What changed in this filing

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Item 1. Financial Statements

2024-06-27 compared with 2024-04-04 · 100 added, 75 removed, 420 unchanged (29% of the section changed)

3 unchanged sentences

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

February 24, 2024 August 26, 2023

May 25, 2024 August 26, 2023

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, 102,353,618 and 101,929,868 shares issued at February 24, 2024 and August 26, 2023, respectively 1,024 1,019

Treasury stock, 2,365,100 shares and 2,365,100 shares at cost at February 24, 2024 and August 26, 2023, respectively ( 78,451 ) ( 78,451 )

Common stock, $0.01 par value, 600,000,000 shares authorized, 102,500,950 and 101,929,868 shares issued at May 25, 2024 and August 26, 2023, respectively 1,025 1,019

Treasury stock, 2,365,100 shares and 2,365,100 shares at cost at May 25, 2024 and August 26, 2023, respectively ( 78,451 ) ( 78,451 )

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 24, 2024 February 25, 2023 February 24, 2024 February 25, 2023

Thirteen Weeks Ended Thirty-Nine Weeks Ended

May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023

Net sales $ 334,757 $ 324,792 $ 955,634 $ 922,254

5 unchanged sentences

Depreciation and amortization 4,142 4,363 12,711 13,035

Business transaction costs 2,703 — 2,703 —

Total operating expenses 74,852 65,041 206,937 183,770

22 unchanged sentences

(Unaudited, dollars in thousands)

Twenty-Six Weeks Ended

February 24, 2024 February 25, 2023

Thirty-Nine Weeks Ended

May 25, 2024 May 27, 2023

Operating activities

5 unchanged sentences

Estimated credit (gains) losses ( 167 ) 206

Unrealized (loss) gain on foreign currency transactions ( 203 ) 106

Unrealized loss on foreign currency transactions ( 191 ) ( 74 )

Deferred income taxes 12,416 11,696

24 unchanged sentences

Principal payments of long-term debt ( 45,000 ) ( 81,500 )

Deferred financing costs — ( 2,694 )

Net cash used in financing activities

1 unchanged sentence

Cash and cash equivalents

Net increase (decrease) in cash 48,057 ( 4,296 )

Net increase in cash 120,841 1,387

Effect of exchange rate on cash 125 ( 87 )

2 unchanged sentences

$ 208,681 $ 68,794

Twenty-Six Weeks Ended

February 24, 2024 February 25, 2023

Thirty-Nine Weeks Ended

May 25, 2024 May 27, 2023

Supplemental disclosures of cash flow information

28 unchanged sentences

Balance at February 24, 2024 102,353,618 $ 1,024 2,365,100 $ ( 78,451 ) $ 1,310,605 $ 416,640 $ ( 2,336 ) $ 1,647,482

Net income — — — — — $ 41,334 — 41,334

Stock-based compensation — — — — 4,193 — — 4,193

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

Repurchase of common stock — — — — — — — —

Shares issued upon vesting of restricted stock units 63,553 — — — ( 1,070 ) — — ( 1,070 )

Exercise of options to purchase common stock 83,779 1 — — 1,277 — — 1,278

Balance at May 25, 2024 102,500,950 1,025 2,365,100 ( 78,451 ) 1,315,005 457,974 ( 2,241 ) 1,693,312

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

15 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

Repurchase of common stock — — — — — — — —

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

See accompanying notes to the unaudited consolidated financial statements.

36 unchanged sentences

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

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

4 unchanged sentences

The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures (“ASU 2023-09”), which updates disclosures required in the footnotes to the financial statements to further aid investors in understanding how to analyze income tax reporting.

7 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 24, 2024 February 25, 2023 February 24, 2024 February 25, 2023

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023

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 receivable from transactions with external customers were $( 0.2 ) million and $( 0.1 ) million for the thirteen and twenty-six weeks ended February 24, 2024, respectively.

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.

