Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37540 | |
Entity Registrant Name | HOSTESS BRANDS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4168492 | |
Entity Address, Address Line One | 7905 Quivira Road | |
Entity Address, City or Town | Lenexa, | |
Entity Address, State or Province | KS | |
Entity Address, Postal Zip Code | 66215 | |
City Area Code | 816 | |
Local Phone Number | 701-4600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001644406 | |
Current Fiscal Year End Date | --12-31 | |
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 138,377,187 | |
Common Class A | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, Par Value of $0.0001 per share | |
Trading Symbol | TWNK | |
Security Exchange Name | NASDAQ | |
Warrant | ||
Class of Stock [Line Items] | ||
Title of 12(b) Security | Warrants, each exercisable for a half share of Class A Common Stock | |
Trading Symbol | TWNKW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 228,096 | $ 173,034 |
Accounts receivable, net | 156,720 | 125,550 |
Inventories | 49,309 | 49,348 |
Prepaids and other current assets | 7,624 | 21,614 |
Total current assets | 441,749 | 369,546 |
Property and equipment, net | 318,492 | 303,959 |
Intangible assets, net | 1,950,270 | 1,967,903 |
Goodwill | 706,615 | 706,615 |
Other assets, net | 17,861 | 17,446 |
Total assets | 3,434,987 | 3,365,469 |
Current liabilities: | ||
Long-term debt and lease obligations payable within one year | 14,171 | 13,811 |
Tax receivable agreement payments payable within one year | 10,000 | 11,800 |
Accounts payable | 71,139 | 61,428 |
Customer trade allowances | 55,157 | 46,779 |
Warrant liabilities | 1,249 | 861 |
Accrued expenses and other current liabilities | 46,541 | 55,715 |
Total current liabilities | 198,257 | 190,394 |
Long-term debt and lease obligations | 1,103,327 | 1,113,037 |
Tax receivable agreement obligations | 137,274 | 144,744 |
Deferred tax liability | 315,544 | 295,009 |
Other long-term liabilities | 1,595 | 1,560 |
Total liabilities | 1,755,997 | 1,744,744 |
Commitments and Contingencies | ||
Additional paid in capital | 1,300,329 | 1,281,018 |
Accumulated other comprehensive loss | (4,161) | (10,407) |
Retained earnings | 438,872 | 356,101 |
Treasury stock | (56,063) | (6,000) |
Stockholders’ equity | 1,678,990 | 1,620,725 |
Total liabilities and stockholders’ equity | 3,434,987 | 3,365,469 |
Common Class A | ||
Current liabilities: | ||
Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 132,741,603 shares issued and 129,170,487 shares outstanding as of September 30, 2021 and 130,791,908 shares issued and 130,347,464 shares outstanding as of December 31, 2020 | $ 13 | $ 13 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - Common Class A - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 132,741,603 | 130,791,908 |
Common stock, outstanding (in shares) | 129,170,487 | 130,347,464 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net revenue | $ 287,969 | $ 260,855 | $ 844,875 | $ 760,566 |
Cost of goods sold | 188,990 | 169,700 | 545,271 | 500,700 |
Gross profit | 98,979 | 91,155 | 299,604 | 259,866 |
Operating costs and expenses: | ||||
Advertising and marketing | 14,767 | 11,762 | 39,692 | 32,983 |
Selling expense | 8,166 | 8,675 | 26,250 | 39,173 |
General and administrative | 23,565 | 21,913 | 69,254 | 71,261 |
Amortization of customer relationships | 5,877 | 6,739 | 17,633 | 20,333 |
Business combination transaction costs | 0 | 0 | 0 | 4,282 |
Other operating expense | 0 | 729 | 0 | 756 |
Total operating costs and expenses | 52,375 | 49,818 | 152,829 | 168,788 |
Operating income | 46,604 | 41,337 | 146,775 | 91,078 |
Other expense (income): | ||||
Interest expense, net | 9,928 | 10,265 | 29,899 | 32,570 |
Change in fair value of warrant liabilities | 228 | (2,260) | 683 | (64,978) |
Other expense | 378 | 818 | 1,808 | 2,503 |
Total other expense (income) | 10,534 | 8,823 | 32,390 | (29,905) |
Income before income taxes | 36,070 | 32,514 | 114,385 | 120,983 |
Income tax expense | 9,878 | 6,281 | 31,614 | 12,022 |
Net income | 26,192 | 26,233 | 82,771 | 108,961 |
Less: Net income attributable to the non-controlling interest | 0 | 1,368 | 0 | 2,860 |
Net income attributable to Class A stockholders | $ 26,192 | $ 24,865 | $ 82,771 | $ 106,101 |
Earnings per Class A share: | ||||
Basic (in usd per share) | $ 0.20 | $ 0.20 | $ 0.63 | $ 0.86 |
Diluted (in usd per share) | $ 0.19 | $ 0.18 | $ 0.60 | $ 0.33 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 129,846,551 | 124,905,538 | 130,679,974 | 123,889,306 |
Diluted (in shares) | 138,058,866 | 127,586,881 | 138,036,371 | 126,079,472 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 26,192 | $ 26,233 | $ 82,771 | $ 108,961 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate swap and foreign currency contracts designated as a cash flow hedge | (192) | (1,197) | 5,058 | (16,992) |
Reclassification into net income | 962 | 1,352 | 3,441 | 2,530 |
Income tax benefit (expense) | (203) | (39) | (2,253) | 3,611 |
Comprehensive income (loss) | 26,759 | 26,349 | 89,017 | 98,110 |
Less: Comprehensive loss attributed to non-controlling interest | 0 | 1,375 | 0 | 2,034 |
Comprehensive income (loss) attributed to Class A stockholders | $ 26,759 | $ 24,974 | $ 89,017 | $ 96,076 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common StockClass A | Common StockClass B | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Non-controlling Interest |
Beginning Balance (in shares) at Dec. 31, 2019 | 122,107,000 | 8,411,000 | |||||||
Beginning Balance at Dec. 31, 2019 | $ 1,374,487 | $ 12 | $ 1 | $ 1,123,805 | $ (756) | $ 251,425 | $ 94,432 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | 72,638 | (8,810) | 81,448 | (437) | |||||
Share-based compensation, net of income taxes (in shares) | 106,000 | ||||||||
Share-based compensation, net of income taxes | 2,180 | 2,180 | |||||||
Exchanges (in shares) | 969,000 | (969,000) | |||||||
Exchanges | 11,802 | 11,819 | (17) | (11,802) | |||||
Distributions | (1,613) | ||||||||
Exercise of employee stock options and warrants (in shares) | 2,000 | ||||||||
Exercise of employee stock options | 153 | 153 | |||||||
Exercise of public warrants (in shares) | 1,000 | ||||||||
Exercise of public warrants | 2 | 2 | |||||||
Payment of taxes for employee stock awards | (1,004) | (1,004) | |||||||
Tax receivable agreement arising from exchanges, net of income taxes | (1,942) | (1,942) | |||||||
Ending Balance (in shares) at Mar. 31, 2020 | 123,185,000 | 7,442,000 | |||||||
