotion.

• For a selection of customer promotional claims resolved after August 26, 2023, we compared that amount to the August 26, 2023 allowance for promotions balance and traced the resolved deduction to an approved trade promotion.

/s/ Deloitte & Touche LLP

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Deferred income taxes 116,133 105,676

Warrant liability — 159,835

Other long-term liabilities 38,346 44,639

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Depreciation and amortization 17,416 17,285 16,982

Business transaction costs — — 27,125

Loss on impairment — — 3,000

Total operating expenses 248,471 242,802 236,091

3 unchanged sentences

Interest expense ( 30,068 ) ( 21,881 ) ( 31,557 )

(Loss) gain in fair value change of warrant liability ( 30,062 ) ( 66,197 ) 30,938

(Loss) in fair value change of warrant liability — ( 30,062 ) ( 66,197 )

Gain on legal settlement — — 5,000

Gain (loss) on foreign currency transactions 191 ( 5 ) 658

Other (expense) income ( 453 ) ( 140 ) 441

Total other (expense) income ( 52,190 ) ( 92,815 ) 740

(Loss) gain on foreign currency transactions ( 344 ) 191 ( 5 )

Other income (expense) 11 ( 453 ) ( 140 )

Total other income (expense) ( 29,257 ) ( 52,190 ) ( 92,815 )

Income before income taxes 175,692 150,569 80,860

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Stock compensation expense 14,480 11,697 8,265

Loss on impairment — — 3,000

Loss (gain) in fair value change of warrant liability 30,062 66,197 ( 30,938 )

Loss in fair value change of warrant liability — 30,062 66,197

Estimated credit losses 315 601 1,114

Unrealized (gain) loss on foreign currency transactions ( 191 ) 5 ( 658 )

Unrealized loss (gain) on foreign currency transactions 344 ( 191 ) 5

Deferred income taxes 10,590 11,789 9,403

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Other 567 681 ( 16 )

Changes in operating assets and liabilities, net of acquisition:

Changes in operating assets and liabilities:

Accounts receivable, net ( 13,374 ) ( 21,796 ) ( 22,284 )

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— ( 2,400 ) ( 1,600 )

Proceeds from note receivable

Acquisition of business, net of cash acquired

— — ( 982,075 )

Proceeds from sale of business — — 5,800

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Tax payments related to issuance of restricted stock units ( 2,859 ) ( 3,660 ) ( 435 )

Proceeds from issuance of common stock — — 352,542

Equity issuance costs — — ( 3,323 )

Repurchase of common stock ( 16,448 ) ( 59,858 ) —

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Principal payments of long-term debt ( 121,500 ) ( 50,000 ) ( 150,000 )

Repayments of Revolving Credit Facility — — ( 25,000 )

Proceeds from issuance of long-term debt — — 460,000

Proceeds from Revolving Credit Facility — — 25,000

Deferred financing costs ( 2,694 ) ( 544 ) —

Net cash (used in) provided by financing activities ( 110,032 ) ( 150,049 ) 754,652

Net decrease in cash

Net cash (used in) financing activities ( 138,532 ) ( 110,032 ) ( 150,049 )

Net increase (decrease) in cash

20,397 ( 7,549 ) ( 20,466 )

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$ 289 $ 6,872 $ 26,222

Operating lease right-of-use assets recognized at ASU No 2016-02 transition

$ — $ — $ 5,102

Finance lease right-of-use assets recognized at ASU No 2016-02 transition

$ — $ — $ 1,185

Non-cash credits for repayment of note receivable $ 395 $ — $ —

See accompanying Notes to the Consolidated Financial Statements

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Foreign currency translation adjustments — — — — — — 61 61

Public equity offering 13,379,205 134 — — 349,085 — — 349,219

Shares issued upon vesting of restricted stock units 72,755 1 — — ( 436 ) — — ( 435 )

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Foreign currency translation adjustments — — — — — — 14 14

Reclassification adjustment for currency translation gains related to the liquidation of foreign entities — — — — — — ( 1,147 ) ( 1,147 )

Repurchase of common stock — — 1,720,520 ( 59,858 ) — — — ( 59,858 )

Warrant conversion 4,830,761 48 — — 189,849 — — 189,897

Shares issued upon vesting of restricted stock units 256,374 3 — — ( 3,663 ) — — ( 3,660 )

4 unchanged sentences

Foreign currency translation adjustments — — — — — — ( 642 ) ( 642 )

Reclassification adjustment for currency translation gains related to the liquidation of foreign entities — — — — — — ( 1,147 ) ( 1,147 )

Repurchase of common stock — — 546,346 ( 16,448 ) — — — ( 16,448 )

Warrant conversion 4,830,761 48 — — 189,849 — — 189,897

Shares issued upon vesting of restricted stock units 210,718 2 — — ( 2,861 ) — — ( 2,859 )

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

The product portfolio the Company develops, markets and sells consists primarily of protein bars, ready-to-drink (“RTD”) shakes, sweet and salty snacks and confectionery products marketed under the Atkins®, Atkins Endulge®, Quest® and Quest Hero TM brand names.

Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities in the nutritional snacking space.

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The common stock of Simply Good Foods is listed on the Nasdaq Capital Market under the symbol “SMPL.”

While the Company’s business has improved from the end of fiscal year 2021, driven in part by the increasing normalization of consumer mobility and shopper traffic patterns in brick-and-mortar retailers versus prior periods that were pressured by COVID-19 movement restrictions, the ultimate effect COVID-19, supply chain challenges, cost pressures, and the overall effects of the current high inflation environment on consumer purchasing patterns could have on our business continues to be not fully known.

Additionally, management is continuing to monitor the conflict in Ukraine, especially regarding the availability and cost of raw materials that are produced in this region and Europe in general.

Management is also monitoring for signs of any expansion of economic or supply chain disruptions or broader supply chain inflationary costs resulting either directly or indirectly from the crisis in Eastern Europe.

Factors contributing to the uncertainty described above, among other things, include (i) continued supply chain disruptions, including disruptions resulting from labor shortages and other cost pressures, (ii) changes to customer operations, (iii) a reversal in improving consumer purchasing and consumption behavior, and (iv) unforeseen business disruptions or other effects due to current global geopolitical tensions, including relating directly or indirectly to the Ukraine crisis.

While the Company’s business has improved from the end of fiscal year 2022, the Company’s business performance in fiscal year 2023 was affected by unfavorable raw material costs, higher co-manufacturing costs, and supply chain challenges, including supply chain disruptions resulting from labor shortages and disruptions in sourcing ingredients.

The supply chain environment showed signs of improvement during the year, which we expect to continue during fiscal year 2024.

Additionally, management is continuing to monitor the dynamic macroeconomic inflationary environment in the United States and elsewhere, elevated levels of supply chain costs, and consumer behavior.

Current or future governmental policies may increase the risk of inflation and possible economic recession, which could further increase the costs of ingredients, packaging and finished goods for our business as well as negatively effect consumer behavior and demand for our products.

Basis of Presentation

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Actual results could differ from those estimates.

Business Combination

On August 21, 2019 , the Company’s wholly-owned subsidiary Simply Good Foods USA, Inc., formerly known as Atkins Nutritionals, Inc., (“Simply Good USA”) entered into a Stock and Unit Purchase Agreement (the “Purchase Agreement”) to acquire Quest Nutrition, LLC (“Quest”), a healthy lifestyle food company (the “Quest Acquisition”).

On November 7, 2019 , Simply Good USA completed the Quest Acquisition via Simply Good USA’s acquisition of 100% of the equity interests of Voyage Holdings, LLC, and VMG Quest Blocker, Inc.

(the “Target Companies”) for a cash purchase price of approximately $ 1.0 billion subject to customary post-closing adjustments for the Target Companies’ levels of cash, indebtedness, net working capital and transaction expenses as of the closing date.

The Quest Acquisition was accounted for using the acquisition method of accounting prescribed by ASC Topic 805, Business Combinations (“ASC 805”), whereby the results of operations, including the revenues and earnings of Quest, are included in the financial statements from the date of acquisition.

Additionally, assets acquired and liabilities assumed were recognized at their fair values based on widely accepted valuation techniques in accordance with ASC Topic 820, Fair Value Measurements, as of the closing date.

The process for estimating fair values requires the use of significant estimates, assumptions and judgments, including determining the timing and estimates of future cash flows and developing appropriate discount rates.

ASC 805 establishes a measurement period to provide companies with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination and cannot extend beyond one year from the acquisition date.

The Company completed its final assessment of purchase price allocation for the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition during the first quarter of fiscal year 2021.

Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date.

Fair Value Measurements

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Assets and liabilities are valued based upon observable and non-observable inputs.

Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Valuations using Level 1 inputs are based on unadjusted quoted

prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1.

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and NCP-ATK Holdings, Inc.

on July 7, 2017, which created the Company, and the Quest Acquisition.

on July 7, 2017, which created the Company, and the acquisition of Quest.

Intangible assets primarily includes brands and trademarks with indefinite lives and customer-related relationships with finite lives.

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The qualitative assessments did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit and indefinite-lived intangibles had fair values in excess of their carrying values.

Accordingly, no further impairment assessment was necessary, and the Company determined neither its reporting unit or any indefinite-lived intangibles were impaired.

Accordingly, no further impairment assessment was necessary, and the Company determined neither its reporting unit nor any indefinite-lived intangibles were impaired.

There were no impairment charges related to goodwill in the fifty-two weeks ended August 26, 2023 or since the inception of the Company.

There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 26, 2023 or August 27, 2022.

There was a $ 3.0 million loss on impairment of an indefinite-lived intangible related to the SimplyProtein brand in the fifty-two weeks ended August 29, 2020.

Refer to Note 4, Goodwill and Intangibles for additional information regarding the Company’s reporting units and impairment assessments.

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Right-of-use assets also include any lease payments made and exclude lease incentives.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease terms may

include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term operating leases that have a term of one year or less.

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The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is assessed as part of this evaluation.

