The Simply Good Foods Company · NASDAQ:SMPL
The Simply Good Foods — Q3 2017 Earnings Presentation
31 slides from The Simply Good Foods's earnings presentation, Jul 12, 2017
Slide 1: Q3 Earnings Conference Call & Webcast
Q3 Earnings Conference Call & Webcast July 12, 2017
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation contains statements that are not historical facts but that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by the use
Slide 3: Today's Speakers & Agenda
Today’s Speakers & Agenda Agenda Company Overview Investment Highlights Joe Scalzo Shaun Mara Growth Opportunities Chief Executive Chief Financial Officer Officer Summary Financials 2
Slide 4: Company Overview
Company Overview Simply Good Foods Company By merging with Atkins, Conyers Park Acquisition Corp became the Simply Good Foods Company on July 7th Conyers Park Acquisition Corp was a Special Purpose Acquisition Corporation that raised over $400 million last July Executive founders Jim Kilts and
Slide 5: Strong Brand Attributes – Aligned with Consumer Megatrends
Strong Brand Attributes – Aligned with Consumer Megatrends Source: CDC Division on Diabetes, U.S. Department of Health & Human Services, WHO. IRI, MULO, Health Focus International, (4) Among U.S. consumers; Aided awareness statistic – sourced from Nielsen Global Health & Wellness Support and MWW Bra
Slide 6: Key Investment Highlights
Key Investment Highlights Expect to deliver our 9th straight year of snacking POS growth in the US Significant opportunity with a new group of consumers which our proprietary research has identified Progressing against our four strategic growth initiatives Expect to deliver 2017 Adjusted EBI
Slide 7: Heading to a 9th Straight Year of Consumption Growth
Heading to a 9th Straight Year of Consumption Growth $443 $415 $396 $378 $346 $333 $331 $267 $213 $166 $137 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD YTD Source: Nielsen FDMx and Retail Link for years 2008 – 2011. Total U.S. Multi-Outlet IRI, excluding frozen meals, for 2012 onwards. 2016(2)
Slide 8: With Significant Opportunity to Expand Target Consumer Base
With Significant Opportunity to Expand Target Consumer Base Expand target from 8mm low carb program dieters to include 31mm self-directed consumers Historically Atkins Segment Approach Targeted by Buyer? Atkins? Branded Program Yes Yes Historical target: 21mm (19%) 8mm open to low carb Currently T
Slide 9: Focused on Four Key Growth Strategies
Focused on Four Key Growth Strategies 1 Improved advocacy, education and activation for the core program dieter 2 Communication to target newly identified self-directed low-carbers Product innovation / portfolio expansion to meet consumer demands for cleaner labels, 3 higher protein and new prod
Slide 10: Marketing Activity
Marketing Activity Program Buyer • Younger celebrity (Alyssa Milano) Happy Weight • Emotional End Benefit – no weight loss claim – “Get to your Happy Weight” • Implied simplicity and healthfulness – “Atkins taught me to make simple choices about the best foods to eat” Results – Consumers using Atk
Slide 11: Marketing Activity
Marketing Activity Self-Directed Low-Carber • Product – Oriented :15 second spots • No weight loss messaging • Extend to younger, more gender- neutral audience • Hidden Sugars is a compelling idea New Buyers to Atkins franchise +23% in 2016, +9% YTD 2017 Superfoods 10
Slide 12: 'Clean Bar' Product Initiative
‘Clean Bar’ Product Initiative Atkins is improving its current product portfolio to deliver on shorter and cleaner label / fewer ingredient trends while maintaining same great taste Existing products being reformulated and new products developed with cleaner labels – Six meal bar flavors have be
Slide 13: White Space Opportunity – E-Commerce Growth
White Space Opportunity – E-Commerce Growth 2016 Atkins U.S. Snacking Gross Sales By Channel White Space Opportunities Drug E-Commerce E-commerce starting to show strong growth with more focus and investment Club 5% 2% 10% – Q3 E-Commerce gross sales up almost 80% 46% Mass – YTD E-Commerce gross s
Slide 14: Opportunities Exist for Strategic, Accretive M&A
Opportunities Exist for Strategic, Accretive M&A Core capabilities in R&D and Consumer understanding support close-in/bolt on M&A model Scalable presence and influence in the adult/nutrition aisle December 2016 Simply Protein acquisition is first example of adjacent acquisition SMPL team add
Slide 15: Atkins Nutritionals Inc. Financial Overview
Atkins Nutritionals Inc. Financial Overview
Slide 16: 3rd Quarter of 2017 Demonstrates Growth…
3rd Quarter of 2017 Demonstrates Growth… Pro Forma Adjusted Gross Profit Pro Forma Adjusted EBITDA Pro Forma Adjusted Net Sales (1) (and % Margin) (1) (and % Margin) (1) 7% Year-Over-Year 8% Year-Over-Year 20% Year-Over-Year Growth Growth Growth $97 $44 $90 $40 $15 45.1% 44.7% $12 15.3% 13.7% Q3 Q3
