Simply Good Foods Co (SMPL)

CIK: 0001702744. SIC: 2000 Food and Kindred Products. Latest 10-K as of: 2025-10-28.

SIC breadcrumb: Manufacturing > Food And Kindred Products > SIC 2000 Food and Kindred Products

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1702744. Latest filing source: 0001702744-25-000046.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-10-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001702744.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-09. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001702744.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001702744-26-000012.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-09. Report date: 2026-02-28.

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements. When used anywhere in this Report, the words “expect,” “believe,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. These statements include, but are not limited to, our expectations regarding our supply chain, including but not limited to, raw materials and logistics costs, the effect of price increases, inflationary pressure on us and our contract manufacturers, changes in taxes, tariffs, duties, governmental laws and regulations, our growth, our competitive position, and the unforeseen business disruptions or other effects due to current global geopolitical tension. We disclaim any undertaking to publicly update or revise any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by applicable law. These statements reflect our current views with respect to future events and are based on assumptions subject to risks and uncertainties. Such risks and uncertainties include those related to our ability to sell our products.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended August 30, 2025, (“Annual Report”) and our unaudited consolidated financial statements and the related notes appearing elsewhere in this Report. In addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements regarding the Company’s expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that could cause actual results to differ materially from the Company’s expectations. The Company’s actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified in Item 1A. “Risk Factors” of our Annual Report and this Report. The Company assumes no obligation to update any of these forward-looking statements.

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. In context, “Quest” may also refer to the Quest brand, “Atkins” may also refer to the Atkins brand, and “OWYN” may also refer to the OWYN brand. Atkins, Quest, OWYN, and the Simply Good logo are either registered trademarks or trademarks of the Company’s wholly owned subsidiary Simply Good Foods USA, Inc. or one of its affiliates in the United States and elsewhere. All rights are reserved.

Overview

The Simply Good Foods Company, headquartered in Denver, Colorado, is a consumer packaged food and beverage company with ambitious goals to raise the bar on what food can be with trusted brands and innovative nutritious snacking products. Within our portfolio of trusted brands (Quest, Atkins, and OWYN), we offer a wide variety of nutritional snacks and beverages, including high protein chips, bars, ready-to-drink (RTD) shakes, and powders, and low sugar, low carb sweets and baked goods. We are a leader of the nutritious snacking movement, poised to expand our healthy lifestyle platform through innovation-driven organic growth and external investment opportunities.

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 carbohydrates, Atkins for those following a low-carbohydrate lifestyle or seeking to manage weight or blood sugar levels, and OWYN for consumers seeking protein-rich beverages that are plant-based and tested for the top nine allergens that also limit sugars and simple carbohydrates. We distribute our products in major retail channels, primarily in North America, including grocery, club, and mass merchandise, and through e-commerce, convenience, specialty, and other channels. Our portfolio of nutritious snacking brands gives us a strong platform with which to introduce new products, expand distribution, and attract new consumers to our products.

The Simply Good Foods Company (“Simply Good Foods”) was formed in March 2017 to acquire NCP-ATK Holdings, Inc. (“Atkins”), which was completed in July 2017. As part of Simply Good Foods’ strategy to become an industry-leading snacking platform, we acquired Quest Nutrition, LLC (“Quest”) in November 2019 and we acquired Only What You Need, Inc. in June 2024. We refer to the acquisition of Quest Nutrition, LLC as the “Quest Acquisition” and the acquisition of Only What You Need, Inc. as the “OWYN Acquisition”.

Business Trends

During the twenty-six weeks ended February 28, 2026, our results of operations were primarily driven by continued distribution-related declines for Atkins and recent velocity-related declines for OWYN, which were partially offset by Quest volume-driven growth. In recent periods, retail distribution for the Atkins brand has been under pressure. The Atkins brand has had, and continues to have, a large retail presence on-shelf, which is being reduced in the current fiscal year and could be reduced in future periods. In response, during the current fiscal year, 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 products. In the second quarter of fiscal year 2026, OWYN experienced poor velocities, including on newly expanded distribution, which will result in distribution-related declines in the current fiscal year and could continue to be reduced in future periods. In response, the Company is taking actions to increase consumer demand to restore velocities and growth for the brand.

