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Landcadia Holdings III, Inc.
001-39609
(Commission File Number)
| Delaware | 85-2096734 | |||||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | ( Identification No.) | |||||||||||||||||||
| 10590 Hamilton Avenue | 45231 | |||||||||||||||||||
| Cincinnati | , | Ohio | ||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||||||||
1510 West Loop South, Houston, Texas 77027
(Address of principal executive offices, including zip code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
(513) 851-4900
| Title of | Trading Symbol(s) | Name of | ||||||||
| HLMN | The Nasdaq Stock Market LLC | |||||||||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
| Non-accelerated filer | ☒ (Do not check if a smaller reporting company) | Smaller reporting company | ☐ | |||||||||||||||||
| Emerging growth company | ☐ | |||||||||||||||||||
As of
LANDCADIA HOLDINGS III, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020
TABLE OF CONTENTS
Balance Sheets
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | $ | - | $ | - | ||||
| Total current assets | - | - | ||||||
| Deferred offering costs | 377,200 | - | ||||||
| Total Assets | $ | 377,200 | $ | - | ||||
| LIABILITIES AND STOCKHOLDER'S EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable | $ | 215,450 | $ | - | ||||
| Notes payable, affiliates | 161,750 | |||||||
| Total current liabilities | 377,200 | - | ||||||
| Total Liabilities | $ | 377,200 | $ | - | ||||
| Commitments | - | - | ||||||
| Stockholder's Equity: | ||||||||
| Preferred stock, $0.0001 par value, 1,000,000 authorized, no shares issued or outstanding | $ | - | $ | - | ||||
| Common stock | ||||||||
| Class A common stock, $0.0001 par value, 380,000,000 shares authorized, no shares issued and outstanding | - | - | ||||||
| Class B common stock, $0.0001 par value 20,000,000 shares authorized, 14,375,000 and 6,943,125 issued and outstanding, respectively (1) | 1,438 | 694 | ||||||
| Additional paid-in capital | 632 | 306 | ||||||
| Retained earnings | - | - | ||||||
| Note receivable, affiliates | (2,070 | ) | (1,000 | ) | ||||
| Total Stockholder's equity | - | - | ||||||
| Total liabilities and stockholder's equity | $ | 377,200 | $ | - | ||||
| September 24, 2022 | December 25, 2021 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 29,228 | $ | 14,605 | |||||||
| Accounts receivable, net of allowances of $2,446 ($2,891 - 2021) | 126,138 | 107,212 | |||||||||
| Inventories, net | 534,970 | 533,530 | |||||||||
| Other current assets | 25,852 | 12,962 | |||||||||
| Total current assets | 716,188 | 668,309 | |||||||||
| Property and equipment, net of accumulated depreciation of $320,767 ($284,069 - 2021) | 181,260 | 174,312 | |||||||||
| Goodwill | 823,626 | 825,371 | |||||||||
| Other intangibles, net of accumulated amortization of $398,638 ($352,695 - 2021) | 749,126 | 794,700 | |||||||||
| Operating lease right of use assets | 78,220 | 82,269 | |||||||||
| Deferred tax assets | — | 1,323 | |||||||||
| Other assets | 26,698 | 16,638 | |||||||||
| Total assets | $ | 2,575,118 | $ | 2,562,922 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 150,620 | $ | 186,126 | |||||||
| Current portion of debt and finance lease liabilities | 12,805 | 11,404 | |||||||||
| Current portion of operating lease liabilities | 12,868 | 13,088 | |||||||||
| Accrued expenses: | |||||||||||
| Salaries and wages | 16,496 | 8,606 | |||||||||
| Pricing allowances | 9,861 | 10,672 | |||||||||
| Income and other taxes | 3,726 | 4,829 | |||||||||
| Interest | 5,236 | 1,519 | |||||||||
| Other accrued liabilities | 57,210 | 41,052 | |||||||||
| Total current liabilities | 268,822 | 277,296 | |||||||||
| Long-term debt | 913,815 | 906,531 | |||||||||
| Deferred tax liabilities | 141,471 | 137,764 | |||||||||
| Operating lease liabilities | 72,880 | 74,476 | |||||||||
| Other non-current liabilities | 11,310 | 16,760 | |||||||||
| Total liabilities | $ | 1,408,298 | $ | 1,412,827 | |||||||
| Commitments and contingencies (Note 7) | |||||||||||
| Stockholders' equity: | |||||||||||
| Common stock, $0.0001 par, 500,000,000 shares authorized, 194,394,767 issued and outstanding at September 24, 2022 and 194,083,625 issued and 193,995,320 outstanding at December 25, 2021 | 20 | 20 | |||||||||
| Additional paid-in capital | 1,400,084 | 1,387,410 | |||||||||
| Accumulated deficit | (212,718) | (210,181) | |||||||||
| Accumulated other comprehensive income (loss) | (20,566) | (27,154) | |||||||||
| Total stockholders' equity | 1,166,820 | 1,150,095 | |||||||||
| Total liabilities and stockholders' equity | $ | 2,575,118 | $ | 2,562,922 | |||||||
Class B Common Stock Additional Paid-in Additional Paid-in Contents in the Preparation of Financial Statements: twenty-six weeks ended June 25, 2022. There were no stock. “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA. $447.4 million as of September 24, 2022 represents an increase of $56.4 million from the December 25, 2021 level of $391.0 million. We expect to customers, and continuing to scale its distribution networks. time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 General and administrative expenses - - - - Net Income $ - $ - $ - $ - Basic and diluted earnings per share: Net Income per share $ - $ - $ - $ - Basic and diluted weighted average number of shares outstanding (1) 8,706,791 6,037,500 6,937,041 6,037,500 (1)Excludes an aggregate of 1,875,000 and 905,625 shares as of September 30, 2020 and 2019, respectively, that are subject to forfeiture if the over-allotment option is not exercised by the underwriters.Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Net sales $ 378,538 $ 364,480 $ 1,135,665 $ 1,081,476 Cost of sales (exclusive of depreciation and amortization shown separately below) 214,802 236,999 648,221 654,264 Selling, general and administrative expenses 133,246 110,447 366,013 325,288 Depreciation 14,312 14,454 41,738 46,065 Amortization 15,557 15,504 46,644 45,827 Management fees to related party — 56 — 270 Other expense (income), net 1,070 315 (3,124) (2,232) Income (loss) from operations (449) (13,295) 36,173 11,994 Loss on change in fair value of warrant liability — 3,990 — 3,990 Interest expense, net 14,696 11,801 38,857 49,979 Interest expense on junior subordinated debentures — 1,471 — 7,775 (Gain) loss on mark-to-market adjustments — (261) — (1,685) Refinancing charges — 8,070 — 8,070 Investment income on trust common securities — (44) — (233) Income (loss) before income taxes (15,145) (38,322) (2,684) (55,902) Income tax provision (benefit) (5,679) (5,798) (147) (11,023) Net income (loss) $ (9,466) $ (32,524) $ (2,537) $ (44,879) Basic and diluted income (loss) per share $ (0.05) $ (0.19) $ (0.01) $ (0.38) Weighted average basic shares outstanding 194,370 168,440 194,171 116,945 Net income (loss) from above $ (9,466) $ (32,524) $ (2,537) $ (44,879) Other comprehensive income (loss): Foreign currency translation adjustments (7,834) (4,740) (8,745) 1,575 Hedging activity 3,811 246 15,333 246 Total other comprehensive income (loss) (4,023) (4,494) 6,588 1,821 Comprehensive income (loss) $ (13,489) $ (37,018) $ 4,051 $ (43,058) financial statements.Condensed Consolidated Financial Statements.Landcadia Holdings III, Inc.StatementsTable of CHANGES IN STOCKHOLDERS’ EQUITY Retained Note receivable, Shares (1) Amount Capital Earnings affiliates Total Balance, December 31, 2019 6,943,125 $ 694 $ 306 $ - $ (1,000 ) $ - Net income - - - - - - Balance, June 30, 2020 (unaudited) 6,943,125 694 306 - (1,000 ) - Class B shares issued 7,431,875 744 326 - (1,070 ) Net income - - - - - - Balance, September 30, 2020 (unaudited) 14,375,000 $ 1,438 $ 632 $ - $ (2,070 ) $ - Class B Common Stock Retained Note receivable, Shares (1) Amount Capital Earnings affiliates Total Balance, December 31, 2018 6,943,125 $ 694 $ 306 $ - $ (1,000 ) $ - Net income - - - - - - Balance, June 30, 2019 (unaudited) 6,943,125 694 306 - (1,000 ) - Net income - - - - - - Balance, September 30, 2019 (unaudited) 6,943,125 $ 694 $ 306 $ - $ (1,000 ) $ - (1)Excludes an aggregate of 1,875,000 and 905,625 shares as of September 30, 2020 and 2019, respectively, that are subject to forfeiture if the over-allotment option is not exercised by the underwriters. Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Cash flows from operating activities: Net income (loss) $ (2,537) $ (44,879) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 88,382 91,892 Deferred income taxes 5,670 (21,538) Deferred financing and original issue discount amortization 2,251 3,036 Stock-based compensation expense 10,789 8,817 Increase in fair value of warrant liabilities — 3,990 Write off of deferred financing fees, premiums and discounts associated with debt refinancing — (8,372) Change in fair value of contingent consideration (2,926) (1,110) Other non-cash interest and change in fair value of interest rate swap — (1,685) Changes in operating items: Accounts receivable, net (19,482) (17,097) Inventories, net (6,004) (110,065) Other assets (5,549) 3,003 Accounts payable (34,648) 12,896 Other accrued liabilities 27,171 (24,193) Net cash provided by (used for) operating activities 63,117 (105,305) Cash flows from investing activities: Acquisition of business, net of cash received (2,500) (39,102) Capital expenditures (46,431) (36,955) Net cash used for investing activities (48,931) (76,057) Cash flows from financing activities: Repayments of senior term loans (6,384) (1,072,042) Borrowings on senior term loans — 883,872 Proceeds from recapitalization of Landcadia, net of transaction costs — 455,161 Proceeds from sale of common stock in PIPE, net of issuance costs — 363,301 Repayments of senior notes — (330,000) Repayment of Junior Subordinated Debentures — (108,707) Financing fees — (20,988) Borrowings on revolving credit loans 161,000 246,000 Repayments of revolving credit loans (154,000) (244,000) Principal payments under finance lease obligations (998) (697) Proceeds from exercise of stock options 1,885 1,761 Cash payments related to hedging activities (1,421) — Other financing activities 1,809 — Net cash provided by financing activities 1,891 173,661 Effect of exchange rate changes on cash (1,454) 610 Net increase (decrease) in cash and cash equivalents 14,623 (7,091) Cash and cash equivalents at beginning of period 14,605 21,520 Cash and cash equivalents at end of period $ 29,228 $ 14,429 Supplemental disclosure of cash flow information: Interest paid on junior subordinated debentures, net $ — $ 7,542 Interest paid 30,597 55,624 Income taxes paid 2,550 1,990 financial statements.Condensed Consolidated Financial Statements. Nine months ended September 30, 2020 2019 Cash flows from operating activities: Net income $ - $ - Adjustments to reconcile net income to net cash provided by operating activities - - Net cash provided by (used in) operating activities - - Cash flows from investing activities: Net cash provided by (used in) investing activities - - Cash flows from financing activities: Net cash provided by (used in) financing activities - - Net increase (decrease) in cash and cash equivalents - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - �� Non-cash financing activities: Stock issuance $ - $ - Common Stock Shares (in thousands) Amount Additional Paid-in-capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity Thirty-nine weeks ended September 24, 2022 Balance at December 25, 2021 193,995 $ 20 $ 1,387,410 $ (210,181) $ (27,154) $ 1,150,095 Net income (loss) — — — (1,887) — (1,887) Stock option activity, stock awards and employee stock purchase plan 53 — 6,018 — — 6,018 Hedging activity — — — — 8,413 8,413 Change in cumulative foreign currency translation adjustment — — — — 3,735 3,735 Balance at March 26, 2022 194,048 $ 20 $ 1,393,428 $ (212,068) $ (15,006) $ 1,166,374 Net income (loss) — — — 8,816 — 8,816 Stock option activity, stock awards and employee stock purchase plan 223 — 3,435 — — 3,435 Hedging activity — — — — 3,109 