Ending Balance at Mar. 31, 2020 | 1,458,316 | $ 12 | $ 1 | 1,135,013 | (9,583) | 332,873 | 80,580 | ||
Beginning Balance (in shares) at Dec. 31, 2019 | 122,107,000 | 8,411,000 | |||||||
Beginning Balance at Dec. 31, 2019 | 1,374,487 | $ 12 | $ 1 | 1,123,805 | (756) | 251,425 | 94,432 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | $ 98,110 | ||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 125,149,000 | 5,622,000 | |||||||
Ending Balance at Sep. 30, 2020 | 1,503,288 | $ 12 | $ 1 | 1,156,753 | (11,004) | 357,526 | 59,400 | ||
Beginning Balance (in shares) at Mar. 31, 2020 | 123,185,000 | 7,442,000 | |||||||
Beginning Balance at Mar. 31, 2020 | 1,458,316 | $ 12 | $ 1 | 1,135,013 | (9,583) | 332,873 | 80,580 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | (1,536) | (1,324) | (212) | 1,096 | |||||
Share-based compensation, net of income taxes (in shares) | 46,000 | ||||||||
Share-based compensation, net of income taxes | 1,929 | 1,929 | |||||||
Exchanges (in shares) | 1,140,000 | (1,140,000) | |||||||
Exchanges | 13,676 | 13,803 | (127) | (13,676) | |||||
Distributions | (365) | ||||||||
Exercise of employee stock options and warrants (in shares) | 37,000 | ||||||||
Exercise of employee stock options | 408 | 408 | |||||||
Payment of taxes for employee stock awards | (32) | (32) | |||||||
Tax receivable agreement arising from exchanges, net of income taxes | (2,556) | (2,556) | |||||||
Ending Balance (in shares) at Jun. 30, 2020 | 124,408,000 | 6,302,000 | |||||||
Ending Balance at Jun. 30, 2020 | 1,470,205 | $ 12 | $ 1 | 1,148,565 | (11,034) | 332,661 | 67,635 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | 26,349 | 24,974 | 109 | 24,865 | 1,375 | ||||
Share-based compensation, net of income taxes (in shares) | 60,000 | ||||||||
Share-based compensation, net of income taxes | 1,720 | 1,720 | |||||||
Exchanges (in shares) | 680,000 | (680,000) | |||||||
Exchanges | 8,165 | 8,244 | (79) | (8,165) | |||||
Distributions | (1,445) | ||||||||
Exercise of employee stock options and warrants (in shares) | 1,000 | ||||||||
Exercise of employee stock options | 2 | 2 | |||||||
Payment of taxes for employee stock awards | (347) | (347) | |||||||
Tax receivable agreement arising from exchanges, net of income taxes | (1,431) | (1,431) | |||||||
Ending Balance (in shares) at Sep. 30, 2020 | 125,149,000 | 5,622,000 | |||||||
Ending Balance at Sep. 30, 2020 | 1,503,288 | $ 12 | $ 1 | 1,156,753 | (11,004) | 357,526 | $ 59,400 | ||
Beginning Balance (in shares) at Dec. 31, 2020 | 130,347,000 | 444,000 | |||||||
Beginning Balance at Dec. 31, 2020 | 1,620,725 | $ 13 | 1,281,018 | (10,407) | 356,101 | $ (6,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | 32,894 | 6,162 | 26,732 | ||||||
Share-based compensation, net of income taxes (in shares) | 146,000 | ||||||||
Share-based compensation, net of income taxes | 2,723 | 2,723 | |||||||
Exercise of employee stock options and warrants (in shares) | 20,000 | ||||||||
Exercise of employee stock options | 262 | 262 | |||||||
Exercise of public warrants (in shares) | 672,000 | ||||||||
Exercise of public warrants | 7,722 | 7,722 | |||||||
Payment of taxes for employee stock awards | (843) | (843) | |||||||
Ending Balance (in shares) at Mar. 31, 2021 | 131,185,000 | 444,000 | |||||||
Ending Balance at Mar. 31, 2021 | 1,663,483 | $ 13 | 1,290,882 | (4,245) | 382,833 | $ (6,000) | |||
Beginning Balance (in shares) at Dec. 31, 2020 | 130,347,000 | 444,000 | |||||||
Beginning Balance at Dec. 31, 2020 | 1,620,725 | $ 13 | 1,281,018 | (10,407) | 356,101 | $ (6,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | 89,017 | ||||||||
Ending Balance (in shares) at Sep. 30, 2021 | 129,170,000 | 3,572,000 | |||||||
Ending Balance at Sep. 30, 2021 | 1,678,990 | $ 13 | 1,300,329 | (4,161) | 438,872 | $ (56,063) | |||
Beginning Balance (in shares) at Mar. 31, 2021 | 131,185,000 | 444,000 | |||||||
Beginning Balance at Mar. 31, 2021 | 1,663,483 | $ 13 | 1,290,882 | (4,245) | 382,833 | $ (6,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | 29,364 | (483) | 29,847 | ||||||
Share-based compensation, net of income taxes (in shares) | 22,000 | ||||||||
Share-based compensation, net of income taxes | 1,640 | 1,640 | |||||||
Exercise of employee stock options and warrants (in shares) | 220,000 | ||||||||
Exercise of employee stock options | 3,135 | 3,135 | |||||||
Exercise of public warrants (in shares) | 209,000 | ||||||||
Exercise of public warrants | 2,405 | 2,405 | |||||||
Payment of taxes for employee stock awards | (392) | (392) | |||||||
Repurchase of common stock (in shares) | 1,176,000 | 1,176,000 | |||||||
Repurchase of common stock | (16,691) | $ (16,691) | |||||||
Ending Balance (in shares) at Jun. 30, 2021 | 130,460,000 | 1,620,000 | |||||||
Ending Balance at Jun. 30, 2021 | 1,682,944 | $ 13 | 1,297,670 | (4,728) | 412,680 | $ (22,691) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income (loss) | $ 26,759 | 26,759 | 567 | 26,192 | |||||
Share-based compensation, net of income taxes | 2,642 | 2,642 | |||||||
Exercise of employee stock options and warrants (in shares) | 19,000 | ||||||||
Exercise of employee stock options | 255 | 255 | |||||||
Exercise of public warrants (in shares) | 643,000 | ||||||||
Exercise of public warrants | (494) | (494) | |||||||
Payment of taxes for employee stock awards | (42) | (42) | |||||||
Reclassification of warrants | 298 | 298 | |||||||
Repurchase of common stock (in shares) | 1,952,000 | 1,952,000 | |||||||
Repurchase of common stock | (33,372) | $ (33,372) | |||||||
Ending Balance (in shares) at Sep. 30, 2021 | 129,170,000 | 3,572,000 | |||||||
Ending Balance at Sep. 30, 2021 | $ 1,678,990 | $ 13 | $ 1,300,329 | $ (4,161) | $ 438,872 | $ (56,063) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Warrant issuance fees | $ 500 | |||
Tax effect from share-based compensation | $ 361 | $ 496 | $ 103 | |
Tax effect from tax receivable agreement | $ 754 | $ 952 | $ 1,341 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net income | $ 82,771 | $ 108,961 |
Depreciation and amortization | 37,992 | 40,999 |
Debt discount amortization | 931 | 977 |
Change in fair value of warrant liabilities | 683 | (64,978) |
Tax receivable agreement remeasurement | 0 | 610 |
Unrealized foreign exchange losses | (177) | 1,392 |
Non-cash lease expense | 971 | 358 |
Share-based compensation | 7,005 | 6,583 |
Deferred taxes | 18,280 | 8,575 |
Loss on sale of assets | 0 | 317 |
Change in operating assets and liabilities, net of acquisitions and dispositions: | ||
Accounts receivable | (31,240) | (7,106) |
Inventories | 39 | 7,462 |