As of February 24, 2024, and August 26, 2023, the allowances for doubtful accounts related to these accounts receivable were $ 0.7 million and $ 1.9 million, respectively.

Charges related to credit losses on accounts receivable from transactions with external customers were immaterial and $( 0.2 ) million for the thirteen and thirty-nine weeks ended May 25, 2024, respectively.

Charges related to credit losses 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.

As of May 25, 2024, and August 26, 2023, the allowance for credit losses related to accounts receivable was $ 0.6 million and $ 1.9 million, respectively.

Goodwill and Intangibles

As of February 24, 2024, and August 26, 2023, 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 24, 2024, or since the inception of the Company.

As of May 25, 2024, and August 26, 2023, 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 25, 2024, or since the inception of the Company.

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

February 24, 2024

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

19 unchanged sentences

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

Changes in Intangible assets, net during the twenty-six weeks ended February 24, 2024, were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 3.8 million and $ 3.9 million for the thirteen weeks ended February 24, 2024, and February 25, 2023, respectively, and $ 7.7 million and $ 7.8 million for the twenty-six weeks ended February 24, 2024, and February 25, 2023, respectively.

There were no impairment charges related to intangible assets during the thirteen and twenty-six weeks ended February 24, 2024 and February 25, 2023.

Changes in Intangible assets, net during the thirty-nine weeks ended May 25, 2024, were primarily related to recurring amortization expense.

Amortization expense related to intangible assets was $ 3.7 million and $ 3.9 million for the thirteen weeks ended May 25, 2024, and May 27, 2023, respectively, and $ 11.4 million and $ 11.8 million for the thirty-nine weeks ended May 25, 2024, and May 27, 2023, respectively.

During the thirteen weeks ended May 25, 2024, the Company conducted a quantitative impairment assessment over the Atkins brand indefinite lived intangible asset.

Based on our testing, the asset had an excess fair value well over its respective carrying value, resulting in no impairment.

There were no impairment charges related to its finite-lived intangible assets during the thirteen and thirty-nine weeks ended May 25, 2024 and May 27, 2023.

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

34 unchanged sentences

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

The Company was in compliance with all covenants as of February 24, 2024 and August 26, 2023, respectively.

The Company was in compliance with all covenants as of May 25, 2024 and August 26, 2023, respectively.

Long-term debt consists of the following:

(In thousands) February 24, 2024 August 26, 2023

Term Facility (effective rate of 7.9% at February 24, 2024)

(In thousands) May 25, 2024 August 26, 2023

Term Facility (effective rate of 7.9% at May 25, 2024)

$ 240,000 $ 285,000

Finance lease liabilities (effective rate of 5.6% at February 24, 2024)

Finance lease liabilities (effective rate of 5.6% at May 25, 2024)

Deferred financing fees 2,339 3,351

2 unchanged sentences

Long-term debt, net of deferred financing fees $ 237,661 $ 281,649

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended February 24, 2024.

The Company is no t required to make principal payments on the Term Facility over the twelve months following the period ended May 25, 2024.

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

As of February 24, 2024, the Company had letters of credit in the amount of $ 3.2 million outstanding.

As of May 25, 2024, the Company had letters of credit in the amount of $ 3.2 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 as of February 24, 2024.

No amounts were drawn against these letters of credit as of May 25, 2024.

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 24, 2024, and August 26, 2023, the book value of the Company’s debt approximated fair value.

As of May 25, 2024, and August 26, 2023, 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.

6 unchanged sentences

These valuations require significant judgment.

Components of the balance sheet such as accounts receivable, cash and cash equivalents and others approximated fair value as of February 24, 2024.

Components of the balance sheet such as accounts receivable, cash and cash equivalents and others approximated fair value as of May 25, 2024.

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

Twenty-Six Weeks Ended

(In thousands) February 24, 2024 February 25, 2023

Thirty-Nine Weeks Ended

(In thousands) May 25, 2024 May 27, 2023

Income before income taxes $ 145,213 $ 126,743

1 unchanged sentence

Effective tax rate 24.2 % 23.5 %

The effective tax rate for the twenty-six weeks ended February 24, 2024, was 1.4 % more than the effective tax rate for the twenty-six weeks ended February 25, 2023, which was primarily driven by permanent differences.