3,109 Change in cumulative foreign currency translation adjustment — — — — (4,646) (4,646) Balance at June 25, 2022 194,271 $ 20 $ 1,396,863 $ (203,252) $ (16,543) $ 1,177,088 Net income (loss) — — — (9,466) — (9,466) Stock option activity, stock awards and employee stock purchase plan 124 — 3,221 — — 3,221 Hedging Activity — — — — 3,811 3,811 Change in cumulative foreign currency translation adjustment — — — — (7,834) (7,834) Balance at September 24, 2022 194,395 $ 20 $ 1,400,084 $ (212,718) $ (20,566) $ 1,166,820 Thirty-nine weeks ended September 25, 2021 Balance at December 26, 2020 90,935 $ 9 $ 565,815 $ (171,849) $ (29,388) $ 364,587 Net income (loss) — — — (8,970) — (8,970) Stock option activity, stock awards and employee stock purchase plan 268 — 3,384 — — 3,384 Change in cumulative foreign currency translation adjustment — — — — 2,473 2,473 Balance at March 27, 2021 91,203 $ 9 $ 569,199 $ (180,819) $ (26,915) $ 361,474 Net income (loss) — — — (3,385) — (3,385) Stock option activity, stock awards and employee stock purchase plan 18 — 1,914 — — 1,914 Change in cumulative foreign currency translation adjustment — — — — 3,842 3,842 Balance at June 26, 2021 91,221 $ 9 $ 571,113 $ (184,204) $ (23,073) $ 363,845 Net income (loss) — — — (32,524) — (32,524) Stock option activity, stock awards and employee stock purchase plan — — 5,280 — — 5,280 Vesting of restricted shares 88 — — — — — Proceeds from exercise of stock options — — — — — — Recapitalization of Landcadia, net of issuance costs and fair value of assets and liabilities acquired 58,672 6 378,016 — — 378,022 Shares issued to PIPE, net of issuance costs 37,500 4 363,297 — — 363,301 Hedging activity — — — — 246 246 Change in cumulative foreign currency translation adjustment — — — — (4,740) (4,740) Balance at September 25, 2021 187,481 $ 19 $ 1,317,706 $ (216,728) $ (27,567) $ 1,073,430 financial statements.Landcadia Holdings III, Inc.Notes toCondensed Consolidated Financial Statements1.Nature of Business and Subsequent EventBusinessLandcadia Holdings III, Inc., (the “Company,” “we,” “us” or “our”), was formed as Automalyst LLC, a Delaware limited liability company on March 13, 2018 and converted into a Delaware corporation on August 24, 2020.The Company has not had any significant operations to date. The Company was formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not yet identified a Business Combination for these purposes. There is no assurance that the Company’s plans to consummate a Business Combination will be successful or successful within the target business acquisition period.All activity through September 30, 2020 relates to the Company’s formation and initial public offeringStatements.part with proceeds from its $500,000,000 Public Offering and a $12,000,000 private placement (the “Private Placement”) of private placement warrants (the “Sponsor Warrants”), see Notes 4 and 5. The registration statement for the Public Offering was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on October 8, 2020. The Company consummated the Public Offering of 50,000,000 units (the “Units”) at $10.00 per Unit on October 14, 2020, generating gross proceeds of $500,000,000. Simultaneously with the closing of the Public Offering, the Company consummated the Private Placement of an aggregate of 8,000,000 Sponsor Warrants at a price of $1.50 per Sponsor Warrant, generating proceeds of $12,000,000. Upon the closing of the Public Offering and Private Placement on October 14, 2020, $500,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Public Offering and the Private Placement was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”). The Company granted the underwriters a 45-day option from the date of the prospectus, October 8, 2020, to purchase additional units. If the over-allotment is exercised in full, proceeds from the Public Offering and Private Placement will be $575,000,000 and $13,500,000, respectively.We have evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial statements were issued. The Company did not identify any subsequent events that would have required adjustment to or disclosure in the financial statements, other than those included herein.Trust AccountThe proceeds held in the Trust Account can only be invested in permitted United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.The Company’s second amended and restated certificate of incorporation (the “Charter”) provides that, other than the withdrawal of interest to pay tax obligations (less up to $100,000 interest to pay dissolution expenses), none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the Business Combination; (ii) the redemption of any shares of Class A common stock included in the Units sold in the Public Offering (“Public Shares”) properly submitted in connection with a stockholder vote to amend the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete the Business Combination within 24 months from the closing of the Public Offering (October 14, 2022) or to provide for redemption in connection with a Business Combination; or (iii) the redemption of the Public Shares if the Company is unable to complete the Business Combination within 24 months from the closing of the Public Offering, subject to applicable law.Initial Business CombinationThe Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and private placement of the Sponsor Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one initial Business Combination having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the Company’s signing a definitive agreement in connection with an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to registered as an investment company under the Investment Company Act.The Sponsors and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Class B shares (“Founder Shares”)| and Public Shares in connection with the completion of the Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within 24 months from the closing of the Public Offering or to provide for redemption in connection with a Business Combination and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Public Offering, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete a Business Combination within the prescribed time frame; and (iv) vote any Founder Shares held by them and any Public Shares purchased during or after the Public Offering (including in open market and privately-negotiated transactions) in favor of the Business Combination.The Company, after signing a definitive agreement for the Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the Trust Account and not previously released to the Company to pay its taxes, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to commencement of the tender offer, including interest earned on the Trust Account and not previously released to the Company to pay its taxes. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval. If the Company seeks stockholder approval, it will complete the Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of the Public Shares and the related Business Combination, and instead may search for an alternate Business Combination.Notwithstanding the foregoing redemption rights, if the Company seeks stockholder approval of the Business Combination and it does not conduct redemptions in connection with the Business Combination pursuant to the tender offer rules, the Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the Public Offering, without the Company’s prior consent.The Company will have 24 months from the closing of the Public Offering to complete the Business Combination. If the Company does not complete the Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the Public Shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims to creditors and the requirements of other applicable law. The Sponsors and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete its Business Combination within 24 months of the closing of the Public Offering; however, if the Sponsors, officers and directors acquire Public Shares in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares the Company does not complete the Business Combination within the required time period. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Public Offering.Pursuant to the letter agreement referenced above, the Sponsors, officers and directors agreed that, if the Company submits the Business Combination to the Company’s public stockholders for a vote, such parties will vote their Founder Shares and any Public Shares in favor of the Business Combination.Fiscal Year EndThe Company has a December 31 fiscal year-end.2.Summary of Significant Accounting PoliciesPresentationOurPresentation:preparedeliminated.conformityaccordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and applicable rules of AmericaRegulation S-X. Accordingly, they do not include all information or footnotes required by U.S. generally accepted accounting principles for complete financial statements. Operating results for the thirteen and thirty-nine weeks ended September 24, 2022 do not necessarily indicate the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements for the year ended December 25, 2021 and notes thereto included in the Form 10-K filed on March 16, 2022 with the Securities and Exchange Commission (“GAAP”SEC”).rules and regulationsterms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, the "Merger Agreement”) by and among Landcadia, Helios Sun Merger Sub, a wholly-owned subsidiary of Landcadia (“Merger Sub”), HMAN Group Holdings Inc., a Delaware corporation (“Hillman Holdco”) and CCMP Sellers’ Representative, LLC, a Delaware Limited Liability Company in its capacity as the Stockholder Representative thereunder (the “Stockholder Representative”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Hillman Holdco with Hillman Holdco surviving the merger as a wholly owned subsidiary of New Hillman, which was renamed “Hillman Solutions Corp.” (the “Merger” and together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to New Hillman following the closing date and Old Hillman prior to the closing date. See Note 3 - Merger Agreement for more information.these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the datedates of the financial statements and the reported amounts of revenuerevenues and expenses duringfor the reporting period.periods. Actual results couldmay differ from thosethese estimates.Emerging Growth Company“emerging growth company,” as definedamount that reflects the consideration the Company expects to be entitled to in Section 2(a)exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.Securities Actrelated sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of 1933 (as amended, the “Securities Act”),cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales.Thirteen weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Fastening and Hardware $ 210,853 $ — $ 39,578 $ 250,431 Personal Protective 61,000 — 322 61,322 Keys and Key Accessories — 51,688 1,145 52,833 Engraving and Resharp — 13,944 8 13,952 Consolidated $ 271,853 $ 65,632 $ 41,053 $ 378,538 Thirteen weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Fastening and Hardware $ 189,935 $ — $ 34,648 $ 224,583 Personal Protective 71,521 — 79 71,600 Keys and Key Accessories — 52,586 778 53,364 Engraving and Resharp — 14,913 20 14,933 Consolidated $ 261,456 $ 67,499 $ 35,525 $ 364,480 Thirty-nine weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Fastening and Hardware $ 625,537 $ — $ 121,710 $ 747,247 Personal Protective 192,573 — 984 193,557 Keys and Key Accessories — 149,901 2,611 152,512 Engraving and Resharp — 42,315 34 42,349 Consolidated $ 818,110 $ 192,216 $ 125,339 $ 1,135,665 Thirty-nine weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Fastening and Hardware $ 557,745 $ — $ 114,565 $ 672,310 Personal Protective 217,769 — 270 218,039 Keys and Key Accessories — 144,969 1,345 146,314 Engraving and Resharp — 44,760 53 44,813 Consolidated $ 775,514 $ 189,729 $ 116,233 $ 1,081,476 Thirteen weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue United States $ 265,446 $ 64,372 $ — $ 329,818 Canada 1,941 1,260 41,053 44,254 Mexico 4,466 — — 4,466 Consolidated $ 271,853 $ 65,632 $ 41,053 $ 378,538 Thirteen weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue United States $ 256,407 $ 66,563 $ — $ 322,970 Canada 1,866 936 35,525 38,327 Mexico 3,183 — — 3,183 Consolidated $ 261,456 $ 67,499 $ 35,525 $ 364,480 Thirty-nine weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue United States $ 800,925 $ 189,066 $ — $ 989,991 Canada 5,794 3,150 125,339 134,283 Mexico 11,391 — — 11,391 Consolidated $ 818,110 $ 192,216 $ 125,339 $ 1,135,665 Thirty-nine weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue United States $ 760,946 $ 187,602 $ — $ 948,548 Canada 5,145 2,127 116,233 123,505 Mexico 9,423 — — 9,423 Consolidated $ 775,514 $ 189,729 $ 116,233 $ 1,081,476 modifiedgloves and eye-wear, as well as in-store merchandising services for the related product category.Jumpstart Our Business Startups Actcombined entity prior to the Merger are presented as those of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to complyOld Hillman with the independent registered public accounting firm attestation requirements of Section 404exception of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reportsshares and proxy statements, and exemptions frompar value of equity recast to reflect the requirements of holdingexchange ratio on the Closing Date, adjusted on a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.Further, section 102(b)(1)retroactive basis. A summary of the JOBS Act exempts emerging growth companiesimpact of the reverse recapitalization on the cash, cash equivalents and restricted cash, change in net assets and the change in common shares is included in the tables below.$ 479,602 375,000 (36,140) Net change in cash and cash equivalents as a result of recapitalization $ 818,462 132 (81) (77,190) Change in net assets as a result of recapitalization $ 741,323 91,220,901 58,672,000 37,500,000 Common Shares outstanding immediately after the Business Combination 187,392,901 being required to comply with new or revised financial accounting standards until private companies (that is, those that have not hadLandcadia's balance sheet was a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to complynon-cash financingnew or revised financial accounting standards. The JOBS Act provides that a company can electBusiness Combination, Landcadia entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to opt outwhich it issued 37,500,000 shares of common stock at $10.00 per share (the “PIPE Shares”) for an aggregate purchase price of $375,000 (the “PIPE Financing”), which closed simultaneously with the consummation of the extended transition period and complyBusiness Combination.requirements that applyBusiness Combination, the Company incurred $36,140 of transaction costs, net of tax, consisting of underwriting, legal and other professional fees which were recorded as accumulated deficit as a reduction of proceeds.non-emerging growth companies but any suchthe sponsors in a private placement simultaneously with the closing of the Landcadia IPO, which are exercisable for an election to opt out is irrevocable. aggregate of 8,000,000 shares of common stock at a purchase price of $11.50 per share (the “Private Placement Warrants”).has elected notissued 91,220,901 common shares in exchange for 553,439 Old Hillman common shares resulting in an exchange ratio of 164.83. This exchange ratio was applied to opt outOld Hillman's common shares which further impacted common stock held at par value and additional paid in capital, as well as the calculation of such extended transition period which means that when a standard isweighted average shares outstanding and loss per common share.or revised50,000,000 shares to the public shareholders and it has different application dates for public or private companies,8,672,000 shares to the Company, as an emerging growth company, can adopt the new or revised standardSPAC sponsor shareholders at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.Cash and Cash EquivalentsThe Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30,Closing Date. and December 31, 2019.Deferred Offering CostsThe Company complies with the requirements of the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which(“("ASC") 805 to require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date. This update is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to 1) the recognition of an acquired contract liability, and 2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendment is effective on fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact provided by the new standard.ASC”issued ASU 2022-01, which clarifies the guidance in ASC Topic 815, Derivatives and Hedging on fair value hedge accounting of interest rate risk for portfolios of financial assets. The ASU amends the guidance in ASU 2017-12 which established the "last-of-layer" method for making the fair value hedge accounting for these portfolios more accessible. ASU 2022-01 renames that method the "portfolio layer'' method. Under current guidance, the last-of-layer method enables an entity to apply fair value hedging to a stated amount of a closed portfolio of prepayable financial assets without having to consider prepayment risk or credit risk when measuring those assets. ASU 2022-01 expands the scope of this guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and non-prepayable financial assets. The amendment is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact provided by the new standard.340-10-S99-1to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35,000 of incremental term loan funds to be used to finance the acquisition. OZCO has business operations throughout North America and SEC Staff Accounting Bulletin Topic 5A-“Expensesits financial results reside in the Company's Hardware and Protective Solutions reportable segment.Accounts receivable $ 1,341 Inventory 3,435 Other current assets 26 Property and equipment 595 Goodwill 9,093 Customer relationships 23,500 Trade names 2,600 Technology 4,000 Total assets acquired 44,590 Less: Liabilities assumed (4,756) Total purchase price $ 39,834 Goodwill at Dispositions Goodwill at December 25, 2021 September 24, 2022 Hardware and Protective Solutions $ 574,698 $ (158) $ — $ 72 $ 574,612 Robotics and Digital Solutions 220,936 — — — 220,936 Canada 29,737 — — (1,659) 28,078 Total $ 825,371 $ (158) $ — $ (1,587) $ 823,626 30, 2020,24, 2022 and December 25, 2021 consist of costs incurredthe following: Estimated
Useful Life
(Years)September 24, 2022 December 25, 2021 Customer relationships 13 - 20 $ 963,418 $ 965,054 Trademarks - Indefinite Indefinite 85,242 85,591 Trademarks - Other 7 - 15 31,387 29,000 Technology and patents 8 - 12 67,717 67,750 Intangible assets, gross 1,147,764 1,147,395 Less: Accumulated amortization 398,638 352,695 Other intangibles, net $ 749,126 $ 794,700 legal, accounting,intangible assets, including the adjustments resulting from fluctuations in foreign currency exchange rates for the thirteen and other costs incurredthirty-nine weeks ended September 24, 2022 was $15,557 and $46,644, respectively. Amortization expense for the thirteen and thirty-nine weeks ended September 25, 2021 was $15,504 and $45,827, respectively.connection with the formation and preparationfourth quarter. Impairment is also tested when events or changes in circumstances indicate that the carrying values of the Public Offering. These costs were charged to capital uponassets may be greater than their fair values. During the closing ofthirteen and thirty-nine weeks ended September 24, 2022 and the Public Offering.Accounts Payablethirteen and Accrued LiabilitiesAccounts payable and accrued liabilities are $215,450 as ofthirty-nine weeks ended September 30, 2020, and primarily consist of costs incurred for the formation and preparation of the Public Offering with corresponding amounts charged to deferred offering costs.Earnings Per ShareEarnings per share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period, excluding shares of common stock subject to forfeiture by the Sponsors. In accordance with FASB ASC 260, “Earnings Per Share”,25, 2021, the Company did not identify any triggering events that would result in an impairment analysis outside of the annual assessment.dilutive warrants,impact on its ongoing business operations.or other contracts that could, potentially, be exercised or converted intoof Hillman held by any of them during the lock-up period described therein and were granted certain registration rights with respect to their respective shares of Hillman common stock, as a result, diluted earnings per share isin each case, on the same as basic earnings per share for the periods presented.Income TaxesThe Company complies with the accountingterms and reporting requirements of FASB ASC, 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicablesubject to the periodsconditions therein.whichnet sales, consist primarily of the differences are expectedsale of excess inventory to affect taxable income. Valuation allowances are established, when necessary,Ollie's Bargain Outlet Holdings, Inc. ("Ollie's"). John Swygert, President and Chief Executive Officer of Ollie's, is a member of our Board of Directors. Sales to reduce deferred tax assets torelated parties were $497 in the amount expected to be realized.unrecognizedsuch sales made in the thirteen weeks ended September 24, 2022 and throughout 2021.benefits as ofrate on a year-to-date basis in each interim period. These rates are derived, in part, from expected annual pre-tax income or loss. In the thirteen and thirty-nine weeks ended September 30, 2020. FASB ASC 740 prescribes a recognition threshold24, 2022 and a measurement attributethe thirteen and thirty-nine weeks ended September 25, 2021, the Company applied an estimated annual effective tax rate based on expected annual pre-tax income to the interim period pre-tax loss to calculate the income tax benefit.financial statement recognitionthirteen weeks ended September 24, 2022 of $5,679 and measurementan income tax benefit for the thirty-nine weeks ended September 24, 2022 of $147. The effective tax positions taken or expected to be takenrate for the thirteen and thirty-nine weeks ended September 24, 2022 was primarily the result of an estimated increase in Global intangible low-taxed income ("GILTI") from the Company's Canadian operations. The effective tax rate also includes the impact from non-deductible stock compensation, state and foreign income taxes, and the discrete income tax benefit for the Pennsylvania income tax rate change resulting in a reduction to the Company's deferred taxes.return. For those benefits to be recognized, a tax position must be more-likely-than not to be sustained upon examination by taxing authorities.rate was 15.1% and 19.7%, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits asrecorded an income tax expense. No amounts were accruedbenefit for the paymentthirteen weeks ended September 25, 2021 of interest$5,798, and penalties at September 30, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject toan income tax examinations by major taxing authorities since inception. There was no income tax provisionbenefit for the periodthirty-nine weeks ended September 30, 2020.As25, 2021 of December 31, 2019$11,023. The effective tax rate for the Companythirteen and thirty-nine weeks ended September 25, 2021 was taxed as a limited liability company, therefore all tax implications were the responsibilityresult of its member.Recent Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect onan estimated increase in GILTI from the Company’s financial statements.3.Stockholders’ EquityOn March 13, 2018, JFG, through a subsidiary, purchased a 100% of the membership interest in the Company for $1,000. On