Slide 17: …Continuing YTD Trend Through 9 Months of Fiscal Year 2017
…Continuing YTD Trend Through 9 Months of Fiscal Year 2017 Pro Forma Adjusted Gross Profit Pro Forma Adjusted EBITDA Pro Forma Adjusted Net Sales (1) (and % Margin) (1) (and % Margin) (1) 6% Year-Over-Year 8% Year-Over-Year 16% Year-Over-Year Growth Growth Growth $299 $281 $139 $129 $55 46.5% $47 45
Slide 18: Key Investment Highlights
Key Investment Highlights Expect to deliver our 9th straight year of snacking POS growth in the US Significant opportunity with a new group of consumers which our proprietary research has identified Progressing against our four strategic growth initiatives Expect to deliver 2017 Adjusted EBI
Slide 19: Q3 Earnings Call – Q&A
Q3 EARNINGS CALL – Q&A July 12, 2017 18
Slide 20: Appendix
APPENDIX -SimplyvGood FOODS COMPANY”
Slide 21: Non-GAAP Reconciliation For Atkins Nutritionals
Non-GAAP Reconciliation For Atkins Nutritionals 39-Weeks Ended 13-Weeks Ended 27-May-17 28-May-16 27-May-17 28-May-16 Net Income (As reported in the Q3 10Q) $ 14.6 $ 8.9 $ 4.3 $ 0.8 Interes t expens e $ 20.1 $ 20.3 $ 6.4 $ 6.6 Income ta x expens e 8.7 6.7 1.8 1.0 Depreci a ti on a nd a morti za ti o
Slide 22: Pro Forma Reconciliation For Atkins Nutritionals
Pro Forma Reconciliation For Atkins Nutritionals 39-Weeks Ended 13-Weeks Ended 27-May-17 28-May-16 27-May-17 28-May-16 Net Sales (As defined in the Q3 10Q) $ 298.6 $ 324.4 $ 96.5 $ 104.6 Remova l of Frozen Mea l s rel a ted Net Sa l es $ - $ (46.8) $ - $ (15.8) Li cens i ng Income Adjus tment - 3.0
Slide 23: Q1 2016 Consolidated Pro Forma Financials
Q1 2016 Consolidated Pro Forma Financials Reported Frozen November Non-GAAP Adjus ted Licens e Atkins ' (1) (2) 28, 2015 Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 99.7 99.7 (13.1) 86.6 Cos t of Goods S old 53.6 53.6 (10.5) 43.1 % o f Ne t S a le s 53.8% NM 53.8% NM 49.8% Gros s Profit 4
Slide 24: Q2 2016 Consolidated Pro Forma Financials
Q2 2016 Consolidated Pro Forma Financials Reported Frozen February Non-GAAP Adjus ted Licens e Atkins ' (1) (2) 27, 2016 Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 120.1 120.1 (15.9) 104.2 Cos t of Goods S old 72.8 72.8 (13.5) 59.3 % o f Ne t S a le s 60.7% NM 60.7% NM 57.0% Gros s Profi
Slide 25: Q3 2016 Consolidated Pro Forma Financials
Q3 2016 Consolidated Pro Forma Financials Reported Frozen May Non-GAAP Adjus ted Licens e Atkins ' 28, 2016 (1) (2) Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 104.6 104.6 (14.8) 89.8 Cos t of Goods S old 62.2 62.2 (12.5) 49.7 % o f Ne t S a le s 59.4% NM 59.4% NM 55.3% Gros s Profit 42.4
Slide 26: YTD May 2016 Consolidated Pro Forma Financials
YTD May 2016 Consolidated Pro Forma Financials Reported Frozen May Non-GAAP Adjus ted Licens e Atkins ' 28, 2016 Adjus tments (1) Non-GAAP Adjus tments (2) Pro Forma Net Sales 324.4 324.4 (43.8) 280.6 Cos t of Goods S old 188.7 188.7 (36.5) 152.1 % o f Ne t S a le s 0.6 NM 58.2% NM 54.2% Gros s Prof
Slide 27: Q4 2016 Consolidated Pro Forma Financials
Q4 2016 Consolidated Pro Forma Financials Reported Frozen Aug Non-GAAP Adjus ted Licens e Atkins ' (1) (2) 27, 2016 Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 103.5 1.9 105.4 (15.0) 90.4 Cos t of Goods S old 59.8 – 59.8 (12.4) 47.4 % o f Ne t S a le s 57.8% NM 56.7% NM 52.4% Gros s Profi
Slide 28: Q1 2017 Consolidated Pro Forma Financials
Q1 2017 Consolidated Pro Forma Financials Reported Frozen November Non-GAAP Adjus ted Licens e Atkins ' 26, 2016 Adjus tments (1) Non-GAAP Adjus tments (2) Pro Forma Net Sales 99.8 99.8 99.8 Cos t of Goods S old 51.1 51.1 51.1 % o f Ne t S a le s 51.2% NM 51.2% NM 51.2% Gros s Profit 48.7 – 48.7 – 4
Slide 29: Q2 2017 Consolidated Pro Forma Financials
Q2 2017 Consolidated Pro Forma Financials Reported Frozen February Non-GAAP Adjus ted Licens e Atkins ' 25, 2017 (1) (2) Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 102.3 102.3 102.3 Cos t of Goods S old 55.7 55.7 55.7 % o f Ne t S a le s 54.5% NM 54.5% NM 54.5% Gros s Profit 46.6 – 46.6
Slide 30: Q3 2017 Consolidated Pro Forma Financials
Q3 2017 Consolidated Pro Forma Financials Reported Frozen May Non-GAAP Adjus ted Licens e Atkins ' (1) (2) 26, 2017 Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 96.5 96.5 96.5 Cos t of Goods S old 52.9 52.9 52.9 % o f Ne t S a le s 54.9% NM 54.9% NM 54.9% Gros s Profit 43.6 – 43.6 – 43.6 %
Slide 31: YTD May 2017 Consolidated Pro Forma Financials
YTD May 2017 Consolidated Pro Forma Financials Reported Frozen May Non-GAAP Adjus ted Licens e Atkins ' 26, 2017 (1) (2) Adjus tments Non-GAAP Adjus tments Pro Forma Net Sales 298.6 298.6 298.6 Cos t of Goods S old 159.8 159.8 159.8 % o f Ne t S a le s 53.5% NM 53.5% NM 53.5% Gros s Profit 138.9 – 1
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