This Quarterly Report on Form 10-Q (this "Report") contains forward-looking
statements. 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 achievements to differ materially from those
expressed or implied by these forward-looking statements. These statements
include, but are not limited to, the effect of the novel coronavirus
("COVID-19") on our business, financial condition and results of operations. We
disclaim any undertaking to publicly update or revise any forward-looking
statements contained herein to reflect any change in our expectations with
regard thereto or any change in events, conditions or circumstances on which any
such statement is based. These statements reflect our current views with respect
to future events and are based on assumptions subject to risks and
uncertainties. Such risks and uncertainties include those related to our ability
to sell our products.

  The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with our consolidated financial
statements and related notes included in our Annual Report on Form 10-K for the
fiscal year ended August 29, 2020 ("Annual Report") and our unaudited condensed
consolidated financial statements and the related notes appearing elsewhere in
this Report. In addition to historical information, the following discussion
contains forward-looking statements, including but not limited to, statements
regarding the Company's expectation for future performance, liquidity and
capital resources that involve risks, uncertainties and assumptions that could
cause actual results to differ materially from the Company's expectations. The
Company's actual results may differ materially from those contained in or
implied by any forward-looking statements. Factors that could cause such
differences include those identified in Item 1A. "Risk Factors" of our Annual
Report. The Company assumes no obligation to update any of these forward-looking
statements.

Unless the context requires otherwise in this Report, the terms "we," "us," "our," the "Company" and "Simply Good Foods" refer to The Simply Good Foods Company and its subsidiaries.

Overview

The Simply Good Foods Company is a consumer-packaged food and beverage company
that aims to lead the nutritious snacking movement with trusted brands that
offer a variety of convenient, innovative, great-tasting, better-for-you snacks
and meal replacements. Our nutritious snacking platform consists of the
following core brands that specialize in providing products for consumers that
follow certain nutritional philosophies, dietary approaches and/or
health-and-wellness trends: Atkins® for those following a low-carb lifestyle;
and Quest® for consumers seeking to partner with a brand that makes the foods
they crave work for them, not against them, through a variety of protein-rich
foods and beverages that also limit sugars and simple carbs. We distribute our
products in major retail channels, primarily in North America, including
grocery, club and mass merchandise, as well as through e-commerce, convenience,
specialty and other channels. Our portfolio of nutritious snacking brands gives
us a strong platform with which to introduce new products, expand distribution,
and attract new consumers to our products. Our platform also positions us to
continue to selectively pursue acquisition opportunities of brands in the
nutritious snacking category.

  To that end, in November 2019, we completed the acquisition of Quest
Nutrition, LLC ("Quest"), a healthy lifestyle food company, for a cash purchase
price of approximately $1.0 billion (subject to customary adjustments) (the
"Acquisition of Quest"). For more information, please see "Liquidity and Capital
Resources - Acquisition of Quest."

Effects of COVID-19



  In December 2019, a novel coronavirus disease, or COVID-19, was reported and
in January 2020, the World Health Organization, or WHO, declared it a Public
Health Emergency of International Concern. On February 28, 2020, the WHO raised
its assessment of the COVID-19 threat from high to very high at a global level
due to the continued increase in the number of cases and affected countries, and
on March 11, 2020, the WHO characterized COVID-19 as a pandemic. On March 27,
2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was
signed into law. The CARES Act provided a substantial stimulus and assistance
package intended to address the effect of the COVID-19 pandemic, including tax
relief and government loans, grants and investments. Additionally, various
federal, state and local government-imposed movement restrictions and
initiatives have been implemented to reduce the global transmission of COVID-19,
including reduced or eliminated food services, the closure of retailing
establishments, the promotion of social distancing and the adoption of remote
working policies.

