Document Entity Information
Document Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document Entity Information [Abstract] | ||
Entity Registrant Name | Amplify Snack Brands, Inc. | |
Entity Central Index Key | 1,640,313 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 76,745,948 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 8,311 | $ 10,323 |
Accounts receivable, net of allowances of $12,849 and $9,261, respectively | 45,345 | 42,852 |
Inventories | 26,960 | 18,250 |
Prepaid expenses and other current assets | 8,643 | 7,804 |
Total current assets | 89,259 | 79,229 |
Property, plant and equipment, net | 68,037 | 45,884 |
Other assets: | ||
Goodwill | 177,714 | 151,953 |
Intangible assets, net | 551,218 | 559,996 |
Other assets | 1,160 | 1,178 |
Total assets | 887,388 | 838,240 |
Current liabilities: | ||
Accounts payable and accrued expenses | 48,149 | 45,087 |
Senior term loan- current portion | 5,162 | 5,936 |
Tax receivable obligation- current portion | 7,114 | 7,114 |
Notes payable, net- current portion | 4,801 | 991 |
Other current liabilities | 1,211 | 908 |
Total current liabilities | 66,437 | 60,036 |
Long-term liabilities: | ||
Senior term loan, net | 570,095 | 571,576 |
Revolving credit facility, net | 8,417 | 7,210 |
Notes payable, net | 1,986 | 6,678 |
Net deferred tax liabilities | 62,752 | 54,890 |
Tax receivable obligation | 81,905 | 81,905 |
Other long-term liabilities | 6,612 | 4,211 |
Total long-term liabilities | 731,767 | 726,470 |
Commitment and contingencies (Note 9) | ||
Shareholders' Equity: | ||
Common stock, $0.0001 par value, 375,000,000 shares authorized at September 30, 2017 and December 31, 2016 and 76,744,340 and 76,786,000 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 8 | 8 |
Additional paid-in capital | 43,498 | 41,279 |
Common stock held in treasury, at par, 1,555,007 and 2,948,995 shares at September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Retained earnings | 44,304 | 41,916 |
Accumulated other comprehensive income (loss) | 1,374 | (31,469) |
Total shareholders' equity | 89,184 | 51,734 |
Total liabilities and shareholders' equity | $ 887,388 | $ 838,240 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 12,849 | $ 9,261 |
Common stock - par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 375,000,000 | 375,000,000 |
Common stock, shares issued (in shares) | 76,744,340 | 76,786,000 |
Common stock, shares outstanding (in shares) | 76,744,340 | 76,786,000 |
Treasury stock, shares held (in shares) | 1,555,007 | 2,948,995 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Sales | $ 94,864 | $ 67,982 | $ 283,056 | $ 182,193 |
Cost of goods sold | 58,948 | 35,646 | 173,365 | 88,891 |
Gross profit | 35,916 | 32,336 | 109,691 | 93,302 |
Sales & marketing expenses | 10,914 | 8,903 | 33,230 | 22,551 |
General & administrative expenses | 9,594 | 15,971 | 30,100 | 27,688 |
Loss (gain) on change in fair value of contingent consideration | 431 | (505) | 549 | (505) |
Total operating expenses | 20,939 | 24,369 | 63,879 | 49,734 |
Operating income | 14,977 | 7,967 | 45,812 | 43,568 |
Interest Expense | 11,329 | 5,636 | 33,307 | 11,788 |
Other expense (income), net | 102 | (4,221) | (789) | (4,221) |
Loss on extinguishment of debt | 0 | (1,100) | 0 | (1,100) |
Income before income taxes | 3,546 | 5,452 | 13,294 | 34,901 |
Income tax expense | 2,872 | 3,807 | 10,906 | 16,086 |
Net income | 674 | 1,645 | 2,388 | 18,815 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 11,931 | (9,030) | 32,843 | (9,030) |
Comprehensive income (loss) | $ 12,605 | $ (7,385) | $ 35,231 | $ 9,785 |
Basic and diluted earnings per share (USD per share) | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.25 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 76,739,354 | 75,455,047 | 76,752,323 | 75,032,287 |
Diluted (in shares) | 76,794,326 | 75,557,760 | 76,920,915 | 75,094,446 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net income | $ 2,388 | $ 18,815 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 10,815 | 4,247 |
Amortization of deferred financing costs and debt discounts | 2,570 | 888 |
Deferred income taxes | 6,755 | 2,419 |
Equity-based compensation expense | 2,553 | 3,972 |
Loss on disposal of property, plant and equipment | 8 | 39 |
Loss on exit activity | 190 | 0 |
Loss on extinguishment of debt | 0 | (1,100) |
Loss (gain) on change in fair value of contingent consideration | 549 | (505) |
Other non-cash activities | 15 | (38) |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Operating assets | (10,028) | (12,692) |
Operating liabilities | 663 | 2,436 |
Payments of founder contingent compensation | 0 | (23,000) |
Net cash provided by (used in) operating activities | 16,478 | (2,319) |
Investing activities: | ||
Payments for acquisitions, net of cash acquired of $-0- and $15,580 | 0 | (382,137) |
Payments for property, plant and equipment | (14,448) | (2,980) |
Proceeds from sale of property, plant and equipment | 89 | 0 |
Net cash used in investing activities | (14,359) | (385,117) |
Financing activities: | ||
Term loan borrowings | 0 | 593,420 |
Payments on term loans | (4,500) | (197,313) |
Payoff of maturing notes payable | (1,000) | 0 |
Payments on revolving credit facility | (9,500) | (15,000) |
Proceeds from revolving credit facility | 10,500 | 20,500 |
Tax withholding paid on behalf of employees for equity-based compensation | (476) | 0 |
Payment of deferred financing costs | 0 | 15,517 |
Net cash (used in) provided by financing activities | (4,976) | 386,090 |
Effect of exchange rate changes on cash and cash equivalents | 845 | (218) |
Decrease in cash and cash equivalents | (2,012) | (1,564) |
Cash and cash equivalents—Beginning of period | 10,323 | 18,751 |
Cash and cash equivalents—End of period | 8,311 | 17,187 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 2,861 | 14,555 |
Interest paid | 30,220 | 7,616 |
Non-cash investing and financing activities during the period: | ||
Issuance of common shares as consideration | 0 | 35,319 |
Accrued capital expenditures | 667 | 43 |
Notes Payable | ||
Non-cash investing and financing activities during the period: | ||
Contingent consideration | 0 | 3,777 |
Contingent Consideration for Earn-Out Period | ||
Non-cash investing and financing activities during the period: | ||
Contingent consideration | $ 0 | $ 1,085 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) Cash acquired at acquisition - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Acquired from Acquisition | $ 0 | $ 15,580 |
Business Overview
Business Overview | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | BUSINESS OVERVIEW Amplify Snack Brands, Inc., a Delaware corporation, and its subsidiaries (collectively, the "Company," and herein referred to as "we", "us", and "our") is a high growth, snack food company focused on developing and marketing products that appeal to consumers’ growing preference for better-for-you ("BFY") snacks. Corporate Reorganization and Initial Public Offering Prior to the consummation of our initial public offering ("IPO") on August 4, 2015, a series of related reorganization transactions (hereinafter referred to as the "Corporate Reorganization") occurred in the following sequence: • TA Topco 1, LLC ("Topco"), the former parent entity of the Company, liquidated in accordance with the terms and conditions of Topco's existing limited liability company agreement ("Topco Liquidation"). The holders of existing units in Topco received 100% of the capital stock of the Company, which was allocated to such unit holders pursuant to the distribution provisions of the existing limited liability company agreement of Topco based upon the liquidation value of Topco. Since Topco was liquidated at the time of our IPO, the implied liquidation value of Topco was based on the IPO price of $18.00 per share. Topco ceased to exist following the Topco Liquidation. • The Company entered into a tax receivable agreement ("TRA") with the former holders of units in Topco pursuant to which such holders received the right to future payments from the Company. Refer to Note 2 for more details regarding the TRA. Crisps Topco Limited Acquisition On September 2, 2016, the Company completed its acquisition of Crisps Topco Limited (“Tyrrells Group”), a company incorporated under the laws of England and Wales, which owns the Tyrrells international portfolio of premium snack brands, through Thunderball Bidco Limited (the “Purchaser”), a direct, wholly-owned subsidiary of the Company. The acquisition was completed pursuant to a Share Purchase Agreement (the “Purchase Agreement”) with SkinnyPop Popcorn LLC, a direct wholly-owned subsidiary of the Company (the “Purchaser Guarantor”), Crisps Holdings Limited, a company incorporated under the laws of the Cayman Islands (the “Institutional Seller”) and individual selling equity holders (the “Management Sellers”). The Company acquired all of the outstanding equity interests of Tyrrells Group for total consideration of approximately $416.4 million . Refer to Note 3 for more details regarding this transaction. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Change in Fiscal Year In December 2016, the Company's Board of Directors approved a change in the fiscal year end from a calendar year ending on December 31 to a 52- or 53-week fiscal year ending on the last Saturday in December, effective beginning with fiscal year 2017. In a 52- or 53-week fiscal year, each of the Company's fiscal quarters will consist of two four-week fiscal months followed by a five- or six-week fiscal month. The change to the Company’s fiscal year does not impact the Company’s calendar year results for the year ended December 31, 2016, and the Company does not expect the change will impact the prior year comparability of each of the fiscal quarters and annual period in 2016 in future filings. Basis of Presentation The accompanying interim condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016 , the interim condensed consolidated statements of comprehensive income (loss) for the 13 and 39 weeks ended September 30, 2017 and the three and nine months ended September 30, 2016 and the interim condensed consolidated statements of cash flows for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016 , are unaudited. Interim Financial Statements The accompanying unaudited interim condensed consolidated financial statements of Amplify Snack Brands, Inc. (“Condensed Consolidated Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required for annual financial statements. The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements at and for the fiscal year ended December 31, 2016, and in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial position as of September 30, 2017 and results of our operations for the 13 and 39 weeks ended September 30, 2017 and the three and nine months ended September 30, 2016 , and cash flows for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016 . The interim results for the 39 weeks ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 30, 2017. Therefore, the Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2017. Use of Estimates The unaudited interim condensed consolidated financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. The Company routinely evaluates its estimates, including those related to accruals and allowances for customer programs and incentives, bad debts, income taxes, long-lived assets, inventories, equity-based compensation, accrued broker commissions and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Foreign Currency Transactions and Translation Exchange adjustments resulting from foreign currency transactions are recognized as a component of other non-operating income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss). For the Company's non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars by using period-end exchange rates. Income and expense items are translated at a weighted-average exchange rate prevailing during the period. Adjustments resulting from translation of financial statements are reflected as a separate component of shareholders' equity. Segment Reporting On September 2, 2016, the Company completed the acquisition of Tyrrells Group, a diversified, international company that manufactures and markets BFY snack foods. As a result of this transaction, management determined that it operates in two operating and reportable segments, North America and International. The North America and International segments both operate in the large and growing global snack food category and whose brands and products are offered in the natural and conventional grocery, drug, convenience, food service, club, mass merchandise and other channels. The two snack food segments are reported separately based on differences in manufacturing and distribution methods and economic characteristics. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Our term loan and revolving credit facility bear interest at a variable interest rate plus an applicable margin and, therefore, carrying amount approximates fair value. The fair value of our term loan and revolving credit facility are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active. The following table presents liabilities measured at fair value on a recurring basis (in thousands): September 30, 2017 December 31, 2016 Liabilities: Contingent consideration (1) $ 3,040 $ 2,491 (1) Contingent consideration is reported in Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Contingent Consideration In connection with the acquisition of Boundless Nutrition, LLC, (“Boundless Nutrition”) a manufacturer and distributor of the Oatmega protein snack bar and BFY cookie products, in April 2016, payment of a portion of the purchase price is contingent upon the achievement for the year ending December 31, 2018 ("Boundless Earn-out Period") of a defined contribution margin in excess of the sum of the original principal amount and accrued interest of the notes issued to the sellers of Boundless Nutrition (see Notes Payable discussion below for additional details). The Company is required to reassess the fair value of the contingent consideration at each reporting period. In connection with the acquisition of Paqui, LLC (“Paqui”) in April 2015, payment of a portion of the purchase price is contingent upon the achievement for the year ending December 31, 2018 ("Paqui Earn-out Period" and with the Boundless Earn-out Period, the "Earn-out Periods") of a defined contribution margin in excess of the sum of the original principal amount and accrued interest of the notes issued to the sellers of Paqui (see Notes Payable discussion below for additional details). The significant inputs used in the fair value estimates include numerous gross sales scenarios for the Earn-out Periods for which probabilities are assigned to each scenario to arrive at a single estimated outcome (Level 3). The estimated outcome is then discounted based on the individual risk analysis of the liability. The present value of the estimated outcome is used as the underlying price and the sum of the original principal amount and accrued interest of the notes issued to the sellers of Paqui and Boundless Nutrition ("Earn-Out Threshold") is used as the exercise price in the Black-Scholes option pricing