Prepaids and other current assets | 13,991 | (4,334) |
Accounts payable and accrued expenses | 7,949 | 2,186 |
Customer trade allowances | 8,441 | 5,989 |
Net cash provided by operating activities | 147,636 | 107,991 |
Investing activities | ||
Purchases of property and equipment | (33,360) | (33,382) |
Acquisition of business, net of cash acquired | 0 | (316,013) |
Acquisition and development of software assets | (3,330) | (4,994) |
Net cash used in investing activities | (36,690) | (354,389) |
Financing activities | ||
Repayments of long-term debt and lease obligations | (8,375) | (8,375) |
Proceeds from long-term debt origination, net of fees paid | 0 | 136,888 |
Distributions to non-controlling interest | 0 | (3,423) |
Repurchase of common stock | (50,063) | 0 |
Tax payments related to issuance of shares to employees | (1,277) | (1,383) |
Cash received from exercise of options and warrants, net of fees | 13,285 | 565 |
Payments on tax receivable agreement | (9,270) | (10,327) |
Net cash provided by (used in) financing activities | (55,700) | 113,945 |
Effect of exchange rate changes on cash and cash equivalents | (184) | (337) |
Net increase (decrease) in cash and cash equivalents | 55,062 | (132,790) |
Cash and cash equivalents at beginning of period | 173,034 | 285,087 |
Cash and cash equivalents at end of period | 228,096 | 152,297 |
Cash paid during the period for: | ||
Interest | 29,019 | 31,883 |
Net taxes paid | 1,568 | 5,403 |
Supplemental disclosure of non-cash investing: | ||
Accrued capital expenditures | $ 5,603 | $ 3,124 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Descr i ption of Business Hostess Brands, Inc. is a Delaware corporation headquartered in Lenexa, Kansas. The condensed consolidated financial statements include the accounts of Hostess Brands, Inc. and its subsidiaries (collectively, the “Company”). The Company is a leading sweet snacks company focused on developing, manufacturing, marketing, selling and distributing snacks in North America under the Hostess® and Voortman® brands. The Company produces a variety of new and classic treats including iconic Hostess® Donettes®, Twinkies®, CupCakes, Ding Dongs® and Zingers® as well as a variety of Voortman® cookies and wafers. Basis of Presentation The Company’s operations are conducted through wholly-owned operating subsidiaries. The condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. For the periods presented, the Company has one reportable segment. Adoption of New Accounting Standards In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”. This update provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. This update is effective for fiscal years beginning after December 15, 2021. The Company is currently evaluating the effect of this ASU on the Company’s condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. ASU No. 2020-04 is elective and effective as of March 12, 2020 through December 31, 2022. Once elected, this ASU must be applied prospectively for all eligible contract modifications. The Company will adopt Topic 848 when its relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 to have a material impact on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes (Topic 740)”. This ASU simplifies the accounting for certain income tax related items, including intraperiod tax allocations, deferred taxes related to foreign subsidiaries and step-up in tax basis of goodwill. The ASU is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. The Company adopted the standard effective January 1, 2021. Adoption of Topic 740 did not have a material impact on the Company’s condensed consolidated financial statements. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and for the reported amounts of revenues and expenses during the reporting period. Management utilizes estimates, including, but not limited to, valuation and useful lives of tangible and intangible assets, valuation of expected future payments under the tax receivable agreement, and reserves for trade and promotional allowances. Actual results could differ from these estimates. Accounts Receivable Accounts receivable represents amounts invoiced to customers for performance obligations which have been satisfied. As of September 30, 2021 and December 31, 2020, the Company’s accounts receivable were $156.7 million and $125.6 million, respectively, which have been reduced by an allowance for damages occurring during shipment, quality claims and doubtful accounts in the amount of $2.6 million and $3.5 million for the periods ending September 30, 2021 and December 31, 2020, respectively. Inventories Inventories are stated at the lower of cost or net-realizable value on a first-in first-out basis. Abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) are expensed in the period they are incurred. The components of inventories are as follows : (In thousands) September 30, December 31, Ingredients and packaging $ 22,785 $ 22,965 Finished goods 23,798 23,583 Inventory in transit to customers 2,726 2,800 $ 49,309 $ 49,348 Software Costs Capitalized software is included in “other assets, net” in the condensed consolidated balance sheets in the amount of $15.1 million and $14.7 million as of September 30, 2021 and December 31, 2020, respectively. Capitalized software costs are amortized over their estimated useful life of five years commencing when such assets are ready for their intended use. Software amortization expense included in general and administrative operating expense was $1.0 million and $2.9 million for the three and nine months ended September 30, 2021, compared to $1.4 million and $4.0 million for the three and nine months ended September 30, 2020, respectively. Disaggregation of Revenue Net revenue consists of sales of packaged food products in the United States, primarily within the Sweet Baked Goods category. The Company also sells products in the United States and Canada within the Cookies category. The following tables disaggregate revenue by geographical market and category. Three Months Ended September 30, 2021 ( In thousands ) Sweet Baked Goods Cookies Total United States $ 258,818 $ 25,185 $ 284,003 Canada — 3,966 3,966 $ 258,818 $ 29,151 $ 287,969 Three Months Ended September 30, 2020 ( In thousands ) Sweet Baked Goods Cookies Total United States $ 234,103 $ 22,328 $ 256,431 Canada — 4,424 4,424 $ 234,103 $ 26,752 $ 260,855 Nine Months Ended September 30, 2021 (In thousands) Sweet Baked Goods Cookies Total United States $ 759,010 $ 73,394 $ 832,404 Canada — 12,471 12,471 $ 759,010 $ 85,865 $ 844,875 