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

20

Table of Contents

year, with productivity a modest offset in the quarter. Margins are expected to remain under pressure until the Company realizes the benefits expected from recently implemented pricing actions, productivity initiatives and other mitigating actions, which are expected to build as the fiscal year progresses. 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. 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.

The ongoing conflict in Iran and geopolitical tensions in the region could lead to significant disruption of global energy supplies and increases in global energy prices, adversely affect global supply chains, heighten inflationary pressures on our input costs and supply chain, and adversely affect consumer spending patterns. We are continuing to evaluate the evolving macroeconomic environment, however at this time we do not expect these factors to result in a material negative effect on our business, financial condition and results of operations.

Intangible Assets

As a result of the declines of net sales and future revenue projections assessed during the second quarter of fiscal year 2026, the Company identified a triggering event indicating that it was more likely than not that the fair value of both the OWYN and Atkins brands and trademarks indefinite-lived intangible assets were less than their respective carrying amounts. The Company conducted a quantitative assessment as of the last day of its second quarter, February 28, 2026, utilizing an income approach to estimate the fair value of the intangible assets. Based on testing, the respective assets carrying values exceeded their fair values, resulting in a loss on impairment of $187.0 million for OWYN and $62.0 million for Atkins during the thirteen weeks ended February 28, 2026. There were no impairment charges related to the Company’s indefinite-lived intangible assets during the twenty-six weeks ended March 1, 2025.

We believe the estimates and assumptions utilized in our impairment assessments 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 initial 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 impairment charges that could materially affect the consolidated financial statements. Refer to Note 4, Goodwill and Intangibles, of our Notes to Unaudited Consolidated Financial Statements in this Report for additional information regarding the Company’s impairment assessments.

Restructuring and Other

For the twenty-six weeks ended February 28, 2026, the Company incurred $4.5 million of costs for restructuring activities which have been included within General and administrative on the Consolidated Statements of Operations and Comprehensive Income (Loss). As of February 28, 2026, the outstanding restructuring liability was $1.1 million. Refer to Note 14, Restructuring and Other, of our Notes to Unaudited Consolidated Financial Statements in this Report for additional information regarding restructuring and other activities.

The Company has also announced certain future restructuring activities in conjunction with the implementation of the Company’s modified organization design and actions to streamline its operations, which will create a more efficient organization that will continue to support and build its business. These restructuring plans primarily include workforce reductions, changes in management structure, actions to streamline its operations and other cost savings initiatives. While early in the process, the Company expects to incur approximately $15.0 million, including the $4.5 million referenced above, in restructuring and other costs, which are to be paid throughout fiscal 2026 and fiscal 2027.

In connection with the restructuring activities, the Company recorded incremental stock-based compensation expense of $1.0 million in connection with the separation of the Company’s prior President and Chief Executive Officer in January 2026. Refer to Note 12, Omnibus Incentive Plan, of our Notes to Unaudited Consolidated Financial Statements in this Report for additional information.

Key Financial Definitions

Net sales. Net sales consist primarily of product sales less the cost of promotional activities, slotting fees and other sales credits and adjustments, including product returns.

Cost of goods sold. Cost of goods sold consists primarily of the costs we pay to our contract manufacturing partners to produce the products sold. These costs include

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-10-28. Report date: 2025-08-30.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes included in Item 8 of this Report. In addition to historical information, the following discussion contains forward-looking statements, including, but not limited to, statements regarding the Company’s expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that could cause actual results to differ materially from the Company’s expectations. The Company’s actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in “Cautionary Note Regarding Forward-Looking Statements,” and in Item 1A “Risk Factors” of this Report. The Company assumes no obligation to update any of these forward-looking statements.