  Beginning in the third quarter of 2020, we actively engaged with the various
elements of our value chain, including our customers, contract manufacturers,
and logistics and transportation providers, to meet demand for our products and
to remain informed of any challenges within our value chain. Given the
unpredictable nature of the COVID-19 pandemic and the initial surge in
consumption, we increased finished goods inventory of some of our key products.
In the fourth quarter of 2020 and continuing into the first quarter of 2021,
consumption habits became more steady and inventory levels normalized. Based on
information available to us as of the date of this Report, we believe we will be
able to deliver our products to meet customer orders on a timely basis, and
therefore, we expect our products will continue to be available for purchase to
meet consumer meal replacement and snacking needs for the foreseeable future. We
continue
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to monitor customer and consumer demand, and intend to adapt our plans as needed
to continue to drive our business and meet our obligations during the evolving
COVID-19 situation.

  We implemented remote work arrangements and restricted business travel in
March 2020, and to date, these arrangements have not materially affected our
ability to maintain our business operations, including the operation of
financial reporting systems, internal control over financial reporting, and
disclosure controls and procedures. We believe our lean infrastructure, which
allows for significant flexibility, speed-to-market and minimal capital
investment, has enabled us to adjust our expenditures to maintain cash flow
until the more fulsome reopening of the U.S. economy and the associated return
of shopping behavior to more normal patterns occurs. We also believe the return
of these shopping patterns along with our brand benefits of active nutrition and
weight management will drive more better-for-you snacking and meal replacement
usage occasions.

  Our consolidated results of operations for the thirteen weeks ended
November 28, 2020 continued to be affected by changes in consumer shopping and
consumption behavior due to COVID-19. The nutritional snacking category has
experienced a marked decrease in shopping trips (particularly in the mass
channel) and fewer usage occasions. There is still uncertainty related to the
duration of reduced consumer mobility and when shopping trips will return to
pre-pandemic levels, particularly in the mass market retail channel. This has
affected our portable and convenient on-the-go products, especially the
nutrition and protein bar portion of our business for both our Atkins and Quest
brands. While our Quest brand has outperformed its portion of the nutritious
snaking segment, the performance of our Atkins brand, which is part of the
weight management portion of the market, has remained slower due to what we
believe is the temporary softer interest in weight management for consumers,
fewer on-the-go usage occasions and weakness in the mass channel that has
experienced reduced shopper traffic during the pandemic.

  Based on the duration and severity of economic effects from the COVID-19
pandemic, including but not limited to stock market volatility, the potential
for (i) continued increased rates of reported cases of COVID-19, (ii) unexpected
supply chain disruptions, (iii) changes to customer operations, (iv) continued
or additional changes in consumer purchasing and consumption behavior beyond
those evidenced to date, and (v) the closure of customer establishments, we
remain uncertain of the ultimate effect COVID-19 could have on our business. We
also believe the COVID-19 uncertainty will continue during our 2021 fiscal year.

Restructuring and Related Charges



  In May 2020, we announced certain restructuring activities in conjunction with
the implementation of our future-state organization design, which created a
fully integrated organization with our completed Acquisition of Quest. The new
organization design became effective on August 31, 2020. These restructuring
plans primarily include workforce reductions, changes in management structure,
and the relocation of business activities from one location to another.

  For the thirteen weeks ended November 28, 2020, we incurred a total of $2.5
million in restructuring and restructuring related costs which have been
included within General and administrative on the Consolidated Statements of
Operations and Comprehensive Income. As of November 28, 2020, we have incurred
aggregate restructuring and restructuring related costs of $8.0 million since
May 2020. Overall, we expect to incur a total of approximately $9.2 million in
restructuring and restructuring-related costs, which are to be paid throughout
fiscal 2021 and the first quarter of fiscal 2022. Refer to Note 15,
Restructuring and Related Charges, of our Notes to Unaudited Condensed
Consolidated Financial Statements in this Report for additional information
regarding restructuring activities.

SimplyProtein Sale



  Effective September 24, 2020, we sold the assets exclusively related to our
SimplyProtein® brand of products for approximately $8.8 million of
consideration, including cash of $5.8 million and a note receivable for
$3.0 million, to a newly formed entity led by the Company's former
Canadian-based management team who had been responsible for this brand prior to
the sale transaction (the "SimplyProtein Sale"). In addition to purchasing these
assets, the buyer assumed certain liabilities related to the SimplyProtein
brand's business. There was no gain or loss recognized as a result of the
SimplyProtein Sale. The transaction enables our management to focus its full
time and our resources on our core Atkins® and Quest® branded businesses and
other strategic initiatives.