Nine Months Ended September 30, 2020 (In thousands) Sweet Baked Goods Cookies Total United States $ 693,085 $ 56,094 $ 749,179 Canada — 11,387 11,387 $ 693,085 $ 67,481 $ 760,566 Concentrations For the three months ended September 30, 2021 and 2020, the Company has one customer (together with its affiliates) that accounted for 18.0% and 19.7% of total net revenue, and for the nine months ended September 30, 2021 and 2020, 18.8% and 21.0% of total net revenue, respectively. Foreign Currency Remeasurement Certain Voortman Cookies Limited (“Voortman”) sales and costs are denominated in the Canadian dollar (“CAD”). CAD transactions have been remeasured into US dollars (“USD”) on the condensed consolidated statement of operations using the average exchange rate for the reporting period. Balances expected to be settled in CAD have been remeasured into USD on the condensed consolidated balance sheet using the exchange rate at the end of the period. During both the three and nine months ended September 30, 2021, the Company recognized a gain on remeasurement of $0.2 million, which is reported within other expense on the condensed consolidated statement of operations. During the three and nine months ended September 30, 2020, the Company recognized losses on remeasurement of $0.4 million and $1.1 million, respectively, reported within other expense on the condensed consolidated statement of operations. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: (In thousands) September 30, December 31, Land and buildings $ 64,663 $ 59,774 Right of use assets, operating 32,192 31,354 Machinery and equipment 272,971 255,821 Construction in progress 34,071 25,041 403,897 371,990 Less accumulated depreciation and amortization (85,405) (68,031) $ 318,492 $ 303,959 Depreciation expense was $5.9 million and $17.4 million for the three and nine months ended September 30, 2021, compared to $6.3 million and $16.6 million for the three and nine months ended September 30, 2020, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Included in accrued expenses and other current liabilities are the following: (In thousands) September 30, December 31, Incentive compensation $ 14,239 $ 16,199 Payroll, vacation and other compensation 10,447 9,886 Interest rate swap and foreign currency contracts 5,229 13,694 Accrued interest 4,768 4,815 Other 11,858 11,121 $ 46,541 $ 55,715 |
Debt and Lease Obligations
Debt and Lease Obligations | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Lease Obligations | Debt and Lease Obligations A summary of the carrying value of the debt and lease obligations are as follows: (In thousands) September 30, December 31, Term Loan (3.0% as of September 30, 2021) Principal $ 1,094,388 $ 1,102,763 Unamortized debt premium and issuance costs (3,987) (4,917) 1,090,401 1,097,846 Lease obligations 27,097 29,002 Total debt and lease obligations 1,117,498 1,126,848 Less: Current portion of long term debt and lease obligations (14,171) (13,811) Long-term portion $ 1,103,327 $ 1,113,037 At September 30, 2021, minimum debt repayments under the term loan are due as follows: ( In thousands ) 2021 $ 2,792 2022 11,167 2023 11,167 2024 11,167 2025 1,058,095 Leases The Company has entered into operating leases for certain properties which expire at various times through 2026. The Company determines if an arrangement is a lease at inception. At September 30, 2021 and 2020, right of use assets related to operating leases are included in property and equipment, net on the condensed consolidated balance sheet (see Note 2. Property and Equipment). As of September 30, 2021 and 2020, the Company has no outstanding financing leases. Lease liabilities for operating leases are included in the current and non-current portions of long-term debt and lease obligations on the condensed consolidated balance sheet. The table below shows the composition of lease expense: Three Months Ended Nine Months Ended (In thousands) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Operating lease expense $ 1,504 $ 1,209 $ 4,928 $ 4,273 Short-term lease expense 501 456 1,083 2,014 Variable lease expense 367 445 1,109 1,466 $ 2,372 $ 2,110 $ 7,120 $ 7,753 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Warrants As of September 30, 2021 and December 31, 2020, there were 40,866,087 and 53,936,776 public warrants outstanding, and 419,011 and 541,658 private placement warrants outstanding, respectively. Each warrant entitles its holder to purchase one-half of one share of Class A common stock at an exercise price of $5.75 per half share, to be exercised only for a whole number of shares of Class A common stock. The warrants expire on November 4, 2021, or earlier upon redemption or liquidation. The Company may call the outstanding public warrants for redemption at a price of $0.01 per warrant, if the last sale price of the Company’s common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The private placement warrants, however, are nonredeemable so long as they are held by Gores Sponsor, LLC or its permitted transferees. The potential resale of the private placement warrants, which would result in a conversion to public warrants, has been registered with the SEC. When sold to the public, the private placement warrants will become public warrants. In July 2021, the agreement governing the Company’s public and private placement warrants was amended. Subsequent to the amendment, the exercise price for all outstanding warrants is payable through a “cashless exercise” with a premium of $0.25 added to the valuation price of each share for purposes of calculating the number of shares issuable upon exercise of the warrants. During the three months ended September 30, 2021, 4,389,288 warrants were exercised on a cashless basis, resulting in the issuance of 642,199 shares of the Company’s Class A common stock, under the terms of the amended warrant agreement. From October 1, 2021 through the expiration of the warrants on November 4, 2021, an additional 47.2 million warrants were exercised on a cashless basis, resulting in the issuance of 9.2 million shares of the Company’s Class A common stock. Interest Rate Swap and Foreign Currency Contracts The Company entered into interest rate swap contracts with counter parties to make a series of payments based on fixed rates ranging from 1.11% to 1.78% and receive a series of payments based on the greater of LIBOR or 0.75%. Both the fixed and floating payment streams are based on the September 30, 2021 notional amount of $600 million reducing by $100 million each year, until $500 million remains outstanding through August 2025. The Company entered into these transactions to reduce its exposure to changes in cash flows associated with its variable rate debt and has designated these derivatives as cash flow hedges. At September 30, 2021, the interest on the Company’s variable rate debt hedged by these contracts is effectively fixed at rates ranging from 3.36% to 4.03%. To reduce the effect of fluctuations in CAD denominated expenses relative to their U.S. dollar equivalents originating from its Canadian operations, the Company entered into CAD purchase contracts. The contracts provide for the Company to sell a total of $13.8 million USD for $17.3 million CAD at varying defined settlement dates through September 2022. The Company has designated these contracts as cash flow hedges. A summary of the fair value of interest rate and foreign currency instruments is as follows: (In thousands) September 30, December 31, Liability derivatives Location Interest rate swap contracts (1) Accrued expenses $ 4,973 $ 13,688 Foreign currency contracts (2) Accrued expenses 256 6 $ 5,229 $ 13,694 (1) The fair values of these contracts are measured at each reporting period by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2). (2) The fair values of foreign currency contracts are measured at each reporting period by comparison to available market information on similar contracts (Level 2). A summary of the gains and losses related to interest rate and foreign currency instruments in the condensed consolidated statement of operations is as follows: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Loss on derivative contracts designated as cash flow hedges Location Interest rate swap contracts Interest expense, net $ 962 $ 1,352 $ 3,441 $ 2,530 Loss on other derivative contracts Location Foreign currency contracts Other expense $ — $ — $ — $ 255 |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share is calculated by dividing net income attributable to the Company’s Class A stockholders for the period by the weighted average number of shares of Class A common stock outstanding for the period excluding non-vested share-based awards. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards including RSUs and stock options as well as public and private placement warrants. Below are basic and diluted net income per share: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Numerator: Net income (loss) attributable to Class A stockholders (in thousands) - basic $ 26,192 $ 24,865 $ 82,771 $ 106,101 Less: Change in fair value of warrant liabilities — (2,260) — (64,978) Numerator - diluted 26,192 22,605 82,771 41,123 Denominator: Weighted-average Class A shares outstanding - basic 129,846,551 124,905,538 130,679,974 123,889,306 Dilutive effect of warrants 7,462,176 2,394,619 6,700,256 1,938,355 Dilutive effect of RSUs 564,237 286,724 515,334 251,811 Dilutive effect of stock options 185,902 — 140,807 — Weighted-average shares outstanding - diluted 138,058,866 127,586,881 138,036,371 126,079,472 Net income per Class A share - basic $ 0.20 $ 0.20 $ 0.63 $ 0.86 Net income per Class A share - diluted $ 0.19 $ 0.18 $ 0.60 $ 0.33 For warrants that are liability-classified, during periods when the impact would be dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period and adjusts the numerator to remove the change in fair value of the warrant liability and adjusts the denominator to include the dilutive shares calculated using the treasury stock method. During the three and nine months ended September 30, 2021, the diluted weighted-average shares outstanding includes the dilutive impact of equity-classified warrants. Stock options that were excluded from the computation of diluted weighted average shares, because their effect was anti-dilutive, for the three and nine months ended September 30, 2021, were 1,841 and 36,451 compared to 490,557 and 571,230 for the three and nine months ended September 30, 2020, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to U.S. federal, state and local income taxes as well as Canadian income tax on its controlled foreign subsidiary. The income tax provision is determined based on the estimated full year effective tax rate, adjusted for infrequent or unusual items, which are recognized on a discrete basis in the period they occur. The Company’s estimated annual effective tax rate is 27.5% prior to taking into account any discrete items. As of September 30, 2021, and December 31, 2020, income taxes receivable were $1.4 million and $12.3 million, respectively. |
Tax Receivable Agreement Obliga
Tax Receivable Agreement Obligations | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Tax Receivable Agreement Obligations | Tax Receivable Agreement Obligations The following table summarizes activity related to the tax receivable agreement for the nine months ended September 30, 2021: (In thousands) Balance December 31, 2020 $ 156,544 Payments (9,270) Balance September 30, 2021 $ 147,274 As of September 30, 2021 the future expected payments under the tax receivable agreement are as follows: (In thousands) 2021 $ 2,400 2022 9,000 2023 9,700 2024 9,900 2025 9,800 Thereafter 106,474 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Liabilities related to legal proceedings are recorded when it is probable that a liability has been incurred and the associated amount can be reasonably estimated. Where the estimated amount of loss is within a range of amounts and no amount within the range is a better estimate than any other amount, the minimum amount is accrued. As additional information becomes available, potential liabilities are reassessed and the estimates revised, if necessary. Any accrued liabilities are subject to change in the future based on new developments in each matter, or changes in circumstances, which could have a material effect on the Company’s financial condition and results of operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s operations are conducted through wholly-owned operating subsidiaries. The condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. For the periods presented, the Company has one reportable segment. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”. This update provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. This update is effective for fiscal years beginning after December 15, 2021. The Company is currently evaluating the effect of this ASU on the Company’s condensed consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. ASU No. 2020-04 is elective and effective as of March 12, 2020 through December 31, 2022. Once elected, this ASU must be applied prospectively for all eligible contract modifications. The Company will adopt Topic 848 when its relevant contracts are modified upon transition to alternative reference rates. The Company does not expect the adoption of Topic 848 to have a material impact on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes (Topic 740)”. This ASU simplifies the accounting for certain income tax related items, including intraperiod tax allocations, deferred taxes related to foreign subsidiaries and step-up in tax basis of goodwill. The ASU is effective for fiscal years beginning after December 15, 2020 and early adoption is permitted. The Company adopted the standard effective January 1, 2021. Adoption of Topic 740 did not have a material impact on the Company’s condensed consolidated financial statements. |
