Simply Good Foods (SMPL) risk factors, FY2025 10-K

Risks Related to our Business

1. 01Changing consumer preferences, habits, perceptions of certain nutritional snacking products and discretionary spending may negatively affect our brand loyalty, purchase frequency rate and net sales, and materially and adversely affect our business, financial condition and results of operations29% rewritten
2. 02We may not be able to compete successfully in the highly competitive nutritional snacking industry39% rewritten
3. 03Our operations are dependent on a global supply chain and the effects on us or our suppliers of supply chain constraints and inflationary pressures, including those related to tariffs, could adversely affect our operating results
4. 04If we cannot maintain or increase the prices of our products to cover elevated input costs, our margins may decrease
5. 05If we fail to implement our growth strategies successfully, timely, or at all, our ability to increase our revenue and operating profits could be materially and adversely affected
6. 06If we do not continually enhance our brand recognition, maintain or increase distribution of our products, attract new consumers to our brands and introduce new and innovative products, either on a timely basis or at all, our business may suffer
7. 07Our growth may be limited if we cannot maintain or secure additional shelf or retail space for our products in brick-and-mortar retailers21% rewritten
8. 08If the perception of our brands or organizational reputation are damaged, our consumers, distributors and retailers may react negatively, which could materially and adversely affect our business, financial condition and results of operations
9. 09Negative information, including inaccurate information, about us on social media or online applications that report on the nutritional value of products may harm our reputation and brands, which could have a material and adverse effect on our business, financial condition and results of operations39% rewritten
10. 10We must appropriately allocate resources to maintain consumer awareness of our brands, build brand loyalty and generate interest in our products. Our marketing strategies and channels will evolve, and our programs may or may not be successful
11. 11Our geographic focus makes us particularly vulnerable to economic and other events and trends in North America
12. 12The actual or perceived effects of a disease outbreak, epidemic, pandemic or similar widespread public health concern, could negatively affect our operations, liquidity, financial condition and results of operations21% rewritten

Risks Related to our Operating Model

1. 13Ingredient and packaging costs are volatile and may rise significantly for a variety of reasons, many of which are outside our control, which may negatively affect the profitability of our business25% rewritten
2. 14We rely on sales to a limited number of retailers for a substantial portion of our net sales and losing one or more such retailers may materially harm our business. In addition, we maintain “at-will” contracts with these retailers, which do not require recurring or minimum purchase amounts of our products
3. 15The loss of, a disruption in or an inability to efficiently operate our fulfillment network could materially and adversely affect our business, financial condition, and results of operations
4. 16Climate Change, or legal, regulatory or market measures to address climate change, may negatively affect our business and operationsNew
5. 17We intend to grow through mergers and acquisitions or joint ventures, and we may not successfully integrate, operate or realize the anticipated benefits of such business combinations37% rewritten
6. 18We may not realize the expected benefits of acquisitions, including the OWYN acquisition, because of integration difficulties and other challenges35% rewritten
7. 19Our insurance policies may not provide adequate levels of coverage against claims
8. 20Loss of our key executive officers or other personnel, or an inability to attract and retain such management and other personnel, could negatively affect our business
9. 21We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business
10. 22Any inadequacy, failure or interruption of our information technology systems may harm our ability to effectively operate our business, and our business is subject to online security risks, including security breaches and identity theft

Regulatory Risks and Litigation Risks

1. 23All of our products must comply with federal, state and local regulations. Any non-compliance with the FDA or other applicable regulations could harm our business
2. 24Our advertising is regulated for accuracy, and if our advertising is determined to be false or misleading, we may face fines or sanctions
3. 25Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation
4. 26Litigation or legal proceedings could expose us to significant liabilities and have a negative effect on our reputation

Risks Related to our Capital Structure

1. 27Our indebtedness could materially and adversely affect our financial condition and ability to operate our company, and we may incur additional debt
2. 28The credit facilities governing our debt arrangements contain financial and other covenants
3. 29Changes in interest rates may adversely affect our earnings and cash flows
4. 30We may need additional capital in the future, and it may not be available on acceptable terms or at all
5. 31We have incurred and will continue to incur significant costs because of operating as a public company, and our management has been and will continue to be required to devote substantial time to compliance efforts
6. 32If we cannot implement appropriate systems, procedures and controls, we may not be able to successfully procure, offer or ship our products, grow our business and account for transactions in an appropriate and timely manner82% rewritten
7. 33current and future changes in our business. Failure to implement promptly appropriate internal systems, procedures and controls could materially and adversely affect our business, financial condition and results of operationsNew
8. 34We may be required to recognize impairment charges that could materially affect our financial resultsNew
9. 35Our only significant asset is ownership of 100% of Atkins Intermediate Holdings, LLC and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or satisfy our other financial obligations

Risks Related to our Common Stock

1. 36Our stock price may be volatile
2. 37We do not expect to declare any dividends in the foreseeable future
3. 38Anti-takeover provisions in our amended and restated certificate of incorporation and second amended and restated bylaws, and provisions of Delaware law, could impair a takeover attempt

Other Risks

1. 39Disruptions in the worldwide economy may materially and adversely affect our business, financial condition and results of operations
2. 40Our international operations expose us to regulatory, economic, political and social risks in the countries in which we operate76% rewritten
3. 41can add to our costs and limit our ability to react effectively and timely to adverse events. We cannot be certain that we can enter and successfully compete in additional foreign markets or that we can continue to compete in the foreign markets in which we currently operateNew
4. 42Our international operations expose us to fluctuations in exchange rates, which may materially and adversely affect our operating results