Our Reportable Segment



  Following the Acquisition of Quest, our operations are organized into two
operating segments, Atkins and Quest, which are aggregated into one reporting
segment, due to similar financial, economic and operating characteristics. The
operating segments are also similar in the following areas: (a) the nature of
the products; (b) the nature of the production processes; (c) the methods used
to distribute products to customers, (d) the type of customer for the products,
and (e) the nature of the regulatory environment. The recently announced
restructuring and new organization design creates an efficient and fully
integrated organization that will continue to support and build multi-category
nutritional snacking brands.

Key Financial Definitions

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Net sales. Net sales consist primarily of product sales less the cost of promotional activities, slotting fees and other sales credits and adjustments, including product returns.



  Cost of goods sold. Cost of goods sold consists primarily of the costs we pay
to our contract manufacturing partners to produce the products sold. These costs
include the purchase of raw ingredients, packaging, shipping and handling,
warehousing, depreciation of warehouse equipment, and a tolling charge for the
contract manufacturer. Cost of goods sold includes products provided at no
charge as part of promotions and the non-food materials provided with customer
orders.

Operating expenses. Operating expenses consist primarily of selling and marketing, general and administrative, depreciation and amortization, and business transaction costs. The following is a brief description of the components of operating expenses:

•Selling and marketing. Selling and marketing expenses are comprised of broker commissions, customer marketing, media and other marketing costs.



•General and administrative. General and administrative expenses are comprised
of expenses associated with corporate and administrative functions that support
our business, including employee salaries, professional services, integration
costs, restructuring costs, insurance and other general corporate expenses.

•Depreciation and amortization. Depreciation and amortization costs consist of
costs associated with the depreciation of fixed assets and capitalized leasehold
improvements and amortization of intangible assets.

•Business transaction costs. Business transaction costs are comprised of legal, due diligence, consulting and accounting firm expenses associated with the process of actively pursuing potential and completed business combinations, including the Acquisition of Quest.

Results of Operations



  Overall, the results in the first quarter of fiscal 2020 were better than
expected amid the ongoing challenges of operating in the COVID-19 environment.
The Acquisition of Quest and the strong performance of the Quest brand drove the
increases in net sales and net operating income for the thirteen weeks ended
November 28, 2020 compared to the thirteen weeks ended November 30, 2019. While
we are encouraged with our start to fiscal year 2021, including the momentum of
the Quest brand and the progress made against our strategic initiatives, there
is still uncertainty related to when mobility, consumption behavior and shopping
trips will return to pre-COVID-19 levels.

  In assessing the performance of our business, we consider a number of key
performance indicators used by management and typically used by our competitors,
including the non-GAAP measures of Adjusted EBITDA and Adjusted Diluted Earnings
Per Share. Because not all companies use identical calculations, this
presentation of Adjusted EBITDA and Adjusted Diluted Earnings Per Share may not
be comparable to other similarly titled measures of other companies. See
"Reconciliation of Adjusted EBITDA" below for a reconciliation of Adjusted
EBITDA to net income for each applicable period. See "Reconciliation of Adjusted
Diluted Earnings Per Share" below for a reconciliation of Adjusted Diluted
Earnings Per Share to diluted earnings per share for each applicable period.

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Table of Contents
Comparison of Unaudited Results for the Thirteen Weeks Ended November 28, 2020
and the Thirteen Weeks Ended November 30, 2019

  The following unaudited table presents, for the periods indicated, selected
information from our Condensed Consolidated Statements of Operations and
Comprehensive Income, including information presented as a percentage of net
sales:
                                  Thirteen Weeks                        Thirteen Weeks
                                      Ended                                 Ended
 (In thousands)                 November 28, 2020      % of Sales     November 30, 2019      % of Sales
 Net sales                      $        231,152          100.0  %    $        152,153          100.0  %
 Cost of goods sold                      137,111           59.3  %              89,947           59.1  %
 Gross profit                             94,041           40.7  %              62,206           40.9  %