August 24, 2020, TJF purchased a 51.7% membership interest in the Company for $1,070. Simultaneously, the Company converted from a limited liability company to a corporationCompany's Canadian operations, state and its previously outstanding membership interests converted into shares of Class B common stock. The total number of authorized shares of all classes of capitalforeign income taxes, non-deductible transaction expenses, and non-deductible stock is 401,000,000, of which 380,000,000 shares are Class A shares at par value $0.0001 per share; 20,000,000 shares are Class B shares at par value $0.0001 per share (the “Founder Shares”); and 1,000,000 shares are preferred stock at par value $0.0001 per share. The Sponsors held an aggregate of 11,500,000 Class B shares based on the proportional interest in the Company. Further, on September 16, 2020, we conducted a 1:1.25 stock split of the Founder Shares so that a total of 14,375,000 Founder Shares were issued and outstanding. As of September 16, 2020, JFG owned 6,943,125 Founder Shares and TJF owned 7,431,875 Founder Shares. An aggregate of 1,875,000 Founder Shares are subject to forfeiture to the extent the underwriters do not exercise their over-allotments option. The financial statements reflect the changes in stock retroactively for all periods presented.Following these transactions, the Company had $2,070 of invested capital, or $0.0001 per share. For further information on the Founder Shares, see Note 4.4.Public OfferingPublic UnitsIn the Public Offering, the Company sold 50,000,000 Units at a price of $10.00 per Unit (the “Public Units”). compensation. Unit consists of one share of the Company’s Class A common stock, $0.0001 par value and one-third of one redeemable warrant (each whole warrant is a “Public Warrant”). Underentitled the terms of the warrant agreement, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act no later than 15 business days following the completion of the Business Combination covering the shares of Class A common stock issuable upon exercise of the Public Warrants, to use its best efforts to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the Public Warrants expire or are redeemed. If a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective by the 60th business day after the closing of the Business Combination, warrantholders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement.Each Public Warrant entitles the holder thereof to purchase one share of Class A common stock at aan exercise price of $11.50 per share and a redemption price of $.10 a share. Each As of the date of the merger, as discussed in Note 3 - Merger Agreement, there were 24,666,628 warrants outstanding consisting of 16,666,628 public warrants, which were included in the units issued in Landcadia's initial public offering ("Public Warrant will becomeWarrants"), and 8,000,000 private placement warrants, which were included in the units issued in the concurrent private placement at the time of Landcadia's initial public offering ("Private Placement Warrants" and, collectively with the Public Warrants, the "Warrants"). The Public and Private Placement Warrants were accounted for as liabilities and are presented as warrant liabilities on the Consolidated Balance Sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within loss on change in fair value of warrant liabilities in the Consolidated Statements of Comprehensive Loss. The fair market value of the warranty liabilities were recorded as $77,190 and $81,180 as of the date of the Merger and the third quarter ending September 25,2021, respectively, on the Consolidated Balance Sheets. The change in fair market value of the warranty liability was related to a $3,990 loss in the third quarter of 2021. The Public Warrants were considered part of Level 1 of the fair value hierarchy, as those securities are traded on an active public market. At the Closing Date, the Company valued the Private Warrants using Level 3 of the fair value hierarchy. The Private Warrants were valued using a Modified Black Scholes Model, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants are the share price of the Company's common stock, the risk free rate, and the expected volatility of the Company’s common stock. However, ifdoes not complete the Business Combination on or prior to the 24-month period allotted to complete the Business Combination, theannounced that it would redeem all of its outstanding warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Class A common stock to the holder upon exercise of Public Warrants issued in connection with the Units during the exercise period, there will be no net cash settlement of these Public Warrants and the Public Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the warrant agreement. Once the Public Warrants become exercisable, the Company may call the warrants for redemption: (i) in whole and not in part; (ii) at a price of $0.01 per warrant; (iii) upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”“Public Warrants”) to each warrant holder; and (iv) if, and only if, the reported closing price of the Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.Underwriting CommissionsIn connection with the Public Offering, the Company paid an underwriting discount of $10,000,000 ($0.20 per Unit sold) to the underwriters on October 14, 2020, with an additional fee (“Deferred Discount”) of $17,500,000 ($0.35 per Unit sold) payable upon the Company’s completion of the Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its Business Combination. See Note 5 for further information on underwriting commissions.5.Commitments and Related Party TransactionsOver-allotmentIn connection with the Public Offering, the Company granted the underwriters a 45-day option to purchase up to 7,500,000 additional Units to cover any over-allotment, at the initial public offering price less the underwriting discounts and commissions. If the over-allotment is exercised, the Company will increase the Public Units, Sponsor Warrants, underwriting commissions and Deferred Discount by the proportional amount of Units granted.Founder SharesThe Founder Shares are identical to the Public Shares except that the Founder Shares are subject to certain transfer restrictions and the holders of the Founder Shares will have the right to elect all of the Company’s directors prior to the Business Combination. The Founder Shares will automatically convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights. The initial stockholders collectively own 20% of the Company’s issued and outstanding shares after the Public Offering. To the extent that the over-allotment option is not exercised in full, the Sponsors will forfeit their pro rata share of 1,875,000 Founder Shares.The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until one year after the completion of the Business Combination, or earlier if, subsequent to the Business Combination, (i) the closing price of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), that were issued under the Amended and Restated Warrant Agreement (the “Warrant Agreement”), dated November 13, 2020, by and between the Company and Continental Stock Transfer & Trust Company (“CST”), as warrant agent (the “Warrant Agent”) as part of the units sold in the Company’s initial public offering (the “IPO”) and that remain outstanding at 5:00 p.m. New York City time on December 22, 2021 (the “Redemption Date”) for a redemption price of $0.10 per Public Warrant. In addition, the Company would redeem all of its outstanding warrants to purchase Common Stock that were issued under the Warrant Agreement in a private placement simultaneously with the IPO (the “Private Warrants” and, together with the Public Warrants, the “Warrants”) on the same terms as the outstanding Public Warrants.$12.00$10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) foron any 20twenty trading days within any 30-tradingthirty-day trading period ending on the third trading day period commencingprior to the date on which a notice of redemption is given and (ii) if the Reference Value is less than $18.00 per share, the Private Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants. At the direction of the Company, the Warrant Agent delivered a notice of redemption to each of the registered holders of the outstanding Warrants.As the Reference Value was less than $18.00 per share, payment upon exercise of the Warrants was made either (i) in cash, at least 150an exercise price of $11.50 per share of Common Stock or (ii) on a “cashless basis” in which the exercising holder received a number of shares of Common Stock determined in accordance with the terms of the Warrant Agreement and based on the Redemption Date and the volume weighted average price (the “Fair Market Value”) of the Common Stock during the 10 trading days after the Business Combination or (ii)immediately following the date on which the notice of redemption was sent to holders of Warrants. The Company completesprovided holders the Fair Market Value no later than one business day after such 10-trading day period ends. In no event did the number of shares of Common Stock issued in connection with an exercise on a liquidation, merger, stock exchangecashless basis exceed 0.361 shares of Common Stock per Warrant. If any holder of Warrants would, after taking into account all of such holder’s Warrants exercised at one time, have been entitled to receive a fractional interest in a share of Common Stock, the number of shares the holder was entitled to receive was rounded down to the nearest whole number of shares. Any WarrantsPublic Warrants Private Warrants Total Beginning balance as of July, 14 2021 16,666,628 8,000,000 24,666,628 Shares issued for cash exercises (666) — (666) Shares issued for cashless exercises (16,199,169) (8,000,000) (24,199,169) Shares redeemed by the Company (466,793) — (466,793) Ending balance as of December 25, 2021 — — — September 24, 2022 December 25, 2021 Revolving loans $ 100,000 $ 93,000 Senior term loan, due 2028 844,618 851,000 Finance leases 4,826 1,782 1,809 — 951,253 945,782 Unamortized discount on Senior term loan (5,246) (5,948) Current portion of long-term debt and financing lease liabilities (12,805) (11,404) Deferred finance fees (19,387) (21,899) Total long-term debt, net $ 913,815 $ 906,531 similar transaction afterparties thereto (the “ABL Credit Agreement”), increasing the Business Combination that resultsaggregate commitments thereunder to $375,000 and extended the maturity. Portions of the ABL Agreement are separately available for borrowing by the Company's United States subsidiary and Canadian subsidiary for $325,000 and $50,000, respectively. The interest rate for the ABL Revolver is, at the discretion of the Company, adjusted SOFR (or a Canadian banker’s acceptance rate in the case of Canadian Dollar loans) plus a margin varying from 1.25% to 1.75% per annum based on availability or an alternate base rate (or a Canadian prime rate or alternate base rate in the case of Canadian Dollar loans) plus a margin varying from 0.25% to 0.75% per annum based on availability. The stated maturity date of the revolving credit commitments under the ABL Credit Agreement is July 29, 2027. The loans and other amounts outstanding under the ABL Credit Agreement and related documents are guaranteed by The Hillman Companies, Inc., a wholly‑owned subsidiary of the Company, and, subject to certain exceptions, the Borrower’s wholly-owned domestic subsidiaries and are secured by substantially all of the Borrower’s and the guarantors’ assets plus, solely in the case of the Canadian Borrower, its and its wholly-owned Canadian subsidiary’s assets, which has guaranteed by the Canadian portion under the ABL Credit Agreement.Loss (gain) on extinguishment of debt Term Credit Agreement $ 20,243 ABL Revolver 288 6.375% Senior Notes, due 2022 1,083 11.6% Junior Subordinated Debentures (13,603) Interest rate swaps 59 Total $ 8,070 stockholders havingfixed rate Senior Notes and Junior Subordinated Debentures is included in Note 17 - Fair Value Measurements.their sharesfor consideration. Control over the use of the identified asset means the lessee has both 1) the right to obtain substantially all of the economic benefits from the use of the asset and 2) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2033. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees, nor material restrictive covenants.Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Operating lease costs $ 5,082 $ 5,482 $ 15,029 $ 15,724 Short term lease costs 1,563 834 5,891 2,820 Variable lease costs 529 576 1,066 1,334 Finance lease costs: Amortization of right of use assets 485 230 1,082 668 Interest on lease liabilities 34 29 87 96 September 24, 2022 December 25, 2021 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average remaining lease term 6.30 2.82 6.60 2.60 Weighted average discount rate 7.35% 2.84% 7.88% 5.59% September 24, 2022 December 25, 2021 Finance lease assets, net, included in property plant and equipment $ 4,757 $ 1,768 Current portion of long-term debt 1,818 767 Long-term debt, less current portion 3,008 1,015 Total principal payable on finance leases $ 4,826 $ 1,782 Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 14,497 $ 14,854 Operating cash outflow from finance leases 84 99 Financing cash outflow from finance leases 998 697 Operating Leases Finance Leases Less than one year $ 18,489 $ 1,934 1 to 2 years 17,227 1,683 2 to 3 years 16,638 1,095 3 to 4 years 15,871 266 4 to 5 years 14,287 17 After 5 years 23,361 1 Total future minimum rental commitments 105,873 4,996 Less - amounts representing interest (20,125) (170) Present value of lease liabilities $ 85,748 $ 4,826 stock for cash, securities or other property (the ‘‘Lock Up Period’’).Founder Shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummationis detail of the Business Combinationchanges in the Company's accumulated other comprehensive loss from December 26, 2020 to September 24, 2022, including the effect of significant reclassifications out of accumulated other comprehensive income (loss) (net of tax):Accumulated Other Comprehensive Loss Balance at December 26, 2020 $ (29,388) Other comprehensive income before reclassifications 1,849 Amounts reclassified from other comprehensive income 385 2,234 Balance at December 25, 2021 (27,154) Other comprehensive income before reclassifications 7,882 (1,294) Net current period other comprehensive income 6,588 Balance at September 24, 2022 $ (20,566) one-for-one basis, subjectgain of $2,982, reclassified a loss of $385 and a net of tax of $850 into other comprehensive income due to adjustmenthedging activities. The amounts reclassified out of other comprehensive income were recorded as interest expense. See Note 16 - Derivatives and Hedging for stock splits, stock dividends, reorganizations, recapitalizationsadditional information on the interest rate swaps.like,interest rate swaps. subject to further adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the Business Combination described in Note 3 - Merger Agreement, Landcadia Holdings III, Inc. (“Landcadia”) became the direct parent company of Old Hillman and was renamed Hillman Solutions Corp. (“New Hillman”). Shares of Class A common stock of New Hillman (“New Hillman Shares”) are publicly traded on the Nasdaq Stock Market. Consequently, the outstanding stock options issued under the 2014 Equity Incentive Plan (the “Prior Plan”) prior to the Merger were converted and modified to purchase New Hillman Shares.Class Astock underlying awards under the 2014 Equity Incentive Plan that on or after the Effective Date expire or become unexercisable, or are forfeited, cancelled or otherwise terminated, in each case, without delivery of shares or cash therefore, and would have become available again for grant under the Prior Plan in accordance with its terms (not to exceed 14,523,510 shares of common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, 20%aggregate).numbercombined voting power or value of all sharesclasses of Class A common stock outstanding after such conversion (after giving effectof the Company. The first option period began on January 1, 2022 and the first purchase was made in April of 2022.any redemptions of shares of Class A common stock by public stockholders), including the totalESPP.Class A common stock issued, or deemed issued or issuable upon conversion or exerciseoutstanding during the period. Diluted earnings per share include the dilutive effect of any equity-linked securities or rights issued or deemed issued, bystock options, restricted stock awards and units, and warrants. The following is a reconciliation of the basic and diluted earnings per share ("EPS") computations for both the numerator and denominator (in thousands, except per share data):Thirteen weeks ended September 24, 2022 Thirty-nine weeks ended September 24, 2022 Earnings
(Numerator)Shares
(Denominator)Per Share
AmountEarnings
(Numerator)Shares
(Denominator)Per Share
AmountNet loss $ (9,466) 194,370 $ (0.05) $ (2,537) 194,171 $ (0.01) Dilutive effect of stock options and awards — — — — — — Net income per diluted common share $ (9,466) 194,370 $ (0.05) $ (2,537) 194,171 $ (0.01) Thirteen weeks ended September 25, 2021 Thirty-nine weeks ended September 25, 2021 Earnings
(Numerator)Shares
(Denominator)Per Share
AmountEarnings
(Numerator)Shares
(Denominator)Per Share
AmountNet loss $ (32,524) 168,440 $ (0.19) $ (44,879) 116,945 $ (0.38) Dilutive effect of stock options and awards — — — — — — Dilutive effect of warrants — — — — — — Net loss per diluted common share $ (32,524) 168,440 $ (0.19) $ (44,879) 116,945 $ (0.38) relationthe same period during which the hedged transactions affect earnings.Asset Derivatives Liability Derivatives Balance Sheet
LocationFair Value Fair Value Balance Sheet
LocationFair Value Fair Value Derivatives designated as hedging instruments: 2021 Swap 1 Other current assets/other assets $ 9,426 $ 1,513 Other accrued expenses $ — $ (170) 2021 Swap 2 Other current assets/other assets 14,135 2,250 Other accrued liabilities — (270) 2021 Swap 3 Other current/other non-current assets 310 59 Other accrued liabilities/other non-current liabilities (471) (1,880) Total hedging instruments $ 23,871 $ 3,822 $ (471) $ (2,320) consummationfair value of derivative instruments is included in Note 17 - Fair Value Measurements.initial business combination, excludingfollowing three categories:Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. As of September 24, 2022 Level 1 Level 2 Level 3 Total Trading securities $ 1,167 $ — $ — $ 1,167 Interest rate swaps — 23,400 — 23,400 Contingent consideration payable — — (9,305) (9,305) As of December 25, 2021 Level 1 Level 2 Level 3 Total Trading securities $ 1,686 $ — $ — $ 1,686 Interest rate swaps — 1,502 — 1,502 Contingent consideration payable — — (12,347) (12,347) Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Revenues Hardware and Protective Solutions $ 271,853 $ 261,456 $ 818,110 $ 775,514 Robotics and Digital Solutions 65,632 67,499 192,216 189,729 Canada 41,053 35,525 125,339 116,233 Total revenues $ 378,538 $ 364,480 $ 1,135,665 $ 1,081,476 Segment income (loss) from operations Hardware and Protective Solutions $ 7,113 $ (24,901) $ 15,255 $ (8,856) Robotics and Digital Solutions (14,094) 11,158 4,198 17,858 Canada 6,532 448 16,720 2,992 Total income (loss) from operations $ (449) $ (13,295) $ 36,173 $ 11,994 shareslegal proceedings that may be instituted against the Company (9) adverse changes in currency exchange rates; (10) the impact of Class A common stockCOVID-19 on the Company’s business; or equity-linked securities exercisable for(11) regulatory changes and potential legislation that could adversely impact financial results. The foregoing list of factors is not exclusive, and readers should also refer to those risks that are included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Annual Report on Form 10-K filed on March 16, 2022. Given these uncertainties, current or convertible into shares of Class A common stock issued,prospective investors are cautioned not to place undue reliance on any such forward looking statements.be issued,release publicly any updates or revisions to any sellerforward-looking statements in this communication to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.and any private placement-equivalent warrants issueddescribed herein, “New Hillman”), a special purpose acquisition company ("SPAC") consummated the previously announced Business Combination (the “Closing”) pursuant to the Sponsors, officers or directors upon conversionterms of working capital loans; provided that such conversionthe Agreement and Plan of Founder Shares will never occurMerger, dated as of January 24, 2021 (as amended on a less than one-for-one basis.March 12, 2021, the "Merger Agreement”). Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to New Hillman following the closing date and Old Hillman prior to the closing date. See Note 1 - Basis of Presentation of the Notes to Condensed Consolidated Financial Statements for additional information.Sponsor Warrantsconjunctionconnection with the Public Offering,Closing, the Sponsors purchasedCompany entered into a new credit agreement with Jefferies Finance LLC, as administrative agent, and the lenders and other parties thereto (the “Term Credit Agreement”), which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn). The Company also entered into an amendment to their existing asset-based revolving credit agreement (the “ABL Amendment”) with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto (the “ABL Credit Agreement”), increasing the aggregate of 8,000,000 Sponsor Warrants at a price of $1.50 per warrant ($12,000,000 incommitments thereunder to $250.0 million, extended the aggregate) inmaturity and conformed certain provisions to the Private Placement. A portionTerm Credit Agreement. The proceeds of the purchase pricefunded term loans under the Term Credit Agreement and revolving credit loans under the ABL Credit Agreement were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of the Sponsor Warrants was added to the proceeds from the Public Offering to be heldMay 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in the Trust Account such that at closing of the Public Offering, $500,000,000 was placed in the Trust Account.Each Sponsor Warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share.The Sponsor Warrants (including the Class A common stock issuable upon exercise of the Sponsor Warrants) are not transferable, assignable or salable until 30 days after the completionfull senior notes due July 15, 2022 (the “6.375% Senior Notes”).they are non-redeemable so longthe refinancing described above, on July 13, 2021, the Company delivered a notice to redeem in full 11.6% Junior Subordinated Debentures due September 30, 2027 (the “Junior Subordinated Debentures”) issued under the Indenture, dated as they are heldof September 5, 1997 (as amended and supplemented, the “Debentures Indenture”), between The Hillman Companies and The Bank of New York Mellon, a New York banking corporation, as Trustee (the “Trustee”) and deposited an amount with the Trustee sufficient to satisfy and discharge the Debentures Indenture, which is no longer in effect. Notices to redeem 4,217,837 trust preferred securities (the “Trust Preferred Securities”) issued in a public offering by the initial purchasersHillman Group Capital Trust ("Trust") and 130,449 of trust common securities (the “Trust Common Securities”) issued by the Trust to Hillman Companies were also delivered on July 13, 2021. Upon the payment of the Sponsor Warrants or their permitted transferees. Ifredemption price for the Sponsor Warrants are held by someoneDebentures on August 12, 2021, the Trust redeemed the Trust Preferred Securities and the Trust Common Securities, which as of August 12, 2021 was no