What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-10-28 compared with 2024-10-29 · 108 added, 110 removed, 236 unchanged (48% of the section changed)

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Our fiscal year ends the last Saturday in August.

Our fiscal year 2024 ended August 31, 2024, was a fifty-three week period.

Our fiscal years 2023 and 2022 ended August 26, 2023, and August 27, 2022, respectively, were each fifty-two week periods.

Our fiscal year 2025 ended August 30, 2025, was a fifty-two week period.

Our fiscal years 2024 and 2023 ended August 31, 2024, and August 26, 2023, were a fifty-three week period and a fifty-two week period, respectively.

Our fiscal quarters are comprised of thirteen weeks each, except for fifty-three week fiscal periods for which the fourth quarter is comprised of fourteen weeks, and end on the thirteenth Saturday of each quarter (fourteenth Saturday of the fourth quarter, when applicable).

Our fiscal quarters for fiscal 2024 ended on November 25, 2023, February 24, 2024, May 25, 2024, and August 31, 2024.

Our fiscal quarters for fiscal 2025 ended on November 30, 2024, March 1, 2025, May 31, 2025, and August 30, 2025.

Unless the context requires otherwise in this Report, the terms “we,” “us,” “our,” the “Company” and “Simply Good Foods” refer to The Simply Good Foods Company and its subsidiaries.

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

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

We believe Simply Good Foods is poised to expand its wellness platform through innovation and organic growth along with acquisition opportunities.

To that end, in June 2024, we completed the acquisition of Only What You Need, Inc., a plant-based protein food company, for a cash purchase price of approximately $281.9 million (subject to customary adjustments).

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Our nutritious snacking platform consists of brands that specialize in providing products for consumers that follow certain nutritional philosophies and health-and-wellness trends:

Quest for consumers seeking a variety of protein-rich foods and beverages that also limit sugars and simple carbs, Atkins for those following a low-carb lifestyle, and OWYN for those looking for a plant-based ready-to-drink protein shake offering.

We distribute our products in major retail channels, primarily in North America, including grocery, club, and mass merchandise, as well as through e-commerce, convenience, specialty, and other channels.

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Business Trends

Our consolidated results of operations for the fiscal year ended August 31, 2024, were driven by volume, an additional week of activity with fiscal year 2024 having fifty-three weeks, and successfully completing the OWYN Acquisition;

and the reversal of the unfavorable effects of higher raw material costs, higher co-manufacturing costs, and supply chain challenges including supply chain disruptions resulting from labor shortages and disruptions in ingredients in fiscal year 2023.

For the fiscal year ended August 31, 2024, the Company benefited from lower ingredient and packaging costs which resulted in gross margin expansion compared to fiscal 2023.

The Company continues to engage and have discussions with its contract manufacturers and logistics and transportation providers to have its cost structure reflect lower market prices.

The Company is monitoring key ingredient inflation which may affect profitability;

however we believe the Company's strategy and positioning will continue to drive profitable growth for our product offerings and growth within the growing nutritional snacking category.

Based on information available to us as of the date of this Report, we believe we will be able to deliver products at acceptable levels to fulfill customer orders on a timely basis;

therefore, we expect our products will continue to be available for purchase to meet consumer meal replacement and snacking needs for the foreseeable future.

We continue to monitor customer and consumer demand along with our supply chain and logistics capabilities and intend to adapt our plans as needed to continue to drive our business and meet our obligations.

Our consolidated results of operations for the fiscal year ended August 30, 2025, were primarily driven by Quest and OWYN volume growth, which more than offset continued declines in Atkins driven primarily by a reduction of distribution.

In recent periods, retail distribution for the Atkins brand has been under pressure, driving net sales declines for the brand that have been partially offset by growth in the e-commerce channel.

The Atkins brand has had, and continues to have, a large retail presence on-shelf, which is being reduced in fiscal year 2026 and could be reduced in future periods.

In response, in fiscal year 2026, we are taking actions to bolster the highest performing Atkins products and simultaneously working with retailers to replace lower performing Atkins products with higher performing Quest and OWYN products.

The Company’s gross margin was affected by the unfavorable effects of higher commodity expenses compared to the prior year.

We continue to monitor macroeconomic trends and uncertainties such as consumer and economic uncertainty, key ingredient inflation, supply chain challenges, and the effects of tariffs, which may have adverse effects on net sales and profitability.

We are continuing to evaluate these factors and our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026.

Economic pressures on customers and consumers, including the challenges of high inflation and the effects of tariffs, may negatively affect our net sales and profitability in the future.

Please also see the information under Item 1A.