Principles of Consolidation | Principles of ConsolidationThe accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements and for the reported amounts of revenues and expenses during the reporting period. Management utilizes estimates, including, but not limited to, valuation and useful lives of tangible and intangible assets, valuation of expected future payments under the tax receivable agreement, and reserves for trade and promotional allowances. Actual results could differ from these estimates. |
Accounts Receivable | Accounts ReceivableAccounts receivable represents amounts invoiced to customers for performance obligations which have been satisfied. |
Inventories | Inventories Inventories are stated at the lower of cost or net-realizable value on a first-in first-out basis. Abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) are expensed in the period they are incurred. |
Software Costs | Software CostsCapitalized software is included in “other assets, net” in the condensed consolidated balance sheets in the amount of $15.1 million and $14.7 million as of September 30, 2021 and December 31, 2020, respectively. Capitalized software costs are amortized over their estimated useful life of five years commencing when such assets are ready for their intended use. |
Disaggregation of Revenue | Disaggregation of RevenueNet revenue consists of sales of packaged food products in the United States, primarily within the Sweet Baked Goods category. The Company also sells products in the United States and Canada within the Cookies category. |
Foreign Currency Remeasurement | Foreign Currency RemeasurementCertain Voortman Cookies Limited (“Voortman”) sales and costs are denominated in the Canadian dollar (“CAD”). CAD transactions have been remeasured into US dollars (“USD”) on the condensed consolidated statement of operations using the average exchange rate for the reporting period. Balances expected to be settled in CAD have been remeasured into USD on the condensed consolidated balance sheet using the exchange rate at the end of the period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Components of Inventories | The components of inventories are as follows : (In thousands) September 30, December 31, Ingredients and packaging $ 22,785 $ 22,965 Finished goods 23,798 23,583 Inventory in transit to customers 2,726 2,800 $ 49,309 $ 49,348 |
Disaggregation of Revenue | The following tables disaggregate revenue by geographical market and category. Three Months Ended September 30, 2021 ( In thousands ) Sweet Baked Goods Cookies Total United States $ 258,818 $ 25,185 $ 284,003 Canada — 3,966 3,966 $ 258,818 $ 29,151 $ 287,969 Three Months Ended September 30, 2020 ( In thousands ) Sweet Baked Goods Cookies Total United States $ 234,103 $ 22,328 $ 256,431 Canada — 4,424 4,424 $ 234,103 $ 26,752 $ 260,855 Nine Months Ended September 30, 2021 (In thousands) Sweet Baked Goods Cookies Total United States $ 759,010 $ 73,394 $ 832,404 Canada — 12,471 12,471 $ 759,010 $ 85,865 $ 844,875 Nine Months Ended September 30, 2020 (In thousands) Sweet Baked Goods Cookies Total United States $ 693,085 $ 56,094 $ 749,179 Canada — 11,387 11,387 $ 693,085 $ 67,481 $ 760,566 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: (In thousands) September 30, December 31, Land and buildings $ 64,663 $ 59,774 Right of use assets, operating 32,192 31,354 Machinery and equipment 272,971 255,821 Construction in progress 34,071 25,041 403,897 371,990 Less accumulated depreciation and amortization (85,405) (68,031) $ 318,492 $ 303,959 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Included in accrued expenses and other current liabilities are the following: (In thousands) September 30, December 31, Incentive compensation $ 14,239 $ 16,199 Payroll, vacation and other compensation 10,447 9,886 Interest rate swap and foreign currency contracts 5,229 13,694 Accrued interest 4,768 4,815 Other 11,858 11,121 $ 46,541 $ 55,715 |
Debt and Lease Obligations (Tab
Debt and Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Debt and Lease Obligation | A summary of the carrying value of the debt and lease obligations are as follows: (In thousands) September 30, December 31, Term Loan (3.0% as of September 30, 2021) Principal $ 1,094,388 $ 1,102,763 Unamortized debt premium and issuance costs (3,987) (4,917) 1,090,401 1,097,846 Lease obligations 27,097 29,002 Total debt and lease obligations 1,117,498 1,126,848 Less: Current portion of long term debt and lease obligations (14,171) (13,811) Long-term portion $ 1,103,327 $ 1,113,037 |
Schedule of Maturities of Long-term Debt | At September 30, 2021, minimum debt repayments under the term loan are due as follows: ( In thousands ) 2021 $ 2,792 2022 11,167 2023 11,167 2024 11,167 2025 1,058,095 |
Composition of Lease Expenses | The table below shows the composition of lease expense: Three Months Ended Nine Months Ended (In thousands) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Operating lease expense $ 1,504 $ 1,209 $ 4,928 $ 4,273 Short-term lease expense 501 456 1,083 2,014 Variable lease expense 367 445 1,109 1,466 $ 2,372 $ 2,110 $ 7,120 $ 7,753 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the Fair Value of Interest Rate and Foreign Currency Instruments | A summary of the fair value of interest rate and foreign currency instruments is as follows: (In thousands) September 30, December 31, Liability derivatives Location Interest rate swap contracts (1) Accrued expenses $ 4,973 $ 13,688 Foreign currency contracts (2) Accrued expenses 256 6 $ 5,229 $ 13,694 (1) The fair values of these contracts are measured at each reporting period by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2). (2) The fair values of foreign currency contracts are measured at each reporting period by comparison to available market information on similar contracts (Level 2). |