As of August 28, 2021, the Company had outstanding liability-classified private warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock (the “Private Warrants”).

During the fifty-two weeks ended August 27, 2022 and August 28, 2021, the Company had outstanding liability-classified private warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock (the “Private Warrants”).

Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party.

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On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock.

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

As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of August 26, 2023 or August 27, 2022.

During the reporting periods the Private Warrants were outstanding, they were precluded from equity classification, being liability-classified.

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The fair value adjustments were determined using a Black-Scholes option-pricing methodology (“Black-Scholes model”).

The valuation was primarily based on observable market data while the related theoretical private

warrant volatility assumption within the Black-Scholes model represented a Level 3 measurement within the fair value measurement hierarchy.

The periodic remeasurement of the Private Warrants was reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income.

The valuation was primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represented a Level 3 measurement within the fair value measurement hierarchy.

The periodic remeasurement of the Private Warrants was reflected in (Loss) in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income.

Revenue Recognition

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The Company provides standard assurance type warranties that its products will comply with all agreed-upon specifications.

No services beyond an assurance type warranty are provided to customers.

services beyond an assurance type warranty are provided to customers.

While customers generally have a right to return defective or non-conforming products, past experience has demonstrated that product returns have been immaterial.

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Shipping and Handling Costs

Shipping and handling costs include costs paid to third-party warehouse operators associated with delivering product to customers and depreciation and amortization of assets at the third-party warehouse.

Shipping and handling costs include costs paid to third-party warehouse operators associated with delivering product to customers and depreciation and amortization of company-owned assets at the third-party warehouse.

Shipping and handling costs are recognized in Cost of goods sold .

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Share-Based Compensation

The Company uses share-based compensation, including stock options, restricted stock units, performance stock units, and stock appreciation rights, to provide long-term performance incentives for its employees, directors, and consultants of the Company.

Share-based compensation is recognized on a straight-line basis over the requisite service period of the award based on their grant-date fair value.

Forfeitures are recognized as they occur.

Forfeitures are

recognized as they occur.

Share-based compensation expense is included in General and administrative.

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Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting.

The amendments in this ASU are effective for all entities and can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 and December 31, 2022.

The amendments of this ASU should be applied on a prospective basis.

In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting.

Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which extended the period of time for which ASU 2020-04 could be applied.

As a result, the amendments in ASU 2020-04 can be applied to contract modifications due to rate reform and eligible existing and new hedging relationships entered into between March 12, 2020 and December 31, 2024.

The amendments of these ASUs are effective for all entities and should be applied on a prospective basis.

On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to its credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”), as described in Note 6, Long-Term Debt and Line of Credit.

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The Company does not anticipate the amendments in this ASU will be material to its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which amends existing guidance related to the accounting for income taxes.

This ASU was intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance.

The Company adopted this ASU as of the first day of fiscal year 2022.

The adoption of this ASU did not have a material effect on the consolidated financial statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which provided updates for technical corrections, clarifications to guidance, simplifications to wording or structure of guidance, and other minor improvements across various areas of accounting within GAAP.

The Company adopted this ASU as of the first day of fiscal year 2022 on a prospective basis.

The adoption of this ASU did not have a material effect on the consolidated financial statements.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material effect on the Company’s consolidated financial statements.

Business Combination

On August 21, 2019 , Simply Good USA entered into the Purchase Agreement to acquire Quest.

On November 7, 2019 , Simply Good USA completed the Quest Acquisition for a cash purchase price at closing of $ 988.9 million subject to customary post-closing

Simply Good USA acquired Quest as a part of the Company’s vision to lead the nutritious snacking movement with trusted brands that offer a variety of convenient, innovative, great-tasting, better-for-you snacks and meal replacements.

Quest is a healthy lifestyle food company offering a variety of bars, cookies, chips, ready-to-drink shakes and pizzas that compete in many of the attractive, fast growing sub-segments within the nutritional snacking category.

The Quest Acquisition was funded through a combination of cash, equity and debt financing.

Total consideration paid on the closing date was $ 988.9 million.

Cash sources of funding included $ 195.3 million of cash on hand, net proceeds of approximately $ 350.0 million from an underwritten public offering of common stock, and $ 443.6 million in new term loan debt.

In the third fiscal quarter of 2020, the Company received a post-closing release from escrow of approximately $ 2.1 million related to net working capital adjustments, resulting in a total net consideration paid of $ 986.8 million.

Business transaction costs within the Consolidated Statements of Income and Comprehensive Income for the fifty-two weeks ended August 29, 2020 was $ 27.1 million, which included $ 14.5 million of transaction advisory fees related to the Quest Acquisition, $ 3.2 million of banker commitment fees, $ 6.1 million of non-deferrable debt issuance costs related to the incremental term loan, and $ 3.3 million of other costs, including legal, due diligence, and accounting fees.

Included in the transaction advisory fees paid for the Quest Acquisition was $ 12.0 million paid to Centerview Partners LLC, an investment banking firm that served as the lead financial advisor to the Company for this transaction.

Three members of the Company’s Board of Directors, Messrs.

