On this page of StockholderLetter.com we present the latest annual shareholder letter from Simply Good Foods Co — ticker symbol SMPL. Reading current and past SMPL letters to shareholders can bring important insights into the investment thesis.

 •  12/17/2025 Letter Continued (Full PDF)
 •  12/7/2023 SMPL Stockholder Letter
 •  12/12/2024 SMPL Stockholder Letter
 •  More "Food & Beverage" Category Stockholder Letters
 •  SMPL Benford's Law Stock Score = 91

SMPL Shareholder/Stockholder Letter Transcript:

FISCAL 2025 ANNUAL REPORT ON FORM 10-K

This Fiscal Year 2025 Annual Report (this    Report   ) contains forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the    Exchange Act   ). When used anywhere in this Report, the words    expect,       believe,       anticipate,       estimate,   
   intend,       plan    and similar expressions are intended to identify forward-looking statements. These statements relate to future events or our
future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual
results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements.
We caution you that these forward-looking statements reflect our current views with respect to future events, are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not place undue reliance on forwardlooking statements. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks
and uncertainties. These risks and uncertainties relate to, among other things, our operations being dependent on changes in consumer preferences
and purchasing habits regarding our products, a global supply chain and effects of supply chain constraints, inflationary pressure and tariffs on
us and our contract manufacturers, our ability to continue to operate at a profit or to maintain our margins, the sufficiency of our sources of
liquidity and capital, our ability to maintain current operation levels and implement our growth strategies, our ability to maintain and gain
market acceptance for our products or new products, our ability to capitalize on attractive opportunities, our ability to respond to competition
and changes in the economy including changes regarding inflation and increasing ingredient and packaging costs and labor challenges due to tariffs
or other challenges at our contract manufacturers and third party logistics providers, the amounts of or changes with respect to certain
anticipated raw materials and other costs, difficulties and delays in achieving the synergies and cost savings in connection with acquisitions,
changes in the business environment in which we operate including general financial, economic, capital market, regulatory and geopolitical
conditions affecting us and the industry in which we operate, our ability to maintain adequate product inventory levels to timely supply customer
orders, changes in taxes, tariffs, duties, governmental laws and regulations, the availability of or competition for other brands, assets or other
opportunities for investment by us or to expand our business, competitive product and pricing activity, difficulties of managing growth profitably,
the effect pandemics or other global disruptions on our business, financial condition and results of operations, the loss of one or more members
of our management team, potential for increased costs, the harm to our business resulting from unauthorized access of the information
technology systems we use in our business, and other risks and uncertainties indicated in this Report, including those set forth under    Risk
Factors    in this Report. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking
statements such as those contained in documents we have filed with the U.S. Securities and Exchange Commission (the    SEC   ), including in this
Report in    Management   s Discussion and Analysis of Financial Condition and Results of Operations,       Risk Factors    and those contained in
subsequent reports we will file with the SEC. All forward-looking statements in this Report are qualified entirely by the cautionary statements
included in this Report and such other filings. These risks and uncertainties or other important factors could cause actual results to differ materially
from results expressed or implied by forward-looking statements contained in this Report. These forward-looking statements speak only as of
the date of this Report. We undertake no intention or obligation to update or revise any forward-looking statements, whether because of new
information, future events or otherwise, except as required by applicable law, and readers should not rely on the forward-looking statements as
representing the Company   s views as of any date subsequent to the date of the filing of this Report.