The effective tax rate for the thirty-nine weeks ended May 25, 2024, was 0.7 % greater than the effective tax rate for the thirty-nine weeks ended May 27, 2023, which was primarily driven by permanent differences.

The components of lease expense were as follows:

Thirteen Weeks Ended Twenty-Six Weeks Ended

(In thousands) Statements of Operations Caption February 24, 2024 February 25, 2023 February 24, 2024 February 25, 2023

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands) Statements of Operations Caption May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023

Operating lease cost:

10 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 24, 2024 August 26, 2023

(In thousands) Balance Sheets Caption May 25, 2024 August 26, 2023

Operating lease right-of-use assets Other long-term assets $ 34,756 $ 40,022

4 unchanged sentences

Operating lease liabilities Other long-term liabilities 31,492 37,272

Finance lease liabilities Long-term debt, less current maturities — —

Total lease liabilities $ 39,264 $ 44,981

Future maturities of lease liabilities as of February 24, 2024, were as follows:

Future maturities of lease liabilities as of May 25, 2024, were as follows:

(In thousands) Operating Leases Finance Leases

6 unchanged sentences

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

February 24, 2024 August 26, 2023

May 25, 2024 August 26, 2023

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 24, 2024 February 25, 2023

Thirty-Nine Weeks Ended

(In thousands) May 25, 2024 May 27, 2023

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 24, 2024, the Company will be required to make payments of $ 3.0 million over the next year.

Based on the terms of the contracts in place and achievement of performance conditions as of May 25, 2024, the Company will be required to make payments of $ 1.2 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.

The Company did not repurchase any shares of common stock during the twenty-six weeks ended February 24, 2024.

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.

As of February 24, 2024, approximately $ 71.5 million remained available under the stock repurchase program.

The Company did not repurchase any shares of common stock during the thirty-nine weeks ended May 25, 2024.

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.

As of May 25, 2024, approximately $ 71.5 million remained available under the stock repurchase program.

Earnings Per Share

3 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 24, 2024 February 25, 2023 February 24, 2024 February 25, 2023

Thirteen Weeks Ended Thirty-Nine Weeks Ended

(In thousands, except per share data) May 25, 2024 May 27, 2023 May 25, 2024 May 27, 2023

Basic earnings per share computation:

10 unchanged sentences

Diluted earnings per share from net income $ 0.41 $ 0.35 $ 1.09 $ 0.96

Diluted earnings per share calculations for the thirteen and twenty-six weeks ended February 24, 2024 excluded 0.6 million and 0.8 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 and 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 24, 2024, excluded an immaterial number of non-vested stock units 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 shares 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 25, 2024 both excluded 0.8 million shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

Diluted earnings per share calculations for the thirteen and thirty-nine weeks ended and 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 25, 2024 and May 27, 2023 excluded an immaterial number of non-vested stock units that would have been anti-dilutive, respectively.

Omnibus Incentive Plan

Stock-based compensation includes stock options, restricted stock units, performance stock unit awards and stock appreciation rights, which are awarded to employees, directors, and consultants of the Company.

Stock-based compensation expense for equity-classified awards is recognized on a straight-line basis over the requisite service period of the award based on their grant date fair value.

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

The Company recorded stock-based compensation expense of $ 4.6 million and $ 3.0 million in the thirteen weeks ended February 24, 2024, and February 25, 2023, respectively, and $ 8.7 million and $ 6.3 million in the twenty-six weeks ended February 24, 2024, and February 25, 2023, respectively.

Stock-based compensation expense for equity-

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

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

The Company recorded stock-based compensation expense of $ 4.5 million and $ 4.1 million in the thirteen weeks ended May 25, 2024, and May 27, 2023, respectively, and $ 13.2 million and $ 10.5 million in the thirty-nine weeks ended May 25, 2024, and May 27, 2023, respectively.

