Page 1

Simply Good FOODS COMPANY ™ M The Simply Good Foods Company Reports Fiscal Second Quarter 2021 Financial Results ; Provides Full Fiscal Year 2021 Outlook Denver , CO , April 7 , 2021 - The Simply Good Foods Company ( Nasdaq : SMPL ) ( “ Simply Good Foods , " or the " Company " ) , a developer , marketer and seller of branded nutritional foods and snacking products , today reported financial results for the thirteen and twenty - six weeks ended February 27 , 2021 . The Company's fiscal second quarter 2021 and year - to - date period results include Quest results for the full period . The Company's fiscal second quarter 2020 results include thirteen - weeks of Quest and about twenty - three weeks for the year - to - date period . Highlights : ( ¹ ) • Net sales increased 1.5 % driven by strong e - commerce and Quest performance • Net income of $ 19.1 million versus $ 10.7 million • Earnings per diluted share ( “ EPS ” ) of $ 0.19 versus $ 0.11 • Adjusted Diluted EPS ( 3 ) of $ 0.25 versus $ 0.23 • Adjusted EBITDA ( 2 ) increased 2.2 % to $ 42.6 million Provides full fiscal year 2021 outlook : ° ° Net Sales expected to be in the $ 930-940 million range Adjusted EBITDA ( ² ) expected to be in the $ 180-185 million range " In the second quarter we executed well against our initiatives driving sales and earnings growth in a challenging operating environment due to continued reduced consumer mobility related to COVID - 19 , " said Joseph E. Scalzo , President and Chief Executive Officer of Simply Good Foods . " Retail takeaway in measured channels was slightly better than the last quarter and our e - commerce momentum continued . Our earnings growth and strong cash flow have provided us with flexibility to invest in our business and deleverage . Our fiscal third quarter is off to a good start and we're positioned well to deliver on our plans over the remainder of the fiscal year . " Fiscal Second Quarter 2021 Results Net sales increased $ 3.5 million , or 1.5 % , to $ 230.6 million . The core North America and international net sales increase contributed 1.0 % and 1.7 % , respectively , to total Company growth and the SimplyProtein® brand divestiture and the European business exit were a combined 1.2 % headwind . As expected , trade promotion expense was greater than last year supporting higher levels of in - store merchandising and display . Additionally , as discussed last quarter , second quarter net sales were affected by the timing of shipments related to the seasonal inventory build by certain retailers that occurred in the first quarter . Total Simply Good Foods retail takeaway for the thirteen weeks ending February 28 , 2021 , increased 1.7 % in the U.S. measured channels of IRI MULO + Convenience Stores , and outpaced the category . The Company estimates that its U.S. retail takeaway in measured and unmeasured channels increased mid- single - digits , on a percentage basis versus last year , driven by solid Quest measured channel performance and about a combined 60 % year - over - year increase within the e - commerce channel for the Atkins® and Quest® brands . Gross profit was $ 90.3 million for the second quarter of fiscal 2021 , an increase of $ 4.9 million . Gross margin was 39.1 % , an increase of 150 basis points versus last year . The year ago period was negatively affected by a non - cash $ 5.1 million inventory purchase accounting step - up adjustment related to the Quest acquisition that was a 220 basis point headwind in the second quarter of fiscal 2020. In the second quarter of fiscal 2021 , gross profit growth was affected by higher trade promotion expense . In the second quarter of fiscal 2021 the Company reported net income of $ 19.1 million compared to net income of $ 10.7 million for the comparable period of 2020. The increase in net income was primarily due to lower transaction and integrations costs related to the Quest acquisition . Selling and marketing expense declined $ 0.9 million , due to lower selling costs as a result of the Quest integration . Total Company second quarter of fiscal 2021 marketing and advertising expense was about the same as the year ago period due primarily to the decline of investments in the SimplyProtein brand . In the second quarter of fiscal 2021 , core North America and international marketing and advertising expense increased 8.0 % . For the full year , the Company continues to anticipate that marketing and advertising expense related to its core businesses will increase at least in - line with organic sales growth . General and administrative expenses declined $ 1.5 million as cost control measures and Quest acquisition synergies more than offset an increase in incentive compensation . 1