Our fiscal year ends the last Saturday in August. 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 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. In context, “Quest” may also refer to the Quest brand, “Atkins” may also refer to the Atkins brand, and “OWYN” may also refer to the OWYN brand. Atkins, Quest, OWYN, and the Simply Good logo are either registered trademarks or trademarks of the Company’s wholly owned subsidiary Simply Good Foods USA, Inc. or one of its affiliates in the United States and elsewhere. All rights are reserved.

Overview

The Simply Good Foods 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 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.

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). For more information, please see “Liquidity and Capital Resources-OWYN Acquisition”.

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 food and beverage option. 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. Our portfolio of nutritious snacking brands gives us a strong platform with which to introduce new products, expand distribution, and attract new consumers to our products.

Business Trends

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. “Risk Factors” for additional information regarding the risks of inflation, higher raw material, packaging, co-manufacturing, and logistics costs, and supply chain challenges.

38

Our Reportable Segment

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: (a) the nature of the products; (b) the nature of the production processes; (c) the methods used to distribute products to customers, (d) the type of customer for the products, and (e) the nature of the regulatory environment. The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions. 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

Net sales. Net sales consist primarily of product sales less the cost of promotional activities, slotting fees and other sales credits and adjustments, including product returns.

Cost of goods sold. Cost of goods sold consists primarily of the costs we pay to our contract manufacturing partners to produce the products sold. These costs include the purchase of raw ingredients, packaging, shipping and handling, warehousing, depreciation of warehouse equipment, and a tolling charge payable to the contract manufacturer. Cost of goods sold includes products provided at no charge as part of promotions and the non-food materials provided with customer orders.

Operating expenses. 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, 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 expense, restructuring costs, insurance and other general corporate expenses.

•Depreciation and amortization. Depreciation and amortization expenses consist of expenses associated with the depreciation of fixed assets and capitalized leasehold improvements and amortization of intangible assets.

•Business Transaction Costs. 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-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. Because not all companies use identical calculations, this presentation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. 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-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.

39

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:

52-Weeks Ended

% of Net Sales

53-Weeks Ended

% of Net Sales

(In thousands)

August 30, 2025

August 31, 2024

Net sales

$

1,450,920 

100.0 

%

$

1,331,321 

100.0 

%

Cost of goods sold

925,173 

63.8 

%

819,755 

61.6 

%

Gross profit

525,747 

36.2 

%

511,566 

38.4 

%

Operating expenses:

Selling and marketing

134,282 

9.3 

%

143,929 

10.8 

%

General and administrative

155,930 

10.7 

%

129,699 

9.7 

%

Depreciation and amortization

16,900 

1.2 

%

16,917 

1.3 

%

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 

%

Income from operations

156,887 

10.8 

%

206,497 

15.5 

%

Other income (expense):

Interest income

2,663 

0.2 

%

4,307 

0.3 

%

Interest expense

(23,249)

(1.6)

%

(26,029)

(2.0)

%

(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)

%

Income before income taxes

135,903 

9.4 

%

186,050 

14.0 

%

Income tax expense

32,289 

2.2 

%

46,741 

3.5 

%

Net income

$

103,614 

7.1 

%

$

139,309 

10.5 

%

Other financial data:

Adjusted EBITDA (1)

$

278,162 

19.2 

%

$

269,130 

20.2 

%

(1)    Adjusted EBITDA is a non-GAAP financial metric. See below for a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.

Net sales. 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 $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 $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 $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:

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•Selling and marketing. 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 $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 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 $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 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 $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 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. 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 $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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Reconciliation of EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP financial measures commonly used in our industry and should not be construed as alternatives to net income as an indicator of operating performance or as alternatives to cash flow provided by operating activities as a measure of liquidity (each as determined in accordance with GAAP). 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: 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. Management of the Company uses EBITDA and Adjusted EBITDA to supplement net income because these measures reflect operating results of the on-going operations, eliminate items that are not directly attributable to the Company’s underlying operating performance, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics the Company’s management uses in its financial and operational decision making. The Company also believes that EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. 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-two weeks ended August 30, 2025, and fifty-three weeks ended August 31, 2024:

52-Weeks Ended

53-Weeks Ended

(In thousands)