Summary of the Gains and Losses Related to Interest Rate and Foreign Currency Instruments in the Consolidated Statement of Operations | A summary of the gains and losses related to interest rate and foreign currency instruments in the condensed consolidated statement of operations is as follows: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Loss on derivative contracts designated as cash flow hedges Location Interest rate swap contracts Interest expense, net $ 962 $ 1,352 $ 3,441 $ 2,530 Loss on other derivative contracts Location Foreign currency contracts Other expense $ — $ — $ — $ 255 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | Below are basic and diluted net income per share: Three Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Numerator: Net income (loss) attributable to Class A stockholders (in thousands) - basic $ 26,192 $ 24,865 $ 82,771 $ 106,101 Less: Change in fair value of warrant liabilities — (2,260) — (64,978) Numerator - diluted 26,192 22,605 82,771 41,123 Denominator: Weighted-average Class A shares outstanding - basic 129,846,551 124,905,538 130,679,974 123,889,306 Dilutive effect of warrants 7,462,176 2,394,619 6,700,256 1,938,355 Dilutive effect of RSUs 564,237 286,724 515,334 251,811 Dilutive effect of stock options 185,902 — 140,807 — Weighted-average shares outstanding - diluted 138,058,866 127,586,881 138,036,371 126,079,472 Net income per Class A share - basic $ 0.20 $ 0.20 $ 0.63 $ 0.86 Net income per Class A share - diluted $ 0.19 $ 0.18 $ 0.60 $ 0.33 |
Tax Receivable Agreement Obli_2
Tax Receivable Agreement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Tax Receivable Agreement | The following table summarizes activity related to the tax receivable agreement for the nine months ended September 30, 2021: (In thousands) Balance December 31, 2020 $ 156,544 Payments (9,270) Balance September 30, 2021 $ 147,274 |
Future Expected Payments Under Tax Receivable Arrangement | As of September 30, 2021 the future expected payments under the tax receivable agreement are as follows: (In thousands) 2021 $ 2,400 2022 9,000 2023 9,700 2024 9,900 2025 9,800 Thereafter 106,474 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 156,720 | $ 125,550 |
Reserve to cover allowances for damages occurring during shipment, quality claims and doubtful accounts | $ 2,600 | $ 3,500 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Ingredients and packaging | $ 22,785 | $ 22,965 |
Finished goods | 23,798 | 23,583 |
Inventory in transit to customers | 2,726 | 2,800 |
Inventories | $ 49,309 | $ 49,348 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Software Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||||
Capitalized software | $ 15.1 | $ 15.1 | $ 14.7 | ||
Capitalized software, estimated useful life | 5 years | ||||
Software amortization expense | $ 1 | $ 1.4 | $ 2.9 | $ 4 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 287,969 | $ 260,855 | $ 844,875 | $ 760,566 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 284,003 | 256,431 | 832,404 | 749,179 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 3,966 | 4,424 | 12,471 | 11,387 |
Sweet Baked Goods | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 258,818 | 234,103 | 759,010 | 693,085 |
Sweet Baked Goods | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 258,818 | 234,103 | 759,010 | 693,085 |
Sweet Baked Goods | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Cookies | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 29,151 | 26,752 | 85,865 | 67,481 |
Cookies | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 25,185 | 22,328 | 73,394 | 56,094 |
Cookies | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 3,966 | $ 4,424 | $ 12,471 | $ 11,387 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Concentrations (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
One Customer | Customer concentration risk | Consolidated net revenues | ||||
Concentration Risk [Line Items] | ||||
Percentage of total net revenues for customer | 18.00% | 19.70% | 18.80% | 21.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Foreign Currency Remeasurement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Foreign currency transaction gain on remeasurement | $ 0.2 | $ 0.2 | ||
Foreign currency transaction loss on remeasurement | $ 0.4 | $ 1.1 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 403,897 | $ 403,897 | $ 371,990 | ||
Less accumulated depreciation and amortization | (85,405) | (85,405) | (68,031) | ||
Property and equipment, net | 318,492 | 318,492 | 303,959 | ||
Depreciation expense | 5,900 | $ 6,300 | 17,400 | $ 16,600 | |
Land and buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 64,663 | 64,663 | 59,774 | ||
Right of use assets, operating | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 32,192 | 32,192 | 31,354 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 272,971 | 272,971 | 255,821 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 34,071 | $ 34,071 | $ 25,041 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Incentive compensation | $ 14,239 | $ 16,199 |
Payroll, vacation and other compensation | 10,447 | 9,886 |
Interest rate swap and foreign currency contracts | 5,229 | 13,694 |
Accrued interest | 4,768 | 4,815 |
Other | 11,858 | 11,121 |
Accrued expenses and other current liabilities | $ 46,541 | $ 55,715 |
Debt and Lease Obligations - Su
Debt and Lease Obligations - Summary of Debt and Lease Obligation (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Lease obligations | $ 27,097 | $ 29,002 |
Total debt and lease obligations | $ 1,117,498 | $ 1,126,848 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Less: Current portion of long term debt and lease obligations | Less: Current portion of long term debt and lease obligations |
Less: Current portion of long term debt and lease obligations | $ (14,171) | $ (13,811) |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term portion | Long-term portion |
Long-term portion | $ 1,103,327 | $ 1,113,037 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Effective fixed interest rate on long-term debt (as a percent) | 3.00% | |
Principal | $ 1,094,388 | 1,102,763 |
Unamortized debt premium and issuance costs | (3,987) | (4,917) |
Long-term debt | $ 1,090,401 | $ 1,097,846 |
Debt and Lease Obligations - Sc