Kilts, West, and Ratzan, have business relationships with certain partners of Centerview Partners LLC (including relating to Centerview Capital Consumer, a private equity firm and affiliate of Conyers Park Sponsor LLC), but they are not themselves partners, executives or employees of Centerview Partners LLC, and Centerview Partners LLC is not a related party of the Company pursuant to applicable rules and policies.

The advisory fee paid to Centerview Partners LLC represents approximately 1.2 % of the total cash purchase price paid by the Company on the closing date of the Quest Acquisition.

All transaction advisory fees relating to the Quest Acquisition were approved by the Company’s Audit Committee.

The following table sets forth the final purchase price allocation of the Quest Acquisition to the estimated fair value of the net assets acquired at the date of acquisition, in thousands:

Assets acquired:

Cash and cash equivalents $ 4,745

Accounts receivable, net 25,359

Inventories 44,032

Prepaid assets 1,214

Other current assets 3,812

Property and Equipment, Net

Intangible assets, net (2)

Other long-term assets 20,997

Liabilities assumed:

Accounts payable 25,200

Other current liabilities 11,237

Deferred income taxes (3)

Other long-term liabilities 18,891

Total identifiable net assets 912,295

Total assets acquired and liabilities assumed $ 986,820

(1) Property and equipment, net primarily consisted of leasehold improvements for the Quest headquarters of $ 6.9 million, furniture and fixtures of $ 2.2 million, and equipment of $ 0.7 million.

The Quest headquarters lease ends in April 2029.

The useful lives of the leasehold improvements, furniture and fixtures, and equipment are consistent with the Company’s accounting policies.

(2) Intangible assets were recorded at fair value consistent with ASC Topic 820, Fair Value Measurement, as a result of the Quest Acquisition.

Intangible assets consisted of $ 750.0 million of indefinite brands and trademarks, $ 115.0 million of amortizable customer relationships, and $ 3.4 million of internally developed software.

The useful lives of the intangible assets are disclosed in Note 5 of the Consolidated Financial Statements.

The fair value measurements of the assets and liabilities were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy.

Level 3 fair market values were determined using a variety of information, including estimated future cash flows and market comparable data and companies.

The fair values of the intangible assets were estimated using inputs primarily from the income approach and the with/without method, which estimates the value using the cash flow impact in a hypothetical scenario where the customer relationships are not in place.

The significant assumptions used in estimating the fair value of the intangible assets include the estimated life the asset will contribute to cash flows, profitability, and the estimated discount rate.

(3) Primarily as a result of the fair value attributable to the identifiable intangible assets, the deferred income tax liability was $ 10.8 million.

(4) Goodwill was recorded at fair value consistent with ASC Topic 820, Fair Value Measurement, as a result of the Quest Acquisition.

Amounts recorded for goodwill created in an acquisition structured as a stock purchase for tax are generally not expected to be deductible for tax purposes.

Amounts recorded for goodwill resulting in a tax basis step-up are generally expected to be deductible for tax purposes.

Tax deductible goodwill was estimated to be $ 67.7 million.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Since the initial preliminary estimates reported in the first fiscal quarter of 2020, the Company updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of assets acquired and liabilities assumed in the table above.

Specifically, the carrying amount of the intangible assets, net increased by $ 20.0 million as a result of valuation adjustments related to the Company’s finalization of tax attributes, which also resulted in a decrease to deferred income taxes of $ 3.2 million.

Additionally, accounts receivable, net decreased $ 4.3 million and inventories increased $ 0.9 million due to fair value measurement period adjustments, and the carrying amount of property and equipment, net decreased by $ 0.5 million to reflect its estimated fair value.

As a result of these adjustments and the change in total net consideration paid of approximately $ 2.1 million related to net working capital adjustments discussed above, goodwill decreased $ 21.5 million.

Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date.

The results of Quest’s operations have been included in the Company’s consolidated financial statements since November 7, 2019, the date of acquisition.

The following table provides net sales from the acquired Quest business included in the Company’s results:

52-Weeks Ended

(In thousands) August 29, 2020

Net sales 286,803

Unaudited Pro Forma Financial Information

Pro forma financial information is not intended to represent or be indicative of the actual results of operations of the combined business that would have been reported had the Quest Acquisition been completed at the beginning of the fiscal year 2019, nor is it representative of future operating results of the Company.

The following unaudited pro forma combined financial information presents combined results of the Company and Quest as if the Quest Acquisition had occurred at the beginning of fiscal 2019:

52-Weeks Ended

(In thousands) August 29, 2020

Net sales $ 885,044

Gross profit $ 355,395

Net income $ 90,028

Property and Equipment, Net

Property and equipment, net , as presented with the Consolidated Balance Sheets, is summarized as follows:

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Property and equipment, net $ 24,861 $ 18,157

Total depreciation expense was $ 3.2 million for the fifty-two weeks ended August 27, 2022, $ 2.3 million for the fifty-two weeks ended August 28, 2021, and $ 1.8 million for the fifty-two weeks ended August 29, 2020.

