The Simply Good Foods Company · NASDAQ:SMPL
The Simply Good Foods — Q2 2020 Earnings Presentation
22 slides from The Simply Good Foods's earnings presentation, Apr 6, 2020
Slide 1: Second Quarter Fiscal Year 2020 Earnings Conference Call & Webcast Presentation
Second Quarter Fiscal Year 2020 Earnings Conference Call & Webcast Presentation April 6, 2020
Slide 2: Disclaimer
Disclaimer 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 w
Slide 3: Joseph E. Scalzo, President and Chief Executive Officer
JOSEPH E. SCALZO PRESIDENT AND CHIEF EXECUTIVE OFFICER 2
Slide 4: Today's Speakers and Agenda
TODAY’S SPEAKERS AND AGENDA Speakers Agenda \ Mark Pogharian Introduction VP, Investor Relations Joe Scalzo Second Quarter 2020 Highlights President & Chief Executive Officer Business Update Todd Cunfer Financial Summary Chief Financial Officer Q&A 3
Slide 5: COVID-19 Impact
COVID-19 IMPACT The first half of the year exceeded our plan; the Company was well positioned to achieve our previously communicated outlook as we closed the first half in February In March, retail foot traffic was extremely volatile due to COVID-19 movement restrictions - Retail takeaway was si
Slide 6: 2nd Quarter Fiscal 2020 Highlights
2nd QUARTER FISCAL 2020 HIGHLIGHTS Delivered financial results that were greater than our estimate - Solid gross and EBITDA margin progression Atkins bars and confections growth solid - Atkins e-commerce business continues to be robust Quest results strong across all metrics and on track with
Slide 7: Broad and Diversified Portfolio
BROAD AND DIVERSIFIED PORTFOLIO TRUSTED & ADVANTAGED BRANDS: GROWTH VISION: Simply Good Foods 1 aims to lead the Compelling consumer Brands that transcend lifestyle brands multiple forms nutritious snacking movement with 2 Ability to increase trusted brands that Scale, outsourced margins; low cap-ex
Slide 8: 2nd Quarter Highlights: Revenue & Profit Growth
2nd QUARTER HIGHLIGHTS: REVENUE & PROFIT GROWTH $227.1 Driven by: Legacy Atkins Business +12.1% Quest +71.3% $123.8 Driven by: + Higher legacy Atkins sales; contribution from Quest + Gross profit increase driven primarily by higher sales, partially offset by slightly higher trade promotion + Lower l
Slide 9: Simply Good Foods Consumption
SIMPLY GOOD FOODS CONSUMPTION Atkins Q2 retail takeaway increased +6.1% with growth across all channels Atkins e-commerce gross sales up about 60% in the current and year-to-date period Quest performance strong across all forms in measured channels; non-measured specialty channel pressured Q2
Slide 10: Atkins YTD Point of Sales Drivers of Growth
ATKINS® YTD POINT OF SALES DRIVERS OF GROWTH Retail takeaway continues to be driven by base velocity gains Bars and confections growth solid, POS +8.2% and +31.3%, respectively RTD Shakes down 4.0% – a bit more than anticipated - due to increased innovation by other manufacturers On-going di
Slide 11: Quest YTD Point of Sales Drivers of Growth
QUEST® YTD POINT OF SALES DRIVERS OF GROWTH Retail takeaway by form in-line with estimates in measured channels - ~50% of U.S. sales in non-measured channels - Non-measured channel growth less than the increase of IRI MULO universe Core bar business consumption and loyalty solid; IRI MULO bar re
Slide 12: Quest, a Unique Active Nutrition Brand
QUEST®, A UNIQUE ACTIVE NUTRITION BRAND Active digital and social marketing efforts to drive awareness, consideration and trial Continue to build distribution of core products in in key measured channels Multi-pack expansion to increase share of shelf; new pack size to expand distribution; upd
Slide 13: Summary
SUMMARY Simply Good Foods is uniquely positioned as a U.S. leader in nutritional snacking - Atkins® and Quest® are strong consumer brands with broad product offerings A portfolio of brands aligned around consumer mega trends of better-for-you snacking Operating our business for the long-tem an
Slide 14: Todd Cunfer, Chief Financial Officer
TODD CUNFER CHIEF FINANCIAL OFFICER 13
Slide 15: Net Sales Drivers of Growth
NET SALES DRIVERS OF GROWTH Total Simply Good Foods 14
Slide 16: 2nd Quarter Net Sales & Profit Growth
2nd QUARTER NET SALES & PROFIT GROWTH Fiscal Q2 2020 vs. Year Ago Period Net Sales1 Gross Profit Adjusted EBITDA (and % Margin)1 (and % Margin)1,2 83.4% Year-Over-Year 72.0% Year-Over-Year 81.7% Year-Over-Year Growth Growth Growth $227.1 Includes $5.1 million inventory step-up, a $123.8 220 bps head
Slide 17: Year-to-Date Net Sales & Profit Growth
YEAR-TO-DATE NET SALES & PROFIT GROWTH Fiscal YTD 2020 vs. Year Ago Period Net Sales1 Gross Profit Adjusted EBITDA (and % Margin)1 (and % Margin)1,2 55.0% Year-Over-Year 45.3% Year-Over-Year 48.0% Year-Over-Year Growth Growth Growth $379.3 Includes $7.5 million inventory step-up, a 200 bps headwind
Slide 18: Earning Per Share-Diluted
EARNING PER SHARE-DILUTED 2020 EPS-Diluted vs. Year Ago Period Reconciliation of 1 Fiscal Q2 EPS-Diluted Fiscal Q2 YTD EPS-Diluted Adjusted Diluted EPS $0.45 Adj.’d 1 $0.39 Adj.’d1 $0.23 $0.33 42.4% Adj.’d 1 GAAP $0.18 Adj.’d1 43.0% $0.15 GAAP $0.11 22.1% GAAP $0.06 GAAP 2Q19 2Q20 2Q19 2Q20 YTD YTD
Slide 19: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW Year-to-date debt pay-down of $21 million; term loan debt at February 20, 2020, $635.5 million (LIBOR +375 bps) 1 On target to achieve trailing 12 months Net Debt to Adjusted EBITDA ratio of less than 3.75x by fiscal year-end August 2020 The Company has a $75.0 millio
Slide 20: Quest Integration Update
QUEST INTEGRATION UPDATE Cost synergies of $20 million on track; majority to be achieved in fiscal 2021 and 2022 Integrated supply chain – procurement, distribution and warehousing – work and discussions with vendors are proceeding as planned ERP implementation progressing; legacy Atkins integ
Slide 21: Fiscal 2020 Outlook Withdrawn
FISCAL 2020 OUTLOOK WITHDRAWN In the first half of March retail takeaway of our products was very strong; was followed by a notable slowdown underscoring unpredictable shopping behavior - Duration of COVID-19 movement restrictions uncertain and retail takeaway volatility will most likely continue
Slide 22: Q&A
Q&A Simply ¥Good FOODS COMPANY”
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