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Our Reportable Segment

For the fifty-three weeks ended August 31, 2024, following the OWYN Acquisition, we determined our operations are organized into two operating segments, Quest and Atkins, and OWYN, due to similar financial, economic and operating characteristics.

Following the OWYN Acquisition during the fifty-three weeks ended August 31, 2024, the Company determined its operations are organized into two operating segments, Quest and Atkins, and OWYN, due to similar financial, economic and operating characteristics.

The operating segments are also similar in the following areas:

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The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions.

As a result, during the fifty-three weeks ended August 31, 2024, the Company determined its operations are organized into two operating segments, which were aggregated into one reporting segment.

Previously, during the fifty-two weeks ended August 26, 2023, and August 27, 2022, we determined our operations were organized into one consolidated operating segment and reportable segment.

As a result, as of the fifty-two weeks ended August 30, 2025, and fifty-three weeks ended August 31, 2024, the Company determined its operations are organized into two operating segments, which were aggregated into one reportable segment due to similar financial, economic and operating characteristics.

As of the fifty-two weeks ended August 26, 2023, the Company determined its operations were organized into one consolidated operating segment and reportable segment.

Key Financial Definitions

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Operating expenses.

Operating expenses consist primarily of selling and marketing, general and administrative, depreciation and amortization, and business transaction costs.

Operating expenses consist primarily of selling and marketing, general and administrative, depreciation and amortization, business transaction costs, and loss on impairment.

The following is a brief description of the components of operating expenses:

• Selling and marketing.

Selling and marketing expenses comprise broker commissions, customer marketing, media and other marketing costs.

Selling and marketing expenses comprise broker commissions, consumer marketing, media and other marketing costs.

• General and administrative.

General and administrative expenses are comprised of expenses associated with corporate and administrative functions that support our business, including employee compensation, stock-based compensation, professional services, executive transition costs, integration costs, restructuring costs, insurance and other general corporate expenses.

General and administrative expenses are comprised of expenses associated with corporate and administrative functions that support our business, including employee compensation, stock-based compensation, professional services, executive transition costs, integration expense, restructuring costs, insurance and other general corporate expenses.

• Depreciation and amortization.

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Business transaction costs are comprised of transaction advisory fees, non-deferrable debt issuance costs, legal, due diligence, consulting, and accounting expenses associated with the OWYN Acquisition.

• Loss on impairment.

Loss on impairment is comprised of impairment charges related to our brand and trademarks indefinite-lived intangible asset and our licensing agreements finite-lived intangible asset.

Results of Operations

During the fifty-three weeks ended August 31, 2024, our net sales increased $88.6 million, or 7.1%, to $1,331.3 million compared to net sales of $1,242.7 million for the fifty-two weeks ended August 26, 2023, driven by Quest volume growth, an additional week of activity with fiscal year 2024 having 53 weeks, and the OWYN Acquisition, which more than offset continued softness in Atkins net sales.

Gross profit and gross profit margin improved due to higher sales volumes and lower ingredient and packaging costs.

We expect to see continued growth during fiscal year 2025 by building on our existing capabilities and strengthening the position of our brands in the marketplace.

We will continue to invest in our business and improve our operating efficiencies as well as proceeding with the integration of OWYN.

During the fifty-two weeks ended August 30, 2025, our net sales increased $119.6 million, or 9.0%, to $1,450.9 million compared to net sales of $1,331.3 million for the fifty-three weeks ended August 31, 2024, driven by Quest and OWYN volume growth, which more than offset continued declines in Atkins driven primarily by a reduction of distribution.

Gross profit increased, driven by higher sales volumes, while gross profit margin decreased primarily as a result of unfavorable commodity expenses compared to the prior period and lower gross profit margins of the OWYN business.

We expect to continue building on our existing capabilities and strengthening the position of our brands in the marketplace, and will continue to invest in our business and improve our operating efficiencies.

In assessing the performance of our business, we consider a number of key performance indicators used by management and typically used by our competitors, including the non-GAAP measures EBITDA and Adjusted EBITDA.

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See “Reconciliation of EBITDA and Adjusted EBITDA” below for a reconciliation of EBITDA and Adjusted EBITDA to net income for each applicable period.

A discussion regarding our financial condition and results of operations for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, is presented below.

A discussion regarding our financial condition and results of operations for the fifty-two weeks ended August 26, 2023, compared to the fifty-two weeks ended August 27, 2022, can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended August 26, 2023, filed with the SEC on October 24, 2023.