Dear Fellow Stockholders,
I am pleased to provide you with the Annual Report for The Simply Good Foods Company for Fiscal Year 2025. Looking back at the year, I am
very appreciative of the nimbleness and tenacity of our entire team. In a dynamic year for the U.S. food industry, we delivered solid top and bottom
line results, largely completed the integration of our acquisition of Only What You Need, Inc. (OWYN), invested in our talent and capabilities,
and put our cash to work, repaying $150 million dollars of our term loan debt and repurchasing more than $50 million dollars of our common
stock.
Our vision is to be the scaled leader in high protein, low sugar, and low carbohydrate food and beverage, a generational shift in how consumers
eat that is quickly mainstreaming. The Nutritional Snacking category   s performance was a stand-out within the U.S. food industry, once again,
growing 13% in Fiscal Year 20251, making this the category   s fifth consecutive year of growth of at least high single digits. We continue to
believe Nutritional Snacking has a long runway for growth in the years ahead.
Recapping our financial performance
Net sales increased 9.0% to $1,450.9 million, driven by the acquisition of OWYN and another year of double-digit growth from Quest, partially
offset by declines on Atkins and the effect of lapping the extra week in Fiscal Year 2024. Combined consumption for our three brands grew
5.5%, led by Quest and OWYN. Adjusted EBITDA2 increased 3.4% to $278.2 million driven by net sales growth. It is worth highlighting we
meaningfully stepped-up investments in new product innovation, selling capabilities and marketing, proactively increasing support for our most
attractive growth opportunities.
Rapidly Evolving Our Organization
Over the last few years, we have rapidly evolved our organization to accelerate our growth, differentiate our organization in a highly competitive
category, and drive value creation for our stockholders. Quest and OWYN today represent, in aggregate, over 70% of our net sales as compared
to less than 50% in Fiscal Year 2023. Quest chips is now run-rating annual retail sales over $400 million putting it on pace to soon become the
Quest brand   s largest product form, and we are building capabilities to more effectively target exciting innovation and productivity
opportunities, as well as investing in capacity to support growth. With that background, we are pleased to share the following updates.
Strong Operating Cash Flow Enabling Value Accretive Uses of Cash
Strong cash generation is a hallmark of our business. In Fiscal Year 2025, we generated cash flow from operations of $178.5 million, or
$157.9 million of cash after investments in capital expenditures. As a result, we chose to reinforce our balance sheet and opportunistically
buy back shares, by repaying $150.0 million of our term loan debt and repurchasing $50.9 million of our common stock. At the end of
the Fiscal Year 2025, the outstanding principal balance on our term loan was $250.0 million, reflecting the repayment of essentially all of
the $250 million borrowed to fund the OWYN acquisition in just one year. This resulted in a trailing 12-month Net Debt to Adjusted
EBITDA3 ratio of 0.5x.
Quest
Quest delivered another strong year, generating 12% consumption growth and 13% net sales growth on a 52-week basis, helping to deliver
a five-year net sales compound annual growth rate of nearly 20% since we acquired the company in 2019. With Fiscal Year 2025 net
sales of $863 million, Quest is quickly approaching $1 billion in net sales, a remarkable feat considering the brand generated only
$350 million when we acquired it just six years ago, and a reflection of the hard working and talented team managing the brand. Quest
continues to be one of the most innovative brands in the category, supported by a best-in-class R&D and new product team and a loyal
following of    Questies    always eager for the brand   s next delicious, protein-packed offering. We continue to enhance the pipeline of
innovation for the brand, which remains a key lever in Quest   s long-term growth profile, with growth further supported by the activation
of strong merchandising both within and outside of our core aisle, as well as our award-winning It   s Basically CheatingTM advertising
campaign.
1
Nutritional Snacking category growth, MULO++C for the 52-weeks ending August 31, 2025, vs. the comparable year ago period.
2
Adjusted EBITDA is a non-GAAP financial measure. Please refer to Annex I of our proxy statement for the 2026 Annual Meeting of
Stockholders for a reconciliation of this non-GAAP financial measure.
3
Net Debt to Adjusted EBITDA is a non-GAAP financial measure. Please refer to Annex I of our proxy statement for the 2026 Annual
Meeting of Stockholders for a reconciliation of this non-GAAP financial measure

Atkins
Atkins remains a trusted leader in weight management and a pioneer of the low sugar, low carbohydrate movement. With growing
consumer focus on weight wellness, including interest in GLP-1 therapies, we believe strongly in the brand   s long-term relevance. To
position Atkins for a stronger future, we are streamlining its on-shelf assortment to focus on core product offerings and repurposing shelf
space, where possible, toward high-potential opportunities for Quest and OWYN. In Fiscal Year 2025, we advanced several initiatives to
strengthen Atkins, many of which began rolling out as we entered Fiscal Year 2026. Consumer research reinforces Atkins    credibility and
proven track record in helping consumers achieve their goals, giving us confidence these actions will stabilize and support the brand   s
long-term profitability.
OWYN
OWYN delivered a strong first full year since we acquired the company, with net sales of $137 million, up 22% versus the prior 12 months
(including 10 months prior to closing the acquisition), and consumption growth of 34%. With the integration largely complete, we are
leveraging our scale across marketing, sales, R&D, and operations to accelerate growth. In Fiscal Year 2026, we plan to increase trialdriving trade and merchandising spend and build brand awareness through advertising. With household penetration still below 5%, we see
significant opportunity ahead. OWYN   s plant-based, clean-label positioning in RTD shakes and protein powders   and potential future
formats   gives us confidence in its long-term growth potential.
Overcoming Challenges, Positioning Simply Good Foods for Future Growth in Fiscal Year
2026 and Beyond
We remain confident in our asset light, strong margins and high cash flow business model, and we are laser focused on driving net sales and
Adjusted EBITDA growth. We will do this through world-class innovation, breakthrough marketing to drive brand awareness and ensuring
our products are physically available everywhere consumers shop. We will leverage productivity and more efficient ways of working to drive our
margins while providing increasing support to fuel our growth.
We believe Fiscal Year 2026 will be a tale of two halves, with the first half challenged by a combination of distribution driven headwinds to
Atkins net sales, lapping of certain year-ago successful promotional periods, and cost inflation, most notably from cocoa and the imposition of
tariffs. By the second half, we expect top line growth to reaccelerate with our pricing, productivity and cost-coverage actions expected to drive
accelerating bottom line growth as we exit Fiscal Year 2026 and move into Fiscal Year 2027. We remain focused on enabling profitable,
organic growth as the key driver of stockholder value while supplementing it with value-accretive investments in capacity, common stock
repurchases and potentially M&A, leveraging our strong balance sheet and cash flow.
In closing, I would like to thank our hard-working and dedicated employees, our valued customers and supply chain partners, and our loyal
consumers. I also want to thank our Board of Directors for their ongoing guidance and strong engagement, helping me and our leadership team
navigate a dynamic period for the industry and putting us on a path for sustainable top and bottom-line growth for years to come.
On behalf of our Board, employees and myself, I want to thank you, our stockholders, for your investment in The Simply Good Foods Company
and your confidence in us to continue to build stockholder value. We hope you and your families remain healthy and safe.
Sincerely,
Geoff E. Tanner
President & Chief Executive Officer



 12/17/2025 Letter Continued (Full PDF)