model. Although the Company believes its estimates and assumptions are reasonable, different assumptions, including those regarding the operating results of Paqui and Boundless Nutrition, or changes in the future may result in different estimated amounts. The contingent consideration is included in Other long-term liabilities in the accompanying condensed consolidated balance sheets. The Company will satisfy this obligation with a cash payment to the sellers of each of Paqui and Boundless Nutrition upon the achievement of the respective milestone discussed above. The following table summarizes the Level 3 activity related to the Contingent Consideration (in thousands): 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Balance at beginning of the period $ 2,491 $ 1,911 Fair value of Boundless Nutrition contingent consideration at acquisition date — 1,085 Loss (gain) on change in fair value of contingent consideration 549 (505 ) Balance at end of the period $ 3,040 $ 2,491 Inventories In our North American operations, inventories are valued at the lower of cost or net realizable value using the weighted-average cost method. The Company generally procures certain raw materials inputs and packaging from suppliers and contracts with third-party firms to assemble and warehouse finished products. The third-party co-manufacturers invoice the Company monthly for labor inputs upon the production or shipment of finished product during the period. In our international operations, inventories are valued at the lower of cost or net realizable value using the first-in, first-out method. The Company owns the manufacturing facilities used for production. The costs of finished goods inventories include raw materials, direct labor, indirect production, and overhead costs. Write-downs are provided for finished goods expected to become non-saleable due to age and provisions are specifically made for slow moving or obsolete raw ingredients and packaging. The carrying value of our inventories is adjusted when we believe that the net realizable value is less than the carrying value. These write-downs are measured as the difference between the cost of the inventory, including estimated costs to complete and estimated selling prices. Charges related to slow moving or obsolete items are recorded as a component of cost of goods sold. Charges related to packaging redesigns are recorded as a component of selling and marketing expenses. Once inventory is written down, a new, lower-cost basis is established. These adjustments are estimates that require management judgment. Actual results could vary from our estimates and additional inventory write-downs could be required. Recognition of Net Sales, Sales Incentives and Trade Accounts Receivable Net sales are recognized when the earnings process is complete and the risks and rewards of ownership have transferred to the customer, which occurs upon the receipt and acceptance of product by the customer. The Company’s customers are primarily businesses that are stocking its products. The earnings process is complete once the customer order has been placed and approved and the product shipped has been received by the customer or when product is picked up by the Company’s customers at the Company’s co-manufacturer. Product is sold to customers on credit terms established on a customer-by-customer basis. The credit factors used include historical performance, current economic conditions and the nature and volume of the product. The Company offers its customers a variety of sales and incentive programs, including price discounts, coupons, slotting fees, in-store displays and trade advertising. The costs of these programs are recognized at the time the related sales are recorded and are classified as a reduction in net sales. These program costs are estimated based on a number of factors including customer participation and performance levels. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. Accounts are charged to bad debt expense as they are deemed uncollectable based upon a periodic review of aging and collections. As of September 30, 2017 and December 31, 2016 , the Company recorded total allowances related to sales and incentive programs against trade accounts receivable of approximately $12.8 million and $9.3 million , respectively. Recoveries of receivables previously written off are recorded as income when received. Concentration Risk Customers with 10% or more of the Company’s net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer one 14 % 22 % 15 % 26 % Customer two 6 % 10 % 9 % 13 % The Company outsources a significant percentage of the manufacturing of its products to a single co-manufacturer in the United States. This co-manufacturer represented 16% and 19% of the consolidated accounts payable balance as of September 30, 2017 and December 31, 2016 , respectively. As of both September 30, 2017 and December 31, 2016 , no customers represented more than 10% of the Company's consolidated accounts receivable balance outstanding. Earnings per Share Basic earnings per share has been computed based upon the weighted average number of common shares outstanding. The Company's unvested shares of restricted common stock contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with GAAP and therefore are included in the computation of basic earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating securities according to dividends declared and participation rights in undistributed earnings. Diluted earnings per share has been computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive. The dilutive effect of unvested restricted stock units ("RSUs") and outstanding stock options has been accounted for using the two-class method or the treasury stock method, if more dilutive. 13 Weeks Ended Three Months Ended 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 (in thousands, except share and per share amounts) Basic and diluted earnings per share: Numerator: Net income $ 674 $ 1,645 $ 2,388 $ 18,815 Less: net income attributable to participating securities (16 ) (83 ) (72 ) (1,078 ) Net income attributable to common shareholders 658 1,562 2,316 17,737 Denominator: Basic: Basic weighted average shares outstanding 76,739,354 75,455,047 76,752,323 75,032,287 Less: participating securities (1,849,483 ) (3,802,277 ) (2,304,845 ) (4,300,007 ) Basic weighted average common shares outstanding 74,889,871 71,652,770 74,447,478 70,732,280 Basic earnings per share $ 0.01 $ 0.02 $ 0.03 $ 0.25 Diluted: Basic weighted average shares outstanding 76,739,354 75,455,047 76,752,323 75,032,287 Unvested RSUs (1) 54,972 89,053 168,592 62,159 Outstanding stock options (2) — 13,660 — — Diluted weighted average shares outstanding 76,794,326 75,557,760 76,920,915 75,094,446 Less: participating securities (1,849,483 ) (3,802,277 ) (2,304,845 ) (4,300,007 ) Diluted weighted average common shares outstanding 74,944,843 71,755,483 74,616,070 70,794,439 Diluted earnings per share $ 0.01 $ 0.02 $ 0.03 $ 0.25 (1) Excludes the weighted average impact of 545,725 and 373,848 unvested RSUs for the 13 weeks ended September 30, 2017 and three months ended September 30, 2016, respectively, and 797,812 and 131,848 unvested RSUs for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, respectively, because the effects of their inclusion would be anti-dilutive. (2) Excludes the weighted average impact of 642,540 and 87,703 outstanding stock options for the 13 weeks ended September 30, 2017 and three months ended September 30, 2016, respectively, and 442,625 and 179,174 outstanding stock options for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, respectively, because the effects of their inclusion would be anti-dilutive. Tax Receivable Agreement ("TRA") As discussed in Note 1, immediately prior to the consummation of the IPO in August 2015, the Company entered into a TRA with the former holders of units in Topco. In December 2015, all of the former holders of units in Topco collectively assigned their interests to a new counterparty. The Company estimated an obligation of approximately $96.1 million based on the full and undiscounted amount of expected future payments under the TRA in consideration of a reduction in the Company's future U.S. federal, state and local taxes resulting from the utilization of certain tax attributes. The Company accounted for the obligation under the TRA as a dividend and elected to reduce additional paid in capital. Subsequent adjustments of the TRA obligation due to certain events, such as potential changes in tax rates or insufficient taxable income, will be recognized in the consolidated statements of comprehensive income. Future cash payments under the TRA will be classified as a financing activity on the condensed consolidated statements of cash flows. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which amends the hedge accounting recognition and presentation requirements specified under ASC 815 Derivatives and Hedging . The ASU provides guidance to reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company currently does not utilize derivative instruments, but may in the future. In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718): "Scope of Modification Accounting", which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718 Stock Compensation. An entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We do not anticipate any significant award modifications, as such do not anticipate the adoption of ASU 2017-09 will have a material impact on our condensed consolidated statements of comprehensive income. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 simplifies the accounting for goodwill impairments by eliminating Step 2 from the goodwill impairment test. Under the previous guidance an impairment of goodwill is when the carrying amount of goodwill exceeds its implied fair value, whereas under the new guidance a goodwill impairment loss would be recognized if the carrying amount of the reporting unit exceeds its fair value, limited to the total amount of goodwill allocated to the reporting unit. The ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard in January 2017 and it did not have an impact on its results of operations, statements of financial position or statements of cash flows. In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments". ASU 2016-15 clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230. This ASU is effective for interim and annual periods beginning after December 15, 2017. Early application is permitted. The adoption of the standard will impact the classification of our contingent consideration payments in 2019 on our condensed consolidated statements of cash flows. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses” (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this standard will have a material impact to our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", which clarifies the principles for recognizing revenue. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures as well as additional disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. In 2015, the FASB issued a deferral of the effective date of the standard to the first quarter of 2018, with early adoption in fiscal 2017 permitted. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for intellectual property licenses. Upon becoming effective, the Company will apply the amendments in the updated standard either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is currently evaluating the provisions of ASU No. 2014-09 and assessing the impact on its financial statements. As part of our assessment work to-date, we have formed an implementation work team, completed training on the new ASU’s revenue recognition model and are continuing our contract review and documentation. It has not yet been determined if the full retrospective or the modified retrospective method will be applied. In March 2016, the FASB issued ASU No. 2016-09, "Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting", which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted. The Company adopted the standard on October 1, 2016 and the adoption did not have an impact on its results of operations, statements of financial position or statements of cash flows. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize assets and liabilities related to lease arrangements longer than twelve months on the balance sheet. This standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is in the process of assessing the impact of the adoption of ASU No. 2016-02 on its financial position, results of operations, cash flows and financial statement disclosures but does not believe the adoption will have a material impact. As of September 30, 2017 , the Company has $9.4 million of non-cancellable lease commitments. We anticipate the majority of these leases will be recorded on our condensed consolidated balance sheets upon adoption of this standard. In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which simplifies the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. This revised guidance was effective for annual reporting periods beginning after December 15, 2015, and related interim periods. The amendments in the update were applied prospectively to adjustments to provisional amounts that occurred after the effective date of the update with early application permitted for financial statements not yet issued. We have adopted this guidance and will apply it as necessary in our financial statements. Based on changes to our provisional purchase price accounting, during the 39 weeks ended September 30, 2017, we recorded approximately $0.2 million of additional expense, previously reported financial information has not been restated for measurement period adjustments. In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory", which applies to inventory that is measured using first-in, first-out ("FIFO") or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively. The Company adopted the standard January 1, 2017 and the adoption did not have a material impact on our condensed consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern”. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The Company applied the standard for the 39 weeks ended September 30, 2017 condensed consolidated financial statements and it had no impact on its disclosures. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition | ACQUISITIONS Tyrrells Group Acquisition On September 2, 2016, the Company acquired 100% of the voting interests of Tyrrells Group, an international manufacturer and distributor of BFY snacks, for total consideration of approximately $416.4 million . The Company paid approximately $381.1 million in cash and issued approximately 2.1 million shares of its common stock with an acquisition date fair value of approximately $35.3 million . The Company financed the cash portion of the transaction with proceeds from term loans totaling $600 million . This acquisition has been accounted for under the acquisition method of accounting, whereby the purchase consideration was allocated to tangible and intangible net assets acquired and liabilities assumed at their estimated fair values on the date of acquisition. The excess purchase consideration over fair value of net assets acquired and liabilities assumed was recorded as goodwill. Due to the nature of the Tyrrells acquisition the company’s tax basis in assets carried over from Tyrrells group. Therefore, the company has recorded deferred tax liabilities for the differences in book and tax bases of identifiable intangibles and fixed assets. The Company has incurred approximately $9.4 million of transaction expenses in connection with the Tyrrells Group acquisition to date, which are included as part of general and administrative expense in the accompanying consolidated statements of comprehensive income. Of the $9.4 million , approximately $0.1 million was incurred during the 39 weeks ended September 30, 2017, with the remainder having been incurred during the year ended December 31, 2016. The Company incurred approximately $8.4 million and $8.5 million of transaction related expenses during the three and nine months ended September 30, 2016, respectively. During the 39 weeks ended September 30, 2017, Tyrrells Group contributed approximately $91.1 million of net sales to the Company. As of the acquisition date, Tyrrells Group had $28.0 million of gross accounts receivable, of which we estimated $6.6 million will be uncollectable, mostly related to the costs of promotional activities being offset against trade receivable invoices by customers. In 2017, the Company completed its accounting of the purchase consideration and estimated fair value of assets acquired and liabilities assumed at the date of acquisition, with adjustments to fair value of certain assets and liabilities identified during the measurement period. The adjustments identified during the measurement period were a result of changes to the original fair value estimates of certain items acquired and are the result of additional information obtained since September 2, 2016, that related to facts and circumstances that existed at the acquisition date. The following table summarizes the final allocation of the purchase consideration for Tyrrells Group to the estimated fair value of assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase consideration: Provisional Valuation as of December 31, 2016 Measurement Period Adjustments Final Valuation Cash paid as purchase consideration $ 381,069 $ — $ 381,069 Fair value of equity issued to Sellers 35,319 — 35,319 Total purchase consideration 416,388 — 416,388 Less: cash and cash equivalents acquired (15,451 ) — (15,451 ) Total purchase price, net of cash and cash equivalents acquired 400,937 — 400,937 Fair value of net assets acquired and liabilities assumed: Accounts receivable 21,424 — 21,424 Inventory 8,921 — 8,921 Property, plant and equipment 42,612 9,005 51,617 Other assets 2,845 — 2,845 Indefinite-lived identifiable intangible asset- trade names 261,854 (27,900 ) 233,954 Definite-lived identifiable intangible assets- customer relationships (15-year useful life) 44,240 532 44,772 Accounts payable (19,498 ) — (19,498 ) Other liabilities (13,123 ) (1,844 ) (14,967 ) Deferred tax liabilities (51,810 ) 2,843 (48,967 ) Total fair value of net assets acquired and liabilities assumed 297,465 (17,364 ) 280,101 Excess purchase consideration over fair value of net assets acquired (goodwill) $ 103,472 $ 17,364 $ 120,836 Goodwill is calculated as the excess of consideration paid over the net assets acquired and represents synergies, organic growth and other benefits that are expected to arise from integrating Tyrrells Group into our operations. The goodwill associated with the Tyrrells Group acquisition is not deductible for tax purposes. Pro Forma Combined Statements of Operations (Unaudited) The following unaudited pro forma combined statements of operations presents the Company's operations as if the Tyrrells Group acquisition and related financing activities had occurred on January 1, 2016. The pro forma information includes the following adjustments (i) amortization of acquired definite-lived intangible assets; (ii) depreciation based on the fair value of acquired property and equipment; (iii) costs of goods sold based on the fair value of acquired inventory; (iv) interest expense incurred in connection with incremental term loan borrowings used to finance the acquisition of Tyrrells; and (v) inclusion of equity-based compensation expense associated with equity awards granted to certain Tyrrells' employees in connection with the acquisition. The pro forma combined statements of operations are not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date and are not intended to be a projection of future results (in thousands, except per share data): Three Months Ended Nine Months Ended (Unaudited) Net sales $ 90,048 $ 269,781 Net income $ (2,345 ) $ 6,610 Net income per share- basic $ (0.03 ) $ 0.09 Net income per share- diluted $ (0.03 ) $ 0.08 Boundless Nutrition Acquisition In April 2016, the Company acquired 100% of the voting rights of Boundless Nutrition, a manufacturer and distributor of the Oatmega protein snack bar and a line of BFY cookie products, for total consideration of approximately $21.5 million . This acquisition has been accounted for under the acquisition method of accounting and the excess purchase consideration over fair value of net assets acquired and liabilities assumed was recorded as goodwill and represents a value attributable to brand recognition associated with Boundless Nutrition's products and position in the BFY snack category. For the 39 weeks ended September 30, 2017 , Oatmega products contributed net sales of approximately $13.1 million . In connection with the Boundless Nutrition acquisition we recognized approximately $8.5 million of goodwill from expected synergies due to our ability to diversify our product offerings and leverage our North American distribution channels. For tax purposes, the acquisition is treated as an acquisition of assets, therefore the Company's tax basis in assets was allocated based on their fair value. The goodwill associated with the Boundless Nutrition acquisition is deductible for tax purposes. In 2016, the Company completed its accounting of the purchase consideration and estimated fair value of assets acquired and liabilities assumed at the date of acquisition, with an adjustment to fair value of contingent consideration identified during the measurement period. The following table summarizes the final allocation of the purchase consideration for Boundless Nutrition to the estimated fair value of assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase consideration: Cash paid as purchase consideration $ 16,651 Fair value of notes payable issued to sellers as consideration 3,776 Fair value of contingent consideration 1,085 Total purchase consideration 21,512 Less: cash and cash equivalents acquired (129 ) Total purchase price- net of cash and cash equivalents acquired 21,383 Fair value of net assets acquired and liabilities assumed: Accounts receivable and inventory 2,046 Property, plant and equipment 751 Other assets 178 Indefinite-lived identifiable intangible asset- trade name 9,440 Definite-lived identifiable intangible assets- customer relationships and trade name 2,160 Accounts payable (1,111 ) Other liabilities (532 ) Total fair value of net assets acquired and liabilities assumed 12,932 Excess purchase consideration over fair value of net assets acquired (goodwill) $ 8,451 Management evaluated the impact to the Company's financial statements of the Boundless Nutrition acquisition and concluded that the impact was not significant enough to require or separately warrant the inclusion of pro forma financial results inclusive of Boundless Nutrition. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY Inventories, net of reserves and provisions, consist of the following (in thousands): September 30, 2017 December 31, 2016 Raw materials and packaging $ 12,630 $ 9,313 Work in process 1,483 760 Finished goods 12,847 8,177 Inventories, net $ 26,960 $ 18,250 As of September 30, 2017 and December 31, 2016 , we had approximately $0.5 million and $0.6 million in reserves, respectively, for finished goods deemed unsaleable and raw materials and packaging deemed obsolete. If future demand or market conditions are less favorable than those projected by our management, additional inventory write-downs may be required. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost. Accumulated depreciation is recognized ratably over the expected useful life of the asset. Property, plant and equipment, net consist of the following (in thousands): September 30, 2017 December 31, 2016 Machinery and equipment $ 55,459 $ 35,889 Furniture and fixtures 4,198 3,665 Building 5,483 4,408 Land 1,152 928 Leasehold improvements 6,552 3,922 Construction in progress 3,397 — Property, plant and equipment, gross 76,241 48,812 Less: accumulated depreciation (8,204 ) (2,928 ) Property, plant and equipment, net $ 68,037 $ 45,884 Depreciation expense was approximately $1.8 million and $5.4 million for the 13 and 39 weeks ended September 30, 2017 , respectively, and approximately $0.5 million and $0.8 million for the three and nine months ended September 30, 2016 , respectively. Depreciation expense is included in cost of goods sold, sales and marketing and general and administrative expense in the accompanying condensed consolidated statements of comprehensive income (loss). |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill consists of the following (in thousands): North America International Total Balance as of December 31, 2016 $ 55,872 $ 96,081 $ 151,953 Purchase price accounting adjustments (1) — 16,123 16,123 Allocation of goodwill to North America segment (1) 18,378 (18,378 ) — Foreign currency translation impact — 9,638 9,638 Balance as of September 30, 2017 $ 74,250 $ 103,464 $ 177,714 (1) In 2017, the Company completed its accounting of the purchase consideration and estimated fair value of assets acquired and liabilities assumed at the date of the Tyrrells Group acquisition, with adjustments to the fair value of certain assets and liabilities identified during the measurement period. The adjustments reflected in the table above were a result of changes to the original fair value estimates of certain items acquired and are the result of additional information obtained since December 31, 2016, that related to facts and circumstances that existed at the acquisition date. When the Company completed its allocation of the purchase consideration for Tyrrells Group it allocated a portion of the total transaction goodwill balance to the North America operating segment, based on estimated future profitability. Intangible assets consist of the following (in thousands): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets with indefinite lives: Trade names $ 457,259 $ — $ 457,259 $ 464,488 $ — $ 464,488 Intangible assets with finite lives: Customer relationships 110,894 (16,984 ) 93,910 106,830 (11,387 ) 95,443 Non-competition agreement 90 (41 ) 49 90 (32 ) 58 Trade name 20 (20 ) — 20 (13 ) 7 Total $ 568,263 $ (17,045 ) $ 551,218 $ 571,428 $ (11,432 ) $ 559,996 Amortization of finite-lived intangibles was approximately $1.8 million and $5.4 million for the 13 and 39 weeks ended September 30, 2017 , respectively, and approximately $1.3 million and $3.4 million for the three and nine months ended September 30, 2016 , respectively. Amortization of finite-lived intangible assets is included as part of general and administrative expense in the accompanying condensed consolidated statements of comprehensive income. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES The following table shows the components of accrued liabilities (in thousands): September 30, 2017 December 31, 2016 Unbilled inventory 3,819 2,409 Accrued personnel costs 1,408 3,031 Accrued interest 3,628 3,297 Accrued sales tax and value added tax (VAT) payable 1,281 825 Other accrued expenses and liabilities 3,591 2,943 Total accrued liabilities $ 13,727 $ 12,505 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Debt consists of the following (in thousands): September 30, 2017 December 31, 2016 Term loans, net of unamortized original issue discount of $5,721 and $6,321, respectively $ 588,280 $ 592,179 Revolving loans 9,500 8,500 Notes payable, net of unamortized discount of $118 and $236, respectively 6,787 7,669 Deferred financing costs, net of accumulated amortization of $2,663 and $813, respectively (14,106 ) (15,957 ) Total debt 590,461 592,391 Less: Current portion (9,963 ) (6,927 ) Long-term debt $ 580,498 $ 585,464 Credit Facility In connection with the acquisition of Tyrrells Group, the Company entered into a Credit Agreement on September 2, 2016 (the "Credit Facility"), which provided for term loans in the aggregate principal amount of $600 million (the "Term Loans") and revolving loans in the aggregate principal amount of $50 million (the "Revolving Loans"), of which $ 20 million is denominated in pounds sterling. The Company borrowed from the Term Loans in full to finance the acquisition of Tyrrells Group and pay down all outstanding indebtedness under the Credit Agreement entered into on July 17, 2014 (the "Prior Credit Facility"). As of September 30, 2017, the Company had $40.7 million of available capacity under the Revolving Loans. In connection with the issuance of the Credit Facility, the Company incurred an original issue discount ("OID") of approximately $6.6 million and paid lender and legal fees of approximately $15.4 million , which are capitalized and presented as a direct reduction to the related debt instrument in the condensed consolidated balance sheets. These costs are recognized as additional interest expense over the term of the related debt instrument using the effective interest method. In addition, the Company recognized a loss on extinguishment of debt of approximately $1.1 million related to the write-off of unamortized deferred financing costs incurred under the Prior Credit Facility. The Company must repay the Term Loans in installments of $1.5 million per quarter due on the last day of each quarter beginning with the quarter ending December 31, 2016, with the remaining balance due at maturity in a final installment of $559.5 million . The Term Loans and Revolving Loans are scheduled to mature on September 2, 2023 and September 2, 2021, respectively. In addition to the installment payments described above, the Credit Facility includes an annual mandatory prepayment of the Term Loans from 50% of the Company's excess cash flow as measured on annual basis, with step-downs to 25% and 0% of the Company's excess cash flow if the Company's Total Leverage Ratio (as defined in the Credit Facility), tested as of the last day of the Company's fiscal year, is less than 4.50 to 1.00 but greater than 3.75 to 1.00, and less than or equal to 3.75 to 1.00, respectively. Excess cash flow is generally defined as the Company's Consolidated Net Income (as defined in the Credit Facility) less debt service costs, unfinanced capital expenditures, unfinanced acquisition expenditures, and certain restricted payments, as adjusted for changes in the Company's working capital and less other customary items. The excess cash flow requirement discussed above will commence with the fiscal year ending December 30, 2017. In addition, the Credit Facility requires mandatory