Comparison of Results for the Fifty-Three Weeks Ended August 31, 2024, and the Fifty-Two Weeks Ended August 26, 2023

A discussion regarding our financial condition and results of operations for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024, is presented below.

A discussion regarding our financial condition and results of operations for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, filed with the SEC on October 29, 2024.

Comparison of Results for the Fifty-Two Weeks Ended August 30, 2025, and the Fifty-three weeks ended August 31, 2024

The following table presents, for the periods indicated, selected information from our consolidated financial results, including information presented as a percentage of net sales:

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Business transaction costs 820 0.1 % 14,524 1.1 %

Loss on impairment 60,928 4.2 % — — %

Total operating expenses 368,860 25.4 % 305,069 22.9 %

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Interest expense (23,249) (1.6) % (26,029) (2.0) %

Gain (loss) on foreign currency transactions 267 — % (344) — %

Other expense 1,008 0.1 % 11 — %

(Loss) gain on foreign currency transactions (421) — % 267 — %

Other income 23 — % 1,008 0.1 %

Total other income (expense) (20,984) (1.4) % (20,447) (1.5) %

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(1) Adjusted EBITDA is a non-GAAP financial metric.

See “Reconciliation of EBITDA and Adjusted EBITDA” below for a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.

Net sales of $1,331.3 million represented an increase of $88.6 million, or 7.1%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

The increase in net sales was primarily driven by Quest volume growth and the OWYN Acquisition, which contributed 2.4% of the increase, and partially offset by continued softness in Atkins net sales.

See below for a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.

Net sales of $1,450.9 million represented an increase of $119.6 million, or 9.0%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

The increase in net sales was primarily driven by Quest and OWYN volume growth, which more than offset continued declines in Atkins driven primarily by a reduction of distribution.

Cost of goods sold.

Cost of goods sold increased $30.5 million, or 3.9%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

The cost of goods sold increase was primarily driven by higher sales volumes and the effect of the non-cash $3.2 million inventory step-up charge related to the OWYN Acquisition.

Cost of goods sold increased $105.4 million, or 12.9%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

The cost of goods sold increase was primarily driven by higher sales volumes, primarily as a result of the growth for Quest and OWYN.

Gross profit.

Gross profit of $511.6 million increased $58.1 million, or 12.8%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

Gross profit as a percentage of net sales was 38.4% for the fifty-three weeks ended August 31, 2024, an increase of 190 basis points from 36.5% of net sales for the fifty-two weeks ended August 26, 2023.

The increase in gross profit margin was primarily driven by lower ingredient and packaging costs and was partially offset by the effect of the non-cash $3.2 million inventory step-up charge related to the OWYN Acquisition.

Gross profit of $525.7 million increased $14.2 million, or 2.8%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

Gross profit as a percentage of net sales was 36.2% for the fifty-two weeks ended August 30, 2025, a decrease of 220 basis points from 38.4% of net sales for the fifty-three weeks ended August 31, 2024.

The decrease in gross profit margin was primarily driven by unfavorable commodity expenses compared to the prior year period and lower gross profit margins of the OWYN business.

Operating expenses.

Operating expenses increased $56.6 million, or 22.8%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, due to the following:

Operating expenses increased $63.8 million, or 20.9%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024, due to the following:

• Selling and marketing .

Selling and marketing expenses increased $24.4 million, or 20.5%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

The increase was primarily related to increased investments in marketing growth initiatives of $20.1 million and the OWYN Acquisition of $2.1 million.

Selling and marketing expenses decreased $9.6 million, or 6.7%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

The decrease was primarily related to an overall decrease in marketing spend.

• General and administrative .

General and administrative expenses increased $18.1 million, or 16.3%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

The increase was primarily attributable to an increase of $7.8 million of employee-related costs, $3.9 million in stock-based compensation expense, $3.7 million related to the OWYN Acquisition, higher executive transition costs, and higher corporate expenses and other costs.

General and administrative expenses increased $26.2 million, or 20.2%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

The increase was primarily attributable to an increase of $20.3 million in integration expenses related to the OWYN Acquisition, an increase of $8.0 million in employee-related costs, and higher corporate expenses and other costs, partially offset by a decrease in stock based compensation of $3.1 million.

• Depreciation and amortization .

Depreciation and amortization expenses were $16.9 million and $17.4 million for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, respectively.

Depreciation and amortization expenses were $16.9 million for both the fifty-two weeks ended August 30, 2025, and the fifty-three weeks ended August 31, 2024.

• Business transaction costs.