August 30, 2025

August 31, 2024

Net income

$

103,614 

$

139,309 

Interest income

(2,663)

(4,307)

Interest expense

23,249 

26,029 

Income tax expense

32,289 

46,741 

Depreciation and amortization

21,431 

20,993 

EBITDA

177,920 

228,765 

Loss on impairment

60,928 

— 

Stock-based compensation expense

15,273 

18,421 

Executive transition costs

— 

3,871 

Business transaction costs

820 

14,524 

Inventory step-up

1,412 

3,226 

Integration expense

20,856 

588 

Term loan transaction fees

715 

— 

Other (1)

238 

(265)

Adjusted EBITDA

$

278,162 

$

269,130 

(1) Other items consist principally of exchange impact of foreign currency transactions and other expenses.

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Liquidity and Capital Resources

Overview

We have historically funded our operations with cash flow from operations and, when needed, with borrowings under our Credit Agreement (as defined below). Our principal uses of cash have been working capital, debt service, repurchases of our common stock, and acquisition opportunities.

We had $98.5 million in cash as of August 30, 2025. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. As circumstances warrant, we may issue debt and/or equity securities from time to time on an opportunistic basis, dependent upon market conditions and available pricing. 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 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, 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. Substantially concurrent with the consummation of the business combination which formed the Company between Conyers Park Acquisition Corp. and NCP-ATK Holdings, Inc. on July 7, 2017, the full $200.0 million of the Term Facility (the “Term Loan”) was drawn.

On November 7, 2019, we 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 Incremental Facility Amendment was executed to partially finance the acquisition of Quest Nutrition, LLC on November 7, 2019. No amounts under the Term Facility were repaid as a result of the execution of the Incremental Facility Amendment.

Effective as of December 16, 2021, we 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 then-effective maturity date of the Initial Term Loans and (ii) December 16, 2026.

On January 21, 2022, we entered into 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 SOFR and related replacement provisions for LIBOR.

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.

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

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:

43

i.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; or

ii.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. Simply Good Foods USA, Inc., is the administrative borrower and certain other subsidiary holding companies are co-borrowers under the Credit Agreement. Each of our domestic subsidiaries that is not a named borrower under the Credit Agreement has provided a guarantee on a secured basis. As security for the payment or performance of the debt under the Credit Agreement, the borrowers and the guarantors have pledged certain equity interests in their respective subsidiaries and granted the lenders a security interest in substantially all of their domestic assets. All guarantors other than Quest Nutrition, LLC and Only What You Need, Inc. are holding companies with no assets other than their investments in their respective subsidiaries.

The Credit Agreement contains certain financial and other covenants that limit our ability to, among other things, incur and/or undertake asset sales and other dispositions, liens, indebtedness, certain acquisitions and investments, consolidations, mergers, reorganizations and other fundamental changes, payment of dividends and other distributions to equity and warrant holders, and prepayments of material subordinated debt, in each case, subject to customary exceptions materially consistent with credit facilities of such type and size. The Revolving Credit Facility has a maximum total net leverage ratio equal to or less than 6.00:1.00 contingent on credit extensions in excess of 30% of the total amount of commitments available under the Revolving Credit Facility. Any failure to comply with the restrictions of the credit facilities may result in an event of default. We were in compliance with all financial covenants as of August 30, 2025, and August 31, 2024, respectively.

As of August 30, 2025, the outstanding balance of the Term Facility was $250.0 million. We are not required to make principal payments on the Term Facility over the twelve months following the period ended August 30, 2025. The outstanding balance of the Term Facility is due upon its maturity in March 2027. As of August 30, 2025, there were no amounts drawn against the Revolving Credit Facility.

OWYN Acquisition

On April 29, 2024, the Company’s wholly owned subsidiary, Simply Good Foods, USA, Inc. entered into a stock purchase agreement (the “Purchase Agreement”) to acquire Only What You Need, Inc. (“OWYN”), a plant-based protein food company (the “OWYN Acquisition”), for approximately $280.0 million. On June 13, 2024, pursuant to the Purchase Agreement, the Company completed the OWYN Acquisition by acquiring 100% of the equity interests for a cash purchase price at closing of $281.9 million, subject to certain customary post-closing adjustments. We acquired OWYN as a part of our 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 that will now offer plant-based products to a wider market of consumers.