Total depreciation expense was $ 4.4 million for the fifty-two weeks ended August 26, 2023, $ 3.2 million for the fifty-two weeks

ended August 27, 2022, and $ 2.3 million for the fifty-two weeks ended August 28, 2021.

Goodwill and Intangibles

Changes to Goodwill during the fifty-two weeks ended August 27, 2022 and the fifty-two weeks ended August 28, 2021 were as follows:

(In thousands) Goodwill

Balance as of August 29, 2020 $ 544,774

Acquisition of business measurement period adjustments 1,178

Sale of business ( 2,818 )

Balance as of August 28, 2021 $ 543,134

Balance as of August 27, 2022 $ 543,134

The change in Goodwill attributed to the acquisition of a business during the fifty-two weeks ended August 28, 2021 was the result of subsequent measurement period adjustments made to finalize the acquisition method of accounting for the Quest Acquisition as described in Note 3, Business Combination.

Additionally, effective September 24, 2020, the Company sold the assets exclusively related to its SimplyProtein® brand of products for approximately $ 8.8 million of consideration, including cash of $ 5.8 million and a note receivable for $ 3.0 million, to a newly formed entity led by the Company’s former Canadian-based management team who had been responsible for this brand prior to the sale transaction (the “SimplyProtein Sale”).

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

There was no gain or loss recognized as a result of the SimplyProtein Sale.

In conjunction with the SimplyProtein Sale, the Company disposed of $2.8 million of goodwill associated with the SimplyProtein business.

As of August 26, 2023 and August 27, 2022, Goodwill in the Consolidated Balance Sheets was $ 543.1 million.

For fiscal year 2023, the Company performed a qualitative goodwill impairment assessment for its consolidated reporting unit.

The qualitative assessment did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit had a fair value in excess of its carrying value.

Accordingly, no further impairment assessment was necessary, and the Company determined its reporting unit was not impaired.

There were no impairment charges related to goodwill during the fifty-two weeks ended August 26, 2023 or since the inception of the Company.

During the fifty-two weeks ended August 27, 2022, the Company substantially completed its efforts to fully integrate its operations and organization structure after the Quest Acquisition.

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Additionally, the Company’s chief operating decision maker reviews operating results and forecasts at the consolidated level.

As a result, the Company determined its operations are organized into one , consolidated operating segment and reporting unit.

Previously, during the fifty-two weeks ended August 28, 2021 and August 29, 2020, the Company had two reporting units which were its operating segments, Atkins and Quest.

For fiscal year 2022, the Company performed a qualitative goodwill impairment assessment for its consolidated reporting unit.

The qualitative assessment did not identify indicators of impairment, and it was determined that it was more likely than not the reporting unit had a fair value in excess of its carrying value.

Accordingly, no further impairment assessment was necessary, and the Company determined its reporting unit was not impaired.

There were no impairment charges related to goodwill in the fifty-two weeks ended August 27, 2022 or since the inception of the Company.

As a result, during fifty-two weeks ended August 26, 2023 and August 27, 2022, the Company determined its operations are organized into one , consolidated operating segment and reporting unit.

Previously, during the fifty-two weeks ended August 28, 2021, the Company had two reporting units which were its operating segments, Atkins and Quest.

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

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Software and website development costs 3 - 5 years 6,328 5,356 972

Intangible assets in progress 3 - 5 years 79 — 79

$ 1,183,407 $ 75,288 $ 1,108,119

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Software and website development costs 3 - 5 years 5,863 4,190 1,673

Intangible assets in progress 3 - 5 years 303 — 303

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

Changes in Intangible assets, net during the fifty-two weeks ended August 27, 2022 were primarily related to recurring amortization expense.

Changes in Intangible assets, net during the fifty-two weeks ended August 28, 2021 were primarily related to the SimplyProtein Sale and recurring amortization expense.

Changes in Intangible assets, net during the fifty-two weeks ended August 26, 2023 and August 27, 2022 were primarily related to recurring amortization expense.

Changes in Intangible assets, net during the fifty-two weeks ended August 28, 2021 were primarily related to the sale of the assets and liabilities of the Company’s SimplyProtein brand and recurring amortization expense.

In conjunction with the SimplyProtein Sale, the Company sold its SimplyProtein brand intangible asset, which had a carrying value of approximately $ 5.0 million as of the date of the sale.

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Accordingly, no further impairment assessment was necessary.

There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 27, 2022 or August 28, 2021, respectively.

There was a $ 3.0 million loss on impairment of an indefinite-lived intangible related to the SimplyProtein brand in the fifty-two weeks ended August 29, 2020.

There were no impairment charges related to indefinite-lived intangibles recognized in the fifty-two weeks ended August 26, 2023, August 27, 2022, or August 28, 2021, respectively.

During the fifty-two weeks ended August 26, 2023, the Company did not identify indicators of impairment related to its finite-lived intangible assets, which are tested for impairment when events or circumstances indicated that the carrying amount may not be recoverable.

17 unchanged sentences

VAT payable 4,707 5,171

Accrued restructuring — 851

Accrued capital expenditures 2 350

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On November 7, 2019, the Company entered into a second amendment (the “Incremental Facility Amendment”) to the Credit Agreement to increase the principal borrowed on the Term Facility by $ 460.0 million.