Business transaction costs were $14.5 million for the fifty-three weeks ended August 31, 2024, and were comprised of expenses related to the OWYN Acquisition, including $5.7 million of transaction advisory fees, $3.4 million of non-deferrable third-party financing costs incurred in connection with the 2024 Incremental Facility Amendment to the Credit Agreement (as defined below), and $5.4 million of legal, due diligence, accounting, and other costs.

Business transaction costs were $0.8 million for the fifty-two weeks ended August 30, 2025, compared to $14.5 million for the fifty-three weeks ended August 31, 2024, and were comprised of expenses related to the OWYN Acquisition.

• Loss on impairment .

Loss on impairment charges were $60.9 million for the fifty-two weeks ended August 30, 2025.

Refer to Note 5, Goodwill and Intangibles, for additional information regarding the Company’s impairment assessments.

Interest income.

Interest income increased $3.2 million or 276.5% to $4.3 million for the fifty-three weeks ended August 31, 2024, compared to $1.1 million of interest income for the fifty-two weeks ended August 26, 2023, primarily due to higher cash balances, the increase in interest rates, and other sources of interest income.

Interest income decreased $1.6 million or 38.2% to $2.7 million for the fifty-two weeks ended August 30, 2025, compared to $4.3 million of interest income for the fifty-three weeks ended August 31, 2024, primarily due to lower cash balances and the decrease in interest rates.

Interest expense.

Interest expense decreased $4.0 million for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, primarily due to the effect of principal prepayments reducing the outstanding balance of the Term Facility (defined below) during a majority of the fiscal year prior to the incremental borrowing made in June 2024.

Additionally, interest expense related to the amortization of deferred financing costs and debt discount decreased $0.7 million for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

Interest expense is expected to increase in fiscal year 2025 as a result of the incremental borrowing to fund in part the OWYN Acquisition.

Gain (loss) on foreign currency transactions.

Foreign currency transactions resulted in an immaterial gain and an immaterial loss for the fifty-three weeks ended August 31, 2024, and August 26, 2023, respectively.

The variance is attributable to changes in foreign currency rates related to our international operations.

Interest expense decreased $2.8 million for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024, primarily due to the effect of principal payments reducing the outstanding balance of the Term Facility (as defined below) during the fiscal year.

Additionally, interest expense related to the amortization of deferred financing costs and debt discount decreased $0.6 million for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

(Loss) gain on foreign currency transactions.

Foreign currency transactions resulted in an immaterial loss and an immaterial gain for the fifty-two weeks ended August 30, 2025, and August 31, 2024, respectively.

Income tax expense.

Income tax expense increased $4.6 million for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023.

The increase in our income tax expense is primarily driven by higher income from operations and changes in permanent differences.

Net income was $139.3 million for the fifty-three weeks ended August 31, 2024, an increase of $5.7 million, compared to net income of $133.6 million for the fifty-two weeks ended August 26, 2023.

Net income benefited from higher gross profit, including the benefit of the fifty-third week, higher interest income, and lower interest expense, and was partially offset by growth in marketing expenses, higher stock-based compensation expenses, business transaction costs related to the OWYN Acquisition, and higher income tax expense.

Income tax expense decreased $14.5 million for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024.

The decrease in our income tax expense is primarily driven by lower income from operations and changes in permanent differences.

Net income was $103.6 million for the fifty-two weeks ended August 30, 2025, a decrease of $35.7 million, compared to net income of $139.3 million for the fifty-three weeks ended August 31, 2024.

The decrease was driven by higher operating expenses, primarily the loss on impairment, and was partially offset by higher gross profit and lower interest expense.

Adjusted EBITDA.

Adjusted EBITDA increased $23.6 million, or 9.6%, for the fifty-three weeks ended August 31, 2024, compared to the fifty-two weeks ended August 26, 2023, driven primarily by higher gross profit, including contribution from the OWYN Acquisition, partially offset by investments in growth initiatives and higher advertising costs.

Adjusted EBITDA increased $9.0 million, or 3.4%, for the fifty-two weeks ended August 30, 2025, compared to the fifty-three weeks ended August 31, 2024, driven primarily by higher gross profit.

For a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see “Reconciliation of EBITDA and Adjusted EBITDA” below.

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Simply Good Foods defines EBITDA as net income or loss before interest income, interest expense, income tax expense, depreciation and amortization, and Adjusted EBITDA as further adjusted to exclude the following items:

stock-based compensation expense, executive transition costs, business transaction costs, inventory step-up, integration costs, term loan transaction fees, and other non-core expenses.

loss on impairment, stock-based compensation expense, executive transition costs, business transaction costs, inventory step-up, integration expenses, term loan transaction fees, and other non-core expenses.