longer be deemed to be outstanding. The last day of trading for the Trust Preferred Securities on the New York Stock Exchange (the “NYSE”) was August 11, 2021 and the Company voluntarily delisted the Trust Preferred Securities from the NYSE.thanparties thereto (the “ABL Credit Agreement”), increasing the initial purchasersaggregate commitments thereunder to $375,000 and extended the maturity. Portions of the Sponsor WarrantsABL Agreement are separately available for borrowing by the Company's United States subsidiary and Canadian subsidiary for $325,000 and $50,000, respectively. The interest rate for the ABL Revolver is, at the discretion of the Company, adjusted SOFR (or a Canadian banker’s acceptance rate in the case of Canadian Dollar loans) plus a margin varying from 1.25% to 1.75% per annum based on availability or their permitted transferees,an alternate base rate (or a Canadian prime rate or alternate base rate in the Sponsor Warrants will be redeemablecase of Canadian Dollar loans) plus a margin varying from 0.25% to 0.75% per annum based on availability. The stated maturity date of the revolving credit commitments under the ABL Credit Agreement is July 29, 2027. The loans and other amounts outstanding under the ABL Credit Agreement and related documents are guaranteed by The Hillman Companies, Inc., a wholly‑owned subsidiary of the Company, and, exercisablesubject to certain exceptions, the Borrower’s wholly-owned domestic subsidiaries and are secured by substantially all of the Borrower’s and the guarantors’ assets plus, solely in the case of the Canadian Borrower, its and its wholly-owned Canadian subsidiary’s assets, which has guaranteed by the Canadian portion under the ABL Credit Agreement.holdersas steel, zinc, and nickel used by our vendors in their manufacturing processes. The final purchase cost of our products may also be dependent upon inflation or deflation in the local economies of vendors in China and Taiwan that could impact the cost of labor used in the manufacturing of our products. We identify the directional impact of changes in our product cost, but the quantification of each of these variable impacts cannot be measured as to the individual impact on our product cost with a sufficient level of precision.same basis as the warrants includedimpacted products.Units soldCanadian dollar exchange rate versus the U.S. dollar. Our sales in Canada are denominated in Canadian dollars while a majority of the products are sourced in U.S. dollars. A weakening of the Canadian dollar versus the U.S. dollar results in lower sales in terms of U.S. dollars while the cost of sales remains unchanged. We have a practice of hedging some of our Canadian subsidiary's purchases denominated in U.S. dollars. The U.S. dollar declined in value relative to the Canadian dollar by approximately 1.9% in 2020, declined by 0.2% in 2021, and increased by 5.9% during the thirty-nine weeks ended September 24, 2022. We may take pricing action, when warranted, in an attempt to offset a portion of product cost increases. The ability of our operating divisions to institute price increases and seek price concessions, as appropriate, is dependent on competitive market conditions. Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021(dollars in thousands) Amount % of
Net SalesAmount % of
Net SalesNet sales $ 378,538 100.0 % $ 364,480 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 214,802 56.7 % 236,999 65.0 % Selling, general and administrative expenses 133,246 35.2 % 110,447 30.3 % Depreciation 14,312 3.8 % 14,454 4.0 % Amortization 15,557 4.1 % 15,504 4.3 % Other (income) expense 1,070 0.3 % 371 0.1 % Income from operations (449) (0.1) % (13,295) (3.6) % Loss on change in fair value of warrant liability — — % 3,990 1.1 % Interest expense, net of investment income 14,696 3.9 % 13,228 3.6 % Mark-to-market adjustment of interest rate swap — — % (261) (0.1) % Refinancing charges — — % 8,070 2.2 % Income (loss) before income taxes (15,145) (4.0) % (38,322) (10.5) % Income tax expense (benefit) (5,679) (1.5) % (5,798) (1.6) % Net income (loss) $ (9,466) (2.5) % $ (32,524) (8.9) % $ 58,973 15.6 % $ 56,528 15.5 % Public Offering. Otherwise,thirteen weeks ended September 24, 2022, a decrease of approximately $22.2 million compared to $237.0 million, or 65.0% of net sales, in the Sponsor Warrants have termsthirteen weeks ended September 25, 2021. Cost of sales as a percentage of net sales in the thirteen weeks ended September 24, 2022 decreased (8.3)% compared to the thirteen weeks ended September 25, 2021. In the third quarter of 2021, we evaluated our customers' needs and provisions that are identicalthe market conditions and ultimately decided to thoseexit certain protective product categories related to COVID-19, including cleaning wipes, disinfecting sprays, face masks, and certain disposable gloves which caused an inventory valuation adjustment in our Hardware and Protective Solutions segment of $32.0 million.Public Warrants except thatNotes to Condensed Consolidated Financial Statements for additional information).Sponsor Warrants may be exercisedthirteen weeks ended September 24, 2022 which was comparable to depreciation expense of $14.5 million in the thirteen weeks ended September 25, 2021. Amortization expense was $15.6 million in the thirteen weeks ended September 24, 2022 which was comparable to $15.5 million in the thirteen weeks ended September 25, 2021.a cashless basis. If the Company does not complete the Business Combination, then the proceeds will be partrevaluation of the liquidating distributioncontingent consideration associated with the acquisitions of Resharp and Instafob (see Note 17 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) along with exchange rate losses of $0.6 million. In the thirteen weeks ended September 25, 2021 other income consisted primarily of an exchange rate loss of $0.3 million along with a $0.1 million loss on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob. Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021(dollars in thousands) Amount % of
Net SalesAmount % of
Net SalesNet sales $ 1,135,665 100.0 % $ 1,081,476 100.0 % Cost of sales (exclusive of depreciation and amortization shown separately below) 648,221 57.1 % 654,264 60.5 % Selling, general and administrative expenses 366,013 32.2 % 325,288 30.1 % Depreciation 41,738 3.7 % 46,065 4.3 % Amortization 46,644 4.1 % 45,827 4.2 % Other (income) expense (3,124) (0.3) % (1,962) (0.2) % (Loss) income from operations 36,173 3.2 % 11,994 1.1 % Loss on change in fair value of warrant liability — — % 3,990 0.4 % Interest expense, net of investment income 38,857 3.4 % 57,521 5.3 % Mark-to-market adjustment of interest rate swap — — % (1,685) (0.2) % Refinancing charges — — % 8,070 0.7 % Income (loss) before income taxes (2,684) (0.2) % (55,902) (5.2) % Income tax expense (benefit) (147) — % (11,023) (1.0) % Net income (loss) $ (2,537) (0.2) % $ (44,879) (4.1) % $ 165,260 14.6 % $ 168,806 15.6 % public stockholders“Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.Sponsor Warrants issuedthirteen and thirty-nine weeks ended September 25, 2021 (dollars in thousands): Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Hardware and Protective Solutions Segment Revenues $ 271,853 $ 261,456 $ 818,110 $ 775,514 Segment Income from operations 7,113 (24,901) 15,255 (8,856) 28,693 30,634 80,569 95,780 Sponsors will expire worthless.Registration Rightsholdersincrease in sales was partially offset by increased expenses:Founder Shares, Sponsor Warrants, sharesthirteen weeks ended September 24, 2022 to $172.8 million as compared to $194.4 million in the thirteen weeks ended September 25, 2021. Cost of Class A common stock issuable upon conversionsales as a percentage of net sales was 63.6% in the Founder Shares, Sponsor Warrants or working capital loans will be entitledthirteen weeks ended September 24, 2022, a decrease of 10.8% from 74.3% in the thirteen weeks ended September 25, 2021. The decrease in cost of sales as a percentage of net sales was primarily due to registration rights. These holders will be entitledan inventory valuation adjustment in our Hardware and Protective Solutions segment of $32.0 million primarily related to make up to three demands, excluding short form registration demands, thatstrategic review of our COVID-19 related product offerings in the Company register such securities for sale underthirteen weeks ended September 25, 2021.Securities Act. In addition, these holders will have ‘‘piggy-back’’ registration rights to include their securities in other registration statements filed by the Company. Notwithstanding the foregoing, JFG may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years; respectively after the effective date of the registration statement relatingthirteen weeks ended September 24, 2022 compared to the Public Offeringthirteen weeks ended September 25, 2021 primarily due to increased variable selling and may not exercise itscompensation costs.rights on more than one occasion.for COVID-19 protective and cleaning products in the 2022, partially offset by price increases of $7.1 million.Company will bearincrease was driven by increased sales partially offset by increased operating expenses:expenses incurredthirty-nine weeks ended September 24, 2022 to $518.0 million as compared to $519.5 million in the thirty-nine weeks ended September 25, 2021. Cost of sales as a percentage of net sales was 63.3% in the thirty-nine weeks ended September 24, 2022, a decrease of 3.7% from 67.0% in the thirty-nine weeks ended September 25, 2021 The decrease is primarily due to an inventory valuation adjustment in our Hardware and Protective Solutions segment of $32.0 million primarily related to the strategic review of our COVID-19 related product offerings in the third quarter of 2021.filingMerger. Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Robotics and Digital Solutions Revenues $ 65,632 $ 67,499 $ 192,216 $ 189,729 Segment income from operations (14,094) 11,158 4,198 17,858 22,446 23,483 63,654 64,596 any such registration statements.Underwriting CommissionsJefferies LLCAdjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA. Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Canada Revenues $ 41,053 $ 35,525 $ 125,339 $ 116,233 Segment income (loss) from operations 6,532 448 16,720 2,992 7,834 2,411 21,037 8,430 underwriterprimary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying trends in our businesses. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive naturePublic Offering,bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.Thirteen Weeks Ended
September 24, 2022Thirteen Weeks Ended
September 25, 2021Thirty-nine Weeks Ended
September 24, 2022Thirty-nine Weeks Ended
