The Simply Good Foods Company · NASDAQ:SMPL
The Simply Good Foods — SPAC Merger (May 2017)
46 slides from The Simply Good Foods's SPAC merger presentation, May 17, 2017
Slide 1: Lender Presentation May 17, 2017
Lender Presentation May 17, 2017 The Simply Good Foods Company
Slide 2: Safe Harbor Disclosures: Important Notice
1 Safe Harbor Disclosures Important Notice Regarding Information Contained in this Presentation The information contained in this presentation is being provided on a confidential basis, and for a limited informational pur pos e, to a limited number of institutions or agencies. This presentation is i
Slide 3: Safe Harbor Disclosures: Additional Information
2 Safe Harbor Disclosures Additional Information In connection with the proposed transaction, The Simply Good Foods Company has filed a Registration Statement on Form S - 4, which in cludes a preliminary proxy statement/prospectus of Conyers Park. Conyers Park will mail a definitive proxy statement/
Slide 4: Today's Agenda
3 3. Atkins Nutritionals Business Overview Joe Scalzo, Atkins Nutritionals 4. Atkins Nutritionals Growth Strategy Joe Scalzo, Atkins Nutritionals 5. Atkins Nutritionals Financial Overview Shaun Mara, Atkins Nutritionals 6. Appendix 2. Introduction to Conyers Park Dave West and Brian Ratzan, Conyers
Slide 5: The Simply Good Foods Company Transaction Overview
The Simply Good Foods Company Transaction Overview Section 1
Slide 6: Transaction Overview
5 Transaction Overview Transaction Overview ▪ On April 11, 2017, Conyers Park Acquisition Corp. (“Conyers Park”) entered into a definitive agreement with Atkins Nutritionals, Inc. (“Atkins” or the “Company”) to combine under a new holding company, The Simply Good Foods Company (“Simply Good Foods”)
Slide 7: Transaction Detail
6 Transaction Detail ▪ Selling shareholders will be paid $628mm cash consideration and issued approximately 10mm rollover shares at close ▪ Cash considering of $628mm and approximately $25mm of estimated transaction costs will be funded with the following: – Common stock private placement in the amo
Slide 8: Pro Forma Corporate Structure
7 Pro Forma Corporate Structure Atkins Nutritionals Holdings, Inc. Atkins Nutritionals Holdings II, Inc. Atkins Nutritionals, Inc. Conyers Park SPAC Shareholders Conyers Park Acquisition Corp. The Simply Good Foods Company Former Atkins Shareholders 85% 15% NCP - ATK Holdings, Inc. Atkins Intermedia
Slide 9: Sources, Uses and Pro Forma Capitalization
8 Sources, Uses and Pro Forma Capitalization Cash Sources and Uses Pro Forma Capitalization ($ in millions) Cash Sources $ % Cash from Conyers Park Trust $403 57% PIPE Equity 100 14% New 1L Term Loan 200 28% Total Sources $703 100% Cash Uses $ % Cash to Balance Sheet $50 7% Acquisition of Equity 297
Slide 10: Summary Term Sheet
9 Summary Term Sheet Borrowers: Initially the Merger Subs, and after giving effect to the acquisition, NCP - ATK Holdings, Inc., Atkins Nutritional Holdings, Inc., Atkins Nutritional Holdings II, Inc., and Atkins Nutritionals, Inc. (the “Borrowers”) Facilities: $75mm Revolving Credit facility (“RC
Slide 11: Syndication Calendar / Transaction Timeline
10 Syndication Calendar / Transaction Timeline May 2017 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 June 2017 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Event Date Lender Meeting to Launch Ter
Slide 12: Introduction to Conyers Park
Introduction to Conyers Park Section 2
Slide 13: Experienced Leadership Team
12 Experienced Leadership Team Atkins Nutritionals Conyers Park Jim Kilts Executive Chairman Dave West Chief Executive Officer Brian Ratzan Chief Financial Officer Joe Scalzo Chief Executive Officer Shaun Mara Chief Financial Officer ▪ Founded Centerview Capital in 2006 ▪ Former Vice Chairman of Pro
Slide 14: Conyers Park Overview
13 ▪ $ 403mm special purpose acquisition company ▪ Attractive vehicle to pursue larger scale investment within the consumer industry and have permanent capital for subsequent roll - ups ▪ A natural extension of our team’s experience given Jim Kilts’ and Dave West’s history of creating value in publi
Slide 15: Experienced Team With Solid Track Record
14 Experienced Team With Solid Track Record Deep consumer focus, experience and operational excellence … ▪ Our principals have 90+ collective years of consumer experience ▪ Operational approach led by Jim Kilts and Dave West – Have helped build or revitalize some of the most recognized brands in the
Slide 16: Conyers Park Investment Thesis