Stock Options

The following table summarizes stock option activity for the twenty-six weeks ended February 24, 2024:

The following table summarizes stock option activity for the thirty-nine weeks ended May 25, 2024:

Shares underlying options Weighted average

4 unchanged sentences

Forfeited ( 9,954 ) 39.38

Outstanding as of February 24, 2024 2,505,981 $ 20.65 5.15

Vested and expected to vest as of February 24, 2024 2,505,981 $ 20.65 5.15

Exercisable as of February 24, 2024 2,017,921 $ 16.64 4.39

As of February 24, 2024, the Company had $ 3.9 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 1.3 years.

During the twenty-six weeks ended February 24, 2024, and February 25, 2023, the Company received $ 3.0 million and $ 4.8 million in cash from stock option exercises, respectively.

Outstanding as of May 25, 2024 2,419,262 $ 20.82 4.91

Vested and expected to vest as of May 25, 2024 2,419,262 $ 20.82 4.91

Exercisable as of May 25, 2024 1,934,142 $ 16.70 4.13

As of May 25, 2024, the Company had $ 3.1 million of total unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 1.0 year.

During the thirty-nine weeks ended May 25, 2024, and May 27, 2023, the Company received $ 4.3 million and $ 5.0 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 24, 2024:

The following table summarizes restricted stock unit activity for the thirty-nine weeks ended May 25, 2024:

Units Weighted average

4 unchanged sentences

Forfeited ( 11,471 ) 38.77

Non-vested as of February 24, 2024 556,721 $ 37.55

As of February 24, 2024, the Company had $ 13.5 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.6 years.

Non-vested as of May 25, 2024 502,286 $ 37.61

As of May 25, 2024, the Company had $ 12.3 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a weighted average period of 1.6 years.

Performance Stock Units

During the twenty-six weeks ended February 24, 2024, the Company granted performance stock units under its equity compensation plan.

During the thirty-nine weeks ended May 25, 2024, 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 24, 2024:

The following table summarizes performance stock unit activity for the thirty-nine weeks ended May 25, 2024:

Units Weighted average

4 unchanged sentences

Forfeited ( 1,008 ) 57.43

Non-vested as of February 24, 2024 180,683 $ 59.28

As of February 24, 2024, the Company had $ 6.6 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.9 years.

Non-vested as of May 25, 2024 182,740 $ 59.06

As of May 25, 2024, the Company had $ 5.9 million of total unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.7 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 24, 2024, 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 24, 2024:

The SARs outstanding as of May 25, 2024, 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 25, 2024:

Shares underlying SARs Weighted average

3 unchanged sentences

Forfeited — —

Outstanding as of February 24, 2024 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 25, 2024 150,000 $ 37.67

The SARs exercised during 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 during 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.

Subsequent Events

Only What You Need, Inc.

On April 29, 2024, the Company entered into a stock purchase agreement (the “Purchase Agreement”) to acquire Only What You Need, Inc.

(“OWYN”), a plant-based protein food company (the “Acquisition”), for approximately $ 280.0 million.

On June 13, 2024, pursuant to the Purchase Agreement, the Company completed the acquisition of OWYN for approximately $280.0 million, subject to certain customary adjustments for levels of cash, indebtedness, net working capital, purchase price adjustments and transaction related expenses as of the closing date.

On June 13, 2024, the Company entered into a sixth amendment (the “2024 Incremental Facility Amendment”) to the Credit Agreement to increase the principal borrowed on the Term Facility by $ 250.0 million.

The terms of the incremental borrowing are the same as the terms of the outstanding borrowings under the Term Facility.

The 2024 Incremental Facility Amendment was executed to partially finance the acquisition of OWYN on June 13, 2024.

No amounts under the Term Facility were repaid as a result of the execution of the 2024 Incremental Facility Amendment.

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