The Company believes that EBITDA and Adjusted EBITDA, when used in conjunction with net income, are useful to provide additional information to investors.

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EBITDA and Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in the non-GAAP calculation.

The following unaudited table provides a reconciliation of EBITDA and Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the fifty-three weeks ended August 31, 2024, and fifty-two weeks ended August 26, 2023:

The following unaudited table provides a reconciliation of EBITDA and Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the fifty-two weeks ended August 30, 2025, and fifty-three weeks ended August 31, 2024:

52-Weeks Ended 53-Weeks Ended

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EBITDA 177,920 228,765

Loss on impairment 60,928 —

Stock-based compensation expense 15,273 18,421

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Inventory step-up 1,412 3,226

Integration of OWYN 588 —

Integration expense 20,856 588

Term loan transaction fees 715 —

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We make no assurance that we can issue and sell such securities on acceptable terms or at all.

Our material future cash requirements from contractual and other obligations relate primarily to our principal and interest payments for our Term Facility, as defined and discussed below, and our operating and finance leases.

Refer to Note 7, Long-Term Debt and Line of Credit, and Note 10, Leases, of the Consolidated Financial Statements included in Item 8 of this Report for additional information related to the expected timing and amount of payments related to our contractual and other obligations.

Debt and Credit Facilities

On July 7, 2017, we entered into a credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”).

On July 7, 2017, the Company (through certain of its subsidiaries) entered into a credit agreement with Barclays Bank PLC and other parties (as amended to date, the “Credit Agreement”).

The Credit Agreement at that time provided for (i) a term facility of $200.0 million (“Term Facility”) with a seven-year maturity and (ii) a revolving credit facility of up to $75.0 million (the “Revolving Credit Facility”) with a five-year maturity.

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

Effective as of the date of the 2024 Incremental Facility Amendment, the interest rate per annum for the Initial Term Loans is based on either:

On January 31, 2025, the Company entered into a seventh amendment (the “2025 Repricing Amendment”) to the Credit Agreement to reduce the interest rate per annum applicable to the Initial Term Loans outstanding under the Credit Agreement immediately prior to the effective date of the 2025 Repricing Amendment.

Effective as of the 2025 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) 1.00% 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 2024 Incremental Facility Amendment, the Company expensed $3.4 million of non-deferrable third-party financing costs through Business transaction costs and capitalized $1.2 million of third-party financing costs.

SOFR subject to a floor of 0.50%, plus (x) 2.00% margin for the Term Loan or (y) 3.00% margin for the Revolving Credit Facility.

In connection with the closing of the 2025 Repricing Amendment, the Company expensed $0.7 million of non-deferrable third-party costs through General and administrative expenses within the Consolidated Statements of Income and Comprehensive Income.

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 OWYN Acquisition was funded through a combination of incremental borrowings under our outstanding Term Facility, totaling $250.0 million, and cash on hand.

Business transaction costs within the Consolidated Statements of Income and Comprehensive Income for the fifty-three weeks ended August 31, 2024, were $14.5 million, which included $5.7 million of transaction advisory fees, $3.4 million of non-deferrable third-party financing costs incurred in connection with the 2024 Incremental Facility Amendment to the Credit Agreement, and $5.4 million of legal, due diligence, accounting, and other costs.

In the second fiscal quarter of 2025, the Company received a post-closing release from escrow of approximately $1.7 million related to net working capital adjustments, resulting in a total net consideration paid of $280.2 million.

Business transaction costs within the Consolidated Statements of Income and Comprehensive Income for the fifty-two weeks ended August 30, 2025, were $0.8 million, which consisted of legal, accounting, and other costs.

Stock Repurchase Program

On October 21, 2022, we announced that our Board of Directors had approved the addition of $50.0 million to our stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $150.0 million.

During the fifty-two weeks ended August 30, 2025, the Company repurchased 1,592,471 shares of common stock at an average share price of $31.95.

The Company did not repurchase any shares of common stock during the fifty-three weeks ended August 31, 2024.

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.

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.

As of August 30, 2025, approximately $20.7 million remained available for repurchases under our $150.0 million stock repurchase program.

On October 21, 2025, the Company's Board of Directors approved a $150.0 million increase to its existing stock repurchase program.

Refer to Note 12, Stockholders’ Equity, of the Consolidated Financial Statements included in Item 8 of this Report for additional information related to our stock repurchase program.

The following table sets forth the major sources and uses of cash for the fifty-three weeks ended August 31, 2024, and August 26, 2023.