 Operating expenses:
 Selling and marketing                    25,195           10.9  %              18,434           12.1  %
 General and administrative               25,415           11.0  %              18,145           11.9  %
 Depreciation and                                           1.8  %                                1.6  %
 amortization                              4,244                                 2,453
 Business transaction costs                    -              -  %              26,159           17.2  %

 Total operating expenses                 54,854           23.7  %              65,191           42.8  %

 Income (loss) from                                        17.0  %              (2,985)          (2.0) %
 operations                               39,187

 Other income (expense):
 Interest income                               3              -  %               1,379            0.9  %
 Interest expense                         (8,372)          (3.6) %              (4,969)          (3.3) %

 Gain on foreign currency                                     -  %                                  -  %
 transactions                                  9                                    16
 Other income                                 47              -  %                  37              -  %
 Total other expense                      (8,313)          (3.6) %              (3,537)          (2.3) %

 Income (loss) before income                               13.4  %              (6,522)          (4.3) %
 taxes                                    30,874
 Income tax expense                                         3.6  %                               (1.1) %
 (benefit)                                 8,374                                (1,729)
 Net income (loss)              $         22,500            9.7  %    $         (4,793)          (3.2) %

 Other financial data:
 Adjusted EBITDA(1)             $         48,697           21.1  %    $         31,795           20.9  %


(1) Adjusted EBITDA is a non-GAAP financial metric. See "Reconciliation of Adjusted EBITDA" below for a reconciliation of Adjusted EBITDA to net income for each applicable period.



  Net sales. Net sales of $231.2 million represented an increase of $79.0
million, or 51.9%, for the thirteen weeks ended November 28, 2020 compared to
the thirteen weeks ended November 30, 2019. The net sales increase of 51.9% was
primarily attributable to the Acquisition of Quest, which drove 51.7% of the
increase. The remaining 0.2% increase in net sales attributable to the legacy
Atkins business was primarily driven by international sales growth, partially
offset by a 1.7% decrease in net sales due to the SimplyProtein Sale in the
first quarter of fiscal year 2021 as well as reduced sales volume due to the
continued effects of COVID-19 related movement restrictions and stay-at-home
orders.

  Cost of goods sold. Cost of goods sold increased $47.2 million, or 52.4%, for
the thirteen weeks ended November 28, 2020 compared to the thirteen weeks ended
November 30, 2019. The cost of goods sold increase was driven by sales volume
growth attributable to the Acquisition of Quest.

  Gross profit. Gross profit increased $31.8 million, or 51.2%, for the thirteen
weeks ended November 28, 2020 compared to the thirteen weeks ended November 30,
2019. Gross profit of $94.0 million, or 40.7% of net sales, for the thirteen
weeks ended November 28, 2020 decreased 20 basis points from 40.9% of net sales
for the thirteen weeks ended November 30, 2019. The decrease in gross profit
margin was primarily the result of the Acquisition of Quest's lower gross profit
margins, partially offset by a non-cash $2.4 million inventory purchase
accounting step-up adjustment in the first quarter of fiscal year 2020.

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  Operating expenses. Operating expenses decreased $10.3 million, or 15.9%, for
the thirteen weeks ended November 28, 2020 compared to the thirteen weeks ended
November 30, 2019 due to the following:

•Selling and marketing. Selling and marketing expenses increased $6.8 million,
or 36.7%, for the thirteen weeks ended November 28, 2020 compared to the
thirteen weeks ended November 30, 2019. The increase was primarily related to
the Acquisition of Quest.

•General and administrative. General and administrative expenses increased $7.3
million, or 40.1%, for the thirteen weeks ended November 28, 2020 compared to
the thirteen weeks ended November 30, 2019. The increase was primarily
attributable to the Acquisition of Quest as well as restructuring charges of
$2.5 million in the thirteen weeks ended November 28, 2020. These increases were
partially offset by reductions in stock-based compensation and costs related to
the integration of Quest.

•Depreciation and amortization. Depreciation and amortization expenses increased
$1.8 million, or 73.0%, for the thirteen weeks ended November 28, 2020 compared
to the thirteen weeks ended November 30, 2019. The increase was primarily due to
amortization for the intangible assets recognized in the Acquisition of Quest of
$2.2 million.

