Exhibit 99.1

 

The Simply Good Foods Company Reports Third Quarter Fiscal 2017 Financial Results

 

Denver, CO, July 12, 2017 – The Simply Good Foods Company (NASDAQ: SMPL, SMPL.W) (“Simply Good Foods”) today reported fiscal third quarter financial results for its subsidiary NCP-ATK Holdings, Inc., a developer, marketer and seller of branded nutritional foods and snacking products (together with its operating subsidiary “Atkins Nutritionals, Inc.” referred to herein as “Atkins”).

 

Fiscal third quarter 2017 financial results for Atkins reflect the 13 weeks ended May 27, 2017, prior to the closing of the recent business combination (the “Business Combination”) between Atkins and Conyers Park Acquisition Corp. (“Conyers Park”) which occurred on July 7, 2017. In connection with the closing of the Business Combination, Atkins and Conyers Park merged under Simply Good Foods, a new holding company, and both Conyers Park and Atkins became wholly-owned subsidiaries of Simply Good Foods.

 

“We are very pleased with our third quarter financial results, which are evidence of the consistent, successful execution of our efforts to increase consumption through distribution and velocity gains as well as the introduction of innovative new products,” commented Joseph E. Scalzo, President and Chief Executive Officer, of Simply Good Foods. “The completion of our merger with the Conyers Park team marks an exciting milestone as we take a meaningful step forward in our business evolution. We believe we have significant potential to leverage our well-established brand and capitalize on our strategic growth initiatives to drive continued sales and profitability and to create value for our shareholders.”

 

Third Quarter Fiscal 2017 Highlights

 

  Net sales were $96.5 million

 

  Gross profit was $43.6 million, representing 45.1% of net sales

 

  Net income was $4.3 million

 

  Pro Forma Adjusted EBITDA was $14.8 million, representing 15.3% of net sales

 

On a GAAP basis, net sales decreased approximately 8% from the 13 weeks ended May 28, 2016 primarily due to a strategic decision to begin licensing frozen meals in September 2016, which negatively affected comparability. Gross profit increased 3%, or 450 basis points as a percentage of net sales, compared to the prior year period. Net income increased $3.6 million from the 13 weeks ended May 28, 2016.

 

Pro Forma Adjusted net sales, which have been adjusted for the change in licensing, increased $6.7 million, or 7%, as a result of higher Atkins sales on its core snacking business as well as the acquisition of Wellness Foods, Inc. (a Canada-based developer, marketer and seller of the SimplyProtein® brand) in December 2016. Pro Forma Adjusted EBITDA, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, increased approximately 20% to $14.8 million, or 15.3% of net sales, for the 13 weeks ended May 27, 2017 compared to $12.3 million, or 13.7% of pro forma adjusted net sales, in the prior year period.

 

 

 

 

Year-to-Date Fiscal 2017 Highlights

 

  Net sales were $298.6 million

 

  Gross profit was $138.9 million, representing 46.5% of net sales

 

  Net income was $14.6 million

 

  Pro Forma Adjusted EBITDA was $55.1 million, representing 18.5% of net sales

 

On a GAAP basis, net sales decreased approximately 8% from the 39 weeks ended May 28, 2016 primarily due to a strategic decision to begin licensing frozen meals in September 2016, which negatively affected comparability. Gross profit increased 2%, or 470 basis points as a percentage of net sales, compared to the prior year period. Net income increased $5.7 million, or 64% from the 39 weeks ended May 28, 2016.

 

Pro Forma Adjusted net sales, which have been adjusted for the change in licensing, increased approximately $18 million, or 6%, as a result of higher Atkins sales on its core snacking business as well as the acquisition of Wellness Foods, Inc. in December 2016. Pro Forma Adjusted EBITDA, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, increased 16% to $55.1 million, or 18.5% of net sales, for the 39 weeks ended May 27, 2017 compared to $47.4 million, or 16.9% of pro forma adjusted net sales in the prior year period.

 

For the full fiscal year of 2017, Simply Good Foods continues to expect to achieve approximately $72 million in Adjusted EBITDA. In subsequent years, expectations are for annual growth in net sales of 4% to 6% with Adjusted EBITDA growth in the high single digits.