15 Conyers Park Investment Thesis ▪ Atkins is a well positioned, growing $ 6 00mm brand (at retail, including frozen meals) – Stands for “low carb”, “low sugar”, “protein rich” nutrition for many consumers – Important to retailers due to leadership position in the nutrition and wellness aisle ▪ Stro
Slide 17: Transaction Consistent With Attributes Highlighted During IPO
16 Transaction Consistent With Attributes Highlighted During IPO x Market and / or cost leadership positions x High margins x Strong free cash flows x Potential for revenue, cost structure, market share and / or distribution improvements x Platforms for future acquisition x Operational stability thr
Slide 18: Opportunity to Leverage Our Significant Brand Building Experience
17 Opportunity to Leverage Our Significant Brand Building Experience… Over their careers, Conyers Park’s principals have helped build or revitalize some of the most recognized brands in the consumer industry
Slide 19: Augment Atkins' Experienced Leadership Team
18 Private and public company experience across multiple branded consumer products, food and nutrition categories …And Augment Atkins’ Experienced Leadership Team 90+ year track record of building and revitalizing brands Leadership has delivered ~$50bn of value creation for shareholders ▪ Management
Slide 20: Pro Forma Ownership and Board of Directors
19 Pro Forma Ownership and Board of Directors Simply Good Foods Ownership Simply Good Foods Board of Directors Name Position Experience James M. Kilts Non - Executive Chairman P&G, Gillete, Philip Morris, Nabisco, Kraft David J. West Executive Vice Chairman J.M. Smuckers Company, Big Heart Pet Brand
Slide 21: Atkins Nutritionals Business Overview
Atkins Nutritionals Business Overview Section 3
Slide 22: Powerful Brand With Strong Consumer Equity
21 Powerful Brand With Strong Consumer Equity (1) Source: U.S. Multi - Outlet IRI data for Atkins U.S. snacking and frozen meals. Company reported net sales for international. (2) Total U.S. Multi - Outlet IRI data. Fiscal years ending August. (3) Fiscal year to date as of February 26 th . (4) Among
Slide 23: Atkins is Aligned with Consumer Mega Trends
22 Atkins is Aligned with Consumer Mega Trends Source: CDC Division on Diabetes, U.S. Department of Health & Human Services, WHO. IRI , MULO, Health Focus International , Nielsen Global Health & Wellness Support and MWW Brand Tracking Study. (1) Defined as BMI greater than or equal to 30. Reflects a
Slide 24: Atkins is a Leader in the Fast Growing Nutritional Snacking Space
23 11.7% 10.9% 9.2% 6.8% 4.8% 3.5% 3.4% Atkins is a Leader in the Fast Growing Nutritional Snacking Space (1) Total Nutritional Snacking is a custom database created for Atkins by IRI comprised of multiple product categories including nutrit ion al snacks and drinks. Source: U.S. Multi - Outlet IRI
Slide 25: Atkins is the Leader in Its Aisle
24 Atkins is the Leader in Its Aisle
Slide 26: Consumer and Customer Strength Generates Track Record of Growth
25 Consumer and Customer Strength Generates Track Record of Growth $137 $166 $213 $267 $333 $378 $396 $415 $443 $201 $215 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2016 (2) YTD 2017 (2) Source: Nielsen FDMx and Retail Link for years 2008 – 2011. Total U.S. Multi - Outlet IRI, excluding frozen
Slide 27: Atkins Nutritionals Growth Strategy
Atkins Nutritionals Growth Strategy Section 4
Slide 28: Atkins Brand Evolution Over Time
27 Atkins Brand Evolution Over Time 1980’s – 1990’s 2008 – 2015 Today / Future Better Weight For a Healthier Heart Balanced Approach to Weight Loss t hrough Healthier Snacking Healthier Approach to Eating 2000 – 2007 Low Carb Craze and M assive Product P roliferation
Slide 29: Significant Opportunity to Expand Consumer Base
28 Significant Opportunity to Expand Consumer Base a s Identified By Proprietary Research Segment Approach Historically Targeted By Atkins? Atkins Buyer? Addressable Population (U.S. Adults 25 - 64) 168mm Currently Trying to Lose Weight 108mm (64%) Branded Program 21mm (19%) Self Directed 77mm ( 71%
Slide 30: Self Directed Healthy Eaters Can Be Huge Source of Volume
29 Self Directed Healthy Eaters Can Be Huge Source of Volume Atkins Consumer Mix P urchasing Behavior 52% 33% 15% Self Directed Healthy Eaters Previously on Atkins Diet Program Active Atkins Dieters Source: IRI panel report. ▪ Active dieters are most loyal, profitable, and frequent purchasers driv
Slide 31: Incremental Growth Areas
30 …And Present a Number of Incremental Growth Areas That We Are Just Beginning to Tap ▪ Improved advocacy, education and activation for the core program dieter ▪ Communication to target self - directed low carb - ers ▪ Product innovation / portfolio expansion to meet consumer demands for cleaner la