•Business transaction costs. Business transaction costs were $26.2 million for
the thirteen weeks ended November 30, 2019 and was comprised of expenses related
to the Acquisition of Quest.

  Interest income. Interest income decreased $1.4 million for the thirteen weeks
ended November 28, 2020 compared to the thirteen weeks ended November 30, 2019
primarily due to $195.3 million of cash on hand being utilized for the
Acquisition of Quest in the first quarter of fiscal year 2020 and lower market
rates.

  Interest expense. Interest expense increased $3.4 million for the thirteen
weeks ended November 28, 2020 compared to the thirteen weeks ended November 30,
2019 primarily due to the first quarter of fiscal year 2020 term loan funding of
$460.0 million to partially finance the Acquisition of Quest.

Gain on foreign currency transactions. The gain in foreign currency related to our international operations was nominal for the thirteen weeks ended November 28, 2020 and November 30, 2019.



  Income tax expense (benefit). Income tax expense increased $10.1 million, for
the thirteen weeks ended November 28, 2020 compared to the thirteen weeks ended
November 30, 2019. The increase in our income tax expense is primarily driven by
higher pre-tax book income offset by other permanent differences.

  Net income (loss). Net income was $22.5 million for the thirteen weeks ended
November 28, 2020, an increase of $27.3 million compared to the net loss of $4.8
million for the thirteen weeks ended November 30, 2019. The increase was
primarily related to increased operating income and decreased transaction costs
from the Acquisition of Quest in the first quarter of fiscal year 2020.

  Adjusted EBITDA. Adjusted EBITDA increased $16.9 million, or 53.2%, for the
thirteen weeks ended November 28, 2020 compared to the thirteen weeks ended
November 30, 2019, driven primarily by the Acquisition of Quest. For a
reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure,
see "Reconciliation of Adjusted EBITDA" below.

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Reconciliation of Adjusted EBITDA

  Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure commonly used
in our industry and should not be construed as an alternative to net income as
an indicator of operating performance or as an alternative to cash flow provided
by operating activities as a measure of liquidity (each as determined in
accordance with GAAP). Simply Good Foods defines Adjusted EBITDA (earnings
before interest, tax, depreciation, and amortization) as net income before
interest income, interest expense, income tax expense, depreciation and
amortization with further adjustments to exclude the following items: business
transaction costs, stock-based compensation expense, inventory step-up,
integration costs, restructuring costs, non-core legal costs, and other non-core
expenses. The Company believes that the inclusion of these supplementary
adjustments in presenting Adjusted EBITDA, when used in conjunction with net
income, are appropriate to provide additional information to investors, and
management of the Company uses Adjusted EBITDA to supplement net income because
it reflects more accurately operating results of the on-going operations,
enhances the overall understanding of past financial performance and future
prospects and allows for greater transparency with respect to the key metrics
the Company uses in its financial and operational decision making. The Company
also believes that Adjusted EBITDA is frequently used by securities analysts,
investors and other interested parties in the evaluation of companies in its
industry. Adjusted EBITDA may not be comparable to other similarly titled
captions of other companies due to differences in the non-GAAP calculation.

The following unaudited tables below provide a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, which is net income, for the thirteen weeks ended November 28, 2020 and November 30, 2019:


                                                        Thirteen Weeks Ended
      (In thousands)                         November 28, 2020       November 30, 2019
      Net income (loss)                     $       22,500          $           (4,793)
      Interest income                                   (3)                     (1,379)
      Interest expense                               8,372                       4,969
      Income tax expense                             8,374                      (1,729)
      Depreciation and amortization                  4,513                       2,525
      EBITDA                                        43,756                        (407)
      Business transaction costs                         -                      26,159
      Stock-based compensation expense               1,110                       1,673
      Inventory step-up                                  -                       2,437
      Integration of Quest                           1,246                       1,438
      Restructuring                                  2,519                           -
      Non-core legal costs                               -                         479

      Other (1)                                         66                          16
      Adjusted EBITDA                       $       48,697          $           31,795

(1) Other items consist principally of exchange impact of foreign currency transactions and other expenses.