 

Conference Call and Webcast Information

 

The Company will host a conference call with members of the executive management team to discuss these results today, Wednesday, July 12, 2017 at 7:30 a.m. Central time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial 877-407-0792 from the U.S and International callers can dial 201-689-8263.

 

In addition, the call and supplementary presentation slides will be broadcast live over the Internet hosted at the “Investor Relations” section of the Company's website at http://thesimplygoodfoodscompany.com. The webcast will be archived for 30 days. A telephone replay will be available approximately two hours after the call concludes and will be available through Wednesday, July 24, 2017, by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13664853.

About The Simply Good Foods Company

 

The Simply Good Foods Company, or “Simply Good Foods,” is the company created by the business combination of Conyers Park Acquisition Corp., with executive founders Jim Kilts and Dave West, long-time business leaders in the consumer products sector, and NCP-ATK Holdings, Inc. Today, our highly-focused product portfolio consists primarily of nutrition bars, ready-to-drink shakes, snacks and confectionery products marketed under the Atkins®, SimplyProtein®, Atkins Endulge®, Atkins Harvest Trail brand names. Simply Good Foods will look to expand its platform through investment opportunities in the snacking space and broader food category. Over time, Simply Good Foods aspires to become a portfolio of brands that bring simple goodness, happiness and positive experiences to consumers and their families. For more information, please visit https://www.thesimplygoodfoodscompany.com.

 

 2 

 

 

Forward Looking Statements

 

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by or include words such as “will”, “believe”, “potential”, “increase”, “continue”, “expect”, “aspires”, “outlook” or the negative or other variations thereof and other similar words, phrases or expressions. These forward-looking statements include statements regarding future plans for the Company, the estimated or anticipated future results and benefits of the Company’s future plans and operations, future opportunities for the Company, and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements based on a number of factors, including but not limited to the following: changes in the business environment in which the Company operates including general financial, economic, regulatory and political conditions affecting the industry in which the Company operates; changes in consumer preferences and purchasing habits; the availability of or competition for other brands, assets or other opportunities for investment by the Company or to expand the Company’s business; changes in taxes, governmental laws, and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the loss of one or more members of Company’s management teams; and other risk factors described from time to time in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission from time to time. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.

 

Non-GAAP Financial Measure and Related Information

 

This communication includes Pro Forma Net Sales and Adjusted EBITDA, a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Atkins defines Adjusted EBITDA as net income (loss) before interest expense, income tax expense, depreciation and amortization with further adjustments to exclude the following items: stock-based compensation and warrant expense, transaction costs and IPO readiness, restructuring costs, management fees, transactional exchange impact and other onetime expenses. Atkins believes that the inclusion of these supplementary adjustments in presenting Adjusted EBITDA are appropriate to provide additional information to investors and reflects more accurately operating results of the on-going operations. Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in calculation. Atkins management believes that this non-GAAP measure of financial results provides useful information to management and investors regarding certain financial and business trends relating to Atkins’ financial condition and results of operations. You should review the reconciliation of Atkins’ non-GAAP financial measures to the comparable GAAP financial measures which are included in this press release, Form 10-Q and investor presentation to be filed by The Simply Good Foods Company, and not rely on any single financial measure to evaluate Atkins’ business. In addition, certain of the financial information of Atkins contained herein is unaudited and does not conform to SEC Regulation S-X and as a result such information may be presented differently in future filings by The Simply Good Foods Company with the SEC.

 

Investor Contacts

 

Katie Turner/ Rachel Perkins
ICR
646-277-1228
Katie.turner@icrinc.com

Rachel.perkins@icrinc.com

 

 3 

 

 

NCP-ATK Holdings, Inc. and Subsidiaries
(dba Atkins Nutritionals)

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(In thousands, except share data)

  

   Thirteen Weeks Ended   Thirty-Nine Weeks Ended 
  

May 27,

2017

   May 28,
2016
  

May 27,

2017

  

May 28,

2016

 
Net sales  $96,503   $104,590   $298,614   $324,367 
Cost of goods sold   52,933    62,162    159,759    188,651 
Gross profit   43,570    42,428    138,855    135,716 
                     