prepayment of the Term Loans from the net cash proceeds of (i) certain debt issuances and (ii) certain asset sales outside the ordinary course of business and from proceeds of property insurance and condemnation events, in each case of this clause (ii) subject to the Company’s right in some circumstances to reinvest such proceeds in the Company’s business. Any voluntary prepayment as part of a repricing transaction shall be accompanied by a prepayment premium equal to 1.0% of the principal amount of such prepayment, if such prepayment is made on or prior to the date that is twelve months after September 2, 2016. Interest The Term Loans bear interest, at the Company's option, at either the Eurodollar rate plus a margin of 5.50% or the prime rate plus a margin of 4.50% , with step-downs to 5.00% and 4.00% , respectively, if the Company's First Lien Leverage Ratio (as defined in the Credit Facility) is less than or equal to 4.50 to 1.00. The Eurodollar rate is subject to no floor with respect to the Revolving Loans and an annual 1.00% floor with respect to the Term Loans and the prime rate is subject to a 1.00% floor with respect to the Revolving Loans and a 2.00% floor with respect to the Term Loans. As of September 30, 2017, the interest rate on the outstanding Term Loans balance was 6.74% per annum and the weighted-average interest rate on the outstanding Revolver Loans balance was 6.74% per annum. The Company is also required to pay a commitment fee on the unused commitments under the Revolving Loans at a rate equal to 0.50% per annum with a step-down to 0.375% per annum, if the Company's First Lien Leverage Ratio is less than or equal to 3.25 to 1.00. Guarantees The Credit Facility is secured by liens on substantially all the Company's assets, including a pledge of 100% of the equity interests in the Company's domestic subsidiaries and a pledge of 65% of the voting equity interests and 100% of the non-voting equity interests in the Company's direct foreign subsidiaries. All obligations under the Credit Facility are unconditionally guaranteed by substantially all of the Company's direct and indirect domestic subsidiaries, with certain exceptions, including, among others, certain immaterial subsidiaries, non wholly-owned subsidiaries and subsidiaries prohibited by law, regulation or contract from guaranteeing the obligations under the Credit Facility. These guarantees are secured by substantially all of the present and future property and assets of the guarantors, with certain exceptions, including among others, certain contracts or other agreements to the extent such security interest would be prohibited or restricted by law or by such contract or other agreement, property and assets over which such security interest is not permitted, motor vehicles or other assets covered by a certificate of title or ownership and other property and assets to the extent such security interest would create adverse tax consequences. Covenants As of the last day of any fiscal quarter of the Company, the terms of the Credit Facility require the Company and its subsidiaries (on a consolidated basis and subject to certain customary exceptions) to maintain a maximum First Lien Leverage Ratio of not more than 8.50 to 1.00, initially, and decreasing to 6.25 to 1.00 over the term of the Credit Facility, which shall be in effect only when the Revolving Loans and undrawn amounts under Letters of Credit are outstanding in excess of 30% of the Revolving Commitments as of such date. As of September 30, 2017 , the Company was in compliance with this financial covenant. The Credit Facility contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the parties, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The Credit Facility contains customary negative covenants, including, among others, restrictions on the incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, repurchases of equity interests in the Company, entering into affiliate transactions and asset sales. The Credit Facility also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control and judgment defaults. Notes Payable In April 2016, the Company issued $4.0 million in unsecured notes to the sellers of Boundless Nutrition in connection with its acquisition. The notes bear interest at a rate per annum of 0.67% with principal and interest due at varying maturity dates between April 29, 2018 and December 31, 2018. The Company paid off $ 1.0 million of the outstanding notes payable balance on April 29, 2017. The Company recorded an acquisition-date fair value discount of approximately $0.2 million based on market rates for debt instruments with similar terms (Level 3), which is amortized to interest expense over the term of the notes using the effective-interest method. In April 2015, the Company issued $3.9 million in unsecured notes to the sellers of Paqui in connection with its acquisition. The notes bear interest at a rate per annum of 1.5% with principal and interest due at maturity on March 31, 2018. The Company recorded an acquisition-date fair value discount of approximately $0.2 million based on market rates for debt instruments with similar terms (Level 3), which is amortized to interest expense over the term of the notes using the effective-interest method. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase Commitments The Company entered into certain supply contracts for their popcorn kernels, oils, potatoes, root vegetables and natural ingredients used in Oatmega protein bars. Certain contracts also stipulate that if the Company fails to purchase the stated quantities within the time period specified, the Company has the option to purchase all remaining quantities under the contract, or the seller has the right to assess liquidated damages, including payment of the excess of the contract price over the market price for all remaining contracted quantities not purchased. The following table shows the remaining outstanding purchase commitments based on the calendar year in which the contract expires: Ingredient Commitments 2017 $ 5,905 2018 36,168 2019 3,924 Total $ 45,997 Lease Commitments The Company entered into an operating lease on February 26, 2015 for its corporate headquarters located in Austin, Texas. On August 1, 2017, the Company entered into an amended lease agreement which expanded the Company's corporate headquarters at its existing location. Boundless Nutrition entered into an operating lease for an office space and manufacturing facility in November 2014, which the Company assumed as part of the acquisition. In January 2017, the Company exited its Boundless Nutrition lease and entered into a sublease with a third party for the remainder of the lease term. In connection with the lease abandonment, the Company incurred a loss on exit activity of approximately $0.2 million . Tyrrells Group has several operating leases for office space and manufacturing facilities which the Company assumed as part of the acquisition. Rent expense from operating leases totaled approximately $0.4 million and $1.0 million for the 13 and 39 weeks ended September 30, 2017 , respectively, and approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2016 , respectively. As of September 30, 2017 , minimum rental commitments under non-cancellable operating leases were as follows (in thousands): Remainder of 2017 $ 506 2018 1,592 2019 1,436 2020 1,383 2021 1,351 Thereafter 3,113 Total $ 9,381 Legal Matters From time to time, the Company is subject to claims and assessments in the ordinary course of business. The Company is not currently a party to any litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results from operations or cash flow. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, the Company recorded tax expense of $10.9 million on pre-tax income of $13.3 million and tax expense of $16.1 million on pre-tax income $34.9 million , respectively. The effective tax rate was 82.0% and 46.1% for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, respectively. The Company's effective tax rate is dependent on many factors, including the impact of enacted tax laws in jurisdictions in which the Company operates and the amount of taxable income the Company earns within those jurisdictions. The increase in the effective tax rate for the 39 weeks ended September 30, 2017 , compared to the nine months ended September 30, 2016 , was primarily due to foreign currency gains from the remeasurement of intercompany loans, which were treated as discrete items in the current period, along with the impact of entering foreign jurisdictions in connection with our acquisition of Tyrrells Group in September 2016. As of September 30, 2017 , we have established a long-term liability for an uncertain tax position in the amount of approximately $1.1 million related to pre-acquisition activity by Tyrrells Group. The Company's policy is to accrue interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2017 , the interest associated with the Company's position is not material. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | EQUITY-BASED COMPENSATION In July 2015, the Amplify Snack Brands, Inc. 2015 Stock Option and Incentive Plan (the "2015 Plan") was adopted by the Company's board of directors, approved by the Company's stockholders and became effective immediately prior to the consummation of the Company's IPO in August 2015. The 2015 Plan provides for the grant of various equity-based incentive awards to officers, employees, non-employee directors and consultants of the Company and its subsidiaries. The types of awards that may be granted under the 2015 Plan include incentive stock options, non-qualified stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), stock appreciation rights ("SARs") and other equity-based awards. The Company initially reserved 13,050,000 shares of common stock for issuance under the 2015 Plan, which is subject to certain adjustments for changes in the Company's capital structure, as defined in the 2015 Plan. As of September 30, 2017 , 3,803,294 shares were available for issuance under the 2015 Plan. In September 2017, a stock option award to purchase 1,166,173 shares of the Company's common stock was granted to an employee in connection with his appointment as an officer of the Company. This award was granted outside of the 2015 Plan. For the 13 weeks ended September 30, 2017 and three months ended September 30, 2016 , equity-based compensation expense was approximately $1.2 million and $1.8 million , respectively. For the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016 , equity-based compensation expense was approximately $2.6 million and $4.0 million , respectively. RSUs During the 39 weeks ended September 30, 2017 , 790,229 RSUs were granted to certain employees and one non-employee director with a grant date fair value of approximately $6.4 million , which are calculated based on the closing market value of the Company's common stock on the date of grant. The grant date fair value of the RSU awards is amortized to equity-based compensation expense on a straight-line basis over a three or four -year service period based on the terms of the award. Stock Options In September 2017, stock options awards to purchase 1,865,877 shares of the Company's common stock were granted to two employees in connection with their appointment as officers of the Company. The grant date fair value of these stock option awards was approximately $4.1 million , which was estimated on the date of grant using the Black-Scholes valuation model. The grant date fair value of stock option awards is amortized to equity-based compensation expense on a straight-line basis over a three-year service period. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION On September 2, 2016, the Company completed the acquisition of Tyrrells Group, a diversified, international company that manufactures and markets BFY snack foods. As a result of this transaction, management determined that it operates in two operating and reportable segments, North America and International. The North America and International segments both operate in the large and growing global snack food category and whose brands and products are offered in the natural and conventional grocery, drug, convenience, food service, club, mass merchandise and other channels. The two segments are reported separately based on differences in manufacturing and distribution methods and economic characteristics. This reporting structure aligns with the way our Chief Operating Decision Maker ("CODM"), our CEO, regularly reviews operating performance of the North America and International segments for purposes of allocating resources, deploying capital and evaluating operating performance. Certain expenses such as professional fees, insurance and costs related to employees who focus on both our domestic and international business have been excluded from our individual segments' profitability measures, along with non-recurring transaction related expenses that are not part of revenue generating activities. For purposes of our segment results, revenue is attributed to individual geographies on the basis of the physical location of where the sales occur. Prior to the Tyrrells Group acquisition, the Company operated as one reportable segment with all of its business conducted in North America. Figures from the prior period have be restated to conform with the current period segment information presentation. We have provided information on our net sales, depreciation, amortization, segment operating income, stock compensation, corporate overhead expenses, loss on change in fair value of contingent consideration and non-recurring transaction expenses. Additionally, we have provided information related to capital expenditures, fixed assets and total assets. 