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

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.

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Cash Flows

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.

52-Weeks Ended

53-Weeks Ended

(In thousands)

August 30, 2025

August 31, 2024

Net cash provided by operating activities

$

178,457 

$

215,704 

Net cash used in investing activities

$

(20,932)

$

(286,882)

Net cash (used in) provided by financing activities

$

(191,205)

$

115,901 

Operating activities. 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 $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 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. 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 prepayments on the Term Facility.

Critical Accounting Policies, Judgments and Estimates

General

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. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which could potentially result in materially different results under different assumptions and conditions. Management regularly reviews the estimates and assumptions used in the preparation of the financial statements for reasonableness and adequacy. 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.

Revenue Recognition

We recognize revenue when performance obligations under the terms of a contract with our customer are satisfied. We have determined that fulfilling and delivering products is a single performance obligation. Revenue is recognized at the point in time when we have satisfied our performance obligation and the customer has obtained control of the products. This generally occurs when the product is delivered to or picked up by our customer based on applicable shipping terms, which is typically within 30 days.

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Revenue is measured as the amount of consideration expected to be received in exchange for fulfilled product orders, including estimates of variable consideration. 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 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. We review these estimates regularly and make revisions as necessary. Uncertainties related to the estimate of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration. Adjustments to variable consideration have historically been insignificant.

Although some payment terms may be longer, the majority of our payment terms are less than 60 days. As a result, we do not have any material significant payments’ terms as payment is received shortly after the time of sale.

While our revenue recognition does not involve significant judgment, it represents a key accounting policy.

Trade Promotions

We offer trade promotions through various programs to customers and consumers. Trade promotions include discounts, rebates, slotting and other marketing activities. Trade promotions are recorded as a reduction to net sales with a corresponding reduction to accounts receivable at the time of revenue recognition for the underlying sale. 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 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.

As of August 30, 2025, and August 31, 2024, the allowance for trade promotions was $37.8 million and $36.3 million, respectively. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period. These differences have historically been insignificant.

Business Combination

On June 13, 2024, we completed the OWYN Acquisition for a cash purchase price of approximately $281.9 million, subject to certain customary post-closing adjustments. The OWYN Acquisition was accounted for using the acquisition method of accounting prescribed by Accounting Standard Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), whereby the results of operations, including the revenues and earnings of OWYN, 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. Significant judgment is required to determine the fair value of certain tangible and intangible assets. 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. 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. 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 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-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: (a) the nature of the products; (b) the nature of the production processes; (c) the methods used to distribute products to customers, (d) the type of customer for the products, and (e) the nature of the regulatory environment. The Company also designed its organizational structure to support entity-wide business functions across brands, products, customers, and geographic regions. 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.

46

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. The qualitative assessment evaluates factors including macro-economic conditions, industry-specific and company-specific considerations, legal and regulatory environments, and historical performance. If we determine that it is more likely than not that the fair value of a reporting unit or an indefinite-lived intangible asset is less than its carrying value, a quantitative assessment is performed. Otherwise, no further assessment is required. 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 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.

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 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. Costs of these finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Finite-lived intangible assets are tested for impairment when events or circumstances indicated that the carrying amount may not be recoverable. 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.

Income Taxes

We are subject to income taxes in the United States and numerous other jurisdictions. Significant judgment is required in determining our provision for income tax, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Income taxes include federal, state and foreign taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the differences between the financial statement balances and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. Significant management judgment is required in determining the effective tax rate, evaluating tax positions and determining the net realizable value of deferred tax assets.

New Accounting Pronouncements

Refer to Note 2, Summary of Significant Accounting Policies, of the Consolidated Financial Statements included in Item 8 of this Report for information regarding recently issued accounting standards.

47