Simply Good Foods Co - Annual Report: 2024 (Form 10-K)

53-Weeks Ended52-Weeks Ended52-Weeks Ended(In thousands)August 31, 2024August 26, 2023August 27, 2022Domestic$ $ $ Foreign Total income before income taxes$ $ $

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% % %

Change in fair value of warrant liabilities

State income tax expense, net of federal Valuation allowance ()Taxes on foreign income above the U.S. tax Change in tax rate ()Non-deductible transaction costs Other permanent items()()()Income tax expense % % %

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$ Accrued expenses Net operating loss carryforwards Share based compensation Lease liabilities Capitalized Section 174 Expenditures Tax capitalization of inventory costs Transaction costs Federal benefit of state taxes Other Deferred tax assets Valuation allowance Deferred tax asset, net of valuation allowance$ $ Deferred tax liabilities:Excess tax over book depreciation()()Intangible assets()()Lease right-of-use assets()()Other()()Deferred tax liabilities()()Net deferred tax liabilities$()$()

The Company had federal net operating loss carryforwards of $ million and $ million, state net operating loss carryforwards of $ million and $ million, and foreign net operating loss carryforwards of $ million and $ million at August 31, 2024 and August 26, 2023, respectively. Federal net operating loss carryforwards will begin to expire in 2037 and the state net operating loss carryforwards will begin to expire in 2031.

As of August 31, 2024, the Company has valuation allowances on its deferred tax assets.

As of August 31, 2024, the Company does not intend to indefinitely reinvest its foreign earnings within its subsidiary in Canada and has not recognized any tax liabilities related to this jurisdiction. It is the Company’s intention to reinvest the earnings of its other non-U.S. subsidiaries in its Australia and New Zealand operations. As of August 31, 2024, the Company has not made a provision for U.S. or additional foreign withholding taxes for any outside basis differences inherent in its investments in foreign subsidiaries that are indefinitely reinvested. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

As of August 31, 2024, and August 26, 2023, the Company has unrecognized tax benefits.

The Company records interest and penalties associated with unrecognized tax benefits as a component of tax expense. As of August 31, 2024, and August 26, 2023, the Company has accrued any interest or penalties on unrecognized tax benefits, as there is no position recorded as of these fiscal year-ends. No changes to the uncertain tax position balance are anticipated within the next 12 months and are not expected to materially affect the financial statements.

As of August 31, 2024, tax years 2017 to 2023 remain subject to examination in the United States by the Internal Revenue Service and state tax authorities and the tax years 2017 to 2023 remain subject to examination in other major foreign jurisdictions where the Company conducts business. State income tax returns are generally subject to examination for a period of three to six years after the filing of the respective return.

The future utilization of federal net operating loss carryforwards generated after 2017 is limited to 80% of taxable income. An additional limitation applies to the use of federal net operating loss and credit carryforwards, under Section 382 of the Internal Revenue Code of

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$ $

Variable lease cost (1)

Cost of goods sold and General and administrative

Total operating lease cost$ $ $ Finance lease cost:Amortization of right-of use assetsCost of goods sold$ $ $ Interest on lease liabilitiesInterest expense Total finance lease cost$ $ $ Total lease cost$ $ $

(1)Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.

$ LiabilitiesCurrent:Operating lease liabilitiesAccrued expenses and other current liabilities$5,494 $7,566 Finance lease liabilitiesCurrent maturities of long-term debt— 143 Long-term:Operating lease liabilitiesOther long-term liabilities34,330 37,272

Finance leasesWeighted-average discount rateOperating leases % %Finance leases % %

$ $ Operating cash flows from finance leases$ $ $ Financing cash flows from finance leases$ $ $

11.

million over the next year.

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12.

shares of the Company’s common stock. Such Private Warrants were held by Conyers Park, a related party. Each whole warrant entitled the holder to purchase one share of the Company’s common stock at a price of $ 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 shares of the Company’s common stock. As a result of the cashless exercise on January 7, 2022, there were outstanding liability-classified Private Warrants as of August 31, 2024, or August 26, 2023.