Debt and Lease Obligations - Schedule of Maturities of Long-term Debt (Details) - Term Loan $ in Thousands | Sep. 30, 2021USD ($) |
Debt Instrument [Line Items] | |
2021 | $ 2,792 |
2022 | 11,167 |
2023 | 11,167 |
2024 | 11,167 |
2025 | $ 1,058,095 |
Debt and Lease Obligations - Co
Debt and Lease Obligations - Composition of Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||||
Operating lease expense | $ 1,504 | $ 1,209 | $ 4,928 | $ 4,273 |
Short-term lease expense | 501 | 456 | 1,083 | 2,014 |
Variable lease expense | 367 | 445 | 1,109 | 1,466 |
Total lease cost | $ 2,372 | $ 2,110 | $ 7,120 | $ 7,753 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ / shares in Units, $ in Millions | Nov. 04, 2021shares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021CAD ($)shares | Jul. 31, 2021$ / shares | Dec. 31, 2020shares |
Derivative [Line Items] | ||||||
Warrants redemption price (in dollars per share) | $ / shares | $ 0.01 | |||||
Share price (in dollars per share) | $ / shares | $ 24 | $ 24 | ||||
Warrants trading days threshold | 20 days | |||||
Warrants trading day period before redemption | 30 days | |||||
Exercise price of warrants premium added to the valuation price (in dollars per share) | $ / shares | $ 0.25 | |||||
Warrants exercised after amendment (in shares) | 4,389,288 | |||||
Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Warrants exercised after amendment (in shares) | 47,200,000 | |||||
Cash Flow Hedge | ||||||
Derivative [Line Items] | ||||||
Maximum contracted sales amount | $ 13,800,000 | $ 13,800,000 | $ 17.3 | |||
Designated as Hedging Instrument | Interest rate swap contracts | Cash Flow Hedge | ||||||
Derivative [Line Items] | ||||||
Notional amount of derivative contracts | $ | $ 600,000,000 | 600,000,000 | ||||
Reduction in notional amount per year | $ | $ 100,000,000 | |||||
Designated as Hedging Instrument | Interest rate swap contracts | Cash Flow Hedge | Minimum | ||||||
Derivative [Line Items] | ||||||
Fixed interest rate | 1.11% | 1.11% | 1.11% | |||
Notional amount of derivative contracts | $ | $ 500,000,000 | $ 500,000,000 | ||||
Effective fixed interest rate on long-term debt (as a percent) | 3.36% | 3.36% | 3.36% | |||
Designated as Hedging Instrument | Interest rate swap contracts | Cash Flow Hedge | Maximum | ||||||
Derivative [Line Items] | ||||||
Fixed interest rate | 1.78% | 1.78% | 1.78% | |||
Effective fixed interest rate on long-term debt (as a percent) | 4.03% | 4.03% | 4.03% | |||
Designated as Hedging Instrument | Interest rate swap contracts | Cash Flow Hedge | LIBOR | ||||||
Derivative [Line Items] | ||||||
Basis spread on variable rate (as a percent) | 0.75% | 0.75% | 0.75% | |||
Common Class A | ||||||
Derivative [Line Items] | ||||||
Warrant conversion ratio | 0.5 | 0.5 | 0.5 | |||
Warrant exercise price (in dollars per share) | $ / shares | $ 5.75 | $ 5.75 | ||||
Common Class A | Common Stock | ||||||
Derivative [Line Items] | ||||||
Shares issued as a result of warrants exercised after amendment (in shares) | 642,199 | |||||
Common Class A | Common Stock | Subsequent Event | ||||||
Derivative [Line Items] | ||||||
Shares issued as a result of warrants exercised after amendment (in shares) | 9,200,000 | |||||
Public Warrants | ||||||
Derivative [Line Items] | ||||||
Warrants outstanding (in shares) | 40,866,087 | 40,866,087 | 40,866,087 | 53,936,776 | ||
Private Placement Warrant | ||||||
Derivative [Line Items] | ||||||
Warrants outstanding (in shares) | 419,011 | 419,011 | 419,011 | 541,658 |
Derivative Instruments - Summar
Derivative Instruments - Summary of the Fair Value of Interest Rate and Foreign Currency Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Liability derivatives | $ 5,229 | $ 13,694 |
Accrued expenses | Interest rate swap contracts | ||
Derivative [Line Items] | ||
Liability derivatives | 4,973 | 13,688 |
Accrued expenses | Foreign currency contracts | ||
Derivative [Line Items] | ||
Liability derivatives | $ 256 | $ 6 |
Derivative Instruments - Summ_2
Derivative Instruments - Summary of the Gains and Losses Related to Interest Rate and Foreign Currency Instruments in the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative [Line Items] | ||||
Loss on derivative contracts designated as cash flow hedges | $ 962 | $ 1,352 | $ 3,441 | $ 2,530 |
Interest rate swap contracts | Interest expense, net | ||||
Derivative [Line Items] | ||||
Loss on derivative contracts designated as cash flow hedges | 962 | 1,352 | 3,441 | 2,530 |
Foreign currency contracts | Other expense | ||||
Derivative [Line Items] | ||||
Loss on other derivative contracts | $ 0 | $ 0 | $ 0 | $ 255 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income (loss) attributable to Class A stockholders (in thousands) - basic | $ 26,192 | $ 24,865 | $ 82,771 | $ 106,101 |
Change in fair value of warrant liabilities | 228 | (2,260) | 683 | (64,978) |
Numerator - diluted | $ 26,192 | $ 22,605 | $ 82,771 | $ 41,123 |
Denominator: | ||||
Weighted-average Class A shares outstanding - basic (in shares) | 129,846,551 | 124,905,538 | 130,679,974 | 123,889,306 |
Dilutive effect of warrants (in shares) | 7,462,176 | 2,394,619 | 6,700,256 | 1,938,355 |
Weighted-average shares outstanding - diluted (in shares) | 138,058,866 | 127,586,881 | 138,036,371 | 126,079,472 |
Net income per Class A share - basic (in usd per share) | $ 0.20 | $ 0.20 | $ 0.63 | $ 0.86 |
Net income per Class A share - dilutive (in usd per share) | $ 0.19 | $ 0.18 | $ 0.60 | $ 0.33 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,841 | 490,557 | 36,451 | 571,230 |
RSUs | ||||
Denominator: | ||||
Dilutive effect of share-based payment arrangements (in shares) | 564,237 | 286,724 | 515,334 | 251,811 |
Option | ||||
Denominator: | ||||
Dilutive effect of share-based payment arrangements (in shares) | 185,902 | 0 | 140,807 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | |||
Income taxes receivable | $ 1.4 | $ 12.3 | |
Forecast | |||
Income Tax Disclosure [Line Items] | |||
Effective income tax rate (as a percent) | 27.50% |
Tax Receivable Agreement Obli_3
Tax Receivable Agreement Obligations - Summary of Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Reconciliation Of Tax Receivable Agreement Liability [Roll Forward] | |
Balance December 31, 2020 | $ 156,544 |
Payments | (9,270) |
Balance September 30, 2021 | $ 147,274 |
Tax Receivable Agreement Obli_4
Tax Receivable Agreement Obligations - Future Expected Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Income Tax Disclosure [Abstract] | |
2021 | $ 2,400 |
2022 | 9,000 |
2023 | 9,700 |
2024 | 9,900 |
2025 | 9,800 |
Thereafter | $ 106,474 |