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Net sales: North America $ 63,481 $ 59,494 $ 193,157 $ 173,705 International 31,383 8,488 89,899 8,488 Total net sales $ 94,864 $ 67,982 $ 283,056 $ 182,193 Depreciation expense: North America $ 325 $ 172 $ 825 $ 447 International 1,479 367 4,564 367 Total depreciation expense $ 1,804 $ 539 $ 5,389 $ 814 Amortization of intangible assets: North America $ 1,095 $ 1,105 $ 3,291 $ 3,259 International 732 174 2,135 174 Total amortization expense $ 1,827 $ 1,279 $ 5,426 $ 3,433 Segment operating income (loss): North America $ 19,548 $ 19,407 $ 62,630 $ 61,929 International 261 619 (1,409 ) 619 Segment operating income 19,809 20,026 61,221 62,548 Corporate overhead (1) (2,703 ) (1,737 ) (8,604 ) (5,400 ) Non-recurring and unusual transactions (2) (546 ) (9,024 ) (3,703 ) (10,113 ) (Loss) gain on change in fair value of contingent consideration (431 ) 505 (549 ) 505 Equity-based compensation (1,152 ) (1,803 ) (2,553 ) (3,972 ) Operating income 14,977 7,967 45,812 43,568 Reconciliation to income before taxes: Interest expense 11,329 5,636 33,307 11,788 Other expense (income), net 102 (4,221 ) (789 ) (4,221 ) Loss on extinguishment of debt — 1,100 — 1,100 Income before income taxes $ 3,546 $ 5,452 $ 13,294 $ 34,901 Net sales by brand: SkinnyPop brand $ 56,963 $ 53,432 $ 171,752 $ 162,486 Tyrrells brand (3) 25,511 6,891 74,212 6,891 Oatmega brand 4,578 4,095 13,147 6,682 Paqui brand 1,760 1,865 7,512 4,435 Lisa's Chips brand (4) 1,996 703 5,879 703 Thomas Chipman and the Wholesome Food Company brands (5) 4,056 996 10,554 996 Total net sales $ 94,864 $ 67,982 $ 283,056 $ 182,193 (1) Included in corporate overhead are administrative costs required to operate effectively as a public company, recurring professional fees, corporate-related insurance costs, personnel costs of our executive team, and certain individuals within our finance and human resources departments. (2) For the 13 and 39 weeks ended September 30, 2017, we incurred severance and integration costs, along with legal, accounting and consulting fees of approximately $0.4 million and $3.0 million , respectively, in connection with the Tyrrells Group acquisition. In addition, we paid fees of approximately $0.1 million and $0.7 million for the 13 and 39 weeks ended September 30, 2017, respectively, to help conduct our search for executive leadership and board of director personnel. For the three and nine months ended September 30, 2016, we incurred legal, accounting, consulting and ratings agency fees along with severance and integration costs of approximately $9.0 million and $9.5 million , respectively, in connection with the Tyrrells Group and Boundless Nutrition acquisitions. In addition, we incurred legal, accounting, printing and filing fees of approximately $0.6 million for the nine months ended September 30, 2016, in connection with our secondary equity public offering, which closed in May 2016. (3) Tyrrells brand includes private label net sales of items that were manufactured at our facilities in the United Kingdom. (4) Lisa's Chips brand includes private label net sales of items that were manufactured at our facility in Germany. (5) Thomas Chipman and the Wholesome Food Company brands includes private label net sales of items that were manufactured at our facility in Australia. All of our outstanding debt and notes payable and associated interest expense are held by our North America segment. Interest income was immaterial to both segments. Customer Concentrations - North America Customers with 10% or more of our North America segment net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer one 21 % 26 % 22 % 27 % Customer two 9 % 11 % 13 % 14 % Customer Concentrations - International Customers with 10% or more of our International segment net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer three 12 % 11 % 11 % 11 % Customer four 12 % 11 % 10 % 11 % 13 Weeks Ended Three Months Ended 39 Weeks Ended Nine Months Ended Capital expenditures: North America $ 3,241 $ 1,664 $ 10,964 $ 1,910 International 825 1,070 3,484 1,070 $ 4,066 $ 2,734 $ 14,448 $ 2,980 Fixed assets: September 30, 2017 December 31, 2016 North America $ 14,507 $ 4,168 International 53,530 41,716 $ 68,037 $ 45,884 Total assets: September 30, 2017 December 31, 2016 North America $ 412,154 $ 378,658 International 475,234 459,582 $ 887,388 $ 838,240 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS The Company entered into a foreign currency option contract in August 2016, to hedge its exposure to currency fluctuations in connection with the anticipated acquisition of Tyrrells, because the purchase price was denominated in pounds sterling (£). The Company subsequently terminated this foreign currency option contract and entered into a forward currency exchange contract to purchase £ 278 million at a US dollar to pound sterling forward rate of 1.3157 . In connection with the acquisition of Tyrrells on September 2, 2016, the Company settled this forward currency exchange contract and recorded a gain of approximately $3.6 million , representing the difference between the forward rate of 1.3157 and the spot rate on the settlement date. The Company did not designate this forward currency exchange contract as a cash flow hedge for accounting purposes and the resulting gain was recognized within other income and expense, net in the accompanying condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2016. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Change in Fiscal Year | Change in Fiscal Year In December 2016, the Company's Board of Directors approved a change in the fiscal year end from a calendar year ending on December 31 to a 52- or 53-week fiscal year ending on the last Saturday in December, effective beginning with fiscal year 2017. In a 52- or 53-week fiscal year, each of the Company's fiscal quarters will consist of two four-week fiscal months followed by a five- or six-week fiscal month. The change to the Company’s fiscal year does not impact the Company’s calendar year results for the year ended December 31, 2016, and the Company does not expect the change will impact the prior year comparability of each of the fiscal quarters and annual period in 2016 in future filings. |
Basis of Presentation and Interim Financial Statements | Basis of Presentation The accompanying interim condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016 , the interim condensed consolidated statements of comprehensive income (loss) for the 13 and 39 weeks ended September 30, 2017 and the three and nine months ended September 30, 2016 and the interim condensed consolidated statements of cash flows for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016 , are unaudited. Interim Financial Statements The accompanying unaudited interim condensed consolidated financial statements of Amplify Snack Brands, Inc. (“Condensed Consolidated Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required for annual financial statements. The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements at and for the fiscal year ended December 31, 2016, and in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial position as of September 30, 2017 and results of our operations for the 13 and 39 weeks ended September 30, 2017 and the three and nine months ended September 30, 2016 , and cash flows for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016 . The interim results for the 39 weeks ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 30, 2017. Therefore, the Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2017. |
Use of Estimates | Use of Estimates The unaudited interim condensed consolidated financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. The Company routinely evaluates its estimates, including those related to accruals and allowances for customer programs and incentives, bad debts, income taxes, long-lived assets, inventories, equity-based compensation, accrued broker commissions and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Foreign Currency Transaction and Translation | Foreign Currency Transactions and Translation Exchange adjustments resulting from foreign currency transactions are recognized as a component of other non-operating income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss). For the Company's non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars by using period-end exchange rates. Income and expense items are translated at a weighted-average exchange rate prevailing during the period. Adjustments resulting from translation of financial statements are reflected as a separate component of shareholders' equity. |
Segment Reporting | Segment Reporting On September 2, 2016, the Company completed the acquisition of Tyrrells Group, a diversified, international company that manufactures and markets BFY snack foods. As a result of this transaction, management determined that it operates in two operating and reportable segments, North America and International. The North America and International segments both operate in the large and growing global snack food category and whose brands and products are offered in the natural and conventional grocery, drug, convenience, food service, club, mass merchandise and other channels. The two snack food segments are reported separately based on differences in manufacturing and distribution methods and economic characteristics. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Our term loan and revolving credit facility bear interest at a variable interest rate plus an applicable margin and, therefore, carrying amount approximates fair value. The fair value of our term loan and revolving credit facility are estimated based on Level 2 inputs, which were quoted prices for identical or similar instruments in markets that are not active. |
Inventories | Inventories In our North American operations, inventories are valued at the lower of cost or net realizable value using the weighted-average cost method. The Company generally procures certain raw materials inputs and packaging from suppliers and contracts with third-party firms to assemble and warehouse finished products. The third-party co-manufacturers invoice the Company monthly for labor inputs upon the production or shipment of finished product during the period. In our international operations, inventories are valued at the lower of cost or net realizable value using the first-in, first-out method. The Company owns the manufacturing facilities used for production. The costs of finished goods inventories include raw materials, direct labor, indirect production, and overhead costs. Write-downs are provided for finished goods expected to become non-saleable due to age and provisions are specifically made for slow moving or obsolete raw ingredients and packaging. The carrying value of our inventories is adjusted when we believe that the net realizable value is less than the carrying value. These write-downs are measured as the difference between the cost of the inventory, including estimated costs to complete and estimated selling prices. Charges related to slow moving or obsolete items are recorded as a component of cost of goods sold. Charges related to packaging redesigns are recorded as a component of selling and marketing expenses. Once inventory is written down, a new, lower-cost basis is established. These adjustments are estimates that require management judgment. Actual results could vary from our estimates and additional inventory write-downs could be required. |
Recognition of Net Sales, Sales Incentives and Trade Accounts Receivable | Recognition of Net Sales, Sales Incentives and Trade Accounts Receivable Net sales are recognized when the earnings process is complete and the risks and rewards of ownership have transferred to the customer, which occurs upon the receipt and acceptance of product by the customer. The Company’s customers are primarily businesses that are stocking its products. The earnings process is complete once the customer order has been placed and approved and the product shipped has been received by the customer or when product is picked up by the Company’s customers at the Company’s co-manufacturer. Product is sold to customers on credit terms established on a customer-by-customer basis. The credit factors used include historical performance, current economic conditions and the nature and volume of the product. The Company offers its customers a variety of sales and incentive programs, including price discounts, coupons, slotting fees, in-store displays and trade advertising. The costs of these programs are recognized at the time the related sales are recorded and are classified as a reduction in net sales. These program costs are estimated based on a number of factors including customer participation and performance levels. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. Accounts are charged to bad debt expense as they are deemed uncollectable based upon a periodic review of aging and collections. As of September 30, 2017 and December 31, 2016 , the Company recorded total allowances related to sales and incentive programs against trade accounts receivable of approximately $12.8 million and $9.3 million , respectively. Recoveries of receivables previously written off are recorded as income when received. |
Earnings Per Share | Earnings per Share Basic earnings per share has been computed based upon the weighted average number of common shares outstanding. The Company's unvested shares of restricted common stock contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with GAAP and therefore are included in the computation of basic earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating securities according to dividends declared and participation rights in undistributed earnings. Diluted earnings per share has been computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive. The dilutive effect of unvested restricted stock units ("RSUs") and outstanding stock options has been accounted for using the two-class method or the treasury stock method, if more dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which amends the hedge accounting recognition and presentation requirements specified under ASC 815 Derivatives and Hedging . The ASU provides guidance to reduce the complexity of and simplify the application of hedge accounting by preparers. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company currently does not utilize derivative instruments, but may in the future. In May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718): "Scope of Modification Accounting", which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718 Stock Compensation. An entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We do not anticipate any significant award modifications, as such do not anticipate the adoption of ASU 2017-09 will have a material impact on our condensed consolidated statements of comprehensive income. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 simplifies the accounting for goodwill impairments by eliminating Step 2 from the goodwill impairment test. Under the previous guidance an impairment of goodwill is when the carrying amount of goodwill exceeds its implied fair value, whereas under the new guidance a goodwill impairment loss would be recognized if the carrying amount of the reporting unit exceeds its fair value, limited to the total amount of goodwill allocated to the reporting unit. The ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard in January 2017 and it did not have an impact on its results of operations, statements of financial position or statements of cash flows. In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments". ASU 2016-15 clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230. This ASU is effective for interim and annual periods beginning after December 15, 2017. Early application is permitted. The adoption of the standard will impact the classification of our contingent consideration payments in 2019 on our condensed consolidated statements of cash flows. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses” (Topic 326), which amends the guidance on the impairment of financial instruments. The standard adds an impairment model, referred to as current expected credit loss, which is based on expected losses rather than incurred losses. The standard applies to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantees and loan commitments. Under the guidance, companies are required to disclose credit quality indicators disaggregated by year of origination for a five-year period. The new guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. We do not anticipate this standard will have a material impact to our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", which clarifies the principles for recognizing revenue. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures as well as additional disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. In 2015, the FASB issued a deferral of the effective date of the standard to the first quarter of 2018, with early adoption in fiscal 2017 permitted. In 2016, the FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for intellectual property licenses. Upon becoming effective, the Company will apply the amendments in the updated standard either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is currently evaluating the provisions of ASU No. 2014-09 and assessing the impact on its financial statements. As part of our assessment work to-date, we have formed an implementation work team, completed training on the new ASU’s revenue recognition model and are continuing our contract review and documentation. It has not yet been determined if the full retrospective or the modified retrospective method will be applied. In March 2016, the FASB issued ASU No. 2016-09, "Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting", which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted. The Company adopted the standard on October 1, 2016 and the adoption did not have an impact on its results of operations, statements of financial position or statements of cash flows. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize assets and liabilities related to lease arrangements longer than twelve months on the balance sheet. This standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is in the process of assessing the impact of the adoption of ASU No. 2016-02 on its financial position, results of operations, cash flows and financial statement disclosures but does not believe the adoption will have a material impact. As of September 30, 2017 , the Company has $9.4 million of non-cancellable lease commitments. We anticipate the majority of these leases will be recorded on our condensed consolidated balance sheets upon adoption of this standard. In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which simplifies the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. This revised guidance was effective for annual reporting periods beginning after December 15, 2015, and related interim periods. The amendments in the update were applied prospectively to adjustments to provisional amounts that occurred after the effective date of the update with early application permitted for financial statements not yet issued. We have adopted this guidance and will apply it as necessary in our financial statements. Based on changes to our provisional purchase price accounting, during the 39 weeks ended September 30, 2017, we recorded approximately $0.2 million of additional expense, previously reported financial information has not been restated for measurement period adjustments. In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory", which applies to inventory that is measured using first-in, first-out ("FIFO") or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively. The Company adopted the standard January 1, 2017 and the adoption did not have a material impact on our condensed consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern: Disclosures about an Entity’s Ability to Continue as a Going Concern”. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The Company applied the standard for the 39 weeks ended September 30, 2017 condensed consolidated financial statements and it had no impact on its disclosures. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Liabilities Measured at Fair Value on a Recurring Basis | The following table presents liabilities measured at fair value on a recurring basis (in thousands): September 30, 2017 December 31, 2016 Liabilities: Contingent consideration (1) $ 3,040 $ 2,491 (1) Contingent consideration is reported in Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. |
Schedule of Fair Value Level 3 Activity | The following table summarizes the Level 3 activity related to the Contingent Consideration (in thousands): 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Balance at beginning of the period $ 2,491 $ 1,911 Fair value of Boundless Nutrition contingent consideration at acquisition date — 1,085 Loss (gain) on change in fair value of contingent consideration 549 (505 ) Balance at end of the period $ 3,040 $ 2,491 |
Schedule of Concentration of Risk | Customers with 10% or more of the Company’s net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer one 14 % 22 % 15 % 26 % Customer two 6 % 10 % 9 % 13 % |
Schedule of Earnings per Share | 13 Weeks Ended Three Months Ended 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 (in thousands, except share and per share amounts) Basic and diluted earnings per share: Numerator: Net income $ 674 $ 1,645 $ 2,388 $ 18,815 Less: net income attributable to participating securities (16 ) (83 ) (72 ) (1,078 ) Net income attributable to common shareholders 658 1,562 2,316 17,737 Denominator: Basic: Basic weighted average shares outstanding 76,739,354 75,455,047 76,752,323 75,032,287 Less: participating securities (1,849,483 ) (3,802,277 ) (2,304,845 ) (4,300,007 ) Basic weighted average common shares outstanding 74,889,871 71,652,770 74,447,478 70,732,280 Basic earnings per share $ 0.01 $ 0.02 $ 0.03 $ 0.25 Diluted: Basic weighted average shares outstanding 76,739,354 75,455,047 76,752,323 75,032,287 Unvested RSUs (1) 54,972 89,053 168,592 62,159 Outstanding stock options (2) — 13,660 — — Diluted weighted average shares outstanding 76,794,326 75,557,760 76,920,915 75,094,446 Less: participating securities (1,849,483 ) (3,802,277 ) (2,304,845 ) (4,300,007 ) Diluted weighted average common shares outstanding 74,944,843 71,755,483 74,616,070 70,794,439 Diluted earnings per share $ 0.01 $ 0.02 $ 0.03 $ 0.25 (1) Excludes the weighted average impact of 545,725 and 373,848 unvested RSUs for the 13 weeks ended September 30, 2017 and three months ended September 30, 2016, respectively, and 797,812 and 131,848 unvested RSUs for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, respectively, because the effects of their inclusion would be anti-dilutive. (2) Excludes the weighted average impact of 642,540 and 87,703 outstanding stock options for the 13 weeks ended September 30, 2017 and three months ended September 30, 2016, respectively, and 442,625 and 179,174 outstanding stock options for the 39 weeks ended September 30, 2017 and nine months ended September 30, 2016, respectively, because the effects of their inclusion would be anti-dilutive. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Acquisition | he following table summarizes the final allocation of the purchase consideration for Tyrrells Group to the estimated fair value of assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase consideration: Provisional Valuation as of December 31, 2016 Measurement Period Adjustments Final Valuation Cash paid as purchase consideration $ 381,069 $ — $ 381,069 Fair value of equity issued to Sellers 35,319 — 35,319 Total purchase consideration 416,388 — 416,388 Less: cash and cash equivalents acquired (15,451 ) — (15,451 ) Total purchase price, net of cash and cash equivalents acquired 400,937 — 400,937 Fair value of net assets acquired and liabilities assumed: Accounts receivable 21,424 — 21,424 Inventory 8,921 — 8,921 Property, plant and equipment 42,612 9,005 51,617 Other assets 2,845 — 2,845 Indefinite-lived identifiable intangible asset- trade names 261,854 (27,900 ) 233,954 Definite-lived identifiable intangible assets- customer relationships (15-year useful life) 44,240 532 44,772 Accounts payable (19,498 ) — (19,498 ) Other liabilities (13,123 ) (1,844 ) (14,967 ) Deferred tax liabilities (51,810 ) 2,843 (48,967 ) Total fair value of net assets acquired and liabilities assumed 297,465 (17,364 ) 280,101 Excess purchase consideration over fair value of net assets acquired (goodwill) $ 103,472 $ 17,364 $ 120,836 The following table summarizes the final allocation of the purchase consideration for Boundless Nutrition to the estimated fair value of assets acquired and liabilities assumed at the date of acquisition (in thousands): Purchase consideration: Cash paid as purchase consideration $ 16,651 Fair value of notes payable issued to sellers as consideration 3,776 Fair value of contingent consideration 1,085 Total purchase consideration 21,512 Less: cash and cash equivalents acquired (129 ) Total purchase price- net of cash and cash equivalents acquired 21,383 Fair value of net assets acquired and liabilities assumed: Accounts receivable and inventory 2,046 Property, plant and equipment 751 Other assets 178 Indefinite-lived identifiable intangible asset- trade name 9,440 Definite-lived identifiable intangible assets- customer relationships and trade name 2,160 Accounts payable (1,111 ) Other liabilities (532 ) Total fair value of net assets acquired and liabilities assumed 12,932 Excess purchase consideration over fair value of net assets acquired (goodwill) $ 8,451 |
Pro Forma Combined Statements of Operations | The pro forma combined statements of operations are not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date and are not intended to be a projection of future results (in thousands, except per share data): Three Months Ended Nine Months Ended (Unaudited) Net sales $ 90,048 $ 269,781 Net income $ (2,345 ) $ 6,610 Net income per share- basic $ (0.03 ) $ 0.09 Net income per share- diluted $ (0.03 ) $ 0.08 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories, net of reserves and provisions, consist of the following (in thousands): September 30, 2017 December 31, 2016 Raw materials and packaging $ 12,630 $ 9,313 Work in process 1,483 760 Finished goods 12,847 8,177 Inventories, net $ 26,960 $ 18,250 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property, plant and equipment, net consist of the following (in thousands): September 30, 2017 December 31, 2016 Machinery and equipment $ 55,459 $ 35,889 Furniture and fixtures 4,198 3,665 Building 5,483 4,408 Land 1,152 928 Leasehold improvements 6,552 3,922 Construction in progress 3,397 — Property, plant and equipment, gross 76,241 48,812 Less: accumulated depreciation (8,204 ) (2,928 ) Property, plant and equipment, net $ 68,037 $ 45,884 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | North America International Total Balance as of December 31, 2016 $ 55,872 $ 96,081 $ 151,953 Purchase price accounting adjustments (1) — 16,123 16,123 Allocation of goodwill to North America segment (1) 18,378 (18,378 ) — Foreign currency translation impact — 9,638 9,638 Balance as of September 30, 2017 $ 74,250 $ 103,464 $ 177,714 (1) In 2017, the Company completed its accounting of the purchase consideration and estimated fair value of assets acquired and liabilities assumed at the date of the Tyrrells Group acquisition, with adjustments to the fair value of certain assets and liabilities identified during the measurement period. The adjustments reflected in the table above were a result of changes to the original fair value estimates of certain items acquired and are the result of additional information obtained since December 31, 2016, that related to facts and circumstances that existed at the acquisition date. When the Company completed its allocation of the purchase consideration for Tyrrells Group it allocated a portion of the total transaction goodwill balance to the North America operating segment, based on estimated future profitability. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following (in thousands): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets with indefinite lives: Trade names $ 457,259 $ — $ 457,259 $ 464,488 $ — $ 464,488 Intangible assets with finite lives: Customer relationships 110,894 (16,984 ) 93,910 106,830 (11,387 ) 95,443 Non-competition agreement 90 (41 ) 49 90 (32 ) 58 Trade name 20 (20 ) — 20 (13 ) 7 Total $ 568,263 $ (17,045 ) $ 551,218 $ 571,428 $ (11,432 ) $ 559,996 |
Schedule of Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following (in thousands): September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets with indefinite lives: Trade names $ 457,259 $ — $ 457,259 $ 464,488 $ — $ 464,488 Intangible assets with finite lives: Customer relationships 110,894 (16,984 ) 93,910 106,830 (11,387 ) 95,443 Non-competition agreement 90 (41 ) 49 90 (32 ) 58 Trade name 20 (20 ) — 20 (13 ) 7 Total $ 568,263 $ (17,045 ) $ 551,218 $ 571,428 $ (11,432 ) $ 559,996 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The following table shows the components of accrued liabilities (in thousands): September 30, 2017 December 31, 2016 Unbilled inventory 3,819 2,409 Accrued personnel costs 1,408 3,031 Accrued interest 3,628 3,297 Accrued sales tax and value added tax (VAT) payable 1,281 825 Other accrued expenses and liabilities 3,591 2,943 Total accrued liabilities $ 13,727 $ 12,505 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Debt consists of the following (in thousands): September 30, 2017 December 31, 2016 Term loans, net of unamortized original issue discount of $5,721 and $6,321, respectively $ 588,280 $ 592,179 Revolving loans 9,500 8,500 Notes payable, net of unamortized discount of $118 and $236, respectively 6,787 7,669 Deferred financing costs, net of accumulated amortization of $2,663 and $813, respectively (14,106 ) (15,957 ) Total debt 590,461 592,391 Less: Current portion (9,963 ) (6,927 ) Long-term debt $ 580,498 $ 585,464 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Purchase Commitment | Ingredient Commitments 2017 $ 5,905 2018 36,168 2019 3,924 Total $ 45,997 |
