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Acquisition | 9 Months Ended
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Oct. 04, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisition | 5. ACQUISITION On February 21, 2025, we completed the acquisition of 100% of the equity interests of Purposeful Foods Holdings, Inc., the parent company of Simple Mills, Inc., for total consideration of approximately $848.6 million, which includes $17.8 million payable to the sellers upon realization of certain tax benefits acquired as part of the transaction. Simple Mills, a market-leading natural brand offering premium better-for-you crackers, cookies, snack bars, and baking mixes, expands the company's presence in the better-for-you snacking category. The acquisition has been accounted for as a business combination. The total goodwill recorded for the acquisition was $367.9 million and is not deductible for tax purposes. The following table summarizes the preliminary fair value of purchase consideration paid for Simple Mills and the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair value. The goodwill, identifiable intangible assets, taxes, and certain other assets and liabilities are still under review. When relevant information is obtained, resulting changes to our provisional purchase price allocation are adjusted to reflect new information obtained about the facts and circumstances that existed as of the respective acquisition date that, if known, would have affected the measurement of the amounts recognized as of those dates. We recognized a $19.0 million goodwill measurement period adjustment related to the valuation of trademarks and customer relationships, deferred taxes and assumed liabilities during the second quarter of Fiscal 2025. Additionally, the company recorded an immaterial purchase price adjustment during the third quarter of Fiscal 2025. These measurement period adjustments are reflected in the 'measurement period adjustments' column below. The impact to the amortization expense on the Condensed Consolidated Statements of Income is immaterial for the twelve and forty weeks ended October 4, 2025 (amounts in thousands):
|  | Initial Preliminary Allocation |  |  | Measurement Period Adjustments |  |  | Updated Preliminary Allocation |
Fair value of consideration transferred: |  |  |  |  |  |  |  |  |
Cash consideration paid at closing |  | $ | 830,713 |  |  | $ | — |  |  | $ | 830,713 |
Payable to seller |  |  | 17,824 |  |  |  | 48 |  |  |  | 17,872 |
Total consideration |  | $ | 848,537 |  |  | $ | 48 |  |  | $ | 848,585 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 38,833 |  |  | $ | — |  |  | $ | 38,833 |
Accounts receivable, net of allowances |  |  | 18,065 |  |  |  | — |  |  |  | 18,065 |
Inventories |  |  | 19,612 |  |  |  | (101 | ) |  |  | 19,511 |
Property, plant, and equipment |  |  | 1,729 |  |  |  | 13 |  |  |  | 1,742 |
Operating lease right-of-use assets |  |  | 1,668 |  |  |  | — |  |  |  | 1,668 |
Customer relationships |  |  | 173,100 |  |  |  | 4,700 |  |  |  | 177,800 |
Trademarks - infinite-lived |  |  | 334,300 |  |  |  | 21,100 |  |  |  | 355,400 |
Other financial assets |  |  | 1,936 |  |  |  | — |  |  |  | 1,936 |
Total identifiable assets acquired |  | $ | 589,243 |  |  | $ | 25,712 |  |  | $ | 614,955 |
Current maturities of operating leases |  |  | 1,172 |  |  |  | — |  |  |  | 1,172 |
Accounts payable |  |  | 14,702 |  |  |  | (75 | ) |  |  | 14,627 |
Other financial liabilities |  |  | 7,621 |  |  |  | 281 |  |  |  | 7,902 |
Deferred income taxes, net |  |  | 104,098 |  |  |  | 6,450 |  |  |  | 110,548 |
Total liabilities assumed |  | $ | 127,593 |  |  | $ | 6,656 |  |  | $ | 134,249 |
Total identifiable net assets acquired |  | $ | 461,650 |  |  | $ | 19,056 |  |  | $ | 480,706 |
Goodwill |  | $ | 386,887 |  |  | $ | (19,008 | ) |  | $ | 367,879 |
Property, plant and equipment in the table above includes machinery and equipment and leasehold improvements. The following table presents the acquired intangible assets subject to amortization (amounts in thousands, except amortization periods):
|  | Total |  |  | Amortization years |  | Amortization Method
Customer relationships |  | $ | 177,800 |  |  | 17 |  | Straight-line
Trademarks |  |  | 355,400 |  |  | Indefinite |  | N/A
Total intangible assets |  | $ | 533,200 |  |  |  |  |
Acquisitions Pro Forma Simple Mills contributed net sales of $70.7 million and $156.4 million and net loss of $2.0 million and $8.3 million, which includes interest and amortization expense, net of tax impact, for the twelve and forty weeks ended October 4, 2025, respectively. The following table provides the supplemental pro forma net sales and net income of the combined entity had the acquisition date of Simple Mills been December 31, 2023, the first day of Fiscal 2024 (amounts in thousands):
| For the Twelve Weeks Ended |  |  | For the Forty Weeks Ended |
| October 4, 2025 |  |  | October 5, 2024 |  |  | October 4, 2025 |  |  | October 5, 2024 |
Net sales | $ | 1,226,554 |  |  | $ | 1,257,323 |  |  | $ | 4,059,506 |  |  | $ | 4,169,724 |
Net income attributable to Flowers Foods | $ | 41,182 |  |  | $ | 60,842 |  |  | $ | 160,639 |  |  | $ | 172,370 |
We incurred costs of $2.0 million in the fourth quarter of Fiscal 2024 and additional costs of $1.7 million and $16.4 million during the twelve and forty weeks ended October 4, 2025, respectively, related to the acquisition (including integration costs). These costs are reflected in the selling, distribution, and administrative expenses line item of the Condensed Consolidated Statements of Income and are reflected in the pro forma net income. The pro forma financial information also includes the following adjustments (net of tax based on statutory rates) related to the acquisition: amortization of the intangible assets and interest expense for the additional indebtedness incurred to finance the acquisition that would not have been incurred without the transaction. These adjustments increased the pro forma net income attributable to Flowers Foods by $1.6 million and $8.5 million for the twelve and forty weeks ended October 4, 2025, respectively, and decreased pro forma net income by $12.0 million and $49.3 million for the twelve and forty weeks ended October 5, 2024, respectively.

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