September 25, 2021Net (loss) income $ (9,466) $ (32,524) $ (2,537) $ (44,879) Income tax provision (benefit) (5,679) (5,798) (147) (11,023) Interest expense, net 14,696 11,801 38,857 49,979 Interest expense on junior subordinated debentures — 1,471 — 7,775 Investment income on trust common securities — (44) — (233) Depreciation 14,312 14,454 41,738 46,065 Amortization 15,557 15,504 46,644 45,827 Mark-to-market adjustment of interest rate swap — (261) — (1,685) EBITDA $ 29,420 $ 4,603 $ 124,555 $ 91,826 Stock compensation expense 2,485 5,280 10,789 8,817 Management fees — 56 — 270 916 462 1,481 571 25,255 487 28,968 10,769 178 802 2,393 8,941 — 650 — 2,000 — — — 2,636 Loss on change in fair value of warrant liability — 3,990 — 3,990 — 8,070 — 8,070 — 32,026 — 32,026 Change in fair value of contingent consideration 719 102 (2,926) (1,110) Adjusted EBITDA $ 58,973 $ 56,528 $ 165,260 $ 168,806 its indirect parent, JFG, beneficially owns 48.3%other costs associated with streamlining our operations.Founder Shares. Jefferies LLC received allNotes to Condensed Consolidated Financial Statements for additional information).underwriting discount that wasNotes to Condensed Consolidated Financial Statements for additional information) and the secondary offering of shares in 2022.atJuly 15, 2022 (the “6.375% Senior Notes”) and the closing11.6% Junior Subordinated Debentures (see Note 11 - Long-Term Debt of the Public Offering,Notes to Condensed Consolidated Financial Statements for additional information).will receiveProtective Solutions segment of $32.0 million primarily related to strategic review of our COVID-19 related product offerings. We evaluated our customers' needs and the market conditions and ultimately decided to exit the following protective product categories related to COVID-19; cleaning wipes, disinfecting sprays, face masks, and certain disposable gloves (see the Current Economic Conditions section of Management's discussion and analysis for additional Deferred Discount payableinformation).Thirteen weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated Operating income (loss) $ 7,113 $ (14,094) $ 6,532 $ (449) Depreciation and amortization 18,440 10,284 1,145 29,869 Stock compensation expense 2,131 197 157 2,485 Restructuring 831 85 — 916 Litigation expense — 25,255 — 25,255 Acquisition and integration expense 178 — — 178 Change in fair value of contingent consideration — 719 — 719 Adjusted EBITDA $ 28,693 $ 22,446 $ 7,834 $ 58,973 Thirteen weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated Operating income (loss) $ (24,901) $ 11,158 $ 448 $ (13,295) Depreciation and amortization 17,615 10,842 1,501 29,958 Stock compensation expense 4,535 745 — 5,280 Management fees 47 9 56 Restructuring — — 462 462 Inventory valuation 32,026 — — 32,026 Litigation expense — 487 — 487 Acquisition and integration expense 662 140 — 802 Change in fair value of contingent consideration — 102 — 102 Buy-back expense 650 — — 650 Adjusted EBITDA 30,634 23,483 2,411 56,528 Thirty-nine weeks ended September 24, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated Operating income (loss) $ 15,255 $ 4,198 $ 16,720 $ 36,173 Depreciation and amortization 53,159 31,754 3,469 88,382 Stock compensation expense 8,693 1,248 848 10,789 Restructuring 1,357 124 — 1,481 Litigation expense — 28,968 — 28,968 Acquisition and integration expense 2,105 288 — 2,393 Change in fair value of contingent consideration — (2,926) — (2,926) Adjusted EBITDA $ 80,569 $ 63,654 $ 21,037 $ 165,260 Thirty-nine weeks ended September 25, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated Operating income (loss) $ (8,856) $ 17,858 $ 2,992 $ 11,994 Depreciation and amortization 52,135 34,816 4,941 91,892 Stock compensation expense 7,591 1,226 — 8,817 Management fees 232 38 — 270 Restructuring 64 10 497 571 Inventory valuation 32,026 — — 32,026 Litigation expense — 10,769 — 10,769 Acquisition and integration expense 7,952 989 — 8,941 Change in fair value of contingent consideration — (1,110) — (1,110) Buy-back expense 2,000 — — 2,000 Anti-dumping duties 2,636 — — 2,636 Adjusted EBITDA $ 95,780 $ 64,596 $ 8,430 $ 168,806 Trust Account upon completionfederal statutory rate due to an estimated increase in GILTI from the Company's Canadian operations, non-deductible stock compensation, state and foreign income taxes, and includes the discrete income tax benefit for the Pennsylvania income tax rate change resulting in a reduction to the Company's deferred taxes.Business Combination. See Note 4Notes to Condensed Consolidated Financial Statements for further information regarding underwriting commissions.Administrative Services AgreementTheadditional information). Excluding acquisitions, the primary use of cash in both periods was our investment in new key duplicating kiosks and machines.administrative services agreement to finance racking and warehouse equipment, net of repayments, in which2022 for $1.8 million.will pay Fertitta Entertainment, Inc., (an affiliate of TJF) for office space, secretarial and administrative services provided to membersrefinanced all of our management team,outstanding debt. On July 14, 2021 we entered into a new credit agreement, which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn). Concurrently with the Term Credit Agreement, we also entered into an amendment to their existing asset-based revolving credit agreement (the “ABL Amendment”) and extended the maturity and conformed certain provisions to the Term Credit Agreement. The proceeds were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of May 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in full senior notes due July 15, 2022 (the “6.375% Senior Notes”), issued by the Borrower and as a result the 6.375% Senior Notes are redeemed, satisfied and discharged and no longer in effect. Additionally, we fully redeemed the 11.6% Junior Subordinated Debentures. In connection with the refinancing we incurred a loss of $8.1 million and paid $38.7 million in financing fees, of which $21.0 million was recorded as a financing activity.amount notamendment ("OZCO Amendment") to exceed $20,000 per month commencingthe term loan credit agreement dated May 31, 2018, which provided $35.0 million of incremental term loan funds to be used to finance the acquisition, (see Note 5 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information). In the thirty-nine weeks ended September 25, 2021 we used $8.0 million to make regularly scheduled payments under our old Term Credit agreement. Our revolver draws, net of repayments, provided cash of $2.0 million in the thirty-nine weeks ended September 25, 2021. Finally, in the thirty-nine weeks ended September 25, 2021 the Company received $1.8 million on the dateexercise of effectivenessstock options.Public OfferingABL Revolver had an outstanding amount of $100.0 million and endingoutstanding letters of credit of $32.8 million leaving $195.4 million of available borrowings as a source of liquidity based on the customary asset-backed loan borrowing base and availability provisions. Our material cash requirements for known contractual obligations include debt, lease obligations, and capital expenditures each of which are discussed in more detail earlier in this section and in the Notes to the Condensed Consolidated Financial Statements. We believe projected cash flows from operations and ABL Revolver availability will be sufficient to meet our liquidity and capital needs for these items in the short-term and also in the long-term beyond the next 12 months. We also have cash requirements for purchase orders and contracts for the purchase of inventory and other goods and services, which are based on current distribution needs and are fulfilled by our suppliers within the completionshort term.a Business Combination or liquidation.Directors’ Paymentspay $100,000generate sufficient operating cash flows to each ofmeet our independent directors at the closing of a Business Combination for services rendered as board members priorshort-term liquidity needs, and we expect to the completion of a Business Combination.Sponsors’ Indemnification of the Trust AccountsThe Sponsors have agreed that they will be jointly and severally liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share or (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seekmaintain access to the Trust Accountcapital markets, although there can be no assurance of our ability to do so. However, disruption and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover,volatility in the event that an executed waiver is deemed to be unenforceable against a third party,global capital markets, could impact our capital resources and liquidity in the Sponsors willfuture.be responsiblehave any off-balance sheet arrangements.extent of any liabilityCondensed Consolidated Financial Statements. Some accounting policies require management to exercise significant judgment in selecting the appropriate assumptions for such third party claims.Sponsor LoansOn August 24, 2020 the Sponsors agreed to loan the Company upcalculating financial estimates. Such judgments are subject to an aggregateinherent degree of $300,000 by the issuanceuncertainty. These judgments are based on our historical experience, known trends in our industry, terms of unsecured promissory notes to cover expenses related to the Public Offering. These loans will be payable without interestexisting contracts, and other information from outside sources, as appropriate. Management believes that these estimates and assumptions are reasonable based on the earlier of December 31, 2020 or the completion of the Public Offering. Asfacts and circumstances as of September 30, 2020,24, 2022, however, actual results may differ from these estimates under different assumptions and circumstances.Company had $161,750 in notes payable, affiliates related to deferred offering costs paid by the Sponsors. As“Critical Accounting Policies and Estimates” section of October 16, 2020, these amounts were repaid in full.In addition, the Sponsors will not be prohibited from loaning the Company funds in order to finance transaction costs in connection with the Business Combination. Up to $1,000,000 of these loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Sponsor Warrants. The terms of such loans have not been determined and no written agreements exist with respect to such loans. No agreement with the JFG or its affiliates will be entered into, and no fees for services will be paid to the JFG or its affiliates prior to the effective date of the Public Offering, unless the Financial Industry Regulatory Authority, Inc. determines that such payment would not be deemed underwriting compensation in connection with the Public Offering. See Note 4 for the terms of the warrants.Landcadia Holdings III, Inc.Item 2. Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations.The following discussion and analysisOperations” in Part II, Item 7 of the Company’s financial condition and results of operations of Landcadia Holdings III, Inc. (the “Company”) should be read in conjunction withAnnual Report on Form 10-K for the financial statements and the notes thereto contained elsewhere in this report (the “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. For example, statements made relating to future business combinations, use of proceeds of past securities offerings, future loans and conversions of warrants are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in the Risk Factors section of the Company’s final prospectus for its initial public offering of units (the “Public Offering”)year ended December 25, 2021, as filed with the U.S. Securities and Exchange Commission. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this report.OverviewWe are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination with one or more businesses (“Business Combination”). We consummated the Public OfferingCommission on October 14, 2020 and are currently in the process of locating suitable targets for our Business Combination. We intend to use the cash proceeds from our public offering and the private placement of warrants described below as well as additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business Combination.The Company’s management team is led by Tilman Fertitta, our Co-Chairman and Chief Executive Officer, and Richard Handler, our Co-Chairman and President. Mr. Fertitta is the sole shareholder of TJF, LLC (“TJF”) and Mr. Handler is the Chief Executive Officer of Jefferies Financial Group Inc. (“JFG”), and its largest operating subsidiary, Jefferies Group LLC, a global investment banking firm. The Company’s sponsors are TJF and JFG (collectively, the “Sponsors”).On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The CARES Act includes several significant business tax provisions that, among other things, eliminates the taxable income limit for certain net operating losses (“NOL”) and allows businesses to carryback NOLs arising in 2018, 2019, and 2020 to the five prior years; suspends the excess business loss rules; accelerates refunds of previously generated corporate alternative minimum tax credits; adjusts business interest limitations under IRC section 163(j) from 30% to 50%; and addresses other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company is still evaluating the impact, if any,16, 2022.CARES Act on its financial position, results of operations and cash flows.Liquidity and Capital ResourcesOn October 14, 2020 we consummated a $500,000,000 public offering consisting of 50,000,000 units at a price of $10.00 per unit (“Unit”). Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value (the “Class A Common Stock”) and one-third of one redeemable warrant (each, a “Public Warrant”). Simultaneously, with the closing of the Public Offering, we consummated the $12,000,000 private placement (“Private Placement”) of an aggregate of 8,000,000 private placement warrants (“Sponsor Warrants”) at a price of $1.50 per warrant. Upon closing of the Public Offering and Private Placement on October 14, 2020, $500,000,000 in proceeds (including $17,500,000 of deferred underwriting commissions) from the public offering and private placement was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. The remaining $12,000,000 held outside of trust was usedNotes to pay underwriting commissions of $10,000,000, loans to our Sponsors, and deferred offering and formation costs. The Company granted the underwriters a 45-day option from the date of the prospectus, October 8, 2020, to purchase additional units. If the over-allotment is exercised in full, proceeds from the Public Offering and Private Placement will be $575,000,000 and $13,500,000, respectively.Our working capital needs will be satisfied through the funds, held outside of the U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”), from the public offering. Interest on funds held in the Trust Account may be used to pay income taxes and franchise taxes, if any. Our Sponsors may, but are not obligated to, loan us funds as may be required in connection with the Business Combination. Up to $1,500,000 of these loans may be converted into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender and would be identical to the sponsor warrants.Results of OperationsWe have neither engaged in any significant business operations nor generated any revenues to date. All activities to date relate to the Company’s formation and its initial public offering and search for a suitable Business Combination. We generate non-operating income in the form of interest income on cash, cash equivalents, and marketable securities held in the Trust Account. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses as we locate a suitable Business Combination.Critical Accounting PoliciesThe preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited financial statements and accompanying notes. Actual results could differ from those estimates. The Company has identified the following as its critical accounting policies:Loss per Common ShareBasic loss per common share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. All shares of Class B common stock are assumed to convert to shares of Class A common stock on a one-for-one basis. Consistent with FASB ASC 480, shares of Class A common stock subject to possible redemption, as well as their pro rata share of undistributed trust earnings consistent with the two-class method, have been excluded from the calculation of loss per common share for the three and nine months ended September 30, 2020. Such shares, if redeemed, only participate in their pro rata share of trust earnings. Diluted loss per share includes the incremental number of shares of common stock to be issued in connection with the conversion of Class B common stock or to settle warrants, as calculated using the treasury stock method. For the three and nine months ending September 30, 2020 and 2019, the Company did not have any dilutive warrants, securities or other contracts that could, potentially, be exercised or converted into common stock. As a result, diluted loss per common share is the same as basic loss per common share for all periods presented. For the three and nine months ended September 30, 2020, the Company reported no income or loss available to common shareholders.Recent Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.Off-Balance Sheet ArrangementsWe did not have any off-balance sheet arrangements as of September 30, 2020.Contractual ObligationsAs of September 30, 2020, we did not have any long-term debt, capital or operating lease obligations.The Company entered into an administrative services agreement in which we will pay Fertitta Entertainment, Inc., (an affiliate of TJF) for office space, secretarial and administrative services provided to members of our management team, in an amount not to exceed $20,000 per month commencing on the date of effectiveness of the Public Offering and ending on the earlier of the completion of a Business Combination or liquidation.Risk.AsRisk30, 2020, we24, 2022. The foreign subsidiaries' net tangible assets were not subject$113.5 million and the net intangible assets were $58.1 million as of September 24, 2022.any market or interest rate risk.We have not engagedmanage the exposure to currency fluctuations in any hedging activities since our inception. We do not expect to engage in any hedging activities with respectthe Canadian dollar versusmarketaccompanying Condensed Consolidated Financial Statements.which we are exposed.Procedures.Evaluation of ProceduresDisclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submittedSecurities Exchange Actsupervision and with the participation of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (who serves as our principal executive officer) and Chief Financial Officer (who serves as our principal financial and accounting officer), to allow timely decisions regarding required disclosure.As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as of September 30, 2020.defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon theirthat evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as definedwere effective, as of September 24, 2022, in Rules 13a-15(e)ensuring that material information required to be disclosed in reports that we file or submit under the15d-15(e) underreported within the Exchange Act) were effective.waswere no changechanges in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the quarter endingthirty-nine weeks ended September 30, 202024, 2022 that hashave materially affected, or is reasonableare reasonably likely to materially affect, our internal control over financial reporting.II—IIProceedingsNone.FactorsWe are subject to various claims and litigation that could causearise in the normal course of business. For a description of our actual resultsmaterial legal proceedings, see Note 7 - Commitments and Contingencies, to differ materially from thosethe accompanying Condensed Consolidated Financial Statements included in this Quarterly Report are any of the risks described in theForm 10-Q.Factors section of the final prospectus for our Public Offering filed with the SEC on October 13, 2020 (the “Prospectus”). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.As of the date of this Quarterly Report, thereFactors.risk factorsrisks from those disclosed in the Prospectus, except as discussed below. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filingsForm 10-K filed on March 16, 2022 with the SEC.The securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in EuropeSecurities and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our Amended and Restated Certificate of Incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could have an impact on the per-share redemption amount that may be received by public stockholders.ProceedsUnregistered Sales of Equity SecuritiesOn March 13, 2018, JFG, through a subsidiary, purchased a 100% of the membership interest in the Company for $1,000. On August 24, 2020, TJF purchased a 51.7% membership interest in the Company for $1,070. Simultaneously we converted the Company from a limited liability company to a corporation and its previously outstanding membership interests converted into shares of Class B common stock. The total number of authorized shares of all classes of capital stock is 401,000,000, of which 380,000,000 shares are Class A shares at par value $0.0001 per share; 20,000,000 shares are Class B shares at par value $0.0001 per share (the “Founder Shares”); and 1,000,000 shares are preferred stock at par value $0.0001 per share. The Sponsors hold an aggregate of 11,500,000 Class B shares based on the proportional interest in the Company. Further, on September 16, 2020, we conducted a 1:1.25 stock split of the Founder Shares so that a total of 14,375,000 Founder Shares were issued and outstanding. As of September 16, 2020, JFG owns 6,943,125 Founder Shares and TJF owns 7,431,875 Founder Shares. An aggregate of 1,875,000 Founder Shares are subject to forfeiture to the extent the underwriters do not exercise their over-allotments option.Simultaneously with the closing of the Public Offering, the Sponsors purchased an aggregate of 8,000,000 Sponsor Warrants at a price of $1.50 per Sponsor Warrant for an aggregate purchase price of $12,000,000 in the Private Placement. These securities were issued in connection with our incorporation pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Each of our Sponsors is an accredited investor for purposes of Rule 501 of Regulation D.Use of ProceedsOn October 14 , 2020, we consummated the Public Offering of 50,000,000 Units. Each Unit consists of one share of Class A Common Stock and one-third of one Public Warrant, each whole Public Warrant entitling the holder thereof to purchase one share of Class A Common Stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $500,000,000. Jefferies LLC served as the sole book-running manager of the Public Offering. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (File No. 333-248856). The SEC declared the registration statement effective on October 8, 2020.Following the closing of the Public Offering and the Private Placement, $500,000,000 was placed in the Trust Account, comprised of $490,000,000 of the proceeds from the Public Offering (which amount includes $17,500,000 of the underwriters’ deferred discount) and $10,000,000 of the proceeds of the Private Placement and paid $10,000,000 in underwriting discounts. There has been no material change in the planned use of proceeds from the public offering as described in the Prospectus.
Not Applicable.InformationOn November 13, 2020, the Company entered into an amended and restated warrant agreement with Continental Stock Transfer & Trust Company, which amended and restated the warrant agreement entered into in connection with the Public Offering to conform the description of the warrants to the Prospectus.Exhibit No. Description3.1a)Exhibits, including those incorporated by reference. 101.INS*Filed herewith. XBRL Instance Document101.SCHXBRL Taxonomy Extension Schema Document101.CALXBRL Taxonomy Extension Calculation Linkbase Document101.DEFXBRL Taxonomy Extension Definition Linkbase Document101.LABXBRL Taxonomy Extension Label Linkbase Document101.PREXBRL Taxonomy Extension Presentation Linkbase Document* Filed herewith.** Furnished.(1) Previously filed as an exhibit to our Registration Statement on Form S-1 filed with the SEC on October 2, 2020 and incorporated by reference herein.(2) Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 14, 2020 and incorporated by reference herein.Securities Exchange Act, of 1934, the registrantRegistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.LANDCADIA HOLDINGS III, INC.By:/s/ Tilman J. Fertitta /s/ Robert O. Kraft Name: Tilman J. Fertitta/s/ Anne S. McCallaRobert O. Kraft Title: Chief Executive Officer (principal executive officer)Anne S. McCallaBy: /s/ Richard H. LiemName: Richard H. LiemTitle: Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)Controller Dated: November 13, 2020(Chief Accounting Officer)
DATE: November 3, 2022