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Reconciliation of Adjusted Diluted Earnings Per Share

  Adjusted Diluted Earnings Per Share. Adjusted Diluted Earnings Per Share is a
non-GAAP financial measure commonly used in our industry and should not be
construed as an alternative to diluted earnings per share as an indicator of
operating performance. Simply Good Foods defines Adjusted Diluted Earnings Per
Share as diluted earnings per share before depreciation and amortization,
business transaction costs, stock-based compensation expense, inventory step-up,
integration costs, restructuring costs, non-core legal costs, and other non-core
expenses, on a theoretical tax effected basis of such adjustments at an assumed
statutory rate. The Company believes that the inclusion of these supplementary
adjustments in presenting Adjusted Diluted Earnings per Share, when used in
conjunction with diluted earnings per share, are appropriate to provide
additional information to investors, and management of the Company uses Adjusted
Diluted Earnings Per Share to supplement diluted earnings per shares because it
reflects more accurately operating results of the on-going operations, enhances
the overall understanding of past financial performance and future prospects and
allows for greater transparency with respect to the key metrics the Company uses
in its financial and operational decision making. The Company also believes that
Adjusted Diluted Earnings per Share is frequently used by securities analysts,
investors and other interested parties in the evaluation of companies in its
industry. Adjusted Diluted Earnings per Share may not be comparable to other
similarly titled captions of other companies due to differences in the non-GAAP
calculation.

The following unaudited tables below provide a reconciliation of Adjusted Diluted Earnings Per Share to its most directly comparable GAAP measure, which is diluted earnings per share, for the thirteen and thirteen weeks ended November 28, 2020 and November 30, 2019:


                                                              Thirteen 

Weeks Ended

November 28, 2020

November 30, 2019


 Diluted earnings (loss) per share                  $     0.23           $  

(0.05)



 Depreciation and amortization                            0.03                         0.02
 Business transaction costs                                  -                         0.22
 Stock-based compensation expense                         0.01                         0.01
 Inventory step-up                                           -                         0.02
 Integration of Quest                                     0.01                         0.01
 Restructuring                                            0.02                            -
 Non-core legal costs                                        -                            -

 Other (1)                                                   -                            -
 Net loss impact on diluted earnings per share               -              

(0.01)


 Rounding (2)                                            (0.01)                           -
 Adjusted diluted earnings per share                $     0.29           $             0.22


(1) Other items consist principally of exchange impact of foreign currency
transactions and other expenses.
(2) Adjusted Diluted Earnings Per Share amounts are computed independently for
each quarter. Therefore, the sum of the quarterly Adjusted Diluted Earnings Per
Share amounts may not equal the year to date Adjusted Diluted Earnings Per Share
amounts due to rounding.

Liquidity and Capital Resources

Overview



  We have historically funded our operations with cash flow from operations and,
when needed, with borrowings under our credit facilities. Our principal uses of
cash have been debt service, working capital and the Acquisition of Quest.

  We had $91.5 million in cash and cash equivalents as of November 28, 2020. We
believe our sources of liquidity and capital will be sufficient to finance our
continued operations, growth strategy and additional expenses we expect to incur
for at least the next twelve months. As circumstances warrant, we may issue debt
and/or equity securities from time to time on an opportunistic basis, dependent
upon market conditions and available pricing. We make no assurance that we can
issue and sell such securities on acceptable terms or at all.

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Debt and Credit Facilities

  On July 7, 2017, we entered into a credit agreement with Barclays Bank PLC and
other parties (as amended to date, the "Credit Agreement"). The Credit Agreement
provides for (i) a term facility of $200.0 million ("Term Facility") with a
seven year maturity and (ii) a revolving credit facility of up to $75.0 million
(the "Revolving Credit Facility") with a five year maturity. Substantially
concurrent with the consummation of the Acquisition of Atkins, the full $200.0
million of the Term Facility (the "Term Loan") was drawn. The interest rate per
annum is based on either (i) a base rate equaling the higher of (a) the "prime
rate", (b) the federal funds effective rate plus 0.50% and (c) the Euro-currency
rate applicable for an interest period of one month plus 1.00% plus (x) 3.00%
margin for the Term Loan or (y) 2.00% margin for the Revolving Credit Facility,
or (ii) London Interbank Offered Rate ("LIBOR") adjusted for statutory reserve
requirements, plus (x) 4.00% margin for the Term Loan subject to a floor of
1.00% or (y) 3.00% margin for the Revolving Credit Facility. As security for the
payment or performance of its debt, we have pledged certain equity interests in
its subsidiaries.