Operating Expenses:                    
Distribution   4,084    4,598    13,413    13,673 
Selling   4,350    5,444    12,621    14,813 
Marketing   9,733    9,494    28,969    28,958 
General and administrative   12,276    12,215    33,975    34,080 
Depreciation and amortization   2,482    2,458    7,409    7,705 
Other Expense   17    227    75    652 
Total operating expenses   32,942    34,436    96,462    99,881 
                     
Income from operations   10,628    7,992    42,393    35,835 
                     
Other income (expense):                    
Change in warrant liabilities   1,119        722     
Interest expense   (6,430)   (6,559)   (20,059)   (20,292)
Loss (gain) on foreign currency transactions   724    357    6    (44)
Other income (expense)   83    (12)   282    104 
Total other expense   (4,504)   (6,214)   (19,049)   (20,232)
                     
Income before income taxes   6,124    1,778    23,344    15,603 
Income tax expense   1,777    1,002    8,747    6,728 
Net income  $4,347   $776   $14,597   $8,875 
                     
Other comprehensive income:                    
Foreign currency translation adjustments   (805)   33    (389)   158 
Comprehensive income  $3,542   $809   $14,208   $9,033 

 

 4 

 

 

NCP-ATK Holdings, Inc. and Subsidiaries

(dba Atkins Nutritionals)

Net Income to Adjusted EBITDA Reconciliation

(Unaudited)

 

   13-Weeks Ended   39-Weeks Ended 
   27-May-17   28-May-16   27-May-17   28-May-16 
                 
Net Income (As reported in the Q3 10Q)  $4.3   $0.8   $14.6   $8.9 
                     
Interest expense  $6.4   $6.6   $20.1   $20.3 
Income tax expense   1.8    1.0    8.7    6.7 
Depreciation and amortization   2.5    2.5    7.4    7.7 
Stock Based Compensation   (0.3)   0.5    1.1    1.5 
Management Fees (1)   0.4    0.7    1.4    1.4 
Restructuring Charges (2)   0.0    0.2    0.1    0.7 
Transaction Fees/IPO Readiness (One time in nature)   (0.2)   0.2    0.4    0.5 
Legal Costs (One time in nature)   0.2    -    0.6    0.0 
Frozen Licensing Media (One time in nature)   0.5    -    0.8    0.0 
Other Exp (3)   (0.8)   (0.4)   (0.1)   (0.0)
                     
Adjusted EBITDA (As defined in the Q3 10Q)  $14.8   $12.1   $55.1   $47.7 

 

Note: Dollars In millions. 

(1) Historical management fees paid to selling shareholders.
(2) One-time costs of restructuring activities
(3) Other charges consist principally of exchange impact of foreign currency transactions as well as minor impacts of channel inventory returns.

 

 5 

 

 

NCP-ATK Holdings, Inc. and Subsidiaries

(dba Atkins Nutritionals)

Net Sales to Pro Forma Adjusted Net Sales Reconciliation

(Unaudited)

  

   13-Weeks Ended   39-Weeks Ended 
   27-May-17   28-May-16   27-May-17   28-May-16 
                 
Net Sales (As defined in the Q3 10Q)  $96.5   $104.6   $298.6   $324.4 
                     
Removal of Frozen Meals related Net Sales  $-   $(15.8)  $-   $(46.8)
Licensing Income Adjustment   -    1.0    -    3.0 
Net Frozen Meals Licensing Adjustment   -    (14.8)   -    (43.8)
                     
Atkins' Pro forma Adjusted Net Sales  $96.5   $89.8   $298.6   $280.6 
                     
Adjusted EBITDA (As defined in the Q3 10Q)  $14.8   $12.1   $55.1   $47.7 
                     
Removal of Frozen Meals related EBITDA  $-   $(0.8)  $-   $(3.3)
Licensing Income Adjustment   -    1.0    -    3.0 
Net Frozen Meals Licensing Adjustment   -    0.2    -    (0.3)
                     
Atkins' Pro forma Adjusted EBITDA  $14.8   $12.3   $55.1   $47.4 

 

Note: Dollars in millions. Financial metrics do not include the impact of purchase accounting or other impacts from the consummation of this transaction.

 

 

6

 


The following information was filed by Simply Good Foods Co (SMPL) on Wednesday, July 12, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Simply Good Foods Co's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Simply Good Foods Co.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account