Schedule of Future Minimum Rental Commitments for Noncancellable Operating Leases | As of September 30, 2017 , minimum rental commitments under non-cancellable operating leases were as follows (in thousands): Remainder of 2017 $ 506 2018 1,592 2019 1,436 2020 1,383 2021 1,351 Thereafter 3,113 Total $ 9,381 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Net sales: North America $ 63,481 $ 59,494 $ 193,157 $ 173,705 International 31,383 8,488 89,899 8,488 Total net sales $ 94,864 $ 67,982 $ 283,056 $ 182,193 Depreciation expense: North America $ 325 $ 172 $ 825 $ 447 International 1,479 367 4,564 367 Total depreciation expense $ 1,804 $ 539 $ 5,389 $ 814 Amortization of intangible assets: North America $ 1,095 $ 1,105 $ 3,291 $ 3,259 International 732 174 2,135 174 Total amortization expense $ 1,827 $ 1,279 $ 5,426 $ 3,433 Segment operating income (loss): North America $ 19,548 $ 19,407 $ 62,630 $ 61,929 International 261 619 (1,409 ) 619 Segment operating income 19,809 20,026 61,221 62,548 Corporate overhead (1) (2,703 ) (1,737 ) (8,604 ) (5,400 ) Non-recurring and unusual transactions (2) (546 ) (9,024 ) (3,703 ) (10,113 ) (Loss) gain on change in fair value of contingent consideration (431 ) 505 (549 ) 505 Equity-based compensation (1,152 ) (1,803 ) (2,553 ) (3,972 ) Operating income 14,977 7,967 45,812 43,568 Reconciliation to income before taxes: Interest expense 11,329 5,636 33,307 11,788 Other expense (income), net 102 (4,221 ) (789 ) (4,221 ) Loss on extinguishment of debt — 1,100 — 1,100 Income before income taxes $ 3,546 $ 5,452 $ 13,294 $ 34,901 Net sales by brand: SkinnyPop brand $ 56,963 $ 53,432 $ 171,752 $ 162,486 Tyrrells brand (3) 25,511 6,891 74,212 6,891 Oatmega brand 4,578 4,095 13,147 6,682 Paqui brand 1,760 1,865 7,512 4,435 Lisa's Chips brand (4) 1,996 703 5,879 703 Thomas Chipman and the Wholesome Food Company brands (5) 4,056 996 10,554 996 Total net sales $ 94,864 $ 67,982 $ 283,056 $ 182,193 (1) Included in corporate overhead are administrative costs required to operate effectively as a public company, recurring professional fees, corporate-related insurance costs, personnel costs of our executive team, and certain individuals within our finance and human resources departments. (2) For the 13 and 39 weeks ended September 30, 2017, we incurred severance and integration costs, along with legal, accounting and consulting fees of approximately $0.4 million and $3.0 million , respectively, in connection with the Tyrrells Group acquisition. In addition, we paid fees of approximately $0.1 million and $0.7 million for the 13 and 39 weeks ended September 30, 2017, respectively, to help conduct our search for executive leadership and board of director personnel. For the three and nine months ended September 30, 2016, we incurred legal, accounting, consulting and ratings agency fees along with severance and integration costs of approximately $9.0 million and $9.5 million , respectively, in connection with the Tyrrells Group and Boundless Nutrition acquisitions. In addition, we incurred legal, accounting, printing and filing fees of approximately $0.6 million for the nine months ended September 30, 2016, in connection with our secondary equity public offering, which closed in May 2016. (3) Tyrrells brand includes private label net sales of items that were manufactured at our facilities in the United Kingdom. (4) Lisa's Chips brand includes private label net sales of items that were manufactured at our facility in Germany. (5) Thomas Chipman and the Wholesome Food Company brands includes private label net sales of items that were manufactured at our facility in Australia. |
Customer Concentration - North America | Customer Concentrations - North America Customers with 10% or more of our North America segment net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer one 21 % 26 % 22 % 27 % Customer two 9 % 11 % 13 % 14 % Customer Concentrations - International Customers with 10% or more of our International segment net sales consist of the following: 13 Weeks Ended September 30, 2017 Three Months Ended September 30, 2016 39 Weeks Ended September 30, 2017 Nine Months Ended September 30, 2016 Customer: Customer three 12 % 11 % 11 % 11 % Customer four 12 % 11 % 10 % 11 % |
Schedule of Capital Expenditures and Fixed Assets by Segment | 13 Weeks Ended Three Months Ended 39 Weeks Ended Nine Months Ended Capital expenditures: North America $ 3,241 $ 1,664 $ 10,964 $ 1,910 International 825 1,070 3,484 1,070 $ 4,066 $ 2,734 $ 14,448 $ 2,980 Fixed assets: September 30, 2017 December 31, 2016 North America $ 14,507 $ 4,168 International 53,530 41,716 $ 68,037 $ 45,884 Total assets: September 30, 2017 December 31, 2016 North America $ 412,154 $ 378,658 International 475,234 459,582 $ 887,388 $ 838,240 |
Business Overview - Narrative (
Business Overview - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Sep. 02, 2016 | Aug. 03, 2015 |
Tyrrells | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 416,388 | $ 416,388 | |
Topco | |||
Business Acquisition [Line Items] | |||
Percent of common shares owned (in shares) | 100.00% | ||
Liquidation, price per share (USD per share) | $ 18 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017USD ($)shares | Jul. 01, 2017USD ($) | Sep. 30, 2016USD ($)shares | Sep. 30, 2017USD ($)segmentshares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Aug. 03, 2015USD ($) | Apr. 30, 2015USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Number of reportable segments | segment | 2 | ||||||||
Number of primary snack food segments | segment | 2 | ||||||||
Payoff of maturing notes payable | $ 1,000,000 | $ 1,000,000 | $ 0 | ||||||
Allowance against trade accounts receivable | $ 12,849,000 | 12,849,000 | $ 9,261,000 | ||||||
Non-cancellable lease commitments | 9,381,000 | 9,381,000 | |||||||
Cost of goods sold | 58,948,000 | $ 35,646,000 | $ 173,365,000 | $ 88,891,000 | |||||
Customer Concentration Risk | Customer One | Accounts Receivable | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Concentration risk, percentage | 10.00% | ||||||||
Assemblers | Supplier Concentration Risk | Accounts Payable | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Concentration risk, percentage | 16.00% | 19.00% | |||||||
Notes Payable | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Debt instrument, face amount | $ 4,000,000 | $ 3,900,000 | |||||||
Debt instrument, interest rate, stated percentage | 0.67% | 1.50% | |||||||
Unamortized discount | $ 118,000 | $ 118,000 | $ 236,000 | $ 200,000 | $ 200,000 | ||||
Former Holders of Topco Units | Tax Receivable Agreement (TRA) | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Recorded tax payment obligation | $ 96,100,000 | ||||||||
Restricted Stock Units | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Antidilutive securities excluded from computation of earnings per share, (in shares) | shares | 545,725 | 373,848 | 797,812 | 131,848 | |||||
Employee Stock Option | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Antidilutive securities excluded from computation of earnings per share, (in shares) | shares | 642,540 | 87,703 | 442,625 | 179,174 | |||||
Accounting Standards Update 2015-16 | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Cost of goods sold | $ 200,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Level 3 | Paqui and Boundless Nutrition | Fair value measurements, recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration | $ 3,040 | $ 2,491 | $ 2,491 | $ 1,911 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Schedule of Contingent Consideration Level 3 Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Loss (gain) on change in fair value of contingent consideration | $ 431 | $ (505) | $ 549 | $ (505) |
Paqui and Boundless Nutrition | Level 3 | Fair value measurements, recurring | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of the period | 2,491 | 1,911 | ||
Fair value of Boundless Nutrition contingent consideration at acquisition date | 0 | 1,085 | 0 | 1,085 |
Loss (gain) on change in fair value of contingent consideration | 549 | (505) | ||
Balance at end of the period | $ 3,040 | $ 2,491 | $ 3,040 | $ 2,491 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) - Customer Concentration Risk - Sales Revenue, Net | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Customer one | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 14.00% | 22.00% | 15.00% | 26.00% |
Customer two | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 6.00% | 10.00% | 9.00% | 13.00% |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income | $ 674 | $ 1,645 | $ 2,388 | $ 18,815 |
Less: net income attributable to participating securities | (16) | (83) | (72) | (1,078) |
Net income attributable to common shareholders | $ 658 | $ 1,562 | $ 2,316 | $ 17,737 |
Basic: | ||||
Basic weighted average shares outstanding (in shares) | 76,739,354 | 75,455,047 | 76,752,323 | 75,032,287 |
Less: participating securities (in shares) | (1,849,483) | (3,802,277) | (2,304,845) | (4,300,007) |
Basic weighted average common shares outstanding (in shares) | 74,889,871 | 71,652,770 | 74,447,478 | 70,732,280 |
Basic earnings per share (USD per share) | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.25 |
Diluted: | ||||
Basic weighted average shares outstanding (in shares) | 76,739,354 | 75,455,047 | 76,752,323 | 75,032,287 |
Diluted weighted average shares outstanding (in shares) | 76,794,326 | 75,557,760 | 76,920,915 | 75,094,446 |
Less: participating securities (in shares) | (1,849,483) | (3,802,277) | (2,304,845) | (4,300,007) |
Diluted weighted average common shares outstanding (in shares) | 74,944,843 | 71,755,483 | 74,616,070 | 70,794,439 |
Diluted earnings per share (USD per share) | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.25 |
Restricted Stock Units | ||||
Diluted: | ||||
Unvested/Outstanding (in shares) | 54,972 | 89,053 | 168,592 | 62,159 |
Employee Stock Option | ||||
Diluted: | ||||
Unvested/Outstanding (in shares) | 0 | 13,660 | 0 | 0 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | Dec. 31, 2016 | Sep. 02, 2016 | Apr. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||||||||
Net Sales | $ 94,864 | $ 67,982 | $ 283,056 | $ 182,193 | ||||
Goodwill | $ 151,953 | 177,714 | 177,714 | $ 177,714 | ||||
Tyrrells | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100.00% | |||||||
Total purchase consideration | 416,388 | $ 416,388 | ||||||
Cash paid as purchase consideration | 381,069 | 381,069 | ||||||
Acquisition related costs | 400 | 3,000 | ||||||
Net sales of acquiree since acquisition date | 91,100 | |||||||
Acquired receivables, fair value | 28,000 | |||||||
Acquired receivable, estimated uncollectible | 6,600 | |||||||
Goodwill | $ 103,472 | $ 120,836 | ||||||
Boundless Nutrition, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired | 100.00% | |||||||
Total purchase consideration | $ 21,512 | |||||||
Cash paid as purchase consideration | 16,651 | |||||||
Goodwill | $ 8,451 | |||||||
General and Administrative Expense [Member] | Tyrrells | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition related costs | 8,400 | 100 | 8,500 | $ 9,400 | ||||
Common Stock | Tyrrells | ||||||||
Business Acquisition [Line Items] | ||||||||
Equity interest issued as purchase consideration (in shares) | 2.1 | |||||||
Share consideration | $ 35,300 | |||||||
New Credit Facility | Term Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from issuance of debt | $ 600,000 | |||||||
Oatmega brand | ||||||||
Business Acquisition [Line Items] | ||||||||
Net Sales | $ 4,578 | $ 4,095 | $ 13,147 | $ 6,682 |
Acquisition - Schedule of Tyrre
Acquisition - Schedule of Tyrrells Acquisitions (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 02, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Purchase consideration: | ||||
Less: cash and cash equivalents acquired | $ 0 | $ (15,580) | ||
Fair value of net assets acquired and liabilities assumed: | ||||
Excess purchase consideration over fair value of net assets acquired (goodwill) | $ 151,953 | 177,714 | ||
Measurement period adjustments, excess purchase consideration over fair value of net assets acquired (goodwill) | 16,123 | |||
Tyrrells | ||||
Purchase consideration: | ||||
Cash paid as purchase consideration | 381,069 | $ 381,069 | ||
Measurement period adjustments, cash paid as purchase consideration | 0 | |||
Fair value of equity issued to Sellers | 35,319 | 35,319 | ||
Measurement period adjustments, fair value of equity issued to Sellers | 0 | |||
Total purchase consideration | 416,388 | 416,388 | ||
Measurement period adjustments, total purchase consideration | 0 | |||
Less: cash and cash equivalents acquired | (15,451) | (15,451) | ||
Measurement period adjustments, less: cash and cash equivalents acquired | 0 | |||
Total purchase price-net of cash and cash equivalents acquired | 400,937 | 400,937 | ||
Measurement period adjustments, total purchase price, net of cash and cash equivalents acquired | 0 | |||
Fair value of net assets acquired and liabilities assumed: | ||||
Accounts receivable | 21,424 | 21,424 | ||
Measurement period adjustments, accounts receivable | 0 | |||
Inventory | 8,921 | 8,921 | ||
Measurement period adjustments, inventory | 0 | |||
Property and equipment | 42,612 | 51,617 | ||
Measurement period adjustments, property and equipment | 9,005 | |||
Other assets | 2,845 | 2,845 | ||
Measurement period adjustments, other assets | 0 | |||
Indefinite-lived identifiable intangible asset- trade name | 261,854 | 233,954 | ||
Measurement period adjustments, indefinite-lived identifiable intangible asset- trade names | (27,900) | |||
Definite-lived identifiable intangible assets- customer relationships (15-year useful life) | 44,240 | 44,772 | ||
Measurement period adjustments, definite-lived identifiable intangible assets- customer relationships (15-year useful life) | 532 | |||
Accounts payable | (19,498) | (19,498) | ||
Measurement period adjustments, accounts payable | 0 | |||
Other liabilities | (13,123) | (14,967) | ||
Measurement period adjustments, other liabilities | (1,844) | |||
Deferred tax liabilities | (51,810) | (48,967) | ||
Measurement period adjustments, deferred tax liabilities | 2,843 | |||
Total fair value of net assets acquired and liabilities assumed | 297,465 | 280,101 | ||
Measurement period adjustments, total fair value of net assets acquired and liabilities assumed | (17,364) | |||
Excess purchase consideration over fair value of net assets acquired (goodwill) | $ 103,472 | $ 120,836 | ||
Measurement period adjustments, excess purchase consideration over fair value of net assets acquired (goodwill) | $ 17,364 | |||
Customer relationships | Tyrrells | ||||
Fair value of net assets acquired and liabilities assumed: | ||||
Acquired finite-lived intangible assets, useful life | 15 years |
Acquisition - ProForma Statemen
Acquisition - ProForma Statement of Operations (Details) - Tyrrells - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Net sales | $ 90,048 | $ 269,781 |
Net income | $ (2,345) | $ 6,610 |
Net income per share- basic | $ (0.03) | $ 0.09 |
Net income per share- diluted | $ (0.03) | $ 0.08 |
Acquisition - Schedule of Bound
Acquisition - Schedule of Boundless Acquisition (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Purchase consideration: | ||||
Less: cash and cash equivalents acquired | $ 0 | $ (15,580) | ||
Fair value of net assets acquired and liabilities assumed: | ||||
Excess purchase consideration over fair value of net assets acquired (goodwill) | $ 177,714 | $ 151,953 | ||
Boundless Nutrition, LLC | ||||
Purchase consideration: | ||||
Cash paid as purchase consideration | $ 16,651 | |||
Total purchase consideration | 21,512 | |||
Less: cash and cash equivalents acquired | (129) | |||
Total purchase price-net of cash and cash equivalents acquired | 21,383 | |||
Fair value of net assets acquired and liabilities assumed: | ||||
Accounts receivable and inventory | 2,046 | |||
Property and equipment | 751 | |||
Other assets | 178 | |||
Indefinite-lived identifiable intangible asset- trade name | 9,440 | |||
Definite-lived identifiable intangible assets- customer relationships and trade name | 2,160 | |||
Accounts payable | (1,111) | |||
Other liabilities | (532) | |||
Total fair value of net assets acquired and liabilities assumed | 12,932 | |||
Excess purchase consideration over fair value of net assets acquired (goodwill) | 8,451 | |||
Notes Payable | Boundless Nutrition, LLC | ||||
Purchase consideration: | ||||
Fair value of liabilities incurred | 3,776 | |||
Contingent Consideration for Earn-Out Period | Boundless Nutrition, LLC | ||||
Purchase consideration: | ||||
Fair value of liabilities incurred | $ 1,085 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and packaging | $ 12,630 | $ 9,313 |
Work in process | 1,483 | 760 |
Finished goods | 12,847 | 8,177 |
Inventories, net | 26,960 | 18,250 |