The following table sets forth the major sources and uses of cash for the fifty-two weeks ended August 30, 2025, and the fifty-three weeks ended August 31, 2024.

A discussion regarding the major sources and uses of cash for the fifty-two weeks ended August 26, 2023, can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, filed with the SEC on October 29, 2024.

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$ (20,932) $ (286,882)

Net cash provided by (used in) financing activities $ 115,901 $ (138,532)

Net cash (used in) provided by financing activities $ (191,205) $ 115,901

Operating activities.

Our net cash provided by operating activities increased $44.6 million to $215.7 million for the fifty-three weeks ended August 31, 2024, compared to $171.1 million for the fifty-two weeks ended August 26, 2023.

The increase in cash provided by operating activities was primarily attributable to changes in working capital, comprised of changes in accounts receivable, net, inventories, prepaid expenses, accounts payable, and accrued expenses and other current liabilities, which are driven by the timing of payments and receipts and seasonal building of inventory.

Changes in working capital provided cash of $21.3 million in the fifty-three weeks ended August 31, 2024, compared to $21.2 million of cash consumed in the fifty-two weeks ended August 26, 2023, an improvement of $42.5 million.

Income from operations increased by $1.5 million to $206.5 million for the fifty-three weeks ended August 31, 2024, as compared to $204.9 million for the fifty-two weeks ended August 26, 2023.

Our net cash provided by operating activities decreased $37.2 million to $178.5 million for the fifty-two weeks ended August 30, 2025, compared to $215.7 million for the fifty-three weeks ended August 31, 2024.

The decrease in cash provided by operating activities was primarily attributable to changes in working capital, comprised of changes in accounts receivable, net, inventories, prepaid expenses, other current assets, accounts payable, accrued interest, accrued expenses and other current liabilities, and other assets and liabilities, which are driven by the timing of payments and receipts and the building of inventory.

Changes in working capital consumed cash of $32.9 million in the fifty-two weeks ended August 30, 2025, compared to $19.0 million of cash provided in the fifty-three weeks ended August 31, 2024, a difference of $51.9 million.

Income from operations decreased by $49.7 million to $156.9 million for the fifty-two weeks ended August 30, 2025, as compared to $206.5 million for the fifty-three weeks ended August 31, 2024.

The decrease was driven by higher operating expenses, primarily the loss on impairment, and was partially offset by higher gross profit.

Investing activities.

Our net cash used in investing activities was $286.9 million for the fifty-three weeks ended August 31, 2024, compared to $12.2 million for the fifty-two weeks ended August 26, 2023.

The increase in cash used in investing activities was primarily due to the OWYN Acquisition of $280.4 million, net of cash acquired, as well as $5.7 million of purchases of property and equipment.

The $12.2 million of net cash used in investing activities for the fifty-two weeks ended August 26, 2023, was primarily comprised of $11.6 million purchases of property and equipment.

Our net cash used in investing activities was $20.9 million for the fifty-two weeks ended August 30, 2025, compared to $286.9 million for the fifty-three weeks ended August 31, 2024.

Our net cash used in investing activities for the fifty-two weeks ended August 30, 2025, was primarily comprised of $20.5 million of purchases of property and equipment, primarily at our contract manufacturing facilities.

The $286.9 million of net cash used in investing activities for the fifty-three weeks ended August 31, 2024, was primarily comprised of the OWYN Acquisition for $280.4 million, and $5.7 million purchases of property and equipment.

Financing activities.

Our net cash provided by financing activities was $115.9 million for the fifty-three weeks ended August 31, 2024, compared to the net cash used by financing activities of $138.5 million for the fifty-two weeks ended August 26, 2023.

Net cash provided by financing activities for the fifty-three weeks ended August 31, 2024, primarily consisted of $250.0 million of proceeds from the 2024 Incremental Facility Amendment in conjunction with the OWYN Acquisition, partially offset by $135.0 million in principal payments on the Term Facility.

Net cash used in financing activities for the fifty-two weeks ended August 26, 2023, primarily consisted of $121.5 million in principal prepayments on the Term Facility and $16.4 million in repurchases of common stock.

Our net cash used in financing activities was $191.2 million for the fifty-two weeks ended August 30, 2025, compared to the net cash provided by financing activities of $115.9 million for the fifty-three weeks ended August 31, 2024.

Net cash used in financing activities for the fifty-two weeks ended August 30, 2025, primarily consisted $150.0 million in principal payments on the Term Facility and $50.9 million in repurchases of common stock, which was offset by $12.9 million in proceeds from option exercises.

Critical Accounting Policies, Judgments and Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S.