The Term Facility together with the incremental borrowing make up the Initial Term Loans (as defined in the Incremental Facility Amendment).

The Term Facility together with the incremental

borrowing make up the Initial Term Loans (as defined in the Incremental Facility Amendment).

The Incremental Facility Amendment was executed to partially finance the acquisition of Quest Nutrition, LLC on November 7, 2019.

1 unchanged sentence

Effective as of December 16, 2021, the Company entered into a third amendment (the “Extension Amendment”) to the Credit Agreement.

The Extension Amendment provided for an extension of the stated maturity date of the Revolving Commitments and Revolving Loans (each as defined in the Credit Agreement) from July 7, 2022 to the earlier of (i) 91 days prior to the maturity date of the Initial Term Loans on July 7, 2024 and (ii) December 16, 2026.

On January 21, 2022, the Company entered into a repricing amendment (the “2022 Repricing Amendment”) to the Credit Agreement.

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

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

The Extension Amendment provided for an extension of the stated maturity date of the Revolving Commitments and Revolving Loans (each as defined in the Credit Agreement) from July 7, 2022 to the earlier of (i) 91 days prior to the then-effective maturity date of the Initial Term Loans and (ii) December 16, 2026.

On January 21, 2022, the Company entered into the “2022 Repricing Amendment” to the Credit Agreement.

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.

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The Company is not required to make principal payments on the Term Facility over the twelve months following the period ended August 26, 2023.

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

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

As of August 26, 2023, aggregate principal maturities of debt for each of the next five fiscal years and thereafter are as follows:

13 unchanged sentences

Level 3 Measurements

As of August 28, 2021, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

During the fifty-two weeks ended August 27, 2022 and August 28, 2021, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

Such Private Warrants were held by Conyers Park Sponsor, LLC (“Conyers Park”), a related party.

On January 7, 2022, Conyers Park elected to exercise the Private Warrants in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock.

As a result of Conyers Park’s election to exercise the Private Warrants, there were no outstanding liability-classified Private Warrants as of August 27, 2022.

As a result of Conyers Park’s election to exercise the Private Warrants, there were no outstanding liability-classified Private Warrants as of August 26, 2023 or

August 27, 2022.

Refer to Note 11, Stockholders’ Equity, for additional details regarding the cashless exercise of the Private Warrants.

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As a result of the unobservable inputs that were used to determine the expected volatility of the Private Warrants, the fair value measurement of these warrants reflected a Level 3 measurement within the fair value measurement hierarchy.

There were no Private Warrants outstanding as of August 27, 2022.

As of August 28, 2021 and August 29, 2020, the Company had 6,700,000 Private Warrants outstanding with a fair value price per Private Warrant of $ 23.86 and $ 13.98 , respectively.

The table below summarizes the inputs used to calculate the fair value of the warrant liability at each of the following reporting dates:

August 28, 2021 August 29, 2020

Exercise price $ 11.50 $ 11.50

Stock price $ 35.35 $ 25.39

Dividend yield — % — %

Expected term (in years) 0.86 1.85

Risk-free interest rate 0.06 % 0.14 %

Expected volatility 21.70 % 29.20 %

Per share value of warrants $ 23.86 $ 13.98

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

The adjustments for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 resulted in a loss of $ 30.1 million, a loss of $ 66.2 million and a gain of $ 30.9 million, respectively.

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

The adjustments for the fifty-two weeks ended August 27, 2022 and August 28, 2021 resulted in a loss of $ 30.1 million and $ 66.2 million, respectively.

As a result of the warrant exercise on January 7, 2022, there was no associated adjustment during the fifty-two weeks ended August 26, 2023.

There were no transfers of financial instruments between the three levels of the fair value hierarchy during the fiscal years ended August 26, 2023, August 27, 2022, and August 28, 2021, respectively.

Additionally, all other components of the balance sheet such as accounts receivable, cash and cash equivalents and others approximated fair value as of August 26, 2023.

The sources of income before income taxes are as follows:

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Change in fair value of warrant liabilities

5.0 20.5 ( 10.8 )

State income tax expense, net of federal 4.0 4.2 4.3

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Change in tax rate — ( 0.2 ) 1.8

Non-deductible transaction costs — — 0.1

Other permanent items ( 1.2 ) ( 1.9 ) 1.4

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Accounts receivable allowances $ 1,381 $ 1,519

Inventories write-downs 277 71

Accrued expenses 3,732 4,330

Net operating loss carryforwards 149 2,394

Share based compensation 4,398 3,430

Tax credits 86 173

Lease liabilities 11,200 12,733

Tax capitalization of inventory costs 2,177 2,257

Transaction costs 1,961 2,137

Federal benefit of state taxes 1,418 1,444

Other 1,664 659

Deferred tax assets 27,931 28,509

Valuation allowance — ( 2,218 )

Deferred tax asset, net of valuation allowance $ 28,509 $ 28,063

Deferred tax liabilities:

Prepaid expense $ ( 699 ) $ ( 748 )

Excess tax over book depreciation ( 4,870 ) ( 3,776 )

Website development costs ( 403 ) ( 659 )

Intangible assets ( 127,791 ) ( 116,682 )

3 unchanged sentences

Net deferred tax liabilities $ ( 116,133 ) $ ( 105,544 )

The Company had state net operating loss carryforwards of $ 2.1 million and $ 2.5 million and foreign net operating losses of $ 0.0 million and $ 9.4 million at August 27, 2022 and August 28, 2021, respectively.