As discussed in Note 8, Fair Value of Financial Instruments, the liability-classified warrants were remeasured on a recurring basis, primarily based on observable market data while the related theoretical private warrant volatility assumption within the Black-Scholes model represents a Level 3 measurement within the fair value measurement hierarchy. The periodic fair value remeasurements of the warrant liability, including the cashless exercise and the settlement of the warrant liability, have been reflected in (Loss) in fair value change of warrant liability within the Consolidated Statements of Income and Comprehensive Income.

Stock Repurchase Program

The Company adopted a $ million stock repurchase program on November 13, 2018. On April 13, 2022, and October 21, 2022, the Company announced that its Board of Directors had approved the addition of $ million and $ million, respectively, to its stock repurchase program, resulting in authorized stock repurchases of up to an aggregate of $ million. Under the stock repurchase program, the Company may repurchase shares from time to time in the open market or in privately negotiated transactions. The stock repurchase program does not obligate the Company to acquire any specific number of shares or acquire shares over any specific period of time. The stock repurchase program may be suspended or discontinued at any time by the Company and does not have an expiration date.

The Company did not repurchase any shares of common stock during the fifty-three weeks ended August 31, 2024. During the fifty-two weeks ended August 26, 2023, the Company repurchased shares of common stock at an average share price of $ per share. During the fifty-two weeks ended August 27, 2022, the Company repurchased shares of common stock at an average share price of $ per share. As of August 31, 2024, approximately $ million remained available under the stock repurchase program.

Accumulated Other Comprehensive Loss

During the fifty-two weeks ended August 27, 2022, the Company recognized a foreign currency translation gain of $ million related to the liquidation of a foreign subsidiary. The gain is reflected as a component of Other income (expense) in Gain (loss) on foreign currency transactions within the Consolidated Statements of Income and Comprehensive Income.

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$ $ Denominator:Weighted average common shares outstanding – basic Basic earnings per share from net income$ $ $ Diluted earnings per share computation:Numerator:

Item 16. Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto, duly authorized.

THE SIMPLY GOOD FOODS COMPANY

By:

/s/ Geoff E. Tanner

Date:

October 29, 2024

Name:

Geoff E. Tanner

Title:

President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Geoff E. Tanner

President, Chief Executive Officer and Director

October 29, 2024

Geoff E. Tanner

(Principal Executive Officer)

/s/ Shaun P. Mara

Chief Financial Officer

October 29, 2024

Shaun P. Mara

(Principal Financial Officer)

/s/ Timothy A. Matthews

Vice President, Controller and Chief Accounting Officer

October 29, 2024

Timothy A. Matthews

(Principal Accounting Officer)

/s/ James M. Kilts

Chairman of the Board of Directors

October 29, 2024

James M. Kilts

/s/ Clayton C. Daley, Jr.

Director

October 29, 2024

Clayton C. Daley, Jr.

/s/ Nomi P. Ghez

Director

October 29, 2024

Nomi P. Ghez

/s/ Michelle P. Goolsby

Director

October 29, 2024

Michelle P. Goolsby

/s/ Robert G. Montgomery

Director

October 29, 2024

Robert G. Montgomery

/s/ Brian K. Ratzan

Director

October 29, 2024

Brian K. Ratzan

/s/ David W. Ritterbush

Director

October 29, 2024

David W. Ritterbush

/s/ Joseph E. Scalzo

Director

October 29, 2024

Joseph E. Scalzo

/s/ Joseph J. Schena

Director

October 29, 2024

Joseph J. Schena

/s/ David J. West

Director

October 29, 2024

David J. West

/s/ James D. White

Director

October 29, 2024

James D. White

Simply Good Foods Co - Annual Report: 2024 (Form 10-K)

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