Slide 32: Improved Advocacy / Education / Activation for Core Consumers
31 Improved Advocacy / Education / Activation for Core Consumers Chef’d Initiative Improved Website and Mobile App “Happy Weight” Communicatio n Social Media
Slide 33: New Communication to Reach Self-Directed Low Carb-ers
32 New Communication to Reach the Self - Directed Low Carb - ers and Expand Base Before After “Hidden Sugar” Communication Food Focused TV Advertising “Cleaner” Labels
Slide 34: Portfolio Expansion to Attract New Users / Occasions
33 Portfolio Expansion to Attract New Users / Occasions Atkins Harvest Trail SimplyProtein Super Foods Bar Launch Date: Q1 Fiscal 2016 Brand Focus : ▪ Natural / simple ingredients ▪ Adds a nut and fruit bar to Atkins’ product portfolio ▪ Product extension opportunity Acquired: December 2016 Brand Fo
Slide 35: White Space an Opportunity for Distribution Gains
34 White Space an Opportunity for Distribution Gains 46% 37% 10% 5% 2% Mass Grocery Club Drug E - Commerce 2016 U.S. Snacking Gross Sales By Channel White Space Opportunities ▪ E - commerce opportunity significant ▪ C - store and club underpenetrated ▪ Significant natural and specialty channel oppor
Slide 36: Scalable M&A Platform
35 Scalable M&A Platform Atkins is a leader in nutritional snacking the brand stands for low carb, low sugar, protein rich Conyers Park / Atkins team has deep expertise in brand building, merchandising and product development as well as snacking, nutrition and health & wellness Strong customer rel
Slide 37: Atkins Nutritionals Financial Overview
Atkins Nutritionals Financial Overview Section 5
Slide 38: Summary Financials
37 Summary Financials EBITDA (and % Margin) Gross Profit (and % Margin) Net Sales $353 $366 $380 $402 $428 2014A 2015A 2016A 2017E 2018E $161 $166 $176 $188 $201 45.7% 45.4% 46.2% 46.7% 46.9% 2014A 2015A 2016A 2017E 2018E $54 $59 $64 $72 $78 15.4% 16.1% 16.9% 17.8% 18.2% 2014A 2015A 2016A 2017E 2018
Slide 39: First Half of 2017E Consistent with Overall Growth Outlook
38 $35 $40 18.0% 19.6% 1st Half 2016A 1st Half 2017A $90 $97 46.4% 47.2% 1st Half 2016A 1st Half 2017A $195 $205 1st Half 2016A 1st Half 2017A First Half of 2017E Consistent with Overall Growth Outlook EBITDA (and % Margin) Gross Profit (and % Margin) Net Sales 5 % Year - Over - Year Growth 7 % Year
Slide 40: Highly Attractive Cash Flow Characteristics
39 Highly Attractive Cash Flow Characteristics Capital Expenditures as % of Net Sales Working Capital (1) as % of Net Sales 0.1% 0.4% 0.2% 2014A 2015A 2016A 11.2% 9.6% 10.3% 2014A 2015A 2016A Minimal Annual Capital Expenditure Needs of ~$1mm Modest W orking Capital Requirements ▪ Asset - lite busine
Slide 41: Conclusion – Atkins Highlights
40 Conclusion – Atkins Highlights ▪ Atkins is a well positioned, growing $ 6 00mm brand (at retail, including frozen meals) ▪ Strong business performance and financial metrics ▪ Well positioned to take advantage of consumer mega trends ▪ Platform for future M&A ▪ Strong management team that we’ve wo
Slide 42: Appendix
Appendix Section 6
Slide 43: Annual Financials (August Fiscal Year End)
42 Annual Financials (August Fiscal Year End) 1st Half Financials Historicals (Filed in Historicals (Filed in Historicals Proxy Statement) Projections Proxy Statement) 2014A 2015A 2016A 2017E 2018E 2016A 2017A Adjusted Net Sales (As Defined Per Filed Proxy Statement) $401 $419 $430 $399 $428 $220 $2
Slide 44: Non-GAAP Reconciliation For Atkins Nutritionals
43 Non - GAAP Reconciliation For Atkins Nutritionals Note: Dollars in millions. (1) Historical management fees paid to selling shareholders. (2) One - time costs of restructuring activities largely due to the elimination of costs as part of the licensing of the frozen meal business. (3) Other charge
Slide 45: 2016 Total Consolidated Pro Forma Financials
44 2016 Total Consolidated Pro Forma Financials Note: Dollars in millions. (1) Non - GAAP adjustments of $9mm (as provided in the proxy statement) include: stock based compensation, management fees, restructuring charges, transaction / IPO readiness expenses, recall receivable reserve, exchange impa
Slide 46: The Simply Good Foods Company Projection Assumptions
45 The Simply Good Foods Company Projection Assumptions Gross Profit Cash Flow Net Sales EBITDA ▪ A nnual top - line growth of 4% – 6% – Driven by a combination of category growth, new products and distribution expansion ▪ Gross profit growth of 5% – 7% – Cost of goods sold to improve 10bps – 30bps
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