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

While the majority of our revenue, expenses, assets and liabilities are not based on estimates, there are certain accounting principles that require management to make estimates regarding matters that are uncertain and susceptible to change.

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Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, of our Consolidated Financial Statements in this filing;

however, the following discussion pertains to accounting policies we believe are most critical to the portrayal of its financial condition and results of operations and that require significant, difficult, subjective or

complex judgments.

Other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of our financial condition, results of operations and cash flows to those of other companies.

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The most common forms of variable consideration include trade promotions, such as consumer incentives, coupon redemptions and other marketing activities, allowances for unsaleable product, and any additional amounts where a distinct good or service cannot be identified or the value cannot be reasonably estimated.

Estimates of variable consideration are made using various information including historical data on performance of similar trade promotional activities, market data from IRI, and our best estimate of current activity.

Estimates of variable consideration are made using various information including historical data on performance of similar trade promotional activities, market data from Circana, and our best estimate of current activity.

Revisions can include changes for consideration paid to customers that lack sufficient evidence to support a distinct good or service assertion, or for which a reasonably estimable fair value cannot be determined, primarily related to our assessments of cooperative advertising programs.

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The recognition of trade promotions requires management to make estimates regarding the volume of incentive that will be redeemed and their total cost.

These estimates are made using various information including historical data on the performance of similar trade promotional activities, market data from IRI, and the Company’s best estimates of current activity.

These estimates are made using various information including historical data on the performance of similar trade promotional activities, market data from Circana, and the Company’s best estimates of current activity.

Our consolidated financial statements could be materially affected if the actual promotion rates are different from the estimated rates.

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

We expect to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable within the measurement period, but not to exceed one year from the acquisition date.

In the second fiscal quarter of 2025, a measurement period adjustment of $1.7 million was recorded to goodwill.

The final fair value determination of the assets acquired and liabilities assumed was completed prior to one year from the transaction completion, consistent with ASC 805.

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived intangible assets, comprising our brands and trademarks, are not amortized, but instead are tested for impairment at least annually, or more frequently if indicators of impairment exist.

We conduct our annual impairment tests at the beginning of

the fourth fiscal quarter.

We conduct our annual impairment tests at the beginning of the fourth fiscal quarter.

We perform our goodwill impairment assessment for each reporting unit that has goodwill.

The process of evaluating goodwill and indefinite-lived intangibles for impairment is subjective and requires significant judgment at many points during the analysis.

For the fifty-three weeks ended August 31, 2024, following the OWYN Acquisition, we determined our operations are organized into two operating segments, Quest and Atkins, and OWYN, which are aggregated into one reporting segment, due to similar financial, economic and operating characteristics.

For the fifty-two weeks ended August 30, 2025, and the fifty-three weeks ended August 31, 2024, the Company determined its operations are organized into two operating segments, Quest and Atkins, and OWYN, which are aggregated into one reportable segment due to similar financial, economic and operating characteristics.

The operating segments are also similar in the following areas:

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The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions.

Previously, during the fifty-two weeks ended August 26, 2023, and August 27, 2022, we determined our operations were organized into one, consolidated operating segment and reportable segment.

As of the fifty-two weeks ended August 26, 2023, the Company determined its operations were organized into one consolidated operating segment and reportable segment.

We assess goodwill and indefinite-lived intangible assets using either a qualitative or quantitative approach to determine whether it is more likely than not that the fair values of the reporting units or indefinite-lived intangible assets are less than their carrying amounts.

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The quantitative approach compares the estimated fair value of the reporting unit, including goodwill, or the indefinite-lived intangible asset to its carrying amount.

The material inputs and assumptions underlying the quantitative assessments of goodwill and intangible impairment are based on operational forecasts derived from expectations of future operating performance, which require considerable management judgment regarding matters that are uncertain and susceptible to change.

The material inputs and assumptions underlying the quantitative assessments of goodwill and intangible impairment are based on operational forecasts derived from expectations of future operating performance, which requires considerable management judgment regarding matters that are uncertain and susceptible to change.

Determining the estimated fair value requires multiple Level 3 inputs based on data available at the time of the quantitative assessment including, but not limited to, future revenue projections, discount rates, and royalty rates.

Impairment is indicated if the estimated fair value of the reporting unit or indefinite-lived intangible asset is less than the carrying amount, and an impairment charge is recognized for the differential.

During fiscal year 2024, we performed a qualitative assessment in the fiscal third quarter that indicated potential indicators of impairment for the Atkins brand indefinite lived intangible asset.

However, based on our quantitative assessment, the asset had an excess fair value well over its respective carrying value, resulting in no impairment.

