Simply Good Foods Co (NASDAQ:SMPL) saw its shares gallop Wednesday, on the release of quarterly financial numbers.
The Denver-based company, a developer, marketer and seller of branded nutritional foods and snacking products, today reported financial results for the thirteen week period ended May 30, 2020. The Company completed the acquisition of Quest Nutrition, LLC on November 7, 2019.
Net sales increased 54.2%, or $75.6 million, to $215.1 million. Gross profit was $88.6 million for the third quarter of 2020, an increase of $32.0 million or 56.4%.
The increase in gross profit was driven by the Quest acquisition, partially offset by the legacy Atkins net sales decline. Favorable legacy Atkins trade promotions and lower input costs drove gross margin expansion of 60 basis points.
In the third quarter of 2020 the Company reported net income of $16.4 million, an increase of $2.9 million versus the comparable period of 2019.
The increase in gross profit was partially offset by a 39.7% increase in selling and marketing expenses due to the inclusion of Quest. Legacy Atkins selling and marketing expense declined 10%
Adjusted EBITDA increased 74.2% to $43.4 million, primarily related to the Quest acquisition. Earnings per diluted share, $0.17, an increase of $0.01 per fully diluted share. Adjusted Diluted EPS of $0.26 versus $0.20
CEO Joseph Scalzo said,"The impact of COVID-19 during our fiscal third quarter was unprecedented. Despite the challenges of working remotely, our employees performed admirably, adjusting to the evolving market changes while continuing to execute well against our plans."
SMPL shares gained $1.56, or 7.3%, to $22.75.