  On March 16, 2018 (the "Amendment Date"), we entered into an amendment (the
"Repricing Amendment") to the Credit Agreement. As a result of the Repricing
Amendment, the interest rate on the Term Loan was reduced and, as of the
Amendment Date, such loans had an interest rate equal to, at our option, either
LIBOR plus an applicable margin of 3.50% or a base rate plus an applicable
margin of 2.50%. The Repricing Amendment did not change the interest rate on the
Revolving Credit Facility. The Revolving Credit Facility continued to bear
interest based upon our consolidated net leverage ratio as of the last financial
statements delivered to the administrative agent. No additional debt was
incurred, or any proceeds received, by us in connection with the Repricing
Amendment. The incremental fees paid to the administrative agent are reflected
as additional debt discount and are amortized over the terms of the long-term
financing agreements using the effective-interest method.

  On November 7, 2019, we entered into an amendment (the "Incremental Facility
Amendment") to the Credit Agreement to increase the principal borrowed on the
Term Facility by $460.0 million. The Term Facility together with the incremental
borrowing make up the Initial Term Loans (as defined in the Incremental Facility
Amendment) and as of the Amendment No. 2 Effective Date (as defined in the
Incremental Facility Amendment), the Initial Term Loans bear interest at a rate
equal to, at our option, either LIBOR plus an applicable margin of 3.75% or a
base rate plus an applicable margin of 2.75%. The Incremental Facility Amendment
was executed to partially finance the Acquisition of Quest. No amounts under the
Term Facility were repaid as a result of the execution of the Incremental
Facility Amendment.

  The Applicable Rate per annum applicable to the loans under the Credit
Agreement Amendment is, with respect to any Initial Term Loan that is an ABR
Loan (as defined in the Credit Agreement), 2.75% per annum, and with respect to
any Initial Term Loan that is a Eurodollar Loan, 3.75% per annum. The
incremental term loans will mature on the maturity date applicable to the
Initial Term Loans, which date is July 7, 2024.

  The Credit Agreement contains certain financial and other covenants that limit
our ability to, among other things, incur and/or undertake asset sales and other
dispositions, liens, indebtedness, certain acquisitions and investments,
consolidations, mergers, reorganizations and other fundamental changes, payment
of dividends and other distributions to equity and warrant holders, and
prepayments of material subordinated debt, in each case, subject to customary
exceptions materially consistent with credit facilities of such type and size.
The Revolving Credit Facility has a maximum total net leverage ratio equal to or
less than 6.25:1.00 (with a reduction to 6.00:1.00 on and after the third
anniversary of the closing date of the Credit Agreement) contingent on credit
extensions in excess of 30% of the total amount of commitments available under
the Revolving Credit Facility. Any failure to comply with the restrictions of
the credit facilities may result in an event of default. We were in compliance
with all financial covenants as of November 28, 2020 and August 29, 2020,
respectively.

  At November 28, 2020, the outstanding balance of the Term Facility was $581.5
million. We are not required to make principal payments on the Term Facility
over the twelve months following the period ended November 28, 2020. As of
November 28, 2020, there were no amounts drawn against the Revolving Credit
Facility.

Public Equity Offering



  On October 9, 2019, we completed an underwritten public offering of 13,379,205
shares of our common stock at a price to the public of $26.35 per share. We paid
underwriting discounts and commissions of $0.19 per share resulting in net
proceeds to us of $26.16 per share, or approximately $350.0 million (the
"Offering"). We paid $0.8 million for legal, accounting and registrations fees
related to the Offering. The net proceeds were used to pay a portion of the
purchase price and related fees and expenses for the Acquisition of Quest.