The Company had state net operating loss carryforwards of $ 0.3 million and $ 2.1 million at August 26, 2023 and August 27, 2022, respectively.

The state net operating loss carryforwards will begin to expire in 2030.

As of August 26, 2023, the Company has no valuation allowances on its deferred tax assets.

The Company had previously recorded a valuation allowance of $2.2 million on deferred tax assets related to foreign net operating loss carryforwards generated within the United Kingdom and the Netherlands.

As of August 27, 2022, the Company no longer had operations in either jurisdiction.

Accordingly, during the fifty-two weeks ended August 27, 2022, the Company wrote off the United Kingdom and Netherlands net operating loss carryforwards and the corresponding $2.2 million valuation allowance as the net operating loss carryforwards were no longer utilizable.

As of August 26, 2023, the Company does not intend to indefinitely reinvest its foreign earnings within its subsidiary in Canada and has not recognized any tax liabilities related to this jurisdiction.

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The Company records interest and penalties associated with unrecognized tax benefits as a component of tax expense.

As of August 27, 2022 and August 28, 2021, the Company has not accrued interest or penalties on unrecognized tax benefits, as there is no position recorded as of these fiscal years.

No changes to the uncertain tax position balance are anticipated within the next 12 months, and are not expected to materially affect the financial statements.

As of August 26, 2023 and August 27, 2022, the Company has not accrued any interest or penalties on unrecognized tax benefits, as there is no position recorded as of these fiscal year-ends.

No changes to the uncertain tax position balance are anticipated within the next 12 months,

and are not expected to materially affect the financial statements.

As of August 26, 2023, tax years 2016 to 2022 remain subject to examination in the United States and the tax years 2016 to 2022 remain subject to examination in other major foreign jurisdictions where the Company conducts business.

State income tax returns are generally subject to examination for a period of three to five years after the filing of the respective return.

State income tax returns are generally subject to examination for a period of three to six years after the filing of the respective return.

The components of lease expense were as follows.

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Total operating lease cost $ 12,554 $ 12,145 $ 8,433

Short-term lease cost General and administrative $ — $ — $ 30

Finance lease cost:

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2024 $ 9,476 $ 145

2024 9,424 145

Thereafter 13,496 —

32 unchanged sentences

Warrants to Purchase Common Stock

As of August 28, 2021, the Company had outstanding liability-classified Private Warrants that allowed holders to purchase 6,700,000 shares of the Company’s common stock.

During the fifty-two weeks ended August 27, 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 in full on a cashless basis, resulting in a net issuance of 4,830,761 shares of the Company’s common stock.

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

As a result of the cashless exercise on January 7, 2022, there were no outstanding liability-classified Private Warrants as of August 26, 2023 or August 27, 2022.

As discussed in Note 7, Fair Value of Financial Instruments, the liability-classified warrants were remeasured on a recurring basis, primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represents a Level 3 measurement within the fair value measurement hierarchy.

The periodic fair value remeasurements of the warrant liability, including the cashless exercise and the settlement of the warrant liability, have been reflected in (Loss) gain in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income.

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 Consolidated Statements of Income and Comprehensive Income.

Stock Repurchase Program

The Company adopted a $ 50.0 million stock repurchase program on November 13, 2018.

On April 13, 2022, the Company announced that its Board of Directors had approved the addition of $ 50.0 million to its stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $ 100.0 million.

On April 13, 2022, and October 21, 2022, the Company announced that its Board of Directors had approved the addition of $ 50.0 million and $ 50.0 million, respectively, to its stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $ 150.0 million.

Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions.

2 unchanged sentences

During the fifty-two weeks ended August 26, 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 fifty-two weeks ended August 28, 2021 or August 29, 2020.

During the fifty-two weeks ended August 27, 2022, the Company repurchased 1,720,520 shares of common stock at an average share price of $ 34.79 per share.

The Company did not repurchase any shares of common stock during the fifty-two weeks ended August 28, 2021.

As of August 26, 2023, approximately $ 71.5 million remained available under the stock repurchase program.

1 unchanged sentence

During the fifty-two weeks ended August 27, 2022, the Company recognized a foreign currency translation gain of $ 1.1 million related to the liquidation of a foreign subsidiary.

The gain is reflected as a component of Other income (expense) in Gain (loss) on foreign currency transactions within the Consolidated Statements of Income and Comprehensive Income.

The gain is reflected as a component of Other income (expense) in (Loss) gain on foreign currency transactions within the Consolidated Statements of Income and Comprehensive Income.