Obsolete inventory reserve | $ 500 | $ 600 |
Property, Plant and Equipment41
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 76,241 | $ 76,241 | $ 48,812 | ||
Less: accumulated depreciation | (8,204) | (8,204) | (2,928) | ||
Property, plant and equipment, net | 68,037 | 68,037 | 45,884 | ||
Depreciation | 1,804 | $ 539 | 5,389 | $ 814 | |
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 55,459 | 55,459 | 35,889 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 4,198 | 4,198 | 3,665 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 5,483 | 5,483 | 4,408 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 1,152 | 1,152 | 928 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 6,552 | 6,552 | 3,922 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 3,397 | $ 3,397 | $ 0 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 151,953 |
Purchase price accounting adjustments (1) | 16,123 |
Allocation of goodwill to North America segment | 0 |
Foreign currency translation | 9,638 |
Goodwill, ending balance | 177,714 |
North America | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 55,872 |
Purchase price accounting adjustments (1) | 0 |
Allocation of goodwill to North America segment | 18,378 |
Foreign currency translation | 0 |
Goodwill, ending balance | 74,250 |
International | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 96,081 |
Purchase price accounting adjustments (1) | 16,123 |
Allocation of goodwill to North America segment | (18,378) |
Foreign currency translation | 9,638 |
Goodwill, ending balance | $ 103,464 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Schedule of Indefinite and Finite Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Intangible assets, gross | $ 568,263 | $ 568,263 | $ 571,428 | ||
Less: accumulated amortization | (17,045) | (17,045) | (11,432) | ||
Intangible assets, net | 551,218 | 551,218 | 559,996 | ||
Amortization of intangible assets | 1,827 | $ 1,279 | 5,426 | $ 3,433 | |
General and Administrative Expense [Member] | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Amortization of intangible assets | 1,800 | $ 1,300 | 5,400 | $ 3,400 | |
Customer relationships | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Finite-lived intangible assets, gross | 110,894 | 110,894 | 106,830 | ||
Less: accumulated amortization | (16,984) | (16,984) | (11,387) | ||
Intangible assets, net | 93,910 | 93,910 | 95,443 | ||
Non-competition agreement | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Finite-lived intangible assets, gross | 90 | 90 | 90 | ||
Less: accumulated amortization | (41) | (41) | (32) | ||
Intangible assets, net | 49 | 49 | 58 | ||
Trade names | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Finite-lived intangible assets, gross | 20 | 20 | 20 | ||
Less: accumulated amortization | (20) | (20) | (13) | ||
Intangible assets, net | 0 | 0 | 7 | ||
Trade names | |||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Indefinite-lived intangible assets | 457,259 | 457,259 | 464,488 | ||
Intangible assets, net | $ 457,259 | $ 457,259 | $ 464,488 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Unbilled inventory | $ 3,819 | $ 2,409 |
Accrued personnel costs | 1,408 | 3,031 |
Accrued interest | 3,628 | 3,297 |
Accrued sales tax and value added tax (VAT) payable | 1,281 | 825 |
Other accrued expenses and liabilities | 3,591 | 2,943 |
Total accrued liabilities | $ 13,727 | $ 12,505 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Apr. 30, 2015 |
Debt Instrument [Line Items] | ||||
Total debt | $ 590,461 | $ 592,391 | ||
Deferred financing costs, net of accumulated amortization of $2,663 and $813, respectively | (14,106) | (15,957) | ||
Less: Current portion | (9,963) | (6,927) | ||
Long-term debt | 580,498 | 585,464 | ||
Deferred financing costs, accumulated amortization | 2,663 | 813 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total debt | 588,280 | 592,179 | ||
Unamortized discount | 5,721 | 6,321 | ||
Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Total debt | 6,787 | 7,669 | ||
Unamortized discount | 118 | 236 | $ 200 | $ 200 |
Revolving Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 9,500 | $ 8,500 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Sep. 02, 2016USD ($) | Sep. 30, 2017USD ($) | Jul. 01, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Sep. 02, 2016GBP (£) | Sep. 02, 2016USD ($) | Apr. 30, 2016USD ($) | Apr. 30, 2015USD ($) |
Debt Instrument [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 0 | $ 1,100,000 | $ 0 | $ 1,100,000 | |||||||
Payoff of maturing notes payable | $ 1,000,000 | $ 1,000,000 | $ 0 | ||||||||
New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unamortized discount | $ 6,600,000 | ||||||||||
Debt issuances costs | 15,400,000 | ||||||||||
New Credit Facility | Scenario One, Total Funded Debt to Consolidated EBTIDA Ratio | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, covenant, EBITDA ratio, maximum (up to) | 8.50 | ||||||||||
New Credit Facility | Scenario Two, Total Funded Debt to Consolidated EBTIDA Ratio | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, covenant, EBITDA ratio, maximum (up to) | 6.25 | ||||||||||
Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unamortized discount | $ 5,721,000 | $ 5,721,000 | $ 6,321,000 | ||||||||
Term Loan | New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 600,000,000 | ||||||||||
Debt instrument, periodic payment | $ 1,500,000 | ||||||||||
Debt instrument, final periodic payment, due at maturity | $ 559,500,000 | ||||||||||
Debt instrument, covenant, percent of excess cash flow | 50.00% | ||||||||||
Mandatory prepayment, percentage of excess cash flow, stepdown to 25% | 25.00% | ||||||||||
Mandatory prepayment, percentage of excess cash flow, stepdown to 0% | 0.00% | ||||||||||
Debt instrument, covenant, leverage ratio, maximum | 4.50 | 4.50 | |||||||||
Prepayment premium percentage of principal | 1.00% | ||||||||||
Debt instrument, interest rate effective percentage | 6.74% | 6.74% | |||||||||
Debt instrument, pledged equity interest | 100.00% | ||||||||||
Debt instrument, pledged voting equity interest | 65.00% | ||||||||||
Debt instrument, pledged non-voting equity interest | 100.00% | ||||||||||
Term Loan | New Credit Facility | Stepdown Leverage Threshold One | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, covenant, leverage ratio, maximum | 4.50 | 4.50 | |||||||||
Debt instrument, covenant, leverage ratio, minimum | 3.75 | 3.75 | |||||||||
Term Loan | New Credit Facility | Stepdown Leverage Threshold Two | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, covenant, leverage ratio, maximum | 3.75 | 3.75 | |||||||||
Term Loan | New Credit Facility | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 5.50% | ||||||||||
Debt instrument, basis spread on variable rate, step down percentage | 5.00% | ||||||||||
Term Loan | New Credit Facility | Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 4.50% | ||||||||||
Debt instrument, basis spread on variable rate, step down percentage | 4.00% | ||||||||||
Line of Credit | Revolving Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, remaining borrowing capacity | $ 40,700,000 | $ 40,700,000 | |||||||||
Credit facility, commitment fee percentage | 0.50% | ||||||||||
Line of Credit | Revolving Facility | Commitment Fee Step-Down Threshold on First Lien Leverage Ratio | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, covenant, leverage ratio, maximum | 3.25 | 3.25 | |||||||||
Credit facility, commitment fee percentage, annual step-down | 0.375% | ||||||||||
Line of Credit | Revolving Facility | New Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | £ 20,000,000 | $ 50,000,000 | |||||||||
Debt instrument, interest rate effective percentage | 6.74% | 6.74% | |||||||||
Notes Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 4,000,000 | $ 3,900,000 | |||||||||
Unamortized discount | $ 118,000 | $ 118,000 | $ 236,000 | $ 200,000 | $ 200,000 | ||||||
Debt instrument, interest rate, stated percentage | 0.67% | 1.50% | |||||||||
Minimum | Term Loan | New Credit Facility | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, interest rate effective percentage | 1.00% | 1.00% | |||||||||
Minimum | Term Loan | New Credit Facility | Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, interest rate effective percentage | 2.00% | 2.00% | |||||||||
Minimum | Line of Credit | Revolving Facility | New Credit Facility | Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, interest rate effective percentage | 1.00% | 1.00% |
Commitment and Contingencies -
Commitment and Contingencies - Long Term Purchase Commitments (Details) - Inventories - Popcorn Kernels, Oils, Potatoes, Root Vegetables and Various Ingredients $ in Thousands | Sep. 30, 2017USD ($) |
Loss Contingencies [Line Items] | |
2,017 | $ 5,905 |
2,018 | 36,168 |
2,019 | 3,924 |
Total | $ 45,997 |
Commitment and Contingencies 48
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Loss on exit activity | $ 200 | $ 190 | $ 0 | ||
Operating leases rent expense | $ 400 | $ 100 | $ 1,000 | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Rental Commitments for Noncancellable Operating Leases (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2017 | $ 506 |
2,018 | 1,592 |
2,019 | 1,436 |
2,020 | 1,383 |
2,021 | 1,351 |
Thereafter | 3,113 |
Total | $ 9,381 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense | $ 2,872 | $ 3,807 | $ 10,906 | $ 16,086 | |
Pre-tax income | 3,546 | $ 5,452 | $ 34,900 | $ 13,294 | $ 34,901 |
Effective income tax rate | 82.00% | 46.10% | |||
Tyrrells | |||||
Income Tax Contingency [Line Items] | |||||
Long-term liability for uncertain tax position | $ 1,100 | $ 1,100 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense recorded during the period | $ (1.2) | $ 1.8 | $ 2.6 | $ 4 | |
Granted (in shares) | 790,229 | ||||
Grant date fair value | $ 6.4 | ||||
2015 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 13,050,000 | 13,050,000 | 13,050,000 | ||
Number of shares available for grant (in shares) | 3,803,294 | 3,803,294 | 3,803,294 | ||
Restricted Stock Units | 2015 Plan | Vesting Tranche 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unit vesting period | 3 years | ||||
Restricted Stock Units | 2015 Plan | Vesting Tranche 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unit vesting period | 4 years | ||||
Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 1,166,173 | ||||
Two Officers | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 1,865,877 | ||||
Weighted average grant date fair value of options | $ 4.1 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of primary snack food segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 94,864 | $ 67,982 | $ 283,056 | $ 182,193 | |
Depreciation | 1,804 | 539 | 5,389 | 814 | |
Amortization of intangible assets | 1,827 | 1,279 | 5,426 | 3,433 | |
Operating income | 14,977 | 7,967 | 45,812 | 43,568 | |
Loss on change in fair value of contingent consideration | (431) | 505 | (549) | 505 | |
Equity-based compensation | 1,200 | (1,800) | (2,600) | (4,000) | |
Interest expense | 11,329 | 5,636 | 33,307 | 11,788 | |
Other expense (income), net | 102 | (4,221) | (789) | (4,221) | |
Gain (Loss) on Extinguishment of Debt | 0 | 1,100 | 0 | 1,100 | |
Income before income taxes | 3,546 | 5,452 | $ 34,900 | 13,294 | 34,901 |
Payments for personnel search costs | 100 | 700 | |||
Professional fees | 600 | ||||
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | 19,809 | 20,026 | 61,221 | 62,548 | |
Operating Segments | North America | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 63,481 | 59,494 | 193,157 | 173,705 | |
Depreciation | 325 | 172 | 825 | 447 | |
Amortization of intangible assets | 1,095 | 1,105 | 3,291 | 3,259 | |
Operating income | 19,548 | 19,407 | 62,630 | 61,929 | |
Operating Segments | International | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 31,383 | 8,488 | 89,899 | 8,488 | |
Depreciation | 1,479 | 367 | 4,564 | 367 | |
Amortization of intangible assets | 732 | 174 | 2,135 | 174 | |
Operating income | 261 | 619 | (1,409) | 619 | |
Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | (2,703) | (1,737) | (8,604) | (5,400) | |
Segment Reconciling Items | |||||
Segment Reporting Information [Line Items] | |||||
Non-recurring and unusual transactions | (546) | (9,024) | (3,703) | (10,113) | |
Loss on change in fair value of contingent consideration | (431) | 505 | (549) | 505 | |
Equity-based compensation | (1,152) | (1,803) | (2,553) | (3,972) | |
SkinnyPop brand | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 56,963 | 53,432 | 171,752 | 162,486 | |
Tyrrells brand | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 25,511 | 6,891 | 74,212 | 6,891 | |
Oatmega brand | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 4,578 | 4,095 | 13,147 | 6,682 | |
Paqui brand | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 1,760 | 1,865 | 7,512 | 4,435 | |
Lisa's Chips brand | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 1,996 | 703 | 5,879 | 703 | |
Thomas Chipman and the Wholesome Food Company brands | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 4,056 | 996 | 10,554 | 996 | |
Tyrrells | |||||
Segment Reporting Information [Line Items] | |||||
Acquisition related costs | $ 400 | $ 3,000 | |||
Tyrrells Group and Boundless Nutrition | |||||
Segment Reporting Information [Line Items] | |||||
Acquisition related costs | $ 9,000 | $ 9,500 |
Segment Information - Customer
Segment Information - Customer Concentrations (Details) - Sales Revenue, Net - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Customer one | North America | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 21.00% | 26.00% | 22.00% | 27.00% |
Customer two | North America | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 9.00% | 11.00% | 13.00% | 14.00% |
Customer three | International | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 12.00% | 11.00% | 11.00% | 11.00% |
Customer four | International | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 12.00% | 11.00% | 10.00% | 11.00% |
Segment Information - Schedul55
Segment Information - Schedule of Capital Expenditures and Fixed by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Capital expenditures | $ 4,066 | $ 2,734 | $ 14,448 | $ 2,980 | |
Fixed assets | 68,037 | 68,037 | $ 45,884 | ||
Total assets | 887,388 | 887,388 | 838,240 | ||
North America | |||||
Segment Reporting Information [Line Items] | |||||
Capital expenditures | 3,241 | 1,664 | 10,964 | 1,910 | |
Fixed assets | 14,507 | 14,507 | 4,168 | ||
Total assets | 412,154 | 412,154 | 378,658 | ||
International | |||||
Segment Reporting Information [Line Items] | |||||
Capital expenditures | 825 | $ 1,070 | 3,484 | $ 1,070 | |
Fixed assets | 53,530 | 53,530 | 41,716 | ||
Total assets | $ 475,234 | $ 475,234 | $ 459,582 |
Derivative Finanical Instrument
Derivative Finanical Instruments - Narrative (details) - Not Designated as Hedging Instrument - Foreign Exchange Forward $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 02, 2016 | Aug. 31, 2016USD ($) | |
Derivative [Line Items] | ||||
Derivative, notional amount | $ 278 | |||
Derivative, forward exchange rate | 1.3157 | 1.3157 | ||
Other Income | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative, net | $ 3.6 | $ 3.6 |