Acquisition of Quest



  On August 21, 2019, our wholly-owned subsidiary Simply Good Foods USA, Inc.,
formerly known as Atkins Nutritionals, Inc. ("Simply Good USA") entered into a
Stock and Unit Purchase Agreement (the "Purchase Agreement") with VMG Voyage
Holdings, LLC, VMG Tax-Exempt II, L.P., Voyage Employee Holdings, LLC, and other
sellers, as defined in the Purchase Agreement, to acquire Quest, a healthy
lifestyle food company. On November 7, 2019, pursuant to the Purchase Agreement,
Simply Good USA completed the Acquisition of Quest, for a cash purchase price of
approximately $1.0 billion, subject to customary post-closing adjustments.

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Table of Contents


  The Acquisition of Quest was funded through a combination of cash, equity and
debt financing. Total consideration paid on the closing date was $988.9 million.
Cash sources of funding included $195.3 million of cash on hand, net proceeds of
approximately $350.0 million from an underwritten public offering of common
stock, and $443.6 million of new term loan debt. In the third fiscal quarter of
2020, we received a post-closing release from escrow of approximately $2.1
million related to net working capital adjustments, resulting in a total net
consideration paid of $986.8 million as of November 28, 2020. For the thirteen
weeks ended November 30, 2019, we incurred business transaction costs $26.2
million.

Equity Warrants

The Company's private placement warrants to purchase 6,700,000 shares of common stock remain outstanding.

Cash Flows

The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands):



                                                             Thirteen Weeks 

Ended

November 28, 2020

November 30, 2019

Net cash provided by (used in) operating


 activities                                      $           15,197      $  

(7,928)

Net cash provided by (used in) investing


 activities                                      $            5,593      $  

(985,731)

Net cash (used in) provided by financing


 activities                                      $          (25,122)     $          800,071



  Operating activities. Our net cash provided by operating activities increased
$23.1 million to $15.2 million for the thirteen weeks ended November 28, 2020
compared to cash used in operating activities of $7.9 million for the thirteen
weeks ended November 30, 2019. The increase in cash provided by operating
activities was primarily driven by higher income before taxes due to the lack of
significant business transaction and integration costs, partially offset by
changes in working capital.

  Investing activities. Our net cash provided by investing activities was $5.6
million for the thirteen weeks ended November 28, 2020, which was primarily
related to the $5.8 million of cash proceeds received from the SimplyProtein
Sale. The net cash used in investing activities of $985.7 million for the
thirteen weeks ended November 30, 2019 was primarily related to the cash paid
for the Acquisition of Quest, net of cash acquired, of $984.2 million.

  Financing activities. Our net cash used in financing activities was $25.1
million for the thirteen weeks ended November 28, 2020 compared to net cash
provided by financing activities of $800.1 million for the thirteen weeks ended
November 30, 2019. Net cash used in financing activities for the thirteen weeks
ended November 28, 2020 primarily consisted of a $25.0 million principal payment
on the Term Facility. For the thirteen weeks ended November 30, 2019, net cash
provided by financing activities included gross proceeds of $352.5 million from
the Offering offset by issuance costs of $3.3 million, proceeds of $460.0
million from the Term Facility borrowing related to the Incremental Facility
Amendment offset by issuance costs of $8.2 million, and a $1.0 million principal
payment on the Term Facility.

Contractual Obligations

Our contractual obligations are related to our Credit Agreement and our finance and operating leases. There have been no material changes to our contractual obligations from our Annual Report.

Off-Balance Sheet Arrangements



  As of November 28, 2020, we had no material off-balance sheet arrangements
that have or are reasonably likely to have a current or future material effect
on our financial condition, changes in financial condition, income or expenses,
results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncements



  For a description of critical accounting policies that affect our significant
judgments and estimates used in the preparation of our consolidated financial
statements, refer to our Annual Report. There have been no significant changes
to our critical accounting policies since August 29, 2020. Refer to Note 2 of
our unaudited interim condensed consolidated financial statements in this Report
for further information regarding recently issued accounting standards.

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