Earnings Per Share

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Diluted earnings per share computation:

Net income available to common stock stockholders $ 108,574 $ 40,880 $ 65,638

Gain in fair value change of warrant liability — — ( 30,938 )

Numerator for diluted earnings per share $ 133,575 $ 108,574 $ 40,880

Weighted average common shares outstanding – basic 99,442,046 98,754,913 95,743,413

Private Warrants — — 3,327,656

Employee stock options 1,241,762 1,578,329 1,311,889

2 unchanged sentences

Diluted earnings per share from net income $ 1.32 $ 1.08 $ 0.42

Diluted earnings per share calculations for the fifty-two weeks ended August 27, 2022 and August 28, 2021 excluded 0.7 million and 4.1 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the fifty-two weeks ended August 27, 2022, August 28, 2021, and August 29, 2020 excluded 0.3 million shares, an immaterial number of shares, and 0.6 million shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the fifty-two weeks ended August 26, 2023 and August 27, 2022 excluded zero and 0.7 million shares, issuable upon exercise of Private Warrants, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the fifty-two weeks ended August 26, 2023, August 27, 2022, and August 28, 2021 excluded 0.6 million shares, 0.3 million shares, and an immaterial number of shares of common stock issuable upon exercise of stock options, respectively, that would have been anti-dilutive.

Diluted earnings per share calculations for the fifty-two weeks ended August 26, 2023, August 27, 2022, and August 28, 2021 excluded an immaterial number of non-vested stock units that would have been anti-dilutive.

74 unchanged sentences

Stock appreciation rights (“SARs”) permit the holder to participate in the appreciation of the Company’s common stock price and are awarded to non-employee consultants of the Company.

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

The Company’s SARs settle in shares of its common stock if and when the applicable vesting criteria has been met.

SARs cliff vest three years from the date of grant and must be exercised within ten years .

3 unchanged sentences

Outstanding as of August 27, 2022 150,000 $ 24.20

Granted 150,000 37.67

Exercised ( 150,000 ) 24.20

3 unchanged sentences

Exercisable as of August 26, 2023 — $ — 0.00

As of August 27, 2022, the Company had an immaterial amount of total unrecognized compensation cost related to its SARs that will be recognized over a weighted average period of 0.2 years.

The SARs exercised in the fifty-two weeks ended August 26, 2023 resulted in a net issuance of 38,850 shares of the Company’s common stock.

The SARs granted in the fifty-two weeks ended August 26, 2023 are liability-classified;

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

Segment and Customer Information

3 unchanged sentences

Additionally, the Company’s chief operating decision maker reviews operating results and forecasts at the consolidated level.

As a result, the Company determined its operations are organized into one , consolidated operating segment and reportable segment.

Previously, during the fifty-two weeks ended August 28, 2021 and August 29, 2020, the Company had two operating segments, Atkins and Quest, which were aggregated into one reporting segment due to similar financial, economic and operating characteristics.

As a result, during the fifty-two weeks ended August 26, 2023 and August 27, 2022, the Company determined its operations are organized into one , consolidated operating segment and reportable segment.

Previously, during the fifty-two weeks ended August 28, 2021, the Company had two operating segments, Atkins and Quest, which were aggregated into one reporting segment due to similar financial, economic and operating characteristics.

Reconciliation of the totals of reported segment revenue, profit or loss measurement, assets and other significant items reported by segment to the corresponding GAAP totals is not applicable to the Company as it only has one reportable segment.

Additionally, revenues from transactions with external customers for each of Simply Good Foods’ products would be impracticable to disclose and management does not view its business by product line.

Additionally, revenue from transactions with external customers for each of Simply Good Foods’ products would be impracticable to disclose and management does not view its business by product line.

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

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Customer 3 n/a n/a $ 18,521 14 %

n/a - Not applicable as the customer was not significant during these fiscal years.

No other customers of the Company accounted for more than 10% of sales during these periods.

The Company generally does not require collateral from its customers and has not incurred any significant losses on uncollectible accounts receivable.

n/a - Not applicable as the customer was not significant during this fiscal year.

Restructuring and Related Charges

14 unchanged sentences

Balance as of August 27, 2022 $ — $ — $ —

Charges 52 76 128

Cash payments ( 903 ) ( 76 ) ( 979 )

Balance as of August 26, 2023 $ — $ — $ —

The Company’s total restructuring and restructuring-related costs incurred in the fifty-two weeks ended August 27, 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.

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

therefore no restructuring and restructuring-related costs were incurred in the fifty-two weeks ended August 26, 2023.

During the fifty-two weeks ended August 27, 2022, the Company incurred $ 0.1 million of restructuring charges which included an immaterial gain on lease termination related to its lease in the Netherlands.

In the fifty-two weeks ended August 28, 2021, the Company incurred a total of $ 4.3 million in restructuring and restructuring-related costs, which included a $ 0.5 million impairment charge, net of a gain on lease termination, related to its leases in Toronto, Ontario and the Netherlands.

The Company’s total restructuring and restructuring-related costs incurred in the fifty-two weeks ended August 29, 2020 were $ 5.5 million.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data