As of the date of our annual impairment assessment, which is the first day of the fourth fiscal quarter, in fiscal years 2025, 2024 and 2023, we performed qualitative assessments of goodwill and indefinite-lived intangible assets.

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

Accordingly, no further impairment assessment was necessary, and no impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-three weeks ended August 31, 2024, or the fifty-two weeks ended August 26, 2023, or August 27, 2022.

Additionally, we determined there was not a material risk of impairments as of the date of the most recent assessment.

The qualitative assessments did not identify indicators of impairment based on the information available at that time, and it was determined that it was more likely than not each reporting unit and indefinite-lived intangible had fair values in excess of their carrying values.

As a result of the declines of future revenue projections during the fourth quarter of fiscal year 2025, the Company conducted an additional qualitative assessment in the fiscal fourth quarter that indicated potential indicators of impairment for the Atkins brand and trademarks indefinite-lived intangible asset.

Accordingly, the Company proceeded to conduct a quantitative impairment assessment.

Based on our quantitative assessment, the asset had an excess carrying value over its respective fair value, resulting in a loss on impairment.

No impairment charges related to goodwill or indefinite-lived intangibles were recognized in the fifty-three weeks ended August 31, 2024, or fifty-two weeks ended August 26, 2023.

We also have intangible assets that have determinable useful lives, consisting primarily of customer relationships, proprietary recipes and formulas, licensing agreements, and software and website development costs.

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Finite-lived intangible assets are tested for impairment when events or circumstances indicated that the carrying amount may not be recoverable.

For the fifty-three weeks ended August 31, 2024, and the fifty-two weeks ended August 26, 2023, and August 27, 2022, we did not identify indicators of impairment related to our finite-lived intangible assets, and as such there were no impairments recorded related to finite-lived intangible assets.

We also determined that there was no material risk of intangible impairments related to our finite-lived intangible assets as of the date of the most recent assessments.

For the fifty-two weeks ended August 30, 2025, we identified indicators of impairment related to our licensing agreements finite-lived intangible asset.

Accordingly, the Company proceeded to conduct a quantitative impairment assessment.

Based on our quantitative assessment, the asset had an excess carrying value over its respective fair value, resulting in a loss on impairment.

For the fifty-three weeks ended August 31, 2024, and August 26, 2023, we did not identify indicators of impairment related to our finite-lived intangible assets, and as such there were no impairments recorded related to finite-lived intangible assets.

We believe the estimates and assumptions utilized in our impairment assessment are reasonable and are comparable to those that would be used by other marketplace participants.

However, actual events and results could differ substantially from those utilized in our valuations.

Significant declines of future revenue projections or changes of other assumptions used in estimating fair values versus those utilized at the time of the initial valuations could result in further impairment charges that could materially affect the consolidated financial statements.

We are subject to income taxes in the United States and numerous other jurisdictions.

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Significant management judgment is required in determining the effective tax rate, evaluating tax positions and determining the net realizable value of deferred tax assets.

Warrant Liability

During the fifty-two weeks ended August 27, 2022, we had outstanding Private Warrants that allowed holders to purchase 6,700,000 shares of our common stock.

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

Each whole warrant entitled the holder to purchase one share of our common stock at a price of $11.50 per share.

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 our common stock.

As a result of the cashless exercise on January 7, 2022, there were no outstanding Private Warrants as of August 31, 2024, or August 26, 2023.

During the reporting periods the Private Warrants were outstanding, we accounted for our Private Warrants as a derivative warrant liability in accordance with ASC Topic 815-40, Derivatives and Hedging:

Contracts in Entity’s Own Equity.

Accordingly, we recognized the Private Warrants as a liability at fair value and adjusted the Private Warrants to fair value at each reporting period through other income.

We utilized the Black-Scholes option-pricing valuation model (“Black-Scholes model”) to estimate the fair value of the Private Warrants at each reporting date.

The application of the Black-Scholes model utilizes significant assumptions, including expected volatility, the determination of which requires significant judgment.

In order to determine the most accurate measure of this volatility, we measured expected volatility based on several inputs, including considering a peer group of publicly traded companies, Simply Good Foods’ implied volatility based on traded options, the implied volatility of comparable warrants, and the implied volatility of any outstanding public warrants during the periods they were outstanding.

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.

The expected volatility was historically a key assumption or input to the valuation of the Private Warrants, however changes in the expected volatility assumption had less of an effect on the Black-Scholes model valuation as the Private Warrants approached their expiration.

New Accounting Pronouncements

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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 7. Management’s Discussion and Analysis